Sitting of 25 June 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS
FELIXSTOWE DOCK AND RAILWAY BILL
Lords Amendments considered and agreed to.

WAYS AND MEANS
COVENT GARDEN MARKET
Resolved,
That, for the purposes of any Act of the present Session to prohibit the use for certain purposes of lands at Covent Garden and to provide for the disposal of such lands and for the basis of compensation payable on the disposal of them, it is expedient to authorise—

(a) the charging of any sums by way of betterment levy which are chargeable by virtue of that Act;

(b) the payment into the Consolidated Fund of any sums required to be so paid by virtue of that Act.—[Mr. Harold Lever.]

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    £ Sterling (Value)
    Sir Knox Cunninghamasked the Chancellor of the Exchequer whether, taking the value of the £ sterling at 20s. on 1st November, 1967, he will state its value today.
    The Financial Secretary to the Treasury (Mr. Harold Lever): Taking the internal purchasing power of the £ as 20s. in November, 1967, its value in May, 1968, the latest date for which information is available, is estimated at 19s. 3d. This estimate is based on movements in the index of retail prices.
    Sir Knox Cunningham: Will the hon. Gentleman tell his right hon. Friend the
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    Prime Minister, in words of one syllable and four letters, that this is what has happened to the £ in our pockets?
    Mr. Lever: It is unnecessary to give my right hon. Friend this information in words of any particular number of syllables.

    Gold
    Mr. Ian Lloydasked the Chancellor of the Exchequer (1) whether it remains Her Majesty's Government's policy to discontinue the purchase of newly-mined gold by the Bank of England for monetary purposes, either from South Africa or other sources, indefinitely;
    (2) what discussions have taken place with the South African Treasury or Reserve Bank on the future gold buying policy of Her Majesty's Government; and with what result.
    The Chancellor of the Exchequer (Mr. Roy Jenkins): I have nothing to add to the Washington communiqué with regard to the Government's policy towards the buying and selling of monetary gold, about which I made a statement to the House on 18th March. Discussions with South Africa have been confined to normal Central Bank contacts.—[Vol. 752, c. 40–9.]
    Mr. Lloyd: Does this mean that the size of the United Kingdom gold reserves will depend entirely on its balance of payments with the other nine of the Group of Ten, and that there is no question of accepting either newly-mined gold or monetary gold from outside this Group?
    Mr. Jenkins: I do not think that the hon. Gentleman is right in that assumption. We could acquire gold from sources other than those within the terms of the Washington communiqué.

    Houses (Rent Increases)
    Mr. Turtonasked the Chancellor of the Exchequer whether it is his policy to limit weekly increases of rent of each Government controlled home to 7s. 6d. in a 12-month period, as recommended in Command Paper No. 3604.
    The Minister of State, Treasury (Mr. Dick Taverne): The recent rent increases for houses owned by Government Departments are within the recommended

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    limits of an average of 7s. 6d. a week for standard rents, and a maximum increase for any individual house of 10s. a week, in any one year.
    Mr. Turton: Is the hon. and learned Gentleman aware that the tenants of Government-controlled property will have had a 30 per cent. increase in rents, spread over 3 years, up to 1970? Does he appreciate that this is making tenants believe that the Government have no hope of stabilising the cost of living in this period, and that it is a very bad example for other landlords?
    Mr. Taverne: This is not a bad example for other landlords. There has been no increase since 1958 and the average increase in these rents will be about 3s. 4d. a week in the next three years. The largest individual increase is 8s. 3d. a week in any one year, which is less than the recommended limit.
    Sir Harmar Nicholls: How does this increase compare with that allowed under the recommendation of the Prices and Incomes Board to local authorities?
    Mr. Taverne: It is within the limits recommended, and within the policy announced by the Ministry of Housing for local authority tenants.

    Bank Rate
    Mr. Martenasked the Chancellor of the Exchequer what has been the number of months since October, 1964, in which Bank Rate has been at 7 per cent. or higher.
    Mr. Harold Lever: Since October, 1964, Bank Rate has been at 7 per cent. or higher for a total of approximately 20 months.
    Mr. Marten: Is the Minister aware that Bank Rate has never been so high for so long since 1694, when records were first kept? In the light of the Labour Party's statement at the last election, about the level of interest rates, would the Government deal with this rather "grotty" performance when it has its confessional in the autumn?
    Mr. Lever: I do not recall the reference to incidents of 1694 in the Labour Party's election manifesto. On the other hand, our rates have to keep in line with world rates, and world rates
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    are at a pretty high level, historically speaking.
    Sir C. Osborne: Is the Minister aware that one of the consequences of this continued high Bank Rate is that the 3½ per cent. War Loan, £2,000 million of which is held by ordinary people, stands at its lowest ever, 46 per cent., and unless Bank Rate is reduced the holders of Government stock will continue to be swindled? Will he do something to help?
    Mr. Lever: It is a logical corollary of an increase in interest rate that the value of unredeemable stock will decline correspondingly. We are anxious to see interest rates throughout the world come down, but ours cannot go out of line, and we can only have more freedom for action when our balance of payments has been put right.

    Gold (Two-tier System)
    Mr. Sheldonasked the Chancellor of the Exchequer if he will make a statement on the present operation of the two-tier gold system.
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer if, in view of current strains in the two-tier gold price system he will reconsider the Government's decision to oppose a change in the official price of 35 dollars per ounce for gold.
    Mr. Roy Jenkins: The two-tier gold system has been working satisfactorily. I see no reason why it should not last a considerable time.
    Mr. Sheldon: But since it is almost certain that there has been some leaking of gold between these two tiers, can my right hon. Friend make an estimate, however approximate, of how much it might be?
    Mr. Jenkins: No. I would not necessarily accept my hon. Friend's assumption. I certainly could not make an estimate.
    Mr. Bruce-Gardyne: Has the Chancellor noticed that Dr. Emminger has said that one of the effects of raising the price of gold will be to enable all countries to pursue more expansionary economic policies? Does the right hon. Gentleman agree with that forecast, and

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    does he regard it as an advantage or disadvantage in raising the price of gold?
    Mr. Jenkins: I have not noted this statement of Dr. Emminger, although in general I note statements from him and other central bankers with close attention and great interest. Raising the price of gold would be one way of increasing liquidity, but, in our view, it would be an irrational and lopsided and, possibly, disrupting way.
    Mr. Barnett: While hoping that the two-tier system will give us adequate breathing space, may I ask my right hon. Friend whether he feels that there is an adequate amount of liquidity, bearing in mind the reducing deficit in the United States and the long time it will be before the S.D.R.s come into force? Does my right hon. Friend feel that some further action might be needed fairly soon to increase liquidity?
    Mr. Jenkins: This problem requires constant attention. The progress which we have made and which we hope to continue to make with the S.D.R. scheme will be a substantial move in this direction, although I do not close my mind to other methods.
    Mr. Gresham Cooke: In view of the pressures on the two-tier system, should we not be well advised to ask the Americans to raise the price of gold from 35 dollars?
    Mr. Jenkins: No. The assumption three months ago would have been that the gap between the two prices would be substantially in excess of that which exists at present.

    Economic Outlook (Forecasts)
    Mr. Sheldonasked the Chancellor of the Exchequer what forecasts he intends to publish during 1968.
    Mr. Roy Jenkins: It is not my intention to publish during the remainder of this year revised forecasts of the short-term economic outlook comparable in scope and detail with those embodied in the Financial Statement for 1968–69.
    Mr. Sheldon: Would my right hon. Friend give an indication of his intentions about publishing future forecasts, and, in particular, can he say whether he intends at some time to publish forecasts giving
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    indications of some of the elements in our balance of payments?
    Mr. Jenkins: My general intention is to move, as I have tried to do in the forecasts published in association with the Budget statement, in the direction of disclosing more fully than has been done before the basis on which we make our forecasts with a view to having an informed discussion. We made a big step forward this year. It is reasonable to see how it goes for the time being.
    Mr. Iain Macleod: While accepting and welcoming the fact that the right hon. Gentleman has given more information than any of his predecessors, may I urge him to continue the good work and to give even more forecasts and not be too disheartened by the fact that every one he has given so far has been wrong?
    Mr. Jenkins: I thought that the right hon. Gentleman was being almost too agreeable to be true in the early part of his supplementary question. I shall not be put off by the latter part, except to say that he is wrong. Our forecasts of exports and of the growth of the national product show every indication of being in line with what we suggested. But, whether they be accurate or not, I will bear in mind what I took to be the more serious part of his supplementary question.

    Government Employees (Holidays)
    Dr. John Dunwoodyasked the Chancellor of the Exchequer what steps he will take to encourage Government employees to take their holidays outside the peak season.
    Mr. Harold Lever: I do not think that such encouragement is either necessary or practicable.
    Dr. Dunwoody: Would my hon. Friend consider this matter again, because if he could encourage Government employees to do this we would avoid the near shut down of some Government Departments in August and help the economy of the tourist areas considerably in the out-of-season period?
    Mr. Lever: Civil servants must have the same measure of choice in these matters as other citizens.
    Sir C. Osbome: And Members of Parliament.
    Mr. Lever: There is a limit to what we should properly do in the direction suggested by my hon. Friend.

