Sitting of 10 November 1965

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CORPORATION OF THE TRINITY HOUSE OF LEITH ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act 1936, relating to the Corporation of the Trinity House of Leith, presented by Mr. Ross (under Section 7 of the Act); and ordered to be considered upon Tuesday next and to be printed.[Bill 9.]

MOTORWAYS (FOG CONDITIONS)
Sir M. Redmayne(by Private Notice)asked the Minister of Transport what advice he has now received from police leaders and from the National Road Safety Advisory Council as a result of the meetings held on 8th and 9th November, regarding fog hazards on the motorways.
The Minister of Transport (Mr. Tom Fraser): My hon. Friend the Parliamentary Secretary received full reports from the police forces of Lancashire and Staffordshire on Monday, 8th November. The conclusion to be drawn from these reports is that the multiple accidents were caused by vehicles travelling at speeds which were too high for the prevailing conditions. The police representatives are convinced, as I am, that the remedy is to drive more slowly and carefully. Speeds must be reduced, whatever may be the means by which this is achieved.
I have called a conference on Friday of this week of all the chief constables and county surveyors concerned with the control of motorways to consider proposals for action. My National Road Safety Advisory Council has advised me to introduce urgently a speed limit on
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lengths of motorway during fog of 20 m.p.h. and a general experimental speed limit of 70 m.p.h. on all motorways for the winter months. But, whatever we do, nothing can absolve the individual motorist of his responsibility for adjusting his driving to the prevailing conditions.
Sir M. Redmayne: While I agree with a great deal of what the right hon. Gentleman says, may I ask whether he will not perhaps agree that in fog conditions a speed limit may give a false impression of security and that there are occasions when even a 20 m.p.h. speed limit would be too high? There have been suggestions in regard to the closure of motorways. Has the right hon. Gentleman considered whether a good alternative might be that in emergency the centre lane only should be used so that the speed limit would be imposed, as it were, by the slowest vehicles in the lane, and that no passing should be permitted?
Will he give urgent consideration to the fact that the problem arises largely from the difficulty of judging speeds and distance under fog conditions, and, therefore, there is a strong case for some kind of permanent fog lighting system similar to the airport landing system? I believe that this is under consideration by the Lancashire Police.
Will the right hon. Gentleman also give consideration to allowing the provision of rear-facing fog lamps on vehicles, particularly commercial vehicles, which could be put on in fog and, what is more, could be provided with a flashing switch in the event of a multiple crash" which would tend to halt the traffic behind? May I assure the right hon. Gentleman that we shall support him in any bold and large-scale experiment on these or any other lines?
Mr. Fraser: All the suggestions made by the right hon. Gentleman have to be taken into account. They have to be considered, and considered fully. He will appreciate that some of his suggestions are not proposals which could be given effect to at once. The installation of flood lighting on motorways for fog conditions is a large undertaking which could not be done all at once, nor could we all at once ensure that all our motor vehicles which are likely to drive in fog are fitted

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with the special new rear lighting system to be used in fog conditions.
Some of the suggestions are obviously a little more long-term than we could perhaps give effect to urgently for the conditions of this winter. The right hon. Gentleman's suggestion about limiting the use of the motorway to the centre lane is another that we should have to consider. I think that there is something in the proposition that if one made vehicles drive in convoy, with no overtaking at all, in fog it would be a very great help. But I do not want to make up my mind before seeing the chief constables and county surveyors about what remedies might be introduced.
Mr. Gresham Cooke: While I agree that some of the speeds by maniacs on the motorways in fog must be reduced and that the golden rule that one should be able to pull up within the distance one sees ahead should be observed, may I ask the right hon. Gentleman whether he is aware that in the United States on many motorways there are lights beside the road or overhead indicating the speed that the police think right for the conditions then prevailing? Will the right hon. Gentleman consider whether such warning lights should be put up at strategic points on our motorway system?
Mr. Fraser: Yes, Sir. But again this is not something which can be done at once. What the chief constables up to now have said to us is that, in their experience, it is very difficult for drivers, particularly in fog conditions, to determine at what speed they are travelling, so even if drivers see a sign which says what their maximum speed should be, one can understand that they do not always read their speedometers to see whether they are in fact driving at that speed. It is far better if the motorist drives within the distance he has in front of him and not up to the limit suggested by a sign set either over or beside the highway.
Mrs. Braddock: Would my right hon. Friend consider, since there are to be many additional roads of this sort, permanent lighting of the sodium type on these roads? This is one of the things I have not heard suggested, but if the roads were lit properly, even in fog conditions, there would be much less difficulty.
Mr. Fraser: Lighting throughout the length of the motorways would be perhaps the best contribution we could make. But it would be a very costly business. We do not even have the wiring on these highways to do it, so clearly it is not something that can be carried out in the short term. I am willing to listen to all the proposals which may be made about what can be done in the short term and the long term, but I am sure that the House will expect me at this point to be concerned mainly with what I can do immediately.
Sir J. Eden: While accepting that the speed limit is a measure which must be considered and that it is one which will almost certainly help reduce accidents, may I ask the right hon. Gentleman whether he will not agree that multiple pile-ups could probably have been lessened if there had been really effective accident warning devices in operation? Why have the right hon. Gentleman and his Department shown such obstinacy and lack of imagination in refusing to see the audio-visual system which has been developed in my constituency, which is a new type of warning device which I believe would have been effective in matters of this kind?
Mr. Fraser: Many hon. Members mislead themselves if they think that, with a different device, we can avoid pile-ups. In one pile-up at the weekend a police vehicle was involved. It was well lit up, was light in colour and had a blue oscillating light on top flashing all the time, and still other vehicles came pounding along the motorway, rammed into it and thereby forced it into vehicles in front, causing a pile-up. It is clear that drivers are travelling much too fast for these conditions and will have to drive much more slowly.
Mr. Orme: I am sure most hon. Members welcome the fact that the Minister will discuss this serious matter this week with representatives of Lancashire and the Midlands. Will he bear in mind that the main problem is protecting the motorist from himself? If he will bear that in mind, will he not consider that, when fog reaches a certain density, the motorways should be closed, just as airfields are closed in the interests of safety?
Mr. Fraser: I am anxious to do what I can to save motorists from themselves. The closure of motorways in fog conditions is one of the suggestions I shall have to ask the chief constables and county surveyors to consider. But the difference between motorways and airports is that when one closes an airport one does not put aircraft on to other airports equally fogbound; they do not take to the air at all. But if we close motorways, which are the safest roads we have in this country, we oblige motorists to go on to roads which are less safe. Of course, it may be that by driving on roads which are less safe they will drive more carefully. Experience is that they do. We shall have to take this into account, but if we adopt this suggestion it will prove that at the end of the day we have to take pretty severe measures to bring motorists to their senses.
Sir H. Harrison: This is really a human problem. It is the fault of drivers and their lack of judgment. Does not the right hon. Gentleman think that the time has arrived when people who want to drive cars should be taught to drive only by properly qualified instructors?
Mr. Fraser: That is another question which I had better deal with some other time.
Mr. Heffer: Although my right hon. Friend feels that the motorways are the safest roads in the country, is he aware that his view is not shared by people who travel on them? I use motorways twice a week and my experience is that many drivers think that they can go at any speed they like on them. Will not my right hon. Friend agree that, to save them from themselves, the only answer at the moment, until there is a long-term solution, is to close the motorways in dense fog?
Mr. Fraser: I shall invite the chief constables and the county surveyors to consider this among other suggestions. But my hon. Friend must bear in mind, and I ask hon. Members to recognise, that the three-lane road is a very dangerous road. The House will also recognise that when we put vehicles off the motorways, which have either dual carriageways or three lanes on either side, we are diverting the traffic on to three-lane roads, which many hon. Members have told me
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are the most dangerous roads. In good conditions the motorways are undoubtedly the safest. The accident rate on them is about one-third of the accident rate generally.
Several Hon. Members rose—
Mr. Speaker: Order. We must get on.

BILLS PRESENTED
  RURAL WATER SUPPLIES AND SEWERAGE
  Bill to increase the limit on the contributions out of moneys provided by Parliament which may be made under Section 1 of the Rural Water Supplies and Sewerage Act 1944, presented by Mr. Crossman; supported by Mr. J. Griffiths, Mr. MacDermot, Mr. MacColl, and Mr. Mellish; read the First time; to be read a Second time tomorrow and to be printed.[Bill 1.]
  HOUSING (SLUM CLEARANCE COMPENSATION)
  Bill to amend the provisions of Part II of Schedule 2 to the Housing Act 1957 relating to private dwellings, presented by Mr. Crossman; supported by Mr. J. Griffiths, Mrs. Castle, Mr. MacDermot, Mr. Mellish, and Mr. MacColl; read the First time; to be read a Second time tomorrow and to be printed.[Bill 2.]
  TEACHERS' SUPERANNUATION
  Bill to amend the law relating to the superannuation and other benefits payable to or in respect of teachers and certain other persons employed in connection with the provision of educational services, and for purposes connected therewith, presented by Mr. Crosland; supported by Mr. J. Griffiths, Mr. Redhead, and Mr. MacDermot; read the First time; to be read a Second time tomorrow and to be printed. [Bill 3.]
  PENSIONS (INCREASE)
  Bill to make provision with respect to increases or supplements in respect of certain pensions, presented by the Chancellor of the Exchequer; supported by Mr. Ross, Mr. Crossman, and Mr. MacDermot; read the First time; to be read a Second time tomorrow and to be printed. Bill 4.]
  WORKMEN'S COMPENSATION AND BENEFIT (AMENDMENT)
  Bill to amend the law with respect to the supplementation of workmen's compensation and the provision of other benefit in respect of employment before 5th July 1948, presented by Miss Herbison; supported by Mr. Ross, Mr. J. Griffiths, Mr. Houghton, Mr. Harold Davies, Mr. Finch, and Mr. Pentland; read the First time; to be read a Second time tomorrow and to be printed. [Bill 5.]
  AIR CORPORATIONS
  Bill to provide for the capital reconstruction of the British Overseas Airways Corporation; to provide for Exchequer investment in that Corporation otherwise than by way of loan; to amend the financial duties and borrowing powers of that Corporation and of the British European Airways Corporation; to enable the Treasury to guarantee foreign currency debts of those Corporations; and to amend Sections 21 and 23(4) of, and paragraphs 9 and 10 of Schedule 1 to, the Air Corporations Act 1949, presented by Mr. Roy Jenkins; supported by Mr. Diamond, Mr. Mason, Mr. Stonehouse, and Mr. Swingler; read the First time; to be read a Second time tomorrow and to be printed. [Bill 6.]
  EXPIRING LAWS CONTINUANCE
  Bill to continue certain expiring laws, presented by Mr. MacDermot; read the First time; to be read a Second time tomorrow and to be printed. [Bill 7.]
  UNIVERSITIES (SCOTLAND)
  Bill to amend the law relating to the Universities of St. Andrews, Glasgow, Aberdeen and Edinburgh; to make provisions consequential on the foundation of a University of Dundee; and for purposes connected therewith, presented by Mr. Ross; supported by Mr. Crosland, and Mrs. Hart; read the First time; to be read a Second time tomorrow and to be printed. Bill 8.]
ORDERS OF THE DAY
  QUEEN'S SPEECH

    DEBATE ON THE ADDRESS
    [SECOND DAY]
    Order read for resuming adjourned debate on Question [9th November]:
    That an humble Address be presented to Her Majesty, as follows:
    Most Gracious Sovereign,
    We Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
    Question again proposed.
    Mr. Speaker: I understand that the general feeling of the House is that we should continue today the general debate and that on Thursday we should debate largely the Land Commission and housing, on Friday foreign affairs and defence, on Monday transport and technology, and on Tuesday economic affairs.
    2.50 p.m.
    Mr. Raymond Gower: I trust that the House will appreciate that I am in a somewhat embarrassing position and will bear with me for a short period. After waiting throughout most of yesterday's debate I had the fortune to catch your eye, Mr. Speaker, seven minutes before the Adjournment, when my few remarks were rudely terminated. Many aspects of our proceedings are designed for the convenience of the Front Benches, but I am advised that it is traditional during the debate on the Address for a back bencher interrupted by the previous night's Adjournment to be allowed to continue next day, and as back benchers we should not lightly sacrifice that right. I promise to be brief.
    Last night, in my last sentence, I stated that I welcomed the proposed changes in the leasehold law. Not to do so at this stage would make nonsense of all that I have ever said or written on this topic. I do not know to what extent leasehold constitutes a special problem in parts of England, but I have always contended that its very incidence and extent have made leasehold a very special problem in parts of South Wales.

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    I do not know what formula the Government are adopting or what formula they will decide to adopt, but I hope that it will be fair and reasonable. I plead with Ministers to include within the scope of this Bill those leasehold properties, leasehold houses of which the freeholds are owned by local authorities and by other public bodies. There are many such houses in South Wales. In my own constituency of Barry, the Glamorgan County Council is a considerable freehold owner of leasehold houses. In some respects the leasehold owners of these houses are in a worse position than the leaseholders of private freehold property. For while some private landlords ask high or even excessive prices for the freeholds, Glamorgan County Council usually refuses to sell at all. It is no solution to a person with about 20 years unexpired leasehold to be assured that the county council will not deal harshly with him on the expiry of the lease. He wants something better than 20 years unexpired leasehold, otherwise no mortgage can be obtained on his house. Likewise I understand that the Swansea Borough Council is a major owner of freehold properties in that town. In parts of Cardiff and Barry many of these houses have British Railways as their freehold owners. I understand that in some parts of the industrial valleys in South Wales the freeholds are owned by the National Coal Board. If this Measure is to be fair and just, its effect should extend to all such houses where the freeholds are owned by local authorities, or by public bodies.
    I recall that in a Private Member's Bill introduced about two years ago by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), the present Chancellor of the Exchequer intervened to say that in his view a case had been made out for the inclusion of these houses owned by public authorities. I hope that the right hon. Gentlemen the Chancellor of the Exchequer and the Secretary of State for Wales have exerted themselves to influence the Cabinet to include these properties in the Bill. If such properties are omitted it is a sure sign that the Secretary of State for Wales has failed in this important respect.
    Yesterday, many Scottish Members bewailed the fact that the references in the Speech to Scotland were limited to
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    one short paragraph of two lines at the end of the Speech. In this respect, at any rate, Scotland was one paragraph and two lines better off than Wales which, despite the appointment of a Secretary of State, had no separate reference at all. As my right hon. Friend the Leader of the Opposition pointed out yesterday, the proposals of the Gracious Speech are inadequate to deal with the deep-seated problems and difficulties of the economy of this country in these postwar years. Apart from a few admittedly useful and electorally attractive measures of social reform, the proposals are not designed to make the people of this country appreciate the need for ever-increased efficiency and change.
    The Prime Minister may seem like a conjurer. He can offer remedies which are painless and even pleasant. Change and progress and an increase of efficiency are not always painless; they are not always pleasant.
    2.55 p.m.
    The Chancellor of the Duchy of Lancaster (Mr. Douglas Houghton): The hon. Gentleman the Member for Barry (Mr. Gower) can appeal to my right hon. Friend the Prime Minister on leasehold reform with a much better prospect of success than he could ever have appealed to his right hon. Friend when he was a member of the Government. We are very anxious to have his warm-hearted approval of the Measures which will, in due course, be brought before the House.
    The biggest lie on the hoardings at the present time is the one which says," Labour breaks promises". The worst that can be said by anyone, including a somewhat brazen Opposition, is that we have not fulfilled all of our promises at once, notwithstanding a crowded first Session and a very full one ahead. We may admittedly have to have a slight overspill into a third Session. I suppose that the complaint is that the Government have not managed to cram five years' work into two or three years. The spectacle of 13 years of Tory rule chiding a Labour Government for not doing everything in the first Session, or even in the first two or three, is surely one of Satan rebuking Sin.
    Thirteen years of Tory rule was surely enough. We had 13 years of Government, including the grievous and expensive Suez venture, one "stop-go" after

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    another, and a thumping balance of payments problem to finish with. Surely enough was enough. The remnants of the former Government, now on the Opposition benches, are in no condition to lecture us. As to the comments of the right hon. Gentleman the Leader of the Opposition yesterday to my right hon. Friend the Prime Minister, about the composition of his Cabinet, it came ill from a survivor of the" Night of the long knives". In July, 1963, the right hon. Gentleman will remember that Mr. Macmillan tried to rejuvenate his Government by sacking half of his Cabinet, all of whom were younger than himself. Surely we on this side of the House do not have to read the Prorogation speech again in order to put the dishonest poster to scorn. Nor do I need to read the Queen's Speech again to convince the House how foolish the slogans of the Opposition will look by this time next year.
    What is nagging the Leader of the Opposition is that this Government are too popular— as the noble Marquess of Salisbury would put it," Too popular by half"— for the peace of mind of the right hon. Gentleman. He can find no firm ground for constructive criticism, so yesterday he had to fall back on being a party political pea-shooter. The Leader of the Opposition is not an alternative Prime Minister so much as a candidate for the next Command Performance. His speeches in the country sound like the Fourth Form at St. Dominic's, and those in the House like a man with nothing to say. I thought that the right hon. Gentleman's speech yesterday was a complete write-off. I am sorry that he is not here this afternoon. I dislike being rude to him in his absence but I fully expected that the Leader of the Opposition would be in his place for the opening of the debate.[Interruption.] I hear that the Leader of the Opposition has a perfectly good reason for being absent and I apologise for any reflection I might have made upon him. It is a pity that I was not passed a note earlier, and I could have moderated some of my remarks.
    I listened to his speech yesterday, and read it again this morning, and I say, quite frankly, that the country is in no mood for that sort of stuff. At this hour of deep anxiety especially, the country is looking for what it is now getting, above
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    all, from a Labour Government, namely, integrity and courage. Whatever we are doing and whatever we do not do, we are at least honest about it. After 13 years of slipshod and equivocal government, that of itself is a welcome change.
    I will deal particularly with a fairly wide range of social services. I think that I shall satisfy the House that our record is good, that our promises are sound and will be fulfilled and that we have some very useful work in progress. The social services are a pretty large sector on the home front. We started last year with some heavy commitments on benefits and the relief of poverty. The House may recall the words of the Gracious Speech a year ago on this subject:
    "My Government will have particular regard for those on whom age, sickness and personal misfortune impose special disabilities. They believe that radical changes in the national schemes of social security are essential to bring them into line with modern needs. They will therefore embark at once upon a major review of these schemes. Meanwhile, they will immediately introduce legislation to increase existing rates of National Insurance and associated benefits. Action will be proposed to modernise and develop the health and welfare services. Steps will be taken to increase the number of doctors and other trained staff in the National Health Service. Prescription charges for medicines will be abolished"
    Every bit of that can look the Opposition squarely in the face this afternoon.
    By the end of March this year—within four months—we had brought a little more money and a little more happiness to about 8½ million people on benefits, pensions and assistance. Some of the higher benefits were payable before last Christmas; the House will recall the £6 million that my right hon. Friend the Minister of Pensions and National Insurance was able to distribute in fuel and comforts grants to well over 1 million aged and chronic sick people on National Assistance. These improvements were better than anything they had ever had at one time since the scheme began — 12s. 6d. a week for a single person and 21s. for a married couple, at an extra cost of what? The extra cost this full year of National Insurance and injury benefits alone will be £ 285 million. Corresponding increases to war pensioners costing £ 15 million and improved National Assistance of £ 25 million bring the grand

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    total to £325 million extra this full year.
    We remedied a grievance of long standing— the 10s. widow— which right hon. and hon. Members opposite persistently declined to remedy. We abolished the earnings rule for widows which right hon. and hon. Members opposite frequently refused to remove. Prescription charges for medicines under the Health Services went as well. This is all as we said. We were criticised by some of our friends overseas for having done too much. But we did it in the cause of humanity, admittedly, perhaps, at some risk to the economy. But if that was one of our major mistakes, then this alert, aggressive and death-dealing Opposition kept very quiet about it.
    Dr. Wyndham Davies rose—
    Mr. Houghton: No.
    By the end of December last year, two months after we took office, the necessary legislation had been passed by this House and other necessary action had been taken by my right hon. Friends the Ministers of Pensions and National Insurance and Health to give effect to this opening broadside in our strategy on the social services. I would say in passing that the appreciation of the beneficiaries can still be heard eight months afterwards more loudly than the approval of right hon. and hon. Members opposite.
    Then we set about work on the longer-term reforms upon which we had set our hearts for a long time before we came to office. I will deal first with five matters which are referred to in the Gracious Speech: short-term wage-related benefits; workmen's compensation; public service pensions increases; doctors' pay and improvements in doctors' services and the hospital programme; and improved services for the family.
    Dr. Wyndham Davies rose—
    Mr. Houghton: I have hardly begun. There is a lot more of this. If the House will bear with me I will refer to the work in progress.
    Dr. Wyndham Davies: Would the right hon. Gentleman give way?
    Mr. Speaker: Order. If a Member clearly indicates that he does not wish to
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    give way, merely getting up again and again will not make him do so.
    Mr. Houghton: I apologise for not giving way, but I have a lot of information to give to the House, and I wish to be free for a little longer to give it.
    First, I want to say something about the earnings-related short-term benefits. In putting forward better provision for those who lose their jobs, the Government are implementing their decision to concentrate special attention on schemes to promote faster economic growth. Faster growth demands the most efficient use of labour and the mobility of labour in the light of economic and technological developments. If this is to be achieved, proper provision must be made for those who have to change their jobs and risk a period of transitional unemployment.
    The first Measure to secure this was the Redundancy Payments Act, which will be brought into operation by my right hon. Friend the Minister of Labour next month. This, as the House well recalls, will provide a tax-free lump sum for workers whose jobs disappear and will apply whether or not a worker is subsequently unemployed. The improvements mentioned in the Gracious Speech for earnings-related supplements to unemployment benefit for the early months of unemployment will be the second strand of our policy for encouraging the economic use of labour. The National Insurance benefits for unemployment, however, have been very closely linked with those for sickness and industrial injury benefits in the past.
    We have decided that our concept of a revised structure of short-term benefits should include sickness benefits and industrial injury benefits as well as unemployment. There are many social and administrative problems which are very difficult to overcome if one attempts to separate unemployment from sickness benefit. Workers who begin by being sick and then become unemployed, or the other way round, may wish to switch from one classification to another in order to get the advantage of the higher benefit. Therefore, sickness benefits will be included in the proposals which will be introduced by my right hon. Friend as soon as possible. There will be corresponding adjustments in the industrial injury benefit.

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    We also thought that we should take this opportunity of improving the widows' allowances in the early period of their widowhood, immediately after bereavement. I am sure that the House welcomes this, especially if we can give the widow more and give it to her for a longer period immediately after her sorrow.
    The details of all these proposals will be included in the Bill. We want to get the Bill passed as soon as we can in this Session so that, if approved by Parliament in time, the necessary arrangements can be completed to introduce the scheme in the autumn of next year. It can, however, be said now that it is the intention that the supplements to unemployment and sickness benefits will be payable after a short waiting period for the early periods of unemployment and sickness and will be related to a person's earnings as assessed under Pay-As-You-Earn. The supplements to widows will be related to their husband's earnings. These changes are regarded by the Government as an important and essential first step pending the completion of our major review.
    Another Measure which will be introduced by my right hon. Friend the Minister of Pensions and National Insurance will be very welcome in many quarters of the House, especially among some of my hon. Friends on the Government benches. I refer to the Workmen's Compensation and Benefit (Amendment) Bill, which will deal with an intractable problem, which the right hon. Member for Bridlington (Mr. Wood) will well remember, of old pre-1948 workmen's compensation cases which it was not found possible then or since fully to assimilate into the industrial injuries scheme.
    Those "old cases", as they are called, have been exercising the attention of successive Ministers since 1948. Today, my right hon. Friend has introduced a Bill to simplify and improve the allowances now available and also to extend their scope so as roughly to double the number of workmen's compensation cases who are entitled to them. I am sure that my hon. Friends who represent constituencies especially concerned with this problem will study the Bill with great interest and, I feel certain, with satisfaction.
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    I now come to something which gives me very great pleasure indeed to announce, and that is the Bill which my right hon. Friend the Chancellor of the Exchequer is introducing, and which has been presented this afternoon, to improve the pensions of public service pensioners. Although I must be careful not to bring you into our discussion, Mr. Speaker, I think that I detect a twinkle in your eye. This is something for which you, Mr. Speaker, and right hon. and hon. Members, on both sides, have been pressing for a long time.
    The Bill provides pensions inceases rising to 16 per cent, for the oldest pensioners, the highest general rate of percentage increase ever included in a Pensions (Increase) Bill. The maximum of 16 per cent. will apply to pensions awarded not later than 1st April, 1957, and it will be scaled downwards to 2 per cent. for pensions awarded by 1st April, 1964.
    Right hon. and hon. Members may have noticed that we have not included in these proposals the special bonus for the over-70s which was included in the last Pensions (Increase) Act. We felt that our method of improving the graduated scale of benefit was fair and would give higher pensions to those who have drawn their pensions longest than by giving an extra bounty to those who have reached a certain age without special reference to the length of time they have been retired.
    Another thing which I am very joyful to notice is that another problem which under the previous Administration was intractable and insoluble has been solved by the present Administration. What is there about this Government that they can solve the insoluble problems of the previous Government? Surely, in all modesty, one is entitled to refer to this. I spoke for hours on this problem in successive Pensions (Increase) Bill debates. It was the problem of how to deal with the pensions increase of a man who formally retired, became disestablished, accepted a lower grade in a disestablished capacity and then ultimately retired from the lower grade. The complexities of fixing his pension increase without unfairness to others has, in the past, baffled the Ministers concerned. Our proposals will be in the Bill and hon. Members will be able to see how satisfactorily we have disposed of this matter.

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    I simply conclude on this matter by saying that together with corresponding measures under the Royal Warrant, this Bill will bring well-deserved relief to 710,000 public service pensioners, concentrating help where it is most needed—that is, on the pensions awarded longest ago.
    I come to No. 4 in the matters referred to in the Gracious Speech. It concerns the general practice Bill and the negotiations with the doctors. The House is aware that my right hon. Friend the Minister of Health has been engaged for some months in discussing with general practitioner representatives the proposals in the family doctor's charter for new conditions of service and new methods of remuneration. Some of the proposals in the charter would require legislation. In particular, the Government have undertaken to introduce legislation to establish a finance corporation to help family doctors with the provision of premises. While negotiations are not yet complete, all right hon. and hon. Members will have been glad to see that the profession has now agreed upon a new system of remuneration, which is to go to the Review Body for pricing. We can all now hope that when the rest of the negotiations have been completed and the Review Body has carried out its task, the way will be open for a transformed and revitalised family doctor service.
    In the absence of my right hon. Friend the Minister of Health, who unavoidably cannot be present, it is only suitable and appropriate that I should congratulate him on the skill, the patience and the success with which he accomplished those difficult negotiations. It fell to me to be close to my right hon. Friend during this period and I am sure that the whole House is relieved that the negotiations have proceeded to this point of agreement and that we are unlikely now to be confronted with any serious unrest and difficulty in the National Health Service.
    Dr. Wyndham Davies: Will the right hon. Gentleman now give way?
    Mr. Houghton: Certainly, he will.
    Dr. Wyndham Davies: I am grateful to the right hon. Gentleman. I merely wanted to draw attention to the fact that he has mentioned that the Government would increase the number of doc-
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    tors. Can he amplify that and say what measures the Government intend to take to increase the number of doctors to keep the National Health Service going?
    Mr. Houghton: One measure is to get improved conditions for doctors, which might help to stop a certain amount of export in professional skill and experience; and other measures are being taken. Part of the difficulty about the supply of doctors is that grievous mistakes were made by the previous Administration in estimating the numbers of doctors required and in cutting down the number of places for medical students.
    I now pass to health, welfare and the hospital programme. The National Plan shows that expenditure on the country's health and welfare services is expected to rise by nearly 25 per cent. by the end of the 1960s. The continuing development of the hospital services is a major part of this expansion. We have already demonstrated our anxiety to stimulate hospital building by exempting it completely, together with housing and schools, from the measures recently taken by my right hon. Friend the Chancellor of the Exchequer to strengthen our economic position.
    The programme of hospital modernisation is fast gathering momentum— [An hon. Member: "What?"]— and this year we shall be spending nearly £ 70 million on hospital building. In a very few years' time, the figure will be half as much again.
    Sir Douglas Glover: What about St. Thomas'?
    Mr. Houghton: There seems to be a certain amount of discomfort on the benches opposite. The material content of the programme and its particular emphasis and priorities need periodically to be reviewed to ensure that it stays in line with current concepts. At the request of my right hon. Friend, a comprehensive and realistic review is currently being undertaken by hospital boards and in the course of the next few months he will be considering the outcome of this review.
    Special attention is being paid to the early improvement of facilities for the mentally ill and the mentally subnormal and the elderly sick. My right hon. Friend has particularly asked hospital

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    boards to ensure that their plans are drawn up in consultation with the local health and welfare authorities, and those authorities are themselves substantially expanding their services. This is because we all recognise that it is better to provide care and treatment in the community for all those who do not require special types of care which can be given only in a hospital.
    The current expenditure on local health services is expected to be rising by 6½ per cent. a year in real terms by the year 1969–70 compared with 5½ per cent. in recent years; and the figure for local welfare services is even more encouraging, 7½ per cent. last year. The most rapid expansion is in mental health. The current expenditure in 1969– 70 is likely to be at least double that of 1964– 65. My right hon. Friend will shortly be considering revised detailed forecasts by local authorities which, because they are flexible, will reflect the latest assessments of the changing needs in their areas.
    I now pass to the last of the matters mentioned in the Gracious Speech, improved services for the family. Hon. and right hon. Gentlemen will have seen the White Paper, Cmd. 2742, in which there is a set of proposals relating to the child, the family and the young offender. My special responsibility for part of that White Paper related to Chapter II, "Family Support". In paragraph 7 there was a reference to the Government's desire to strengthen the organisation of a family service at local authority level. Although I prepared quite comprehensive proposals for a family service, at that time we felt that, none the less, it was desirable to have the widest consultation with those who would be directly concerned with its administration and have views upon it, and other social workers, before we finally made up our mind. So the Government are to appoint a small, independent committee to review the organisation and responsibilities of the local authority personal social services and consider what changes are desirable to ensure an effective family service. That independent committee is about to be set up.
    In passing, I refer to the recruitment and training of the social workers, because the comprehensive proposals in the White Paper and the expansion of the local services generally will require more
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    qualified social workers as the years go by. I have just had completed an up-to-date study of the probable needs during the next few years, and the several Ministers concerned are taking the necessary action to see that plans for an expanded service are not frustrated by lack of social workers.
    After all this I ask the question, what have we not done? One thing we have not done, and it was a grievous disappointment to my hon. and right hon. Friends, and probably to hon. Members opposite, is to bring in plans for the income guarantee; and we have not been able, either, to abolish the remaining prescription charges.
    The measures announced to the House by my right hon. Friend the Chancellor of the Exchequer on 27th July entailed some very painful decisions for all Ministers, but what mattered, from the point of view of the confidence of our friends overseas, was that we had the courage to make them, and the £ has got stronger ever since, and is now safe. In the announcement made by the Chancellor of the Exchequer—a statement, by the way, approved by the whole Government —much was postponed, but nothing was abandoned. Only the most pressing economic reasons persuaded us to bring forward a scheme for earnings-related short-term benefits this Session in advance of the general review. These improvements, which I have already referred to in broad outline, are estimated to cost just over £60 million in a full year.
    Now, in the social services, our plain duty, and firm resolve, is to see that the price of economic recovery does not fall on the poorest in the land. We must make whatever adjustments are necessary in social priorities to see that this does not happen, and this can be done within the financial disciplines which we have imposed upon ourselves to keep our public expenditure within the ceiling set, and the Government are going into all that now.
    Now I turn to work which is in progress. First I want to refer to two surveys. The first is the completion of the inquiry by the Ministry of Pensions and National Insurance into the circumstances of retired pensioners, a survey which was inaugurated by the right hon. Gentleman the Member for Bridlington in response

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    to a debate initiated by my right hon. Friend the Member for Llanelly (Mr. James Griffiths). It was completed earlier this year.
    Detailed inquiries were sent out to 10,500 pensioners; 9,000 were interviewed and gave detailed information about the amount and sources of their income, their capital resources and liabilities, as well as other background information. The response was great. I think the House will be grateful to those who submitted themselves to this interrogation in order to provide information on which sound policies could be based. We should also thank the officers of the Ministry who had this rather delicate task to undertake. We are always thanking my right hon. Friend. She is so full of good works that hardly a week passes but that something upon which we can congratulate her is done. This Session she is going to have quite a bundle of good things—
    Sir D. Glover: Mother Christmas.
    Mr. Houghton: — and we shall see the joy and the satisfaction on the faces of Members on the benches opposite. This information is now being processed, and we shall be bringing a report before the House in due course.
    Another survey is on the unsettled, the homeless and rootless people, the homeless alcoholics, the crude spirit drinkers, discharged prisoners, the homeless mentally disturbed people, the social misfits and drifters. These are a terrible problem, a pathetic problem. I have interested myself personally very much in it. They are a scar on our social life. Various estimates have been made of the size of the problem. We do not know for certain. We want to find out more. One estimate has put the number of homeless single people at 90,000, but another at barely more than one-third of that.
    Many suggestions have been made as to how we are to deal with them. I have asked the Departments concerned, the Ministry of Health, the Home Office, and the Ministry of Housing and Local Government, and the National Assistance Board, to consult the voluntary bodies concerned with this problem and, in consultation with them, to carry out a survey to find out as far as possible the number
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    of people and all we can about them. This is being carried out on behalf of the Departments concerned and the voluntary organisations, by the staff of the National Assistance Board with the help of the officers of the voluntary bodies.
    A survey is now being made of accommodation for people of that kind, and then, in the beginning of December, National Assistance Board officers and others will be carrying out a survey of the number, including those who sleep rough, to see how many are sleeping in and about wherever they can—[An HON. MEMBER: "In Parliament."]— and find out their needs. I should like to think that it is not a laughing matter. I have been to look at the problem for myself, and one comes away feeling very disturbed. In our so-called affluent society we should be able to do better than that.
    I have established contact with numerous voluntary organisations working in that field and I have brought them together in conference. They have never been brought together before, and they have appointed a liaison committee which is keeping in close touch with me. I am glad to say that the chairman is the Rev. Austen Williams, the Vicar of St. Martin-in-the-Fields, who is a wise and experienced worker in these matters. I am very anxious that the voluntary bodies should work together, should consider where the gaps are and what the needs are, and see what we can do to help.
    We must also acknowledge that in many cases voluntary bodies are able to bring to bear on that work a different slant from that of an official organisation. The help and friendship that they offer is often more acceptable to many who shun what they think is officialdom, and voluntary bodies can make different approaches to the varying features and causes of these social casualties.
    I am also very interested in the problem of alcoholism. It is a growing menace in conditions of rising living standards and increasing tensions in social and working life. As the pace gets hotter, the temptations to ease the strain get stronger, and the end of it in some grievous cases is complete physical and moral breakdown. No one helps them by merely saying that they should never have got into that condition. It is a

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    medical and social problem. Moral censure on the alcoholic may be no more justified than on the heavy cigarette smoker who develops lung cancer, or the company director who eats too much and walks too little and collapses at his desk.
    In matters of health, many of us get what we deserve. Health education is the real remedy, but those of us who falter and fall must be treated as casualties and not left to a living death. Among alcoholics, the most tragic of all are the crude spirit drinkers who get right to the bottom. The Minister of Health and I, together with other Ministers, have received well-considered and weighty recommendations on the problem. The difficult job is to ensure that those who reach that low level have a reasonable chance of recovery and rehabilitation. We hope shortly to have more information about the numbers and conditions of such people, and then we shall look at them more closely.
    Sir Keith Joseph: I may have missed something. Did the right hon. Gentleman say that he was going to present a report on these matters in due course, or did I misunderstand him?
    Mr. Houghton: I have not promised to make a report. A report is being made to me, but I am sure that the information that comes to me will be of general interest, and I shall be very anxious that it should become well known.
    Mr. James Tinn: I should like my right hon. Friend to look at the appalling suicide rate, which amounts to something like two-thirds of the fatalities on our roads and which, for women, is higher than fatalities on the roads. Will he look into that factor?
    Mr. Houghton: We shall study any aspect of the problem which is relevant.
    That disposes of the two surveys that are in hand, and I now wish to refer to three studies that we are doing. One is on a subject which has fascinated me for a long time, and that is the relationship between what is sometimes called fiscal welfare and positive welfare; that is, child allowances for taxation purposes on the one hand, and family allowances on the other. The whole question of the future rate of family allowances is being considered as part of the Government's
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    long-term review of the social services. We have in mind the need to contain the total level of public expenditure and must avoid breaking out of it, but the Government have noted a number of interesting studies of this that have been made and, although it is by no means a straightforward matter, we are very anxious to have a look at it.
    Another study is on services for the elderly, the chronic sick and the handicapped. In progress now is a close review of the community care services for the elderly, the chronic sick and the handicapped. It is in three parts: health and welfare services for the elderly, housing for the elderly, and services for the chronic sick and handicapped.
    It is a big problem, and there are some interesting figures that I have never seen before of the numbers involved. We have to bear in mind that in mid-1964 there were in the country 6¼ million people over 65, of whom 2¼ million were over 75. It is estimated that 94 per cent. of them were living in private households, but there were 175,000 sick in hospitals and private nursing homes, 105,000 in residential homes provided by local authorities, voluntary bodies or privately, and 95,000 in hotels, guest houses, and so forth.
    There are some remarkable figures of the extent and scope of the existing services, inadequate though they are. Health advice in the home, through health visitors, for example, was given to 300,000 separate people. In the case of home helps, which as hon. Members know from personal experience in their constituencies, is an area of very great shortage, 300,000 were helped. We have to look now into adequacy. Another important question is the detection of welfare needs and, thirdly, whether any new services are required.
    The detection of welfare needs is especially important both in regard to the information which local practitioners can provide and health visitors. Various ideas are being put forward for a comprehensive welfare visiting system. But it requires money and it requires staff. It is an extra burden on the social services. Do we want it badly enough to pay for it and to be willing to make sacrifices for it? That is the issue confronting the Britain of today. How high is it prepared to set its new social

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    targets, or are we only willing to drift on giving the least that we can afford towards the improvement of life for others?
    Finally, I come to the employment of the older worker, which is something else that I have been very keen on for a number of years. Within 10 years from now there will be 9 million men and women over the minimum ages for the National Insurance pension. Are we going to classify all those as old age pensioners, and worry only about their pensions and general welfare, or are we going to think of something wider and perhaps more specific.
    The National Plan draws attention to the manpower position, and to the tendency in present circumstances, although it is probably caused by higher pensions and the extent of occupational pensions, for people who could probably stay on to give up work. The proportion of older workers in employment is in decline.
    I read the other day that in a work orientated society those who are not at work are out of the stream of life and suffering some form of social depreciation. Dr. Snelgrove, of Luton, has recently published a report entitled, "Elderly Employed" containing some depressing conclusions about the high proportion of people who are
    "unhappy, disillusioned and disconsolate"
    in retirement or because they are
    "not content or satisfied, or adjusted physically, mentally or spiritually to enforced retirement."
    One may criticise the small scope of that survey, but others have been undertaken, although a long time ago. Are we doing what we should to study this problem in the context of present conditions? The major studies of the past may be, to a large extent, out of date, and therefore I am hoping to set on foot a new study.
    Do we know enough about this problem? What can be done to remove obstacles at present presented by employers' pension arrangements? Are we going to tackle decisively the enforced unemployment caused by age limits under occupational schemes of those who otherwise could remain at work and continue a useful life? All this is of great interest
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    to the Government, and we are going to do quite a lot of work on it, and I am glad to see that the B.B.C. is going to run a series of nine television programmes on this topic.
    The one that I am waiting to see is called "Woman's View". The synopsis of this shows that
    "There are twice as many women as men between the ages of 65 and 70, and five times as many between the ages of 75 and 90. This programme will emphasise ways in which a woman's view is different from a man's— for example, the married woman who never retires but must adapt to her husband's retirement. The programme will also highlight some of the legal difficulties."
    Some men I know have retired and say that they hate it because there is too much washing up. Their wives enlist them for part-time work at home, and I think that it will be well worth while embarking on this study.
    Now I come to the end of my review of work in progress, and I will confine my remarks to two matters. First, the major review, which is making progress. I can assure the House that it will be thoroughgoing, and, I hope, radical— radical in the sense that it will discard much that is traditional, and even conventional, in our approach to these matters. It is not intended that everything should wait until it is all ready. The instalment of short-term wage-related benefits is an indication of how we can introduce different parts of a new and comprehensive system at different times.
    Here are the achievements and work in progress to satisfy, I think, the strongest critic, and even the extinct volcanoes sitting on the benches opposite. The stronger the economy, the more we can do. Even the Conservative pamphlet, this thing here, refers to "when economic circumstances permit", but to hear hon. Gentlemen opposite talk, one would think that economic circumstances did permit, at any time, to do everything, otherwise they would not be making such irresponsible criticisms of the deferment that we have felt bound to accept in respect of some measures. The overriding discipline of the economic situation must govern our activities, as well as those of any other Government that might be in our place, but we shall reject any censure from the benches opposite that we put off measures of social advance which either they would not have done at all or would

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    have been obliged to postpone for the same reasons as ourselves. I hope that in the interval we can take another leap forward to set ourselves new objectives and work more energetically to reach them.
    If we are looking for new aims in our national life, there is ample scope here. We are still one of the richest countries in the world. We still have one of the highest standards of living in the world. [HON. MEMBERS: "After 13 years of Tory rule."] We have the resources, aided and abetted by the energy of management and workers and by technological advance and skill. Governments alone do not do everything, even in 13 years. We have done quite a lot in the first year that the party opposite did not do in 13. We have the resources, and we have the skill. We have the means to make Britain a model of civilised living which would give full expression to the humanities and to social and cultural achievements, and I ask this question in conclusion: what better place can we conceivably wish our country to have in the world of tomorrow?
    3.45 p.m.
    Sir Keith Joseph: The right hon. Gentleman the Chancellor of the Duchy of Lancaster asked a number of rhetorical questions and showed at least that his mind was working on some of the problems which we, too, regard as important. But in the last passage of his speech he clearly showed that the country's present wealth and resources, which have to be deployed so as to take account of people's misfortune, for whatever reason, are due to 13 years of co-operation between Government, employers and employees for the greater prosperity of the people of this country.
    The right hon. Gentleman said that not even his strongest critic could fail to be satisfied with the progress report that he had made. I am not one of his strongest critics. I enjoy his speeches, but I am not at all satisfied by a lot of what he told us today, and even less by what he omitted to tell us.
    He blew five faint trumpets of complacent praise for his Government and himself on account of the five social service contributions in the Gracious Speech, and certainly some of these we can welcome in principle with him. Both parties
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    included wage-related benefits for unemployment— and in our case for sickness and widows— in their manifestoes. Both parties provided for increases in public service pensions, though I must say in passing that, from what the right hon. Gentleman has told us about the scale of increases which the Government have provided, for the newest pensioners it has already been far exceeded by the rise in the cost of living during the last year. We shall look with great sympathy on the Workmen's Compensation Bill which is published today, and for these three Bills certainly we have a warm welcome in principle; but the right hon. Gentleman then referred to the steps to be taken to improve the family doctor service.
    I thought that he dealt disingenuously with the intervention of my hon. Friend the Member for Birmingham, Perry Barr (Dr. Wyndham Davies). My hon. Friend asked the right hon. Gentleman how he reconciled what he had to say with the promise in the previous Queen's Speech to increase the number of doctors for the service of the public. The right hon. Gentleman did not say straightforwardly, as I suggest he should have done, that the Government do not contemplate increasing the supply of doctors. He implicitly accepted the assumption in my hon. Friend's question— which I presume my hon. Friend will explore further if he gets an opportunity to take part in the debate— that there will be more doctors in the near future. We all know the time that it takes to train and produce a doctor, but the Government should not seek to hoodwink the House or the country.
    Paragraph 11 on page 187 of the National Plan says:
    "No material change in the number of general practitioners engaged in the general medical services is expected over the next five years …"
    This is very odd, because we do not rely for extra doctors purely on training new ones. This is the most important component, but if the right hon. Gentleman the Minister of Health's negotiations are successful—and we all wish him well with them—surely one of the results will be to reduce the flow of doctors who at the moment are either leaving the country or leaving the general medical services? We cannot, therefore, understand how it is that the Minister of Health

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    and his right hon. Friends have already give up all hope of increasing the family doctor service, which means reducing the flow of dissatisfied doctors from that service. We hope that when the Minister of Labour winds up he will try to reconcile these different arguments.
    The right hon. Gentleman blew his fifth trumpet in praise of the progress that he expects to make in the local health and welfare services. This progress we heartily welcome. Again, page 189 of the National Plan makes it clear that the increases which the Government expect in the local health and welfare services exactly conform to the increases proposed in the health and welfare plans put forward by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) when he was Minister of Health. In other words, the Government are proposing to follow the pace set by the Tory Government in their last Session.
    The right hon. Gentleman will also have the great support of hon. Members on this side of the House in trying to rationalise the local authority personal social services. We are glad that a committee is to be set up to recommend what reorganisation is necessary. We hope that this committee will be given a brief to work fast and, if necessary, continuously, so that we do not have to wait too long for its recommendations.
    We shall await with interest the report of the survey initiated by my right hon. Friend the Member for Bridlington (Mr. Wood) into the conditions of retirement pensioners, and we are glad that the Minister is himself initiating an inquiry into the social misfits, inadequates and drifters. We would ask him particularly to bear in mind that these individuals, much though they deserve our pity, often leave behind them a trail of damaged family life itself deserving the closest relief we can give.
    We are glad that the right hon. Gentleman is looking into those problems that cross many Departments. His appointment and mine reflect the recognition by both main parties that there are in the social services many problems which cross Departmental boundaries and which require a synoptic view.
    After a year in his job the right hon. Gentleman asked a large number of
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    rhetorical questions, and he has apparently only just got down to identifying a number of problems into which we would have expected him to look far earlier. I have to deal with the social policy of the Government and also find time to deal with industrial relations policy, since the Minister of Labour will seek to catch your eye, Mr. Speaker, at the end of the debate.
    First, I want to point out one or two of the major casualties in the Gracious Speech. The right hon. Gentleman has already sought to condone the omission of the minimum income guarantee. This was one pledge that the party opposite made before the election which was absolutely unqualified in terms of our economic circumstances. The other main social pledges were hedged around with qualification; they were only to occur when economic circumstances permitted. But the minimum income guarantee was a priority commitment to be carried out whatever the economic circumstances.
    If it needed any emphasis, it can be pointed out that the election address of the Prime Minister said:
    "An income guarantee will come without delay."
    That was his own election address. It is no good the right hon. Gentlemen claiming that the economic circumstances have now made it impossible. First, they never made any such qualification when they promised it and, secondly, the economic circumstances are the result of their own blunders. First there was the blunder in wrecking the confidence on which this country's economic health depends and, secondly, a series of blunders in failing to take appropriate action when they had wrecked that confidence.
    Over the last year they have dribbled out a series of instalments— and the end may not yet have come— and it is only because of their incompetence in the first months and throughout the year in their handling of our economic affairs that they are forced to throw overboard a pledge the loss of which must hurt their consciences very deeply.
    But there is something that the right hon. Gentleman did not attempt to excuse, and that is the absence from the Gracious Speech and from the National Plan of any reference to half-pay

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    superannuation. This is another pledge which has been given year after year. The right hon. Lady the Minister of Pensions— who has explained that she has had to leave the Chamber for another engagement— herself said that the plan for half-pay superannuation,
    "vigorously and actually costed, was ready for instant application".
    Where is it? It is not in the Gracious Speech. We find on page 204 of the National Plan that there will be no significant effect on expenditure as a result of any major pension review of this sort by 1970.
    This is not just an absentee from the Gracious Speech; it is an absentee from the five-year Plan. The right hon. Gentleman, understandably perhaps, but oddly, since he was one who criticised the previous Government as evasive, failed to refer to or explain this in any way. We hope that he will do better next time in explaining to us and to the country why any of the Government's promises should be accepted when they fail both to carry out their promises and to explain what has happened to them.
    This is all in very great contrast to the coherent and practical policies which the Opposition have recently published or announced. [An HON. MEMBER: "Pie in the sky."] An hon. Members says, "Pie in the sky". I hope that he will listen to what I have to say. He will find that it is the very opposite to pie in the sky. We in the Tory Party build on what is practical and what exists, and do not offer— as the party opposite has so flagrantly done— something which we cannot carry out when we are in power.
    The economic position of this country at the moment is that earnings are rising and are likely to continue to rise. The difference between the two parties is that when the Socialists are in power the cost of living tends to rise as fast as or faster than earnings, whereas under a Tory Administration earnings rise far faster than the rise in prices. But with rising earnings and the prospect of middle-income status for our wage-earners not too far away in the future, it is clear that pensions should be wage-related, always provided that there is a decent base in old age for the lower-paid. It is proper for the State to see that people are covered by arrangements for
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    a decent income in old age, but it is not the job of the Government to squeeze out private savings by making obligatory pensions so expensive that the cost is excessive and prevents private savings taking place. Our proposals, taking into account these trends and factors, are, therefore, to retain the State basic flat-rate pension as the foundation on which wage-related pensions plus private savings can be built. We propose virtually to abolish the State wage-related pension scheme, which has done the job for which it was introduced a few years ago, although we shall naturally preserve the benefits earned under it.
    We can abolish the State wage-related pension scheme because the growth of private occupational pensions schemes has been so rapid. Already, 12 million out of an adult working population of about 20 million are covered by private occupational pension schemes, to a greater or lesser extent. Two-thirds of the adult men and one-quarter of the adult women in the working population are covered. More than £1,000 million— which is not pie in the sky—is being paid out year by year in contributions to private pension schemes, over two-thirds of that £1,000 million being paid by employers.
    There are already about 40,000 approved schemes, and 2 million people are drawing occupational pensions of an average of £ 3 10s. a week, although varying greatly one from another. What we shall do is to require all people earning over, say, £ 9 a week, and from the age of, say, 25 or 30, to belong to such an occupational pension scheme. We shall lay down minimum standards, including some provision for widows. Some of the existing schemes which do not reach these standards will have to improve themselves by a set date. We shall require the preservation of pension rights on change of job. I am glad to see the Minister of Labour nodding his head. This will be subject to reasonable qualifications. We shall require regular audits of all these occupational pension schemes.
    Every contribution under a private occupational scheme— or these private schemes— except for some public service pensions which are not funded— will be invested for the contributor or for his or her family if he or she dies before

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    or shortly after retirement. The pensions are genuinely deferred earnings. The benefits are and will be much better value than the existing State scheme or than any other viable or tolerable State scheme could provide. They will be better because the contributions are invested and will grow for the individual involved.
    The ending of the State graduated pension scheme will, of course, end also the contributions paid under it—
    Mr. Archie Manuel: The right hon. Gentleman indicated a figure of a wage of £ 9 a week as a starting point for the scheme. He knows that we have hundreds of thousands of people in full-time employment earning under £ 9 per week. Does he intend, under this scheme, to leave them out, or should they apply for National Assistance when they retire? What is his answer to that?
    Sir K. Joseph: I think that most men earn over £9 per week. There are very few who do not. Many single women, of course, earn over £9 a week. The person who earns less than £9 tends to be the younger person who is on his way to earning more and the married woman doing part-time work.
    As I say, we shall bring to an end the wage-related scheme, though we shall keep some residuary scheme for those people who cannot be covered, for one reason or another, by private occupational schemes. The ending of the wage-related contributions under the State scheme will, of course, be a saving for contributors—both employers and employees—but much of the money saved to employers and employees will be needed to replace the subsidy lost to the basic scheme by the ending of the graduated scheme.
    This will take some, but not all, of the saved contributions. All those 12 million people already in occupational private schemes will have no additional payments to make, except for the minority whose schemes may not reach the specified standards. In their case some extra payment, partly or wholly made by the employer, will be required to obtain extra benefits. The 7 to 8 million adults who are not now in private occupational schemes and their employers—
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    in some cases, no doubt, the employers alone—will pay the necessary contributions to obtain extra benefits. We shall naturally see to it also that self-employed people are covered for the same purpose.
    When all these schemes mature— and there are 12 million people now in such schemes, some more, some less, near to maturity— there will be no more poverty in old age. Meanwhile, however, we must treat those who are now retired and due to retire over the next few years with more generosity and humanity if their resources are insufficient for decent living. We must do this in such a way as to encourage and not discourage thrift. We have announced our intention to merge the Ministries of Health and Pensions and National Insurance into a new Department of Health and Social Security, with social policy research guiding our welfare, health and social security arrangements.
    We pay tribute to the way in which the National Assistance Board carries out its work, but we intend to abolish the Board as it now is, to transform its duties and to transfer them to the new Ministry. We shall transform them in three principal ways. First, we shall give officials the positive duty of seeking out those in need, both elderly and those in other age groups. This will be a much more tactful and acceptable way of providing help for those in need.
    Secondly, because we are concentrating on those in need and because this is virtually for the elderly an interim measure until private schemes mature for all, we shall be more generous in our arrangements for those in need. Thirdly, in order that none of this shall discourage thrift, we shall raise the disregards, so that people will be able to obtain help even though they have managed, by their own efforts, to save substantially more than is now disregarded.
    This is a coherent and practical set of proposals, which shows up the poverty of the Government's ideas. They have made known no broad strategy either of pensions or of social welfare for the elderly and those in need. We must, of course, give them the benefit of the doubt until their review has gone further, but we are entitled to deduce from the wording of the National Plan that they have no hope or expectation of making their old ideas