    Art and Jewellery Sales (Taxation)
    Mr. Gwilym Robertsasked the Chancellor of the Exchequer what estimates the Treasury has made of the yield from a 10 per cent. sales tax on art and jewellery sales in Great Britain; and if he will take steps to introduce this form of taxation.
    Mr. Harold Lever: As regards the first part of the Question, the information is not available on which to base a reliable estimate. On the second part of the Question, I have nothing to add to what my right hon. Friend said in his Budget Speech about new methods of taxation.— [Vol. 761, c. 273–4.]
    Mr. Roberts: However, would my hon. Friend accept that it is difficult for workers on the shop floor, coping with prices and incomes policy, to understand the Government's attitude to these sophisticated spivs trading in art treasures worth many hundreds of thousands of £s and paying the minimum of taxation?
    Sir C. Osbome: Who says that they are spivs?
    Mr. Lever: I would not accept that people trading in art and similar matters should be regarded as spivs. But they are regarded by the Inland Revenue as trading for tax purposes and are charged tax accordingly. I cannot understand any special reason for anxiety concerning private citizens.
    Sir R. Cary: Since when has the Director of the National Gallery been a sophisticated spiv?
    Mr. Lever: I do not think that that follows from the Question or the supplementary question.

    Scrip Issues
    Mr. Ridleyasked the Chancellor of the Exchequer whether scrip issues may now be made by companies.
    Mr. Taverne: As the provisions in the Prices and Incomes Bill adequately control increases in dividends, there is no need to duplicate safeguards by seeking powers in relation to scrip issues.
    Mr. Ridley: Is it not idiotically silly to put control of scrip issues into the voluntary guidance published by the Treasury? Would the hon. and learned Gentleman accept that it is very dangerous to have government by Ministerial circular, which proves that things of this sort can go wrong and silly mistakes can be made by the Treasury?
    Mr. Taverne: It was very important in the context of the prices and incomes policy to deal with matters which could be widely misunderstood, but the Prices and Incomes Bill makes it clear that any increase could be subject to control.

    Purchase Tax (School Equipment)
    Sir J. Langford-Holtasked the Chancellor of the Exchequer whether he is aware that pupils' tables which are now becoming more widely used by education authorities in place of desks are tax-free if provided with an ink-well, but are taxable if no ink-well is provided; and if he will take action to correct this anomaly.
    Mr. Harold Lever: There is no anomaly. Pupils' tables specialised for school use are not taxable, whether or not provided with ink-well holes.
    Sir J. Langford-Holt: May we assume, therefore, that it is part of the leap forward into the technological age to induce local authorities, against their will, to provide tables for earthenware ink-pots for use with quill pens?
    Mr. Lever: I do not know whether the hon. Gentleman appreciated the purport of my Answer, but the implication of his supplementary question is that we tax desks for schools according to whether or not they have ink-well holes. I do not see any reference to quill pens. There is no anomaly in this matter. The desks are duty-free in either case.

    Economic Position
    Mr. Gwilym Robertsasked the Chancellor of the Exchequer whether he is satisfied with the results of devaluation

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    in the light of the latest balance of payments figures; and if he will make a further statement on the general economic position.
    Mr. Roy Jenkins: The main effects of devaluation and the Budget have not yet had time to work through, particularly on the volume of imports, but export performance has been encouraging.
    Mr. Roberts: Now that the half-baked "I'm Backing Britain" campaign has died a natural death, would my right hon. Friend consider introducing a Government-inspired drive to encourage import substitution? Would he consider instituting research into every method in and outside G.A.T.T. which can be used to give advantage to home-produced products?
    Mr. Jenkins: Import substitution is of great importance at present. It is, I think, difficult: to stress enough the advantage which there is for the business community and for the community as a whole if we pursue this matter energetically, because it is the key to a steady growth affecting both profits and real wages over the next few years.
    Sir C. Osborne: Did the right hon. Gentleman read the article in the Economist on Saturday which stated that the balance of payments deficit for the first six months of this current year was running at £1,300 million against a so-called £800 million deficit in 1964? Does he accept those figures?
    Mr. Jenkins: We have not yet seen figures for the first half of this year. I read the article. Questions have been tabled about the first quarter which I shall answer later.
    Mr. Maclennan: Has my right hon. Friend had an opportunity of reading the Report of the "Little Neddy" on the agricultural industry concerning the opportunities for import savings of up to £220 million by 1972? Will my right hon. Friend give it the most favourable consideration?
    Mr. Jenkins: I will certainly pay careful attention to this Report.
    Sir H. Harrison: I should like to reinforce what was said by the hon. Member for Caithness and Sutherland (Mr. Maclennan). The Eastern Counties are
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    prepared to help. Will the Chancellor study carefully this way of saving imports by the agriculture industry?
    Mr. Jenkins: I shall study this matter carefully in relation not only to the Eastern Counties, but to the whole of the country. However, it is necessary to have some regard to the public expenditure aspect of the matter as well as the import saving aspect.
    Mr. Barnett: As imports are causing the greatest concern, will the Chancellor give his estimate of the import figures for the remaining six months of the year?
    Mr. Jenkins: No. I have no further forecast to offer to the House.
    Mr. Higgins: In the light of the figures which are available, will the Chancellor tell us whether he thinks his main forecast or his higher forecast is more likely to be achieved, or does he think we shall fall below both?
    Mr. Jenkins: I think that the export position is at least as promising as I indicated in my main forecast.

    Exchange Rates
    Sir B. Rhys Williamsasked the Chancellor of the Exchequer what steps he is taking, following the successful reopening of the free London gold market, to ensure that the transition to a general system permitting reasonable flexibility in the rates of exchange of the world's main trading currencies takes place in an orderly way.
    Mr. Roy Jenkins: I would not favour a move to a system of greater flexibility in exchange rates than at present.
    Sir B. Rhys Williams: Is it not becoming evident that the whole Bretton Woods concept of permanently fixed exchange rates and an immutable price for gold are a vanishing vision? Should we not accept it with gladness? Would it not be statesmanlike for the Government in the management of sterling to shape their policies accordingly?
    Mr. Jenkins: I think that it would be extremely rash to take the view that the 20 or nearly 25 years of the international monetary system, based on the Bretton Woods Agreement, which we have experienced and which has led to the most rapid growth of world trade

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    and the national wealth of most countries participating, has not, on the whole, been a successful system. I do not say that it does not need modification, but it would be foolish to turn our backs on it and say that we want something utterly different rather than something built upon it.

    50 New Penny Piece
    Mr. Straussasked the Chancellor of the Exchequer whether he proposes to accept the published design of the new 50 new pence coin proposed by the Decimal Currency Board.
    Mr. Ogdenasked the Chancellor of the Exchequer if he will now ask the Decimal Currency Board to make further recommendations on the form and style of a 50 new pence coin.
    Mr. Harold Lever: The Government's acceptance of the Decimal Currency Board's recommendation on the shape and size of the new 50 new penny piece was announced on 9th May. The design has not yet been decided.
    Mr. Strauss: Does that mean that the design that was exhibited in the Members' Library, which caused widespread unfavourable comment, has not been accepted and that there will be something better?
    Mr. Lever: The design of the coin has not yet been decided, but its shape, which will be an equilateral curved heptagon, has been settled.
    Mr. Ian Lloyd: Why are the Government so reluctant to seize the opportunity to put a high value of much smaller coins? In view of the current rate of inflation, will not these very large and heavy coins be valueless in about 10 years' time.
    Mr. Lever: It is thought that this will be a convenient coin for a fairly large sum which can be readily distinguished from other coins. For that reason, it has to be larger and somewhat different in shape.

    Surtax
    Sir B. Rhys Williamsasked the Chancellor of the Exchequer what estimate he has made of the effective increase in purchasing power that would
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    follow from a total abolition of Surtax; and what estimate he has made of the effect on the net yield of taxation within one year and within five years of the change.
    Mr. Harold Lever: I estimate that, once the change was fully operative, the abolition of Surtax at present rates would increase incomes, and therefore purchasing power, by about £280 million. The direct increase in demand would be much less because a high proportion of the additional income would be likely to be saved. I have made no estimate of the effect of abolition on the net yield of taxation, but at present income levels the gross yield would be reduced by about £200 million in the first year after the change and by about £275 million in the fifth year.
    Sir B. Rhys Williams: Is it not clear that there is no genuine moral justification for this tax, or even an economic justification for it, and that, in the long run, the entire economy would gain if this vindictive survival from the class war were brought to an end?
    Mr. Lever: This vindictive survival from the class war survived vindictively throughout Conservative Governments. I am afraid that its total abolition cannot be readily envisaged, but some reconsideration of rates and the replacement of the revenue from similar classes in society might well be envisaged.

    Broadcasting Authorities (Dollar Payments)
    Sir J. Langford-Holtasked the Chancellor of the Exchequer, in view of the need to restrict foreign expenditure, whether he will refuse to allow dollars to be spent in the United States of America by the broadcasting authorities for the rights to perform parlour games which were invented in Great Britain.
    Mr. Harold Lever: No. There are no exchange control restriction on current payments of this kind.
    Sir J. Langford-Holt: Is the Financial Secretary therefore saying that any citizen may contract, without any "no say" by him, to pay to an American citizen, if it is the basis of contract, any amount for performing rights or the right to repeat anything?
    Mr. Lever: What causes the hon. Gentleman surprise is the obvious and only sensible rule that Governments can apply unless they want to supervise individually the contracts entered into by British businessmen.

    Price Levels
    Mr. Huntasked the Chancellor of the Exchequer whether, in the light of the 2·2 per cent. rise in the cost of living during April, he will now revise his estimates of the effect of the Budget and devaluation upon price levels.
    Mr. Roy Jenkins: The rise in the retail price index between March and April was 1·8 per cent., not 2·2 per cent. The magnitude of the rise was allowed for in the forecast to which the hon. Gentleman refers.
    Mr. Hunt: Is it not a fact that the right hon. Gentleman forecast a rise over the year of some 5 per cent.? How can the Chancellor justify a rise of almost half that level in a single month?
    Mr. Jenkins: Clearly because by far the greater part occurred as a direct result of the indirect nature of the Budget proposals which I introduced. I gather that indirect rather than direct taxation commends itself to the hon. Gentleman's hon. Friends. At least that is what they have been saying in Committee.
    Mr. Molloy: In this context, would my right hon. Friend be prepared, with his right hon. Friend the Minister of Agriculture and his right hon. Friend the President of the Board of Trade, to examine these increases, particularly in the confectionery and toilet retail sectors, which are causing some irritation?
    Mr. Jenkins: These individual points are not matters for me, but I have no doubt that my right hon. Friends will take note of what my hon. Friends says.

    Licensed Premises (Rating Assessment)
    Dr. Winstanleyasked the Chancellor of the Exchequer if he will review the operation of the present method of basing the rating assessments of licensed premises upon barrelage.
    Mr. Harold Lever: No, Sir. The method has been approved by the courts for many years and I am not aware of
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    any good reason for reviewing its operation.
    Dr. Winstanley: Are we to deduce from that Answer that the Financial Secretary is wholly satisfied with the arrangement whereby the landlord's private residential rooms in a public house, which may amount to more than a third of the whole, are rated according to the amount of beer sold in the public rooms?
    Mr. Lever: I am satisfied that this method of assessing the rental value of the premises as a whole is reasonable and fair, and the courts have so found.

    Invisible Account
    Mr. Maurice Macmillanasked the Chancellor of the Exchequer what was the balance on invisible account in the last quarter of 1967 and in the first two quarters of 1968, respectively.
    Mr. Roy Jenkins: There was a deficit of £10 million in October-December, 1967 and a surplus of £86 million in January-March, 1968—seasonally adjusted. Figures for the current quarter will be published in September.
    Mr. Macmillan: Since these figures indicate a considerable improvement in the invisible balance, can the Chancellor tell the House why the same sets of figures show such a falling off in the current balance, and, further, whether this represents an increase in net private investment overseas?
    Mr. Jenkins: I am not quite sure of the hon. Gentleman's terms. There was a deficit on visible account counteracted to some large extent by this near record surplus on invisible account. There was also a substantial deficit on long-term capital account, a large part of which was caused by an exceptional investment transaction by an oil company, and some of which was caused by an increase in private portfolio investment abroad.

    Memoires of Convicted Persons (Payment in Foreign Currency)
    Sir T. Beamishasked the Chancellor of the Exchequer if he will amend the Exchange Control Regulations to prevent payments in foreign currency to convicted British traitors or their agents;

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    and if he will give details of all sums known to have been so paid in the past.
    Mr. Roebuckasked the Chancellor of the Exchequer whether he will take steps, by legislation or otherwise, to ensure that persons living abroad do not benefit financially from the results of criminal activities in this country, for instance, by the receipt of royalties from writings describing their alleged exploits.
    Mr. Harold Lever: I do not think it would be right for the Treasury to seek to operate through exchange control a moral censorship. Nor would it be practicable; the attempt would involve individual scrutiny by the Bank of England of the thousands of payments to non-residents generally for literary work or other current purposes on the chance of picking out the few considered objectionable. The delays imposed on perfectly legitimate transactions would be intolerable.
    Sir T. Beamish: What kind of logic or morals are involved when one has to go through the inquisition of a means test before a fiver can be sent to an impoverished aunt living abroad, whereas there is no difficulty whatever in sending several thousand pounds to a convicted British traitor living abroad?
    Mr. Lever: The payments to which the hon. Gentleman takes exception, which are not attractive to any right hon. or hon. Member, are covered by a general permission. The only way of dealing with this matter to the hon. Gentleman's satisfaction would be to abolish the general permission or, within it, to search through tens of thousands of applications in the hope of finding the odd one that was a payment of this kind.
    Mr. Roebuck: Is my hon. Friend aware that his reply is not as satisfactory as his letter to me on this subject on 5th June last? Is he aware that many millions of honest taxpayers in this country get very angry indeed when they read about such things as £10,000 tax-free going to spies? Will my hon. Friend look at this question again?
    Mr. Lever: My hon. Friend must not talk as though these payments are made to spies for spying. These payments are made under a general permission for
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    literary and newspaper payments to be made. The only way in which I could control them would be to abolish this general permission and scrutinise each of the tens of thousands of applications individually, and the honest taxpayer would resent paying the cost of that far more than the dissatisfaction he feels at the money going to these thoroughly unworthy people.
    Mr. Biggs-Davison: Is it really so difficult to pick out these very few cases? Thank goodness we do not have more than one or two traitors.
    Mr. Lever: It is not a question of the number of traitors; it is the number of applications falling within this class. They amount to tens of thousands. It is not merely difficult, it is virtually impossible for me to pick out the two or three payments which are made per annum on this basis and segregate them from the others.
    Mr. Arthur Lewis: Is it not a simple matter for the Chancellor to introduce a provision into the Finance Bill saying that no convicted criminal shall have money sent to him abroad?
    Mr. Lever: I am afraid that when my hon. Friend has reflected on his simplist proposition he will not find that it commends the unanimous assent that he would suppose.

    Taxation Proposals (Representations)
    Mr. Evelyn Kingasked the Chancellor of the Exchequer what representations he has received from the Inland Revenue staff associations regarding the complexity of his taxation proposals; and what reply he has given.
    Mr. Harold Lever: I have received no such representations.
    Mr. King: Does not that show how docile the staff must be? Is it not a fact that the incomprehensiblity of the proposals put forward by the Chancellor are causing difficulty even among the experts at the point of collection?
    Mr. Lever: All tax systems are in one degree or another complex, and I have received no such representations of the kind implied by the question.

    Capital Outflow
    Mr. Dickensasked the Chancellor of the Exchequer if he will seek to impose further restrictions on the outflow of capital to advanced countries within the sterling area.
    Mr. Roy Jenkins: The voluntary programme already operates in this field and I have at present no proposals for further action.
    Mr. Dickens: Does not my right hon. Friend agree that he is simply frittering away the advantages of devaluation by continuing to allow £190 million worth of capital to leave this country as it did in the first quarter of 1968, the highest figure in any quarter for the past 11 years? Will he now impose a standstill on the outflow of private capital to advanced countries like Australia, to which capital at the rate of £1 million a day has been flowing in the first quarter of this year, principally to buy Australian gold mining shares.
    Mr. Jenkins: I think that my hon. Friend somewhat exaggerates the size of the problem when he refers to £190 million having gone out. As I said, this was to a large extent accounted for by one exceptional transaction. I agree that there has been some disturbing increase in the outflow of private portfolio investment by individuals to Australia in the first quarter, but I have to consider the position of the sterling area as a whole, and also the fact that this is not a net charge on the reserves.
    Mr. Brian Harrison: Can we take it from the Chancellor's statement that he does not intend to limit portfolio investment by people resident in the United Kingdom taking shares in Australia?
    Mr. Jenkins: I think that what the hon. Gentleman can take is exactly what I said, that the voluntary programme already operates, and at present I have no proposals for further action.
    Mr. Macdonald: Is it not regrettable, but still a fact, that the admirable intent of the voluntary programme has not had trie fullest success hoped for, and therefore will my right hon. Friend think again about this matter?
    Mr. Jenkins: I think that my hon. Friend is under a slight misapprehension. The voluntary programme relates to direct investments and to portfolio investments by institutions, and I think that it has worked satisfactorily.
    Mr. Selwyn Lloyd: Does the right hon. Gentleman agree that in the interests of the standard of living in this country it is important that we should have some part in the wealth explosion which is taking place in Australia?
    Mr. Jenkins: I think that it is very important to preserve a balance. Overseas investment can be of considerable advantage, but it must not be made at the expense of stultifying our home economy.
    Mr. Barnett: I recognise the difficulties, but would not it be better to face the problem of breaking up the sterling area itself rather than allow this continuation of capital outflow at the expense of our own economy?
    Mr. Jenkins: I have to consider this matter in the context of many other considerations.
    Mr. Patrick Jenkin: Does the right hon. Gentleman accept that the mere act of devaluation has of itself rendered the restrictions on overseas investment that much less necessary, and will he resist the pressure from the benches behind him to tighten up still further the damaging policy he was following before?
    Mr. Jenkins: I am not sure that I follow the hon. Gentleman's argument, but I take note of his final point.
    Mr. Dickens: In view of the unsatisfactory nature of that reply, I am bound to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

    Balance of Payments
    Mr. Dickensasked the Chancellor of the Exchequer if he will make a forecast on the balance of payments position in the second half of 1968.
    Mr. Roy Jenkins: I do not wish at this stage to add to what I said on this subject in my Budget speech.
    Since then imports have continued at a rather high level, though this seems