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    of half-pay superannuation effective even by 1970.
    I will now turn to the vital resources which alone can provide the pay and the buildings to support the social services. These resources can come only out of a rising gross national product, which, of course, is the result of industry and commerce working within the Government's policies. This country— this is not a party matter—desperately needs higher productivity and redeployment of labour. We are very much in favour of easing the lot of those people who have temporarily to accept unemployment between two jobs. Therefore, as I have said, we welcome wage-related unemployment benefits. Indeed, we advocate more training, better pay during retraining, more help for moving homes and a better Careers Advisory Service. In this approach, both parties are at one.
    However, there are other policies which are vital in order to increase productivity and to reduce over-manning. We can accept that responsibility for action and initiative, both in raising productivity and reducing over-manning, lies with management, but the responsibility for sensible co-operation in the interests of the country as a whole and of their own members in particular lies with the trade unions. We have announced our intention—my right hon. Friend the Leader of the Opposition has made this clear again and again—that we propose to stimulate both management and unions. Management will be stimulated by competition, by a more suitable tax structure, by requiring more information and by more management education.
    Management will succeed in raising productivity only if industrial relations are good. Broadly speaking, industrial relations reflect the quality of management over the years and we recognise the importance of spreading good management practices such as effective personnel management, good communications, good selection and training of supervisors and quick action over workers' grievances.
    When all that has been said and done, trade unions still have a position in this country virtually above the law. They can, and often do, block good management to the harm of their own members
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    and the country as a whole. Strikes and the threat of strikes interrupt production, damage output and productivity often over a far wider field than the immediate strikers, do harm to the reputation of our industries abroad and thus, injure our export performance. Strikes and the threat of strikes often lead to inflationary settlements. Of course, we can all agree that management should resist even the threat of a strike where they think a concession is wrong. Of course, they should not concede to unofficial spokesmen what they refuse to official spokesmen.
    A Government encourages irresponsibility if it allows demand in some areas far to exceed supply. I hope that the right hon. Gentleman noticed the article in the Financial Times a few days ago about the desperate search for virtually non-existent labour which is going on in the Midlands at the moment, with all the damage which that must do to the country as a whole.
    After acknowledging all that, it is still true that the privileges given to trade unions put them above the law. As part of a general strategy to increase efficiency and prosperity, which will include actions directly addressed to management as well as to trade unions, we have announced certain intentions for trade union reform.
    First, we think that the law does not protect union members completely from suffering hardship at the hands of the union and that when it does, the process may be long and expensive. We propose, therefore, what amounts to a Bill of Rights for trade union members. We intend that if associations of employers or employees are to be entitled to the privileges of trade union status they must submit their rules to the approval of a new registrar. It will be his job to see that these rules conform to certain basic principles.
    Secondly, we propose that the dispute procedure element of collective agreements should be enforceable against unions or management by way of fines— fines which, in the case of unions, anyway, should be limited. We believe that unions will be stimulated to improve their communications with their members by these means. We agree that if the fines were unlimited all sorts of dangers would follow, and I emphasis that in the case of unions we propose that the fines should be limited.
    The Minister of Labour (Mr. R. J. Gunter): I should like to have one point clear in order that I may consider my reply when I wind up the debate. It is argued that a breach of a collective agreement or a breach of a procedural agreement would be punishable. That leads to the next step. One cannot have a collective agreement covering an industry or a works unless there is a closed shop. Everybody must be party to the collective agreement. Do the Conservative Party now agree that a closed shop is desirable?
    Sir K. Joseph: I think that that is fundamentally wrong on two main counts. First, we all know of an industry in which there is a closed shop—the coal mining industry. There has been a long series—possibly explicable historically; I will not enter into that—of disputes in the mines, so that a closed shop in itself is no guarantee—witness the coal mines— of industrial peace. On the other hand, there is industry on industry and factory after factory in which unionisation ranges from nil to 90 or 95 per cent., and in those factories there is industrial peace. There may be many, there may be few, unionists in each factory. But industral peace, after all, depends generally on the trade union members, not upon those who are not trade union members.
    Mr. Gunter: I am not advocating a closed shop. I have never advocated a closed shop. What I am trying to find out is what action is to be taken in respect of men who are not in a union and who are therefore not bound by a collective agreement, although they have benefited from it. What does the right hon. Gentleman propose about them?
    Sir K. Joseph: I do not know of cases—and I should have thought that they would have come out in the newspapers—in which it is non-members of the unions who make trouble and lead unofficial strikes.
    Mr. Charles Mapp: They do.
    Sir K. Joseph: This fact does not come out in the newspapers and it has not appeared in the academic studies. Normally, the problem of the unions is a failure to control their own members, and it is to stimulate them to improve their control of members—which we do
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    not think in any way involves the necessity of a closed shop—that we advocate this enforceability of procedure agreements. The answer to the right hon. Gentleman is that we do not think and we do not accept that a closed shop is in any way a corollary to what we are proposing.
    Thirdly, we propose a new system of labour or industrial courts, local, regional and national, to deal with appeals from the registrar, to deal with charges that a union or management have broken a procedure agreement and to deal with dismissal grievances. The object in proposing this new system of courts is to provide quick, informal, cheap justice and so to deal rapidly with grievances which might otherwise fester to the harm of all concerned.
    Our fourth proposal is that where unions are established, employers shall accept the duty to recognise and the duty to negotiate with them if the majority of their employees desire it. This is something for which the unions have long asked.
    Our fifth proposal is that as the preamble to legislation we shall introduce a code of good industrial practice, non-enforceable, so that both employers and employees will be able to refer to a handbook of the best current practice as it affects all concerned.
    These are five suggestions which we have made, not forgetting that we are pledged to consult the Royal Commission, the F.B.I. and the T.U.C. before legislating. They are reasonable, moderate and constructive proposals. In fact, they are very much in line with the approach contained implicitly in the Minister's own evidence to the Royal Commission on Trade Unions. This is admittedly official evidence, and the civil servants rightly limit themselves to comment on the various alternatives, but they seem by implication to approve, or at least not to have strong arguments against, the proposals which we make. Ironically, it is only our proposal that the unions should in certain circumstances be recognised by employers that they seem to think unnecessary. The argument is on page 84 of the evidence.
    We well realise that there are big issues which we have not touched, and the biggest of these is restrictive labour

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    practices. We think that the spur which we propose to management through competition, the changed tax arrangements, and the disclosure, as recommended by Jenkins, of more information will set in process action by management to reduce and eliminate such restrictive labour practices. But there may well need to be something more.
    We certainly do not think that the Government are entitled to be pleased with themselves, as was indicated by the Prime Minister's speech yesterday. The Prime Minister yesterday went so far as to boast of an all-out attack on restrictive labour practices. He must not confuse himself or seek to confuse the House or the country with words, committees and commissions when what is needed is effective action and in some cases changes in the law. We all saw the comment of The Times on the virtually useless, if not damaging, proposal by the Prime Minister in September of production committees. The Times said: "This proposal came out of the blue to the Departments of Labour and Economic Affairs." The Times implied that it "contributes nothing to the solution of our real problems but is just a proposal for the sake of making a proposal".
    To go through the list of the boasts which the Prime Minister made yesterday, the Government have made the right noises about liner trains, but the test is still to come. We read in the papers this morning that the clash is still before us. We wish the Government luck and we hope that their courage will hold, but there is certainly nothing yet to boast about. On Devlin and the docks, we congratulate the right hon. Gentleman on the speed with which he moved on a number of Devlin recommendations, and again we wish him very good luck in the country's interests, but the test, again, is still to come. There is nothing yet to boast about.
    The Prime Minister quoted shipbuilding and boasted of an all-out attack on restrictive labour practices in shipbuilding. In fact, all that he has done is to appoint the Geddes Committee, an ill-omened name. We all know what happened to the last Geddes Committee— admittedly, headed by another Geddes; their proposals were rejected categorically
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    by the Government. The Prime Minister also boasted of an all-out attack on restrictive labour practices in printing when all that has happened is that Mr. Aubrey Jones has put down a description of some of the restrictive labour practices in printing, coupling it, it is true, with an invitation to report progress, if any, in the next year. We must hope that progress is made, but, again, the test Is still to come. The test is still to come in each and every one of these restrictive labour practice areas, for an all-out attack on each of which the Prime Minister so unjustifiably praised himself yesterday.
    Of course there is much wrong, but are the Government going to do anything about it? They never even mentioned the trade unions in their election manifesto. Before the election the Prime Minister sneered at the idea of a Royal Commission as "taking minutes and wasting years". He may well regret that witticism now, for a Royal Commission has been appointed, and the suspicion must remain that it was appointed only to save the Government from having to do anything about the trade unions.
    We ourselves raised this matter at the election, and we did not have anything in mind as slow as this method. If the Prime Minister and the Government recognise that there is a need for change and that that need is urgent, then may I repeat what my right hon. Friend the Leader of the Opposition has already invited them to do: let them invite the Royal Commission to report soon, and let them ask the members of the Royal Commission to sit continually for a short spell of time rather than for intervals over a long period. The preliminary work has been done and the evidence is coming in. I hope that the Minister of Labour will deal with that suggestion when he replies to the debate.
    I have had to go relatively quickly over social policy and industrial relations policy, but I think that there emerges from all this a consistent picture of a Government, whether on pensions or industrial relations and trade unions, having no policy and taking no decisions. We have had from the Chancellor of the Duchy of Lancaster a series of valuable but relatively minor proposals. We have had no word of encouragement about the major strategy that

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    lies ahead. A minimum income guarantee he has deferred indefinitely. Half-pay on retirement has gone into limbo and is not even provided for in expenditure in the National Plan. On trade unions there is certainly no smack of firm government—just words, and committees, and a Royal Commission—with all the tests of policy and Government courage still to come.
    We have announced our intentions in both these fields with relevant, constructive and sensible policies. The Government have no such policies. Both their record and the Gracious Speech by its omissions show that the Government in both these fields are evasive and ineffective.
    4.21 p.m.
    Mr. Michael Foot: No one who listened to the speech of my right hon. Friend the Chancellor of the Duchy of Lancaster will doubt or question the impressive nature of the measures which the Government have already produced in the field for which he is responsible or which he surveys, nor the importance of the measures which he and the Government are proposing to produce during the next twelve months. I do not believe that any charge could be levelled against my right hon. Friend or his associates about their energy in proceeding with these matters. I can, therefore, understand very well the embarrassments of the right hon. Member for Leeds, North-East (Sir K. Joseph).
    It was very difficult for the right hon Gentleman to explain why he took such a testy attitude towards all these propositions. In particular, I think that the right hon. Gentleman was in a specially awkward position in dealing with trade union practice. I am always a bit suspicious of Tories when they talk about trade union matters. I know that the Tories try to pretend that they are good friends of the trade union movement, that they have directed their efforts in the past to the welfare of the trade union movement, and that they approach these matters today solely for the purpose of assisting the trade union movement in overcoming its own difficulties. That is the kind of attitude they take. Very often Tories talk as if all the original martyrs in the cause were members of the Tolpuddle Conservative and Unionist Association. [Laughter.] They were not
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    even members of the Liberal Party. There is no need for Liberals opposite to laugh. The Tolpuddle Martyrs were martyred by a Liberal Government with the fulsome support of the Tories.
    We on this side of the House, therefore, are very suspicious about hon. Members opposite when they talk about all these matters, and particularly the trade union question. However, many of my hon. Friends know very much more about the trade union question than I do and, therefore, it is one of the subjects about which I have to keep my mouth shut, except when I deal with the irrelevancies of hon. Members opposite.
    We have had an impressive account from my right hon. Friend, and I have no doubt that when my right hon. Friend the Minister of Housing and Local Government outlines the housing Measures to be put through by the Government in the next few months that will be equally impressive, if not more so. Therefore, those of us who have criticisms to make of the Gracious Speech are not criticising because we do not think that there are many good things in it. Indeed, we do so think.
    It is my expectation and hope that we shall have a prosperous and successful Labour Government in office for the rest of my lifetime and even beyond. I dare say that many years hence I shall look down from my vantage point in some celestial place below the Gangway, and I shall be happy to study on 1st January in the year 2,000 how my right hon. Friend the Prime Minister has managed to capture the headlines on that day. I shall also be interested to see whether we have got steel nationalisation by then, and it will be interesting to study how many new Leaders of the Conservative Party have been elected in the interval by the Humphry Berkeley process, or it may be that the hon. Member for Lancaster (Mr. Berkeley) will be a candidate on that occasion, and if that should be the case and he should be elected modernisation will have come at last.
    I must say to my right hon. Friend the Prime Minister that there is one part of his speech which I criticise most severely, a part of his speech where I thought he spoke quite improperly and used language which certainly should not be used. I refer to the most ferocious

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    attack delivered by the Prime Minister on the right hon. Member for Wolverhampton, South-West (Mr. Powell). It was most unfair of the Prime Minister. I am sorry that the right hon. Member is not here, because I always like to pay compliments to people to their faces, whatever I may say behind their backs.
    The right hon. Member for Wolverhampton, South-West, in my opinion, is the best of the whole bunch opposite. He says what he thinks. It does not always get him very far, or other people for that matter. He says what he thinks and nothing will break him of the habit. Nothing will break me of the habit, except elevation to the highest office of State, but the Prime Minister is not in a retiring mood and, therefore, that possibility does not arise.
    The right hon. Member for Wolverhampton, South-West deserves great credit. To bury the British Empire in an official speech as spokesman on defence policy at a Conservative Party conference really takes some doing. All of us should acknowledge such a marvellous example of impudent daring. He also had some sense in What he said and, therefore, the Prime Minister should have been more careful in how he spoke about the right hon. Gentleman, particularly as so many of the other members of the party opposite are now following his course. The right hon. Member for Wolverhampton, South-West is the real Leader of the Conservative Party. He won that election a few months ago. He has got the rest of them mesmerised.
    One of the right hon. Gentleman's chief disciples—and I am sorry that he is not here—is the right hon. Member for Enfield, West (Mr. Iain Macleod). He has been converted to laissez faire in the last few months. He said in a speech on the National Plan that the great principle which the Tories must now establish, the one word which is the very keynote, was the word "choice". I must say that that statement coming from the right hon. Member for Enfield, West in the circumstances which we recall over recent years is surely a most gallant proposition. Nobody chooses him.
    As for the Leader of the Opposition, comments have already been made upon this and the matter was referred to by
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    the right hon. Member for Leeds, North-East. He referred to the so-called economic blunders which have led to the present situation. We all know that the Leader of the Opposition is very eager to kill what he calls this "disgraceful lie" about the £800 million and that he is going up and down the country telling us what really happened. I read his speech at the Conservative conference with great interest. It was a revelation to me. I had thought that we have got into those balance of payments difficulties because of circumstances beyond the Government's control at that time, or maybe a little bad luck, or something like that. But not a bit of it! The right hon. Gentleman said that it was all arranged by his colleagues; that they did it on purpose; that they left the biggest balance of payments crisis in history all according to their plan. If any speech could make it even more certain than it is already that we shall be very little bothered by the challenge of right hon. and hon. Gentlemen opposite, it is the right hon. Gentleman's own exposure of how, in fact, the legacy of the previous Government which has caused many of the difficulties of the Government was something designed by the previous Government. If they did it on purpose on one occasion, who knows that they might not do it on purpose again?
    However, as I indicated before, I am critical of certain matters in the Queen's Speech—or perhaps certain matters that are not in the Queen's Speech —and I am entitled to put some questions to the Government. In May of this year, this House of Commons approved a White Paper on Steel Nationalisation. Many speeches have been made from different parts of the House saying that it is very awkward for the steel industry not to know where it stands. I do not subscribe to that point of view, because it appears from all the production figures which the Steel Federation has spent so much of its shareholders' money on publicising in the newspapers that nothing is so good for the production of the steel industry as the threat of nationalisation. The longer that threat has gone on the more the production figures have gone up, so it is said. I therefore do not argue on that basis. But whatever the steelmasters may say, the people who work in the steel industry

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    and Members of Parliament and the public certainly have the right to know what is the Government's position arising from the fact that last year the proposal for steel nationalisation was in the Queen's Speech, and this year it is not.
    Let us, therefore, first look at the White Paper and ask the Government the perfectly proper question whether they still subscribe to certain of the statements which appeared in the White Paper and were presented to the House—and strongly supported by Ministerial statements—and eventually approved by the House of Commons in May of this year. For example, on page 7 we read:
    "It is essential in the interests of the British economy that the improvement in the efficiency of the iron and steel industry which can be obtained from the common ownership of its main units should be secured as quickly as possible."
    Later in the same paragraph we find:
    "In the Government's view, nationalisation of the main part of the iron and steel industry is the only appropriate means of securing quickly the benefits of common ownership."
    I agree with those statements, and I want a fuller explanation than we have yet had from the Government as to why the Government have changed their mind— if they have changed their mind—because it does not appear here. One cannot say in May that this is the course required to secure this action as quickly as possible and then not propose to follow up such a statement in November.
    Again, I am in absolute agreement with the view stated by the Government on page 15 of the White Paper:
    "An efficient and dynamic steel industry, fully co-ordinated into the Government's general economic plan, is of paramount importance to the country."
    The word "paramount" has something to do with priorities. One cannot say at one moment that something is of paramount importance to the country and at the next moment that it comes low down in the list of priorities. I am, therefore, entitled to ask why the Government have changed their mind on the paramountcy of this question.
    Mr. R. J. Maxwell-Hyslop: Perhaps the hon. Gentleman will recall Tom Lehrer's song:
    "So please remember, when we part in November, I told you so in May"
    Mr. Foot: After we had that debate in May on the White Paper, we passed the words I have just read to the House. We had some discussions within the Labour Party on the matter and, in the subsequent week, a statement was published on the decision of the Government. This confirmed what was said in the White Paper, and said that the Secretary of State for Economic Affairs had said that he was to have consultations with or listen to representations from the steel industry—[HON. MEMBERS: "And the Liberal Party."] He did not take much notice of the Liberal Party then, but we will come to that in a moment.
    The Minister was talking of the steel-masters and said that he would listen to representations from them. That caused concern to some of us and the statement was made:
    "Reference has been made to willingness to listen to any representation from the industry. It would have to be made clear that such consideration will not be allowed to delay the Government's timetable."
    That is a question of priorities.
    What is the Government's timetable for steel now? The National Plan says —quite rightly, in my opinion—that for the purposes of the National Plan it will be necessary to have a fundamental reorganisation of the steel industry. That is quite right, but the White Paper says that a prerequisite of securing the reorganisation of the steel industry is that it should be brought into public ownership. So what is the Government's timetable for steel now? When do they think that they will be able to take the measure which, on their own test, they say is necessary for the reorganisation of the industry? Whatever the steel-masters may say, the public have a right to know, if the Government have changed their timetable, when they believe this action will be effective, because the Government themselves have repeatedly said that drastic action is required to deal with the industry.
    I know that it will be said in some quarters that the postponement of this action is not only a question of Parliamentary priorities, which is what I have been referring to, but is a question of political manoeuvres—if one likes to put it that way; a question of how to deal with the Liberals and some others. We had some guidance given to us on this

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    matter in The Times on Monday—and here, again, I ask the Government whether this is a correct account. The political correspondent of The Times is a journalist greatly respected, I believe, in all quarters of the House, and someone who I do not believe publishes something in his column unless he has good foundations for publishing it. He is an honourable journalist. He will certainly not reveal his sources, and I certainly will not ask him to do so.
    This is what he said on Monday. Speaking of the Government, he asked: "What explains their confidence?" He answers that question by saying:
    "It is, above all, their secure sense that they have Mr. Grimond and the eight other votes that go with him"—
    once there were nine:
    "on their side in what will prove to be a de facto radical alliance.
    No, the ministerial voices explain"—
    so he has been listening to some Ministerial voices—unless he is a new Joan of Arc:
    "there have been no formal talks with the Liberals and no crude horse-trading."
    Has there been any subtle horse-trading? The article continues:
    "Mr. Grimond and his squad will be as unhindered as before to come and go in the division lobbies."
    That will not mean any great change for anybody:
    "But make no doubt that those nine votes— producing an effective majority over the Conservatives of 20 or so—will be at Mr. Wilson's disposal on his days of need.
    If you press for a little more chapter and verse, the admission comes that these are no more than inferences drawn from what is called the demeanour of the Liberals in smoke-filled rooms. That, in turn, is a euphemism for saying that the Liberals now seem to know which side of their bread is buttered."
    That is a bit of a change from the Liberal Party conference. There they were talking about getting their teeth in the red meat. Now they have come down to bread and butter, which, in my opinion, is more than they deserve. When the Leader of the Liberal Party said at his conference that he was getting his teeth into the red meat of power, so horrified was one-tenth of his party— the hon. and learned Member for Cardigan (Mr. Bowen)—at this appalling spectacle that he took the pledge of a
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    permanent vegetarian diet for the rest of his political career. As for these red meat-eating Liberals, a more obviously milk-fed lot of carnivores I never saw in my life, with the possible exception of the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie). who has a vested interest in the matter.
    Mr. David Steel: Does this mean that the hon. Gentleman will never show any gratitude on any occasion when we happen to support the Government in the Division Lobby?
    Mr. Foot: I shall explain my attitude to the Leader of the Liberal Party and his colleagues as clearly as I can. It would be very foolish and particularly dangerous if the Government were to make any kind of horse trading—that is the word. I think—with the Liberals, crude or not, on matters on which the Labour Government have made commitments to my constituents and to other persons who have sent many more than the Liberals to the House of Commons.
    Although when I look across at the Liberal benches I do my best to maintain a humorous vein, these are not humorous matters. It would be quite wrong of the Government and highly dangerous—indeed, it might be the only thing which could destroy the long-term prospect of Labour government in this country—if they were to forsake principle for manoeuvre and were to think that they could get solid backing for their policies by an agreement with the Leader of the Liberal Party. I do not say anything against the Leader of the Liberal Party personally, but I recall that the most diligent activity that I have seen from him in the House of Commons during the whole of the period that I and he have been here was in fighting the great radical Finance Bill that the Labour Government introduced last Session. I had never before seen him here so often. I scratched my head and wondered why the Leader of the Liberal Party was turning up so diligently to fight on the issues of the Capital Gains Tax and the Corporation Tax. It may be because I am a cynical type of fellow, but I could not help thinking that the right hon. Gentleman's activity at that time had some connection with the local election results. At that time the Liberals thought that

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    the Government were unpopular, so the Liberals thought, "We had better move away from the Labour Government as far as possible in case there is a disaster and we, too, go down". Therefore, I would not advise the Labour Government to place much trust on a reed shaken by every wind. It will not do them much good.
    Mr. T. L. Iremonger: Did not the local elections take place before the main debates on the Finance Bill?
    Mr. Foot: As the election results came through the animosity of the Leader of the Liberal Party against the Government increased.
    I regard it as a grievous disappointment, to use the words employed by my right hon. Friend the Chancellor of the Duchy of Lancaster—I am sure that he used those words absolutely sincerely— that steps to secure the introduction of an incomes guarantee have been postponed. Of course, this is a grievous disappointment to me, and I do not say that in any sense in mockery of my right hon. Friend. However, it is equally a grievous disappontment to me that the Steel Bill, which should have been in this Gracious Speech, is not mentioned there. I am entitled to say so. I and those of my colleagues who share my view on this matter intend to table an Amendment to the Gracious Speech to express our views, so that those who have sent us here shall know, amongst other things, whether we are fulfilling the views that we were sent here to state and to represent.
    I am certainly gratified that, although the Government are dropping the proposal this Session—I withdraw none of my criticisms on that score—they have made it clear that it remains in the Labour Party's programme. That commitment is absolute—is it not?
    Mr. Houghton indicated assent.
    Mr. Foot: I am very glad to learn that. The commitment of the Labour Party, the principle of public ownership and of introducing it as speedily as the Government think it is possible, is absolute. That means that steel nationalisation will be in the next election pro-
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    gramme of the Labour Party, if we have not been able to introduce it before— does it not? [HON. MEMBERS: "Answer."] I am sure that the best person to answer that question is my right hon. Friend the Prime Minister. [HON. MEMBERS: "Where is he?"] I make no complaint about the fact that my right hon. Friend is not here. He has many other matters to deal with. I am sure that he will answer it. I have not any doubt about what his answer will be. [HON. MEMBERS: "Oh."] His answer will be, I am sure, that steel nationalisation will be in the next election programme of the Labour Party, if we have not been able to carry it out before.
    That should be understood in all quarters. It should be understood by the Liberals. It should be understood by the Tories. It should be understood by the steelmasters. I have taken all this load of anxiety off their minds! The Measure will go ahead. And speaking not only for myself but for a few others, the sooner we go ahead with this project the better.
    If the Labour Government say, "We have not got a majority here and now for such a Measure", which they say is essential to the economy of the nation and is paramount in the interests of the nation, if they have not got that majority in the present House of Commons they should make up their minds to get that majority as speedily as possible. Therefore, I am in favour of an early election. [HON. MEMBERS: "Hear, hear."] I think that it would be good for the nation, good for the Labour Party, good for the economy, because it would enable the Government to carry out the whole of their programme, and good because it would transform into deeds what the Prime Minister said at the end of his speech, namely, that the Conservative Party has become an irrelevancy.
    The Conservative Party is an irrelevancy, but there are still too many Conservatives here in this place. We have some arguments about the reform of the House of Commons. I am in favour of the reform of the House of Commons, and the greatest thing wrong with the House of Commons is that there are too many Tories in it and a few too many Liberals. Let us have an election as early as possible to remedy this state of affairs.
    4.48 p.m.
    Sir Tatton Brinton: It is a grave disadvantage to be called immediately after such an admirable orator as the hon. Member for Ebbw Vale (Mr. Michael Foot) has sat down. As I listened to that horny-handed pillar of the trade unions, with his hands calloused by long use of his pen, I realised how unworthy I was to speak on any trade union matter. The hon. Gentleman spent a great deal of his time attacking the Tory Party, and subsequently the Liberals; so long, in fact, that I began to wonder whether the steel in his soul was about to be sublimated.
    However, the hon. Gentleman eventually came back to the burning question in which he and certain of his hon. Friends are chiefly interested—the fate of steel nationalisation. I think that the hon. Gentleman can set his heart searchings at rest. The Prime Minister is well on the way to dropping the word "Socialism". In fact, I think that he has already dropped it. The word "Labour" is becoming used less frequently. The word "radical" is gradually taking the field. If I were the Leader of the Liberal Party I would be very worried, because I believe that the Prime Minister is about to lead his party into the Liberal camp under the general name of "radical". If I may offer a word of advice to the Leader of the Liberal Party, I recommend that he remember the words of Lewis Carroll,
    "'If this should stay to dine', he said, 'There won't be much for us!'"
    I turn now to a question which bears on industrial relations and has rather more to do with the practical matter of industrial costs. We are at present very much concerned, on both sides of the House, about unofficial strikes and the way they impinge both on morale and on the prosperity of industry. I do not underestimate this as an important factor particularly in relation to morale, but let us not get lost in the idea that unofficial strikes or strikes of any kind are really a major cost to the economy of the country as a whole. I do not believe that they are. But what is a major cost, and what should be a great worry to us on all sides, is the gradual upward creep of wages and salaries unrelated to an increase in production.
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    The approximate figures which we have heard recently in the House show that, in the course of the last year, there has been about an 8 per cent. increase in actual earnings accompanied by only about a 1 per cent. increase in output. This is the crux of the matter. How has it come about? I shall point to one or two ways in which it happens, very often imperceptibly and not necessarily because of new negotiated agreements but by a sort of automatic process which we must find some way of restricting in order to keep increases in line with rises in production.
    The sort of thing I have in mind is the constant demand for shorter working weeks. This is an objective which one could well support if it meant that people wanted and needed a shorter working week and really proposed to work it. But, in fact, they do not. The figures show conclusively that the number of hours actually worked in industry, 47 or 48 hours a week, has not varied in the last 20 years. Negotiation for a shorter working week is, in fact, negotiation for an increase in earnings for the same length of working time. This is one of the sources of the creep. It is a very subtle way of negotiating because most people, including many employers, would agree that greater leisure throughout the country is something to be desired, and it is difficult to argue against it. But the case is genuine only when the shorter working week is actually worked at the normal place of employment and people do not take on a secondary job.
    In my view, it would be much in the interest of trade unionists themselves and of the country at large if there were concentration of attention on longer holidays. The case is proved by the figures. The fact that people continue to work 47 or 48 hours a week, on average, proves that this is, by and large, a fairly natural sort of working week. I imagine that most hon. Members work a very much longer week than that, but I do not see that many of them look too miserable on it. It seems that the natural working week is the length of time that most people prefer to work, that is, about 45 hours a week or a little more. I am sure that what most people would like— it is certainly what I should like—is a longer annual holiday, preferably a whole

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    week or fortnight extra each year which they could really call their own.
    I am glad to see the Minister of Labour present, and I put it to him that the actual effect on costs of an extra week's holiday, assuming an average of 48 or 49 weeks worked in the year and the same pay expected to be received, would be a fraction over 2 per cent., but a reduction in hours from 42 to 40 would represent an addition to costs of 5 per cent. directly, assuming the usual agreement whereby no pay is lost. In fact, of course, it would amount to rather more than that because the two hours are not added on as a straightforward cost but will subsequently be paid for at overtime rates, inflating actual costs even further to an average of—if I have the figures right—something like 5·8 or 5·9 per cent. Thus, for the same hours and the same work produced there will be an addition to costs of up to 5·9 per cent.
    Would it not be better for the Government and for all of us, employers included, to say that, at the present stage of industrial development in this country, extra holidays are the right thing and shorter working weeks, by and large, are not? Would not this make much better sense and have a much better effect on our industrial costs? In my view, it would be a far better way to progress in the future in what we hope will be a constant improvement in the terms and conditions of work than the way we are going at present.
    I come now to the question of piecework rates and their actual effect in industry. I do not criticise piecework because it is an inescapable necessity in very many types of jobs where the man can control the output of the machine. It may well be inevitable that piecework should be the method adopted in such cases, but there is a consequential difficulty created in many industries by the piecework system, and it arises in this way. A new machine is developed by people quite outside the shop floor and it is then introduced. The immediate demand is that the savings from the use of this machine should be divided, usually under some sort of agreement whereby the firm saves a bit of money, the price to the customer, so it is hoped, is marginally reduced, and something goes to the shop floor worker. On the face of
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    it, that is a perfectly fair arrangement, but the result often tends to be that the piecework earnings of the man operating the machine gradually rise out of due proportion to the earnings of the man supervising him, of the engineers who produce the machine, and of the skilled man working on time rates.
    The man working on time rates, very often a highly skilled fitter or something of that kind, does not receive any of the benefits of new inventions or developments except as a result of negotiations which, while raising his earnings, will at the same time raise the pieceworker's earnings as well. This is one of the dangers of reliance on piecework, that it produces an imbalance between the time-rate worker's earnings and the pieceworker's earnings. I am sure that many trade unionists will be able to confirm that.
    There is a problem here, and I do not see how the Government themselves can tackle it. It is much more a question on which the employers and the unions should concentrate in the future, to ensure that the highly skilled man on time rates is not penalised by being on time rates because it is impossible to measure the actual work he does by normal measurement methods.
    I come now to another question which is probably a more long-term one for high-level agreement between the T.U.C. and the C.B.I., or possibly for Government action. I refer to the impact which agreements, often not in major industries, may have on other firms in the same industry, then on other industries, and in due course on the economy of the country as a whole. How much longer can we accept that agreements can be made, as it were, in a vacuum, to suit only those people making them and without reference to the economy as a whole? This is probably a truism, but it raises a dangerous aspect of our industrial life for the future.
    The argument in favour of a particular agreement may be that the firm is doing very well and can afford to pay more wages. No doubt, that is perfectly true and a quite fair argument, but the raising of wages in that firm will entail demands in other firms, then in other industries, and so on throughout the economy by the sort of spread of wage levels which goes on. This process will take place although, very often, the basis

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    on which the later rises are agreed will not at all be the basis of the original agreement.
    I put this question to the House without myself knowing the answer. Perhaps the Minister of Labour may have an idea himself. To what extent will it be necessary—I should very much regret it, but it may be necessary—for the Government in future to take a much closer look at these developments? The Minister may say that the Prices and Incomes Board exists for precisely this purpose, and perhaps it will be able to do something, although I rather wonder what sort of teeth it will need for the purpose. To what extent will the Government in future have to look at wage agreements, particularly in more important firms, from an overall point of view, first, with reference to the particular industry and, second, with reference to industry as a whole?
    It seems tome that many of these difficulties would be reduced, though not necessarily solved, if the trade unions could only bring about a radical reduction in the total number of unions operating. This is another truism, but my own firm, which makes carpets, already deals with five different unions. Does a carpet factory need to deal with as many different unions as that? Surely, one or, perhaps, two would be all that are necessary, although I recognise that certain of the skills which are used might be well outside the scope of carpet making. We must all know of instances in which it is a question, not of five unions but, perhaps, of as many as 17 or even 20. In Germany, I am told, there are only 16 unions covering the whole range of industry. That may be too few for this country, but we have 170 affiliated to the T.U.C. alone and probably many others which are not affiliated.
    Somehow or other this problem must be tackled. I understand that it is being tackled already in the building trade. It will be interesting to know from the Minister when he replies how much success there has been in amalgamating, I believe, seven unions in that trade which are now trying to produce one overall building union. This is very much a step in the right direction. Obviously, every pressure, assistance and
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    persuasion should be used to cut down the excessive number of unions, which makes it exceedingly difficult to arrive at agreements which are valid within a given factory. When one makes an agreement with one lot of people in line with their general national agreements, and another agreement in line with another union, the two frequently do not match, friction arises and out of it all can grow industrial difficulties and bad relations. One single union within a given factory would be an enormous help in establishing better relations. I would hope that we could make progress on these lines without having to uproot the whole system from the ground up.
    Mr. Simon Mahon: As the hon. Member is in favour of having only one union, would he be in favour of having one employer on the Liverpool dockside?
    Sir T. Brinton: That is a question which I would prefer to have addressed to somebody with direct experience of the docks. I do not have that experience, so I will not attempt to answer it. What I said was that in a given place of work it would be a convenience to deal with as few unions as possible, preferably only one, although I admit that in some instances one alone might not necessarily be appropriate.
    We should try to reduce the number of unions which have to be dealt with, so that they may themselves have wider authority over a given industry in making agreements and to cut down the enormous complication and the vast amount of time which is wasted. Managements waste a great deal of time, and so do union representatives, in negotiating in matters of detail merely because of the multiplicity of bodies that have to be dealt with.
    5.3 p.m.
    Mr. Gregor Mackenzie: In the very nature of a general debate of this kind it is inevitable that we jump a little from subject to subject. I trust, therefore, that the hon. Member for Kidderminster (Sir T. Brinton) will not think me too discourteous if I do not follow all his remarks. I found the hon. Member's comments on the need for a longer working week rather interesting.
    Sit T. Brinton: I did not ask for a longer working week. I ask for a cessation of the constant "phoney" cutting down of the existing week.
    Mr. Mackenzie: I appreciate the point. The hon. Member must, however, look into the minds of many of those working in industry to find the reasons why they have constantly asked for a shorter working week and why, at the same time, a number of them ask for overtime. There are probably good historical reasons for this. In the part of the world from which I come, a man going for a job very often asks whether there will be overtime on, say, Tuesdays, Thursdays and Sundays. In the nature of things, this is because he tries to put away as much as he can for a rainy day and he feels that by working overtime in this way, he can afford himself a measure of protection when unemployment hits him, as it has hit the people of Scotland often and hard in days gone past.
    My comments, however, in this general debate must, in common, no doubt, with those of other Scottish hon. Members, relate more to the proposals contained in the Gracious Speech concerning Scotland. When I looked at the Gracious Speech and read it carefully, it was a long time before I saw any reference to the Government's proposals for Scotland. They come almost in the last paragraph of the provisions which are set out. I was a little taken aback to see that we had been relegated to the last page and almost the last paragraph.
    It was only when I had time to think about it that I appreciated that as a result of the Measures envisaged in the remainder of the Gracious Speech, we in Scotland will get advantage from parallel legislation; and, secondly, that since the paragraph in question in the Gracious Speech is widely phrased, it means that many hon. Members from Scottish constituencies will be able to offer to my right hon. Friend the Secretary of State and his colleagues their opinion about how he might use the blank cheque which has been issued to him in the Gracious Speech. We can put forward many of our hopes and aspirations and I have no doubt that many hon. Members from Scotland could fill quite a catalogue with their hopes for the people whom they represent.
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    We have in Scotland an old saying that "the greetin' bairn is aye fed first". It means, roughly, that he who cries the hardest is most likely to succeed in getting his demands met. I suppose that during the course of the next few months we will use this method to put our point of view to the Government.
    This is also, however, a time for stocktaking, as the hon. Member for Scarborough and Whitby (Sir A. Spearman) suggested yesterday, and I should like to make one or two comments on what has happened in Scotland over the past year. This also is important because, like so many other hon. Members, I was deeply concerned in past years with the real and serious consequences of the former Government's policy as it affected employment in Scotland.
    We have all been delighted this year to find that unemployment is now at a lower figure than for a very long time. It is not as good as we would like it to be, but it is a great deal better than it was as a result of the work of the previous Administration, when sometimes, in Scotland, even during the last five years, despite the buoyancy of the economy in other parts of the country, we had over 127,000 people unemployed. That is a very high figure, even for a country like Scotland.
    Notice taken that 40 Members were not present;
    House counted, and, 40 Members being present—
    Mr. Mackenzie: It is perhaps a little embarrassing for an hon. Member to have the House counted while he is speaking, especially if he has been on his feet only for two minutes. The benches opposite had very small representation. I counted only seven hon. Members opposite. It is worth pointing out that very few of those who indicated earlier that they intended to speak have remained in their places. Perhaps this is something to which we can look forward as a matter of Parliamentary tactics.
    Sir D. Glover: On a point of order, Mr. Deputy Speaker. The hon. Gentleman referred to people who had, he said, indicated their intention to speak. No one can indicate who is to speak except the Chair.
    Mr. Deputy Speaker (Mr. Roderic Bowen): That is not a point of order.
    Mr. Mackenzie: I am sorry if I have offended the susceptibilities of the hon. Member for Ormskirk (Sir D. Glover) but a number of hon. Members opposite rose in their places earlier and I took that to be obviously an indication of their desire to speak.
    I was saying that in this last year in Scotland unemployment has been kept down to a reasonable level and that some 233 firms with about 20,000 jobs have indicated their intention to set up business north of the Border. It may well be that some people will think that this is merely accidental, but I hope that the Government will continue to foster greater expansion in Scotland as being really worth while.
    During the last Session, many right hon. and hon. Members opposite claimed that the Government were reaping the rewards of the legislation introduced by their predecessors. We in Scotland have only one comment on that proposition. Although the Conservative Government were returned in 1951, it was not until about 10 years later that they tackled the problem of unemployment in Scotland by introducing the Local Employment Acts. I was delighted to hear my right hon. Friend the Prime Minister say that he is anxious to bring them up to date. Many of us have had serious reservations about them. I hope that in the next few days we shall hear from the Government precisely what changes they hope to make in giving the Acts more relevance in 1965 and how Scotland can be brought even further from the difficulties seen in years past.
    I cannot deny that, to some extent, the Acts have been helpful, but they have not been helpful enough. During the last year the Government have spent between £ 11 million and £12 million on improving the Scottish employment figures and prospects under these Acts and one must acknowledge their action. But I hesitate to think what might have happened had the party opposite been returned to power a year ago when they would have had to deal with the balance of payments problems.
    I remember a speech made by a leading member of the party opposite in 1963.
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    He said that the Acts were designed to help growth areas, which would be given preference over other parts of the country. He said that, no matter how growth was curtailed in other parts of the country, places like Scotland would receive special consideration, always allowing that there was ability to do so. I hesitate to think what would have happened if the Conservatives had had to deal themselves with the situation they left in 1964.
    It is important to note that most of the work to be done in helping the Scottish people will come from outside Scotland. We want to encourage many newer industries in Scotland— for instance, manufacturers in computers and electronics. The core of the problem in Scotland for a number of years has been too much dependence on primary industries. There has been no great desire to change the structural pattern of industry. We have suffered from our lack of desire to change. But changes are becoming acceptable to the people, including the employers and trade unionists. The Scottish Council has gone out of its way to work with the Secretary of State in bringing more industry and newer types of jobs to the country.
    But we have to make sure that our people not only accept the new challenges but are ready to meet them in working in these newer industries. In this respect, our education is not as good as it might be. It is asking a great deal of workers to change jobs and homes and we must be prepared to look at that aspect as well. I remember speaking about education in last year's debate on the Queen's Speech, when I pointed out that Scotland was not a wealthy nation and had to depend on the skills and talents of its people, who must, therefore, be trained properly to take their part in industry and the future development of Scotland.
    Although we are anxious to welcome newer industries and projects, we are very short of skilled men. My right hon. Friend the Minister of Labour is well aware of the shortage. When one wants to find a really skilled Scottish engineer one is as likely to find him working in Coventry or Birmingham as in a Scottish shipyard. It is a sad commentary on the last Administration that so many of our people have had to seek work elsewhere.

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    The education not only of our adults but of our young people is a very great challenge. It is popular to talk about the "brain drain" of skilled engineers or of emigration from Scotland but we must face the fact that, at rock bottom, the problem is one of educating people in primary and secondary schools.
    We expect a great deal from young people in the schools. I am delighted to see the reference in the Queen's Speech to the need for comprehensive education and to the desire for the Government to recruit more people to the teaching profession. It does not specify my part of the country, where we operate a different system, but I take it that these measures will apply there as well.
    Then we must deal first with the very serious shortage of staff. For many years, we have had the advantage over our friends south of the Border in that we have had a special recruitment scheme which has worked wonders in the last few years, bringing into the profession people who left school early and then had second thoughts, when they took advantage of Government money and the training accorded by technical colleges, colleges of advanced technology and the universities. This process must continue.
    I also want reorganisation of university courses which will enable them to give a broad and liberal education but at the same time will not deny opportunity to people who would otherwise take part in working in our schools. I am sorry that I quarrel with some of my colleagues sometimes on this but I cannot accept that married women teachers and retired people are the answer to the problem of teacher shortage in Scotland. The base of this lies, first of all, in the money which we pay to our students, and the money which we give them when they qualify. Many years before I came to this House I was the vice-president of the Scottish Union of Students, in charge of student grants. I remember, time and time again, advocating then that a student was putting in a full day's work and should be treated as an ordinary working member of the community. If we are to do anything for him, and expect much from him in the years ahead, then we must give him a decent wage while he is working, either in technical college or university.
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    I was terribly disappointed to read about student loans in a newspaper. I am not at all certain who began this exercise in kite-flying, but I am happy to say that it does not seem to be coming from any of my colleagues on the Front Bench. Lest anyone throughout the country gets the notion that there is any support for this idea on these Benches, I want to say that I find it the most pernicious nonsense which I have read for a long time. It is, I trust, not part of the policy of Her Majesty's Government to have education of this kind on hire purchase. We want more students in our universities, and we want many of them to enter the teaching profession. I hope that we will continue, not only to give student grants, but to improve the grants in the years ahead.
    I am not certain that the measures which I have suggested will improve the supply of teachers. It is important that we should not think that we can get away with anything other than the spending of a great deal of money. It is also important, when we get these teachers, that we should have very much better buildings and equipment for them. I have read with interest some of the comments made by hon. and right hon. Gentlemen about the need to spend money on buildings and equipment for our primary and secondary schools. I sometimes wish that they would have a chat about these matters with their colleagues who serve on local authorities and persuade them that this is the right course to adopt.
    For many years I served on a local authority, and whenever we wanted to spend money on a school building or to buy expensive equipment we found that the members who are supported by those on the other side of the House were always first to protest about the spending of public money in this way. I hope that I shall be forgiven for making what seems to be a purely constituency point. It is not such a point because it applies to the whole of Scotland. In this matter of building we have suffered a great deal in the last few years. We started late and we had a lot of slum schools. Even the previous Administration had a long way to make up. During the last decade, however, there were cuts and this held back our school building programme very seriously.

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    The present Government are introducing comprehensive schools. This may not seem to tie in with my last point about delaying school building but it has the effect that, whenever the Government indicate their desire for comprehensive education, there must be a reassessment of school buildings, a reappraisal of school means, and this delays the drawing up of plans, in the hands of the local authorities. The local authority of Lanarkshire is most anxious to take part in a scheme of comprehensive education. I hope that the Government will give what assistance they can because a very great responsibility rests upon them to do so, both to provide the local authority with money and to give it technical advice.
    Soon we in Scotland expect to receive, from the hand of the Secretary of State, his economic plan. It is a plan which has today been attacked in one of the popular newspapers—before it has been published. It seems to be something of a fashion When any of our economic plans are introduced. I hope that, in introducing the Scottish economic plan, the Secretary of State and his colleagues will be mindful of the need for education and re-training, because it is only in this way that we can make an effective contribution to development in Scotland.
    5.25 p.m.
    Mr. R. Gresham Cooke: The hon. Member for Rutherglen (Mr. Gregor Mackenzie) will excuse me if I do not follow him in talking of Scotland. I think that we ought not to let this opportunity pass without congratulating the hon. Member for Ebbw Vale (Mr. Michael Foot) on his brilliant speech. I am sorry that he is not here but I was delighted to hear him call his party back to their first principles, back to their true Marxist origins, and also to throw some shafts of wit upon the scene.
    Mr. Eric S. Heffer: Will the hon. Gentleman vote for steel nationalisation?
    Mr. Gresham Cooke: When the hon. Member catches the eye of the Deputy Speaker, perhaps he will tell us the difference between nationalisation and Marxism. The speech of the hon. Gentleman the Member for Ebbw Vale was rather a relief after the two very dull speeches we had from the Government
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    Front Bench—the Prime Minister yesterday and the Chancellor of the Duchy of Lancaster today.
    I thought that the Chancellor of the Duchy of Lancaster made the sort of very worthy speech that one heard in W.E.U. halls from Fabian speakers before the war. I wanted to ask myself, "What has happened during the last 12 months, where is all his bounce, his ebullience, his ' Mr. Toad of Toad Hall' spirit that he used to show us in opposition? Have 12 months of Government ground him down to such a dull and dreary speaker? "Dear me, what it must be to be a member of the Labour Government in such sad days. He told us one thing—he appreciated that we have the second highest standard of living anywhere, and we all know that is due to the 45 per cent. increase in the standard of living that took place during 13 years of Tory Government. In this non-Socialistic budget, for which I can see troubles coming from Left-wing constituency parties which are going to say that the Government are trying to steal their policy, there are matters which will have to be discussed in detail, such as, for instance, the sentence in the Gracious Speech:
    "Legislation will be introduced to lessen the injustice of the rating system and to limit the burden of rates."
    On behalf of the ratepayers in my constituency I want to put forward three points which I hope we will see included in this legislation. I hope that assistance will be given to those possessing under £10 a week, so that they may be relieved of rates by the Government. I would like to see teacher training and further education taken over by the Exchequer and a new formula created for assessing the general grant, which would assist boroughs such as my own—the grant for the extra assistance that is given for the number of children per head of population. At the moment the extra grant is assessed at 110 children per 1,000 of population. My borough falls just below this figure and does not qualify for a grant. I hope that that is the sort of matter which will be attended to in this forthcoming legislation.
    Surely the most important sentence in the Gracious Speech is the one which says:
    "My Government will …develop the policy for …prices and incomes …will

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    introduce a Bill for this purpose, and will continue to develop the policy in co-operation with all concerned."
    That is the most important pronouncement by the Government. It is the sentence by which the Government will stand or fall in the next year; and, in my view, it will probably fall. We should say to ourselves every morning before breakfast, "Nearly all our reserves are borrowed and we have to pay them back". We have to pay back £1,000 million.
    The Government hope that the balance of payments will be all square in 1966. I hope so, too. But over the four years from 1967 to 1970 over £900 million must be repaid under the international agreements. That is our duty. To achieve a balance in 1966, as we still have to cut down our imports, we cannot afford a rise in output next year because we cannot afford the extra imports which such a rise would entail. According to my calculations, in the next four years we can afford only a rise of 2½ per cent. per annum. If we had a bigger rise, we should run a deficit.
    We were told by the Chancellor of the Exchequer the other day that public expenditure is due to rise 4¼per cent. per annum in the next four years. In those circumstances, the public expenditure is bound to become a greater percentage of the national output and therefore a greater burden on the taxpayer if, as I believe, we hold output to a maximum increase of only 2½ per cent. up to 1970.
    Can the cost of living and wage settlements be contained within the figure which is adumbrated? In 1963 and 1964 they were held to a rise of 4·5 per cent. But, in the third quarter of 1965, the increase had risen to 6·2 per cent. On 31st October the Chancellor of the Exchequer said that earnings were still going up faster than productivity and that in the first eight months they had increased by 8 per cent., which, as he said, is bound to lead to an increase in prices. Therefore, I cannot see how we can maintain present prices or our competitive position in exports in 1966.
    A year ago, in the debate on the autumn Budget, in referring to the Secretary of State for Economic Affairs, who was then trying to get the T.U.C. to agree to an incomes policy, I said, "Good luck. Have a try. I wish you success". He
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    has tried. No doubt he finds it very trying indeed. But it is no good being a Member of Parliament with business interests unless one can bring the experience of such business to the House, and I will try to do that quite shortly.
    I am associated with a company which uses timber as its main raw material. The directors tell me that the price of timber has increased 22 per cent. in the last year. Much of it is imported and is dependent on world market conditions. The company will find it impossible to maintain its present prices, however much early warning or advance notice is given to the Government.
    As the House knows, I am interested in engineering. I examined one company very carefully. Its turnover has increased 10 per cent. in the last year—above the national average—and it was expected to make a larger profit and to plough back more money into its works in the present financial year. But I am now told by the directors that all this extra turnover has been absorbed in additional costs.
    I went through those costs very carefully item by item, and I found them very interesting. First, production costs have increased because of the shorter working week and the wages settlement achieved about a year ago in the engineering industry. I discovered that the cost of premises had gone up £2,000 per annum through the increase in rates. Surprisingly, selling costs have increased very considerably— £ 24,000— through increases in salaries, wages, National Insurance, travellers' petrol and increased motoring costs. The cost of distributing the products has gone up by £12,000 because of increased warehouse wages and transport and fuel costs. Local office costs have increased because of increases in wages and salaries and National Insurance. The cost of administration at head office, which certainly was not over-staffed, has gone up too, and financial charges have increased because the borrowing of money is more expensive through the increase in Bank Rate.
    In that company costs have increased by £83,000 compared with a year ago, and that sum certainly could not be absorbed. The company had hoped to have £50,000 available for re-equipping at the end of the financial year, but because of the Corporation Tax and the tax on dividends it finds that it has only £16,000 available for that purpose.

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    In the light of this picture of an average company, I believe that no company could contemplate its future safely and that prices will have to go up. I believe, further, that by March or April next year there will be a surging increase in prices throughout industry. If the Government want to be returned to office, as the hon. Member for Ebbw Vale said, they had better have an election quickly because stagnant production next year and a rise in prices and costs can only mean fewer exports and balance of payments difficulties all over again. That is why the Government will probably fall at the next General Election. The public are very fickle, and a few points lead in the Gallup Poll will soon swing the other way. The public will not stand for a third round of extra taxation, whether in the Budget, by the regulator, or any other way.
    We must consider the question of industrial relations. I was very concerned about the 498 unofficial stoppages in the motor industry in the first six months of this year. I was in the United States in September and I was very distressed to find that my own company, Rootes, could have sold in the United States an extra 1,500 cars this summer if they had been available. They were not available because of the number of small unofficial strikes which held up production at every phase.
    I acknowledge the efforts of the Minister of Labour in this respect. He has made a start in tackling these problems by appointing Mr. Scamp as a trouble-shooter for the industry. I think that there will have to be legislation whatever party is in power. We shall have to have a system of local or regional industrial courts to which small disputes can be referred for settlement as soon as they arise. If the union cannot enforce the awards, then it will have to suffer a penalty. But I agree that if the breach of the procedure were brought about by a non-member of the union, it would not be fair for the union to have to pay the penalty. But if, as happens nine times out of ten, it is brought about by a union member, the union will have to be responsible.
    Finally, whatever party is in power, we shall have to work more efficiently if we are to conquer the balance of
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    payments problem. To bring us into line with the rest of the world I should like to see one small reform. I should like every industrial and commercial office in this country to be open by 9 o'clock in the morning and the boss in his chair shortly afterwards. Too often I telephone offices and the faithful secretary says, "Mr. So-and-So is delayed by fog". Delayed my foot—he did not start out early enough! In the United States one can contact anybody by 9 a.m. and some even by 8.30 a.m. If we are to join the Common Market we must remember that we are one hour behind the Continent in winter in any event, and if we do not start telephoning the Continent until 10 a.m. we have lost two hours of telephoning time. This small step of a half-hour earlier start in offices would increase office productivity by 10 per cent. It could be done by that reform alone.
    Although at the moment we are in temporary calm and although the public thinks that things are fairly satisfactory, a storm can blow up again at any time, and probably will. The passengers will not be happy if the captain tips them into a rough sea such as is coming shortly, even if the ship is said to be unsinkable. Unless further drastic steps are taken now to improve our exports position, we shall certainly be in a rough sea of rising prices in the next six months and there will be trouble ahead for the Government.
    5.42 p.m.
    Mr. Eric S. Heffer: I have a certain amount of sympathy with the Opposition this afternoon because it must be exceedingly difficult for them to argue any case at all. We have heard a great deal from them over the past 12 months about the broken promises of the Labour Government, but it will be exceedingly difficult for them to argue along those lines in the next 12 months. For example, there was the Airey Neave Bill. I wonder what will happen to that line of argument.
    Mr. Iremonger: On a point of order. Is it in order for an hon. Member to refer to another hon. Member by name?
    Mr. Deputy Speaker: It certainly is not in order. I am sure that the hon.

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    Member for Liverpool, Walton (Mr. Heffer) will be only too glad to correct himself.
    Mr. Heffer: I was referring to the title given to the hon. Member's Bill in the national Press and I apologise for referring to it in that way. But the hon. Member and his Friends will find it exceedingly difficult to build up any sort of case along the lines which they have followed in the past 12 months. Any intelligent person understood that the Government could not possibly carry out their entire programme in the first 12 months, and yet week in and week out we heard demands from the Opposition benches that the Government's full programme should be carried out within the first few months of the Government's existence. Every time that we failed to carry out some promise or deferred it for a period because of the economic problems which we inherited, there was a great outcry from the Opposition benches. Now they will find it exceedingly difficult to argue along those lines.
    May I take up one or two points made by the right hon. Member for Leeds, North-East (Sir K. Joseph) in relation to trade unions. Much nonsense is spoken in the House by people who have never had any experience of the trade union movement. I warn those people who are suggesting that we can modernise our trade union movement on the basis of legislation that if they pursue that to its logical conclusion they are pursuing an exceedingly dangerous path. One hon. Member spoke of the number of trade unions in this country, he said that there were far too many trade unions. This I accept, but we cannot reduce the number of trade unions in the country on the basis of legislation. It can be done only on the basis of the trade union movement itself reducing its numbers by negotiation, amalgamation and agreement.
    Reference has been made to Germany. Let me point out that in 1933 the trade union movement in Germany was destroyed and in 1945 the Germans were able to sit down and plan their trade union movement. They could start from scratch, and they could therefore decide to have a number of industrial unions, which we cannot possibly do—unless it is suggested that we wipe out the existing trade union movement which has been
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    built on 150 years' experience of the British working class. I urge hon. Members to show some sense on the question of trade unions.
    Let us consider the problem of unofficial strikes. May I refer to that section of the Gracious Speech which deals with the docks? I am sure that all hon. Members with any knowledge of the docks industry—and some of us have a great deal more knowledge of it than others because we have worked in industry for many years—welcome the Devlin Report because it spotlights the problems in that industry which we have known over the years.
    But we must get the question of unofficial disputes in the docks in perspective. The industries in which there are more unofficial strikes than elsewhere are those in which there is casual employment—for example, the docks, the building industry and the shipbuilding industry, leaving aside the very special problems existing in the motor car industry. If we leave the motor car industry aside, we come to the conclusion that unofficial disputes are rife in the industries in which there is casual employment, in which a worker has no definite employer for whom he works for any length of time. He may work in the docks for one employer today and for another employer tomorrow. The situation is exactly the same in the building industry. A man works perhaps for six months for an employer, and then the job finishes and he is out of work. He has no loyalty to that employer, nor has the employer any loyalty to that worker. If we are to get rid of the problems of unofficial disputes in the docks, the building yards and the shipyards, we shall do so only on the basis of introducing measures which will end the casual nature of the employment of the workers.
    Only this week there was a dispute in one of our docks in which the workers were concerned with the type of cargo which they were handling. How can that be referred to some committee or commission which meets in London? It must be settled at the point of production. It must be settled immediately. We can do this only on the basis of proper trade union organisation, proper negotiation and discussions, and the immediate reaction of the employer. The request in this case was that the workmen should

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    have overalls. How are the men to act? Are they to work on this dirty cargo in their normal clothes or to stop working immediately until they are given overalls? The answer to unofficial strikes is to get rid of the problems which create them. This is the important question which hon. Members must understand. I speak from bitter experience of many unofficial disputes in the building industry precisely because of the conditions we had to deal with, and which could not be referred to a district committee or to a national committee because the time factor would not allow it.
    Captain Walter Elliot: I should like to ask the hon. Member a question. He said we could not reduce the number of trade unions by legislation. He may well be right, but when we were arguing about the National Plan the First Secretary of State, talking about the docks, said that he intended to reduce the number of dock labour employers by restricting the issue of licences because he thought that would be helpful. Does the hon. Member agree with that?
    Mr. Heffer: Certainly I do, but I would take it a step further. I think we are only tinkering around with the question of the docks unless we actually come forward with some concrete proposals for bringing the docks under public ownership. I believe that the dockers ought to be working not for a reduced number of employers but for one employer, the Government, through the public ownership in some way of the docks. This is the answer to the problem which the hon. and gallant Gentleman has raised with me.
    Captain Elliot rose—
    Mr. Heffer: With due respect to the hon. and gallant Member, I will not give way. There are many other hon. Members who want to speak and they will not forgive me or him if we take up too much time.
    I believe that the docks must be brought under public ownership for these reasons. Firstly, there is a need for the modernisation of the dock industry. How are we going to get the type of capital investment for the building of new docks and new berths and also for new machinery and equipment required in the docking industry unless we have a
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    national employer who can definitely ensure the investment is there? I think this can best be done on the basis of the public ownership of those docks. I think also that public ownership is required in order that the workers can get proper security and decent conditions. In the Liverpool docks, even today, some of the workers are forced to use toilets which are nothing better than—a sort of open—
    Mr. Simon Mahon: Hole in the ground.
    Mr. Heffer: That is right. I was trying to explain without being too crude about it. One cannot possibly be anything more than crude about the sort of conditions the workers have at Liverpool docks, even today, and despite all the efforts being made by the Mersey Docks and Harbour Board, improvements cannot be pushed forward at the speed required unless we get proper modernisation of the docks through the public ownership of those docks.
    I welcome the Queen's Speech not only for the type of legislation envisaged in it in relation to housing finance, which will be very welcome in the city of Liverpool, not only because of the fact that the rate burden is to be lifted from those hit worst by the increased rates, not only because of the various suggestions and proposals for pensions increases, but particularly because there is the point about legislation which will be introduced in relation to the dock industry. Those are the positive things which I see in the Queen's Speech. I think there is no Member on this side of the House who will not agree that we could not possibly have expected from the party sitting opposite the type of positive programme which is outlined in the speech.
    But having said that, having said I welcome the speech, having said that I think it is positive programme, I want to end by drawing attention to the point made by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), the fact that steel nationalisation is not included in the speech. An hon. Gentleman opposite got up when my hon. Friend was absent and said that he congratulated him on his speech. The point I wanted to make to him then was that I hope he will take his congratulations —and all the other hon. Members on that side who congratulate my hon.

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    Friend—to the length of actually voting for steel nationalisation when it is introduced into the House of Commons, as it will be in future legislation.
    Several Hon. Members rose—
    Mr. Heffer: I am sorry, but I am not giving way any more.
    It is quite clear to me that the reason why steel nationalisation has been left out of this speech at this stage is the peculiar political situation which we have in the House at present. We know that we have a small majority; we know that the Liberals are opposed to the nationalisation of steel, as is the Conservative Party; we also know that, unfortunately, there are one or two of my hon. Friends on my side of the House who indicated their opposition to steel nationalisation. This places any Government in a very difficult situation about this measure.
    But having said that, I equally agree with my hon. Friend the Member for Ebbw Vale that we ought to go to the country early, and I say this as someone holding a marginal seat, having taken it off the party opposite at the last election. I say this because I think we should put not only the programme we are pushing forward but equally steel nationalisation as part of our programme before the people of this country, so that we can be returned with a much larger majority than we have at present so that we can put through all the basic reforms which are required in the structure of our industry. For the life of me, I cannot accept this position of leaving out steel nationalisation at this stage. I understand the problems which the Government have. I sympathise with them in those problems. I think any man of intelligence must. Nevertheless, it seems to me that we should have included it in the Queen's Speech so that it is part of our general programme of advance in the country as a whole.
    Therefore, in conclusion, I would ask this House, when the Amendment is put down, to consider the Amendment with very great gravity—
    Mr. Iremonger: Hear, hear.
    Mr. Heffer: — but not with hypocrisy, because if anything maddens me it is the hypocrisy of the hon. Gentlemen
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    opposite who say "Hear, hear" on the question of steel nationalisation when they have no intention at any stage of ever supporting it. They have never at any time supported any measure of public ownership because they believe in the power and privileges of that small section of employers who control the means of production. I personally believe in Socialism, and my brand of Socialism believes that the only way we shall ever build a just society, a classless society, a society where the ordinary working man will get his real benefits in this world, is when we take the power and privileges away from the vested interests of the hon. Members on the other side of the House.
    5.59 p.m.
    Mr. T. L. Iremonger: I am very glad indeed to follow the hon. Member for Liverpool, Walton (Mr. Heffer). I should, in any case, I think, have felt that the House would want one to intervene on a point of order, to inquire whether in fact a charge of hypocrisy cannot be framed in a way which comes within the rules of order. But I would not want to take a stand on a petty point like that. As a matter of fact, I sympathise with him. I know what he meant. He thought that I was saying "Hear, hear" to the proposition that steel should be nationalised, which would be extremely hypocritical. I can use the word because I use it only hypothetically about myself.
    The fact is that I was applauding what I thought was the hon. Gentleman's intention of putting down an Amendment. What I wanted to say when I was trying to intervene was that I hoped that he and his hon. Friends would co-operate with other hon. Members not necessarily on his own side, because I am quite sure that we could draft an Amendment, for which we would be able to vote, deploring what the hon. Member for Ebbw Vale (Mr. Michael Foot) called the defection of the Prime Minister from the principles of Socialism or Marxism which are laid down in Clause Four of the Socialist Party constitution. That was the defection—which was, I would not say hypocritical, but cautious—from the pledges that he made not only to the electorate but also to his own party.
    I sympathise very much with the hon. Member for Walton, and I am very glad

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    to follow him. He is in the running for the position of shop steward for back benchers in the House of Commons with his interest in Parliamentary reform.
    Mr. Sydney Silverman: Would it be right to assume that the hon. Member for Ilford, North (Mr. Iremonger) is in favour in this place, though nowhere else, of unofficial strikes?
    Mr. Iremonger: Certainly I am in favour of unofficial strikes in this place, and any co-operation which is wanted by hon. Members like the hon. Gentleman for Walton in unofficial strikes will be gladly given by me. I exclude from them the hon. Member for Nelson and Colne (Mr. Sydney Silverman), because he is far too old a hand. He has been ground down.
    However, there is no question in my mind of unofficial strikes when I refer to the hon. Member for Walton as being in the running for the position of shop steward for back benchers, because, in matters of Parliamentary procedure, he is a gaffer's man. He wants to reform Parliamentary procedure so as to make life easier for back benchers and so that the Government get their business through without hon. Members being able to fulfil their duties as an Opposition.
    Mr. Heffer: I cannot understand why the hon. Member for Ilford, North (Mr. Iremonger) should say that, because I went into the Division Lobbies with him on the question of the Ten Minute Rule Bills.
    Mr. Iremonger: I shall shortly be giving the hon. Gentleman an opportunity to go with me into the Division Lobbies on another Ten Minute Rule Bill, which perhaps I might announce now in my own gracious speech. [HON. MEMBERS: "Hear, hear."]
    On page 4 of the Gracious Speech there is a very interesting paragraph which says:
    "A measure will be introduced to provide for fuller disclosure of information by companies, including the disclosure of political contributions."
    That is perfectly fair. I am not against it. However, I propose to introduce a Bill under the Ten Minute Rule at about 4 a.m., the hon. Gentleman will be very
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    sorry to hear, to make that Measure of broader application and bring the whole question of contributions to political parties on to a level basis throughout the whole gamut of society. I propose to introduce a Bill to amend the Trade Disputes Act in a way which will make it compulsory for those who want to contribute to the Labour Party through trade unions to contract in instead of contracting out. When I do that, I am sure that the hon. Member for Walton will be justified in joining me and my hon. Friends in the Division Lobbies. We do not mind staying up, because we are used to it, and we shall be here whatever time it is.
    Mr. Paul B. Rose: Would the hon. Gentleman state whether, in his Bill, there will be permission for shareholders to contract out as well?
    Mr. Iremonger: That as a very fair point, and no doubt the hon. Member for Manchester, Blackley (Mr. Rose) could co-operate in drafting the Bill. What he says is perfectly fair, though I suggest that shareholders only have to sell their shares, and they will not lose their jobs because they sell their shares. That makes it slightly different. I concede that the hon. Gentleman's point is a perfectly fair one. I am for fair shares all round.
    I want to make one further reference to the hon. Member for Walton, who made a very sincere speech and upbraided us for thinking that 'the Government whom he supports are not going to fulfil their promises. They are very likely to do everything that they have said in the way of legislation, but the promise that I do not think they will fulfil is the one which is crucial to the whole Gracious Speech, which says on page 2:
    "My Government's aim is to develop a soundly based economy."
    That is a promise which I am afraid the hon. Gentleman's right hon. Friend will fail to fulfil, and that is why he will go out.
    I want to refer for a moment now to the hon. Member for Ebbw Vale, whom I am very glad to see in his place. He made one of the great speeches of his Parliamentary career, and that is no idle compliment, if he will forgive me for

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    making it. He fills the House when he gets on his feet, not only because the Left wing of the Labour Party come in to back him up, but because hon. Members in all corners of the House take delight in the artistry of his craft. The areas of our philosophies do not coincide at very many points, but the points where they do are very important. We both have a love for the English language which I hope goes beyond pedantry, a great admiration for Jonathan Swift and William Hazlitt, and a passionate belief in the importance of the rights of the House not being eroded by right hon. Gentlemen on Government benches. On all those points, the hon. Member for Ebbw Vale and I have an informal alliance.
    I was glad to hear him say, because it did credit to him, that his right hon. Friend must put the nationalisation of steel into the next Gracious Speech or, as he said, he would be denying the country what he himself had said was a paramount need. I think that the explanation is that we will not have another Gracious Speech and that the present one is the last one. It is my belief that the right hon. Gentleman intends to go to the country in October, 1966, for that very reason.
    The House would do well to take note of what the right hon. Gentleman the Prime Minister said in Bristol on 4th September when he was speaking to some 1,800 people. He was wrong in one respect, but he said quite frankly that by October, 1966, he would have carried out the programme that he had put before the country. The one exception is the nationalisation of steel. So the question arises, will he put the nationalisation of steel into the Labour Party's election manifesto? I hope that he does. He is quite right to put it in if he believes in it. If he does not put it in, it is either that he does not believe in it or, as the hon. Member for Ebbw Vale says, sheer expedient abandonment of principle, because he wants a majority more than he wants Socialism.
    I can understand that. I want a majority more than I want Socialism. But then I do not subscribe to Clause Four of the Labour Party Constitution. The fact is that nobody wants the nationalisation of steel, except the hon. Member for Ebbw Vale and one or two of his Left-
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    wing friends who do not command as much influence in their party as they ought to. On their merits and on their talents, I have always thought that they were at the very highest level of their party.
    As one of my hon. Friends said, the fact is that the Prime Minister is abandoning Socialism. He is trying to creep away from it. I do not blame him, but he is leaving the Left-wing of the Labour Party in the lurch, and the pathetic thing is that when they squeal he does not take any notice at all. When they squeal about Vietnam, about immigration or about steel, they are treated with absolute contempt, which their great oratorical talents do not observe.
    I was particularly sorry to hear the hon. Member for Ebbw Vale say that he expected to see a Labour Government in this country for the rest of his life. I should hate to think that we were to hear so very few more speeches of the quality of the hon. Gentleman's speech this afternoon. I should be very sorry indeed if he had such a short life. As a matter of fact, the more he goes on television and propounds the doctrines in which he believes, the more people vote Conservative and abandon the Labour Party.
    I hope that the hon. Gentleman will put down the Amendment which he has promised to table, in the frank terms in which he spoke tonight. Let him not put the Amendment in the terms that this House wants to nationalise steel. I could not subscribe to that. Let him go to the core and root of the matter and say, as he said at the Labour Party conference, that this House deplores the sham and the expediency and dishonesty of politicians which brings the institution of Parliamentary democracy into contempt. Those were his words. That is what he said at the Blackpool conference, and a very moving speech it was.
    A passage on page 4 of the Gracious Speech refers to
    "the pensions of retired members of the public services."
    I must apologise to the right hon. Gentleman the Chancellor of the Duchy of Lancaster. I may have missed something that he said about this, but if not I hope that whoever replies to the debate will explain the Government's intentions in respect of officers' and officers' widows'

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    pensions. I do not feel that I can speak with any great pride in this matter, and I do not think that any of my right hon. or hon. Friends can either. I am afraid that the fact of the stubborness and meanness of the Treasury, and the fact of the small number of people involved, has meant that the older officers and officers' widows have had about as dirty a deal as any section of the community.
    I hope that the Government will do something about this. I know that it may involve a certain departure from very strict principles which can be expounded with lucidity and logic from the Government Box, but so did the increase for the 10s. widows. It was a complete betrayal of all the principles of the Beveridge Report, as the National Advisory Committee pointed out when the proposal was turned down again and again, yet the Government managed to do it. Let them stretch a point for these people who I do not think have had a fair deal.
    Mr. Sydney Silverman: From whom?
    Mr. Iremonger: From all of us. I think that the hon. Gentleman knows me well enough. We are all toads beneath the harrow. [Interruption]It is a biblical expression. I think that it comes in Job, but I am not sure. No doubt the hon. Gentleman will find the reference there. We are all toads beneath the harrow.
    I was also disappointed with the reference in the Gracious Speech to what I had rather been led to imagine was going to be some wonderful fundamental rethinking of the whole structure of the Welfare State. I do not think that the statement that
    "Measures will be laid before you to provide supplementary national insurance benefits"
    and so on, presages any attempt to meet the fundamental need now to look again at the principles underlying the Beveridge Report, on which the Welfare State is based.
    The Beveridge Report was conceived in an age of poverty, unemployment and declining wealth. It is totally unsuitable for application in a period of expansion and of comparative wealth—wealth, at any rate, as compared with the rest of the world. It is as unsuitable as an over-
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    coat in the middle of summer, and it ought to be rethought.
    Mr. Sydney Silverman: I am not quarrelling with the hon. Gentleman's view that the time has come to reconstruct a great deal of the Beveridge Report, but is not he mistaken in saying that it was conceived at a time of unemployment? Was not it conceived during the only period when we had 100 per cent. employment under a Conservative Administration, and in the expectation, not of a decline, but of an expanding economy at the end of the war?
    Mr. Iremonger: I do not think that that intervention is quite worthy of the hon. Gentleman.
    Mr. Silverman: I will make another one if the hon. Gentleman likes.
    Mr. Iremonger: The hon. Gentleman can try again, but he knows what I mean, and he is far too perceptive and honest not to appreciate it. The Beveridge Report was conceived in terms of the 'thirties, and if the hon. Gentleman says that it was conceived in terms of an expanding economy—
    Mr. Silverman: It was produced in 1944.
    Mr. Iremonger: But the whole thinking was conditioned by the philosophy and the economic evils of a contracting economy. When the hon. Gentleman says that it was conceived in anticipation of an expanding economy, he must realise that Beveridge himself said that he expected a minimum level of 3 per cent. unemployment.
    Mr. Silverman: In Beveridge's view a figure of 3 per cent. unemployment meant an expanding economy. In the 'thirties we did not have a level of 3 per cent. unemployment.
    Mr. Iremonger: My hon. Friend gives me a figure of 8 per cent. I thought that the best Beveridge hoped for was 3 per cent., and he anticipated the possibility of 8 per cent. The hon. Gentleman is not facing the real point. Perhaps we could just agree on this, if one goes to the extreme point of the argument, that Beveridge did not conceive a Welfare State as operating in a period of acute labour shortage, and that is what we

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    have. He did at least conceive it as operating in a period when unemployment was a factor. And if the hon. Gentleman says, "What is 3 per cent.?", he should recall the howls of outrage there were when it was 1½per cent. under the last Conservative Administration. I think, therefore, that my point is a fair one. If it were not, I would concede it to the hon. Gentleman, but I do not think I should.
    I have been interrupted somewhat, but I do not think that the House would entirely forgive me for being tediously long, and I will therefore restrict my closing remarks. But I cannot resist saying something to the Minister of Labour, with reference to this paragraph about
    "My Government will strengthen and develop the policy for productivity, prices and incomes which they have agreed with management and unions. They will introduce a Bill for this purpose, and will continue to develop the policy in co-operation with all concerned ",
    I will not follow the hon. Member for Walton in using an unparliamentary expression, but what a lot of humbug this is. The Minister of Labour had to go to the Trades Union Congress and fight for his Government's life when he tried to get the Congress to accept proposals concerning the legislation which is foreshadowed in the Gracious Speech. He told the T.U.C. that the trade union movement had to face three things—co-operation, compulsion or disaster.
    He has obviously abandoned all hope of co-operation. What he meant by compulsion was legislation, and here we have legislation to try to enforce the prices and incomes policy. I think that it will be a vain hope. At any rate, it is a retreat from what the right hon. Gentleman hoped to be able to achieve, and I do not think that he will be able to stop his retreat there. I think that he will go on further to the disaster that he foretold. He did not say what it was, but I know what he must have been thinking, because there is only one possible interpretation. What he was thinking was that the survival of our economy depends upon our exports exceeding our imports.
    It that is to be achieved certain other things must follow. It is necessary, because of a balance of payments being a prerequisite, and if that is to be achieved
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    it follows that there must be restraint in the spending of spendable income by the consuming public. If this does not come by co-operation or by compulsion it will come by disaster, and the word "disaster" used in the context of the appeal to the trade union movement by the Minister of Labour—however much he muffles it—means that the Government know quite well that they will have to deflate the economy to make up for the lack of productivity and the lack of restraint that we will have failed get by co-operation or compulsion.
    That is where the hon. Member for Walton is wrong when he says that there will not be any broken promises. That is where I am afraid I am right when I say that the one broken promise, for certain, will be the promise to develop a soundly-based economy. All this business about compulsion is spitting in the wind, because there is a fundamental imbalance in the economy, and no amount of discipline or example that this Government show any signs of giving will remedy it.
    The only other thing that I wanted to do was to congratulate my right hon. Friends on the proposal that they have made for legislation to control the trade union movement. I agree with the hon. Member for Walton that legislation is not appropriate in getting at the root of the problem. I hope that he will tell his right hon. Friend the Minister of Labour that.
    Mr. Speaker: Order. The hon. Member should address the Chair.
    Mr. Iremonger: I should have added the words "through you ", Mr. Speaker. I hope that the hon. Member will tell his right hon. Friend that legislation is no good in these matters. The one piece of legislation that I would like to see introduced, and which I am glad to see that my right hon. Friends propose to introduce when they come to power, is a Measure to regulate the procedures of the trade unions.
    I modestly congratulate them on this. The hon. Member for Nelson and Colne (Mr. Sydney Silverman) will remember that I proposed this very thing in a Ten Minute Rule Bill. I was allowed to do it then before everybody had gone to bed. I proposed it on 30th July, 1957,

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    and I had considerable lack of support from hon. Members opposite who were then on the Opposition benches. I had vocal dissent from them and I had no very great sign that the desirability of this idea had burgeoned in the minds of my right hon. and hon. Friends. I am glad that it has done so now. I think that we shall have that Measure before the House, from my right hon. Friends when they are sitting on the Government benches, and that will be before we have any fulfilment of the prime promise contained in the Gracious Speech, namely, that of developing a soundly-based economy.
    6.26 p.m.
    Mr. David Ginsburg: Apart from his comments towards the end of his speech, the hon. Member for Ilford, North (Mr. Iremonger) gave us a fluent but rather mischievous oration. I doubt whether my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will fall for any of his embraces.
    The hon. Member for Ilford, North in the more serious part of his speech, basically ignored the Government's policies and proposals and the immediate problems facing the country. In contradistinction to him, I welcome the Gracious Speech. My reasons for doing so are cogent ones. First, after 12 months in office the Government have a solid record of achievement behind them in circumstances that were far from easy. Second, the Gracious Speech sets out important proposals both with regard to the modernisation of our economy and the improvement and development of modern social services in this country. I have no doubt that my constituents have a greater sense of economic security now that the Labour Party is in office, and there is a far greater feeling of confidence and hope in the country as a whole than there has been for a long time.
    However, let us not be complacent when we speak of the nation's welfare services. There is still a lot to be done. My right hon. Friend the Prime Minister and today my right hon. Friend the Chancellor of the Duchy of Lancaster spoke about the Government's priorities —yesterday in housing and today in social security. The steps outlined will make an enormous difference to the lives of our people.
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    But all this, as the Government must know, can be only a beginning. I want to draw the attention of Ministers to a very important article in the August issue of the National Institute's Economic Review entitled "Social security in Britain and certain other countries". I will read two extracts from its conclusion. It says:
    "The British system of social security compares most favourably with other countries in the comprehensiveness of medical care provided under the National Health Service and of the minimum level of subsistence provided under a centralised National Assistance scheme. The social insurance benefits and family allowances are by contrast much less adequate."
    It goes on to say:
    "The proportion of national resources devoted to social security is very much lower in this country than in any of the Common Market countries: taking cash benefits alone the ratio is not more than about half the level in Germany."
    Clearly, the introduction of wage-related sickness and unemployment benefits, as proposed in the Gracious Speech, and which we all welcome, is very important, but even more important is the comprehensive review of social security which the Government are undertaking, and especially the arrangements for paying retirement benefits. I hope that that issue is kept in the forefront of Ministers' minds.
    I will contrast my warning words to my right hon. Friends with some comments about the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph), in which he seemed to commit the Conservative Party to an extraordinary scheme of social security. It struck me as being half-baked. It would appear that the Conservative Party has jettisoned its wage-related pensions scheme, a wage-related scheme, albeit a limited one, which was introduced only seven years ago by a Conservative Administration. They now propose to jettison it.
    The scheme which they suggest instead seems to me to fly in the face not only of academic experience in this country but the best practical experience in social security in Europe. For example, where in the scheme now proposed by the Conservative Party is the hedge against inflation? Incidentally, it is remarkable that at the moment when the Leader of the Opposition is committing the Conservative Party firmly to going into

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    Europe—which must mean harmonising social security arrangements with Europe, for which there is a very powerful argument—the right hon. Member for Leeds, North-East, the spokesman of the Conservative Party on social security arrangements, takes the Conservative Party's social security philosophy right away from Europe into a scheme which I find it difficult to comprehend. The public will find it difficult to comprehend as well, because we have heard nothing this evening in the right hon. Member's statement about what will be the rights of existing contributors to the scheme which was passed by this Parliament six or seven years ago.
    The House is agreed that the key to everything today is the economic situation and the Government's ability to handle it. There has unquestionably been a great improvement. The Prime Minister told us yesterday that we have halved the deficit both on the current and the capital accounts. The latter achievement, which has not been referred to so much, is particularly important, and even remarkable, when we bear in mind that some of the measures which the Chancellor of the Exchequer announced in April concerning the capital account have not yet begun to bite.
    The Government can take pride or comfort from the statement in the Economist of this weekend. Although the Economist is not noted for its friendliness to the Labour Party, it said in its leader headed "First Term Report":
    "By contrast, Labour's achievement in reducing the long-term capital deficit has been considerable, and it is doubtful if the Conservatives would have done half so well here; at any rate, Labour's measure to stop excessive long-term investment overseas had to be fought through against opposition from orthodox City opinion almost into Lord Cromer's last ditch."
    As we have heard, the Leader of the Opposition is still not willing to accept his party's responsibility for the balance of payments crisis of the autumn, 1964. He claims that he has done some research into the Prime Minister's speeches which suggests to him that the Prime Minister was aware of the way in which things were moving. He claims that the Labour Party exaggerated the economic crisis. I, too, have done some research—into the speeches of the Leader of the
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    Opposition and the speech of the right hon. Member for Barnet (Mr. Maudling) at the time of the 1964 Conservative Budget. In my reading of HANSARD, I found evidence of appalling complacency. It is apparent, from a rereading of the right hon. Member for Barnet's Budget speech in 1964, for example, that he knew and stated clearly that we would be in certain difficulties over our overseas investment. But the right hon. Member for Barnet was not so rash in his statements as the Leader of the Opposition, who tried in his speech to spirit away the import gap— in this case, too, I have reread the right hon. Gentleman's speech—by arguing that imports were steady at the beginning of 1964 and that the trend for our exports was a rising one. The emerging facts did not justify the statistical exercise of the present Leader of the Opposition. Action was required to defend the balance of payments: it was not taken by the previous Government and this Government have taken it.
    Nevertheless, we should not pretend that the problem we face today is out of the way. The gap must be closed and a surplus built up. Whereas I feel reasonably confident about the capital account —indeed, I think there should be a still further improvement—there are, as we must admit, serious problems over the current account. We cannot continue to rely on the surcharge as an indefinite wall of defence, especially if we mean to build bridges to Europe. Continuing action is necessary, both to stimulate exports and to assist import-saving industries.
    This week The Times criticises the Government for what it terms their "interventionist philosophy ". Without intervention, this Government would very easily find themselves in the situation in which the previous Administration found themselves in 1964. The Chancellor of the Exchequer is under some pressure to let production rise, in case there is a risk of demand deficiency later this winter. Perhaps he should relax a little; but when the relaxation comes it must be coupled with measures and action to make industry more efficient.
    Some steps are outlined in the Gracious Speech. I hope that the Opposition will not attack these measures as either doctrinal or interventionist. Indeed, many of the proposals were canvassed by the

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    National Economic Development Council in its pamphlet "Conditions Favourable to Economic Growth", published in 1963; proposals dealing with an incomes policy, regional planning, and many other, subjects. However, it is interesting to note that it was left to a Labour Government seriously to implement the work which N.E.D.C. undertook under the previous Administration.
    In the planning debate last week, my hon. Friend the Member for Birkenhead (Mr. Dell) spoke about the need for mergers and for larger units in the economy if British industry is to compete. I wish this evening to carry his views further as they relate to exports. Larger units are important, not only for efficient production, but—what is vital for the country at present—for marketing overseas. The small and medium-sized firms, of which there are many in my constituency, cannot involve themselves in the overheads of an international marketing operation.
    I agree that many steps forward have been taken by the Government in recent months in stimulating and helping exports, and the results are showing in our better export performance. But to my mind the incentives given do not go far enough. The present chairman of Marks and Spencer, a man whose ability and success needs no advocacy from me, referred in a speech on planning which he made as long ago as 1933, over a generation ago, to the scope for industrywide export corporations, particularly for the purpose of exploiting new markets and for acting as a channel between overseas selling and production at home. I hope that the Government will look hard at proposals of this kind, because the logic in the argument which was used then is even more valid today.
    I should like to end on perhaps a rather different note. Planning the economy needs the working out of a new relationship between Government and industry. This is coming about. There is bound to be intervention by the State, and we must not be ashamed to say so. Government inevitably extends its frontiers. That is why all the time we must seek to redress the balance on behalf of the individual citizen. Therein lies an important part of the job of the House and our job as hon. Members. I am therefore particularly glad that the Govern-
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    ment have made proposals for a Parliamentary Commissioner for Administration. The ombudsman, as he is popularly called, can play a special part in preserving and enhancing the balance between liberty and planning.
    6.42 p.m.
    Mr. A. E. Cooper: I should have thought that if the hon. Member for Dewsbury (Mr. Ginsburg) had wished to carry out his researches properly he need have gone no further than his own Government's White Paper on the balance of payments which was issued at the time of the Budget this year. It is high time that the Government read their own documents and told us either that the figures in those documents were wrong or that they were right.
    The facts were published in the statement in the White Paper, and I have read them so often in the national Press that I thought that even some hon. Members opposite would have taken some trouble to find out about them. In the last financial year to the end of March, on visible and invisible account, on private account, this nation earned a surplus of £57 million. This is published in the Government's White Paper. I drew attention to it during my speech on the Budget. I challenged the Chancellor of the Exchequer to argue against it and he was unable to do so because it is a fact that on visible and invisible account, on private account, this country earned a surplus in the financial year of £57 million.
    The deficit was made up of about £420 million overseas expenditure on military matters, about £160 million on capital account for the oil companies, and about £250 million repayment of debt and aid to under-developed countries—incidentally, partly incurred by the previous Labour Government. This was all on capital account. It totalled roughly £804 million. When the surplus is taken into consideration, we were in deficit on the year to the extent of £744 million. Surely nobody will deny that figure. It has never been denied that there was this deficit on the year.
    What have the Government done about it? Have they reduced military expenditure overseas? No. Have they reduced their aid to undeveloped territories? No. Have they reduced their overseas payments of debt? No. What

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    they have done is to restrict overseas investment on capital account, which is eating the seed corn, because it is from our investment overseas on the long-term that we bring back dividends to this country from which we pay for our necessary imports.
    To say that steps taken by the Government will improve the balance of payments this year is absolute poppycock. There is nothing which the Government have done this year which in this financial year will improve the balance of payments by a penny. What will happen is a reduction in the balance of payments deficit by about £400 million for two reasons which have nothing whatever to do with Government measures. The first is that in the last financial year the oil companies spent about £ 160 million on new investment overseas. This will not recur in this financial year. Secondly, there was considerable stockpiling by industry during the last financial year in anticipation of restrictions to be imposed if a Labour Party Government were returned to power. This will not recur.
    These two items alone will provide an improvement in the balance of payments deficit of at least £ 400 million, and it will not be until the next financial year that we shall begin to see any improvement or otherwise from measures taken directly by the Government. Indeed, it could well be that as a result of measures taken by the Government in this financial year there will be an additional charge on our reserves because the very high interest rates which have ensued throughout the whole of this year— and which show no sign of being eased before the next Budget— cause a very big drain on our reserves.
    The Gracious Speech is not a speech for a dynamic or thrusting Britain. This is a standstill programme which is putting superficial things in the shop window in the hope that a guillible public will be attracted. There is nothing in it of real consequence to assist us in developing the economic life of the country. It is the result of vain promises in a preelection period and incompetent performance while in office. It must be judged against the backcloth of the past year.
    Let us examine the Prime Minister's speeches, pre-election and during this
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    Parliament, and let us see who is the guilty man in this story. The hon. Member for Dewsbury said that he had done a lot of research into speeches. He has not looked at the Prime Minister's speeches. The suggestion that there was some concealment of all the facts of our financial situation before the election does not bear examination for the simple reason that in the Government publication "Economic Trends", of 30th September, 16 days before the General Election, the balance of payments position was clearly set out.
    The Labour Government 16 days after assuming office, published a White Paper on this subject which confirmed the figures which had been given in the White Paper on Economic Trends and added the assurance that there was
    "no undue pressure on resources calling for action".
    This was two weeks after assuming office. They said that there was no strain on the resources calling for action.
    Five weeks later the Prime Minister said in the House:
    "We are dealing with a situation where what matters is not what our trade and payments position is but what people overseas think it is."
    He went on in this statement:
    "The House will agree that, speculative expectations apart, there is nothing in our current economic position which justifies these widespread desires to convert sterling into other currencies."—[OFFICIAL REPORT, 23rd November, 1964; Vol. 702, c. 931.]
    Nothing in our position to justify the movement taking place overseas?
    A few weeks later we ran into real trouble because of the stupidities of the Chequers weekend meeting and the panicky way in which the Government raised the Bank Rate. The Prime Minister then said:
    "The fact is…that so far as the trade gap is concerned…there were reserves and borrowings more than adequate to meet this, but in the course of the past week there has been this new development arising from confidence factors…"—[OFFICIAL REPORT, 23rd November, 1964; Vol. 702, c. 933.]
    Lack of confidence in whom? In Great Britain? No—lack of confidence in the Prime Minister and his Front Bench colleagues. This was why at that time and in the subsequent months the Government saddled this country with an additional £1,100 million of debt and £30

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    to £40 has been put round the neck of every man, woman and child in the country. This is where the Government will fall down. All these proposals for the relief of rates and so forth are all very well, but they must be paid for by somebody and they can be paid for only out of a prosperous economy.
    Mr. Ginsburg: If the Government have been so inefficient in the managing of our external economy, can the hon. Member explain why the £ is at a far higher level today, and indeed has been for many months, than it was a year before the Conservatives left office?
    Mr. Cooper: That is a simple question to answer. Something like half of the trade of the world is done in sterling. A devaluation of the £ by any amount would be a disaster all over the world, and the standby loans and the extra facilities which have been granted to this country have not been given by foreign bankers or countries because they believe in the Labour Government and the policies pursued. These are nothing more than an insurance policy for themselves, to protect themselves against any further idiocy by this Labour Government.
    The Prime Minister said on 17th October, and this was really quite something:
    "A good way of measuring progress is to look at some of the changes which have taken place in Britain's affairs in the past twelve months, changes which never would have taken place if the Tories had remained in power."
    How true that was. They certainly would never have taken place if we had remained in power. The country had the longest period of a 7 per cent. Bank Rate since 1921. We had the toughest credit squeeze since the 1920s. We had a cut in the educational building programme. We had the greatest rise in taxes since the last Labour Government, and an extra £1,100 million of foreign debts laid on the taxpayers of this country. I agree that none of this would have happened if a Conservative Government had been in power.
    We have today the oldest Government, the biggest Government and the most costly Government. Above all, we have the most travelled Government. Hardly a day passes when the Prime Minister and his travelling seraglio, or one or other of his Ministers, are not departing or arriving at London Airport. This Government
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    should be renamed "Wilson's Travel Agencies Unlimited" and the new slogan should be, "Let's go with Labour and see the world", all, of course, on tax-free expense accounts.
    The Gracious Speech is nothing but a holding operation, a squalid attempt to stay in power with the help of the Liberal Party. I understand that at Transport House a new hymn is now being published and issued by the Prime Minister. I am told that it is to be sung to the tune of "O God, our help in ages past" and that it reads:
    "I to old Jo will lift my eyes
    From which doth come my aid,
    My safety cometh from old Jo
    Who a Lib-Lab pact hath made."
    I now come to the Gracious Speech.
    Mrs. Renée Short: And about time.
    Mr. Cooper: One paragaph deals with the National Plan and I wonder who the Government think they are kidding with this Plan. If hon. Members travel round British industry, as I do, they will find very few people who have read the Plan. People in industry will certainly not be impressed by what the First Secretary says about future expectations in trade and industry in this country over a period of five years. Industry is busy trying to plan itself for a year ahead. It is subject to all sorts of overseas problems which are way outside the considerations of this or any other Government.
    If we can refer to the National Plan as nothing more or less than guidance and we do not regard it as something like the laws of the Medes and the Persians it might prove to be of some help, but the Government take a figure of 25 per cent. and work up the facts to suit that figure. Having regard to the trumpeting which heralded this Plan, I think that history will show there has not been a greater flop since the Walls of Jericho fell.
    The Gracious Speech states that
    "My Government will strengthen and develop the policy for productivity, prices and incomes…"
    This is possibly the most important part of the Speech, because upon its fulfilment and our ability to get incomes related to productivity our ability to sell goods overseas depends. This is the corner-stone upon which all our future must be built,

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    but does it look like succeeding? We have a Minister of Technology whose union is certainly not backing the First Secretary, and there are quite a lot of reservations in other unions concerning the early warning system.
    The Minister of Labour, for whom I have a high personal regard, knows a great deal about the day-to-day workings of industry. One of the weaknesses of the national incomes policy—and it is difficult to see how it can be overcome—is that out of a working population of about 24 million probably no more than 9½ million are in unions and the wages of only those 9½ million can be controlled. The rest who are outside the unions are not in any way affected by union arrangements. They can have their wages and salaries moved far beyond the normal. We could find ourselves by virtue of this in an extremely difficult situation.
    I am confident that salaries in employment outside the unions have increased in the last year by very much more than the norm of 3½ per cent., and probably by as much as if not more than the 8 per cent. which the Chancellor of the Exchequer talked about. It is, therefore, no use burying our heads in the sands and thinking that because we have Mr. Aubrey Jones and his colleagues looking into this matter all will be well. There is a great deal more to be done before we reach an incomes policy which is viable and makes sense and before we get co-operation from everybody.
    Mr. Gunter: I am interested in the hon. Member's examination of the weaknesses of the incomes policy but he has given us no lead on what ought to be done. Will he tell the House?
    Mr. Cooper: I know perfectly well that a business operates properly and efficiently by making a profit. That is its consideration. That is the way in which it operates. And its labour costs at all levels are directly geared to the price of the product itself. The great weakness in the nationalised industries, which collectively employ the greatest number of people, is that they are not in competition with anyone and can willy-nilly put up general prices. That is one of the reasons why I am opposed to nationalisation. In private industry we are all exposed to the whip of competition. That
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    is why in many cases we are sometimes able to absorb higher rates of wages, because the effect of competition is to make us more efficient.
    This Government will not admit it— though I do not understand why, because they have been advised by all the practising economists—but one reason why the imposition of the 10 per cent. Surcharge creates efficiency is that, by its very nature, it gives an added protection to industries that should not need it. This is a powerful economic argument for bringing it down. I am satisfied that in private industry competition will, in the main, keep wages and salaries at a level that will be all right, but which will be quite wrong, or almost incapable of fulfilment in the nationalised industries—
    Mr. Michael McGuire: How does the hon. Member reconcile his claim of private industries keeping prices and incomes level with the example set by the National Coal Board of absorbing increases for four years, and keeping its pithead prices level? Coal mining is still a nationalised industry.
    Mr. Cooper: Throughout that period the Coal Board reduced its labour costs enormously by closing down pits and transferring men to other areas. If all industry could cut down its labour costs by getting rid of half of its labour force, we could all keep costs down. Furthermore, in this year the Government have come to the aid of the coal industry with a substantial subvention, and last year they came to the aid of the coal industry by getting rid of a great percentage of its debt.
    I have not the slightest doubt, nor have those with whom I have discussed the subject and who have any knowledge of house construction or the property market, that the setting up of the Land Commission will not result in one extra house being built or the price of properties coming down. It will have the reverse effect. Land prices will increase and the number of houses to be constructed will go down. There can be no doubt about that.
    This great Rent Act of which the Prime Minister talked the other day—what is its effect? Although hon. Members opposite will not admit it, its effect will be twofold. First, it will reduce the amount of rented property to come on

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    the market for renting, because owners will want to sell. Secondly, people living in properties rent controlled under the 1957 Act will, in the main, have their rents put up by about 15 per cent. I cannot believe that the Labour Party will be very pleased about that. I have heard from some of my constituents already that one: effect of this Measure will be that their rents will go up by 15 per cent. per annum. The right hon. Gentleman the Chancellor of the Duchy of Lancaster should have a look at that aspect.
    We read in the Gracious Speech of legislation
    "…to establish a new system of Exchequer subsidies for local authority housing."
    Really, have we still not got to the stage in our affairs at which we can look at this thing very sensibly? Why should a man, and there are many in industry today, taking home £25 or £30 a week— and there are many families with a combined income of £45 or £50, and in some houses in my constituency the total income is considerably higher than that— why should people in that sort of income group live in council houses, subsidised in many cases by old-age pensioners who are trying so desperately to make ends meet? Will any hon. Member opposite give me just one sound ethical reason for that state of affairs?
    Many Conservative-controlled councils have introduced differential rent schemes where, as everyone knows, we start by charging the full economic rent for the property. As the man's income or the family income decreases, rebates are granted. As a result most housing schemes of Conservative-controlled councils operate either at a surplus or at very little deficit. In llford, the only subsidy provided out of the rates is for old-age pensioners. Surely, that is the sensible and practical way to go about things. Council house rents in Scotland are a national scandal. People there are living in council houses at rents of 14s. 8d. a week. Such a thing should not be tolerated in this day. Bearing in mind the high incomes people have today, they should pay an economic rent for the property in which they live.
    This Government, by stealth one way and another, are introducing creeping nationalisation or Socialism—after all, that is the keystone of the Labour Party.
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    But this is a free society, not a Socialist society. This is a society dedicated to a mixed economy, and based principally on private enterprise. Our purpose on these benches is to crush this Government with all speed, and to return to the ways that built and developed our great country.
    7.7 p.m.
    Mrs. Renée Short: The speech of the hon. Member for Ilford, South (Mr. Cooper) is typical of Tory spleen. They are so annoyed that the last Session of the Labour Government was so successful in getting through so much of our election programme. They overlook the fact that we passed nearly 70 Bills, and now that we have a Gracious Speech with proposals for legislation to carry out most of what was left of the election programme they really do not know whether they are coming or going, or what line to take in the House. The hon. Member spoke of what he called the vain promises in the election period, but we are now putting forward a programme which will carry out those "vain promises".
    The hon. Member's remarks about subsidised council houses are typical of the denigratory Tory attitude of trying to divide sections of the people against each other. He mentioned families with £30 to £40 a week coming in and asked why they should live in subsidised council houses. What a scandal it was, according to him, to have low rents. I must tell him that, as a Socialist, I believe that what we should be doing is to make sure that all families live in houses, whether rented or bought, at low rents or low repayment costs. That is my Socialist philosophy, and I shall not be satisfied until every family is living in a good house, well designed, well built, under those conditions. If the hon. Gentleman likes to campaign against that idea, it is all right with me.
    The right hon. Gentleman the Leader of the Opposition yesterday made a very earnest and hard-working attempt to attack the Gracious Speech, and the hon. Member for Ilford, South has merely reflected what his leader sought to do yesterday. Here is the dichotomy. The Leader of the Opposition is placed on the horns of a dilemma. First, we were accused of not carrying out our programme. Now that we are carrying out

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    the programme, we are bringing forward all the old faces, as he called them. But the majority of people—as, indeed, the large majority of Members, and certainly those who think about these things and have the intelligence to understand what the Labour Government are doing—will welcome the Gracious Speech. I do, and I think that the legislation going forward from my right hon. Friend the Minister of Housing and Local Government will bring enormous benefit to the people, and will be much welcomed by them.
    I regret one or two omissions from the Gracious Speech. I, too, am sorry that steel does not feature in it. I, too, as a Socialist, am quite unrelenting about this. I want to see public ownership extended, because only in this way can we really plan the economy. Only by extending public ownership can we make the National Plan work and thus look forward to the implementation of a five-year plan and then second and third five-year plans, as we shall do if the Labour Government carry out their programme and are returned, as they will be, with a larger majority at the next election, whenever that may come. Above all, I believe that we should be extending public ownership because this is the way of transferring economic and political power to the large mass of the people who create the country's wealth from the hands of the small number who now own the greater part of the country's wealth. This is one of the reasons why I am a Socialist.
    I am also rather sorry—probably my right hon. Friend the Chancellor of the Duchy of Lancaster agrees with me about this—about the absence of another item from the Gracious Speech. I refer to proposals I looked for from my right hon. and learned Friend the Home Secretary for the reform of the law relating to abortion. Such a Bill would have been welcomed with acclaim on both sides of the House and by the general public. I draw my right hon. and learned Friend's attention to the fact that we obtained 144 signatures to a Motion asking for the reform of this law before the House rose for the Summer Recess. This was a record number, four times as many as a similar Motion obtained at the beginning of the Session. I remind my right hon. and learned Friend that we look forward
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    to persuading him to carry out the promise given by my hon. Friend the Minister of State, Home Office that should I or any other private Member be successful in the Ballot and introduce such a Bill time will be found for it. I hope that we shall do this very shortly.
    I want to speak mainly about the section of the Gracious Speech which refers to
    "the establishment of a wider European market".
    I want to speak about our export trade. I was rather disappointed that no one spoke about exports in the debate on the National Plan. The subject has been flirted with a little by one or two hon. Members opposite today, but no one has really dealt with the subject. I propose to try to do so.
    I very much welcome the statement that we are to work for
    "the establishment of a wider European market".
    I have always opposed Britain's entry into the European Community. I do not believe that there is a place for Britain in this narrow, capitalist-dominated community. It exists as an uneasy association of States, all producing more or less the same kind of goods, all competing for markets with each other, all taking in each other's washing. The wider horizons of the Soviet Union, of Latin America, of the developing States in Africa, and, above all, of Eastern Europe, are the markets where we can find both a challenge and a promise, a challenge which we must accept if we are to achieve the increase in our exports of 5¼ per cent. per annum outlined in the National Plan.
    Mr. Cooper: How would the hon. Lady get over the fact that 17 per cent. of our exports go to the six countries of the present E.E.C.? With the reduction in tariffs within the Six we are steadily losing our trade. Seventeen per cent. represents a very large sum of money indeed.
    Mrs. Short: I am not saying that the 17 per cent. should not be maintained or improved upon. What I hope to prove to the House is that there is a large market where we are only touching the fringe of the potentiality. We can increase our trade with the Community,

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    but this does not mean that we have to enter it and accept all the political considerations that membership of it would entail.
    The wider horizons of the markets I have outlined, particularly those of Eastern Europe, provide a tremendous challenge and opportunity for the expansion of our export trade. This is particularly relevant to my constituency and to other highly developed industrial constituencies in the Midlands. There is a market for our cars and our motor cycles in Eastern Europe. During the summer Recess I visited four Eastern European countries—not at the nation's expense, either. In those countries one sees no British cars. One sees Mercedes-Benz's. One sees Peugots. One sees Citroens and Fiats, but one does not see British cars. I wonder why.
    There is also a tremendous market for man-made fibres, heating appliances, transformers, switch-gear equipment, automated machine tools, battery electric vehicles, as well as for footwear, clothing, nuclear power stations and computers. All these things, which are produced so well in this country, can be sold to the countries of Eastern Europe. All the countries in Eastern Europe—I visited many factories when I was abroad —are, like ourselves, short of skilled labour. There is, therefore, a considerable market for automated machine tools and for automated machinery for steel works and for railways.
    Some of our great engineering firms have made considerable progress in this field. English Electric recently won an export order worth over £1 million to provide automatic control equipment for Czech steelworks and Czech state railways. Many other Eastern European countries are interested in this.
    When we talk about increasing East-West trade we are talking about increasing trade with countries which in the next decade will have a very rapidly expanding standard of living. This brings us up against certain problems—the problems of long-term contracts and of the political barriers which now exist, so long after the ending of the last war.
    Undoubtedly East Germany is one of the most interesting and hard-working countries of Eastern Europe. It is now Europe's fifth most important industrial
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    nation, even though it has a small population of only 17 million. During discussions that I and several of my Parliamentary colleagues had with leading members of the East German Government—from the Ministry of Foreign Trade and from the Foreign Office—it was made clear to us that they are very anxious to increase their trade with us. There is tremendous enthusiasm for closer contacts with us and for greater trade.
    We, because of political arrangements made at the end of the war, negotiate our contracts with East Germany only through the Confederation of British Industries. We do not do it through the appropriate Ministries. We negotiate trade settlements only for six months at a time. France, Italy, Belgium and Greece—all countries within N.A.T.O.— do very much better for themselves and arrange contracts lasting for three-year periods. We are hamstrung by the idiotic Hallstein doctrine and are over-conscientious in keeping to its rules, dotting the "i's" and crossing the "t's", and we are deliberately hindering our export potential.
    We suffer because Ministers and leading figures in industry in East Germany are unable to travel to Britain to negotiate contracts without applying to the Allied Travel Office in West Berlin for a visa to enter this country. What is more, they have to apply in person and, because of the decentralisation of East German industry, it can mean that a person wanting to come here to negotiate a trade agreement has to travel 150 or 200 miles each way, a return journey of between 300 and 400 miles. He has to go to make his application, he has to return, and then, in a few weeks, if it has been granted, he has to come back again and pick up his permit. After that, he returns to his job and then, when he wants to leave the country, he has to go again to Berlin to take the plane to come to Britain. In all, therefore, he may have to make three long journeys.
    This is the height of idiocy. What would our attitude be, translating the situation into our own terms, if we asked Lord Robens or Lord Beeching to undertake the same kind of journeys when they wanted to go abroad to buy material or machinery for their own industries? The whole process can take a long time; five,

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    six or seven weeks is not unusual. When I wrote to the Foreign Secretary about it, he said that temporary travel documents are obtainable in two or three weeks. Experience shows that it takes, perhaps, three times as long as that. He said also that travel documents are issued to people who are not prominent political persons. Why should not we give travel documents to prominent political persons from that particular country as we do for every other Socialist country for whatever reason people may wish to travel to Britain?
    The Ministers or their deputies who want to come and the leaders of the publicly-owned industries in East Germany are, inevitably, prominent political persons. The consequence of our not being prepared to give visas to these people to come to Britain to negotiate trade contracts is that we penalise our own trading opportunities.
    Mr. Eldon Griffiths: Will the hon. Lady answer two small questions about Berlin? Has she ever had the experience of trying to get into East Germany not as a member of a Parliamentary delegation? I have had that experience, as many British persons have. I assure her that the Communist authorities make it extremely difficult, and certainly more difficult than the British Government do, for people from East Germany seeking to come here.
    The second point—
    Mr. Speaker: Order. An intervention must not be a speech. I think that that was enough.
    Mrs. Short: I have gone to East Germany not as a member of a Parliamentary delegation, and I did not find undue difficulty. I went there and, as the House sees, I got back. I am talking about the difficulties which we create because we adhere to the outmoded and irrelevant procedure of the Allied Travel Office in West Berlin. It is high time that we took back the sovereignty which we handed over to other nations and decided for ourselves who should come to Britain, making it possible for everyone who wishes to come in order to trade to be able to do so without difficulty.
    In 1961, the Labour Party conference discussed the question of East Germany
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    and laid down quite clearly the lines upon which we should proceed. The resolution which was carried at that conference was very ably moved by my right hon. Friend the First Secretary of State, and I urge my right hon. and hon. Friends on the Front Bench to read again those proceedings at the 1961 conference and carry into effect the resolution which was passed. I hope that we shall be able to establish a trade mission between the two countries and take out of the hands of the Confederation of British Industries the negotiation of trade contracts.
    It is highly significant that, on very many occasions, when applicants from East Germany apply to the Allied Travel Office in West Berlin for a permit to come to this country, and state why they wish to come, they receive a visit from representatives of West German industry who manufacture the same kind of goods as the East Germans wish to buy from Britain. The West German representatives are able to go into East Berlin and East Germany without much difficulty—? it is only a car ride away—and they say, "We are able to provide the goods you want without your having to journey to England, without your having to go through this cumbersome and rather humiliating business of applying for a permit from the Travel Office. Let us meet your order".
    The trade figures of the two nations speak for themselves. The figure for exports from Britain to East Germany last year was about £10½million, and the corresponding figure for West Germany was £170 million. I hope that we shall make some inroads into that £170 million and do more of the trade ourselves.
    I want the First Secretary, the President of the Board of Trade and the Foreign Secretary to look into this matter seriously. In my view, nothing should be allowed to stand in the way of the development of our trade with any country in Eastern Europe. We cannot afford it, and it is high time that these outmoded and irrelevant procedures were done away with. The markets are there. The will is there in all the countries of Eastern Europe.
    If we are to grasp our opportunities and improve our trading performance, we must show ourselves much more energetic