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    to have received some check recently. Exports have come well up to my expectations. Our net invisible earnings have done well. The first quarter saw some exceptional investment transactions but these will not affect the prospects for the rest of the year.—[Vol. 761, c. 253–8.]
    Mr. Dickens: Does my right hon. Friend accept the National Institute's forecast of a deficit of about £200 million on current account in the second half of 1968, and will he look again at the question of reintroducing import controls to reduce the amount of manufactured and semi-manufactured goods coming to this country, especially since devaluation?
    Mr. Jenkins: I always take note with interest and attention of the National Institute's forecasts. I do not necessarily accept them. I note that the Institute itself said that it was little if any more certain than those which they made last time, in other words, three months before, which forecast an entirely different outturn. I take note of them, but I do not necessarily accept them. I have nothing to add to what I have said on previous occasions about import controls.
    Mr. Macleod: If the Chancellor is now relying on his main forecast for exports rather than the higher forecast, which I understood from his reply to an earlier question, and if imports are much higher than he expected—as we know they are— how can he possibly maintain that his forecast can work out for the second half of this year?
    Mr. Jenkins: The right hon. Gentleman is not correct in assuming that I am necessarily relying on my main forecast. What I said to the hon. Member for Worthing (Mr. Higgins) was that I thought the position looked at least as good as the main forecast. It may turn out to be better, but there is no doubt that the high level at which our imports have run is higher than we would have hoped. This means that at any rate for the first half of the year the out-turn cannot be as satisfactory as we would have hoped, but I have nothing further to say about the second half of the year, and still less about 1969, for which I still believe we have every prospect of earning a very good surplus indeed.
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer whether it is
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    still his estimate that the United Kingdom will achieve a balance of payments surplus in the second half of 1968, and a surplus of £500 million in 1969.
    Sir C. Osborneasked the Chancellor of the Exchequer if his estimate that the balance of payments deficit will be eliminated by the end of 1968 still holds good; and what deficit he now expects for the current year.
    Mr. Roy Jenkins: I have nothing at this stage to add to what I said on this subject in my Budget speech and in my Answer to a Question from my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) earlier this afternoon.
    Mr. Bruce-Gardyne: Does a very good surplus for next year mean more or less than £500 million? Is it not clear that we are heading for another massive deficit this year? Is the right hon. Gentleman satisfied that our overseas creditors are prepared to put up yet again with hope deferred from this Government?
    Mr. Jenkins: I am satisfied that we are on the right lines and that it is essential to continue this strategy. I believe that we can achieve a surplus in the fairly near future, and a very good surplus, of the biggest size possible. Anyone is extremely foolish who thinks that he can predict this accurately within £50 million or £100 million, but a sizeable, very big surplus for 1969 must and will remain the main objective of our policy.
    Sir C. Osborne: How can this course be justified and give the right hon. Gentleman satisfaction when again the Economist has calculated that we are running at present at a deficit of £1,300 million a year? How on earth can we have a surplus in the second half?
    Mr. Jenkins: It was clearly understood that there would be a deficit in the first half, but we hoped to counteract this in the second half and then move into substantial surplus.
    Mr. Frank Allaun: Would not a large part of the deficit be overcome if the Government ended their net overseas military spending across the exchanges of £232 million a year?
    Mr. Jenkins: My right hon. Friend will be aware that, in January, we took

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    measures, which admittedly will take some time to work out, substantially to reduce our overseas military commitments and the burden which we carry in that respect for the first time since the war, to bring it into line with that of our main competitors in Europe.
    Mr. Iain Macleod: Can the right hon. Gentleman give us a clear answer to this question, which he has ducked at least half a dozen times this afternoon? In his Budget statement, he said—I think that these were his words—that he "hoped and expected" a surplus in the second half of 1968 and a surplus of £500 million as soon as possible. Does he hold to that or not?
    Mr. Jenkins: I said a surplus "of the order of £500 million", and I certainly hold to that as being an objective to which we must work as quickly as we can. I have every intention of continuing to make this a central objective of my policy, as, I believe, any Chancellor should.
    Mr. Michael Foot: In view of my right hon. Friend's renewed assertion about achieving this excess on our balance of payments, does he agree with the statements made by his colleagues in recent days that the projected reduction in our expenditure east of Suez will enable us to increase our expenditure in Europe? Does he not think that this policy must be earnestly reviewed so that we continue to reduce our expenditure in Europe as well as east of Suez?
    Mr. Jenkins: This raises very much wider issues, but it is certainly my view, as we have said and as my right hon. Friend the Prime Minister said in January, that it is necessary for us to bring our overseas military commitment as a whole into line with what we can afford.
    Mr. Iain Macleod: The right hon. Gentleman has evaded the question once more. Does he or does he not, in his own words, "hope and expect" for a surplus in the second half of this year?
    Mr. Jenkins: I certainly hope that we may achieve it in the second half of this year. Clearly, no one can predict this with certainty, and I have nothing firmly to add to the forecast which I gave in the Budget. It does not, from any point
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    of view, encourage the publishing of detailed forecasts if one is tempted to adjust them from week to week or from month to month.

    Inland Revenue Offices (Hours)
    Mr. Dudley Smithasked the Chancellor of the Exchequer if he will provide improved facilities for the public wishing to consult their local income tax inspector by instructing offices of the Inland Revenue to remain open for longer hours and on Saturday mornings.
    Mr. Harold Lever: No, sir. But interviews can be arranged by appointment outside the hours when offices are open to the public.
    Mr. Smith: Does not the hon. Gentleman agree that Saturday morning closing in common with other public sectors places many people at a serious disadvantage, particularly when they have to take time off from work to attend interviews?
    Mr. Lever: What the hon. Gentleman has failed to note is that I referred to interviews by appointment including on Saturday morning or other times when the office is closed. That is different from keeping the offices open in the hope that somebody might want to come in at those times.
    Mr. Higgins: Is the hon. Gentleman aware that if one rings up the Inland Revenue offices in London one does not get a reply after 4 p.m. and one can try for a long time before one realises that the calls are not being answered? Would it be possible for them to make arrangements for a recorded message so that people are told that no officer is available after 4 o'clock?
    Mr. Lever: I shall inquire into that.
    Mr. Dobson: Will my hon. Friend note that many elderly people would like the facility of having a tax inspector visit them at home to discuss their tax affairs, as they are extremely perturbed at having to attend before a tax officer to go through their private affairs with him? Does my hon. Friend think that that might be the answer to the problem?
    Mr. Lever: I am not sure how widespread the demand is for receiving tax officers in the homes of citizens, but I

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    am afraid that the achievement of that must await a more Utopian form of society than we have at present.

    Crosby Spring Interiors (Dividend)
    Mr. Tilneyasked the Chancellor of the Exchequer why the Treasury recommended that the dividend by Crosby Spring Interiors of 28½ per cent. for the year to 31st March, 1968, should be cut to 28·4625 per cent., thereby reducing the distribution to the shareholders from £61,479 to £61,398.
    Mr. Taverne: The company agreed to confine the increase proposed in its dividend to 3½ per cent. above the amount for the previous year.
    Mr. Tilney: For the sake of accuracy, the reduction is of £81 to the first named figure. Is this the best use of Treasury brain power?
    Mr. Taverne: This is a difficult problem. I realise that the adjustment here was a minor and, in many ways, an irritating one, but it would increase the difficulties enormously if one started arguments about how much above the permitted maximum a particular company was allowed.

    Inland Revenue Administration (Scotland)
    Mr. Eadieasked the Chancellor of the Exchequer how many representations he has received regarding the working of the Inland Revenue administration in Scotland; if he is satisfied with the present administration; and if he will make a statement.
    Mr. Harold Lever: None, Sir. I think the present arrangements work satisfactorily.
    Mr. Eadie: Is my hon. Friend aware that this question is prompted by the fact that my mailbag at least contains a large increase of protests about the machinations of the Inland Revenue in relation to people's Income Tax? Does my hon. Friend not find that, in general, that is the position?
    Mr. Lever: Enthusiasm for the activities of the Inland Revenue is not widespread either in England or in Scotland, but I believe that the present system is well understood and works efficiently.
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    None the less, if my hon. Friend has any specific suggestions on how it might be improved, I shall be glad to consider them.

    Selective Employment Tax
    Mr. Eadieasked the Chancellor of the Exchequer how many co-operative societies and kindred organisations in Scotland have made written representations to him regarding the effect of the Selective Employment Tax.
    Mr. Taverne: Twenty-two.
    Mr. Eadie: Is my hon. and learned Friend aware that the kind of answer given to these organisations is not deemed very satisfactory? Can he give any idea of when the Reddaway Committee will give some report on S.E.T.?
    Mr. Taverne: I realise that this is not very satisfactory to co-operative societies, but, with the best will in the world, it is impossible to treat them differently from other distributors. It is expected that the Reddaway Committee, which was set up especially to look at this tax, will complete its inquiry in the early part of next year.