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    and much more knowledgeable in the way we go about trying to get into these markets. Individual firms are making great efforts. I know that many of our well organised and modern firms are thoroughly export-minded and doing everything they can. They take part in the trade fairs which are organised and put on a very good shop window for Britain and for British engineering goods in particular. But, above all, and apart from all that, we need better representation in our embassies abroad. From my conversations during the summer with exhibitors at two trade fairs, I know that this is very much wanted and expected by many of our exhibitors abroad.
    It is urgently necessary, in this age when exports are crucial to Britain's survival, that, in addition to the traditional Foreign Office kind of representation, we have on our embassy staffs men who understand engineering. I mean not necessarily men who are qualified technically or scientifically in every branch— that would not be possible—but people who really understand the language of engineering, who are able to make the right contacts and give the right information, being familiar with what our exhibitors and representatives abroad need to know when they go to an embassy seeking help.
    This is by no means a new idea. As long ago as 1942, now 42 or 43 years ago—[HON. MEMBERS: "Oh."]—I am sorry; I must not overstate the case, and I should have said 23 years ago—the Association of British Chambers of Commerce petitioned the Foreign Secretary at that time, Mr. Anthony Eden as he then was, to ask that all embassy staffs should include astute commercial negotiators. The reply was that we had to have Foreign Service officers who were able to acquire a knowledge of languages, and so forth.
    Then, in 1963, in the lifetime of the last Conservative Government, Mr. Erroll, when he was President of the Board of Trade, announced an experimental scheme to appoint men from industry to commercial posts in embassies. I wonder where those gentlemen are now. Were any appointed? If they were, where are they, and what have they been up to since 1963? In the countries which I visited there was no sign of them. In
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    two of the countries where trade fairs were being held many of our exhibitors expressed the view that such help from embassy staffs would be invaluable. I hope that the new appointment of Lord Brown to be responsible for our export drive will do something to resurrect that very good idea.
    Unless we do the things that I have suggested we shall find that our chief competitors in Europe, which are mainly West Germany and America, will be increasing their trade with the countries of Eastern Europe. At the Leipzig Fair there were a large number of American firms exhibiting—88 I think, the largest number so far at a Eastern European trade fair. The Americans have recently sent a trade delegation to Poland and Rumania. They are becoming conscious that Eastern Europe exists as a flourishing and worthwhile market. We ignore that market at out peril. We are able to get first-rate goods from many of those countries, and in return they want long-term credits and want to be able to buy modern industrial equipment, the sort of equipment that we can produce so well.
    So, if we are looking for the imple-mention of the plan, I hope that we shall not allow any barriers to interfere with our need to expand our trade with the countries of Eastern Europe, and that we shall really go ahead and make a tremendous drive in the coming year to ensure that our export target is reached.
    7.32 p.m.
    Sir Lionel Heald: It is inevitable that during the general part of this debate hon. Members should make their contributions on different subjects. I am very much tempted to follow the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) along some of the paths that she was leading us down. I should particularly like to discuss with her a little more than it is possible to do her apparent view that, while not wishing to have any dealings with the wicked capitalist countries in Western Europe, we should at the same time increase our trade with them. That seems rather a difficult operation.
    One must, unfortunately, confine oneself within reason in these debates, and I have already made up my mind that someone ought to make some reference to the subject which was just mentioned

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    by the hon. Member for Dewsbury (Mr. Ginsburg) at the end of his speech. As far as I know, that was the only reference that has been made to the very important subject of the redress of the individual's grievances. There is a statement in the Gracious Speech that legislation is intended to be introduced.
    I should like briefly to discuss how the matter should be dealt with. I am entirely in favour of steps being taken to improve the machinery for the investigation and, where possible, redress of the grievances of the individual. There are many cases at present, I am sure, where that is not satisfactorily achieved. I am most certainly in favour of steps being taken to that end as soon as they can be. I was, therefore, in common with many other hon. Members, very pleased that the White Paper on the subject was produced. I think it is absolutely essential that the White Paper should be used in the way that such documents ought to be used, as a vehicle for full and free discussion in the House at which all the various points of view, pro and con, can be put —different methods, different expedients —and the Government should maintain a flexible position until they have heard the discussion.
    I am alarmed through reading something written by one of our hon. Friends who is so much better informed than the rest of us are. He said that a Bill was already drafted and all ready and merely wanted, in effect, the rubber stamp of the House in a very perfunctory debate on the White Paper and it could be brought in and become law at once. I believe that that would be very unfortunate indeed. Some hon. Members may not be aware of it, but this is a subject upon which there is a great deal of difference of opinion. It is a very difficult subject indeed. It is one that we ought to discuss and consider very seriously before we enter upon legislation.
    I know that it has been said, "We need machinery. This machinery is better than nothing. Let us try it out. We can always improve it later." The leading article in The Times on the subject spoke of tall oaks growing from small acorns. I believe that that is a very mistaken approach. If in a matter of this kind one makes a mistake with the initial legislation, it is very difficult to get Par-
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    liament or the Government to tackle it again. What they are much more likely to do is to say, "There it is. We must make the best of it." I regard with great concern the possibility that a Bill might be introduced and be—I will not say "steam-rollered"—pushed past without there being very full opportunity for consideration.
    It would not be appropriate for me now to go into any detail about the matter, but I think that I can briefly explain to the House the apprehensions that I have and those felt by a number of people who have studied the question very carefully. It should not be thought that this is a new suggestion which has come along. Ever since the Franks Committee reported some years ago it has been recognised, as the Committee itself said, that it was very unfortunate that its terms of reference were not wide enough to allow it to deal with these cases. It could advise only in relation to tribunals and matters of that kind where there was an existing right of appeal or review or could be one. Beyond that it could not go. It is in that realm that we are not moving.
    The proposal made in the White Paper is for the ombudsman. I do not think it is any use anybody trying to get rid of that word. It is far too enshrined in publicity, and whatever anybody tries to call it, it will undoubtedly keep that name. It has a much grander title in the Gracious Speech—a Parliamentary Commissioner for Administration. One disadvantage of that title is that it has 18 syllables instead of three. There are other disadvantages. I should like the word "ombudsman" to be kept for the purpose of this discussion because it describes what the institution is in the countries where it has been introduced and tried—Scandinavia and, later, New Zealand—where it has to some extent been successful.
    Those are small countries compared with ours, and in such a country it is possible for a single man to be in touch with the cases and investigate them himself, or at any rate see the result of investigation. It must be realised from the beginning that in this country, according to those who have written about the matter, it would be necessary for the ombudsman to have probably six—some authorities have suggested 12—assistant ombudsman all over the country, each with his staff and office. Whatever co-ordination there

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    might be, it would not be possible to have the feature which is being insisted upon as being so valuable in Scandinavia and New Zealand—it has been achieved to a considerable extent there—of having a man who deals with all cases and is able to apply his own methods and work out his own principles. From the very beginning one is dealing with something which is not really on the same basis at all.
    But the matter goes very much further and it is this aspect, of particular interest to us, to which I want to address myself. In the White Paper it is stated:
    "We do not want to create any new institution which would erode the functions of Members of Parliament. …Our proposal is to develop these remedies still further. We shall give Members of Parliament a better instrument which they can use to protect the citizen…"
    namely, the services of the ombudsman. I am not concerned, and it would not be right that I should be, to argue the case tonight but I am bound to say that I take the definite view—and I am fortified in this by the results of studies and discussions with a number of friends inside and outside the House—that the arrangement outlined in the White Paper will not give hon. Members a better instrument for the redress of grievances. It will, if anything, decrease their power and ability to assist their constituents.
    It is laid down that the Commissioner must act only at the instance of Members of Parliament and cannot act in any other way. It is also laid down that it will not be a question necessarily at all of an M.P. being approached by people in his own constituency. A person may go to the next constituency to consult its M.P. if he does not get satisfaction from his own M.P. Let us see what that will mean to us.
    I believe that the vast majority of us take great pride and feel a very great responsibility in the right—which is a remarkable one as one learns when speaking to Parliamentarians from other countries, who are astonished by it—to write a personal letter to a Minister to tell him that one is convinced that a constituent has suffered a grievance. Few hon. Members ever do so until completely satisfied that they should use this remarkable power.
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    Will hon. Members go on doing that under the new system? Let us imagine the system in force. How many hon. Members will be prepared to turn down an application from a constituent in the knowledge that that constituent will be encouraged by the scheme to go to the neighbouring constituency, which may be represented by a political opponent, to ask its M.P. to take up the case instead? At once we find that the question of the redress of grievances—the great right of hon. Members to assist their constituents —instead of being, as now, an entirely non-political matter, may well become one of party politics. I believe that that would be a serious matter.
    In common with most hon. Members on both sides of the House, I never inquire into the politics of a constituent who asks me to do something. But in future will an hon. Member not hesitate before telling a constituent, "I have considered your case but I do not think I should put it forward". A very large number of people turned down in this way—and one will not altogether be able to blame them—will put a letter into the post to another hon. Member who may be on the opposite side of the House to their own M.P.
    I shall not go into the question of whether the ombudsman will be able to go into his job properly without enormous staff or whether he will be able to do very much better than hon. Members. But there is a serious point involved because, as I read it, the ombudsman's right will be very much less than that of hon. Members. Many restrictions will be laid upon him. He will be prevented from inquiring into many things. For example, he will not be entitled ever to make inquiry about Service complaints. Yet Ne have frequently dealt with complaints by people who are in trouble in the Services and such cases are dealt with in a sympathetic manner nowadays. I have had many cases myself. But the ombudsman will not be able to take them.
    It will not be surprising if we find, after Parliament has approved the system, that hon. Members will be told, "That ombudsman cannot have this sort of information, so why should you have it? "I think that the idea of these two things working in a sort of uneasy parallel is something that we should look at very carefully.

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    There is an even more serious matter. The ombudsman is to be limited in a way described in these words:
    "It will not be for him…to examine a decision on the exercise of discretionary powers, unless it appears to him that the decision has been affected by a fault in administration."
    There is no such limitation on hon. Members. A very large number of cases we have to deal with are essentially where a Ministerial discretion has been exercised in a way which we say has been unreasonable or unfair. There has usually been no maladministration; the matter has been dealt with efficiently and the rules observed, but nevertheless the decision should be reviewed.
    I defy anyone to tell the House where the line comes between a fault in administration and a fault in discretion. A recent article in the Law Journal pointed out the extraordinary difficulty of drawing the line. Paragraph 16 of the White Paper states what is to be the objective of the exercise
    "…the scope of the scheme must be made as clear as possible, so that everybody may know as plainly as may be what cases the Commissioner will be able to take up…"
    and what he will not. I do not know, and I do not believe that anybody else knows, where the line between the exercise of discretionary power and a fault in administration is to be drawn. Supposing there has been admirable administration and efficiency yet a most unfair decision. In such a case today, hon. Members are not governed by any kind of narrow rule and to bind the ombudsman, who will, in effect, be the operative channel for hon. Members, in this way strikes me as being not an advance but as very much a retrograde step.
    I know that other hon. Members want to speak and it is not really right to argue this case in detail, but I should like to appeal earnestly to the Government to take the course which I am about to suggest. Let us have a really free, full discussion on the White Paper. Let that be brought forward by the Government with an open mind. Let them remain flexible.
    I have been working on this matter in one way or another for some years and I can say that there is a group, of which I am not actually a member, but with
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    which I am associated through the Inns of Court Conservative Society, which has been working on this recently. It takes the view that something much more efficient and effective is required than this one man with a department of his own of uncertain size. Something is required in the way of an administrative commission, something on the lines which exist in countries like France where they have it worked out to a great degree, a real tribunal at which these things could be dealt with in a formal way. There is no need for a formal approach from the point of view of the actual administration but there would be this great advantage, that it would be recognised as giving authoritative decisions requiring a lot of consideration.
    I would sum up the matter by saying that this ombudsman sounds a nice, easy way of doing it. It is a splendid idea. Here is this great, just man, to have the powers of the Comptroller and Auditor-General, who will be able to right one's grievances. When one looks at the White Paper it will be found that he has no teeth at all. His teeth consist of reporting back again to the House. Having got a complaint from a Member of Parliament he will report to a Select Committee, which will make a report after some discussions. There may be differences of opinion, a majority and minority report. What happens to Mr. Jones' grievance? Everybody has forgotten about that. It is probably a year old by this time, and he may even be dead.
    That is the simple plea I make. I am prepared to say that I recognise that the decision that something ought to be done about this is right. I am sure that my right hon. and hon. Friends would be prepared to co-operate in this matter. I am bound to point out that we cannot say that it is a matter which is not controversial. I might perhaps say that in that connection I read a letter in The Times, just after publication of the White Paper, written by a noble Lady who for many years was known to many of us here as Elaine Burton.
    I happen to know that she was someone who had a great deal to do with redressing grievances. I was once associated with her in a case in which we were successful in obtaining a satisfactory result. I was surprised to find

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    that in her letter she said, in effect, that this was an ideal solution, absolutely perfect, that it was all cut and dried, and it could go through the House in 10 minutes. With the greatest respect to her, I cannot agree with that. I believe that this may be the subject of one of those very important debates that we have from time to time, where there is no party issue involved. We are dealing with great issues affecting individuals and I sincerely hope that the Government will be prepared to treat the matter in that spirit.
    7.55 p.m.
    Mr. William Wilson: I am sorry that I cannot follow the right hon. and learned Gentleman the Member for Chertsey (Sir Lionel Heald) entirely in what he had to say, but the comments which I want to make have some relationship to his, as I, too, want to speak about a subject dealing with the liberty of the individual. I want to refer to that part of the Gracious Speech relating to the development of new ways of dealing with young persons who have come before the courts. It is out of an experience of appearing, almost daily over the last 20 years, in the criminal courts of this country that I want to speak tonight. I feel that any person who has any connection with the juvenile courts, in any capacity, very quickly realises that the biggest single factor that brings young people before the juvenile courts is the home background which they have enjoyed or suffered.
    It is very rare indeed that one hears of a child coming before the courts who has had a good home and a good parental background. I feel that the coincidence is far too great for it to be ignored. We can go a stage further and say that anyone who has any experience of dealing with the older criminals discovers that the biggest single common factor in the background of these older criminals is the juvenile delinquency of their youth. It is no exaggeration to say that if the juvenile delinquency problem could be solved it would be the biggest single factor towards solving the crime rate among senior criminals. My experience teaches me that there is no other real way of dealing with this.
    When we consider this part of the Gracious Speech we also ought to pay tribute to the part played by the proba-
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    tion service of this country in relation to the treatment of juveniles. This is invariably devoted service, carried out under adverse conditions. Sometimes when I look at the buildings and offices where the probation service carries out its work in my constituency, and then look further down the road, at the palatial police station which we have—although I would be the first to acknowledge that the new police station in Coventry was a necessity—I wonder whether this is not a case in which we have our priorities wrong. The probation service is overworked and under-paid, even since the recent wage increases. I often used to wonder, when looking at the television series on probation officers, whether any probation officers were also looking at that programme. It was a sobering thought that the probation officers looking in were probably earning only one tenth of those who were portraying them on the screen.
    A fair amount of criticism and helpful advice has been coming from the probation services on the subject of the family councils referred to in the White Paper, and on the subject of the new treatment of persons coming before juvenile courts. We should ask the Government to take account of how important it is to have the help and the support of the probation service in bringing forward any new ideas. Those engaged in the education service realise that we cannot have educational reforms without the backing of the teachers. Similarly, it is necessary that the reforms which the Government have in mind for dealing with young criminals should have the backing of the probation service.
    While one would agree that there is a great deal to commend in the White Paper's new ideas for the treatment of criminals, one can understand the objection which the probation service raises to them. Take the suggested family councils. They will mean that the parent and various officials will meet together and try to decide what should be done with the child before them. They will have the power to deprive a child of its liberty, although it is not said that he will be sent to a detention centre. It may well be wrong to deprive any individual of any part of its liberty without using the court law which has grown up over a long time.

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    Perhaps the big danger is that a child attending a family council will think that the parents and officials are ranged against him in deciding what should be done with him. The bond between parent and child is substantial and must be preserved, and a child who comes from a good home and has good parents can feel that sense of bond between them. If a child comes from a home in which the parent says, "It hurts me more than it hurts you, but I think that for your own good this is what should be done", the child may well understand the point which the parent is making. But the child who comes before a juvenile court does not come from that sort of home. The link between him and his parent has already been weakened.
    In the family council the part of the parent will be very great indeed. Anyone who attends a juvenile court knows that the most common phrase used there by a parent about his child is simply, "He is a good lad at home". Every parent thinks that his child is a good lad, and that is where the family councils' difficulties will arise. Even though there have been difficulties between the child and the parent, the cry that he is a good lad at home is continually heard in the juvenile courts.
    It may be difficult for a family council to improve the relationship between the parent and the child, and that relationship seems to be fundamental in the problem of juvenile delinquency. We should realise the part which is already played by the probation service in the juvenile court. Every year, 70,000 special reports on children before the courts are prepared by the probation service. They are not only factual; they give an indication of the way in which the child should be treated.
    I cannot think that it is new courts or new councils that we want. What is really needed is the implementation of the legislation which is already in existence. What we are short of is places in remand homes for juvenile offenders. I know that the situation has improved recently. It has improved considerably in my area. One of the first tasks which I had as a Member was to protest about a young lad being kept in an ordinary prison. The situation in my area has changed, but there is still a lot to be done throughout the country.
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    We need better facilities for psychiatric treatment and more places for educationally sub-normal or maladjusted children. But, above all, we need more trained personnel. The probation service is a thousand short of the officers required to carry out the duties placed on it. The White Paper clearly says that before it is implemented full consultations will take place. I hope that those consultations will take place and that the statement in the White Paper is not merely window dressing.
    Children's lives are far too important to be jeopardised by hasty decisions. I hope that the Home Office, when it makes its decisions, will take note of the substantial objections made by a body of individuals who are best fitted by their experience to talk about this subject.
    8.7 p.m.
    Mr. Eldon Griffiths: I agree entirely with what the hon. Member for Coventry, South (Mr. William Wilson) said about the need to improve the status and income of those in the probation service. Recently, I had occasion to go to see a constituent who had just come out of gaol. In the home which his wife had kept together during his period in gaol were two tiny children, and their conditions were appalling. I was ashamed to see them in such conditions in 1965.
    As a Member of Parliament, I made inquiries in the fashion mentioned by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald). In making those inquiries I found that those in the probation service were the only people really tackling the job on the ground, and I was filled with admiration for the way in which they were doing it.
    The hon. Member for Coventry, South will forgive me if I deal with a different and prehaps slightly wider subject in commenting on the Gracious Speech. As a Conservative Member, I welcome many parts of the Gracious Speech. In particular. I was glad to read the Government's intentions about rates. I am not sure that there will not be some details which I will want cleared up. I was also glad to read about the prospect of improved pensions for service people, whether from the Armed Services or from civilian Ministries.

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    Although there was only a glancing mention of it, I was glad to see a reference in the Gracious Speech to agriculture, which concerns by constituency. Farmers will judge the Government not by their words but by their deeds. In view of what they have done in the last year, particularly the lamentable Price Review, very few farmers will be persuaded by a series of new statements in the Gracious Speech that the Government have suddenly become conscious of the real needs of the farming population. It is clear to me that they have not, but the mere fact that they have put in a reference to agriculture is a step forward.
    The criticism which I would make of the Gracious Speech as a whole is that it does not tackle the two big changing factors in our society. First, it does not go into the matter of regional development in anything like the detail that I had expected. We hear a lot about the North-East and Scotland and I am glad that in large measure, due to the efforts and the policy of the previous Government, both those areas are today much better off than they could have expected to be without those policies.
    There is, however, another region of which I presume to speak from time to time, namely, East Anglia. It is here that a new frontier is emerging in Britain today, for three reasons. First, we have the development of the East Coast ports, the ports which face the Common Market. It is increasingly obvious that instead of sending their goods down from the North and from the Midlands into the congested mass of London, and often getting them lost in the docks, many more industrialists from the Midlands and the North prefer to send their goods to the Continental market along an East-to-West route by way of the developing ports of Harwich, Ipswich, Felixstowe, and so on. This is a healthy tendency and I should like to see more effort made by the Government to improve our east-west communications so that we can more easily get these important exports into the European market—by way of our East Coast ports.
    The second reason why East Anglia is becoming a flourishing region is the prospect—perhaps I should put it no higher than that—that off our eastern shore we may find new sources of natural gas and, possibly, fuel oil. It is too early to say
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    for certain that we shall find these new resources, but the picture looks hopeful. If it should be that off those eastern shores we have available an indigenous sterling source of fuel under our own control and not subject to the vulnerabilities of a precarious Middle East, East Anglia will have something that it has never had before—cheap fuel which will not need to be brought from the coalfields and which will be available, perhaps, for the beginnings of a petrochemical industry along our eastern shores.
    The third reason for the growth of this area is the rapid increase in its population, both the existing local population —our birthrate is high—and also the new people coming to East Anglia from London. I should like to see that ugly word "overspill" abolished from our political vocabulary. It is an insult to human beings to describe people as overspill. I am glad to see people coming from London and enriching our technical and cultural life in East Anglia. But I dislike having them described as overspill.
    These are reasons why East Anglia is developing, along with many other regions of Britain, and it did not seem to me that in the Gracious Speech there was any attempt to tackle the regional problem in the detail that I had been led to expect.
    Equally, however, I think that the Gracious Speech fails to tackle the emergence in Britain today of a new group of people within our society. It is of one group in particular that I want to say a few words tonight, namely, the people who have been variously described as the technocrats, the meritocracy or the salariat. Essentially, they are the young and aspiring young marrieds who stand at the middle of British politics today. It is they who form the centre. Those people are of immense importance to all of us in this House, because they are the fulcrum of British politics. They are neither to the Left nor to the Right; and as they go, so goes the nation.
    It is fair to say that in 1945 the Labour Party captured the centre. The consequence was a very large Labour majority in this House. It is equally right to say that in 1959, Mr. Macmillan very largely helped to capture the centre. The result was a Tory majority of 100 seats.

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    In the last election, I regret to say that the Tories lost command of the centre and that the Socialists did not gain it. If anyone gained it, it was the representatives of the party that is not here tonight. I say this, perhaps, with special direction to you, Mr. Deputy Speaker. The representatives of that party who are not here tonight are a disappearing feature of the British political scene. I believe that we shall see tomorrow, just as we saw a week or so ago, that their policies no longer commend themselves to the public. As I see it, however, the future of the country and of this House will rest upon which of the two great parties is most effectively able to persuade these people at the centre that it represents a modern, progressive, efficient and compassionate Britain. We are competing for the people at the centre. Let that be where the competition should lie. I do not think that there will be disagreement on either side about that.
    What I wish to speak of briefly is the kind of thing that, I believe, these people at the centre stand for, what they want in our modern Britain and the kinds of things that the two parties in this House are offering to them. The first thing that these people stand for, or the first thing that they can be identified as, is people who have very large amounts of education and skill. They are the salaried people; the managers, the engineers, the accountants, teachers, scientists, civil servants and so on. The surprising thing is that 7 million people come within that category of the "salaried" and that their number rose by 25 per cent. between 1954 and 1962. They are by far the fastest-growing group in our society. And as Britain becomes more technically sophisticated, they will grow even faster and it is probable that by the middle-1970s they will represent better than one-third of our total force. I welcome this.
    Secondly, a feature of these people is that they have benefited from the great post-war revolution in secondary education. A very large number of them are those who passed the 11-plus, an examination which I for one would like to see reformed drastically, if not entirely removed. These, however, are the people who have come up what my hon. Friend the Member for Uxbridge (Mr. Curran)
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    once called the escalator from Coronation Street. I include myself among them.
    It is because these people have the drive, the energy and the willingness to go without that they have got ahead, and they are beginning to occupy places in our society which were denied to them half a century ago. As these people of the escalator have emerged, however, they have changed. I suggest that they are no longer in tune with old-fashioned Socialism, for two reasons. The first is because, if I understand Socialism aright —I once even supported it—it is founded upon egalitarianism and a sort of sentimental myth about the solidarity of organised labour. I do not believe that these people of whom I speak any longer accept that if a Labour Government were to abolish the public schools, inherited wealth, Savile Row and the 11-plus, suddenly all men would become equal. The people at the centre do not accept this. They know perfectly well, having bettered themselves, that it is untrue.
    The second thing that these people have cast aside is the old myth, which I must confess to having shared as a boy in the late 1930s, of the solidarity of the so called working class. Increasingly, but perhaps wrongly, the people of the centre look upon organised labour rather as the champion of yesterday, as something that is for ever making new demands in the shape of inflationary wage claims and disputing who should bore the holes. That is the image that is possessed increasingly by many of the people at the centre, and it is something that, I am quite sure, the trade union movement will want to take seriously.
    Yet if these people are out of tune with the old-fashioned Socialism as I have described it, I think they are equally out of step with a lot of old-fashioned Toryism. I am sure this is true as well. They are not against the public schools, because many of them want to send their sons there. They want choice in education, and that is something we on this side of the House believe in. Neither do they want to dismantle something called the Establishment. I think they are amused by it and regard it as a dying institution. But if they are content to go along with these things, one thing they will not tolerate. They are against there being any longer in the Tory Party any taint of snobbery. "Top" people are not

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    tops to them. The people in the centre are not prepared, in my judgment, any longer to go unrecognised in British society. They will not accept that people should be entitled to top places in Britain on account of their accent or their tailoring or their school or their fathers or anything else. The people of the centre want to be able, and are entitled to be able, to get to the top themselves, and I believe that in the Tory Party increasingly they are doing so.
    I want to turn very briefly to identify some of the characteristics of the people I am describing tonight, and to their objectives. I presume to do this having gone to several hundred families during my holidays. I did not go to Eastern Europe as did the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) who spoke just before me. I went to many parts of Britain, and I found that there were three or four things that these men I am speaking of, the "pacemakers" they have been called, want above all else out of Britain today.
    I think the first thing, which is common to all of them, is that they want economic: security. In the last twenty years, or even thirteen, one might say, the causes of the old economic insecurities have been removed from the people at the centre: their standard of living has gone up immensely. Yet if they have been freed of the anxieties which used to beset their parents—over whether they could pay the rent, or the doctor's bill; thank God these things no longer beset so many of them—the fact is that in place of the old anxieties there are today new anxieties. They are the sorts of things which politicians sometimes ignore.
    In my view the true fact about modern Britain is that, affluent as we are, many hundreds and thousands of outwardly prosperous teachers, town planners, engineers, civil servants, designers, lie awake at night worrying and scheming about how to stretch their resources to meet their expanding needs. They worry about how to provide private school education if their sons do not get into a grammar school. They worry about whether they should have their babies in a private hospital if the N.H.S. system has not got available a hospital bed. They worry about granny and whether her pension is adequate to support her, and
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    her savings being eroded by inflation. These are the real worries of people in Britain as a whole, and particularly in this middle ground for which we on both sides are competing.
    It is certain that these young people, as they have demonstrated by their votes, think that stop-go will not do in British society today. And if the Conservatives in office failed to solve the problems of stop-go in our nation, then we have to say that with the present Government— they have had but a year, I accept that— there has been a crashing stop and no go. The people I am referring to recognise it, and it is a real problem for us on both sides of the House.
    I think the other desire, after economic security, is the urge, the individual urge of these people, to get ahead. They want to see some blue sky. I think they are prepared to work very hard and to go without, but they expect there to be a relationship between their efforts and the rewards which they get. Far too often in our society today a man who is prepared, as a business man or a worker, to put in more effort, finds that our taxation structure seems to deny him far too much from his extra marginal labour. I believe it is important that for these people at the centre there should be as rapidly as possible a reduction of taxes on earned income.
    I accept that taxes are necessary. It is completely irresponsible to talk of having more and paying less. But if it came to a choice between reducing taxes on earned income and having to retain a tax on capital gains, then I would say, very reluctantly, I would prefer to see a reduction of tax on earned income. I hope and believe that a Conservative Government, when they are returned, will seek to reduce taxes across the board, but I hope that the first priority will go to the reduction of taxes on earned income, because the people of the centre of whom I am speaking wish to see a direct relationship between their effort and their reward.
    The third thing I believe they are seeking is a change in the character of the Welfare State. I am not a wholesale dismantler at all, but I think we must recognise that this is 25 years old. I remember in the early part of the war, when I was in the sixth form at a grammar school, reading the Beveridge

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    Report and loving every word of it, because it seemed to speak of something which needed to be done, certainly in the society I was born into. Thank heaven, very largely it has been done. But the two assumptions which came out of Beveridge have gone, or have become irrelevant. The first was that we lived in a country of massive unemployment. We no longer live in a nation of massive unemployment. The other thing was that we had a diminishing birth rate. Well, the babies are bursting out all over in Britain today. So it is no longer necessary to direct the focus of our Welfare State to the problems of massive unemployment. We do not have it. Nor is it necessary to deal with a decreasing population. We have, heaven knows, more increase in population than we know what to do with. Therefore, it is right to say that in present conditions the Welfare State needs to change, so that it meets the realities of a changing society.
    What to do? Certainly I would not wish to tear it to the ground. But there are certain things, one is housing and another pensions, and there may be health, where I suggest that change is imperative.
    First, on housing. Hon. Members opposite will not agree with me, but I should like to see stress placed upon the massive extension of home ownership in this country. I believe that the people of the centre, not only the young people, but all of us, wherever possible, wish to own homes of our own. It is right that the Government should use their powers to provide cheap rentals for those who stand in need. But having lived many years in the United States I am impressed by the fact that they have achieved something like 85 per cent. of home ownership, and I am sure this adds to the stability of their society. We in this country ought to make it possible for all who wish to own their own homes to do so.
    And there is a method, a method in which the Government have a very large part to play. I do not think we should offer fancy interest rates. If we give a man 3 per cent. for his home why should there not be 3 per cent. for a police station, also an essential service? Why should there not be 3 per cent. for
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    exports? I do not think we can have differential interest rates in the same society. But it should be possible for us to have a national housing administration, as in the United States, where a young couple can be sure of one thing, that they will have a stable rate of interest over a long period of years. What they cannot accept is 3 per cent. one year and 7 per cent. the next, an upward and downward gyration of interest rates. They want above all to look forward to a stable payment, month in, month out, over a long period of years, and that is something we could do and ought to do in this country.
    I spoke, too, of the changes in pensions. This is not the occasion to go into detail. There will be other opportunities for it, but it surely must be right that pensions, as far as possible, should be related to need. They should not be indiscriminate across the board, meaning that many receive moneys from the State that they do not need at the expense of those whose need is great not receiving as much as they ought to have.
    The third field for change in the Welfare State is in the medical field. I would like to see the family doctor made the centre of our welfare services in a community. His condition at the moment is not as good as it should be, and I think we all know that.
    The people of whom I have spoken want to see all these considerable changes in the Welfare State. But the fourth thing that they want is higher standards in the country. More than anything else, I was impressed with the desire of young people not just to have more but to have better. In our country, we have got used to accepting the second-rate and putting up with it, at times almost making a virtue of our toleration of the second-rate. We are so easy-going, we do not like to make a fuss. But we all know that there are far too many restaurants where the crockery is chipped or there is dirt and grime, and we put up with those things in Britain. We know that there are too many trains which are dirty and not on time, and we put up with them in Britain. We have a telephone service which, in spite of all the efforts of the present Postmaster-General and his predecessors, by international standards is

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    still not good enough. Far too many foreign visitors come to London, dial the operator and spend too long waiting, until they get the impression that the signature tune of Britain is an uninterrupted "burr-burr".
    I believe that the people at the centre are looking for an improvement in standards. That has been reflected in the consumer movement and, I hope, will continue to be reflected in Government legislation.
    The last point that I want to make is that people in the centre are haunted by the need for a greater ideal. Over the last years since the war, we have spent too much time as a country on just getting and spending. As the poet said, this can lay waste one's powers. Among younger executives, businessmen and ordinary working families alike there is a desire to serve something greater than self. That greater something can be their country. Not an old-fashioned, flag-waving variety of patriotism; but in having an ideal bigger than themselves. To my mind, that ideal can be found as much as anything else in an association of Britain with the European Community.
    I would make two brief comments on that. I ask the House to sit back and picture Britain as it could be in 20 or 30 years from now. By the end of the century, America will have a population of getting on for 400 million. It will have added to its gross national product something like 12 more Britains between now and then, and, with all the fall-out of the space industry and so on, the gap between our total power, economic, military and political, and that of the United States will go on widening and widening. If at the end of the war it was a ratio of something like 3 to 1 in America's favour and today it is about 8 to 1 in her favour, by the end of the century it is likely to be of the order of magnitude of 20 to 1. At the same time the Soviet Union with the techniques of the 1960s and 1970s will be opening up her vast fields of minerals in Siberia and will have achieved an economic and political power at least equivalent to America's today, and perhaps rather greater. Beyond that, there is China.
    In a world of super-powers of such immense capacity, how are we in our island to make our voice heard in the
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    world? How are we to ensure to our people the standards of living and the technologies that they are entitled to expect?
    I do not think we can do this alone, and I say this with a lot of nostalgia and a lump in my throat about the great past of this country. The time has come when we must boldly take the plunge and decide that it is our rôle to bring into existence a new Europe that is big enough to have a say in the world, not because it is prestigious to have a say, but because I do not want to see the future of mankind decided by some unknown future President of the United States of America, whose attitudes we do not know, talking on the telephone to whichever man has been thrown up to head the Soviet Union.
    That dialogue began at Cuba, and it could go on, but I believe that the peoples of Europe, and of this country in particular, have something to offer to it. If it is right that the next problem of the world, beyond the nuclear confrontation, and the cold war, is the fact that two thousand million barefoot peoples are on the march and are looking for a place in the sun, if it is right, too, that it is a contest between them and the richer countries to the North, including perhaps Russia, and if that conflict of rich and poor should be underlined by the fact of race, then we can make a contribution only as part of a larger unity, which should be Europe.
    For the people at the centre about whom I have spoken tonight, perhaps for too long, the ideal of playing a part in the creation of this Europe is a compelling thing. I do not say the narrow Europe of the Treaty of Rome. It may have to be bigger than that. It may have to include E.F.T.A. I hope, too, that it will lean to the Atlantic, and always keep the Americans with us. And that in the course of time it will open the door to the nations of Eastern Europe as they wrest themselves free from the Communist system which they are in today.
    Our part is surely to be, as it were, the hinge on which this greater Europe that is there today, with all the difficulties of General de Gaulle, will swing open into a very much wider concept. If we can give these people at the centre, and indeed all our people, that ideal, along

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    with some of the other things of which I have spoken, higher standards, economic security, and changes in the Welfare State, then I believe we shall be competing politically about the right things in Britain. On these things let the contest be won.
    8.37 p.m.
    Mr. Michael McGuire: I want to follow the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) on the first part of his speech, when he congratulated my hon. Friend the Member for Coventry, South (Mr. William Wilson) on the reforms suggested in regard to child welfare and juvenile courts. The hon. Gentleman seemed to imply that there was some danger in the reforms suggested by the Government. I am sorry that my hon. Friend is not in the Chamber now. Because a place was not available in a school for the educationally subnormal, the son of one of my constituents was sent to a remand home. It was agreed that he would not have been sent to the remand home had a place been available for him at the school. I hope that this state of affairs will no longer exist and that in future the approved school order will ensure that the local authority concerned is able to deal with the matter as it considers best.
    The right hon. Member for Leeds, North-East (Sir K. Joseph) made a serious attack on the unions in the nationalised industries. I can speak with some knowledge only of the National Union of Mineworkers. I tried to intervene during the right hon. Gentleman's speech to ask whether he could give figures to prove that the conduct of the unions in the nationalised industries was more irresponsible than that of unions in the private sector. The N.U.M. has always shown the greatest responsibility in its conduct and it is a fact that in certain areas under the authority of the National Coal Board, particularly in the Durham and Northumberland coalfields, strikes are very rare indeed. One has to go back a long way to find examples of the members of the unions having acted irresponsibly.
    I believe that one of the great tragedies in the mining industry, paradoxically, has been that the miners have always acted too responsibly. Their outlook has
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    always been for the national good. When the National Union of Mineworkers was putting forward a miners' charter—which, if we are to accept the proposition put forward by the opposition, the miners were always in a position to demand— I well remember Arthur Horner, who could never be accused of being a milk-and-water Socialist, saying, "We can pull down the temple of nationalisation. By putting forward our demands and being able to reinforce them we will destroy the thing that we want to see successfully created." He told his members, "Let us go steady, and we will get these things, because we have more to gain from the success of nationalisation than any other body of workers."
    One of the recommendations of the Royal Commission on the trade unions should be that when members of a union take any big decisions they should do so by secret ballot. One of the causes of strikes and the spreading of strikes, as well as of the delay in getting the men back to work, is the successful intimidation by certain people who use their influence and prey upon the loyalty which union men have for each other. These people often prolong strikes as well as bring them about.
    I was a full-time branch secretary of the National Union of Mineworkers for seven years, and one of the things that I did as speedily as I could was to see that secret ballots were the order of the day. My branch had no strikes while I was secretary. I do not say that that was because I was secretary. All the big decisions, such as election of officers —and this applied when I was elected as well as everyone else—were taken on a secret ballot.
    When the Leader of the Opposition was speaking yesterday it seemed to me that in his opinion the Gracious Speech was a piece of window dressing; it was a question of getting ready for the next election, and was an election winner. I could not agree more. I always believe that the next election is coming as soon as the one that has just been won is over, and that what one must seek to do is to retain power, without which it is not possible to do all the good things that one desires.
    I do not want to carry my cross of Socialism into the wilderness. We were in the wilderness for 13 years. I want

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    to ensure that we have a fair crack at power. I believe that this Gracious Speech is an election winner, and to those people who make the charge that the nationalisation of steel has been abandoned I say that it has been delayed— and quite properly. When we feel that the time is right, and when we have put into effect those measures which the people want, we can go to the country again. Then, if we are defeated on the question of the nationalisation of steel, as seems more than probable if the present situation continues, we shall have something in the bank. The people will not accuse us of political inefficiency—of doing the things that we said we would do, but in the wrong order.
    I should like to turn to the reorganisation of the finance of the coal industry and its capital reconstruction and the subject of aid for the industry in financing the redeployment of its manpower. I shall not anticipate the Bill proposed on this subject, but I believe that the Coal Board should be treated with more generosity than is, I believe, contained in the proposals. For every £ the Coal Board is prepared to spend on redeployment and reorganisation, the Government should give an equal amount.
    Rather paradoxically, one of the factors which has militated against the Coal Board becoming a better employer is that it has always had to take account of the social consequences of transferring men. The Coal Board has set an example second to none in building houses for its transferred workers—an activity which should properly be the Government's responsibility.
    If the Coal Board is constantly to be saddled with this kind of responsibility, it will never have enough money to attract men into the industry and pay them proper rates of pay. Although reference was made, I think, on the other side of the House to miners earning £25 to £35 a week, half the men in the industry work for day wage rates. At my pit a third of those men earning day wage rates went home with only about £9 to £10 a week, and they had no prospects of piece work. Therefore, if the coal industry is to be able to offer proper wages and conditions, the terms of legislation will have to be more generous than are outlined at present.
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    On the subject of council houses and subsidies, I believe that the Labour Party could properly demonstrate that it is a believer in a property-owning democracy. It was the late Hugh Dalton, the first Labour Chancellor, who, through the Public Works Loan Board, gave people opportunities to borrow money at very low rates of interest. We should examine very seriously the fact that our party is saddled with this misnomer, assumed to be simply a "council house party", implying that we believe that council housing is the best way of dealing with the housing problem.
    There will always be people who are unable to get a home of their own unless we provide cheap housing, but I urge my right hon. Friends to look very carefully at the possibility of encouraging more and more people to buy their own homes and encouraging local councils to build more houses. If a person has a stake in a house, that will be less of a charge on the Exchequer by way of subsidies.
    One passage in the Gracious Speech reads:
    "For the protection of consumers, a Bill will be introduced to strengthen the law on misleading trade descriptions."
    Consumer protection is a wide subject. Its greatest scope lies in doing away with the subterfuges which exist in some retail trades, particularly in the furniture trade and in the sale of clothing for school children. Many parents and young couples are held to ransom in both these respects. With modern techniques in furniture making, orange boxes can be made to look like bedroom suites and command the most outrageous prices, with no one being able to check the quality of the goods he is buying.
    These are small things, to which I believe that a Labour Government will pay more attention than a Tory Government. I hope.that it is a long time before the party opposite has the opportunity to pay attention to anything.
    The Gracious Speech mentioned strengthening the National Health Service. I, more than most men, have had cause to be grateful for the introduction by a Labour Government of its greatest piece of legislation, the National Health Service. Voices are constantly telling us that we should reorganise the Service and

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    that there is not the same need for it. They quote Beveridge and say that he envisaged a far different society from that which exists today. I believe that we should strengthen and not whittle away the main fabric of the most noble concept of the last Labour Government, and I believe that the majority of people agree with me. We should not seek to destroy this service by listening to those voices which try to demonstrate that it will be much cheaper, and will provide a better service, if we make changes.
    In my opinion, the doctors have some kind of a case. Basically the doctors' case is that which hon. Members opposite used to deride in respect of the working class, for the doctors are seeking to maintain a differential, and they are saying, and sometimes demonstrating successfully, that their incomes have not matched the rise in other people's earnings. If they have a case—and I believe they have —then we should look at it. I was heartened to hear my right hon. Friend state that the Minister of Health has managed to reach an agreement with the doctors which will strengthen the National Health Service. We should put out of our mind the propaganda, which I am sorry to say sometimes influences our own members, which suggests that instead of seeking to strengthen the National Health Service we should whittle it away.?
    I want to end on a personal note. There is reference in the Gracious Speech to free trade with Ireland. Sydney Smith once said that the ordinary Englishman always displayed great courtesy, courage and kindliness in dealing with other people except when the other people happened to be Irish. I believe it can be shown that the English have treated the Irish in the past with contempt and callous indifference. I hope that during the negotiations which I understand are going on apace with the Taoiseach— which is the Gaelic work for Prime Minister—of Ireland, in the discussions with Sean Lemass and his colleagues, we shall display a greater consideration for the problems of the Irish people and that we shall have a just and lasting settlement.
    I will not continue at length on the question of Ireland for I should probably be ruled out of order. I have noticed the agility of many of my hon. Friends who have tried to introduce a discussion on
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    the Six Counties. It was once said by one of my hon. Friends that the only thing which he could raise in such a discussion on Northern Ireland was Short, Harland and Wolf, and after that he was ruled out of order. I hope that we shall be dealing with one Ireland, because to my mind there is only one Ireland. I hope that we shall remember that we are a powerful nation and that we shall be fair in our dealings with the Irish people and not, as we have done in the past, look upon Ireland as a reservoir of cheap labour or a cheap food store. As an Irishman I believe that one of the difficulties in dealing with this question of Ireland is that far too often emotions and passions are aroused and arguments are put forward which blind us to the real situation. I look forward to a Labour Government concluding an honest and generous deal with the people of Ireland which will be to their profit and ours.
    8.55 p.m.
    Mr. Bernard Weatherill: I hope that the House will forgive me if I do not follow in the debate too closely what the hon. Member for Ince (Mr. McGuire) has been saying since I have only a short time at my disposal. I should like to refer to that part of the Gracious Speech which deals with Government policy as it affects trade unions and employers' associations.
    I suppose that the biggest debating point in the country today is the attitude of the trade unions to their power and influence in industry. While I note that the Government intend to encourage British industry to achieve greater competitive efficiency by reorganisation and better use of manpower, I am surprised that there are no proposals in the Gracious Speech which will encourage the British trade union movement to reorganise in order that it may play its effective part. I accept that the Government have set up a Royal Commission and that this has yet to report. Nevertheless, I was disturbed to read the evidence which the A.E.U. gave to the Commission the other day in which its submission was to a large part directed towards persuading the Commission to report in favour of a closed shop.
    The A.E.U. made the point that if membership of a union was compulsory

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    the union would be in a strong position in being able to apply discipline to unofficial strikers and others who defied its policies. This argument is convincing if the objective is acceptable, but I ask the House to consider two points. First, if the unofficial strikers can be disciplined by the threat or the fact of losing their jobs, would not such a threat more appropriately come from their employer? It seems to me that in such circumstances only the attitude of the trade unions has prevented this form of discipline being applied in the past.
    In saying this I do not deny the right of a union to defend in principle a worker who is dismissed as a result of disciplinary measures. That is part of a union's duty, but unions do not always defend unionists in the right way and, unfortunately, very often the whole power of the union is used against an employer who has dared to discipline an unofficial striker.
    The second point is that if the principle of a closed shop were accepted who is to say that: there might not be a secondary trade union movement protecting the workpeople from the unions themselves? It is fair to say that this process has already started, because I believe that there are two or three unions, which have been set up in the last 25 years or so, whose main objective has been to fight the so-called dilutee agreements in the engineering industry.
    Nor should we apply the closed shop principle to employers' associations. Most people will know that the C.B.I. set-up is a massive organisation of individual manufacturers, commercial undertakings, nationalised industries and trade associations. Can anyone believe that such a body can produce a view which is fairly attributable to all those interests, conflicting and competing as inevitably they are? In practice, the C.B.I. will find it difficult to say anything at all—and this point was fairly made in the October magazine of the Institute of Directors— lest, because it represents such a large part of British industry, it will be taken as speaking for the lot and might, in a statement, adversely affect the £.
    Most of my generation have read the history of the 'thirties with amazement. We know that thousands of men were then allowed to be out of work, largely unemployed or unemployable because of lack of training. This is a circumstance
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    that I hope we shall never allow to happen again. On the other hand, if the objectives of the National Plan are to be achieved, thousands of men at present in the dying industries must be retrained into the newer industries. Unless that is achieved, the National Plan will not succeed.
    I regret that in the Gracious Speech no mention was made of a massive increase in the work of the Government training centres and of training generally. I fear that, to some extent, the omission may be due to the Government's being inhibited from moving in this field by the reactionary policies of some of their trade union supporters. I wonder whether the House realises that because of the dilutee agreements, many men trained for skilled employment before the war have remained consistently in skilled employment ever since, but as they are what the unions call dilutees they can never achieve the status of skilled craftsmen. That is an official attitude which, if continued, will certainly sabotage the National Plan.
    I trust that at some stage, despite whatever opposition the Government may have, they will institute a system whereby vast numbers of people who have been trained or have to be trained in these newer skills and techniques will be given the status and recognition that is an essential part of the reward that a worthwhile workman must have.
    9.3 p.m.
    Mr. Anthony Barber: It is always the case that on the second day of the debate on the Address we have a fairly wide-ranging discussion, and the right hon. Gentleman the Minister of Labour will probably agree that today has been no exception. We have had speeches on almost every conceivable subject, from the ombudsman to juvenile delinquency—
    Mr. Gunter: And abortion.
    Mr. Barber: And abortion. I only regret that I was not able to listen to the whole of what was obviously an admirable speech by my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths).
    It is always a pleasure either to follow the right hon. Gentleman the Minister of Labour, as I did when we were in

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    office, or to precede him, as I now do in Opposition. I say that, not only because the right hon. Gentleman is highly respected on both sides of the House but because he is a man of both intelligence and integrity, who will, therefore, I am sure, agree with me in deploring the state of uncertainty into which the steel industry has now been thrown as a result of the Prime Minister's speech yesterday. It is to the omission from the Queen's Speech of any reference to the future of the steel industry that I want to refer first. I hope that even if the right hon. Gentleman does not reply to my own observations on this point, he will, at any rate, say something about the speech of his hon. Friend the Member for Ebbw Vale (Mr. Michael Foot).
    There was a time when many people in this country thought that the Prime Minister, like the Minister of Labour, was genuinely devoted to the cause of industrial efficiency and modernisation. They thought that the Prime Minister was the type of man who would be prepared to abandon the dogmas of Socialism wherever it was shown to be in the national interest to do so. In his speech yesterday afternoon about the future of the steel industry the Prime Minister confirmed once again that his contrived image of moderation and reasonableness is no more than a subterfuge to tide him over until such time as he believes that he will have a sufficient Parliamentary majority to discard the Liberal Party and to implement the will of the Left wing of the Socialist Party, on whose backs the Prime Minister climbed to power.
    Yesterday the Prime Minister said this in the House:
    "Public ownership of steel on the basis set out in that White Paper is and remains our policy, and we shall legislate to give effect to it."—[OFFICIAL REPORT, 9th November, 1965; Vol. 720, c. 38.]
    What the Prime Minister has done in fact is merely to postpone the evil day and to ensure that the issue will next be fought, not in the House of Commons, but when next we have a General Election.
    All I want to say in the course of this debate about the steel industry is this. This is an industry where both production and productivity are shooting up, an industry which exports directly 20 per
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    cent of its production and where a further 20 per cnt. of its production is exported indirectly in the form of steel-containing products, an industry which the National Plan itself presents as equipped with enough capacity to cater for the demands of the whole period covered by the National Plan. Yet, in the face of these facts, the industry is now to be left in a state of uncertainty until after the result of the General Election. There could rarely have been a more classic example of sordid party political manoeuvre without the slightest regard for the national interest.
    Yesterday the Prime Minister told us that the issue was simply one of priorities. There was one service which the hon. Member for Ebbw Vale did the House this afternoon. That was to say that the reasons given publicly by the Prime Minister for the deferment of this policy are no more than a sham. The Prime Minister now tells us that the health of the economy must be the first consideration of the Government. Yet only three weeks ago he told the nation that the nationalisation of steel was "essential to the economy". He went on for good measure, no doubt in order to satisfy the hon. Member for Ebbw Vale and his friends, "We regard it as urgent". Urgent indeed!
    Now that the right hon. Gentleman has had to forsake the refuge of the Parliamentary Recess he is once again shown to be what some of us have always suspected him of being—a master craftsman of evasion and double-talk. Even the hon. Member for Ebbw Vale made it clear in his speech this afternoon that he no longer trusts his own Prime Minister. I see the hon. Gentleman wagging his head. But yesterday in the House the Prime Minister declared categorically that he proposed to nationalise the steel industry. I have here a copy of this evening's Evening Standard which says that three more promises were apparently made at a Labour Party meeting earlier today. Yet this afternoon the hon. Member for Ebbw Vale said that he wanted a full explanation of what the Prime Minister's intentions were. In other words, he simply does not believe the leader of his own party.
    This is all I have to say about the steel industry, because no doubt there will be other occasions when we shall

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    have the opportunity of going into the merits of this matter. It is of significance that the next occasion on which the great debate will take place, as is clear from the statement of the Prime Minister yesterday, will not be here in the House of Commons, but in the country at the General Election.
    This afternoon we had an account of the Government's social policy from the Chancellor of the Duchy of Lancaster, who made an agreeable speech, as always. But what a disappointed man the right hon. Gentleman must be. That he is a man of high ideals no one who knows him will deny, but the truth is that in one sector after another of social policy the social service Ministers have been thwarted. It is not their fault, but that is the fact, as I shall show. Yesterday evening, the Minister of Labour, speaking at Eastbourne, said:
    "The main object in encouraging automation and other kinds of technological progress must be to benefit the people".
    How right he was. The truth is that all we do and all we want to do in the realm of social policy is dependant on a sound financial and industrial base. Today, the Chancellor of the Duchy put it in this way: the choice before Britain he said, is how high it is prepared to set its new social targets. The stronger the economy, the more we can do.
    I want, therefore, to remind the House of the position we have now reached after 12 months of Socialist Government. The hon. Member for Dewsbury (Mr. Gins-burg) said that, after 12 months in office, the Government have a solid record of achievement behind them. Here are some of the facts. First, the balance of payments, on which the Prime Minister concentrated in his speech yesterday and to which one hon. Member after another has referred in today's debate.
    The Chancellor of the Exchequer and all the members of the Government, quite rightly and justifiably, glean satisfaction from the renewed strength of sterling. But, when the Chancellor of the Exchequer speaks in the economic debate on Tuesday, he would do well to remind the British public of one fact which is known to every foreign banker in the world, but about which Treasury Ministers seem rather coy in their speeches. That fact is, that, during this first year of the Labour Government, the
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    Chancellor of the Exchequer has had to borrow from the rest of the world £1,000 million, a sum as great as the whole of the nation's gold and convertible currency reserves. Every penny of this enormous burden of debt contracted by the Labour Government will have to be repaid, not by the Chancellor of the Exchequer, not by the Minister of Labour or by any or the other right hon. Gentlemen sitting opposite It will have to be repaid by the British people.
    The other day, the First Secretary of State made this comment on our present position:
    "We are embarking on a very exciting, dramatic and encouraging period in our national life".
    The right hon. Gentleman's assessment of the position has about as much validity as his promise of 3 per cent. mortgages.
    The second fact which must be faced is the stagnation of industrial production. It is agreed on all sides that the pace of social advance is ultimately dependent on the level of industrial output. How on earth can the First Secretary of State continue to talk glibly of a 25 per cent. increase in output by 1970 when the latest figures show that the Chancellor's tax increases and credit squeeze have actually reduced industrial production to less than the level at which it stood in January this year? J noted last night that the Labour Party manifesto at the last General Election contained this delightful gem:
    "Not even the Tories' stop-go policies have been able to prevent some increase in production."
    But that is precisely the achievement of the Labour Government during 1965 and, more than that, they have gone one better and have actually succeeded in decreasing industrial production!
    What are the prospects for the future? No one will deny that a prerequisite of increased productivity and production is a high level of industrial investment. The Prime Minister recognised this in his speech yesterday. In an article published a couple of weeks ago, the First Secretary of State said:
    "A faster increase in investment in manufacturing industry is essential to the whole Plan. It is vital that investment from 1967 onwards should be on a strongly rising trend, and this will be affected by decisions taken today."

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    But under the present Government precisely the converse is actually happening. According to the estimates published in the Board of Trade Journal, capital spending in the second quarter of this year was considerably lower than expected—in fact, a fall of 3½ per cent. from the level of the first quarter. The latest industrial survey carried out by the Confederation of British Industries shows that the growth of investment is likely to slow down in the future. It is, therefore, not surprising that the Gracious Speech devotes a paragraph to this very problem. I remind the House of what it says:
    "Steps will be taken to improve the arrangements for providing incentives for industrial investment with due regard to the development of the economy and the special needs of particular areas."
    The paradox is that only seven months ago the Chancellor of the Exchequer introduced a Finance Bill which actually cut the value of the investment allowances by a third, and when my right hon. Friend the Leader of the Opposition sought to restore that value, we were politely told that the Government would be looking into the whole matter during the coming year, and, apparently, they are still looking into it.
    Perhaps the Minister of Labour, when he replies, will deal with the development districts, for which he has a special responsibility. Perhaps he will tell us what is meant in the Gracious Speech by the reference to:
    "providing incentives for industrial investment with due regard … to the special needs of particular areas."
    I ask that question because when we on these benches moved an Amendment to the Finance Bill for differential investment allowances—in other words, for providing greater investment allowances —for the development districts the whole of the Labour Party in the House of Commons that evening trooped into the Lobby and voted against our proposal.
    A third factor of vital concern for our industrial competitiveness to which the Prime Minister devoted considerable time yesterday is the whole complex of policies concerned with productivity, prices and incomes. This is another matter with which the Minister of Labour is directly concerned and a matter which has been referred to in almost every speech in the
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    course of today's debate—with the exception, perhaps, of two—and certainly by my hon. Friends the Members for Kidderminster (Sir T. Brinton) and Twickenham (Mr. Gresham Cooke).
    When some time ago I described the policy of the First Secretary of State as a monumental flop, he became very angry. But I would ask the House to consider in terms of hard facts just what has actually happened. The Ministry of Labour statistics show that since the General Election prices have increased by 4·7 per cent. There is no dispute about that. They have increased at a rate faster than they have been increasing in France, West Germany and Italy. One thing at any rate is clear. At last Britain is now near the top of one of the international league tables, the league table of rising prices. How on earth can the Chancellor claim, as he did the other day, that the Government's measures have already had the effect of slowing down price increases? The very reverse is the case. At least half the increase in the cost of living has followed automatically from the increase in indirect taxation which the Chancellor imposed on the nation. So one could go on.
    In my constituency thousands of people in Altrincham and Sale have to commute daily to Manchester. The only road between the two boroughs and Manchester, as the Minister of Transport would be the first to agree, is one of the most congested in the country, and so for thousands of these people there is no alternative but to travel by train. I will read a paragraph from last week's edition of the local newspaper:
    "A disastrous year for Sale commuters culminated this week with the announcement of British Rail that peak period return fares to Manchester will be increased from 2s. 5d. to 3s. 4d. on December 6th."
    There, in one fell swoop, is a crippling increase of no less than 40 per cent., and it comes on top of another increase earlier in the year.
    As for the incomes policy, here again the published facts run completely counter to the picture being painted by the Government. Even the Chancellor of the Exchequer was constrained the other day to tell us that in the first eight months of this year earnings had risen by 8 per cent. Whether he meant 8 per cent. in eight months or at the rate of 8 per cent.