    HOUSE OF LORDS (LEGISLATION)
    Ql. Mr. Whitakerasked the Prime Minister if he will now make a statement on his proposals to introduce legislation to reform the House of Lords.
    The Prime Minister (Mr. Harold Wilson): I would refer my hon. Friend to the statement which I made to the House on 20th June.—[Vol. 766, c. 1314–28.]
    Mr. Whitaker: But is it not only fair that we treat their Lordships' views with all due respect, in particular their resilution of March, 1910, when they said that hereditary peers should no longer sit or vote in that Chamber? Can we, therefore, no longer frustrate their wishes but bring in legislation this Session?
    The Prime Minister: All relevant considerations, including expressions of opinion as long ago as 1910, will be taken into account.
    Mr. Maudling: Can the right hon. Gentleman tell us when he expects to have this legislation on the Statute Book?
    The Prime Minister: No, Sir. I am not in a position to add to what I said last week about the timing of the Bill.
    Mr. William Hamilton: In view of the wrecking activities in the other place yesterday, will my right hon. Friend consider the possibility of extending the current Session so that we can deal with this matter forthwith?
    The Prime Minister: I do not think that it is appropriate for me to comment on a single day's activities on a Bill which has gone from this House to another place. No doubt we can consider all these questions in due course.
    Mr. Tapsell: Has the right hon. Gentleman noted that his belligerent attitude to the House of Lords is almost universally regarded as irrelevant to our present national problems and as a deliberate attempt to divert attention from them?
    The Prime Minister: I have heard that some hon. Gentlemen think this, but the hon. Member will recognise that the initiative in this matter last week was not taken on this side of the House.
    Mr. C. Pannell: Is my right hon. Friend aware that his statement last week on the House of Lords was pitched in a highly responsible tone which is out of keeping with the derisive treatment which should be accorded to it?
    The Prime Minister: I always believe, on such occasions, in taking refuge in understatement.
    Mr. Sandys: While the need to reform the position of the Second Chamber is generally accepted, does not the Prime Minister realise that, by attempting to alter our Parliamentary constitution without all-party agreement and without referring his proposals to the electors, he is setting a very dangerous precedent?
    The Prime Minister: No, Sir. This has already been before the electors twice. As for all-party agreement, there was every opportunity on this all-party committee which was wrecked by the tactical manoeuvre of right hon. Gentlemen opposite.
    Dr. Winstanley: While recognising that the House of Lords is out-of-date, unrepresentative, undemocratic and—per-
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    haps worst of all—Tory, and while reiterating our support for this reform, may I ask the Prime Minister at the same time to recognise that it would be unfortunate if the preoccupation with this reform, both here and outside, were to divert attention from the very real problems which are at present facing the nation?
    The Prime Minister: I always feel that it is good when someone like the hon. Gentleman can approach the problem in such an objective way, as his choice of words showed. There is no question of this necessary reform interfering with what must be the first priority for any Government in the present circumstances, and that is the economic situation.
    Mr. Emrys Hughes: Is my right hon. Friend aware that, when we come to dealing with the House of Lords, the guillotine will be necessary? Will he see that it is ready and sharpened up for the occasion?
    The Prime Minister: I will see that my hon. Friend is provided with suitable knitting.
    Mr. Maudling: What possible reason can the right hon. Gentleman have for saying that the inter-party discussions on the future of the House of Lords were wrecked by the constitutional action of the present Chamber?
    The Prime Minister: For the reason I gave last week; that this was quite clearly a manoeuvre which began in this House.

    MINISTER OF TECHNOLOGY (SPEECH)
    Sir Knox Cunninghamasked the Prime Minister whether the public speech delivered by the Minister of Technology to the Welsh Council of Labour at Llandudno on 25th May about Parliamentary reform is in accordance with the policy of Her Majesty's Government.
    The Prime Minister: I would refer the hon. and learned Gentleman to the Answers I gave to similar Questions on 29th and 30th May and on 11th June.— [Vol. 765, c. 241–2; Vol. 765, c. 259; Vol. 766, c. 29–30.]
    Sir Knox Cunningham: Since the Minister of Technology is so keen on reform, as the Prime Minister appears to be about another place, will he widen his horizon to include the present Government, who have suffered more by-election defeats and who are the most distrusted and detested Government of this century?
    The Prime Minister: The hon. Gentleman is, of course, entitled to his views, but they are not very widely shared— [HON. MEMBERS: "Oh."]
    Sir Knox Cunningham: That's what you think.
    Mr. Faulds: Go home, foreigner. Go home. [Interruption.]
    Mr. Speaker: Order. The hon. Member for Smethwick (Mr. Faulds) must learn to behave properly.
    The Prime Minister: I do not think that the hon. and learned Member for Antrim, South (Sir Knox Cunningham) expressed quite so fulsome a view when a whole series of by-election defeats faced his party when it was the Government; although he was, of course, speaking from his safe base in Northern Ireland.

    PRESIDENT DE GAULLE
    Mr. Martenasked the Prime Minister if he will now invite the President of France to visit this country.
    The Prime Minister: I would refer the hon. Gentleman to the Answer I gave on 2nd April to a Question by my hon. Friend the Member for Lancaster (Mr. Henig).—[Vol. 762, c. 47.]
    Mr. Marten: In the light of recent events in France, would it not be wise for the right hon. Gentleman to have direct talks with the President to learn straight from him how discontent in a country can quickly lead to rioting?
    The Prime Minister: I do not think there is any need at the present time for me to have talks with the French Head of State. As to the question of rioting, student power, and so on, the hon. Gentleman will have noticed how a certain visitor from France to this country was cut down to size when he got to Britain.
    Mrs. Ewing: Is the Prime Minister aware that this is the 800th year of the "Auld Alliance" between Scotland and France and that, by right of law, General de Gaulle can claim citizenship of Scotland. [An HON. MEMBER: "You can have him."] Will he therefore invite General de Gaulle to visit Scotland before the year is out in the hope that the good will engendered will overflow in the direction of the Prime Minister?
    The Prime Minister: I note what the hon. Lady says, but I have no doubt that the President, whose sense of history is as least as great as hers, will have noted that this is the 800th anniversary.

    IMPORT SUBSTITUTION
    Mr. John Fraserasked the Prime Minister what is the policy of Her Majesty's Government on the extension of public ownership as a contribution towards their policy of import substitution.
    The Prime Minister: Her Majesty's Government are prepared to support any measures, whether within public or private ownership, which contribute to this end, provided that they are fully consistent with our international obligations.
    Mr. Fraser: Would my right hon. Friend agree that the present level of imports shows that private enterprise has not responded to the policy of import substitution, despite all the incentives available? Will the Government redouble their effort in public enterprise to show private enterprise what can be done?
    The Prime Minister: I think my hon. Friend will see from the evidence that a number of firms in private enterprise have taken rapid advantage of the new competitive situation as regards import saving. By far the most spectacular results have been achieved in export orders, but I would not underrate what a large number of firms, both in the private and public sphere, have done in the matter of import saving.
    Mr. Heath: Is the right hon. Gentleman aware that since the nationalisation of the steel industry, imports of steel have gone up, have nearly doubled, and that exports have gone up by only a comparatively small, certainly a lesser,

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    amount? Is not this a strange contribution towards import substitution?
    The Prime Minister: The right hon. Gentleman will be aware that in the last few months, particularly since steel was nationalised, there has been a period of excess steel supplies throughout the Western world. There have been suggestions of dumping, and these will be looked into.

    KING OF GREECE
    Mr. John Fraserasked the Prime Minister if he will make a statement on his meetings with the King of Greece on his recent visit to this country.
    The Prime Minister: My met ting with the King of Greece on 27th May was both private and informal, Sir.
    Mr. Fraser: Did my right hon. Friend discuss with the King of Greece the Labour Party conference resolution about Greece—[Interruption.]—why not? —which called for the expulsion of Greece from the Council of Europe and from N.A.T.O. in an effort to restore democracy? Did he give the King of Greece any indication that we would move in the near future for the expulsion of Greece if democracy is not restored?
    The Prime Minister: No, Sir. We did not get round to that resolution in what was otherwise a very long and fruitful discussion. The King of Greece is in no doubt at all about the attitude of Her Majesty's Government in connection with the dictatorship in Greece and about some of the bestialities which have been perpetrated there. We are counting on the assurance given to us and to our other N.A.T.O. allies and Council of Europe colleagues about the timetable for a return to constitutional rule. If that is not fulfilled, Her Majesty's Government, together with their allies, will get very impatient.

    GIBRALTAR
    Mr. Molloyasked the Prime Minister if he will visit Gibraltar and invite leaders of the Gibraltarian community to Great Britain.
    The Prime Minister: I have, Sir, and so have, more recently, others of my right
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    hon. Friends. The Chief Minister and Deputy Chief Minister of Gibraltar will be coming to London in early July and my noble Friend the Minister of State for Commonwealth Affairs will be going to Gibraltar for constitutional discussions later in that month.
    Mr. Molloy: Would my right hon. Friend consider going to Gibraltar as well, since such a move would demonstrate the feeling of the people of these islands for our friends and colleagues in Gibraltar?
    The Prime Minister: I do not think that the people of Gibraltar are in any doubt about the universal feeling in this country about their future. My right hon. Friend the Secretary of State visited Gibraltar last month, and I visited Gibraltar some little time ago.
    Mr. Maxwell-Hyslop: Would not the right hon. Gentleman agree that the people of Gibraltar have enough to put up with, without a visit from him?
    The Prime Minister: That was not the response they gave me when I was there. In fact, whatever the hon. Gentleman may say, they would certainly not want to see a representative of a Government which tried to sell frigates to Spain.

    RHODESIA
    Mr. Biggs-Davisonasked the Prime Minister what is the result of his investigation into allegations that British passports have been issued to terrorists engaged in subversive activity against Rhodesia.
    The Prime Minister: I would refer the hon. Gentleman to the Answer I gave on 11th June to a Question by my hon. Friend the Member for Fife, West (Mr. William Hamilton).—[Vol. 766, c. 27.]
    Mr. Biggs-Davison: Has the right hon. Gentleman discovered how many passports have been issued to persons so that they may travel to Russia, China, Algeria and such-like countries for the purpose of being trained for guerrilla warfare against Rhodesia?
    The Prime Minister: No, Sir. It is not possible to make such an estimate. In the cases publicised in the Daily Express a month ago, to which I referred

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    at the time, it was the regime which provided the men with illegal travel documents. Our policy is to deny them to known terrorists; and any information about known terrorists would lead to a failure to issue passports, which are, in any event, issued in the first instance for six months.
    Mr. John Lee: Will my right hon. Friend withdraw the passports of those who have given aid and comfort to those who are committing treason in Rhodesia?
    The Prime Minister: No, Sir. The general position in regard to passports has been debated in the House, and it was the subject of a statement made by my right hon. Friend last week.
    Mr. Gresham Cooke: How is it established whether a political refugee from Rhodesia is or is not going to be a terrorist?
    The Prime Minister: That is the difficulty. There have been allegations made by Mr. Smith that some of those who have been granted passports, including those given travel documents by him, have turned out to be terrorists. We will look into any case that is drawn to our attention, but it is impossible to say that a man who can prove that he is a British citizen looks like or does not look like a terrorist; that is, unless one has evidence about him.
    Mr. Speaker: Mr. Faulds. [Interruption.]
    Mr. Faulds: I always welcome that sort of opposition. Would it not be wiser, to expedite the solution of the Southern Rhodesia problem, for us to take the necessary military action ourselves or aid and arm those who are willing to do the fighting? Is this not now the only way of preventing a racial war along the Zambesi?
    The Prime Minister: No, Sir. I certainly do not take the view that this should be settled by force on our part, and I do not believe that there will be any lasting solution for Rhodesia based on force on either side there.

    POPULATION
    Sir D. Rentonasked the Prime Minister whether he will cause an investigation to be held in order to estab-
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    lish what should be the optimum size of the population of England, Wales and Scotland, respectively.
    The Prime Minister: I would refer the right hon. and learned Gentleman to the Answer given on 30th April by my right hon. Friend the Minister of Health to a Question by my hon. Friend the Member for Bebington (Mr. Brooks).—[Vol. 763, c. 986–7.]
    Sir D. Renton: Did not that Answer indicate that no such studies were taking place? In view of the very large increase in population expected from now to the end of the century, should not such studies now begin in order that planning of land use may be rational and high living standards may be maintained?
    The Prime MinisterWe are in fact making studies on this question. As the right hon. and learned Gentleman knows, I do not share his extreme pessimism on on this matter, but I agree about the importance of the subject and we are studying the information available to us.

RAILWAYS (DISPUTE)
The Minister of Transport (Mr. Richard Marsh): With permission, I should like to make a statement.
My hon. Friend the Joint Parliamentary Secretary undertook yesterday that we would keep the House informed of any developments taking place in the railways dispute. There has been a change in the situation in that, as the House will know, the locomotive men's union— A.S.L.E.F.—has now joined in the industrial action a week earlier than they had originally proposed. The A.S.L.E.F. action has not so far had a significant additional effect on the operation of the railways.
The action which started yesterday is, however, still causing considerable disruption, principally from the closure of signal boxes and level crossings. These impose serious limitations on railway working. Nevertheless, the commuter services into London on the Southern Region, where passengers faced most delay and discomfort yesterday, worked rather more easily this morning. But there were fewer passengers.
To help those who came in by car the fullest use is being made of tidal flow

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traffic regulations; there are extra car parks in central areas and charges at meters in central London are suspended. Insurance companies have given their usual assistance to those requiring immediate extra cover in present circumstances, but free lifts have, as usual, been at passengers own risk.
Looking at the freight side, the picture is of reduced operations—and certainly not chaos. Special arangements for the transport of milk from the West Country and Wales, meat, fresh vegetables and fruit have all worked well while there has been no difficulty so far with freight-liners—which are running normally—or the mail. Bulk transport of coal has been slowed, but we have very large stocks at power stations and the position gives no rise to anxiety.
But we must remember that of the 200 million tons or so of goods moved by rail a year some 120 million is in small units: the more urgent elements of this, at least, can switch to road—and are doing so. We must remember that this traffic is slight by road standards: some 1½ thousand million tons or so move by road a year.
There is discomfort and inconvenience for many innocent people in getting to work, but the economy of the country is certainly not being throttled. Priority is being given to exports and the Government will continue to keep essential services going. It is the passengers who suffer now, but it is the railways and railwaymen who will suffer in the longer term if this unnecessary dispute continues.
Let me make the position clear. We cannot continue with ever-increasing railway deficits. Under the financial restructuring proposed in the Transport Bill, from 1st January the Board will no longer have the safety net of a general deficit grant. It will be standing on its own feet financially and I want to make it clear that it is quite out of the question for any settlement of this dispute to be reached on any basis other than one which the Board is satisfied it can afford.
I can only repeat what my hon. Friend said yesterday: the Government hope that the two unions will accept the unanimous award of the Railway Staff National Tribunal and get down as quickly as possible to substantive negotiations with the Board on the pay and efficiency agreements. These can yield quick and substantial pay
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increases for railway workers—ranging up to 30s. per week. Yesterday, the Board sent over to the unions proposals for the train-men so there are now before the two unions proposals which would cover virtually all their staff and bring great benefits to them and to the Railways Board.
The Board has asked them to come and talk. I have heard, within the last hour, that the Transport Salaried Staffs Association has accepted the pay and efficiency proposals for its members. It is my hope, and, I am sure, that of the House, that the other unions will respond to the offers made to them.
Mr. Peter Walker: Is the right hon. Gentleman aware that we on this side of the House welcome the news that the Transport Salaried Staffs Association has accepted the pay and efficiency proposals and hope that in the near future the other two unions will follow that example?
We welcome the Government's decision to recognise that it is vital that this dispute should be settled on a basis which the Board can afford. We also welcome the adherence to the view that the two unions concerned should adhere to the unanimous decision of the Tribunal, upon which there is a very distinguished trade union member.
May I ask two questions, which were asked yesterday, about the provisions being made? One is on the position of season ticket-holders who have to use alternative forms of transport. Is there any possibility of their season tickets being valid for this purpose?
Secondly, on the parking restrictions, very few people know the exact boundaries of Tower Hamlets and other such London boroughs. Would it not be possible to make these facilities available in all London boroughs?
Mr. Marsh: I am grateful to the hon. Member. As he said, both questions were asked of my hon. Friend yesterday. He gave an undertaking that we would look into the possibility of both of them. This is being done and I shall let the hon. Member know as soon as we have the answer.
Dr. John Dunwoody: In view of the almost complete stoppage of main line traffic to such peripheral parts of the country as Devon and Cornwall, will my

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right hon. Friend make special arrangements for industrial and agricultural produce to be brought out of those areas?
Mr. Marsh: I recognise the special problem of the West Country at present. I repeat what I said: there is no evidence so far that freight traffic is, in fact, suffering particularly unduly. Freightliners are running full out. For the transport of goods there are alternative means and a large proportion of these goods are still being transported.
Mr. G. Campbell: Do not the last words spoken by the right hon. Gentleman about the transfer of freight from rail to road illustrate the folly of imposing on industry the restrictions in the Transport Bill on alternative road transport, with complicated and time-wasting procedures?
Mr. Marsh: The hon. Gentleman is returning to a well-tried theme. I can only say that no restrictions are placed on the transport industry in the Transport Bill in terms of road haulage except in so far as British Railways can provide a service as good or better in terms of cost, reliability and speed. The present situation is one of the things which will be argued against the industry.
Mr. Winnick: Is my right hon. Friend aware that in view of the chaos so far caused, certainly on the Southern Region, everyone will hope that negotiations can be started again at the highest level? Will he accept that unless the railwaymen felt that they had a deep, long-standing and justified grievance they would not have begun the action they took in the last few days?
Mr. Marsh: I think that the position is very much more complex than that. We have a situation in which negotiations were referred to arbitration and the arbitration board unanimously came down as being opposed to the agreement. The Railways Board is perfectly willing to meet the unions at any time and has put forward proposals in the very recent past. I can only hope that the two sides will get together to reach an agreement, because it cannot be to anyone's interest —least of all the interests of railwaymen and the industry—to prolong this dispute. All, on both sides, should recognise that.
Captain Orr: In view of the vulnerability of the Northern Ireland economy to any failure in sea or rail transport, will the right hon. Gentleman keep a special eye on this situation?
Mr. Marsh: There is, I understand, at the moment no evidence of dislocation of sea services, but the whole situation has to be watched very carefully.
Mr. Roy Hughes: Does my right hon. Friend agree that this dispute has at least shown that the operation of systematic overtime working is a very poor way to run a railways system?
Mr. Marsh: Of course, the answer to this is to pay rates of pay which encourage men into the industry. There are, I repeat, available increases of up to 10½ per cent. and more for the asking for the men in this industry.
Mr. Lubbock: Is the right hon. Gentleman aware that everyone welcomes the statesmanlike attitude of the T.S.S.A., which set such a good example to the N.U.R. and A.S.L.E.F.? Does he feel that if the solution were put to the membership of these two unions they would be disposed to accept it, whereas the leadership have declined to do so?
May I ask the right hon. Gentleman what additional measures he will take to ensure the free flow of traffic in Greater London, and whether he can make available additional parking spaces and extend the restrictions on waiting during the rush hours in the morning and evening?
Mr. Marsh: Most of this has already been done. We are examining the position with the police and local authorities to see what more can be done. On the question of the general dispute, I think that it would be a mistake for the House either to over-simplify the problem in relation to the unions, or, if I may say so, to get too deeply involved in inter-union differences. It is a very complex set-up. Having put the case, it is better that the unions together should come to an agreement with the Railways Board, as I am sure they are able to do.
Mr. Robert Howarth: Would my right hon. Friend please note that it is not just in the Southern Region where there are special problems? Many Lancashire