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    a year, in either event this is far in excess of any increase in productivity and shows that the Government's policy of holding the increase in incomes down to 3 to 3½ per cent. has been, so far at any rate, a dismal failure.
    But of course it is little wonder that individual unions treat the Government's policy with derision. What chance has the Minister of Labour got? I know that he is sincere in his wish to try to keep increases in incomes in line with increases in productivity—an aim which will be shared by practically every hon. Member. But what chance has he of convincing individual union leaders that this is a policy which they ought to adopt when there, sitting next to him in the Cabinet, is the so-called Minister of Technology who himself has blatantly declared:
    "We will not have wage restraint whoever brings it in."
    The Minister of Technology's differences with his Cabinet colleagues, perhaps rather like the Minister himself, were first regarded by most people in the country as something of a joke. But I must say that on a matter as fundamental as this his failure to resign is fast becoming a scandal.
    The blunt fact is that 70 per cent. of the costs of production is accounted for by labour costs and that, so far this year, labour costs have far outstripped any gains in productivity. Incidentally—a fact which the First Secretary of State seems to ignore—wages have been rising even faster than prices.
    I shall refer to one industry to illustrate the disastrous consequences which can flow from the present drift, and I am pleased that the President of the Board of Trade is here because it is an industry that we have not discussed for a long time—shipbuilding. Last week the Chancellor announced that the Bank of England was making a loan of £1 million to the Fairfield shipyard to prevent it closing down. A good many other yards are at present facing the most serious financial difficulties. Yet, despite this prospect, earnings in the industry are rising at a rate which makes complete nonsense of the statement by the Minister of State, Board of Trade, that the shipyards must cut their costs.
    The Ministry of Labour has published the indices of earnings in the industry up
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    to August. I have here the figures of earnings in one yard which, I am told, is not untypical. They show that between October last year and October this year earnings rose by no less than 19·3 per cent. It really is incredible, therefore, that anyone can seriously pretend that the incomes policy is succeeding.
    On top of all this, the industry, as I am sure the right hon. Gentleman would be first to admit, is riddled with restictive practices. We are all in favour of the inquiry into the industry now going on under the chairmanship of Mr. Geddes, but it does not need an inquiry of any kind to highlight the restrictive practices already known to exist. The Minister of Labour will be the first to recognise the shortage of skilled men in the industry. He knows that one of the principal causes of that shortage is the nineteenth century "stick-in-the-mud" attitude to apprenticeships. I am told that for years certain unions—particularly the Boilermakers Society—have limited the intake of apprentices to a fixed ratio, quite irrespective of the need to increase the existing labour force. In the case of the boiler-makers, the ratio of one apprentice to five craftsmen is written into their rules and I am told that they adhere to this rigidly in most districts. Again, the industry has been satisfied for years that a five-year apprenticeship is quite unnecessary in most trades.
    The Prime Minister is forever paying lip-service to a policy of rooting out restrictive practices—he did it yesterday —but what the country wants is an indication that something is actually being done about it.
    In the ship repairing district on the Mersey there is what is called a burning agreement, which lays down the manning scale for the operation of burning machines, and which was concluded over 40 years ago. Today it is completely out of date but the Boilermakers' Society still insists on its implementation. In practice it works out that when five sets of burners are in use on board a ship, the scale requires the employment of 42 boiler-makers, no less than 32 of whom may be superfluous. How on earth can British shipyards be expected to remain competitive in the face of this sort of nonsense? These are the sort of practices

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    which are crippling the shipbuilding industry at a time when its order books are crammed with orders worth over £350 million.
    I recognise, as every other hon. Member in the House does, the difficulty of eradicating practices which are deeply ingrained, and I do not challenge the sincerity of the Minister of Labour in his efforts. I will say, however, that there are many people who are getting just a a little tired of the unctious moralising of the Prime Minister on the subject of restrictive practices, when he takes virtually no positive steps to do anything about it. Recently the hon. Member for Ebbw Vale said:
    "The biggest threat to this Government is cynicism about politics, cynicism encouraged partly by the actions of the Government which in some respects, have done things differently in office from what they said they would do in Opposition."
    How right he was. I shall not easily forget, when I was Minister of Health, the reckless and grandiose promises which were made about hospital building. What now of the four new medical schools which were the present Minister of Health's specific promise, made to this House before the last election? What now of that paragraph on hospitals in the Labour Party's election manifesto which read:
    "Labour will review the whole plan on the basis of a full assessment of local needs and provide the necessary finance to carry the plan through."
    Where is the reference to hospital building in the Queen's Speech? There was not a word, and why not? Because the Government's plan is to cut back on the projects which they inherited from the previous Administration. [An HON. MEMBER: "Nonsense."] It is no good crying "nonsense". In the last week or two—[Interruption.] In the last week or two the truth has been seeping out—
    Mr. Speaker: Order. Shouting on either side is no contribution to the debate.
    Mr. Barber: The truth has been seeping out. The £8 million general hospital for Exeter is to be indefinitely shelved. The rebuilding of the London teaching hospital of St. Thomas's is now no longer to be completed, despite the categorical assurance of the Chancellor of the
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    Exchequer that the measures which he had introduced would not affect hospital building.
    And what of education? There has been a cut back in the programme for higher education. This is well known and I need not refer to it again. What is not so widely known is that the Chancellor's restrictions are now working their way through to some school building. The right hon. Gentleman said, and I have no doubt that he meant it sincerely, that it was not his intention to impede school building. Let me give one example of the reality of the situation. There is a Roman Catholic school called St. Hugh's, at West Timperley, in Cheshire, which is at present too small. The Department of Education has approved the plans for an extension. All was set to go ahead until the general manager of one of the leading banks sent a letter to those responsible which included this paragraph:
    "I am sure you are aware that the present financial climate is extremely difficult. The amount of money which the bank has available to lend is restricted by the directives which we have received from the Chancellor of the Exchequer through the Governor of the Bank of England."
    The only conclusion to be drawn is that, while the Chancellor of the Exchequer, no doubt with sincerity, says one thing to allay the concern of the general public, the actual effect of his policy on the ground is quite different.
    In the coming days we are to debate a variety of other subjects—housing, the road programme, and so on—and I shall say nothing of them this evening. But there is one overriding consideration which now governs the presentation of their policies by the present Administration, and that is to prepare the way for a General Election. The Parliamentary Liberal Party, clinging to the coat tails of the Prime Minister with a humiliation which would have made their erstwhile leaders cringe, has forfeited any claim it ever had to independence. The choice before the nation is simple, and here I am at one with the hon. Member for Ebbw Vale: the sooner the Prime Minister puts the issue to the test the better.
    9.31 p.m.
    The Minister of Labour (Mr. R. J. Gunter): Like the right hon. Member for Altrincham and Sale (Mr. Barber), I

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    should hate to try to deal with all the subjects which have been touched on in today's debate. As he said, the debate has ranged over a very wide field. I am no expert on abortion or Scottish law or any of those things, and therefore I think that it would be desirable if I were to confine my remarks principally to dealing with the latter part of the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph) in which he spoke about industrial relations, restrictive practices and legislation. I hope that I may say without offence that the speech, excellently delivered, was more indicative of the midnight oil than of an appreciation of what makes British industry tick over.
    May I say to the right hon. Member for Altrincham and Sale, who dealt with restrictive practices, that those practices were in existence in September, 1964. I do not remember the Conservative Party taking any dramatic and dynamic action to deal with what has been a problem in this country for many years; and nobody can deny the nature of that problem.
    I hope that any approach to industrial matters in the House or on the political platforms outside would recognise that Ministers of Labour in previous Administrations tried to grapple with the question of getting industrial relations on a belter footing. Indeed, I know that careful consideration was given by right hon. Gentlemen opposite who preceded me at the Ministry to the question of how legislation might be possible and, if it were necessary,, how it could be implemented. They came to the conclusion on many occasions that the implementation of good industrial relations merely by regulation or legislation was quite impossible and that in industrial relations, when men gather at their place of work and are subjected to strains and stresses, no amount of legislation will automatically bring industrial peace. I think that we all recognise that.
    We do ourselves no good by painting too gloomy a picture of this country. There are vast areas of British industry which are a model to the world. People often talk about strikes. I am not complacent about this matter. I am very unhappy about many of the disputes in British industry. However, the position in many other countries is far worse than
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    it is in this country. America's record, where legislation has been introduced, is much worse than ours in the number of days lost through industrial disputes. If my memory serves me aright, for every 1,000 workers in America, 1,044 working days a year on average are lost, which is far in excess of the number in this country. Over the last ten years, in the table of the 18 leading industrial countries, taking the United States at the top with its appalling record, we are down in twelfth position. The picture, therefore, is not quite as bad as it is painted, although that is not for one moment any reason for complacency.
    One of the problems which I have to face and which worries most of us is the nature of the strikes in this country, the unofficial character of them and the indiscipline that is indicated by unofficial action. For heaven's sake, however, do not let us paint a picture of this great nation among the industrial and trading nations of the world as being one of the most hagridden. It simply is not true.
    I thought that tonight, in reply to what the right hon. Member for Altrincham and Sale has said, I would try to point out that things are moving. Certain things are happening. I never find any consolation in comparing our record with other nations and saying that we lost only a certain number of days in strikes this year. That is a bit daft and childish. What we want to do is to come to grips with the problems that arise from restrictive practices and unofficial action that impede the greater productivity that we want.
    The right hon. Member for Leeds, North-East, who opened the debate for the Opposition, wound up his remarks by saying that the policy of the Government in industrial relations was ineffective and evasive. Those, I think, were his words. I am not sure what they meant, but I will reply to them in the best manner I can. In the first place, one of the great problems that faced the last Administration was the problem of the docks, which has been a running sore in the economy of the country for a very long time.
    Various Ministers of Labour have tried to handle this problem of the docks. Believe me, I know the difficulties of the docks now if ever I did. Therefore, I

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    can understand the dilemma of previous Ministers of Labour. Whatever has happened in the last 12 months and whoever may claim credit for it, at least we have got under way the things that flow from the Devlin Committee. That Committee's Report was published on 5th August, and I undertook to report to the House when we came back how we were getting on.
    Hon. Members will remember that that Report set out a bold and comprehensive plan of action by the Government, the National Dock Labour Board, the employers and the unions. They were asked to engage in the task of a radical improvement in industrial relations in the docks. The essential element of the plan was the final disappearance of the casual system of employment. There are right hon. and hon. Members on the Front Bench opposite who know that this is the nub of the problem in the docks. This has been the curse of the docks for many years. It was, and remains, one of the principal causes of trouble in the docks. Lord Devlin recommended the introduction of regular, permanent employment for all dock workers, a drastic reduction in the number of port employers, the abolition of restrictive practices, reform of the wage structure and the provision of proper welfare facilities for dock workers.
    The House will know that immediately following publication of the Report I held a series of meetings with those principally concerned, the employers and the unions represented on the National Joint Council for the Port Transport Industry, representatives of the National Amalgamated Stevedores and Dockers Union—the "Blue" union—the Chairman of the Ports Council and the rest. We have tried desparately—and this is why we have not been ineffective in this major problem—to get an element of urgency and speed into this tricky problem. We have obtained the co-operation of the interested parties, but, whatever will be the outcome of the negotiations, there was a need for a new and radical approach to these old problems. I am glad to inform the House tonight that—I am not going to report that we are out of the wood; we may yet run into troubled waters—at least encouraging progress has been made over the last few months.
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    On 2nd September the National Joint Council for the industry issued its national policy directive. That directive dealt with the main problems which had to be handled and for which solutions had to be found.
    I want to say a word here about one aspect of the problem. This is the first time that we have been able to make the breakthrough of getting the two unions together and to enable the National Amalgamated Stevedores and Dockers to have a seat upon the negotiating committee, the Modernisation Committee. So please do not let anybody suggest that we have not done anything. This, in a way, could be of major importance to the whole of the docks in this country, the fact that we have at last been able to get the two unions to come together.
    The Committee is meeting regularly, and has a deep sense of urgency. Since it was established it has had seven full meetings and there have been a large number of meetings of sub-committees. The Committee is alive to the need for keeping everybody in the industry informed of the progress made. So this new approach is being made in the docks. The Modernisation Committee has issued its bulletin to every single docker in the country explaining what are the problems and what may appear to them to be the solutions.
    I think hon. Members in all parts of the House should realise and will realise the size of the task with which the Committee is now grappling. I said a moment ago that we may run into troubled waters. I am not disguising the fact that it involves a fundamental reorganisation of an extremely complex industry, and difficult negotiations on the terms and conditions which are to apply under the new scheme of employment. I repeat, the Committee has been working at a fast pace and has covered a lot of ground. I want to tell the House that a lot more time will yet be needed, but I am determined that we are going to come to grips at last with the desperate problems which arise out of casualisation. We are going to make a reality of decasualisation and hope to get the unions and the employers together in negotiations on this within the next few months.
    I referred to the unions. We all recognise that there are far too many employers in the industry at the present time.

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    Many of them employ dock labour only intermittently. There must be a drastic thinning out of them. I am going into some detail on this because it may be one of the great examples of how, under the spur of what I consider to be an almost inspired Report, by getting the unions and the employers working in conjunction with the Government, we can break through the mess and chaos of many generations. It will involve a completely new structure, and, by heavens, it is going to be difficult to get the employers to accept something which is fundamentally different. I would not like anyone, therefore, to under-estimate the difficulties which we have in this work.
    The Dock Labour Board is at a very great pace conducting a whole survey of welfare facilities and amenities, and talks are proceeding about responsibilities for the provision of amenities in the docks. And so this radical effort is being made with a great sense of urgency. So I would beg the right hon. Gentleman the Member for Altrincham and Sale to realise that at least here is one field where we are trying desperately to come to terms with a problem which did not arise in October, 1965; this was an inherited problem. Indeed, I remember reading that it was called the chaos of generation after generation. But we are at last trying to come to terms with it.
    Now I turn to another area which has been much under fire in the country, because of the appalling number of unofficial strikes which have taken place. Much has been said about the need for industrial efficiency. If there is one industry in the country at the present time that we want to see moving as efficiently, quietly and responsibly as any other it is the automobile industry, because it means so much to the economy. It is an industry which has been bedevilled by unofficial strikes. I decided, with the consent of my colleagues, to try to bring about a break-through in that field. We had a situation where obviously there was great hostility between the employers and the unions. There seemed to me to be no roots in the industry. It was new, and there were no traditions. There seemed to be no effort being made to come to terms with the rash of unofficial strikes, so we persuaded them to
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    do something. I do nor, know whether right hon. Gentlemen opposite agree with it or not, but at least one has to try things.
    We persuaded them to accept an independent chairman to preside over a fact-finding or trouble-shooting commission which would go immediately to the point of trouble. In the end, they accepted it. I do not know what success it will have. All I know is that it is a new experiment in industrial relations to try to make a break-through in a field where there is so much trouble.
    I do not want to enlarge upon it, but there is a lot going on, and it would be a pity if any hon. Member thought that the situation was still stagnant and that no effort was being made. Hon. Members opposite know it, because they are interested in industry. There are hundreds of small and medium size firms in the country which are setting an example in the removal of restrictive practices. One can feel the movement in industry, where they are coming to terms with something that has been traditional.
    Do not let us paint a picture of everything being wrong in the country. One can take the example of the national newspapers, where we have a joint board under Lord Devlin to see what is happening. It appears to me from reports I have that the Newspaper Proprietors' Association and the unions, working under the chairmanship of Lord Devlin, are now coming to terms with much of the inefficiency that exists there. One can take the example of the petroleum industry. Esso, Mobil and Shell have recently established agreements providing for more flexible working between crafts and between craft and process workers. In electricity supply, there has been a major breakthrough in the fields of staggered working, the reduction of overtime and many other things. In the field of chemicals, the same story can be heard.
    What I am trying to say tonight is that—though I am not quite sure that everything is being done—it is in the right direction. The subject is so complicated. But at least there is a movement in industry in the right direction. There is a growing awareness of the situation and a willingness to get away from the traditional pattern of restrictive practices of which the right hon. Gentleman spoke.

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    Now may I turn for a moment to the subject of legislation? I would suggest with great respect that the right hon. Gentleman ought to have had prior conversations about legislation with his right hon. Friends who have been Ministers of Labour, because it is the trickiest subject in the world. This afternoon, I interjected—and I use it now as an example —that the great argument is that, once there is a collective agreement established, it becomes enforceable in law. I am not disputing that argument, but following it. It becomes binding on those who are party to it. If that be the case, despite what the right hon. Gentleman said this afternoon, it follows as night follows day that if a collective agreement is going to be enforced, everyone has to be party to it. There cannot be some people who are not party to it.
    One can take, for example, a workshop which is 60 per cent. organised and of whom 40 per cent. do not belong to a union. The right hon. Gentleman would say that it is the 60 per cent. who cause trouble but, if there is one supreme fallacy, it is that the non-unionist does not cause trouble in industry. We could have a situation where 60 per cent. of the men are bound by law as part of a collective agreement, while the other 40 per cent., who do not belong to the union but who enjoy the benefits of the collective agreement, are outside the law. This is a wonderful situation. I know a little about the trade union world. I can see some of the boys sitting down to find out how to get round this one.
    Sir K. Joseph: I am new to this field, but I have read as widely as I can in the time available. I understand that a non-unionist generally has written into the terms of his contract of employment the terms of the agreement between the management and the union. I believe that this is true, in which case the individual is bound by those terms.
    Mr. Gunter: I am sorry. I do not want to pursue this, but the point is that if a union makes a contract with the employer and it becomes legally binding on those who are party to the contract, obviously someone who is not a member of the union and who has not participated at any stage of the machinery in making the agreement cannot be held liable. The right hon. Gentleman shakes his
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    head. What I am trying to say is that the natural corollary to this is the closed shop.
    Let us be clear here. Though many of my hon. Friends do not agree with me. I have never accepted that the closed shop is a desirable thing in a British society, but, unfortunately, I am coming to the conclusion that it is almost inevitable. If we are going to talk of this sort of legislation—and the employers themselves are now more desirous of the closed shop than the unions are for the reasons ·which have been adduced—then I had better ask the Conservative Party to come clean. Is it in favour of the closed shop in modern circumstances?
    Mr. John Page: I think it is fair to say that negotiated agreements are legally enforceable in virtually every industrial country in the world. They are enforceable in Sweden, Japan, Germany, France, and Italy. Why does the right hon. Gentleman say that as night follows day we must have the closed shop? One does not have it in those countries.
    Mr. Gunter: That is indicative of the state we are in. The closed shop exists in America. It exists in the majority of the great plants there. If hon. Gentlemen opposite ask Walter Reuther, he will tell them what to do with non-unionists. His agreements are based on 100 per cent. membership, yet the hon. Gentleman asks me why I say that as night follows day we will have the closed shop. I sometimes wonder about the legislation which enables Walter Reuther to get away with the closed shop and collective agreements, because America has the worst record in the world for days lost through strikes. Let us be careful when we talk about legislation, though I do not dispute that it may come.
    I turn for a moment to deal with the Royal Commission on this matter. I have said before in the House that it is desirable to have a long, cool, look at all its aspects. When the right hon. Member for Leeds, North-East says, "But what we want is a Royal Commission to sit down day after day for a short time "all I say is that men cannot operate like that in an issue as complicated as this. We are dealing not only with the legal aspects, but with certain things that are fundamental to the standards of this country.

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    The Royal Commission has issued a questionnaire to 2,000 employers' associations, unions and other interested people. How can men absorb evidence of this voluminous character if they have to sit down and make decisions day after day? But, of course, I hope that the Royal Commission will come to terms with some of these problems as early as possible. I do not think for one moment that we can come to terms with these problems by demanding that these men should sit down for a short period and come to decisions. There are many things which must be reflected on in this matter. I therefore suggest that we should not be too cynical or critical about the Royal Commission but should allow it to get on with its job.
    Now the evidence is pouring in from my Ministry and now from the A.E.U., and they will be followed next month by the C.B.I. Then we shall be able to come to terms with some of these problems. I say to hon. Members opposite that the suggestion made by the Leader of the Opposition that they will introduce legislation of this or that sort is unwise. An unofficial striker does not regard himself as a criminal. Do hon. Members opposite really believe that many unofficial strikes of the kind which now take place will be stopped because the boys will think, "I shall be hauled up in the courts if I do this"? That is a fallacy.
    The right hon. Gentleman knows better than I do what happened in the war. Under
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    Defence Regulation 1305, no fewer than 1,000 miners were prosecuted. Large fines were imposed on the seven who led them and lesser fines on the 993 who followed. What happened was that the boys said, "We shall not pay. Please send us to gaol." But there were not enough gaols available. Let us be sure, before we bring in any legislation, that we are carrying most of the people with us and making that legislation acceptable and enforceable.
    I now turn to the question of steel. I can only repeat what my right hon. Friend the Prime Minister said, and what is my conviction also. I believe that in the end the public ownership of steel is essential to the wellbeing of the country. But I also believe that it is a question of determining the priorities. We believe that the priorities contained in the Gracious Speech are those which the country wants, and we will implement them. Does anybody suggest that people are not interested in housing, or rating? As a great democratic party we have given priority to the things that the people want.
    I will only say that I hope, especially with respect to industrial relations—and I say this with great sincerity to the right hon. Gentleman—that we can keep to those matters which are of so much interest to us all and allow other people to row about steel.
    Debate adjourned.—[Mr. Harper.]
    Debate to be resumed Tomorrow.

BUILDING REGULATIONS
9.59 p.m.
Mr. Graham Page: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Building Regulations 1965 (S.I., 1965, No. 1373), dated 6th July 1965, a copy of which was laid before this House on 22nd July, in the last Session of Parliament, be annulled.
The purpose of the Motion is to enable the Government to give explanations and, perhaps, some undertakings concerning these Regulations; it is not necessarily our purpose to divide the House. If the undertakings are outrageously inadequate we shall have to consider recording our protest in the Division Lobbies, but I am sure that the Government will be co-operative in respect of any proposals that we may put forward for improving these Regulations—perhaps by Amendment at a later stage—because the Regulations are a co-operative effort between the last Conservative Government and the present Labour Government. The enabling Act was the Public Health Act of 1961, which was put on the Statute Book by a Conservative Government with the intention that there should be Building Regulations common to the whole of England and Wales to replace a mass of byelaws —which, generally speaking but not always, were on the basis of the model byelaws—a certain number of private local Acts and some central regulations.
These Building Regulations are intended to cover public health and safety in the construction of buildings and in the materials used in that construction. During the passage of the Bill which became the Public Health Act, 1961, the hope was expressed that the Regulations would be ready within three years of the Bill becoming an Act, and thus, within those three years, that we should bring about the concentration of all the different and differing pieces of legislation and subordinate legislation into national Building Regulations. Although that three years will have lengthened into about four and a half years before the Regulations become operative, we certainly welcome their arrival now.
We welcome them, but—and it is a big "but". We welcome them in principle and form, as one body of Regulations to
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which builders, architects, developers, local government officers, and lawyers may refer, but we cannot shut our eyes and ears to the considerable volume of complaint about the contents of the Regulations. This is not just frivolous criticism from some small speculative builders who object to the prospect of being disciplined by these Regulations. These complaints and this criticism come from large and responsible firms and federations such as the Confederation of British Industries. It is a long time since I have known such a volume of informed criticism against a Statutory Instrument.
I have had, in the appointment with which the House has honoured me, some experience of the rough and smooth passage of Statutory Instruments. This one is having a very rough passage. It is right that the House should debate what has gone wrong with these Regulations in the four and a half years of their preparation which has given rise to this criticism. I think that things went wrong only in the last year, when the Minister did not sufficiently consult those interested.
I understand that the history of the Regulations is that, immediately after the 1961 Act, the then Minister of Housing and Local Government appointed a working party, which produced a provisional draft of the Regultions as a basis for consultation with the building industry and with other interests concerned. In April 1962, the Minister appointed the Building Regulations Advisory Committee under the chairmanship of Mr. Wynne-Edwards, a vice-president of the Institution of Civil Engineers. I should like to express the gratitude of the House —not only this side, but also, I hope, the Government side—to that Committee for the hard and detailed work they did in advising the Minister and making recommendations about the draft Regulations.
The first act of that Committee was to send out the provisional draft to 127 interests concerned for comments. Part of it went out in May 1962 and another part in October 1962, and the deadline for those comments was February 1963. Nearly 3,000 comments were received from those 127 interests.

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Having congratulated the Committee, it would not be out of place to congratulate those who responded to this request for comment because—if this is not digressing too much—we value in our system of Government this consultation with the interests concerned, and we value the fact that so much voluntary effort is put into assisting any Government in the preparation of specialised legislation of this sort. This should not go unrecognised by the House, and we should thank those who spent much time in sending in their comments on the draft of these Regulations.
I stress that point in this case particularly, because it seems a pity that the process of consultation was not taken further, first in hearing oral evidence from those who sent in written comments —and many of then, I understand, were anxious to give oral evidence in elaboration of what they had written—and secondly in submitting a second draft. Neither of those things was done—neither the taking of oral evidence nor the submission of a second draft.
In February, 1963, the responsibility for Building Regulations was transferred from the Ministry of Housing and Local Government to the Ministry of Public Building and Works. Mr. Wynne-Edwards' Committee was directed to report to both Ministers, which it did in Februar3', 1964. That Report appeared in Cmnd. 2279, Building Regulations Advisory Committee—First Report. The Report sets out clearly the problems confronting the Committee on the draft Regulations and it recommends solutions to the problems. It was not the job of the Committee to redraft the Regulations but merely to advise the Minister. The terms of reference of the Committee were laid down in Section 9 of the Public Health Act, 1961:
"(1) The Minister shall appoint a committee, to be known as the Building Regulations Advisory Committee, for the purpose of advising the Minister on the exercise of his power to make building regulations, and on other subjects connected with building regulations.
(3) Before making any building regulations, the Minister shall consult the Building Regulations Advisory Committee and such other bodies as appear to him to be representative of the interests concerned."
It is true that he had consulted "such other bodies" once, but during 1964 the
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Department prepared a second draft, which I believe was ready in August, 1964.
I should have thought that, in face of the 3,000 comments received from those to whom the first draft had been submitted and in face of the recommendations of the Wynne-Edwards Committee, it would have been right for the Government of that time, in October, 1964, handed a second draft when they took office, to send it out, not perhaps to the whole 127 but to a selection of them. I understand that the only people to whom it was sent were local authority associations, and I am puzzled why they should have had that privileged position as against the building industry. That is my information. I may be wrong, and I stand to be corrected. No doubt the right hon. Gentleman will correct me if I am wrong.
But I know as a fact that those interested in the building industry and so on knew nothing of these Regulations between the draft which they received in 1962 on which to comment and the Statutory Instrument which was laid before the House in July 1965. To have submitted another draft during 1964–65 would not have delayed these Regulations any longer than they have in fact been delayed already. But the result has been that, because of the lack of consultation on a second or final draft of the Regulations, there is this volume of protest upon many practical points in the Regulations as at present drafted.
I can best refer to some of the major points by turning to the recommendations of the Committee, which appear on page 37 of the Committee's First Report, and asking the Parliamentary Secretary to what extent those recommendations are now embodied in the Building Regulations. I do not intend to refer to all 25 of the recommendations but some are very relevant and in asking the questions I may endeavour to answer them in part myself.
I think that in many cases the recommendations have not been embodied in the Regulations. To take, first, Recommendation No. (6), which is that the possibility of separate regulations for smaller buildings should be examined; this in particular is referred to in paragraph 37

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on page 16 of the Committee's Report where it is stated:
"It is of significance that half of housing, and two-thirds of repair and maintenance, were carried out in 1962 by firms employing up to 50 men. We believe it might help in the smooth operation of building control if the simple and smaller projects (which form the vast majority) could be dealt with by a separate set of relatively simple regulations … leaving the more complex regulations for application to larger buildings, where more difficult criteria are involved."
To what extent is that recommendation carried out in these Regulations? I can find very little evidence of it, but in one case where it seems to be carried out it is done by the exclusion of large undertakings from certain exemptions which they had under the previous model bye-laws. I refer in particular to the application of fire precautions to industrial buildings.
Fire precautions come under Part E of the Regulations, headed "Structural Fire Precautions". As I understand, the basic principle of Part E is the separation of a building into compartments, with those compartments contained within fire-resisting walls. It is very right that where members of the public and many workpeople or any congregation of people are collected together the fire precautions should be very strict. I am told that in money value fire causes loss of life, limb, employment, business, property and so on amounting to £156 million a year. Therefore, anything that the Building Regulations can do to prevent that sort of loss is very welcome. But in securing safety for people these Regulations have created some impossibilities in the construction of industrial premises to accommodate plant and machinery.
In Schedule 1 there are certain exemptions from the fire precautions for buildings which house plant and machinery, but to come within these exemptions the building has to be a single-storey building and, as I read the Regulations, one can be certain of not contravening the Regulations only by putting the plant in a single-storey building well spaced from others or in a multi-storey building not exceeding 90 ft. in height and having no connection by mechanical aids or conveyors between the floors. When one thinks of the industrial machinery which is erected nowadays this is quite ridicu-
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lous. What is the Minister doing about this real difficulty which I know has been laid before him by industrialists and particularly by the Confederation of British Industries?
Recommendation No. (2) on page 37 of the Committee's Report states that the appropriate form of regulation should be governed by the circumstances of each case. This in particular is referred to in paragraph 21 on page 13 where the Committee says:
"… the form of regulation used should be tailored to the circumstances—the state of design practice, the level of technology, the complexity of requirements, the quality of the administration and … the economic importance of preserving flexibility for an incentive to new methods."
This certainly has not been observed in the Regulations in connection with oil-fired heating and the hot water installations which may be fired by oil.
When one looks at Part L, which is that which deals with chimneys, flue pipes, hearths, fireplace recesses, and so on, and Part M—heat-producing appliances and incinerators—there are certainly some very restrictive regulations upon modern installations of oil-fired heating and of anticipated future developments in oil-fired heating. Things like 5 in. thick hearths, 8 in. thick jambs, 7 in. diameter flues, all follow far too closely the requirements of solid-fuel installations, make oil-heated industrialised building very difficult, and the use of prefabricated pipes for oil-fired appliances almost impossible in the future.
I hope that the Minister is alive to these defects in the Regulations, and that he has some proposal to put them right. I do not think that any of us would want to hold up this edition of the Building Regulations if we had some assurance that the Minister really had these matters in mind and would be prepared to bring in early amendments.
I want now to refer to Recommendation 3 in page 37 of the Report, and to see to what extent it has been embodied in the Regulations. It says:
"Deemed-to-satisfy clauses, though open to misuse, cannot at present be dispensed with; further study should be given to their future form."
As the House will know, deemed-to-satisfy clauses are those which follow a mandatory injunction that such-and-such

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should be done in building construction; the deemed-to-satisfy clauses say that if one does so-and-so or uses such-and-such material, that will be deemed to satisfy the requirements.
The trouble is that when we start to set out items that are deemed to satisfy the requirements they may be taken as exhaustive and not merely as examples. The Committee said in paragraph 24:
"We understand that some local authorities tend to try to insist on compliance with the published deemed-to-satisfy specifications and are reluctant to accept other ways of meeting the mandatory requirements."
There is a very real complaint here from the plastics industry.
The deemed-to-satisfy clauses set out a number of items that do not include plastic material. This may be very restrictive on the plastics industry in connection with damp courses, external cladding, internal surfaces, ceilings, and, in particular, in connection with thermal insulation and sound insulation. I would ask the hon. Gentleman whether the Minister has this in mind, and whether he has any solution so that the development of this industry will not be hampered. I am told that one manufacturer foresees closing down and being forced out of business by these Regulations if they are strictly enforced, while his product appears to be perfectly safe.
The solution of the Committee to the deemed-to-satisfy-clauses problem is set out in paragraph 25, which states:
"We think that further investigation might be undertaken along the following lines: — (a) in relation to the present draft; making it clear in an explanatory memorandum that they are only examples of methods of compliance; (b) in relation to future drafts: deciding what should be done to make the clauses more representative of present-day practice; and exploring the possibility of removing them from the regulations altogether to a more comprehensive advisory manual of practice."
Indeed, this may be the right solution in Amendments to the Building Regulations in due course. The French have a solution to this, I gather, in the Agrément system, which is explained in paragraph 50 of the Committee's Report. But the Committee itself recommends that the whole set of Regulations should be issued periodically in an amended form. The Committee says this:
"There are clearly advantages in a regular rhythm and an annual issue would soon become
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an accepted convention. In the light of the rate of technological evolution an annual issue does not seem too frequent, and we accordingly recommend it."
Has the Minister in mind bringing before the House frequently Amendments to the Regulations so as to keep them up to date?
Further, what has the Minister in mind in connection with the Committee's Recommendation 11 so far as it relates to these Building Regulations? Recommendation 11 is:
"Suitably trained advisers to local authorities for control of building must be made available."
That is elaborated in paragraph 60 of the Report. This is of very great importance. The Committee talks of it as a matter of urgency:
"We recommend therefore that as a matter of urgency further consideration should be given to ensuring that there are more persons with necessary qualifications to enable local authorities to carry out their functions for control of buildings …"
It is no good bringing in these Building Regulations if there are not the skilled people in the local authorities to operate them and, as the Committee says, to
"negotiate effectively with designers of the largest structures …"
and
"interpret … the varied criteria which Building Regulations of the present and future may employ."
I think the House would wish to know to what extent the personnel of local authorities is being improved and trained and becoming skilled in the application of Building Regulations, because, however sound we may make Regulations, if we have not got the skilled men to operate them they will cause only chaos and confusion.
Closely connected with that is the Committee's very first recommendation:
"Further study should be given to the working in practice of the present system, including the skills and costs involved."
This relates in particular to Clause A9 and Schedule 2 of the Regulations. I cannot see from the Regulations that full consideration has been given to this recommendation. The system on which these Regulations are based is the submission of plans to the local authority, plans which show sufficiently the design and the specification of the work to

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be carried out. The Committee said this:
"Among the matters which deserve objective assessment are: the balance between the prior submission and approval of details on plans, and subsequent control by inspection; whether the system makes undue demands for the preparation of plans; the requirements of professional skill from the authorities responsible for administration; and the cost of operating the control."
I cannot see in Schedule 2 any improvement in the system of submission of plans, any speeding up of the process, or anything more efficient than there was under model byelaws and the various private Local Acts. I would have hoped that these Regulations would have produced a much speedier and much more efficient process for the submission of plans.
The final recommendation to which I want to refer is No. 24:
"Careful consideration is desirable on how outstanding matters involving further research should be followed up."
It then refers to paragraph 111 of the Report, which sets out a very great number of matters which still remain outstanding. These matters are grouped under four headings, the first being
"Matters which need to be solved quickly in the interests of the proper evolution of the Building Control"
and one example of those is
"The relationships between the dimensional co-ordination, industrialised building, and ' deemed-to-satisfy ' provisions".
This goes to the whole root of whether these Building Regulations will encourage or hinder modern methods in building construction.
The second group of outstanding matters is
"Other problems of wide scope needing preliminary general discussion to establish aims and criteria".
and an example of those is
"The protection of foundations from flowing water, floods, excavations, etc."
I am personally concerned about this in my own constituency where the laying of a sewer has drawn off water from beneath a residential area and caused subsidence to some very nice residential properties. There is here a practical point under the Regulations which should be the subject of amendment as soon as possible.
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The third group of outstanding matters is "Problems of Definition and Procedure", and one example given is
"Arrangements for the submission of plans, preparation of forms, etc."
which I have already mentioned.
Finally, there are
"Problems of limited scope offering prospects of solution by ad hoc specific programmes of applied research"
and one example given is
"Concessions for fire-protection devices".
This raises the whole question of sprinklers and the application of the Regulations to large departmental stores. This is dealt with to some extent in the Regulations. Again, I have something of a constituency point here because there was the disastrous departmental store fire in Liverpool not long ago. It was a tragic occurrence, and one hopes that the Regulations really give attention to the defects which were apparent after that fire. I read the Regulations as rather loosening the previous model byelaws in this respect in relation to departmental stores.
It is evident that these Building Regulations must be treated as a first instalment on something which is growing every moment and needs constant attention if we are to make the best use of scientific and technological progress in building methods. If the Minister wishes to bring forward amendments to the Regulations frequently, the House, I am sure, will not begrudge the time spent in examining them, and I do not think that it would wish to delegate the duty to any specialist body outside Parliament. This is one of the most important matters which the House has to consider, the practical application of technological and scientific advance. While giving the utmost care and attention to the public health and safety side of the Regulations, we must strive to encourage and not hinder ingenuity, initiative and inventiveness in building construction. In short, to use the inelegant but expressive term, these Building Regulations must be "with it".
Mr. Robert Cooke: On a point of order, Mr. Speaker. I respectfully draw your attention to the fact that there is not a copy of the Public Health Act, 1961, available to hon. Members in the Vote Office. Is it not the responsibility of the promoting Department to

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see that any old documents which would be needed in the debate are available to hon. Members? As this has happened before under the present Administration, may we have your protection and your direction that the paper is made available?
Mr. Speaker: The hon. Gentleman should have consulted one of his hon. Friends, the hon. Member for Cornwall, North (Mr. Scott-Hopkins), who raised this point with me eight or nine days ago—his hon. Friend is sitting quite close to him—and who had raised the same point with the Deputy Chairman a week before that. First of all, I must emphasise that the Rulings of the Chair do not have to be made three times to become Rulings. My colleague in the Chamber, the Deputy Chairman, ruled when the subject was raised about a fortnight ago that it is the duty of Her Majesty's Government to ensure that relevant papers for a debate are provided in the Vote Office. I added to that a week later that it is not the duty of the Chair to decide which papers are relevant. The question of relevancy must be argued out between hon. Members of the Opposition and hon. Members of the Government.
Mr. James Scott-Hopkins: Further to the point of order, Mr. Speaker. Surely one should be able to ask for your protection when the Government, as has happened on several occasions—I was the hon. Member referred to you just now as having raised the subject—fail to produce any of ihe documents to which hon. Members need to refer. This seems to be a growing habit. It is only for that purpose that my hon. Friend and I are raising the subject with you. We hope that you will help hon. Members to have available documents which could be necessary and in many cases are necessary, which you and one of your colleagues ruled it is the responsibility of the Government to produce.
Mr. Speaker: I can understand the hon. Gentleman's anxiety, in particular in view of the remarks which followed when I made a Ruling the second time the matter was raised. I must now, however, emphasise that the point is quite clear. It is the responsibility of the Gov-
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ernment to provide relevant papers, but it is not the duty of Mr. Speaker to decide which papers are relevant.
10.32 p.m.
Mr. Merlyn Rees: I should like very briefly to ask some general questions about the Building Regulations, 1965, and the Report of the Advisory Committee, both of which are available and are the main documents relative to the Prayer. These general questions are important to firms which make lightweight concrete. I want also to make one or two points concerning inconsistencies in the Regulations in regard to lightweight concrete.
It is strongly felt by firms that the Regulations not only make the situation worse than in the past but inhibit future development. The general questions that I want to ask, which follow from those asked by the hon. Member for Crosby (Mr. Graham Page)—"When will alterations be possible? How long will the Regulations be in force?"—What will be the method of change, not so much in this House, which is important, I agree, but also with regard to firms outside? How can they bring their ideas to bear on the Ministry? How can representations be made? I have no personal interest in the matter, but there is strong feeling on the matter which has been brought to my notice.
The particular questions are highly technical, and I raise them not expecting a reply tonight. I know the interest which my hon. Friend has in this subject, but it is to illustrate the general principle that I bring the questions to his notice. I refer to lightweight concrete. With regard to Schedule 8, page 138, part 4, why are lightweight concrete blocks not included in the list? They have been used in the past, as far as I understand. On page 139, in the reference to fire precautions, lightweight aggregate for concrete columns is given credit to the degree that 9 in. columns have two hours' fire resistance, which is superior to that of dense aggregate. Yet on the same page where there is reference to reinforced concrete beams as opposed to columns, for which it is superior, there is no mention of lightweight aggregate at all. There is this inconsistency. Again, when it comes to concrete floors, there is no mention of lightweight concrete.

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These are inconsistencies which will remain, it is felt, as long as the Regulations are in force. One returns to the question of when can things of this nature be corrected. All that is, perhaps, non-controversial, but one can move to something which is perhaps a matter of argument—sound insulation. On pages 54 and 55 the minimum weight of concrete in party walls is given as 85 lbs. per square foot or 7 inches of dense concrete, yet it refers to 10 inches of lightweight aggregate. In other words, a better performance from the lightweight aggregate is asked for. But experiments at the Building Research Station show that lightweight aggregate is superior to dense aggregate. These questions illustrate the concern of many people in the industry outside as to how the Regulations can be corrected.
There is also the question of qualified staff to operate these Regulations and also in the expanding building activities of local authorities. The Minister of Health liaises, or should do so—mistakes have occurred in the past—with the Department of Education to see that there is a supply of doctors. I hope that something is being done by the Departments concerned, through the College of Estate Management, for example, the Colleges of Technology and other institutions, to see that there is enough trained staff to carry out what are, in general, valuable provisions, but provisions which contain inconsistencies.
10.38 p.m.
Mr. Oscar Murton: The concept of Building Regulations is an important advance on the old system of model building byelaws, which tended to prohibit or at best circumscribe the use of new materials and techniques, even if they secured generally satisfactory standards of safety, health and amenity. Moreover, the building byelaws were capable of rather loose local formulation and interpretation and it was very obvious that a central measure of standardisation was required. For that reason, we welcome the Regulations.
On the other hand, study has shown that there are a number of anomalies in these Regulations and I intend to draw attention to only one of them. I refer particularly to Part E, dealing with structural fire precautions. In my view, the
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Regulations have been drafted predominantly with domestic buildings in mind and not enough thought has been given to certain possible types of industrial buildings. Incidentally, there is some doubt as to the actual interpretation of what a building is. Perhaps the Minister will think about the way the subject is dealt with in the Preamble. One would reasonably expect a building to have both walls and roof, but is it not possible that an open steel framework must also be considered a building?
We should direct our minds to certain types of modern industrial buildings. Some are found in industrial chemical works and others in the premises of large grain merchants. In the former category are fractionating towers and polymer buildings and in the latter are bulk loading structures. The first is a steel space frame to support process vessels at various levels with associated piping and a number of access floors. A polymer building is a multi-storey structure, largely brick clad, designed to support vessels or, indeed, machinery in some cases, on or between various levels of floor. There are numerous openings for vessels, chutes and pipes. Bulk loading structures are towers supporting storage bunkers. These are served by mechanical elevators passing vertically through steel floors. Examination of the Regulations in connection with fire precautions shows that the concept of compartments, as described so eruditely by my hon. Friend the Member for Crosby (Mr. Graham Page), restricts the design of the more conventional of these buildings, and in the case of the requirement of "compartment floors" for multi-storey process structures over 90 ft., I am advised that it simply is not possible to design them.
The Regulations portray the ideal chemical plant as a group of well-spaced single-storey buildings and small multi-storey structures of not more than 90 ft. in height, preferably not connected by mechanical aids of any sort. Quite obviously, this is nonsense.
There must be suggestions about how these designs can be made possible, and I make only two. Steel structures, whether sheeted or open, must be exempt from the concept of compartment floors. Secondly, the definition of "inperforate" which appears in the Regulations must be relaxed to permit penetration of floors

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and walls by vessels, chutes, conveyor housing, internal plant and similar items of incombustible construction.
Having dealt with how to make design possible, let me go on to making design economical in other cases. Steel structures, whether sheeted or open and having a low density of occupation, should be exempt altogether from Part E of the Regulations. The insistence of Regulation E4 that every floor above 30 ft. high in buildings over 90 ft. in total height should be a "compartment floor" is illogical and should be relaxed to take account of density of occupation, hazard and means of escape. One suggestion here is that a fire-stopped floor achieved by closing all openings around vessels or pipes at intervals of, say, 45 ft. in height would be more reasonable.
Finally, the fireproofing of a steel-framed building should be related to hazard and not only to size. For instance, the Regulations at present would require that this protection should be applied to the frame of a 30-ft. high cooling water pumphouse, where there is probably little or no hazard. Once more, I draw attention to the fact that the whole of this Regulation is based upon certain Public Health Acts and that the 1961 Act is vital to our study of the problem. Will the Minister who is responsible for the promoting Department in this case make it available to hon. Members?
10.43 p.m.
Mr. James Scott-Hopkins: I wish to refer to only one aspect of the Regulations: that is, Regulation A4, on page 12, which refers to agricultural workers. It exempts from the application of the Regulations
"a building used exclusively for the accommodation of hop-pickers or"—
this is the important one—
"other persons engaged temporarily in agricultural or horticultural activities".
This seems to be a very strange exemption and I hope that the Parliamentary Secretary will explain it.
I assume that negotiations of some kind must have taken place between the National Farmers' Union and the men's union. My point is that the majority of the Regulations, I have no doubt, have no relevance whatever to temporary accommodation for people of this type. There are, however, certain Regulations,
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particularly concerning fire, which are of the greatest importance.
I do not mind how temporary the buildings are, but there should be Regulations to provide that certain materials used in those buildings are fireproof. Because the Regulations appear to be sound, my hon. Friends have drawn certain conclusions from them. Nevertheless, I think it is extraordinary that this has been excluded so far as agricultural workers and temporary buildings are concerned. It is a matter which is causing me the gravest concern.
10.45 p.m.
Sir Anthony Meyer: I want to concern myself with only one point in these Regulations, but it is a matter of some considerable importance. The Regulations in their present form threaten to put out of business entirely a very go-ahead, efficient firm in my constituency, and they threaten to put it out of business not for anything which is said in the Regulations but for what is not said in the Regulations.
This firm in my constituency manufactures suspended ceilings which consist of panels of polyvinyl chloride stretched on aluminium frames. These provide a light and easily erected ceiling which has one particular advantage. It offers a remarkably effective and economical means whereby old factories can be brought up to modern technical requirements, without losing the benefit of natural light from roof lights, because natural light goes through these sheets of polyvinyl chloride, and one gets an even spread of light.
This form of ceiling is of very low flammability. It has been tested, and has been classified as such, in accordance with British Standard 2782 Part 5/508, but the Regulations which we now have before us make no mention of the British Standard 2782. What they do do, in Regulation El4, which is the Regulation which concerns suspended ceilings, is to stipulate that these ceilings must be of Class 1 or Class 0 as defined in British Standard 476. British Standard 476, incidentally, is five years older than 2782, and this is for fire tests of building materials and structures. Therefore, by implication, any suspended ceiling which does not conform with British Standard 476 is outside the scope of the Regulations and its use is impermissible.