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towns, including my own constituency, start their holiday fortnight this weekend, and are already faced with severe difficulties caused by the dispute. Is it possible to give instructions to the Railways Board to have a look at this problem?
Mr. Marsh: I am sure that the Board will have taken note of the problem raised by my hon. Friend, but, obviously, a dispute of this sort is bound to cause inconvenience to large numbers of people. This cannot be avoided. The only answer is to reach a settlement as soon as possible.
Sir J. Rodgers: Does the right hon. Gentleman realise that certain sections of the community suffer much more than others, particularly my own constituency, where about 30 per cent. commute to London? Will he therefore take urgent steps to try to start negotiations?
Mr. Marsh: It must be clear that the dispute is now in its second day, and that there has been no stoppage of negotiations. The two sides consist of very rational people. They have not as yet been able to reach agreement, but they are in contact and offers are being made. This is the only answer to the problem.
Mr. Spriggs: Is my right hon. Friend aware that while prices continue to rise the workers in the industry are bound to try to maintain the real value of wages?
Mr. Marsh: I am very much in favour of them maintaining the real value of wages and increasing them, but I repeat that this is an industry where increases are available at present of 10½ per cent. and more. I would like to see these men paid more. It is a question of reaching an agreement; but the amount paid out has to be paid for by somebody, and under the Transport Bill there is no longer a method by which the Government can make money available.
Mr. Gresham Cooke: Would the right hon. Gentleman look into the particular complaint of my constituents, who are struggling hard to get to the City via Waterloo? It is that while the parking concessions in central London may be good, those in the City are inadequate. The City should do more by way of parking concessions to enable people to motor into the City.
Mr. Marsh: The hon. Gentleman is clearly the chairman of the "National Society for the Prevention of Cruelty to Civic Commuters". I will look into the matter he raises to see what can be done.
Mr. Bagier: I am sure that my right hon. Friend would not like to oversimplify the situation by saying that there is 10½ per cent. for the taking. Would he not agree that one of the basic problems is that productivity deals have in the past meant, and probably will in future always mean, a sharp cut-back in the number of staff employed, leading to redundancies?
Mr. Marsh: I certainly would not want to over-simplify this matter. It is a very complex issue, on all sides. What will endanger the security of these men more than anything is a falling off in the performance of British Railways, just at the time when they have a golden future. I certainly agree with my hon. Friend that it is a very complex issue.
Sir C. Osborne: Would my hon. Friend agree that the longer the dispute lasts the greater is the danger that the traffic being lost from the railways to the roads will never go back to the railways, thereby making the position of the railway workers worse? Cannot he get that over to the unions?
Mr. Marsh: As my hon. Friend said previously, the position is more complex than that. Now that the railways have had their deficit removed, they are starting with a clean sheet. They have an enormous opportunity in the future, and the extent to which their finances and their economies are endangered at the present time cannot be of any benefit to the railwaymen.
Mr. James Hamilton: Is my right hon. Friend aware that if a signalman goes off sick he receives more for being off sick, if he has a family of two, than for working? With that in mind, does he agree that now is an opportune time to introduce a minimum wage which, at present, is about £16 a week?
Mr. Marsh: The question of a minimum wage is not for me. I repeat, these negotiations are between the Board and the unions. I am sorry to be tedious in terms of repetition, but there are

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sizeable increases available which cannot be made available under the present system unless either there is an increase in productivity which has to be negotiated in order to pay for it, or, alternatively, a further increase in fares. There is now no method of deficit financing.
Mr. Edward M. Taylor: Can the right hon. Gentleman say how many specific productivity proposals have been put to the unions during the course of negotiations and how many have so far been accepted? Could the Minister also say what is the situation in regard to rail movement in Scotland?
Mr. Marsh: The position of commuters in Scotland was this morning somewhat better than it was yesterday. Speaking from memory, in Glasgow yesterday the commuter stoppage was about 75 per cent. and today, I think, it is about 50 per cent.
In reply to the hon. Gentleman's first point, many proposals have been made backwards and forwards, on both sides. If I may say so with respect, the House would help no one if it started taking sides in the middle of negotiations. Both sides have made many proposals, and so far neither side has been able to agree with t'other. I can only hope that situation will not last for long.
Mr. Manuel: Is my right hon. Friend aware that the railway industry is low-paid and that the basic proposal affects only the lowest of the low-paid workers? This raises big problems with the trade union leadership which I hope he appreciates.
Mr. Marsh: I appreciate the problem very much; it is a serious one. As I said, yesterday the Board sent to the unions proposals for the train-men, so there are now proposals before the two unions which would cover virtually all their members. The difficulty is the major point which has to be faced: where does the money come from? It cannot now come from deficit financing and, if this is so, it can only come from increased productivity. The Board's proposals are designed to meet this problem. I am certainly in favour of seeing the railwaymen get more money.
Mr. Bidwell: May I draw my right hon. Friend's attention to the sympathy which was shown to the railwaymen's immediate case in the House yesterday and ask him, in the event of stalemate remaining and keeping the two sides apart, whether he personally will intervene to try to bring the two sides together so that negotiations can continue?
Mr. Marsh: There is no reason why these two groups of very experienced negotiators cannot settle this themselves. They know more about the industry and the problems than any outside bodies, and have had a lot of experience of negotiations together. I am in no doubt at all that, given good will on both sides, which has always been there in the past, they can find their way out of this difficulty.
In the end, of course, it is British Railways who have the job of finding the money and managing the industry. I have complete confidence in the ability of the negotiators on both sides to get themselves out of what is an incredibly difficult situation for both of them.

REPRESENTATION OF THE PEOPLE
3.50 p.m.
Mr. Evelyn King: I beg to move,
That leave be given to bring in a Bill to strengthen the links which ought to exist between Parliament and People.
I suppose that we all recognise how conformist is the influence of the Palace of Westminster and how rapidly even the youngest hon. Member begins to assume that what is now is what must be right. It is, therefore, good that sometimes these conformist opinions should be challenged.
For that reason, I was glad to see the Minister of Technology declaring that Parliament could not go on in its present form for ever and that marking a ballot paper with a cross every five years was insufficient. Indeed, he even said that if there was not a change there could be bloodshed, though I regret that he should have referred to bloodshed. However, I thought that the discussion was worth opening. I suspect that few of us, including even the Prime Minister, are

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friends of referenda. However, I range myself on the side of change.
We now have five-year Parliaments although, in the long eye of history, we have had them a short time. Following Stuart abuse of the system, it was in 1694 that three-year Parliaments were introduced. In 1715, there were seven-year Parliaments. Then there was the Parliament Act of 1911, which not only abated the power of the Upper House, but, as part of a package deal, also reduced to five years the length of a Parliament in order to restrain the Lower House. In the context of the Prime Minister's current proposals, when we are allowed to know what they are, I suggest to hon. Members that here is a precedent. In both Australia and New Zealand there are still three-year Parliaments, and the system works well. Tasmania has five-year Parliaments, reducible to three in certain circumstances. I suggest that that is a device which has much to commend it.
We must recognise that, since 1911, communications have strengthened and public opinion has become much more volatile. In 1968, there is evidence of growing dissatisfaction, world-wide in character but evident in England from by-elections, polls, strikes, student unrest and demonstrations, and Scots, Welsh and even Cornish nationalism. I suggest that each of these bears witness to the feeling of our people that they are too little able to participate in our decisions, that they feel remote from the nature of our discussions and, perhaps above all, are asked for their opinions too infrequently. We ought not to disregard that evidence, because an unrepresentative Parliament long continued is a mischief.
In the 19th century, the Queen had some influence on the date of a Dissolution. That is no longer substantially so, nor can it be revived. In the United States, there is the Supreme Court. We have no equivalent. There are those who believe that in certain circumstances the House of Lords has a large function in this context. That view is now opposed.
If we in the Commons deny influence to any other constitutional organ, then, in equity, the remedy must lie with ourselves. If the hon. Member for Fife, West (Mr. William Hamilton) were pre-
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sent, I would say to him that those who are the first to wish to diminish the influence of the Upper House must also be the first to devise an alternative remedy. It is for them to attach to that ringing phrase, "representation of the people", a real meaning and show that we intend it in deed and in fact.
It might be supposed that those arguments would lead me to a demand to follow Australia and New Zealand and have three-year Parliaments. I do not altogether take that view. We all recognise the need for any Government to take firm and sometimes unpopular actions, and a wise Government of any party will face the nation with the less popular part of their legislative programme while their mandate is fresh and their image untarnished.
Mr. Gladstone took the view that, if mid-term by-elections or other evidence showed demonstrable unpopularity, it was the Government's moral duty to consider resignation. But Mr. Gladstone was considering only confidence at home. We now have to consider our credit abroad and our foreign policy overseas, both of which are weakened by a lack of confidence at home. Nor was it then necessary, as it now is, for a confident and strong Government to dominate in the sphere of industrial disputes. In this decade, a weak Government, because they are weak—whatever the reason for their weakness—can effect economic disaster.
There have been occasions when a British Government have sought a General Election not because of a Parliamentary defeat, but because their Administration has been discredited and because their continuance in office, with all the repercussions which I have tried to describe, was contrary to the national interest. Such occasions are rare, but they exist. How is such a point in time to be identified? That is our problem.
My Bill would provide that the normal run of a Parliament would continue to be five years, subject to one small proviso. If, during the first three years, there are no less than 20 by-elections in which the average swing away from the Government has exceeded 15 per cent., then, before the commencement of the fourth year, a new Parliament will be called. Such a position has not yet arisen and it may be that it never will. It has not arisen at any time in the last 50 years,