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The difficulty is this. The type of suspended ceiling with which I am concerned cannot be tested for flammability by British Standard 476 because if we use the flame test, which is the test in British Standard 476, this particular type of material vanishes into thin air. It does not catch fire. Far from it. It is self-extinguishing. But it just vanishes. Therefore, the test cannot be carried out on this form of ceiling.
If this Regulation comes into force unamended it makes ceilings of this type eventually forbidden, except, presumably, by special Ministerial dispensation, and this will involve a separate application in each case, and that means not only delay, which is serious enough, but also that a great many people who might otherwise want to put up ceilings of this type will be discouraged from doing so.
To the best of my knowledge there are some 11 firms, including the one in my constituency, which is the largest in this field, which are making this kind of ceiling, and their activities will be paralysed or at any rate gravely prejudiced if these Regulations appear unamended, because, of course, architects, local authorities, industrial firms and so on will be influenced by the apparent prohibition in the Regulations on this type of ceiling.
I said "apparent" prohibition because there is a comic side to all this. At this very moment when the Minister of Public Building and Works is issuing these Regulations which forbid the use of this ceiling he has ordered precisely this ceiling for erection in the Stationery Office in Holborn and for the Ordnance Survey office at Crabwood, in Hampshire. I may add that a ceiling of this type is installed and is giving great satisfaction in the Queen's Art Gallery in Buckingham Palace.
I have a list of other places. Many examples are to be found in buildings all over the country, particularly where absolute cleanliness is important. They are found, for instance, in a number of nuclear establishments. Many of them are buildings where the fire hazard is considerable. A good many local authorities, including the G.L.C. and the City of Bradford, have given specific approval to the very low flammability of ceilings of this type.
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Needless to say, when the Regulations first came out, the firm in my constituency made urgent representations to the Ministry of Public Building and Works. It made those representations on 27th September, but all that it has had in writing so far is a stalling reply, and I am not complaining about that. However, the firm has been told verbally that this prohibition by omission is unintentional and is an oversight.
My hon. Friend the Member for Crosby (Mr. Graham Page) mentioned a number of other cases in which there seem to have been oversights. Such things happen. But the Regulations have been quite a while in cooking, and one would have thought, as my hon. Friend suggested, that it might have been worth leaving them to cook just a little longer, to make sure that all the anomalies have been looked into.
In any case, I hope that tonight the Parliamentary Secretary will give an assurance, firstly, that amendments to the Regulations will appear very shortly so as to remedy the obvious defects in them. But that is not enough, because, if the Regulations come into force unamended, as presumably they will, there will be an element of discouragement to architects, industrial firms and so on against installing a particularly convenient and modern kind of ceiling.
It seems to me to be up to the Minister to take some kind of action to ensure that firms in the trade are not penalised and that the authorities that are liable to use this kind of ceiling are made aware officially that there is no possible objection to use of ceilings of this type.
10.53 p.m.
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. James Boyden): I want to apologise most sincerely for the absence of the publications which hon. Members wanted for the debate. I will certainly look into the matter, and I hope that it will not happen again, although we shall probably not have another debate on the Building Regulations for quite a while.
One difficulty which the debate has brought out has been the question of where the line is to be drawn between accurate and tidy Regulations and getting on with the job of putting new Building Regulations under way. The real

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difficulty is that the Regulations are based on public health and safety and, whilst as far as possible such Regulations should not inhibit good building techniques, there are a whole lot of other agencies which are dealing with the technique side, not the least of them being the Directorate General of Research and Development at the Ministry of Public Building and Works, the new Agrément Committee, the National Building Agency.
What has happened has been, in a way, the consolidation of existing practices with a view to going forward at a later date with new and better, though I would not say "bigger", Regulations.
It was rather well put in The Surveyor and Municipal Journal on 6th November of this year, when the Surveyor and Engineer of Epping and Ongar said about the Regulations:
"There has been a 'coming of age', but that maturity will not be reached until the Regulations have been moulded by many further revisions as a result of the experience gained from operation, practice and, perhaps most important of all, from the trend of relaxation and appeals, which will indicate in time which regulations may be difficult to work, or are becoming out of date."
It is a typically British empirical way of going about things, and, as the hon. Gentleman said—I do not think he was really trying to make much political capital out of this—it has been an enterprise for which the Government whom he supported did a large measure of work, and this Government have pushed steadily on with it.
I do not find much indication of the rough passage to which the hon. Member for Crosby (Mr. Graham Page) referred. Indeed, one of the new features which the hon. Gentleman praised is that the technical people, local government people and the Ministries—since this was started by the Ministry of Housing and Local Government—have been at great pains to consult as effectively as they could. This consultation will continue, and I hope to explain shortly the steps that are being taken, and will continue to be taken, to improve the Regulations and meet the points which have been raised in the debate.
I cannot give specific answers to all the particular points which have been raised, but I will deal with some of the things that illustrate these points.
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Although we drew the line, after the first round of major discussions, which took a long time, there is provision for continuous amendment and continuous improvement, and I shall explain that a little later.
I would point out to the hon. Member for Crosby that if the Prayer is successful there will not be any Building Regulations—neither the old ones nor the new ones—and I am sure that the hon. Gentleman's impartial attitude tonight will not go as far as that piece of prejudice. I am sure that he would not like to go down in history as the man who stopped the Building Regulations.
I need to spend a little time on the way in which the Working Party and the Advisory Committee, to which the hon. Gentleman referred many times, worked. One of the difficulties is that all this is based on the Public Health Act—health and safety. The actual technical side of building is not within the compass of the Public Health Act. While that Act was being discussed and going through this House, the Building Regulations Advisory Committee, a Statutory Committee, was set up to advise the Minister of Housing and Local Government on the exercise of his power to make Building Regulations and on other subjects connected with Building Regulations.
One of the interesting things about this is that the Minister, now the Minister of Public Building and Works, must consult this Committee before making any Building Regulations. This Committee was being set up while the Public Health Act was being discussed in the House and at the same time a working party of experts was producing the kind of 10-year revision of model byelaws which the Ministry of Housing and Local Government had done from time to time.
At this stage it changed its direction a little, and instead of working on model byelaws it produced the first draft of the new Building Regulations. It was this draft to which the hon. Member for Crosby referred when he said that he thought that after the first set of discussions the Regulations should have been referred back for further consultation.
I thought that the Advisory Committee worked extremely hard and very sensibly, and I agree with the praise which the hon. Gentleman gave to the members of

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it. It really took a very sensible attitude in sending out this draft to the interested bodies for their observations, and having got their observations, as it were it drew the line and adopted these Regulations as they stood.
As the hon. Member for Crosby said, there were 2,800 comments. They were not hostile, but constructive, and the best of them found their way into the Regulations. One of the difficulties about the British is their conservatism, and it is interesting to notice that one section—a fairly new section on fire regulations—provoked the biggest discussion. There were 888 comments on them.
This is an example of the way in which private bodies, local authority bodies and the Government work together. They were constructive suggestions, worked out in a very democratic and sensible way, and in my view the Advisory Committee was right in saying that having got all this mass of material, and having worked on it for a long time, it was right to draw the line and say that it would not have oral evidence, but, as it were, say, "We must now have the Regulations" That, in essence, is what happened. It is one of the reasons why there are relatively minor difficulties, some of which have been brought out tonight.
All this was done under the previous Administration. The decision to draw the line and to bring the thing together and before the House was a decision of the last Government. What has been happening since is that two quite difficult tasks have been carried out in the Ministry, namely, to turn the ideas of the Advisory Committee into technical language and then again into legal language. I am sure that the hon. Member for Crosby knows the difficulties involved in that. It reminded me of George I's conversation with Walpole. George spoke German and turned it into Latin, and Walpole spoke English and turned it into Latin, and then it was turned into common sense. The common sense of the Committee was turned into more technical language, and then again into the legal language that we have in front of us tonight. It was more complex and difficult than had first been expected —especially the fire section.
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As for dates—the Regulations were laid on 22nd July but do not come into force until 1st February, 1966. This gives opportunity for criticisms, and some have been ventilated tonight. Amendments cannot be made by the 1st February, 1966, and it would seem to be more sensible—this answers one of the points put forward by the hon. Member for Crosby—that the first set of amendments should be made towards the end of 1966. The six months' grace was mainly to enable the people who have to carry out the Regulations to become acquainted with the theory behind them, and to enable the designers and manufacturers to study and apply them.
The Minister is taking some trouble to organise conferences of interested people. I was pleased to see, the other day, that at Plymouth—with our knowledge and approval but not exactly stimulated by us—about 500 people came together to discuss these important Regulations. We are arranging courses at three big centres —London, Leeds and one other—on this kind of field. We believe that it is much better to educate than to convict. We hope that people will be persuaded of their value and that the Regulations will not lead to a lot of prosecutions at this stage.
The original committee is being reconstructed. Mr. Philip Bennett, the architect, has been appointed chairman, and the names of the other members are being discussed. The process of consultation and discussion which every hon. Member, who has spoken tonight, has raised is going on.
I am not trying to dodge the issues which have been raised, but I cannot answer in great detail, because hon. Members are experts in this field. The proper procedure for making representations—I will not use the word complaints —is for the interests concerned to write to the Ministry to make their case. I will give a list of the bodies which have been consulted, which have made representations and are being consulted since the Regulations were made and the bodies which are looking for amendments —Cape Building Products, the Metal Fixing Association, the Structural Insulation Association, the Multiple Shops Federation, the Fibre Building Board

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Development Organisation and the Confederation of British Industries.
There has been correspondence with a large number of individual firms and— answering one point raised in the debate —a meeting has been arranged with the British Plastics Federation. Meetings have also been offered to the Wallpaper Manufacturers Association and the Joint Building Control Committee, which consists of representatives of the building industry and professional bodies. The meetings have been cordial and useful, both to the Department and, on occasion, to the people making the representations on the present Building Regulations or on those which are coming into force.
On the whole, the consultations which have taken place and the criticisms which have been made suggest that the amendments are on relatively marginal matters. Of course, they do not seem marginal if, as has been suggested, a firm's business is threatened, but I should be surprised if such difficulties cannot be overcome under the existing state of affairs.
I should like to quote again from this article in The Surveyor and Municipal Engineer, which has this to say about the general atmosphere of the code:
"The Building Regulations"—
those before the House at the moment—
"provide a code that will increasingly inspire confidence as it becomes better known."
There is a certain element of difficulty in all this because people have, perhaps, been more fearful than they need have been.
Mr. Scott-Hopkins: I did not quite hear what the hon. Gentleman said. Did he say that his right hon. Friend would not consider any amendments to the Regulations until the end of 1966?
Mr. Boyden: No, I did not make a positive statement to that effect. I said that it was obviously not practical to consider amending the Regulations before they come into operation in February, 1966, and that a probable date was towards the end of 1966. I did not make a commitment one way or the other. It would obviously be wrong to bring in a whole series of amendments one after the other. It seems to me at least that the proper course would be to collect the
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views and comments on this matter and then have a set of amendments.
I was going to say, about procedure, that the Building Advisory Committee's recommendation that there should be regular reviews is accepted. Whether there should be annual reviews is an open question, but certainly there should be sets of amendments and provision should be made—this will be done—to revise the Regulations and probably issue another new set after so many years. I should like to be vague on that point and not say how many years. Let us see how it goes.
As hon. Members will appreciate, this is an exceptionally technical and difficult document—160 pages of closely-printed technical material arranged with the greatest care. Every line, every word, is of significance. Therefore, I should not have thought that it was the kind of document which the industry would want to have altered too often. However, one of the points of these central Regulations is that they are much more flexible.
I hope that the brief reference which I now wish to make will not be out of order. Of course, legislation is needed to get rid of many anomalies in Building Regulations generally. For example, there are Regulations covering gas but none for electrical wiring. Legislation is needed to deal with such matters. This set of Regulations—I come back quickly within order—is not breaking new ground in that way. The hon. Member for Cornwall, North (Mr. Scott-Hopkins) spoke about the hop-picking exemption, but this provision takes over what was done under the existing byelaws. Whether it should have been revised is arguable, but it was decided to leave it as it was.
Mr. Scott-Hopkins: This applies to all agricultural workers or horticultural workers. It applies to temporary dwellings for all these people, not only for hop pickers.
Mr. Boyden: But hop pickers were the category mentioned.
May I turn to some of the particular criticisms which have been made on particular points, again by way of illustration rather than by dealing with them to the satisfaction of hon. Members? Reference was made to oil-fired heating equipment. Flues, chimneys and hearths for

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oil-fired stoves and boilers have to comply with the same provisions as solid fuel appliances, as was the case under the building byelaws. Representations have been received that these provisions are too onerous for oil-fired equipment and too inflexible in that they lay down specific requirements and do not set a performance standard which would provide design freedom. In the absence of sufficient technical knowledge to establish generally accepted criteria it is not yet possible to draft a regulation which is tailor-made for oil-fired appliances. But undoubtedly this will come.
Another hon. Member raised the question of sprinklers and the size of air spaces in buildings. Generally the principle has been agreed that there should be some limitation on the size of compartments which can be built, but representations have been made that the maximum size permitted for shops of 20,000 sq. ft. or a capacity of 250,000 cu. ft. would unduly limit the movement of the public and restrict the development of modern sales methods.
It has been urged that where an effective sprinkler or automatic alarm system is installed the permitted limits of size should be raised. This was considered in some detail by the Advisory Committee who recommended against such a relaxation because there are no powers to ensure that once such systems are installed they are maintained in proper working condition. It is accepted that sprinklers or similar systems, properly maintained, can make an effective contribution towards arresting fire. If ways can be found to overcome the objections expressed by the Committee—and the Ministry's staff are pursuing this subject now—the Ministry will consider making an appropriate amending Regulation. One particular concern which shall be nameless believes very much in the value of sprinklers. It has had only one fire where it has had a sprinkler system, and that was because the water was turned off. There is, of course, always a human element. This is the sort of thing which makes it difficult to produce Regulations which will satisfy the up-to-date and "with-it" aspirations of hon. Members who have taken part in the debate.
I use those as illustrations, and I will give one more. It has been contended
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that the Regulations are too onerous on multi-storey car parks, which for this purpose are regarded as a special type of storage building. The provisions can be looked at again, but the point is that it is very difficult to fit the Regulations to specialised buildings of this sort, atlhough, naturally, attempts will be made to deal with this.
In conclusion, I should like to make reference—this has not been done so far in the debate—to some of the virtues of compilation in the Building Regulations. There is one rather simple but quite useful innovation in Statutory Instruments, and that is the way in which the paragraphs have been labelled Al, A2, and so on for particular topics. This is an innovation which, I am sure, will prove most acceptable. There was the closest collaboration with the Statutory Publications Office, having regard to an unfortunate debate—perhaps I should not say that—a debate in which the hon. Member for Crosby took part a little time ago. I am glad that on this occasion he did not have cause to raise that sort of point. The collaboration was close all the way through, and the change which I have just mentioned was one of the innovations made.
Sir A. Meyer: If the hon. Gentleman has now left the part of his speech dealing with specific complaints, will he give me an assurance that, where the Regulations contain a manifest mistake, as must be the case in the instance I gave, he will give urgent attention to devising a procedure for rectification before further damage is done?
Mr. Boyden: I was coming to that. This is a debate in which a great many technical points have been brought up, and it has been almost impossible for me to follow all the matters which hon. Members have raised. I promise to write to all hon. Gentlemen who asked about particular points in order to clarify what the position is. On the broad issues on which there are special interests or special technical points which hon. Members have raised, it would be helpful if the associations or organisations concerned, if they have not already done so, would make representations to the Ministry.
To return to the subject of format and presentation, what has been done,

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although it may seem relatively small, has taken a fair amount of work. There are also the explanatory documents which go with the Regulations. This, the "Guide to the Building Regulations, 1965", is one such. In a way, it is a layman's guide to the Building Regulations. I again apologise if hon. Members have not had a chance to see it. It is an excellent example of the sort of work which comes out of the Ministry of Public Building and Works. It combines great clarity and simplicity with complete accuracy of technical detail. There is also to be a technical guide covering, in particular, fire, stairways and open spaces between buildings, which will include a general index to the whole of the Building Regulations. This is in course of print and should be available in a reasonable time.
There is another example of the way in which the Regulations are well devised and as clear as can be for people who have to deal with these problems. The Advisory Committee suggested that the "deemed-to-satisfy" provisions, about which there has been considerable discussion tonight and which are very difficult to deal with, should be incorporated in the Regulations or relegated to explanatory memoranda. Three Schedules, Schedule 8 on concrete floors, Schedule 16 on roof construction, and Schedule 11 on thermal insulation, have been incorporated in the Regulations. This, again, is the sort of thing which helps to make for clarity and handiness in use.
As regards the language and the technical difficulties, the people who deal with these matters are used to the language and, therefore, find their way about it much more easily than I can. In this sense, a document which looks a little confusing to the layman is nothing like so confusing to the technical man.
As regards the evolution of new means of dealing with building techniques, the Agrément Committee has been set up. We have appointed the chairman and it is getting under way. There is also the National Building Agency, which works in another field, and of course, there is the Department itself. All are working in the same direction in improving the technical efficiency of the building industry and helping to pave the way for better Building Regulations when the legislation comes in due course.
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I come now to the more general point which the hon. Member for Crosby raised in connection with the list of outstanding matters, divided into four sections, which the Advisory Committee said required further thought. It appears on page 35 of the Report. Most of these, probably all of them, are under development at various stages at the Building Research Station or the Fire Research Station.
I thought it a little unkind of the right hon. Gentleman the Leader of the Opposition to comment as he did the other day about the expenditure of the Ministry of Technology, because it is precisely in this form of building and fire research and in many other rôles that the principal expenditures of the Ministry of Technology are taking place. The Building Research Station has a very long tradition and record of achievement in building science. It works extremely closely with my Department, and it worked very closely indeed with the Advisory Committee when it was drawing up the Regulations. This work means more money, it is constantly growing and has done extremely well. I daresay that hon. Members know that the present Director is shortly to retire, and all will agree that he has done a very good job and has made his contribution to the productivity of the building industry.
We are anxious in the Ministry to get greater and greater productivity—sometimes the builders get a little tired of all the nagging that is going on—but, whilst we want more productivity, there is no doubt that there is rising productivity in many fields, and this is the contribution that the Building Research Station, among other bodies, has made towards it.
I have no doubt that when these Regulations are adopted, as I hope they will be, they will have the same sort of smooth development that the Scottish Regulations have had. The Scottish Department has just completed the first review of the original Regulations, and has published proposals for their amendment. The Department seems to be satisfied with the way in which the Regulations have worked, and the way in which the technical people of whom we have talked have reacted to them. In this particular sense the Scottish Building Regulations are

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rather ahead of the English; they were earlier and more comprehensive. I am quite confident that under my right hon. Friend's administration, these Building Regulations will be the success that the previous Government hoped that they would be.
11.22 p.m.
Mr. Graham Page: If I may have the leave of the House, I want to press the hon. Gentleman on this question of amendment of the Regulations. He has caused us great anxiety by saying that there can be no further amendment of the Regulations until, at the earliest, the end of 1966. He said that there are many concerns now in consultation with his Ministry asking for amendment of the Regulations. What is the use of all those consultations if amendments cannot be made for more than 12 months—18 months; before the end of 1966?
My hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) has put the case of the exemption of agricultural buildings. There is the case of people dying in a fire in temporary buildings of the sort mentioned. If this Regulation is not amended it may result in death; it is not just a matter of convenience in building construction. My hon. Friends have put specific cases. It is no good for the hon. Gentleman to say that these matters should be put forward through associations. My hon. Friends are the right people to put them forward, and they have put forward specific cases where the Regulations are dead wrong, and should be amended right away without going through a lot of consultation, when the organisation will be told, "We have had a nice little chat, but we shall not amend until the end of 1966."
The hon. Gentleman said that it will be impossible to amend the Regulations before they come into operation, but I call his attention to the Scottish Building Regulations. They were laid on 11th December, 1963, coming into operation on 15th June, 1964—a period of about six months. The contents of those Regulations were questioned on a Prayer in the House and a number of points of error in the Regulations were put forward —particularly a point about ultra vires. The required amendments to the Regulations were made and came into operation on the same date as the Regulations. The
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amending Statutory Instrument No. 802 of 1964 was laid on 10th June, 1964, and came into operation on 15th June, 1964— exactly the same date as the main Regulations. The hon. Gentleman could do exactly the same thing with the Regulations now before the House, and give effect to the points made in this debate, in which we have shown that there are some very grave errors in the present Regulations. There is plenty of time to correct them.
I do not intend to press to defeat these Regulations tonight because there is so much of value in them, but the hon. Gentleman can rest assured that his Minister will be bombarded with Parliamentary Questions to put these things right. There is plenty of time to do it and I hope that the hon. Gentleman will see that the Minister takes action and brings in amending Regulations so that they come into operation on exactly the same date as the main Regulations.
I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.

RETIREMENT PENSION (MRS. GREEN)
Motion made, and Question proposed. That this House do now adjourn.—[Mrs. Harriet Slater.]
11.25 p.m.
Mr. C. M. Woodhouse: I am grateful to the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance for staying to this late hour to answer this debate, and the more so because we have had some correspondence already on the unfortunate case of Mrs. Green, one of my constituents. I fear that the hon. Gentleman may still find himself obliged to reply that there is nothing he can do to help the matter, not even by altering the law, which is a subject which we could not discuss on the Adjournment in any case. But I hope, still, that he may have second thoughts about what can be done within his existing powers, and in any case I think it is right to give publicity to this lady's misfortune.
I think it is right, in the first place, because her experience may very well not be unique and, in the second place, because something possibly could be done

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to prevent a recurrence of a case of this kind by devising some better means than appears now to exist of obtaining clear information about the individual's rights under the welfare services and the consequences of making a wrong choice, where the individual has a choice open to him or her.
It was a case of unlucky choice that I wish to expose tonight and, moreover, an unlucky choice not by the victim, Mrs. Green, but by the National Health Service on her behalf, acting certainly in good faith but no doubt equally in ignorance of what the consequences would be.
This is the story. Mrs. Green worked for 50 years until she retired at the age of 65 in November last year. Her 65th birthday fell on 29th November. She had paid insurance contributions from the age of 16 until her retirement. She was also, incidentally, a 10s. widow until last year. I think that it would be agreed from these circumstances that she had every reason for believing that she was qualified for the maximum possible pension. If I have done the arithmetic right, that maximum would be today in her case a sum of £5 1s. a week, made up of the standard rate of £4 a week plus 21s. representing the maximum increase that could be earned by deferring retirement, as Mrs. Green did, from the age of 60 to the age of 65. Yet, instead of receiving a pension of £5 1s. per week, she is receiving only £4 18s. per week, representing a forfeiture of 3s. per week in comparison with what she expected. I know that the Minister will not be so heartless as to argue that this a trivial sum. She expected the full sum, and she is not getting it. Why has that happened?
The answer, as I understand it, is that for a period of 39 weeks between the ages of 60 and 65 Mrs. Green was in the Wing-field Hospital, Oxford. The exact dates divided into two periods, were from 20th October, 1960, to 15th April, 1961, and from 17th December, 1962, to 23rd March, 1963. I am sure that these dates are correct. Mrs. Green has been extremely precise and conscientious in giving me all the facts and dates relevant to her case, and these dates exactly account for the 39-week period which led to the loss of 3s. per week from her pension.
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During those periods when she was in hospital Mrs. Green was not allowed to contribute to the National Insurance Scheme, and the period was disallowed from the calculation of the extra pension which she was earning by continuing at work and deferring her retirement until 65. The Minister has pointed out to me in correspondence that for weeks of sickness a contribution is not paid and, in effect, pension is not forgone. But this seems to put the matter in a somewhat unfair light for several reasons.
In the first place, in effect 3s. a week of Mrs. Green's pension is forgone, and not simply for a period corresponding to the 39 weeks that she was in hospital but for the whole of the rest of her life. This is something which she can never recover.
In the second place, Mrs. Green had no choice over the payment of contributions while she was in hospital. She was simply not allowed to pay. If she had been allowed to pay and if she had known the consequences of this gap in her contributions, she certainly would have wanted to keep the payments up.
In the third place—this is the most important point of all that I wish to make— it would have been possible for her to choose a different period to go into hospital if she had known the consequences of entering hospital between her 60th and 65th birthdays, for, as I understand it, it is only in that particular five-year period—though she did not know it— that these unfortunate conditions apply. Her entry into hospital was not, though it might have been, an emergency case. Her doctor had informed her more than 18 months, nearly two years, earlier that she would have to go into hospital at some time, but neither she nor her doctor made any special effort to get her into hospital and get it over before her 60th birthday because neither of them knew that she stood to gain financially by going into hospital either before her 60th birthday or after her 65th birthday but that she stood to lose financially by going into hospital between those two dates. If she had not gone into hospital between those two dates, which she could perfectly easily have arranged had she known the consequences, her pension would not have been reduced.
That is, briefly, the story. I have said that Mrs. Green did not know, and presumably also her doctor did not know,

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the consequences of taking her hospital treatment just when she did at this, as it turned out, wrong and unnecessary period. I admit that I would not have known either if Mrs. Green had consulted me before making her decision.
I am sure that the Joint Parliamentary Secretary will not reply with debating points about the previous Government having failed to provide any remedies in such situations any more than I want to blame the Minister for the inflexibility of the law. The hon. Gentleman will surely agree that it is a hard case. I have no doubt he will explain that he has no power to render the existing law more flexible and I know from experience how often Ministers wish the law were more flexible when they come up against hard luck cases for which the law allows them no discretion.
I know, too, how reluctant Parliament is to give Ministers wide discretionary powers while, at the same time, hon. Members never cease from criticising them for being inflexible in particular cases, although Parliament itself has compelled them to be inflexible. All this I know. I know, too, that nothing can now be done to remedy Mrs. Green's hard case and Mrs. Green, I have reluctantly to say, knows it herself because I have fully explained it to her.
But I ask the hon. Gentleman to look sympathetically at the problem and to see whether it is possible to find some way of improving the facilities open to citizens under the welfare services to understand their rights and to avoid such unlucky consequences in future. The welfare services in my experience are very humanely administered within the limits laid down by Parliament but when unforeseen hard cases arise it seems to me right, without blaming those responsible for the administration, that publicity should be given to such cases in the hope that, even if they cannot be remedied, their repetition can at least be avoided.
11.37 p.m.
The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Norman Pentland): I must congratulate the hon. Member for Oxford (Mr. Woodhouse) on his good fortune in securing this debate so early in the new Session in order to bring
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forward the case of his constituent, Mrs. Green. I know that he feels strongly that something should be done to enable her to qualify for a higher retirement pension. He has pursued this most vigorously and, listening to him, I thought I found in his argument the thread of experience from his service in the last Government and an understanding of what the position involves. I am also grateful for the courteous way in which he kept me in touch with the points he wished to raise.
I should make it clear at once that I myself and my right hon. Friend have every sympathy with Mrs. Green and we can fully appreciate her disappointment at not being able to qualify for a higher retirement pension than the £4 18s. a week she is now receiving. But the hon. Gentleman anticipated my reply in more ways than one and I am afraid there is nothing that my right hon. Friend or I can do. I shall try to explain why.
As the hon. Gentleman said, the matter has been the subject of correspondence between us and I think that the arguments on both sides are well known to us. Therefore, I do not propose to go over all the facts in detail. But, briefly, Mrs. Green's National Insurance position is as follows. As we all know, the minimum pensionable age for a woman is 60 and for a man 65. This does not mean that, if a woman can qualify for a National Insurance retirement pension at that age, she is obliged to take it then. She can defer her retirement.
For those who wish to defer their retirement beyond the age of 60 in the case of a woman or 65 in the case of a man and who continue to work, the National Insurance scheme is flexible. It offers a measure of encouragement by providing, through what we call increments, a higher rate of pension for those who continue to work and pay contributions after the minimum pensionable age. This higher pension is payable on eventual retirement or in any event five years after minimum pensionable age if the person has not by then retired: that is to say, at the age of 65 for a woman.
I stress that the increased rate of pension is earned by forgoing pension to which one would otherwise be entitled and by paying contributions. The amount of the increase is calculated by reference to the number of contributions paid

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during the period of deferred retirement, since that provides a convenient method of assessment. The basic point, however —and I stress this as the hon. Member has raised it forcibly this evening—is that the pension must be forgone. The payment of contributions is subject to that.
I need only deal here with the flat-rate pension,. since the graduated part of the Natoinal Insurance Scheme is not applicable to Mrs. Green's case. Since 1959— which, as the hon. Member has said, is the relevant date for Mrs. Green—the rate at which increased pension can be earned has been Is, of extra pension per week for every complete set of 12 contributions paid. Thus, the maximum amount of increased pension which can be earned during the full five years of deferred retirement—I am talking now of a single person—is £1 1s. a week, or 21 times 12 in the total span of the five-year period. That is how it is assessed.
There is one other provision which I should explain. It is obviously only fair that someone who goes on working after minimum pensionable age should be able to qualify for sickness benefit when he or she is ill. To prevent abuse, however, the National Insurance Act fixes the rate of benefit payable during those periods of sickness at the same rate as the rate at which the pension would have been paid had the person retired at minimum pensionable age. In other words, for those weeks the person, in effect, receives his pension and no contributions are payable. I shall explain the reasons for this arrangement presently.
Mrs. Green reached the age of 60 at the end of 1959. As the hon. Member has said, she was at that time receiving a widow's basic pension of 10s. a week. For reasons with which I need not trouble the House, since that pension is not in dispute and is not relevant to the amount of increased pension which we are discussing, I will leave that aside.
On reaching 60, Mrs. Green became provisionally entitled to a National Insurance retirement pension at the standard rate, which in 1959 was £2 10s. and now is £4 a week. This pension could be paid to her as soon as she retired. However, Mrs. Green decided not to retire but to forgo this pension, to stay at work and to continue paying contributions for a higher pension on eventual retirement under the conditions which I have described.
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During the five years before her 65th birthday, when her pension became payable regardless of retirement, Mrs. Green paid 223 contributions which entitles her to 18s. a week extra pension on top of the present standard rate of £4, making £4 18s. in all. The reason why she did not pay more contributions during those five years, as the hon. Gentleman quite correctly said, was that she was ill for two spells of 25 weeks and 14 weeks, 39 weeks in all; she was ill from October, 1960, to April, 1961, and from December, 1962, to March, 1963 respectively. No contributions were due for those 39 weeks, for which she was paid sickness benefit at the same rate as that at which her pension would have been paid if she had retired at the age of 60.
I do not think these facts are in dispute between the hon. Gentleman and myself. Rather, the hon. Gentleman's argument, as he put it forward to me in correspond-ance and as he has amplified it here tonight, is that the provisions should not be as they are, or that they should not have been applied in the way they have been. I think that is a fair assessment of the hon. Gentleman's argument. Here, of course, we come to the crux of the matter.
The hon. Member says that Mrs. Green is in effect losing 3s. a week extra pension because she was ill and had to go into hospital between her 60th and 65th birthdays, and that she should not be penalised for these reasons. The hon. Member also said that Mrs. Green knew some time before she was actually admitted to hospital that she would have to go there. The fact remains, however —I must impress this upon the hon. Member—that extra pension can be obtained only by forgoing pension in the first place, and Mrs. Green did not forgo her pension when she was ill. Those are the facts. She received her pension as sickness benefit at the same rate for those weeks. I am sure the hon. Member will appreciate that that is the essential point, and that it would not in any way be practicable or fair to run the system of increments to National Insurance retirement pensions with regard to such arbitrary factors as hospital waiting lists. I am quite sure he would agree with that.
I should also point out that, in so far as an element of choice on the part of

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those concerned may be possible, we, of course, make it quite clear to people that only weeks of actual work count for increments, and that weeks of sickness or unemployment do not. My information is that that is made quite clear to the people concerned.
One could argue, of course, that receiving in effect a pension by way of sickness benefit should not prevent someone from also being able to earn extra pension at the same time. That could be argued, but let us examine this proposition. Here, I admit, I am taking an extreme case, but, of course, the extreme case may quite often be a good way of testing the value of a proposition. It would mean, in an extreme case, that a sick person who had no prospect at all of returning to work would be able, simply by refraining from giving notice of his or her retirement, to receive his or her pension by way of sickness benefit for the full five years, and then at the end—
Mr. Woodhouse: I am sure that the hon. Gentleman would agree with me that this is not the kind of contingency which would have been likely to arise in the case of Mrs. Green.
Mr. Pentland: Oh, no. I fully accept that. As I have already said, we have great sympathy with Mrs. Green. All that I am pointing out is the circumstances that could apply in a situation where it is claimed that periods of sickness should be taken into account when calculating the increments to be paid in addition to the pension.
I was going on to say that in the extreme case, which could happen, at the end of the day a person would qualify for the fully incremented pension of £5 1s. 0d. a week. In other words, he would get £5 1s. 0d. for giving up nothing, whereas someone who had retired at minimum pensionable age would get only the £4. I am sure that the hon. Member will agree that that would be unfair and obviously absurd, since it would defeat the whole purpose of having a system of increments to pension.
Again the hon. Gentleman's anticipation is correct; I have had to deal with the position as the law stands. I should be out of order if I attempted to discuss possible changes in the law. The hon. Member understood that himself quite
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clearly, and he has not raised any question involving those issues either. Perhaps I could just say that I suppose that it could be argued that we should have no increments at all. One could have a system under which a person who deferred his retirement received nothing extra when he later retired and began drawing his pension. But the facts are that we do have a system of increments, and they do depend on the person concerned giving up pension and paying contributions to earn them. Therefore, I must tell the hon. Gentleman that I cannot hold out any hope of a change in the system such as would get over the case of Mrs. Green.
I know that the hon. Gentleman appreciates that my right hon. Friend and I have to administer the provisions of the National Insurance Act as they are laid down by Parliament. We have no discretion in these matters at all. We cannot make exceptions to the rules on compassionate grounds or on grounds of hardship, and it is on that statutory basis that Mrs. Green's case has been decided, after very thorough examination.
As the hon. Gentleman knows, she has received a Minister's decision on the number of extra contributions that she paid. She has exercised her right of appeal to the local tribunal, which did not allow her appeal. Through the hon. Member, her case has been brought to my attention and, in the final analysis, to the attention of the House this evening. So, while I and my right hon. Friend have every sympathy with her particular circumstances—and there are other people in the country whose circumstances are very similar to those of Mrs. Green in the matter of increments and their not qualifying for them through sickness—we are quite satisfied that the provisions have been properly applied in her case, and I am bound to say that these provisions are both fair and reasonable.
The hon. Member has pursued the case with vigour and with the courtesy which we all expect from him and which we all get from him, but I am very much afraid that my reply this evening, disappointing though it may be, is the only one I can give on the facts of the case.
Question put and agreed to.
Adjourned accordingly at six minutes to Twelve o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Potato Surplus
  Potato Surplus
MAURITIUS AND SEYCHELLES
  Defence Facilities
  Defence Facilities
POST OFFICE
  New 4d. Stamps (Regional Issues)
  New 4d. Stamps (Regional Issues)

Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of St. Albans

CAYMAN ISLANDS AND TURKS AND CAICOS ISLANDS CONSTITUTION ORDERS
2.35 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON): My Lords, with your Lordships' permission, I should like to repeat a Statement made by my right honourable friend the Secretary of State for the Colonies in another place on November 4, about the Cayman Islands (Constitution) Order in Council 1965, and the Turks and Caicos Islands (Constitution) Order in Council 1965, which have been laid before the House.
These Orders revoke the Cayman Islands (Constitution) Order in Council 1962 and the Turks and Caicos Islands (Constitution) Order in Council 1962, and in each case reproduce the provisions of the Order revoked, with retrospective effect from August 6, 1962; and incidentally in the case of the Turks and Caicos Islands the Order amends the Constitution in certain respects with effect from the commencement of the Order. The 1962 Orders were made by Her Majesty in Council on July 30, 1962, and came into operation on August 6, 1962. They were made under Section 5 of the West Indies Act 1962 and, by virtue of Section 7 (3) of that Act read in conjunction with Section 4 (1) of the Statutory Instruments Act 1946, they should have been laid before both Houses of Parliament after they were made and before they came into operation. It has recently been discovered that, through inadvertence, the requirement to lay the Orders in that way was overlooked at the time. I am advised that the failure to lay the 1962 Orders did not prevent them from coming into operation and having full legal effect from the date from which they purported to do so. However it is pos-
28
sible that the contrary might be argued, and for that reason it has been considered prudent to make these new Orders. I ask the House to accept the apologies of all concerned for the failure to lay the 1962 Orders.
LORD CARRINGTON: My Lords, I am much obliged to the noble Lord for making that Statement. The noble Lord is a most courteous Member of this House. I noticed that in this Statement he did not even once hint to your Lordships that it was really we on this side of the House who were to blame.
LORD WADE: My Lords, may I ask whether this amounts to retrospective legislation?
LORD WALSTON: My Lords, I do not think it amounts to retrospective legislation. I think it amounts to the retrospective putting right of an oversight.

LAW REFORM (MISCELLANEOUS PROVISIONS) (SCOTLAND) BILL [H.L.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, I beg leave to introduce a Bill to exempt from arrestment on the dependence of an action sums falling to be paid by way of wages, salary or other earnings or by way of pension, and to abolish the exemption from arrestment in execution of certain earnings payable by the Crown; to amend Section 5 of the Adoption Act 1958, and to provide in Scotland for the succession of an adopted person to the estate of his natural parent in certain circumstances; to amend Section 5 of the Trusts (Scotland) Act 1961; to provide for the admission in evidence of certain documents in civil proceedings; to confer jurisdiction on the sheriff court to vary or recall certain orders of the Court of Session in respect of maintenance, custody and welfare of children, and to empower the High Court of Justiciary to extend certain time limits in appeals; and to provide that acts of adjournal and acts of sederunt shall be statutory instruments. My Lords, I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Hughes.)
On Question, Bill read 1a, and to be printed.

CHURCH OF ENGLAND CONVOCATIONS BILL [H.L.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg leave to introduce a Bill to make further provision with respect to the duration of the Convocations of the Provinces of Canterbury and York. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read la.—(Lord Stonham.)
On Question, Bill read 1a, and to be printed.

SEXUAL OFFENCES BILL [H.L.]
THE EARL OF ARRAN: My Lords, I beg leave to introduce a Bill to amend the law of England and Wales relating to homosexual acts. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Arran.)
On Question, Bill read 1a, and to be printed.

JUDICIAL BUSINESS (APPEAL COMMITTEES)
2.40 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move the first Motion standing in my name on the Order Paper. This and the succeeding Motion relate to appointments to the Appellate Committee and the Appeal Committee which, as your Lordships know, are sessional Committees which have to be reappointed at the beginning of each Session. The Appellate Committee is, of course, the Committee which hears appeals referred to it by your Lordships' House. The Appeal Committee is the Committee which considers applications and Petitions for leave to appeal. Any noble Lords who are qualified to serve are, in fact, appointed to both Committees. I beg to move.
Moved, That this House, in discharge of its constitutional duty to act as the
30
ultimate tribunal in appeals from England, Scotland and Northern Ireland, orders that two Committees, each of which shall include all Lords qualified under Section 5 of the Appellate Jurisdiction Act 1876, as amended by any subsequent enactment, be appointed to consider, during the present Session, such Petitions as may be referred to them and other matters relating to Causes depending in this House, and to Causes formerly depending in this House; and all other matters relating thereto; and that the Committees do appoint their own chairmen; and that, in pursuance of Section 1 of the Administration of Justice Act 1960, in all Appeals in which the leave of this House is required under that Act, the Petition or Application for leave to appeal shall, after being received by this House, be referred to one of such Committees as aforesaid, and such Committee may, after consideration whether such leave should be granted, take its decision and give directions accordingly on behalf of the House—(The Lord Chancellor.)
On Question, Motion agreed to, and ordered accordingly.

JUDICIAL BUSINESS (APPELLATE COMMITTEES)
THE LORD CHANCELLOR: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That this House, in discharge of its constitutional duty to act as the ultimate tribunal in appeals from England, Scotland and Northern Ireland, orders that two Committees, each of which shall include all Lords qualified under Section 5 of the Appellate Jurisdiction Act 1876, as amended by any subsequent enactment, be appointed to hear, during the present Session, such appeals as may be referred to them in order to secure the due expedition of public and judicial business; and that the Committees have leave to report to the House from time to time—(The Lord Chancellor.)
On Question, Motion agreed to, and ordered accordingly.
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
2.43 p.m.
Debate resumed (according to Order) on the Motion moved yesterday by Lord Francis-Williams—namely, That an humble Address be presented to Her Majesty as follows:—
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
LORD CARRINGTON: My Lords, as your Lordships know, we have by agreement divided the debate on the Address into three parts. To-day we deal with Economic Affairs, to-morrow with Foreign Affairs and Defence, and on Tuesday with Home Affairs. I must say that I am somewhat surprised to see, having regard to the very few senior members of the Government in this House, that the noble Lord, Lord Shackleton, who is the Minister of Defence for the Royal Air Force and the only Minister in this House who is in a Defence Department, is to answer a debate on Economic Affairs, while the noble Lord, Lord Shepherd, who speaks on Economic Affairs, is to answer a debate on Defence. All of us have a great admiration for the versatility and industry of noble Lords opposite, but I am bound to say that I think it would be very much more sensible if they were allowed to speak for the Department about which they know something: and, from your Lordships' point of view, it would be a great deal more profitable, since, however hardworking Ministers may be, it is quite impossible to speak for a Department for which they are not responsible, other than by sticking fairly closely to what, if we are honest, we all know is usually a fairly uninspired brief.
I am also bound to say that I was surprised that on this economic day the noble Lord, Lord Brown, the Minister responsible for exports, has not been chosen to speak. After all, he has just been appointed as Minister and what he
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said would have been of great interest to your Lordships. Indeed, it would have been agreeable to compliment the noble Lord in person on his appointment as Minister responsible for exports. But not only is he remaining silent; he is not even here. Perhaps he has been exported. This might he a good moment to remind the Prime Minister and noble Lords opposite that the appointment of Ministers and the setting up of new Departments may be quite a good publicity gimmick, but it does not of itself solve anything, as no doubt Mr. Cousins would tell us if he were able.
This is an occasion on which we can not only review the proposals which the Government have made in the economic sphere, but also assess the success which they have achieved in the past year. All of us can remember the speeches made by prominent members of the Government about what was wrong with the country and what they would do about it if they got elected. It is hardly necessary for me to quote any of the things they said, and perhaps a couple of quotes will do to remind us:
"Labour will keep prices down",
said Mr. Healey in his Election address.
"The new Labour Government will provide help for the housewife by lowering the rates and steadying prices",
said Mr. Jack Diamond. We were told by a number of Ministers that Stop—Go would be replaced by a steady rate of growth and economic expansion. We were told that we were to have a Britain thoroughly modernised and go-ahead—I think "dynamic" was the word then in fashion. We were told that the days of stagnation were past and that the thirteen wasted years would be replaced by a new virility, a new surge forward in our national prosperity. Well, my Lords, we have had a year of Socialism. How much of all this has come true? Are we on the road to the promised land? I do not know about being on the road, but we are still being promised quite a bit.
What has happened? We have had probably the most serious sterling crisis since the devaluation of the pound which took place under the last Labour Government. I hope we shall not hear from noble Lords opposite that the sterling crisis was caused by the balance-of-payments difficulties they inherited. I

33
think Mr. Heath exploded that myth in the speech he made at Brighton at the Conservative Party Conference. If noble Lords opposite have not read it, I recommend it as good bedside reading. I will provide them with a copy free of charge, if they wish. The sterling crisis was caused entirely by the actions of the Government. It was their fault and their fault alone. We have, as a result of the further standby from a number of friendly countries, a respite. Confidence has slowly been returning. This is greatly to be welcomed by everyone, because the strength of the pound is a matter which far transcends the bounds of Party politics. It is vital to all of us. If the pound suffers then all of us—every man, woman and child in this country—suffer. We have this respite to put our house in order, but we have not solved the economic situation. We have got a breathing space, but nothing more, if in that breathing space we do not show to our friends throughout the world that we are capable of putting our house in order, then the confidence which has slowly been coming back will evaporate as quickly as it did last summer. The chief result, as I see it, of the first year of the Labour Government has been a first-rate sterling crisis.
What then of the other promises? Industrial production has been stagnant since the beginning of 1965—there has been no rise there. Indeed, last month industrial production was less than it was in January. The tax burden has increased by £623 million—not much relief for the poor elector there. We have run up international debts amounting to £1,100 million. At some time these debts must be repaid, and they are a vast added burden on the resources of this country. As to prices, they have been rising faster than they rose for years; and, as for keeping prices steady, Britain has changed from having one of the best records in Europe to having one of the worst. Educational and building programmes have been cut back; we are even told, if I read the gracious Speech aright, that we are going back to building licences; motoring taxation has been put up, and the road programme has been slowed down. Home ownership has been made more difficult and more expensive; there are higher mortgage charges and higher rates. Yet the two most senior Ministers in the Government appear to think that
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this is a good record. In the Daily Mirror of Monday, October 18, the Prime Minister is reported as saying:
"At last Britain is standing on her own feet: the economy is strong, sterling is strong."
How Britain might be standing on her own feet "at last", when in the first year of his Government he has increased our international indebtedness by £1,100 million, is difficult to understand; and how he imagines the economy can be strong when he still finds it necessary to have a high bank rate and to take all the measures which I outlined a moment or two ago to restrict expansion and expenditure, I, for one, find even more extraordinary. He was only following in the footsteps of Mr. George Brown at Blackpool, on September 26, who said that the first year of Labour Government had been a great year for Britain. And yet the Government speakers still go round in their speeches talking about "thirteen wasted years" of Tory government when, as anybody who lived in this country in those thirteen years knows, the standard of life, the prosperity of the people of this country, the homes and the schools that were built, the motor cars that were bought, the television sets and the washing machines, and all the rest of it, all increased at a rate absolutely unprecedented in the history of this country. Our standard of living rose in those thirteen years more than it had done in the entire 50 years before.
It is therefore with critical interest, in the light of all this, that we scrutinise the gracious Speech to discover what Her Majesty's Government propose to do to put right the state of affairs that we find ourselves in; and I am bound to say that I do not find anything very reassuring in the proposals that they make. No doubt—and it is perfectly fair—the Leader of the House will say that they are relying very largely on the National Plan. We are to have, in the not too distant future, a debate on the Plan, and I do not want to anticipate anything that may be said on that occasion. It is a very comprehensive document, and statistically a very valuable one, though some of us have our doubts as to whether the questions that were asked were what one calls num questions or nonne questions. It makes a great deal of difference. It also makes a great deal of difference that those questions were asked, and the

35
conclusions reached before the Chancellor of the Exchequer in July introduced his third and last Budget for the year. But I think there is a lot of very interesting material in the National Plan which can be of great use, so long as we realise that the Plan is an analysis of the problems that face us and not a cure for them.
A great many people think they know what is wrong with our economy, but to know what is wrong is not necessarily to put it right. I read with great interest the action which was required to put right our balance-of-payments problem and which is to be found on page 17 of the National Plan. The proposals are unexceptionable, though in most cases they are not very original, and there is not much indication in the Plan of how they are to be put into effect. For example, defence expenditure overseas will, it is said, be reduced. We have been waiting now for one year for the Government to produce their Defence Review. When, may I ask (and here the noble Lord, Lord Shackleton, will come in very useful) are we likely to get the results of this Defence Review?
It is all very well to say that defence expenditure overseas will be reduced; but where, and how, and when? So far, we have heard nothing but piecemeal decisions; and not only piecemeal decisions, but lack of decisions, all of which is handicapping the Forces in planning ahead and carrying out their present responsibilities. Does the noble Lord, for example, think it a good thing that there should be continual speculation in the newspapers as to the future of the Fleet Air Arm? Does he think that that is good for recruiting? Does he think that the lack of replacement for the ageing aircraft of the R.A.F., and the lack of decision as to what shall replace them, is good for that Service? I very much hope that this evening we shall hear when the Government intend to produce the findings from their Defence Review.
We read in the list of actions required on page 17 that private investment abroad will be limited; and that, of course, has been done. No distinction has been drawn between portfolio investment and the investment of great overseas trading companies, who have been gravely hit by the financial legislation introduced earlier this year and have
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been put at a great disadvantage compared with their competitors in other countries. I should not have thought that that could be considered to be in the national interest. And so we read on, my Lords. Studies will be made, we are told; plans will be made; committees will be formed; examinations will take place. All this is very vague, perhaps necessarily so, and I hope that this evening we shall hear from the Leader of the House some of the concrete proposals that the Government have to make; because there is not very much to get one's teeth into in the gracious Speech.
There are one or two paragraphs, of a very general kind, about the balance of payments and industry with which all of us would agree, and there is a proposal to introduce a Bill to strengthen the prices and incomes policy. This may well be of great importance, and we shall study its terms with great care. The Government, we are told, are going to do something about the docks. That is greatly to be welcomed, though here again we must wait to see exactly what their proposals are. Apart from this, it seems to me that there are some serious omissions. There is, regrettably, no mention of restrictive practices in management or labour, or of any action on unofficial or wildcat strikes. I should have thought, to put this at its lowest, that these matters merited some attention from the Government. We on this side feel they need to be tackled; and I shall have a little more to say on that in a moment.
We must be grateful at least for one omission; that there is nothing in the gracious Speech about steel. Most of us, and I suspect most of the Party opposite, know it to be absolutely irrelevant to the economic situation; yet I wish I felt that the Government had given up the idea altogether. After what the Prime Minister said yesterday I feel I cannot. I do not think they dare. They are too frightened of their Left Wing for that to happen. We have seen evidence of that in the newspapers this morning. In the meantime, the steel industry is left with its head in the air, which I suppose is better than having its head on the block. We all know the real reason why there is no mention of steel; it is because the Government must keep their eyes on the Liberal

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Party. We shall no doubt see in this next Session, on other issues as well as steel, that it is really the Liberal Party who are propping up the Government. "Vote Liberal and keep Labour in" should be an attractive slogan for Liberal Party supporters at the next Election.
There is, however, a mention in the gracious Speech of the Land Bill. There may very well be a case for a tax on the development value of land; and, indeed, the Conservative Party has suggested this. But no one can pretend that the scheme outlined in the White Paper is going to add one acre more land to that available for development; that it is going to make the land cheaper or help our economy in any way whatever. The only thing we can be quite certain about is that there will be a large number of additional bureaucrats and forms for the ordinary citizen to deal with—not a very inspiring or encouraging set of proposals for a country faced with grave economic difficulty.
On the last occasion when we had a debate on economic affairs, I ventured to suggest that one of the difficulties which the Government—indeed, any Government—have to face is that over the past twenty years we have had a series of economic crises. On each occasion we have been told by the Government of the day that the crisis was really serious, that it was a matter of our economic life and death, and that unless there was a radical change in the productive capacity of this country and in the amount that it exported there would be a very serious situation indeed. Broadly speaking, however, the crises have been surmounted without any marked sign that many people in this country have responded to the call for an extra effort. The warnings about economic life and death have died away until the next time, and life has continued on its normal course. The economic crises have never seemed to hurt anybody very much: wages have still gone up, the standard of living has still risen and, although one or two people have been hurt, perhaps severely, but temporarily, by credit squeezes, generally speaking, except for the headlines in the newspapers, the crisis has gone unnoticed by the vast majority of the people in this country. I do not
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think that anybody really believes in it any more.
I do not know whether your Lordships agreed with what I said on that occasion, but there has been quite an interesting sequel during this particular economic crisis. The state of the pound, which I mentioned earlier, caused grave anxiety during the spring and summer, and in the minds of the Press and broadcasters the strength of the pound seems to have become synonymous with the economic strength of this country. Of course it is of vital importance. Indeed, it is perhaps the most important factor in the many factors which form part of our national economic situation; but it is not the only factor. It is perfectly true that if the pound becomes weaker and weaker and our reserves dwindle there comes a time when the country is bankrupt and we have to devalue or take other drastic steps; but the reverse of that situation does not necessarily mean that the economic state of the country is sound.
A rise in our gold reserves over two or three months, although very welcome and a good sign of confidence in sterling, does not mean that all our economic problems are solved. A loss of confidence, a foolish speech, a Party political act by the Government can once again cause a loss of confidence, and the gain of two or three months may be lost almost overnight. Your Lordships will remember the headlines in the newspapers when the last gold figures were announced—"Bubbly Britain", "Bonanza in Gold". One might almost say, "Euphoria in Fleet Street". Is it not natural that most people who read these headlines think that our troubles are over, that the terrible and terrific problems which faced us earlier this year, when everywhere there was gloomy talk of bankruptcy, are a thing of the past and that we can all sit back and expect the National Plan to take us all to higher and higher standards of living without much effort on anybody's part?
I do not for one moment want to suggest that the Chancellor of the Exchequer has encouraged this, because indeed he has not. He has done the reverse: he has said exactly the opposite. But the fact remains that quite a number of the members of Her Majesty's Government

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have allowed this state of affairs to continue without contradiction and have made speeches, such as I have quoted from the Prime Minister, which have led to the sort of conclusions which I have drawn. Ministers have not pointed out the truth, which is that the reason gold reserves have recently been rising is that a number of foreign countries have given us another standby and we have been allowed to live on credit for a little longer.
We have done little yet to put our own house in order. As The Times said on Thursday last, we are still highly protected. We have an import surcharge of 10 per cent., we have one of the highest protective tariffs, and this year we have suffered from one of the sharpest rises in prices since the end of the war. These are the hard facts of our situation, and I think it is the duty of both the Government and the Opposition, as well as of every thinking man in this country, to stress over and over again that we must put our house in order if we are to influence our friends and allies in the Western world, to have the respect of our opponents, and to continue to raise our standard of living at home.
My Lords, I hope that noble Lords opposite will have read the Conservative Party pamphlet called Putting Britain Right Ahead, a statement of Conservative aims. In it you will find some of the broad proposals which we make to put our economy on its feet. There is a sharp difference between our approach and that of the Government. We want to see encouragement and incentives. We believe that those who are working hard in the interests of the country and are proving successful should be allowed to reap the benefit of their success. We want, as this document says, to see less of the tax burden falling on earnings and on success. We want to encourage savings. We want there to be more opportunity for people to have a stake in the country and to have a bit of capital; and to do that we must change the tax system.
We believe, as Mr. Heath has said, that if you want rapid industrial renovation and high efficiency you must have the incentives to obtain it. We must create a climate in which people are enabled to give of their best, and remove those difficulties
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to efficiency which all of us know abound in this country. When we are returned to power we shall tackle the problem of industrial relations; and, as the pamphlet says, we would ask the Royal Commission to let us have their views on a number of matters so that we could get on with legislation. And we have made some suggestions about what that legislation should be—not aimed against anybody, but aimed at a fairer deal for everybody, especially the consumer and the ordinary man in the street. Above all, we must ensure that there is confidence in Britain, and that our friends see us as a country with a great future, full of energy, technical skill and achievement.
My Lords, to put it in a nutshell, having convinced the people of this country that we are in a difficult economic situation we must create a climate in which they can increase production, and, at the same time, we must make it possible for those who do increase production to be suitably and properly rewarded. I believe a Conservative Government can do this. Nothing that we have seen from the Labour Government in the last year, or in the proposals that they set before us in the gracious Speech yesterday, leads me to think that they have, that they can, or that they will.
3.7 p.m.
LORD BYERS: My Lords, I must confess at the outset that I do not find myself in very much agreement with the speech to which the House has just listened. It is all very well for the noble Lord to come here and proclaim that, when a Conservative Government get back to power, they will do all these things for which so many of us waited for thirteen years. I would take a different attitude. I think the Government are to be congratulated on surviving a whole year of office. In this, I think they have surprised their opponents as much as themselves. Their determination to survive for a further period is, I think, evidenced by many of the very sensible proposals contained in the gracious Speech.
Nobody will deny that the Prime Minister is a skilful operator. He has put forward a legislative programme the bulk of which, in principle, commands the support of my colleagues and myself in both Houses of Parliament—a very

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sensible approach to politics. I do not think this is surprising, because the better measures have been lifted almost bodily from various Liberal policy documents which we have been putting out for the last forty years or more. I refer to leasehold enfranchisement, action to deal with rates and betterment values, although I am sorry to see that there is no reference to site-value rating, which I believe is still a very good answer to this problem.
It is no new experience for the Liberal Party to have its clothes borrowed. On this occasion, however, there is a welcome departure from past practice. The Conservatives, if I may say so, have earned a well-deserved reputation for stealing Liberal ideas for inclusion in their General Election manifestos for the express purpose of obtaining votes, and then ditching them during their period of power. The Conservative Party never breaks its Election pledges: it just ignores them.
I must say that I was very interested in the fictional anecdotes with which the noble Lord, Lord Carrington, provided us, about how things were under the Conservatives. I thought that perhaps I might be challenged about this business of the Conservative Election pledges, because they are making a great deal of play at the moment about Election pledges. I would refer to only three of them. In their Manifesto of 1959, this phrase occurs:
"Tories keep the cost of living stable."
We went into this question for the purposes of the 1964 Election, and we found that a pound which would have bought goods worth 20s. in 1951 was then, in 1964, worth less than 14s.
Then we had the statement in 1957 from Mr. Macmillan about taxation: "We believe in lower taxes". Of course, everybody does! But in 1964 it was discovered that a single man earning between £700 and £1,200, and a married man with three children earning between £1,200 and £1,900, paid more direct taxes, as a percentage of income, in 1961–62 than the equivalent income in 1949–50. Then in 1963 we had a remarkable claim in a Conservative advertisement about motorways. "We will build", they said, "one thousand miles by 1970". Well, my Lords, by 1962 I think we knew that just
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over 23 miles of motorways had been completed; and construction was going on at about the same rate when the Conservatives went out of office.
So I think that we ought to stop this business of Election pledges and promises, and get on to the things that really matter in the present and in the future. I am glad that we have in the present Government an Administration that has the courage to take up ideas which have been pioneered, many of them, by the Liberal Party, and by others, too, and in a practical way to include them in the gracious Speech and to show that they mean business. I think that is a notable step forward along the radical road, because it concentrates on intelligent, forward planning and social justice at the expense of outmoded Socialism, which I believe has for far too long been an obstacle to the sort of progress we have never been able to achieve under Conservative Administrations.
I welcome the spirit as well as the content of the gracious Speech. There are, of course, a few blemishes. There is this rather sinister illiberal pronouncement about the Government's intention to strengthen the control of Commonwealth immigration. I should like an explanation of what is meant by that. There is a further blemish, one that we shall be forced to challenge, in the proposal to set up a Land Commission; because I believe that the creation of the Commission itself (which is obviously a sop to the old-fashioned land nationalisers) can only increase the price of land and make it scarce. But we welcome the intention to deal with betterment values, which is a great step forward. In general, I think the proposals are a welcome advance on the sort of measures we have had in the past.
The proposal to deal at long last with the plight of public service pensioners and their dependants is an admirable one. We have campaigned for this for a long time, but have been put off by various Conservative Administrations who have told us it could not yet be done. I would say to the Government that I wish that, for once, they would deal with this matter in a really comprehensive way. Can we make sure we are not going to be niggling and mean, that we are not going to have some measure which will

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try to draw fine lines of distinction between one class or group and another, resulting in anomaly after anomaly, as we have had so often in past legislation? I should like to see a Bill on this subject started in your Lordships' House, so that we can give it proper attention. There has been a great deal of pent-up and silent suffering in the field of public service pensions. I should like to see a humane and generous attitude adopted in this Parliament to this problem.
My Lords, the next point in the gracious Speech to which I should like to refer is transport. I have a suspicion that the Government have still not got the importance of transport in its proper perspective. It is relegated to the end of the speech. It is given about three lines; it is almost an aside, yet we know that in the case of the roads, according to the recent report by Professor Morgan, congestion is costing us something like £1,000 million a year. This is a lot of money, whichever way one looks at it. It must be a tremendous impediment to exporting and to reducing the prices of our goods. I believe that it is completely short-sighted to think in terms of postponing the road programme, or cutting down. We should be getting on with the job. We could approach it, if you like, on a self-financing basis, about which I have spoken so often in this House; but I believe that to give the roads programme the right priority would make a tremendous difference to the solution of our balance-of-payments problem.
I should like next to refer to the question of reform of company law. I think it is a very welcome step; but I hope that it will not be confined to the publishing of political contributions. Of course we should have the full publication of political contributions: it is long overdue. I believe that the shareholders should know, as a matter of principle, about what contributions are made by the companies. I would say to the companies, because as the Chairman of the Party I propose to approach a number of them: "Why have you worried about this? Why not publish?" If you are afraid of publishing, then you had no right to contribute in the past to this sort of thing. The only reason for contributing to political Parties is because you believe it to be in the interests of
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your shareholders that the money should be spent in that way. If you believe that, then there is nothing whatever to stop you from publishing the facts and saying to your shareholders that you believe it to be in the interests of the company to do so; and that if they do not like it they can vote you out of office or vote against it." I object to this hole-and-corner business, to these fronts like United Industrialists and to operations where there is an indirect contribution to political campaigning. I would say, as the noble Lord, Lord Francis-Williams, said yesterday in his able speech, "Publish and be damned!" I do not see why people should not know exactly where the shareholders' money is going.
But I also believe that there are other things that ought to be looked at in the field of the reform of company law. There are many useful suggestions in the Report of the Jenkins Committee I should like to see the rights of employees dealt with in the Articles of Association, so that they and the shareholders know what their rights are—particularly in the case of large companies. I should like to see the end of nominee share-holding which conceals the true control of the business. This should be abolished in modern society. I hope that the Government will look at that matter.
I was not proposing to deal with steel nationalisation until the noble Lord, Lord Carrington, made the rather cheap jibe about the Liberal Party, a jibe which was out of keeping with his engaging and charming manner. I often wonder how he manages to sit on that Front Bench, surrounded by so much Right-wing reaction. He and his noble friend are a couple of the most unlikely conspirators I have ever seen. But, really, this idea of "Vote Liberal and keep Labour in" is preposterous. Does the noble Lord really want a General Election now? Can we have this on record: that the Conservatives really want a General Election now, despite all the evidence in the country, despite the fact that this is not in the national interest?
VISCOUNT DILHORNE: Do you want one?
LORD BYERS: I want to get a number of measures, for which the Liberal Party have worked and slaved, on to the Statute Book. I do not want, and I do

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not think the noble Lord wants, to see a Labour Government with a large Left-wing majority returned, which is what would be likely if a General Election were held at the present time. We must be adult about politics in this country. There is another factor. If you do not vote Liberal there is the risk in certain circumstances—not at the present moment—of letting the Tories in. We have had thirteen years of that lot. I believe that we have to get on with the legislation, so much of it so good, and not talk about a General Election (after which I hope we shall see the Conservatives much lower down the list in many constituencies) because this country has to be a radical country.
LORD CARRINGTON: My Lords, will the noble Lord confirm that the Liberal Party do want to see the Labour Government remain in office?
LORD BYERS: I am merely saying that it is very important at the present moment to know that we are getting some of this legislation through. Politics is about power. As a Party, we have had more influence on the Government of the day in the last year than we had for many years previously. I wish to see this power used. We can, I think, take credit for having killed the nationalisation of iron and steel. We certainly can take credit for moderating the extreme Socialism of the Labour Party in another place, and I should like to enjoy this situation, if only for a few weeks.
Leaving aside these Albert Hall meeting tactics, I would return to the gracious Speech, and I want to say to the Government that the function of Parliament is not merely to legislate. I hope that we shall be given many opportunities during the coming Session to have proper discussions in both Houses on improving administration and the efficiency of the national economy, because I believe that the climate of national opinion is gradually changing in favour of a planned economic growth, and it is beginning to be interested in removing the obstacles to efficiency. So far this is only a glint in the eye, but it is well worth fostering. Both management and workers are beginning to realise that resistance to change has got us nowhere. People are now realising that, thanks largely to the National Plan, far from our having unemployment, we shall, by 1970, have a
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manpower deficit. This is the climate of opinion in which we can get people to take a fresh look at such things as restrictive practices and inefficiency. I do not think we can expect a dramatic breakthrough, but I believe that there is a good deal which may be done usefully by seizing this opportunity.
I am not one to denigrate the National Plan. It is a very good picture of things as they are and as they might be if we could generate the enthusiasm. I still think that some of the targets are too low. I believe there is a good deal to be done in this field in explaining to people, in management and on the factory floor, exactly what we can achieve if we get down to it. I have heard one or two quite interesting remarks recently and I should like, in two minutes, to tell the House about some of them. I think it is now generally agreed that men and management will help to improve productivity when they know precisely what it means in their own department. In the last month one of our better organised industries has introduced a "Black Book". Anybody can write in it suggestions for improving efficiency and to show up bottlenecks and, what is more, say where restrictive practices are holding up production. It has had a very good reception. People have become interested, and this is the kind of interest we want.
Another industrialist said to me the other day that a great deal is talked about restrictive practices, but we should not jump to the conclusion that a practice is restrictive until we have tried to get unions to remove it voluntarily. Quite often attitudes are adopted which may be overcome by discussing the question, not necessarily formally but informally, and saying, "Don't you think it better to do it this way?" This is another contribution which we can make. There are other points which may be dealt with during the debate on the National Plan, but at the moment, the climate of opinion is right for a great deal of educational work to be done.
I find myself puzzled about what is the correct method of measuring such things as increases in incomes and earnings, productivity and the general inflationary pressure. The reason why I say this is that on October 31 the Chancellor of the Exchequer made a

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statement, which was widely quoted, that earnings had risen faster than productivity. He said that over the first eight months earnings had gone up by some 8 per cent. and, if that continued, inevitably it would mean increasing prices. Of course, he was quite right. In answer to my right honourable friend in another place on November 4, the First Secretary of State, when asked to give the average hourly earnings in the first six months of this year compared with the same period last year, said that there had been an increase of 4·8 per cent. compared with 4·9 per cent. the previous year. Then, in other documents and in other places, there have been references to such matters as the increase in the size of wage settlements. Could we not have some standard formula that we could all use, recognised in the Treasury and in the Department of Economic Affairs, which would show us what sort of inflationary pressures are building up because of the increase in wages and prices? It might not be easy to achieve, but it would make matters easier and then we should all be speaking the same language.
My Lords, generally and in principle I welcome this gracious Speech. We shall examine the Bills and measures as they come up. We are completely free to vote against the Government in either House if we feel that a principle in which we believe is not being upheld, but I say that it is a pleasure to find an Administration willing to forsake an outworn Socialism for the more rewarding path of social legislation based on intelligent radicalism. I hope that we shall go on in that way and not see a Conservative Government returned in the next few weeks.
3.26 p.m.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, the noble Lord, Lord Byers, who has quickly established himself as one of the most delightful speakers here, has informed us that he and his colleagues welcome the spirit and the content of the gracious Speech. I am sure that all my colleagues here and elsewhere will welcome the spirit and the content, and, if I may say so, the style and vigour of the speech of the noble Lord. I am sure that we must all agree with the noble Lord regarding
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the letter which he wrote to the Daily Telegraph a day or two ago in which he deplored the recent remarks of Mr. Iain Macleod, who had announced that one of the most important tasks before the Conservatives was to destroy the Liberal Party. Well, that is treated with the contempt it deserves by the noble Lords opposite, and I am sure that none of my friends would echo such appalling language.
The noble Lord, Lord Carrington, raised a complaint about the composition of our speaking team. He was disappointed to find that the debate would be replied to by the noble Lord, Lord Shackleton, and that to-morrow's debate on Foreign Affairs and Defence would be opened by the noble Lord, Lord Shepherd. I do not quite know what has come over the noble Lord. He must be very short of material, as the event has shown. These noble Lords have spoken for the Government before in these circumstances, during the present Parliament and often in the past, and we have never had any complaint, so I do not know what is worrying the noble Lord. He also asked why the noble Lord, Lord Brown, was not present—
NOBLE LORDS: Where is he?
LORD HENLEY: He came in to hear the Liberal speech.
THE EARL OF LONGFORD: He is, to adopt a phrase of the noble Lord, with us in spirit, and was here shortly in substance to-day. He is learning his job and I do not think that anyone can blame him for not insisting on taking part in an economics debate. He is going to make the Government's main speech in the debate on the National Plan, and unless the noble Lord, Lord Carrington, is called abroad, I hope that he will be able shortly to congratulate the noble Lord, Lord Brown. In the time Lord Brown has been in the House, he has, like the noble Lord, Lord Byers, established himself as someone worth listening to and I am surprised that the noble Lord, Lord Carrington, who is always so generous in his attitude to speakers, particularly to a new speaker, should have adopted the tone he did towards a new Minister. However, even the best of us occasionally feel rather waspish when we are in a certain difficulty, and I realise that the

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noble Lord, Lord Carrington, was speaking off his own subject to-day. I cannot recall an occasion in the years during which he was a Minister here when he took a leading part in an economics debate. My memory may he at fault, but my noble friends Lord Shackleton and Lord Shepherd were speaking away on economics when the noble Lord was prudent enough to abstain.
LORD CARRINGTON: My Lords, for four years I was First Lord of the Admiralty and, curiously enough, I confined myself largely to talking about the Navy and Defence.
LORD AIREDALE: My Lords, was it not the First Lord of the Admiralty in the last Administration who was Minister in charge of the Shops, Offices and Railway Premises Bill?
THE EARL OF LONGFORD: My Lords, I think it all cancels out. I think that when the noble Lord, Lord Carrington, passed from the personal side of his speech to its substance we were not surprised to find that he had only recently extracted himself from naval affairs and plunged into economics. He is so much admired on this side that anything I say is in danger of antagonising even my own supporters, but I must say that the speech he delivered this afternoon was an extraordinary example of the superficiality of a Central Office brief. I will not labour the point, because he is far too popular for me to wish to cause him pain. One does not want to rub these things in. We have all made bad speeches in our time. I have been in your Lordships' House for twenty years and I have made plenty. But the noble Lord did announce this: that the sterling crisis was caused entirely by the Government.
SEVERAL NOBLE LORDS: Hear, hear!
THE EARL OF LONGFORD: Yes, but nobody in his senses supposes that. I suppose that people can argue about the share of responsibility till the cows come home, but nobody supposes any more that when the deficit reached the record level of £750 million or £800 million the whole of the responsibility lay with the new Government. If anybody seriously argued that he would be more suited to a mental home than to your Lordships' House. I do not think that I have ever heard a statement of such outrageous
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nonsense come from a statesman so much admired as the noble Lord, Lord Carrington. But I do not want to pursue that topic; I thought that I must just speak plainly.
There are grave issues before us. It is agreed that to-day we must concentrate on economic and financial matters. That does not mean that there are not other matters more prominent in the minds of all of us at the moment—I am referring, of course, to the difficulties overseas. But even within the domestic field, I suppose that one cannot draw a hard and fast line between what could he called economic matters and domestic matters. The noble Lord, Lord Carrington, very likely drew as clear a line as one could, but even he at times crossed it and I may cross it myself.
I suppose that nearly all noble Lords on this side of the House are convinced supporters of the Labour Party, less for reasons of economics than because they believe in a different kind of society than we have seen in this country, a society based on far more social justice and animated by higher social principles. Therefore, one cannot make a first speech in a new Session for the Labour Government without indicating that, in the view of most of us, perhaps all of us, economics are a subordinate part of politics. They are inferior to the social aims which inspire the Labour Party, and, of course, in different ways, all Members of the House.
I am not going to deal with these social questions, but I would point out that, during the last year, we passed a great many measures—82 Bills, 11 more than the average from 1951 to 1964—and that a high proportion of these were concerned with our beginning to realise our social ideals. As soon as we came in we straight away moved towards improving substantially the lot of the old-age pensioners, the unemployed and the widows, and we removed the prescription charges. I mention these points now, though it may be thought that they come more readily into Home Affairs, the subject of our debate on Tuesday, because we were much criticised at the time for what was regarded as extravagance, considering the position in which the country was placed. The Opposition, here and elsewhere, did not exactly oppose these social measures, but they opposed the taxation—and in

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another place they voted against the taxation—required to pay for some of them. It was our Government that took the bold step—an arguable step, but I am proud we took it—of going ahead in spite of the financial difficulties of the position in which we were left by noble Lords opposite. I do not want to intrude further on Tuesday's debate, except to point out that there is a new list of such measures unfolded before us and I am glad to think that they will have the sympathy of the noble Lord, Lord Byers, and his colleagues and that some of them, at least, will have the sympathy of the Conservatives.
I come now to economics. We all agree that none of these social advances which we all want can be achieved unless the economy is sound and progressive. Let me take the Economic Plan. The attitude of the Liberals, I think, is on the whole cordial towards the Plan. The attitude of the Conservatives is more ambiguous. I am not quite sure where the right honourable gentleman Mr. Heath now stands. Before the Plan was published, he described it as:
"the biggest publicity gimmick which the Government have so far produced."
There has been some argument about whether somebody had conveyed an advance copy to him. But I think that he has run away from that position since. Perhaps in the course of the debate we shall be told.
Mr. Enoch Powell has spoken much more harshly about the Economic Plan. He said:
"There is only one kind of national economic plan which would be safe for Britain—that would be a plan of which nobody took any notice."
Perhaps the noble Earl, Lord Dundee, will tell us whether the views of Mr. Powell are repudiated by the Conservative Party. I am going to ask him only one question, so perhaps it is not too much to ask for an answer to this. Are the views of Mr. Powell on planning in general, and on the National Plan in particular, repudiated, are they representative, or have they just not come to the notice of the Conservative Party? Perhaps before nightfall the noble Earl could tell us where they stand.
Here is the Economic Plan, with its provision for a great many social ad-
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vances. If we did not realise it before reading the Plan, we realise now that certain defined increases in exports and investments and certain arrangements for imports are necessary if these social benefits are going to be realised and production increased by 25 per cent. between 1965 and 1970.
THE EARL OF DUNDEE: My Lords, I am not going to answer the noble Earl's question now; I will try to do so when I speak.
THE EARL OF LONGFORD: Is there not an answer ready?
THE EARL OF DUNDEE: As I have not spoken yet and as the noble Earl is making a speech, may I ask him whether the views of Mr. Frank Cousins on incomes policy are repudiated by the Government?
THE EARL OF LONGFORD: My Lords, by some extraordinary sort of prevision, I thought that this was the kind of point the noble Earl might wish to raise. No, I think it is a natural association of ideas. I would only say this about Mr. Frank Cousins. He is a man of strong loyalties and it may be that at certain times it is difficult for him to sec where his loyalty lies. I am not speaking for anyone else. I am giving my own opinion and I hope the noble Earl will take it as that. Just as the noble Lord, Lord Carrington, has strong loyalties to the Brigade of Guards, of which he was such a distinguished and gallant member, and if the point of view of the Brigade of Guards came into conflict with the point of view of the Government he would have to search his conscience, so has my right honourable friend strong loyalities. Noble Lords can snigger away to their hearts' content. Speaking purely for myself, I think that in England a man who has loyalties and does not abandon them or cloak them or fake them is more respected than a man who does the opposite. Therefore I think Mr. Cousins to-day is very much respected, while I agree that there are difficulties in a situation of this kind. The noble Earl asked me a question, and I should appreciate his attention. I am giving the noble Earl my opinion on a personal point which I am bound to say I thought it rather foolish to raise: nevertheless, I am giving it, and I say

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that Mr. Cousins is more respected because it is realised that he has these loyalties and is nevertheless trying to do his duty.
The question arises: what reason is there to think that we shall be able to achieve the target set in the National Plan? Why should we be more successful than our predecessors? We all know that they managed an expansion in production every four years or so and I need not elaborate the point, it is so familiar here and elsewhere—that by some strange coincidence the year that they managed the expansion in production was always an Election year. We hope to do much better than that. But we are asked and noble Lords opposite can ask it—why we expect to do any better? What is there in the record of the last year to imply that we shall be able to sustain this annual growth rate and not just achieve it every Election year?
Here perhaps we may turn to The Times leading article referred to by the noble Lord, Lord Byers (or the noble Lord was making the same point as was made in that leading article), of Monday last. They said:
"It would have required great faith in Mr. Wilson's Administration at the nadir of its fortunes last January, that it would still be there when the new session came round, and inordinate faith to believe that it would have a better chance of remaining there than at any time during its twelve months of office."
That is the view of The Times: that we are more strongly entrenched at the present time than at any moment in the last year. If things had gone so badly as the noble Lord, Lord Carrington, would have us believe, it is strange that we are so popular. Popularity is not the only test of merit, but it is much better than unpopularity, which I am afraid is the position of the noble Lord's Party. In the last year, according to The Times we established ourselves rather more firmly than might have been expected.
The Times, in the same article, refers to:
"the Government's success in persuading foreign bankers that sterling must be bailed out at all costs and eventually convincing those who deal in the currency that devaluation is off."
So, considering what we have been told in this House at different times during the last year, that seems to be quite an achievement: namely, that we have even-
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tually convinced those who deal in sterling that devaluation is off. I should have thought that the noble Lord, Lord Carrington, who I know is essentially fair-minded, might pay some tribute to that achievement.
The same point is made by another paper, the Economist, which under its present editorship, young and somewhat brash as one must call it, could not remotely be described as favourable to the Government. The Economist says:
"Although foreign confidence in Britain's Labour Government last November reached an all-time low, it has now recovered to a remarkable high;"—
this is in the current number of the Economist—
"anybody who has talked to foreign central bankers in recent weeks must report that they now regard Mr. Wilson as a most thoroughly respectable chap."
That is the view of the Economist, which, as I say, is far from friendly to the Government. And I am sure that these hankers would agree that the same thing goes for Mr. Callaghan.
The noble Lord, Lord Carrington, who was not very nice about the Government as a whole, did speak up for the warning given by Mr. Callaghan. Indeed, when the Chancellor of the Exchequer spoke at the Mansion House the other day, he was able to report that during the last twelve months exports had been rising steadily, public expenditure had been brought under control, the pressure of demand was easing off, and the economic future of the regions had become more secure.
"The deficit",
the Chancellor of the Exchequer said:
"on our balance of payments is much reduced, and sterling is correspondingly safe".
All that, after what we have been through in the last year, deserves what Mr. E. M. Forster called "two cheers", but it did not get many cheers from the noble Lord opposite. It is a remarkable achievement, I should have thought, and historians, I think, will judge it in that light. The Chancellor paid high tribute to the Governor of the Bank of England, which will give much pleasure in this House, where he is so well known, and to others who have helped us.
But, as the noble Lord, Lord Carrington, said, the Chancellor did warn

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us that there is still a long way to go: and naturally I would repeat that this afternoon. I would much rather be accused of being dismal than complacent, and I do not want to give an impression that the battle is now over. It seems that the public have realised, in a non-technical kind of way, that we in the Labour Government were faced with exceptional difficulties; they have realised that we did not hesitate to take unpopular steps to cope with them, and that under our auspices the country is beginning to get its head above water. I do not make any claim higher than that, but that is a claim that many of us would have hesitated a year ago to suggest that we should be able to make this afternoon.
I will inflict as few figures as possible on the House this afternoon—and I must congratulate previous speakers on avoiding them, so far as possible—but a few cannot be left out. We all know that we had a deficit last year of £750 million—£800 million, if you count the deferment of the interest and capital on the North American loan. We cannot at this moment, in the middle of November, say what it will be this year, but certainly there has been a tremendous change for the better. In the first half of the year the overall deficit was reduced to about £100 million, compared with over £300 million in the first half of 1964. We have every reason to hope that we shall achieve our goal of reaching equilibrium during the second half of 1966. A considerable element in the improvement comes from a change in the balance of private commercial investment here and abroad, and that must be attributed, partly, at least, to some of the measures taken in the Budget, some of which were very much criticised in this House.
But the relationship between visible imports and exports has also been far more satisfactory than it was last year. If you take a comparison between January-September, 1964, and January-September, 1965, you find that exports have increased by 6·2 per cent. and imports by only 0·6 per cent. So, not surprisingly, the visible trade balance is very much better. This result has not arrived by chance. I will not go into all the measures that have been taken to bring this about. They have been fully
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described, applauded and criticised—or, at any rate, discussed—in this House and elsewhere. But we are entitled, keeping our fingers crossed, and, using the Chancellor of the Exchequer's image, clinging to our winter coats, to congratulate all, not just the Government (perhaps no-one is really attracted by a Government which congratulates itself) but the British people, and particularly those most directly concerned with the export trade in the last year.
In the few minutes more that I intend to keep your Lordships—and it will be only a few minutes—I should like to dwell on the feature of our economy which is causing most anxiety to the Government at the present time. I am not referring to the production figures, which have been somewhat static recently. I think the noble Lord, Lord Carrington, did not make enough allowance for seasonal figures, but the production figures have been static recently. Taking the first eight months of this year compared with last, there has been an average gain of 3½ per cent. in production. But I admit that the improvement was primarily in the last quarter of last year. I would add, without trying to apologise for it or boast of it, that the far-reaching redeployment of resources, which is an integral part of our plan, especially to achieve our aim for exports, does not help the figures of production in the first year: in fact, it may hold them back, and it is only later that this redeployment may have its overall effect on production.
I am not referring to production. I think we need not be too disquieted about that, and most certainly I do not refer to any lack of business confidence. Fixed investment in manufacturing is still running at a high level, and in the first six months of this year was something like 11 per cent. higher in real terms than for the same period in 1964. My right honourable friend the Prime Minister yesterday reiterated the importance we attach to investment. He said:
"The Government's review of incentives and of the means of creating other selective policy weapons to encourage investment and modernisation has made good progress … we intend to publish a White Paper in the near future …"—[OFFICIAL REPORT, Commons. Vol. 720 (No. 1), col. 37, November 9, 1965.]
No doubt we shall want to discuss that when it arrives. But it is surely striking

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—I think a dispassionate judge would find it interesting—that there has been this surge of business confidence during the first year of Labour rule.
We have often been told in this House, and elsewhere, that the business community would never have confidence in a Labour Government. May I quote one or two specimen sentences from an article in last Saturday's Financial Times:
"The other major factor which has sustained investment is the maintenance of business confidence, in itself a function of the continued level of demand…. Most investors seem to have come to the conclusion that the only policy to follow is to disregard the taxation changes in the Budget and to carry on as before…. Any break in general confidence might well find prices at their present level vulnerable, but then there are no indications that business is declining."
I think it is at any rate interesting that there is so great a measure of business confidence at the present time.
I should be accused, fairly enough, of selective quotation if I left the matter there. The article in the Financial Times is headed:
"The economy still at high pressure."
It points out that labour costs have been rising sharply and that the rise in wage costs has far outstripped any productivity gains. That was referred to by the noble Lord, Lord Byers, and the Chancellor of the Exchequer has given us a serious warning lately.
I must leave this all-important issue of prices, productivity and incomes to the noble Lord, Lord Shackleton, but I must make one remark of my own. In our debate at the end of July I referred to the collective or group selfishness which tends to be equally common in every section of the community. I suggested then, and I should venture to repeat now, that this group selfishness is even more insidious than individual selfishness, because this is so easily disguised as a form of loyalty—loyalty whether to one's trade union, business, society or whatever it may be. Those of us who have never earned our livings with our hands are far too ready to conclude that a policy of income restraint means primarily a policy of restraint by the trade unions, or at least we expect that the initiative will come from them. It does not always occur to us what is surely the obvious truth, that
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from those to whom most is given most is required; and that an example in not exploiting the advantages of one's position should be set by the most priviledged sections of the community. I should like to think that both among the business community and among the trade unions a new outlook is beginning to show itself. It is an outlook which must be shown equally all round. There is no question, therefore, of our underestimating the seriousness of this issue, particularly in view of the recent warning of the Chancellor.
I will not recapitulate the steps that the Government have taken to make an incomes policy a reality—the noble Lord, Lord Shackleton, will have a good deal more to say about that—but I would quote one final passage from the Economist and the Economist is no friend of Labour. The Economist said:
"Certainly Labour now looks a better bet as the Party that might some day bring an incomes policy to fruition than the Conservatives, because the Conservatives are at present in the unfortunate process of running away from any determination to implement an incomes policy at all."
Those are not my words; those are the words of the Economist. The Economist adds a cryptic comment, which noble Lords can interpret as they wish. They say:
"The most dangerous anti-planner on this matter may well prove to be Sir Keith Joseph"—
I do not know why they have picked him—
"the shadow Minister of Labour, not Mr. Enoch Powell, the Shadow Minister of No Defence."
That is the assessment of the Economist.
I am certainly not going to end on the plea that we have only to go on doing what we have been doing and all will be well. That attitude is not the attitude of the Government in any way at all. I think Mr. George Brown is justified in treating it as an historic landmark when both sides of industry are officially co-operating in working, on a voluntary basis, an early warning system for prices and incomes. But we are all aware that it is a far cry from that kind of top level acceptance, still in its early days, to making a psychological reality of the incomes policy among the countless firms and factories.

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The House is already familiar with the terms of the gracious Speech, but I should like to underline just two sentences:
"My Government will strengthen and develop the policy for productivity, prices and incomes which they have agreed with management and unions. They will introduce a Bill for this purpose, and will continue to develop the policy in co-operation with all concerned."
There is much that remains to be worked out here, alike in theory and practice. The thinking of my Party has moved on, and many of us are not ashamed to admit that we are still anxious to learn, and hope we are still capable of learning. If we are able to learn lessons from the Liberal Party we are grateful, and it may be that the Conservatives can teach us something, though I am not quite sure at the moment what that something would be. The deep instinct which makes a man or a woman a Socialist should find full expression in the latest developments of our philosophy, but I should hope and believe that, no doubt with differences of emphasis, the new policy—the policy of planning by the co-operation of both sides of industry—will come to be accepted, not just by one Party or two Parties but by the nation as a whole. Certainly this country must find an economic policy which unites, rather than divides, if we are to raise our own standards of living, if we are to help our own weakest brethren, and if we are to face responsibilities in the world and to the world, which were never greater than now. When we look beyond our own shores we see a world which is ready to accept a lead. But we in this country are incapable of giving a lead—and I am sure everyone will agree with me—unless we are economically strong, and it is in that spirit that I am commending the Queen's Speech, and particularly its economic aspects, to the House of Lords this afternoon.
3.58 p.m.
LORD HANKEY: My Lords, I have listened with great interest to the speeches we have just heard. Obviously I cannot hope to compete with the wealth of wit and brilliance to which we have been treated. But I should like, with all diffidence, to draw attention once more to the great importance of achieving a fundamental improvement in our balance of payments and general economic performance. We have made an epic defence
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of the pound in the last year. One must congratulate the Government on the many new measures which they have taken and on the considerable success they have achieved, but, as has been recognised already in this debate, it has been done only with the help of the I.M.F. and of the Group of Ten, help given on a really vast scale. Now that times are getting better, we shall have to repay that.
On the basis of over five years' experience at O.E.E.C. and O.E.C.D. in Paris, I can assure your Lordships that our friends do not like being "touched" for such enormous sums, and that they really look to the people of this country to pull together and to keep their affairs in better order. Our policies are now very closely and critically scrutinised by our friends overseas. They think we have begun our recovery pretty well, but they hope soon to see real results in a better current balance, especially an even better export performance, and a better balance of capital movements: in short, a better basic balance of payments. I am greatly relieved to see that the correction of our balance-of-payments deficit and of the fundamental economic weakness which has recently afflicted our country is one of the foremost priorities of our National Plan. I think it is quite extraordinary that in the space of only one year the Government have not only created the Department of Economic Affairs but drawn up a fairly extensive National Plan in consultation with wide sections of industry and labour. This reflects the utmost credit on all concerned, and of course it now remains to execute the Plan effectively, and I underline the word "effectively".
Our friends overseas are conscious of the fact that we are now taking radical measures to ensure that our resources are used to the best advantage. If inflation is to be kept in check and if we are not to price ourselves out of the world markets, where we have already lost so much ground, then it is universally regarded at O.E.C.D. as essential that incomes should not increase faster than productivity. It is equally essential that the Government should set a good example to the rest of the community and not appropriate more resources and funds for the public sector, either at home, or still less overseas, than the economy can be made to afford. I earnestly hope that

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the Government will live up to their good intentions and good beginnings in this regard. It will not be easy, but as the noble Lord, Lord Byers, pointed out, the Plan should provide a new framework of calculation and also a quite new background for negotiations on these issues. Therefore, I believe that there are real advantages to be derived from our National Plan. I hope that it may in time become non-controversial.
We are greatly indebted to the Conservatives for starting the National Economic Development Council. Now it is time to carry the work forward. The system of Indicative Planning, as it is called, does not involve the State in enforcing on unwilling businessmen courses of action which they reject. It does not involve undue State interference. It should enable us to eliminate or reduce the shocking but hitherto apparently unavoidable stop-and-go episodes that have been so harmful to our rate of economic growth.
The businessman is now being consulted in a way he never has been, and never could be, before. When the system of "Little Neddies" is fully elaborated the Government and the Ministries concerned should gain immeasurably in knowledge of what the businessman suffers and what he needs, and the business community can now be informed authoritatively which way the wind is likely to blow for each industry and for each region, and that should help our businessmen to invest capital profitably, which, after all, is their principal headache. This is the modern way to do things. It works very effectively in France. Except for Germany, almost all our European partners in O.E.C.D. have adopted systems of planning or programming. In this era of planning we should not be left behind.
I agree with a remark that has already been made in this debate that our statistics should be made suitable for this computer age. It has been said that the relation of statistics to economics is the same as the relation of a lamp-post to a drunken man: the lamp-post is more suitable for support than for illumination. So I hope that our statistics will be brought up to date and streamlined, and made more useful for the needs of this inflation-ridden age. The difficulty we have to face is that it is so hard to know
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where we are in economic terms at any given moment.
But, my Lords, planning by itself does not ensure that our balance of payments will be corrected. Even if we ensure, as the Government have indeed done, that more resources are not consumed at home but are made available for export, that is no assurance that those resources will, in fact, be used to make goods that will be sold abroad at prices and with delivery dates which compete in these competitive times. In spite of all that has been done, and it is already a great deal, I wish to urge that much more study and much more detailed work is needed on this side of our affairs.
I am glad that the Economic Development Committees are to deal with the problem of exports. So long as the profit motive is the main incentive in industry and commerce, exporting must be made to pay. We have already taken some small steps in that direction. Where there are difficulties or impediments to our exports, the whole machinery of government should, if necessary, be used to remove them. This is not just a matter for the Board of Trade and the Foreign Office. Questions of credit, transport, docks, shipping, taxation allowances, labour relations, regional developments, housing and roads and others are involved in this vital problem of our balance of payments.
T think that the noble Earl, Lord Longford, recognised that everyone is involved. We are indeed all in this together. What is needed is a new relationship of cooperation between Government and both sides of industry and I believe that this is slowly coming about. The big and little "Neddies" should be able to develop new types of co-operation. The Export Councils should be invaluable. But all this needs pressing forward, otherwise we shall once more have acted too little and too late. I am afraid that unless this is repeated and reiterated, we shall again become over-confident or complacent, as we did in 1962 and as we have done between all preceding crises. It is essential not only to pay off our debts but to build up our reserves as other European countries have done, and to maintain also a better growth rate than in the past. A present we are being steadily outpaced.

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My Lords, perhaps the most important aspect of all is that our industry should be encouraged and enabled to use the latest machinery and the newest techniques where they can be made to pay. This is, indeed, inherent in the Plan. Unless we do this, we cannot expect our exporters to hold their own at a time when so many foreign countries are being helped to industrialise and to install the latest machinery. I went to a conference in Japan a few years ago. A leading member of our Embassy in Tokyo had been visiting Osaka and had been amazed at the capital-intensive development of the textile factories. Over lunch one of the Japanese directors said to him, "You really should not be so surprised. You have misunderstood our position. Japan will not for many years more have a large reserve of available labour, and we are no longer a very low-cost producing country. We are, on the contrary, very much afraid of the really low-cost producers who are arising on every hand further South. Japan can only hope to meet this situation by adopting the very latest techniques of production."
Japan has certainly had the most amazing success in many fields by applying this doctrine, and we have been very glad and interested to welcome her as a full member of O.E.C.D., where she plays her full part. As a contrast, when I was coming back from Budapest, some twelve years ago, I met a British engineer in the train—quite a rarity behind the Iron Curtain. He told me that he had been installing the latest British textile machinery in Bulgaria. I asked how we were getting on with it in Great Britain, and he said that, unfortunately, the textile firms in Lancashire were so much in debt that they could not afford to buy it; and even if they did, the workers would not work it. He said, "In a short time you will find that there is not much left of the textile industry in Lancashire". I am afraid that Lancashire has certainly had its difficulties and, I believe that his words have, to a certain extent, come true.
My Lords, I think the moral is obvious. We cannot stand still; we have to move forward. Any industry, management or trade union which falls behind or prevents progress, is not only sacrificing its own future; it is acting in a way pre-judicial
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to the interests of the whole of this country. I am glad that our National Plan recognises the need for constant progress and I make no excuse for driving this point home from the Cross-Benches. The danger of wider unemployment and a reduced standard of living in this country is, I believe, only to be expected if we do not keep up with the enormous progress which is being made overseas, and if we fail to adopt and work the newest techniques and machines; or if we price ourselves out of the market by slackness in our cost and price policies. If foreign countries make ships, for instance, in a new and better way, then I think we should do the same whenever it can possibly be made to pay. I venture to think that we have reached the point in our efforts when the Government of this country, whatever its Party, will have to make it its business to see that no local impediments or sectional interests stand in the way.
Before I sit down, I should like to draw attention in this connection to the rather chaotic situation in our transport system and docks. I am interested to see that the noble Earl, Lord Jellicoe, put down a Motion in the last Session referring to this situation. It is only slightly better than last year. Our progress has been much too slow. Yet we cannot expect to cure our balance of payments while industrial delivery dates are rendered uncertain by undisciplined acts or dyed-in-the-wool traditionalism in our railways and docks.
The present state of affairs is much more harmful to our exporters than to our importers. We import our food and raw materials, whatever happens. But our exporters cannot be expected to compete effectively across such hazards to their raw material supply and delivery dates in the bustling and competitive world overseas. Many people overseas are now in a rather big hurry. When the Swedes built a very large shipbuilding yard, some seven or eight years ago, they laid the keel of the first ship while the yard was still under construction. You can see that the delay of a week or a fortnight in the delivery of essential components or machinery to such people drives them into an absolute frenzy. I hope that the work of the Economic Development Council on the Movement of Exports will be successful. It deserves every possible support.

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In short, it is for all of us in this country to choose. Either we keep right up to date, and in the forefront of progress, or we must expect a fall in our standard of living. We have avoided this by the narrowest of margins in the last year. If we fall behind, we shall discourage our clients overseas and see our industries decline, one by one. Our balance of payments is not only a matter for economists; it is now a matter for the whole community. As the National Plan recognises, both our current account and our capital account will need to be watched. I greatly hope that, as things improve, now that we are over the worst of the crisis, the Government will see that there is no complacency and that this country's economy and balance of payments are at last set on a permanently more stable course. I am glad the Government have promised to take extra measures, if necessary.
My Lords, if I have spoken at greater length, or more frankly than is customary for a newcomer to your Lordships' House, I beg for your indulgence. But after many years spent at home and overseas in dealing with these questions I wished to try to impart a real sense of urgency to this problem. I believe that a solution is essential for the success of our National Plan and for the wellbeing of our people. I am sure that we are set on the right road. But we now need to correct this fundamental imbalance in our economy, and finish the job quickly, before the next storm comes. On previous form we have no time to lose.
4.17 p.m.
LORD SALTER: My Lords, I am sure that I speak for everyone in this House when I express our sincere appreciation of the speech to which we have just listened, enriched as it was by the experience to which the noble Lord referred and also, I may say, by the very high reputation he gained in the Service by his work. I regard it as a special privilege to be able to say this now, because it happens that I was for many years a friend and an intimate colleague of his father, both before the First World War, during that war and in the Peace Conference afterwards, and I know that he was one of the greatest officials who has ever served this country. After that, of course, came
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also his later services as a Minister and member of this House.
My Lords, I do not propose to inflict a speech upon you to-day. I want to speak on only one point, and on that only for a very few moments. I do not dissent from what the noble Earl, Lord Longford, said about confidence in the pound being greater at this moment than it was or than I think most of us expected it would be at this date. But I think that makes it all the more essential to say starkly what is certainly the truth, that if the pound should go on losing its purchasing value (that is, if the costs and therefore prices of goods and commodities increase so much more rapidly than American dollar prices as during this last year) it will not be possible to continue with success the policy of the Government to maintain the present currency value of the pound. That is, among other things, one reason why I think we should all hope for the success of the efforts Mr. George Brown is making, with the aid of the organisation presided over by Mr. Aubrey Jones, who was formerly a Conservative Minister, to keep a proper relationship between incomes, which are spending power, and productivity.
Let us remember, too, that if, because of a much greater rise in costs and therefore in prices in this country than in America, the Government are unable to maintain their currency policy, then the great loans which we have raised, and which will have to be repaid, and the loss of the realisable securities that we have parted with, will have been all in vain. Again I emphasise that the real and lasting value of a currency is what it will purchase of commodities and services which the public wants, and without that foundation financiers' confidence for the moment is a misleading guide to the future.
4.20 p.m.
BARONESS PLUMMER: My Lords, I am glad that the noble Lord, Lord Byers, is here, but am sorry that I cannot see Lord Rea. I say this because I want to start my speech by apologising to them once again, in that I am going to speak on agriculture. Last Wednesday we had a debate on agriculture which, to me at least, was one of the most interesting I have heard for some time. Nearly every

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speaker had something valuable to contribute—full of information, advice and even exhortation. I did not agree with all of them, but one was made aware of the deep knowledge and experience of noble Lords interested in agriculture. I got the impression that, on the whole, there was not much wrong with our agricultural industry which could not be put right with intelligent and honest discussion, as in the past; nor was there any feeling that our Minister of Agriculture was not indeed doing everything in his power to help it.
I did not participate in that debate because I wanted, once again, to stress the importance of agricultural exports in relation to the balance of payments—hence my desire to speak to-day. Noble Lords will remember that in my maiden speech I mentioned some sort of board or council to co-ordinate and encourage exports of agricultural products. This was again mentioned in last week's debate by my noble friend Lord Champion, when he said [OFFICIAL REPORT, Vol. 269 (No. 118), col. 660, October 27, 1965]:
"with the Minister's encouragement, the interests concerned will soon form an Agricultural Export Council which will be eligible for assistance in its activities from all sources provided by the Government, the British National Exports Council, the Board of Trade Services, and those of our posts abroad."
In his winding-up speech, the noble Earl, Lord Ferrers, said [col. 668] that he was grateful to Mr. Fred Peart, the Minister of Agriculture, for establishing
"some form of export body to try to encourage all sections of agriculture, as a whole, to make a set at exporting some of their goods."—
acknowledging the difficulty, but realising the great step. I hope this body will start to operate soon, for there are ominous signs of strong competition at this time for markets in Eastern Europe, especially from France and the United States, with the full support of their respective Governments.
We are better equipped than any other country in the world not only for exporting livestock and machinery but for teaching other countries, especially the underdeveloped countries, how they can produce economically their own immediate needs. In fact, in exporting our know-how we could relate it to the aid which these countries need so desperately.
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Besides being the greatest tractor exporter in the world, we could also export our knowledge of how to build—here I am again repeating myself—the fertiliser, herbicide and vitamin plants, the feed mills, the irrigation plants, and dams, and how to provide drilling equipment for water. There are also the food processing and packing plants, the freezing plants. We can provide expert advice on how to make veterinary instruments and utilise the results of our veterinary research—how to control disease and supply the laboratory equipment for the control of animal diseases.
We are able to do this because of the accumulation of years of research on the part of the Ministry of Agriculture, through their Agricultural and Horticultural Advisory Councils, their Experimental Centres, the N.A.A.S. regional experiments, the Plant Infestation and Veterinary laboratories, the National Institute of Agricultural Botany and the Agricultural Extension Services—not forgetting the Agricultural Research Council which has just produced its Report for the years 1963 to 1965, a magnificent production. The close link between the Ministry of Agriculture and the Agricultural Research Council provides the result of years of research for practical application for the Ministry of Agriculture's experimental centres, which in turn is used by N.A.A.S. and then passed on to the individual farmer. I submit that in no other country have we such an excellent chain of communication, from basic research into agricultural problems, through to its practical application on the farm. So, with the concerted efforts of all these bodies, including those ancillary industries which might contribute to the activities of the proposed Export Council, our expectations can be fulfilled.
My final plea is rather an unusual one; it may perhaps be a psychological one. It is to try to "bridge that gap" between the agricultural industry and the rest of the community. In the past, to the ordinary citizen, a farmer was a man with some acres of land, some cows, some pigs, some chickens and, if he was up to date, a tractor or two. And—most important of all—he kept his money under his mattress. I agree that it is an old point of view, but it did exist. But now there is a new picture in the minds of the urban population. It is

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that the farmers keep their money under their Jaguars. Of course, neither is true.
I wish the National Farmers' Union, instead of launching a campaign complaining about unfair Price Reviews, would launch another kind of campaign—one to convince people that the farming industry is not a section of the community divorced from the rest of the people, but in fact is part of the huge effort of the whole country. If they were to explain how the results of research produced by the Ministry for the industry are for the ultimate benefit of the consumer, it would go a long way to help narrow, if not close, that gap. I wish they would announce the part that agriculture can arid will play in helping the balance-of-payments situation, which must be the concern of every thinking man and woman of this country.
4.28 p.m.
LORD BARNBY: My Lords, I find myself fortunate in following the noble Lady, who has just given us further confirmation of what we looked forward to after her maiden speech, that her knowledge of agriculture would make a helpful contribution to our debates. I should like to repeat to the noble Lord, Lord Hankey, the congratulations that were just proffered by Lord Salter. Many of us who will remember his father and the great services to the country that he made before he entered this House, will have listened with great interest to the able and fluent speech which the noble Lord has just made to us.
The gracious Speech contains promises of much legislation. We must congratulate the Government on their courage in embarking on such a campaign, even though they may do so with but an infinitesimal majority, though they no doubt count on the support of the Liberal Party. Here I would commend to the noble Lord, Lord Byers, a reflection on the result of the Canadian Election. There was never a better opportunity for the Liberal Party there to make great headway than was the case with the Liberal Party in Canada, under Mr. Pearson.
LORD BYERS: My Lords, the noble Lord really does not know very much about Canadian politics if he can make a remark like that. He must know the difficulties at the present moment between the French and the English Canadians.
LORD BARNBY: I must confess to the noble Lord that I have been going regularly to Canada for over fifty years and have included on my many visits Ottawa, so I think I can claim to have been in touch with politics in Canada. Indeed, I have just returned from a spell in North America, and there in Canada what does one find?—a bounding prosperity.
LORD BYERS: Under the Liberals.
LORD BARNBY: They have been bailed out by the Communists, for if it had not been for the sale of surplus wheat they would not have got going as they did. As regards the United States, how buoyant is their economy; how great their prosperity! This has been brought about by a reduction of taxes, by increasing the buying power, by expansion of industry and by increased profits' contributing to the national revenue, so that they have made a great success of deficit financing. I read political economy at Oxford, and I have studied it ever since. It all seems so different from the policies of our advisers in this country for so long. Anyone recently returning to this country, as I did, would be surprised to find the degree of activity and employment, something which many did not expect would follow the measures which the Socialist Government felt right to impose.
If I may follow the lead of the noble Earl the Leader of the House, I should like to quote from the Financial Times of August 3 this year:
"There seems little prospect of moderating the rise in wages until Mr. Callaghan's deflationary measures begin to have their effect on the unemployment rate."
My reflection on that statement is that it was also the massive support of the United States, in giving a lead to world bankers, which bailed sterling out. In addition, the Socialist Government have adopted the policy which was often recommended to the Conservative Party, that of protection. Those twin moves have undoubtedly mitigated the expected effects. At any rate, a tribute is due to the Socialist Government that activity has remained high.
On other counts one has misgivings. The incomes policy seems to be a flop. Wages are advancing more rapidly than

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incomes, as was emphasised by my noble Leader. After all, what are trade union leaders paid for, except to do their best to raise wages and to improve the working conditions of the people who pay them? Personally, I have never felt that Mr. George Brown's policy, even by a combination of effort on the part of the Federation of British Industries and the Trades Union Congress, could succeed. The Acts relating to redundancy and employment are producing a hoarding of labour; wages are rising beyond the "guiding light". It seems to me that the early warning proposals are just "cuckoo-land". When one has in mind what was said by the noble Lord, Lord Shawcross, in a very impressive speech to a vast audience in the Albert Hall this morning, a speech of candour and courage, a speech made in the presence of Mr. Callaghan, indicating how conditions in this country at present produce a vast wastage of labour, and what was the possibility of present production with 3 million less workers, there is no need for anybody in this House to make any further comments. Mr. Callaghan will have ample opportunity to reflect on what Lord Shawcross said this morning.
Finally, I would make three comments. First of all in relation to the foreign investment policy—
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, may I interrupt the noble Lord? I did not quite know what he was talking about when he mentioned this conference at which Lord Shawcross apparently spoke so bravely. Did he say that it was to-day? I have not heard what it was about.
LORD BARNBY: The Institute of Directors held their annual conference in the Albert Hall, which was attended by some six thousand people, and it was there that Lord Shawcross took the opportunity of enlightening us on the economic opportunities which the Socialist Government now have.
I was about to say that I think that the foreign investment limitation by the Government is wrong, and at that meeting this morning speakers, among them Lord Shawcross, drew attention to the degree to which this policy would inter-
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fere with this country's exports. I urge that investment and initial allowances should be increased to encourage re-equipment. On this point the gracious Speech indicates some hope. I would also add the suggestion that assistance should be given to the construction of buildings in industries like cotton, which are subject to imports from low-wage countries. I would pay tribute to the Government for having helped one particular industry, the wool textile industry, in regard to a rebate on wool-top exports—a matter that was for so long delayed because of resistance by the Customs and Excise Office, although our noble colleague Lord Rhodes was himself satisfied as to the need for such a rebate.
My Lords, I would ask: what are sanctions but economic warfare? Surely this is an appropriate matter for mention in a debate slanted to economics. I am convinced that there is an enormous number of people in this country who would be absolutely against the employment of sanctions under any conditions. They can never succeed. After all, they failed against Italy, they failed against Cuba; and one's mind goes even further back to the days after the Kerensky Revolution, when there was talk of applying sanctions against Communist Russia.
Personally, I dislike coercion. I am indignant that the United States should encourage its representative at the dis-United Nations to say that, should economic sanctions be contemplated by the British, that action would be supported by the United States Government. It is none of their business. British voters resent it. As a Yorkshireman, I resent coercion. I deplore the Prime Minister prematurely making skin-creeping threats. Is it as though to punish naughty children? What would be the ultimate goal should sanctions be applied (and Rhodesia was mentioned in the gracious Speech) for then, of course, the people who would be worst hit would be the non-whites. Gradualness in advance to black rule is essential. Anyone who knows the native habitations around Salisbury in Rhodesia knows the prosperity and that there is no oppression there. One man, one vote, is impracticable, particularly if, as so often happens, there is only one candidate. How can the votes of illiterate people living in kraals be obtained? It would seem

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appropriate that from Government spokesmen there should be some debunking of the fulminations of pocket-sized black Caesars who, by unconstitutional dictatorship, preside over several emergent countries.
There have been suggestions about force. Force, I take it, means military force—white men shooting white men. On the last occasion when this was suggested in Britain Sir Edward Carson described such action as asking troops to be assassins. I myself was astonished at the suggestion by the most reverend Primate that force should be employed. As a churchman I was shocked.
LORD BYERS: He never said that.
LORD BARNBY: Anyhow, he has proved a divine boon to the cartoonists.
LORD SHACKLETON: My Lords, apart from the noble Lord's inaccurate reporting of the Archbishop, I hope he will not take this much further unless he is going to give some notice to the Archbishop. I do not think the Archbishop would have expected an attack on him at this moment in a debate on economics. I did not quite understand the noble Lord's reference to white men shooting white men. Is he suggesting that it is all right provided that there are no black men present?
LORD BARNBY: My Lords, I would say to the noble Lord that I respect his feelings, but as a churchman I also am entitled to my feelings. It shocked me that his reported remarks should have produced his picture with a Crucifix composed of two Army rifles.
In the U.S.A. desegregation is widely admitted to have been too speedy. I suppose that it is now fifty years since I first toured the South in the United States. To-clay Congress, on the suggestion that the government of the District of Columbia should be handed over to a municipality composed of 80 per cent. non-whites, has resisted the President.
I well remember 1914, though I was not then in Parliament, and the effect that threats to coerce the North of Ireland galvanised the Conservative Party into violent resistance. Surely at any suggestion of sanctions now, the Conservative Party would produce similar resistance. I have re-read the Hansard of
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those debates, and the intemperance of the language generated. I remembered the indignation in the country. The events nearly produced a mutiny in the Army at the Curragh.
The other day I went to Williamsburg in the United States. Perhaps other noble Lords will have seen the remarkable contemporary restoration to the Independence Period which has been done there by the Rockefeller interests. It is worth a visit. There I watched the film which included the speeches of the Fathers of the Republic on the alleged injustices of the Mother Country, the lack of understanding of the rights of the white settlers in a land captured from barbarism. There was the poignant grief of the Loyalists, who felt driven to the necessity of opposition. There was the concluding drama of the lowering of the Union Jack and the raising of the Stars and Stripes, for which we all have such respect, which helped us to defeat Nazism along with the gallant help of the settlers in Rhodesia, whose fathers had carried civilization into black Africa. Economic sanctions would be warfare. That no such development could arise must be our prayer.
4.46 p.m.
LORD WINTER BOTTOM: My Lords, I hope that the noble Lord, Lord Barnby, will excuse me if I do not follow him down the rather peculiar lanes into which he has led this debate. I shall return to the gracious Speech with its many interesting proposals—too many, perhaps, because all of them are worthy of a speech, though I shall resist that temptation.
LORD BARNBY: My Lords, does the noble Lord insinuate that I digressed from the gracious Speech? If so, I hope he will note that I emphasised that anything in the nature of sanctions would be economic warfare, and that certainly is appropriate in a debate slanted towards economics.
LORD WINTERBOTTOM: I am certain that the House will appreciate that clarification. I think that the House would gain value from considering the gracious Speech, which the Government have placed before it this year, in relation to the gracious Speech last year. The two are, in fact, two aspects of the purpose of the present Government, and through

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them both runs a continuous theme. That theme is the determination to master our economic environment. This, of course, is nothing new. It is something that has been attempted by many Administrations; in fact, by all recent Governments, both here and abroad. One of the fascinations which I found in the 1959 Election, for instance, which was followed shortly afterwards by the American Presidential Election, was that this esteem of the mastery of our economic environments was common to all the debates in both countries.
We ought not to forget that the Conservative Administration which preceded this one made a very useful and significant contribution towards creating the machinery necessary for the purposes which we both share. The machinery which they created has proved inadequate, and it is, of course, for this reason that the present Labour Administration are applying greater intellectual effort, more machinery, better brains, towards the solution of the problem and the achieving of the ends we are all wanting to see. Perhaps I am an optimist, but I feel that already some signs are showing that we are succeeding in our aims. The much derided "Stop—Go" was a better thing than the damaging boom and slump which we knew between the two wars, and in its place we are trying to put what I should like to call a "Faster—Slower" approach to our rate of economic growth.
It is at the moment far too early to recognise success, but perhaps we are on the verge of it. The reason why I hold this optimistic view is the way in which our economy is remaining strong and vital, in spite of the series of economic restrictions and reduced consumer purchasing power placed upon it by the Chancellor of the Exchequer. The Economist has said that the present Chancellor's economic restrictions are more severe than those imposed by Mr. Selwyn Lloyd in 1960 and 1961, but, nevertheless, the economy has remained strong and buoyant. From past experience, we might have expected to see by now, I think, a slowing-down of our economy. Yet, as the noble Earl, Lord Longford, has pointed out, the growth of our economy continues, if at a slower
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rate, and only in a few places are there signs of slackening to be observed.
I believe that the continuing strength of our economy is due to three causes, two of them good and one bad. The first of these causes is the fact that planning in industry as a whole is, I believe, a much longer-term affair than it was until recently. Of course, all the great industries of our country have planned for long periods of time—five years, six years, and so on; but this tendency has not been general. In smaller, less highly capitalised industries a much shorter view has been taken of the economic situation; but the tendency now is to look into the future, to plan ahead, to make an estimate of what is likely to be achieved; to make the necessary investments to achieve the policies felt necessary and then to go ahead with those policies and those investments, whatever the economic weather is at the time.
The noble Lord, Lord Carrington, was pointing out the fact (and perhaps criticising them for it) that the British people have not been automatically moulding their policies to the economic weather of the day. He said that if the sun goes in we should cut back investment, and "wait and see". This. I think everybody will agree, would be extremely unhealthy. But I think it is a good thing that, at least in industry, the decisions of boards of directors and the managements of the nationalised industries should not be affected by the short-term—
LORD CARRINGTON: My Lords, I think the noble Lord misunderstood me. That is not what I was suggesting. What I was saying was that I thought that all the economic crises we have had since the war had blown over without anybody having done very much, and that, as a result, no one really believes it when we are told that there is an economic crisis. That was my point.
LORD WINTERBOTTOM: I agree with the noble Lord: this is the problem of the man in the street. He has always "had it good", and thanks, perhaps, to both Administrations, he thinks he has a right to expect success. Nevertheless, I should hope that, whereas he may learn that things are not so good as they may seem, industry will continue, as it does at present, to take the distant view; will look to the future, and will base its policy

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upon that view. I believe that this tendency among the smaller firms to think long-term will be reinforced by the existence of the National Plan, which I believe will assist everybody to think into the future and to make plans on the long-term basis.
The second factor which I believe has kept our economy strong is the Government's decision to free the development regions from the restrictions placed upon the nation as a whole. This I regard as a most important innovation, the benefits of which we are just beginning to see. I expect many noble Lords have read the Economist's Supplement on Scotland this week. Personally, on reading it I found it a most fascinating and exciting document. It read almost like a James Bond thriller. From its description of what was happening in Scotland to-day, one could see a rebuilding and a restoration of the Scottish economy—the building of roads, the attraction of new industries, the laying-down of the whole infrastructure of a modern industrial society. What I look forward to seeing, as I am certain every noble Lord does, is that, as a result of these new policies, a new creativeness will arise in these areas which are now backward and suffering from declining industries—areas in which the Industrial Revolution first exploded, and which to-day bear the traces of that explosion—and that they will in due course advance in front of those areas which are prosperous to-day.
But in that Economist report one extraordinary fact stood out: in Scotland, with all the construction work that needs to be done, and is being done, there are at the moment 9,000 construction workers unemployed. This, it strikes me, is a fact of significance. If 9,000 skilled men are out of work now, how many people are there in that area who are not employed but who would like to work, and who would work if work were available? I believe that it is the growth within these areas, which is starting and which will gather momentum, which is at the moment keeping our economy as a whole on balance and steady.
The third reason why I believe that our economy still remains strong is not, I think, a good one. It has been mentioned by several speakers, including the noble Lord, Lord Hankey—whom I should like, as a newcomer myself, to
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compliment on his maiden speech. The hard fact, my Lords, is that towards the end of last year our economy was grossly overloaded; and I believe that in some areas it still is. I know from experience that anywhere from the Trent southward there is a shortage of labour of every kind, and this is not healthy. My hope is that the selective disinflation which the Chancellor is introducing will bring back some measure of order to the situation, and will enable the demand for labour to be brought into a closer relationship with the supply.
But this over-demand for labour in large areas of this country has had one unfortunate effect which the Chancellor has drawn to our attention recently. I refer, of course, to the continued rapid rise in earnings. There is an important paragraph in the gracious Speech referring to Government policies which are designed to correct this, but I would suggest to your Lordships that there are limitations to what a Government can do in this matter. We can legislate for some sort of early-warning system so that the Government of the day can have some influence on the growth of wage rates, but what the Government cannot do is to legislate for an increase in earnings. Because earnings, which are something different, arise as the result of negotiations on the shop floor in each particular plant, and these are not the subject—
LORD BARNBY: My Lords, if the noble Lord will allow me to interrupt, can he indicate how any firm which is forced to raise its prices, and which has to give early warning, is going to deal with the inflow of orders which will be stimulated by the requirements of the Government's proposed legislation?
LORD WINTER BOTTOM: I am sorry, but would the noble Lord please repeat that question? I did not quite get the whole of it.
LORD BARNBY: My Lords, my understanding is that it is suggested there should be an early warning system of the increase of prices, and I asked the noble Lord whether he could help us by explaining how it is expected that any firm forced by circumstances outside its control to raise its prices would be able to deal with the inevitable inflow of increased orders which would make the situation that much worse.
LORD WINTERBOTTOM: My Lords, I think the important fact in the Government's policy is that both prices and incomes are under the supervision of one body. The two are linked; the two will naturally have to be considered together. I expect that, in practice, as the Prices and Incomes Board gets into its stride the correlation of these two factors will become easier and more effective. But I am not speaking specifically of wage rates at the moment; I am speaking of earnings and of the phenomenon known as the wage drift. I should like to give your Lordships two figures. If we consider the growth of wage rates over the last ten years, we find that wage rates increased by 59 per cent. while earnings increased by 72 per cent. This is a very important factor when one is thinking of planning prices and incomes.
I submit that a Government can do nothing about earnings since these are negotiated at plant level between management and labour. But I believe that what we can do is to get generally accepted as a principle in these negotiations at plant level that wage rates and earnings, bonuses and piecework rates, must all be related to productivity. The noble Lord, Lord Byers, mentioned one plant where this particular problem was successfully faced. I know of another where a properly devised and properly prepared incentive scheme caused a rise in productivity of 22 per cent. which was rewarded by a rise in earnings of 13 per cent. If my simple arithmetic is right, this caused a drop of approximately 10 per cent. in the wage costs of this particular product. We cannot stop this.
What we are talking about now, in the short term, is how we can use our existing plant. We could do a lot in the future by increased investment; but in 1966 what we must do is to use our existing plant more effectively. This can be done only by negotiation on the shop floor between the unions and management. I suggest a great deal can he done, and the noble Lord, Lord Byers, and I have given examples. I should like to make a further plea. Do not let us become hypnotised by new investment. There is much we could do in this country by better utilisation of existing plant. I would suggest that better utilisation is as important to our recovery as a higher rate of investment. No one would deny
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the men in a plant higher earnings if, as a result of those higher earnings, productivity increased. This can only be done by national education and in this the National Plan and all the bodies which spring from it have a most important rôle to play.
LORD BARNBY: My Lords, would the noble Lord not agree with Lord Shaw-cross's suggestion this morning that some 3 million people now working could be saved if full productivity could be achieved?
LORD WINTERBOTTOM: If we could get a 20 per cent. increase in productivity, we should have a surprising number of people available for other jobs or for greater productivity in existing plant. That is why I remain an optimist. There are enormous factors of strength and sources of unused skill and capacity on which we can draw. I believe that we are going to be able to do so. I do not agree with those pessimists who say that by the middle of next year we shall see half-a-million unemployed in this country. I believe that this pessimism is just as dangerous and foolish as is excess optimism. Although we have not yet created the body of knowledge and machinery to enable us to get our economy on a steady rate of growth, I nevertheless believe that a beginning has been made; and when we hear the gracious Speech next year we shall see how this theme is being carried to a further stage of success.
5.5 p.m.
LORD FRASER OF LONSDALE: My Lords, I apologise for missing an hour of the debate. I had to rush over to the Ministry of Pensions to sign a report and I thought there was a great deal more time than there was. I heard the three opening speeches and, if I may say so, I thought they were a very agreeable controversy. The noble Earl the Leader of the Labour Party said that, following their philosophy—these are not his words; I am shortening what he said—the Labour Party thought that economics were subservient. I do not remember to what; but presumably they were subservient to Labour Party policy.
THE EARL. OF LONGFORD: My Lords, I said that they were subservient to our social purpose; in other words, they were a means and not an end.
LORD FRASER OF LONSDALE: That is just how I understood it. It is rather like saying you can cut a coat without regard to the size of the cloth or that you can drink more than a quart of beer out of a quart glass. I do not think that is possible.
LORD HOBSON: It is a false analogy.
LORD FRASER OF LONSDALE: You can make the suit a tighter fit and ill-shaped or you can make the beer weaker, but you cannot get more. I have taken up this point which was made so charmingly by the noble Earl because it happens to be the only precise point about which I want to make a speech to-day.
I think it was in the Daily Mirror on Monday that I read that there are far more clouds over Britain than there are over Central Africa or even over the moon. I commend this to your Lordships as a pearl of wisdom. Indeed, there are. That is what worries me about the gracious Speech. It forecasts a programme which, if attempted in full, would be Parliamentarily impossible and financially disastrous in the present state of the country.
I will not impinge on Foreign Affairs or domestic affairs or on to-morrow's debate, but one cannot speak twice and therefore I want to make just one remark about Central Africa which is entirely relevant to finance. Almost incidentally when talks are going on in Rhodesia, a Minister or at any rate a civil servant (I do not remember which) is sent out to discuss with the Rhodesian Government methods whereby we in Britain could pay for the higher education of Rhodesians. I have no doubt that this is a very admirable purpose, equally admirable to the higher education of our own people. But I am bound to wonder whether we can afford this kind of thing. We are not the people we were a hundred years ago, and I call to mind suggestions that in certain circumstances we might take such action as would render both Rhodesia and what was Northern Rhodesia unable to earn their livings. There are very few countries in the whole of Africa able to earn their living, and even some of those that are receive bounties and gifts and aid from us. And so we contemplate, within a week, educating these people and at the same
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time making up for the fact that their economy might be upset because of action taken here. I do not think that we can afford these things. That is the only observation I intend to make about Rhodesia, because I know well it is a matter that is exercising many minds at the present moment.
Only a day or two ago my noble friend Lord Conesford, stimulated by a statement made from the Benches opposite that we were going to lend £10 million to India, said, "Who is going to lend us the £10 million to lend to the Indians?" The answer, given by the noble Lord opposite, was, "You and me"—meaning the taxpayers of this country. That answer is only partly true. We have not the money. We have to borrow to pay our own way, let alone to lend money to other people. So we go on, with contracts, obligations—I will not call it threats—statements of intention, all of which are going to cost us more money than I believe that we as a nation can make. Our hearts are running away with our heads. We are aiming to be more generous than we can afford to be.
That is almost all I want to say, and I will conclude with this thought. I suppose all of us would like Britain once again to be a Power with great influence in the world. She will not gain influence in the world, my Lords, by meddling with the affairs of other people all over the world, by sustaining the United Nations, by paying a great deal towards it and by paying the subscriptions of half-a-dozen other countries as well. That is what we are doing. Just as in the case of India, we are lending money in order that they may pay it to U.N.O.
LORD BARNBY: And the Sudan.
LORD FRASER OF LONSDALE: I do not know about the Sudan; maybe it is in point as well. All over the world we are buying trouble. We have not the money to pay for it, let alone the money to buy ourselves out when we have bought it. As I have said, here in Britain we are attempting a programme which I think is an impossibility and is not viable. If Britain is ever to be great again, the first thing she must do is set her own house in order, stop looking for trouble all over the world, stop trying to police the world, and stop trying to shoot the

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moon. There are many better things to do.
5.13 p.m.
LORD PEDDIE: My Lords, many points of view have been expressed during this debate. To my mind, at least, one truth has been made evident: it is that there are many facets to this question of economic development. I propose to deal with only one, the human factor. I believe that to be the all-powerful consideration. It is the one which affects and influences all others. Human reaction and attitudes of mind provide either the accelerator or the brake in respect of economic development. I am convinced that no policy of development, no programme of mechanisation, no scheme for trade development, can possibly succeed unless the attitude of mind of workers and management is in tune with the forces of progress. I doubt whether in respect of either management or labour we have at this point of time an attitude of mind in perfect tune with progress.
I know it to be a hackneyed expression that to-day our national problem is that of economic change, or industrial transition. Nevertheless, it is true. There is no doubt that over the past few years, and within the memory of us all, there have been revolutionary developments in science and technology which have changed, or rather which have distorted, society. New products have transformed the character of industry and new techniques have lowered craft boundaries. In my opinion, it is the speed of orderly transition which is important. Speed is the essence of the problem. It is not the fact that we know or that we get change; the real point at issue is the speed of the change. The lower the speed of industrial change, the greater our economic difficulties. We may be progressing, other nations may be progressing, but only if our rate of development is equivalent to theirs as each succeeding year passes will our difficulties be reduced and our competitive strength enhanced.
Comparing the experiences of many of our competitors in the industrial sphere and in the economic field with our own, we find that we have no justification for pride. Our productivity per head is lower than that of most of the other nations, and to-day we are only the thirteenth richest nation per head of popu-
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lation. Our proportion of world trade has steadily gone down. I know it is easy to find reasons or possible excuses for this retrogression, and that is the whole tragedy: that it is so easy to find explanations for this lack of progress. We talk a lot in this House about industrial development, and we all realise that industrial change is inevitable. I think we also realise that no nation can isolate itself, Britain less than most. I am convinced that the impact of economic and financial change has been more severe on Britain than on any other nation in the world.
A generation ago we had an economy based on a world-wide Empire. We were a leading exporting nation and the financial centre of the world. We now see the emergence of new and independent nations and the rapid industrial development of our competitors, and this has created an entirely new economic situation. Special and current problems have resulted from the need to adjust ourselves to this new economic situation. My Lords, let us face the fact that few people, including ourselves, like change. It is not easy to discard old habits. History has taught us a fact which I am sure that the Labour Government keep in mind: that it is necessary to direct the course of industrial change. We have had the experience in this country of industrial development which accepted no social responsibility and no obligation to the workers, and this left a legacy of bitterness and suspicion. In more recent days we have seen mass unemployment, and that is something not easily forgotten.
I believe that those experiences provide the underlying principle and justification for the Government's policy on economic affairs. Everyone realises that restrictive practices, of which there are many in industry to-day, are anachronistic. But merely to condemn them is not enough neither is it realistic. We have to recognise that originally these practices were developed to protect craft status and what the worker believed to be his legitimate interests. To-day, the changes in industrial methods have caused the lines of demarcation between one craft and another to become almost unrecognisable. Instead of giving protection, the old protective practices have become restrictive practices and have

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placed a barrier against the improvement of standards and the full employment of new industrial processes.
I believe that to-day we have the knowledge, I am sure that we have the Government, and we have the sense of social responsibility and the influence of organised labour to ensure equitable progress. I think that we can all agree on one thing: that there is no hope for Britain economically if we fossilise the present. It is essential to modernise. Some people believe—I have heard it expressed many times in this House—that we need only increase the number of computers and the number of automatic machines, and the job is done. There is much more to it than that. It is necessary to create also the right public attitude, one that can appreciate the necessity for new technologists and accept the responsibility for their use, as well as their benefits.
Merely to increase the capital content of industry and the number of machines serves us not at all. Indeed, at a particular point of time, it might add to the cost of operation, unless we were able to secure, both in terms of management and of labour, the ability to employ those machines to the full. But I would say that it is far more difficult to change the attitude of men than it is to build the machines. I believe that a change of mental attitude is necessary as much for management as for labour. As one who has spent many years in management, I am conscious of the different forms of restrictive practices that can be found on the shop floor itself. Management, possibly with justification, condemns the workers for these restrictive practices but, at the same time, pursues outworn methods and has a tired approach. Management condemns, again possibly with justification, the workers for refusing to accept blindly new industrial methods, but makes no attempt at all to build an effective down-the-line system of communication.
I believe that the trade unions have to recognise that the job of management is to manage. It is not the job of the trade union to manage. At the same time as the development of our economy necessitates the building up of new industries, it requires the progressive, rational and reasonable running-down of some industries, with the maintenance of
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efficiency at the same time; and this demands a down-the-line communication, so that workers, individually and collectively, are fully appreciative of what is going on. We find workers being blamed for their inability to accept some change in method of operation—some readjustment of their hours, it may be—believed by their employer to be right, but never properly put over.
I believe that joint consultation on a rational basis is a plain necessity in industry like our own, which has not only the task of building up new industries, but also the task of securing a far more effective redeployment of labour within our economy. I believe that Government policy on these matters of economic development is vital. It should be directed towards two things—first, to encourage industrial efficiency, innovation and change; and, secondly, to do what few Governments in the past have achieved; that is, to take full cognisance of the human factor, and obviously protect individuals from the harsh effects of industrial transition.
There is no doubt at all that industrial transition which will benefit the State may impose serious burdens on the individual, and it is necessary for the Government to deal with that position, recognising that only if they do so can they stimulate confidence in industrial progress and secure understanding that this is the factor which influences the standard of living. The relationship between productivity and the standard of living is not always obvious to most of us. I do not think that the majority of workers fully appreciate it. I do not think that there has been an opportunity for people to realise that their individual and collective effort has a dominating influence on the standard of living to-day and to-morrow. But I believe that the programme put forward in the gracious Speech indicates that the Labour Government are pursuing both of these objectives.
A social policy is an essential corollary to industrial development: we cannot get the one without the other. It is necessary for a Government to pursue its economic policy parallel with its social development, which permits the workers to secure the full benefit from the increased productivity for which they have worked. All these problems are interrelated, and so is their solution. There

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is no one magic solution. Questions of housing, training, redundancy payments, are factors which affect the mobility of labour, which, in its turn, is an important factor in securing the continuing development of the nation.
I believe that the Government are to be congratulated on their National Plan. It provides a realistic target of a 25 per cent. increase in productivity by 1970. But the fulfilment of that plan can be achieved only through effort. I know that there are many people, not confined to any one sector of the community, who fool themselves by thinking that they add to the nation's wealth by higher money incomes, incomes that buy less with higher prices. That foolish idea has been partly responsible for many of our economic problems in recent days.
I would say—and I am sure that my noble friends would agree—that legislation can provide only a framework for action. It is not by itself a panacea for our industrial problems. There is the human tendency for people to take things easy. Both management and labour are as keen as each other to find protected positions, from which they can stretch out, yawn and even go to sleep. But they are liable to be rudely awakened and find that their comfortable posture is no longer protected from the outside world. It is not so much physical inertia that we are suffering from today as mental inertia. Indeed, it has been said in the course of this debate that men show willingness and employers eagerness for more overtime. True, overtime is all too frequently a disguised method of additional payment. Nevertheless, there are many cases where people have to stay at work for that length of time. The solution of our problems is not to be found simply by doing a bit more of the same old thing. Effort means expending the same amount of energy doing different things.
I would remind noble Lords opposite that, in spite of their apparent conversion in recent days, they still have a lingering affection for laissez-faire economic policies. If that is so, it is a dream from which they need to be wakened, because laissez-faire is just not practical in the real world of to-day. It is true that competition in certain circumstances can
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stimulate efficiency. But even in industries where competition is acknowledged to be keen, there is no guarantee that it operates in the manner classically prescribed for it; that is, in a way in which the customer benefits through falling prices.
As noble Lords may know, I am a member of the National Board for Prices and Incomes, and that precludes me from making any comment on that subject, except to say that in the reports themselves there is an indication that they have turned up many cases in which, in spite of appearances to the contrary, market mechanism has proved to be defective. These reports have also unveiled defects of labour relations, instances of which can be found in many of our industries. They have demonstrated that improvements can be made in the traditional wage-fixing procedures of industry.
On both sides of industry the investigations of the past few months, not only by the Prices and Incomes Board, have demonstrated the overwhelming importance which habit plays in the way people go about their work to-day. We have suffered from years of consistent neglect of these problems, and the result is the well-known prevalence of restrictive practices and managements where custom and practice take the place of initiative.
My noble friend Lord Winterbottom made reference to the better employment of labour. I agree with him. It is vitally important to introduce new machines; it is even more important, at this point of time, to seek a more intelligent redeployment of labour. Only recently, as is evidenced by one of the reports of the Prices and Incomes Board, there was a statement made, and accepted by the employers, that the most intelligent use of labour in an industry secured an increase of productivity of from 15 per cent. to 25 per cent. without any increase in mechanisation. That could possibly be reflected in many other industries.
This brings me back to my first point. The most important factor to-day is that of keeping regard for the human factor. I believe that the programme outlined in the Queen's Speech is an example of the realistic determination of the Government: realistic, because it provides orderly progress, first things first, and all within the capacity of the nation; determined,

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because it continues to pursue a related social and economic policy which is the very basis of Labour philosophy.
5.33 p.m.
THE EARL OF DUNDEE: My Lords, may I first, on behalf of my noble friends on this side of the House, congratulate the noble Lord, Lord Hankey, on such a thoughtful and interesting maiden speech, based on all the experience he has had in his long work at the Foreign Office and as our representative on O.E.E.C. and O.E.C.D. When your Lordships referred yesterday to the speech of the noble Viscount, Lord Addison, I thought that everybody who followed him dwelt with rather unnecessary emphasis on the fact that he must be getting rather tired of hearing compliments paid to his father instead of to himself. I shall not repeat this redundancy in the case of the noble Lord, Lord Hankey. I will only say that if in 1939 the Prime Minister at that time had followed the present Prime Minister's practice of only creating Life Peers, it is still possible that we might have heard the noble Lord make his maiden speech to-day, but not absolutely certain. We hope to hear the noble Lord speak on many occasions in the future.
In last year's debate on the Address I began by expressing my best wishes to the noble Earl opposite and to the Government on assuming office, and by wishing them a very happy, though not interminable, period in that office. I also respectfully did my best to offer them a little advice. I should like now to repeat my good wishes at the beginning of this new Session, and also to compliment them on the rather limited respects in which they have followed my advice. I particularly implored them to abandon the foolish and disastrous proposal to nationalise the steel industry, which I thought, and still think, would have particularly injurious effects on our export trade. Now it is not mentioned in the Queen's Speech. It is true that the Prime Minister said yesterday that it was only postponed; but I cannot help hoping that if the Government feel able to carry out the first year of their National Plan sitting comfortably down in the warm valleys and only communicating by radio telephony with the commanding heights, then perhaps next year they may again feel able to omit this proposal, without
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even thinking it necessary to apologise. I never really thought that my advice played any great part in this omission, and now I realise that it was entirely due to the noble Lord, Lord Byers, and to the activity of his Party.
Both the noble Lord, Lord Byers, and the noble Earl, Lord Longford, said a great deal about planning, and particularly the National Plan, and I propose to devote the few remarks which I have time to make in following the two noble Lords on this subject. The noble Earl, Lord Longford, particularly asked me a question about Mr. Enoch Powell. I dislike interrupting the noble Earl, and I did so only because I thought that before he finished his speech it was only fair that I should ask him a similar question about Mr. Cousins. I think my reply might be very much on the same lines: Mr. Powell, too, is a man of great intellectual honesty and great singleness of purpose, and it is better to have a loyal man like that on your side than one who may sometimes take refuge in prevarication. I should think that this is partly a question of semantics. Human beings cannot live their lives for even one day without planning. That is why we have been given the gifts of reason and imagination. I think that perhaps a man of Mr. Powell's intellectual integrity might particularly react against those plans which are put forward, which, after all, are very numerous and which contain a great deal of imagination and very little reason.
But I should like to make it clear, as I have always done in this House, that we are in favour of planning. I was in favour of planning long before the noble Lord, Lord Byers, got here. I remember in 1959 making a speech to your Lordships about our planning programme, and, oddly enough, the particular item I was talking on then was that which the noble Lord, Lord Byers, mentioned—namely, our road programme. I should like briefly to remind your Lordships of what our plan was. It was what was called a rolling five-year plan: that is to say, every year we planned five years in advance. But we did not wait five years to start a new plan. We began the new plan next year, always going five years ahead, going one year in advance. The noble Lord, Lord Byers, said something about our not having done enough

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mileage. I do not know what he thinks is enough mileage. We managed to build 1,000 miles of dual carriageway, whereas ten years ago there was none; and that is not counting the 300 miles of motorway.
At the time when I was speaking I pointed out that our expenditure on new construction and major improvements had gone up (this is Exchequer expenditure alone, not counting local authority contributions) in two years from £15 million to £47 million. That was in 1959. In 1961–62 it had gone up to £71 million, in 1963 to £94 million, and in 1964 to £123½ million and that was still going on. I should like to emphasise to the noble Lord, Lord Byers, that we did not stop, delay or reduce any part of that programme in the squeeze of 1957 or the squeeze of 1961. But what has happened this year? In the proposals announced at the end of July, the Chancellor of the Exchequer has decided to postpone all new major road projects, except in the development areas, for another six months. That means that about £30 million worth of new projects are held up, together with another £25 million worth of improvements and construction in the form of grants through the local authorities. I think there you have the difference between Tory planning and Socialist planning.
LORD BYERS: Both equally bad.
THE EARL OF DUNDEE: The noble Lord thinks it is equally bad to postpone the road programme as not to postpone it.
LORD BYERS: My Lords, will the noble Earl allow me to make just one point? He has been talking in terms of £25 million. £90 million and £130 million. Professor Morgan has shown that it is going to require an expenditure, on average, of about £500 million, and it will have to be self-financed. It is an entirely different concept which is required.
THE EARL OF DUNDEE: if the noble Lord had been able to wait a little longer, we might have been able to get to that figure, but meanwhile this Government has set it back. Tory planning goes forwards: Socialist planning goes backwards. I am trying to point out that that is the difference between their planning and ours.
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The noble Lord, Lord Byers, also said some general things about the Government's National Plan. He said that it was all based on Liberal policy documents, and on stealing Liberal ideas. I do not know whether he is right or not, but when I read the Plan I was a little disappointed in it, and perhaps that is the reason why I found it so disappointing. It aims at an increase of only 25 per cent. in our gross national product over the next six years. Surely, that is a miserable figure when you remember that under "Tory stagnation" in thirteen years the gross national product went up by 46 per cent., and in the last six years—which is the comparable period to the next six years—it went up by 25½ per cent. So that is the Government Plan which they have pinched from the Liberals.
LORD BYERS: My Lords, must I go on correcting the noble Earl? When I was talking about pinching things from the Liberals, that was in respect of some of the measures in the gracious Speech, and not in the National Plan at all. I think the noble Earl will see that in Hansard to-morrow.
THE EARL OF DUNDEE: The National Plan is referred to in the gracious Speech. I thought this was the paragraph the noble Lord was referring to:
"In implementing the National Plan My Government will extend the range of the Economic Development Committees and encourage British industry to achieve greater competitive efficiency by reorganisation"—
and so on. However, I think it is a pity that the economic growth aimed at by the Plan should compare so unfavourably with what the Party opposite have always described as stagnation.
The noble Earl, Lord Longford, went on to refer to what were the two most important subjects on which the whole Plan hangs, and they are indeed contained in the next two paragraphs of the gracious Speech—that is, providing incentives and the incomes policy. I have not time to go into these in any detail, and I am only trying to be constructive with regard to incentives. I would say, without wishing to start a controversy about it, that I think the Government's financial policy, the increase of £600 million in taxation, the increase in the income tax, and the imposition of the corporation tax and capital gains tax, all

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combined have not provided an incentive to people to save. National Savings, I am afraid, have already gone down, and I hope that industrial investment next year will not follow suit.
What I would suggest to the noble Earl and his colleagues is that we should revise the corporation tax. I do not ask him to abolish it, but to revise it in such a way that it will bear less hardly on small dynamic companies rather than the big prosperous companies who get off much more lightly under it. In regard to the capital gains tax, I think there are a number of changes which ought to be made in it, but perhaps the most essential one is to protect the taxpayer against being taxed simply on inflation when there is no real gain. In the last twelve months we have already had the pound going down in value at the rate of 1d. a month. It is worth nearly 1s. less now than it was a year ago. Therefore, anybody who sells a piece of property for 20s. when it was valued a year ago at 19s., might now be liable to capital gains tax, although the difference has been entirely due to inflation. I think that one of the incentives to save which ought to be given some attention is to remove that anomaly from the capital gains tax.
The noble Earl went on to say that the noble Lord, Lord Shackleton, was going to speak on incomes policy, although the noble Earl said a good deal about it, too. I should like to say only one thing about it. I hope the Government will approach it, as I am sure Lord Shackle-ton will, not in a spirit of arrogance or cocksureness, but in the spirit of humility. After all, our incomes policy, although it was not as successful as we should have liked it to be, was very much more successful than the policy of the present Government has been so far. Prices have gone up by 4·8 per cent. up to August, and they are probably higher now. As the Chancellor of the Exchequer told us the other day, wages have gone up by about 8 per cent. If you were against an incomes policy, you could easily make a pretty strong attack on the basis of those figures. But I think we should all still keep on trying. I think this is a matter on which we ought to agree. But there are two conditions which I have always believed are essential to a successful incomes policy. One is the removal of restrictive practices, and the
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other is much greater competition in industry—the removal of obstacles to competition by measures such as the Resale Prices Act which we carried through last year. I think this ought to be given much more prominence than it is given in the Plan.
Finally, about the deficit. I am so fond of the noble Earl, Lord Longford, that I have often spent a great deal of time in trying to educate him about the deficit. I do not believe he has got to "A" level yet, but I hope he has got to "O" level, and I should like to keep on persevering. He returned again to what I have often told him is a mistake, that the deficit was responsible for the crisis in sterling. He will remember that on October 26 the Government published a White Paper in which they said:
"There is no undue pressure on resources calling for action."
That was perfectly true: there was not. The crisis, as they admitted later in November, was due to confidence factors later on. But this deficit was not, and ought not to have been, unexpected by anybody. It was spoken of, and the reason why I have mentioned it is that I am afraid the Prime Minister (as I told the noble Earl before, and he would not believe me; I had to refer him to Hansard, and it took a long time) stated that Mr. Maudling had tried to deceive the electors at the Election by pretending that the deficit was not so great as it was, whereas in fact Mr. Maudling had in fact rather tended to exaggerate it. Not only that; he had anticipated it in his Budget statement and had explained to the country what measures he had taken to provide against it by increasing liquidity, by special arrangements with the International Monetary Fund and the United States. So in the autumn of last year this deficit was amply covered, and there was no reason why a financial crisis should have followed from it.
My Lords, what are we to do about the deficit in the future? I want to make it absolutely clear that we ought always, whether we have a deficit or a surplus in our trade, to pay the strictest attention to the economy to avoid waste of every kind. I certainly do not criticise the Government for being anxious to get rid of the adverse balance of trade, but I do think that the priority which is given to that purpose in this National Plan is

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perhaps a little excessive. The whole document is dominated by the thought, "If only we can get rid of this deficit then we can begin to have a little fun. There will be an extra £8,000 million, of which we can spend £4,500 million more on personal consumption"—of which, I am glad to see, £300 million is on drink.
I am not arguing in favour of profligacy of any kind, either in finance or in trade, but I would put this point to noble Lords opposite: suppose we all engaged in trading with each other—I sell something to the noble Earl, Lord Longford, he sells something to the noble Lord, Lord Shackleton, and the noble Lord, Lord Shackleton, sells something to the Liberal Party—we cannot all have a favourable balance. It is just possible that we might all be all-square, but if somebody has a favourable balance, then somebody else must have a deficit, and if you are going to make it a virtue, as I think O.E.C.D. is apt to do, for every trading country to have a surplus, and to say that any trading country which has a deficit is a financial delinquent, then you will never get real world economic growth.
There are only two remedies. One is a greater international liquidity. I think all British Governments have been better than other Governments in this respect, and I do not blame our Government for our failure to get wider measures of liquidity than they have got. But it really is ridiculous that a country which has £11,000 million worth of foreign investments, of which the Prime Minister boasted after he had made an awful fuss about our miserable position, should be considered a financial delinquent because we are £750 million overdrawn. It does not make common sense.
We must try to have much greater liquidity than we have now. Better liquidity can give you a better credit base, but in addition you also want a wider trading base, and I am afraid I must end on a note of disparagement because I do not think the paragraph dealing with this in the Gracious Speech goes far enough:
"My Government will continue to work for the greater unity of Europe. They will seek to strengthen the European Free Trade Association and to promote co-operation between the Association and the European Economic Community, and the establishment of a wider European market."
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In spite of that last phrase, my Lords, although these sentiments are quite unexceptionable, they do not go anything like far enough, and I do not think they will give the impression to our friends and allies in Europe and the rest of the world that we are in earnest about this. This should not be a matter of amour propre at all. We are a great European nation and a great world nation, and we are entitled to give our advice to the rest of the world. General de Gaulle has a right to state his opinion; equally we have the right to state ours, and to go on stating it, whatever the obstacles may be; and our opinion, which I believe to be right, is, or ought to be, that it is to the benefit of the whole world that we should have a united Europe commercially, and to some extent it must inevitably follow, politically.
That is not a thing which we are seeking for our own advantage; it is because it is to the advantage of France, Germany, Italy and all the countries of Europe, and the United States of America, too, and to the Communist world indirectly, because the sooner the Communist countries get accustomed to trading with another great agglomeration of trading nations close to them, the more easily they will be liberated from the shackles of their present political and commercial system. Above all, it will be for the benefit of the undeveloped countries, because the rather miserably inadequate aid they are now getting could be immeasurably increased out of all recognition if we had in Western Europe a full union which should include not only the present European Economic Community but Britain and the whole of E.F.T.A. as well.
5.55 p.m.
LORD SHACKLETON: My Lords, it is customary, in winding up, to refer to the fact that we have had a wide-ranging debate, but I must say I never expected the mutiny of the Curragh to be introduced into a debate on economics as the noble Lord, Lord Barnby, introduced it, at least by implication. I have been a little disappointed by the speeches from the opposite side of the House, and I exclude the excellent speech made by the noble Lord, Lord Byers, who, we must still remember, does belong to the Liberal Opposition, and also with the exception of that of the noble Earl, Lord Dundee.

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I must say I found his speech in striking contrast to that of the noble Lord, Lord Carrington. I can now see why Lord Carrington is so worried about inter-changeability among speakers. I have not heard the noble Earl, Lord Dundee, on defence recently, but I have heard the noble Lord, Lord Carrington, on economics, and I cannot say that he added a great deal to the debate. I do not want to say much about his speech, because my noble friend Lord Longford dealt with it, and it is lucky that our protestations of affection for one another across the Floor of the House, which I believe to be genuine, should at least help to comfort us in our disappointments. May I, therefore, wish the noble Lord, Lord Carrington, a successful trip to Australia, where I believe he is going shortly.
I must say also I am surprised that he referred to the fact that briefs are uninspiring or that it is impossible for a Minister, speaking on another subject—a situation which we have to face very much in this House—to depart from the brief that he is given. Of course the noble Lord, Lord Carrington, in common with other speakers from the Opposition, really gave us nothing of Conservative policy in this matter. I am not complaining against the noble Earl, Lord Dundee, because his speech, and indeed many of the speeches, have been rather speeches by reference. We have had a reference to a Conservative pamphlet. I must admit that I have not read it in detail. Indeed, I must confess that I do not always read all Labour Party pamphlets in detail, and it is better if spokesmen, particularly members of the Opposition, are going to advocate Party policy, that they should put it before the House rather than refer us to another document.
I found the speech of the noble Lord, Lord Barnby, particularly confusing in this respect, because he referred to an eloquent speech made by the noble Lord, Lord Shawcross, which he praised for courage in the face of several thousand members of the Institute of Directors. I should have thought it was the Chancellor who ought to have been praised, but perhaps I did not quite follow what the noble Lord was saying.
LORD BARNBY: My Lords, my reference was because I thought the noble
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Lord, Lord Shawcross, had previously been a member of the Socialist Government, and I particularly admired his courage in very logically saying what he did say.
LORD SHACKLETON: My Lords, clearly anyone who leaves the Socialist Government and moves to the Institute of Directors finds himself in an excessively hostile atmosphere. My difficulty was that we did not know what Lord Shawcross said; and since Lord Barnby did not tell us I cannot answer it'. Therefore, I do complain about speeches by reference.
Having made those rather more particular criticisms, I consider it interesting that the noble Lord, Lord Carrington, was able to get in certain questions regarding the Defence Review. It may well be that the noble Earl, Lord Jellicoe, will be able to ask the same questions to-morrow, and I think that probably he will not get much of an answer, at the moment when the Defence Review is proceeding. However, I admit that it was probably difficult in an economic debate for an ex-Defence Minister not to trail his coat a little. Not only would he like to know the result of the Defence Review—so would I. I think many people will be glad when it is over. But I would repeat that a Defence Review of this kind is not a thing that can be hurried. The subjects are of such depth and profundity that if there is a criticism it is not that the Government are taking too long over it but that circumstances require us to make decisions more quickly than we should wish: we should prefer to make them after even more thorough consideration.
LORD CARRINGTON: My Lords, I do not want to pursue this matter: it may be debated to-morrow, as the noble Lord said. But can he give any indication when we are to get the results of the Defence Review, because there are a great many very important matters awaiting decision?
LORD SHACKLETON: I agree that there are a great many matters awaiting decision. I should not like, however, to give an exact date. Consideration is going on. But I should like to make one point clear: it may be possible, as certain aspects of the matter become

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clearer, to take decisions on those particular points; and certain decisions have already been taken which will not await the wider consideration—in other words, the pattern in which those decisions will have been set. I would assure him that information on those will be given as soon as possible.
I would agree also with the noble Earl, Lord Dundee, in congratulating the noble Lord, Lord Hankey. It is a matter of great satisfaction to have somebody (and this is one of the peculiar virtues of your Lordships' House) who has such wide experience in a field in which he can talk with great authority to the House. The loss to the Government, whatever Government it may be, in not having him representing us in O.E.C.D., following his previous distinguished career, will, I hope, he our gain. We have had many distinguished civil servants who sit on those Benches; and there was a famous occasion on which they all ganged up on an official line and both the Conservative Government and the Opposition were opposed to the Cross-Benches.
We have had some interesting speeches this afternoon. I will try to deal with some of the particular points, and come back to this very difficult question of incomes and prices. I entirely agree with the noble Earl, Lord Dundee, that this is a subject we must approach with humility: it is a very difficult one. But at least I think we are agreed that it is one of the most vital subjects, and I will therefore devote a few minutes towards the end to this particular matter.
First of all. I was very pleased to hear what the noble Baroness, Lady Plummer, had to say about setting up an Agricultural Exports Council—A.E.C. I am not sure whether they chose the title well. It is always important, as we know with children, before choosing names to see how the initials come out. "A.E.C." could he confusing with other names. As the noble Baroness rightly said, we have a great deal in this country that we can export, consistent with our international obligations, under the agricultural umbrella: not only livestock for breeding, machinery, and so on, but also "know-how". We have one of the finest agricultural extension services in the world, and officers of our National Agricultural Advisory Service serving for short terms on
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loan to developing countries provide just one valuable way of getting this "know-how" to those who need it. There are other ways in which we can, and must, increase the return we gain from abroad from this vast and progressive industry of ours, and in this the organisation of an Exports Council will be invaluable.
The noble Baroness referred to the statement made by my noble friend Lord Champion in this House at the end of the last Session. As a result, renewed impetus has been given to the process of crystallising opinion in the industry. What seems to be wanted is that a small group of those most directly concerned should get together in order to formulate concrete proposals for getting an Agricultural Exports Council created. In order that a meeting of this sort may be held as soon as possible, the Ministry of Agriculture will act as convenor, and the proposals which emerge will need to be discussed in an industry-wide form. I must emphasise that there are quite a large number of organisations in the agricultural industry that are closely interested and have a valuable contribution to make in promoting exports, and the A.E.C. must be the industry's own show. To-day's discussion will, I hope, serve to stimulate still further interest in the formation of an export body and an awareness of the useful rôle it could play. The noble Baroness will not expect me to comment on her remarks about the National Farmers' Union, but I have no doubt that in the context of what she said this particular further evidence of Government interest will be relevant, and I am indebted to her.
There are a number of other particular points to which I should like to refer. The noble Lord, Lord Byers (and I shall deal later on with some of his more general aspects), made certain particular points. I do not think I have time to go into the question of company law reform. This is a matter in which I, like he has, have been interested for a number of years, and it has just occurred to me that this is perhaps a suitable subject for debate in your Lordships' House. We are never able to debate this sort of subject in detail in a general debate on the humble Address. I do not think this is a matter in which I am offering Government time in any way, but there may be opportunities when we could have a

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further look, not only at all the proposals which the Government may put forward but also at wider issues in which I am very interested. Because the question of company law and the understanding of what might be called the ethos of the company in this matter, is something to which a good deal of thought is being given; and some of this thought needs bringing out into the open.
This leads on to the point which the noble Lord made; and, of course, my noble friend Lord Peddie, in a very interesting speech, was referring to these questions of efficiency and administration. This is a matter in which I have been deeply interested, and the Government are deeply interested. It is a fact that not only is there a shortage of economists on the Conservative Benches, but there is also a shortage of managers. It is rather surprising when I look at those who have spoken to-day, and who have had direct experience of management in industry in the context of the problems of increasing present-day productivity.
I do not know whether the noble Lord, Lord Byers, is also briefing the noble Lord, Lord Barnby, on management at the same time, but these matters are absolutely fundamental to the success of our National Plan. The National Plan can only be art outline; it is an intention: it is leadership. And it is leadership that this Government are trying to give, something which has not been given in such a definite form in the past. So I welcome the points which the noble Lord, Lord Byers, raised. I will not get into a discussion as to how far our policy is that of the Liberal Party. I remember that the Liberal Party Yellow Book of the '30s was certainly one of the most progressive documents of its kind.
LORD BYERS: It still is.
LORD SHACKLETON: I read it quite recently and commend it to your Lordships.
I should now like to turn to certain of the points, and particularly that made by the noble Lord, Lord Salter. The noble Lord is more experienced in economic administration than, I should think, practically anyone in this country, and therefore we tend to listen with respect to what he has to say about maintaining
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the parity of the pound and the need, to achieve that end, to maintain the stability of prices. I am not sure that his proposition, in quite such simple form, is strictly valid. If our competitors aboard are experiencing a rise in prices, then the need for us to hold our prices stable while maintaining the sterling exchange rate is that much less—in other words, we all sin together—but perhaps this is a small piece of sophistry on my part.
What the noble Lord is saying is that we cannot hold the present parity of sterling if we allow our prices to get out of line with those of other exporting countries, and, since these countries, on the whole, are succeeding in keeping their prices down, it is absolutely vital for us to do the same. I could not agree more completely with the noble Lord. This, of course, is only on this particular issue. There are other absolutely vital reasons for keeping prices down, which bear more indirectly through the effectiveness of our exports, and I will deal with them—does the noble Lord wish to intervene?
LORD SALTER: My Lords, perhaps I might recall exactly what I did say on this point—namely, that if an increase in prices in this country is as much greater as the increase in dollar prices in America as it has been throughout this last year, it will not be possible permanently to maintain the present policy of the Government, which is to retain the currency ratio with the dollar at its present rate.
LORD SHACKLETON: I do not disagree with the noble Lord's general proposition, but I do not want to get into a detailed discussion on the components of this particular equation. Of course I agree in general terms.
Since we are now on this subject of prices, productivity and earnings, I should like to deal with the point made by the noble Lord, Lord Byers, in regard to a possible discrepancy in the measurements that are applied. In any consideration of economics or costs there will be any number of factors that can be applied. It is difficult for us to judge a particular economic situation, or a particular aspect of it, by a single factor. There are a number of measures in other fields by which one judges efficiency: profits is one; and there are many others. I would assure the noble Lord that there is no discrepancy

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between the statements made. The precise figure depends upon the series used and the period covered. Average hourly earnings rose by 4·8 per cent. in the six months up to April, 1965. This was the figure quoted in the First Secretary's Answer. The 8 per cent. figure relates to the increase in the national wage and salary bill in the second quarter of 1965 compared with the year earlier. This is an example of the danger of what might be called "selected statistics". I can assure him, however, that these statistics were not selected by the Government with intent to deceive, but were merely most useful for illustrating the particular point. If the noble Lord would like to discuss this aspect further, I should be happy to do so; but I do not think we can hope in this field to achieve the sort of simplicity which would make this matter much more intelligible to us all.
Then again, allowing for the probable rise in employment which took place over this period, this would mean an increase of a little over 7 per cent. in average earnings per head. But, as stated in the National Plan, the underlying rate of increase of productivity may now have reached a rate of about 3 per cent. per annum. Thus, there is still a gap to be bridged from both sides. A further increase in productivity is both necessary and possible. Recent, and still incomplete, evidence suggests that there was a slower growth in earnings in the third quarter of this year, and a smaller growth seems likely in the year ahead.
Of course we then run into difficulty. My noble friend Lord Winterbottom, in an extremely interesting speech, indicated one of the difficulties we are in with regard to broad planning. Economics has always had this difficulty, that you can either have your broad macroeconomic approach or your micro-economic approach, and you may be able to lay down your general criteria only to find that an enormous increase in productivity is achieved in a particular area, as the noble Lord suggested, and a consequent opportunity for wage increases.
I should like to deal in a little more detail with this question of prices and incomes policy. In the past year, both word and deed on the economic front
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have been dominated by the balance of payments difficulties. On this we are all agreed. Twelve months ago we faced a most serious situation. I do not think I will get into a further argument on whether or not a deficit of £800 million is serious. The Conservative Party perhaps think of it a little more lightly than we do. But I do not think that any Administration in recent years has achieved such a striking figure. Nevertheless, there was a large external deficit and there was speculation against sterling. Our immediate aim has been, and still is, to eliminate the deficit and restore confidence in the pound. We have gone a long way—I think this is acknowledged—in achieving this; but we still have a long way to go, and we shall then have to repay the debts incurred in financing this deficit.
Our fundamental aim, of course, is to prevent all this from happening again. No Government has yet succeeded in doing so. It may be said that this is a most ambitious aim, but it is the theme which runs through the National Plan. For too long the United Kingdom has suffered from a weak balance of payments. I will not go on quoting this, beyond saying that this always leaves us vulnerable to this situation. In order to meet it, it is vital to keep prices in check. Indeed, one reason why the country has not broken out of this spiral in the past has been its failure to check the continual spiral of costs and prices.
I think the noble Lord, Lord Barnby, and possibly the noble Lord, Lord Hankey, expressed some anxiety, or some doubt, as to the success of this, but I would draw attention to what the noble Earl, Lord Dundee, said. We are right at the beginning of this matter, and we cannot be over-confident. But we can he determined in this matter; and that the Government are. If we could stabilise the general level of prices, so that unavoidable increases in some cases are offset by reductions in others, we could transform the balance of payments overnight, or at least in the course of a short time; and we would, incidentally, get rid of a good deal of discomfort and actual suffering in this country. It is not always realised that rising costs and prices weaken the balance of payments in a number of ways. First of all, and most obviously, rising home costs make it difficult for British manufacturers to keep

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down their export prices. Then, again, there is the pull of the home market with prices rising. Thirdly, when prices of home-produced goods go up, people naturally want the cheaper foreign goods, and so imports rise. I would not say that the spiral I have drawn is a complete one, but we are agreed absolutely on the seriousness of this.
These tendencies have been all too evident in the past, and not only in Britain, for prices have risen elsewhere. We can in fact be relieved that our prices have risen less, perhaps, than in some other leading industrial countries, but in the last year our price index has been affected by certain special factors: the increase in indirect taxation, which, after all, forms part of the Government's programme to restrain demand, and the increase in import prices helped to push the index up. But in the last few months I am happy to say prices have been much steadier. Between the second and third quarter of the year the price index rose only by a half a point.
The noble Lord, Lord Carrington, said that this year we had seen one of the sharpest rises in prices since the war. The actual increase in retail prices from September, 1964 to September, 1965 was 4·8 per cent. I know that Conservatives are sensitive about their thirteen years, but the 7 per cent. increase from April, 1955, to April, 1956, seems to be a higher achievement than this Government achieved; then, again, there was a 5½ per cent. increase from June, 1961, to June, 1962, achieved in the mid-period—not immediately after an Election but well before the following one. Of this increase of 4·8 per cent., two-fifths, or 1·8 per cent., is accounted for by the special measures which we were obliged to take to deal with the situation we inherited.
Whether or not our record is worse or better than that of other countries, it clearly is not good enough. Other countries are not faced with our particularly persistent and acute balance-of-payments problems. This is of more vital importance to this country. We need to do a great deal better than others are doing—that is, to avoid the increases which occur elsewhere—if we are to regain a larger share of world trade. Now, when overseas markets are expanding, is the time
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to start reversing the trends of earlier years. Also, of course, we want to put an end to the erosion of real income at home and the misery that this causes, which has resulted from a steady rise in the cost of living over the last twenty, indeed twenty-five, years. I think we are all agreed that it is in the nation's interest and in everyone's personal interest, that we should strive to keep increases in wages, salaries and other forms of income in line with the increase in national productivity.
Your Lordships will remember that this was part of the Joint Statement of Intent signed by representatives of unions, management and Government in December last year. This was the beginning of the new positive policy of productivity. As we have begun, so we have gone on to hammer out a policy which would be acceptable to those concerned with decisions on incomes and prices. Good progress has been made, and the credit for this must be shared by those whom we have consulted on both sides of industry at every stage. It took several months to work things out. The policy was finally launched at the end of April, when it was endorsed by an overwhelming majority at a national conference of trade union executives.
Shortly before, the National Board of Prices and Incomes—an independent body—had been set up under Mr. Aubrey Jones. This was only six months ago. The Board quickly became a going concern, and the Government have already asked the Board to examine eleven cases—five of increases in prices, five of increases in incomes, and one involving both. The task of the Board in these cases—a Board of which my noble friend Lord Peddie is a distinguished member and therefore is unfortunately prevented from speaking on this interesting subject—and the criteria which they apply in assessing increases in prices were set out in the agreed White Paper last April. The Board itself said in its report in June that it regarded its function as that of dealing with increases in prices which result from old habits, inherited attitudes and institutional arrangements. The Board has reported on five cases referred to it and its reports are very lively, constructive and readable. Indeed, I should I like to congratulate it on the readability

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of its reports, which might seem to be of a fairly dull nature. I could give your Lordships some details, but I do not think that I should take up much time on this beyond showing that this aspect of Government policy is beginning to bite, and to bite well. It is already having an impact, and, as I have indicated, in recent months the average level of prices has hardly risen at all. There is evidence that many firms are reluctant to risk the scrutiny of the Board which might follow if their prices were raised; this is perhaps speculative.
On the incomes front the outlook is less cheerful. Many of the recent pay settlements are above the norm of 3 to 3½, per cent. a year, the rate which represents the expected growth in productivity over the next few years. Higher increases are bound to affect costs per unit of output and thus to push up prices. For this reason, and in the light of experience, the Government have decided that more could and should be done to make the existing policy effective.
The gracious Speech refers to the Government's intention to introduce legislation early in the Session designed to carry forward the national policy on prices and incomes. One part of the proposed legislation will be to provide for the reconstitution of the National Board for Prices and Incomes on a statutory footing. The most important part will empower the Board to require witnesses to attend and give evidence, and to require the production of documents and other information. At the same time it will be possible to provide for a sensible and flexible procedure for the conduct of the Board's work which leaves a proper discretion to the members, bearing in mind the importance of obtaining reports quickly, particularly where the cases referred to the Board concern specific prices or claims. This will provide the Board with enabling powers to set up a statutory system of early warning and a standstill on changes pending the report by the Board. It will be possible for these powers to be brought into operation only by an Order in Council subject to the Affirmative Resolution procedure.
The powers will be threefold: to require notification of intention to increase prices or charges, and notifications of
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claims relating to pay or other conditions of employment and of proposed settlements of such claims; second, to refer to the Board for examination, in the light of the considerations of the national interest set out in the White Paper on Prices and Incomes policy, any existing or proposed price and any claim or settlement; and thirdly, to require such proposed price or pay increases to be deferred until after the Board has reported. The proposed legislation will be based firmly on the principle of achieving lasting progress by consent. It is not intended to seek powers to enforce the findings and recommendations of the Board; it is not intended to prevent negotiations from freely taking place at the end of the day. Indeed, it is wholly consistent, in the view of the Government, with what the noble Lord, Lord Hankey, had to say regarding the type of indicative planning which is so essential in a democracy such as ours. In considering whether to exercise the power to set up a statutory system the Government have willingly pledged themselves not to come to a decision before consulting the T.U.C. and the Confederation of British Industries. The Government hope that this statutory power will be kept in reserve.
Your Lordships are aware of the very important progress made towards setting up a voluntary system of early warning of intended price and pay increases. It is a subject for the greatest congratulation, in the light of remarks which noble Lords have made about the rôle of trade unions historically, that the T.U.C. did agree, by a clear majority, to adopt a procedure whereby a Committee of their members would collect advance information from the unions about wages and salary claims. The Committee will themselves scrutinise and discuss these claims before they are submitted to employers, with the aim of seeing whether they are compatible with the agreed national policy. This system is already in operation and the T.U.C. Committee has already considered 51 claims and arranged for further discussion on five of them. We all hope that this voluntary system will prove effective, and the Government are determined to do all they can to promote its success.
The importance of achieving the objectives of this policy is so vital to national

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well-being that a limited form of insurance is considered to be a prudent and reasonable step. We are not out to impose a wage freeze or even a pay pause. All we want is to limit pay and increases to the average level which we estimate can be absorbed by a rise in national productivity. As present, we put that at 3 to 3½ per cent. It is, if I may say so to the noble Earl, Lord Dundee, a higher figure than has been achieved in the past, which was an average figure over thirteen years of 2½ per cent. Perhaps at this late hour we shall have to agree to differ on this. But if industry can find ways of achieving a more dramatic increase, we shall be willing to raise our sights.
There was a particular point to which the noble Lord, Lord Winterbottom, referred, with which I partially dealt, and that was the question of wage drift. This question has been pretty fully discussed, and the intention is that the early warning system should be applied to local and company negotiations as to all others. But, clearly, this is the detail where the hard thinking and the hard work have got to be done. Perhaps it is because the noble Earl, Lord Dundee, and I have been debating with one another for so long on economics that we have either taught one another something or I have learned something from him, but I do strongly agree with him about the problem of international liquidity. It is a subject for satisfaction that increased international liquidity, arrangements with the I.M.F., arrangements which the previous Government have made—and I acknowledge the debt of this country in this matter—have succeeded in getting us through a particular crisis, and it is striking how greatly co-operation has improved between Governments and the Central Banks in dealing with these issues of international finance. These theoretical sinister figures, the Gnomes of Zurich, have now become the Angels of Zurich in the present operation, and we must acknowledge the support that has been given by countries, particularly, of course, by the United States.
THE EARL OF DUNDEE: My Lords, looking to the future, the noble Lord would agree, would he not, that what has been done is nothing like enough?
LORD SHACKLETON: My Lords, I was about to go on. I do absolutely
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agree that much further progress is necessary. The road is still faced with plenty of problems in the field of international liquidity, and these will grow. Unfortunately, not all the countries share our particular views on this matter, but Her Majesty's Government believe that the difference of approach shown by different countries should not prove to be irreconcilable. We are certainly playing a full part in the discussions that have now begun in Paris between the Group of Ten countries, since we believe it is an urgent task to make plans in good time before there is a threat of interruption of trade through lack of means of making payment.
Your Lordships have seen enough and heard enough to be aware of the measure of real success that has been achieved in the past year, a success which has led to a great deal of confidence in industry, and this is perhaps one of the most striking indicators in the present situation. But it remains true that to be steering the right course is not to guarantee safe arrival. What always used to concern me when I was in Opposition was the rather easy optimism in those days of the then Government, and it would be disastrous if we were to allow the favourable aspects of the present situation to beguile us into relaxing our policies. The coming twelve months, with the expansion of the home economy proceeding at a comparatively slow pace—a euphemistic phrase—will be a testing time. Vigilance will be necessary if the Government's supreme objective of external equilibrium during the course of 1966 is to be met, thus permitting a start to be made on repaying the heavy short-term debts which we have had to contract overseas in order to lead us through the critical twelve months just past.
I believe that there is a fundamental difference in the approach of this Government and the last. The last Government's attitude was well summed up by Mr. Reginald Maudling, who said:
"I think our besetting weakness is the inability to rise to the challenge until the challenge really stares us in the face. But it is not altogether a disagreeable weakness."
My Lords, it is a very disagreeable weakness. This country has paid for it, and we are determined to take a tougher approach to these problems than has been taken in the past.

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Much of the legislation which we shall bring forward is directly relevant. Indeed, I would say that those aspects of social legislation which some noble Lords may think not relevant are in fact just as relevant as the others, because it is only on this basis that we can proceed with the Government's plans for the future for the building of a more efficient, a more dynamic and a more generous life for all our people. This is where I should like to say to the noble Lord, Lord Fraser of Lonsdale, that he misunderstood my noble friend Lord Longford. What my noble friend was saying was that the attaining of increased production and wise economic policies were not aims in themselves; they were a means to an end. But clearly it is apparent that the Government, because they are so determined to achieve the good end, will have the highest regard to these economic considerations.
Because time is late, I shall not argue the finer points about importing to export again, or borrowing to lend again. We on this side of the House, and in the
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Government, are confident that we are making a really good beginning and a very determined beginning, and that this will lead to a future in which, on a strong economic basis, we can play our full part both in maintaining peace—and it has been strongly stressed that a successful economy is fundamental to our foreign policy—and in relieving distress at home and poverty throughout the world.
THE DUKE OF DEVONSHIRE: My Lords, I beg to move that this debate be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

ROLL OF THE LORDS
The LORD CHANCELLOR acquainted the House that the Clerk of the Parliaments had prepared a Roll of the Lords.
The same was ordered to lie on the Table, and to be printed.
House adjourned at twenty-two minutes before seven o'clock.