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and probably longer. But should we not take precautions? It could arise during 1969.
If it were to do so, it could only be because the Government have less support than any Government in living memory, that their discredit is total and that they have been discredited over a period of years, with all the dire results which would follow therefrom both at home and abroad. It may be argued that, if such exceptional circumstances were to arise, a Prime Minister could be depended upon to take appropriate action himself. Equally, it can be argued that so great a load of responsibility is too heavy for any one man to bear and that it should be removed from his shoulders. If my Bill were approved, the representation of the people, which we in this House all seek to maintain, would be reassured not by the decision of any individual, but by the impartial nature of statistical facts accurately computed.
3.57 p.m.
Mr. Raymond Fletcher: I rise to oppose the Motion. I am still not very clear what it is that I am opposing. The rather sketchy outline of the projected Bill seemed to be nothing more than an elongated demand for a General Election more appropriate for a Question to the Prime Minister than for a Private Member's Bill.
If I were to give reasons why we should not have a General Election now, and do not need a General Election now, and why I think that the result of a General Election now might provide some shocks to the hon. Member for Dorset, South (Mr. Evelyn King), I should not be talking to this Motion, which I am rather anxious to do.
When we in this House debate how we represent the people, the precise machinery by which we are elected and the forms in which we carry out our duties as representatives, we seem to go through cycles lasting about 30 years. The last occasion when this House was really excited about the problem was in the 1920s, when there was a rash of Private Members' Bills. Some of them were very peculiar Bills and could not be anything other than peculiar being sponsored mainly by Conservative hon. Members.
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There were proposals to restrict the franchise, to deny the vote to former conscientious objectors, to deny the vote to people who were naturalised citizens, and I believe that there was one proposal, considered in 1928, at Cabinet level, to deny the vote to paupers. Many of these Measures were instigated by private Members, but only one succeeded. It is rather an interesting commentary on the way that the House tends to produce results to note that a Private Member's Measure in 1927, which was accepted by accident by the very Conservative Home Secretary and nearly produced riots in the Cabinet, extended the franchise to women at the age of 21.
Most members of the then Cabinet were as agitated as the hon. Gentleman seems to be agitated now. Certain members of their Lordships' House were even more agitated. Early in 1927, Lord Birkenhead wrote to Lord Irwin saying:
"The Cabinet went mad yesterday and decided to give votes to women at 21."
It was argued in Cabinet—we have Sir Winston Churchill's testimony to this effect—that the other members of the Cabinet strongly objected to the undue influence exercised upon Sir William Joynson-Hicks by that dynamic character Lady Astor. Hypnotised by that remarkable lady, Sir William conceded what his Cabinet colleagues said he should not have conceded. In the words of Sir Winston Churchill, never was so great a change in the electorate achieved so incontinently.
I rather think that when we debate a Motion of this kind—in view of my attitude to the next business, I should be happy to debate the Motion for the next two days—we should try to avoid the eccentricities of those who occupied the House in the 1920s.
The basic charge that the hon. Gentleman levelled against this side was that we are unpopular. If unpopularity is a crime it carries with it its own punishment, and, therefore, there is no need for any other. If unpopularity alone is an indication that those who incur it and who perhaps deserve it are no longer fitted to exercise effective authority anyhow, it is a very strange doctrine indeed and it comes even more strangely from the Opposition. I might take it and argue against it if it came from Mr. Cohn-Bendit, or even Tariq Ali, but it comes

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rather strangely from a Conservative Member.
Consider the record. Sir Winston Churchill was not always as popular as he eventually became. In 1922, he suffered a terrible misfortune in his own eyes: he was defeated at Dundee by what Sir William Gilbert would have called that singular anomaly, a prohibitionist. I could imagine that Sir Winston must have considered this the most unkind cut of all. Two years later Sir Winston sustained a similar defeat in rather ignominious circumstances not too far away from the Palace of Westminster itself. Throughout his life he had to face those two imposters—triumph and disaster— with equal fortitude.
If popularity is the only thing that confers legitimacy either on a Government or on a member of a Government, let us consider this unpalatable fact from history. Probably the most popular Member who ever sat in the House was Mr. Horatio Bottomley; he enjoyed enormous popularity until an enterprising journalist revealed that he was a swindler. Another highly popular character in British political history was Lord George Gordon, who enjoyed the undiluted enthusiasm of the London mob until it had to be pointed out that the man was totally insane.
If we are to adopt the criterion of popularity as the only one we shall have some very mysterious figures indeed occupying both Front Benches. We might see Mr. Mick Jagger exercising authority as the Minister of Transport and Mr. Engelbert Humperdinck acting vigorously as the Foreign Secretary. We might, indeed, have to endure Mr. Tom Jones as Prime Minister.
If popularity is the only thing that matters, it is a very bad guide, because, as the hon. Gentleman said, very often unpopular decisions are the right ones. I wish to introduce in evidence the ex-
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perience of his own right hon. Friend, who from time to time, by permission of Lord Salisbury, is permitted to lead the Opposition. There was a time, when the right hon. Gentleman the titular Leader of the Opposition was in office, when he introduced a Measure to abolish retail price maintenance. It was not popular in his own party. It was not popular in the country. But it happened to be the right thing to do at that time, as we have subsequently seen.
If it is validly argued that only popular measures are valid measures, that only popular Governments are legitimate Governments, we are faced with an entirely different proposition: the hon. Gentleman is arguing for no Government at all. This may be what is concealed within this innocuous Motion and in the Bill which the hon. Gentleman has in draft. I say deliberately from this side of the House that I am to some extent speaking from the cumulative experience and the traditions of the House itself—a rather unfamiliar posture for me. I accuse the hon. Gentleman not of interpreting the ideology of the six separate leaders of the Opposition in his Motion and in the projected Bill. There is no such ideology. There is nothing specifically Conservative, there is nothing specifically Liberal, there is nothing specifically democratic, in trying successfully to do by this Measure what Mr. Guy Fawkes signally failed to do by other measures in 1605.
I accuse the hon. Gentleman of presenting to the House not the ideology of Conservatism, not the ideology of tradition, not the ideology of the evolving organic society, but the ideology of Guy Fawkes; and as such I ask the House to reject the Motion.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and negatived.

ORDERS OF THE DAY

  PRICES AND INCOMES BILL
  As amended (in the Standing Committee), considered.
  Mr. Speaker: I have had posted my provisional selection of Amendments up to Clause 8. I think that is as far as we might hope to go today.
  4.10 p.m.
  Mr. Michael Foot: On a point of order, Mr. Speaker. I wish to raise a matter relating our procedure today. I fully understand the situation as regards the selection of Amendments and the posting of the list in the Lobby for the convenience of Members, and I fully realise that an impossible situation would be created if the selection of Amendments were to be a matter of controversy on every occasion at the beginning of the Report stage of a Bill. But I wish to raise what I believe to be a special question of procedure arising on the present Bill.
  Many of us, on looking at the selection of Amendments—I do not think that it is putting matters too moderately—were deeply shocked by the selection. Many of us on this side who find that none of our Amendments is selected feel that this is an outrage on the procedure of the House. We wish to seek a remedy. I am not asking you to pass judgment now on particular Amendments, Mr. Speaker, but I wish to suggest a procedure which could overcome the feelings of outrage which many of us on this side feel.
  I have in mind, in particular, the failure of the Chair to select Amendments dealing with the penal Clauses in the Bill, the Clauses which many of us regard as the most offensive parts of it. As none of these Amendments, either from this side of the House or from that, dealing with the penal Clauses have been selected, I would suggest to you, Mr. Speaker, that you could reconsider the matter and make a fresh announcement to the House about your selection after we have dealt with the new Clauses.
  The practice of placing in the No Lobby a statement of Amendments selected is not a governing factor; it does not create a situation in which the Chair is not able to change its selection. I would ask you
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  respectfully, Mr. Speaker, to take into account the very strong feelings on the matter on this side and one or two other points which I now add.
  Many of my hon. Friends put down an Amendment to the Motion for a Second Reading which we hoped would be selected. One of the prominent parts of our Amendment referred to the penal Clauses of the Bill, and, if that Amendment had been selected, we should then have been able to speak and vote on that aspect of it. However, in your discretion, Mr. Speaker, that Amendment was not selected. In the circumstances, many of us hoped that we should have opportunity to debate and vote on the subject when it came up on Report.
  It was right and proper that the matter should be debated from certain aspects in Standing Committee, but it is right also, we believe, that Amendments should be put down on Report. In 1966, when the earlier Measure same before the House dealing with prices and incomes, which incorporated penal Clauses for the first time, there was an opportunity provided on Report for Amendments dealing with certain aspects of the penal Clauses to be debated then, and many of us fully expected that that precedent would be followed, or partially followed, in the selection of Amendments on this occasion.
  Therefore, Mr. Speaker, I ask that you undetake to make a fresh announcement to the House about the selection of Amendments after we have dealt with the new Clauses, taking into account especially, I hope, the arguments which I have put about the penal Clauses, Clauses which no hon. Member on either side will dispute are of great importance, extending for a longer period than ever proposed before in British history the application of provisions of this nature.
  I would ask that you make such an announcement, Mr. Speaker. If you do not, as far as I can see the only remedy which we should then have—I should like your guidance about it—is the remedy which we would not wish to seek that is, to put down a Motion about the selection of Amendments. I ask you Sir, to consider the points I have put and to undertake to make a fresh announcement about selection after we have dealt with the new Clause.
  4.15 p.m.
  Sir Douglas Glover: Further to that point of order, Mr. Speaker. I support what has been said by the hon. Member for Ebbw Vale (Mr. Michael Foot). It seems to me that, in a great many of the debates which we have recently had, the hard core of opposition to the Government's proposals has been unfortunate in not being selected by the Chair. I accept that the Chair has a fantastically difficulty task, but when there is a sharp division of view in the House, as there is in this case, I feel that the hon. Member for Ebbw Vale makes a powerful request when he asks that the matter be looked at again, if the Chair could agree to do so. Otherwise, the views which a great number of hon. Members hold about the Bill cannot be debated, because the Clauses on which they could be debated are not selected by the Chair.
  I do not wish to delay the House. I wish only to show that the views put forward by the hon. Gentleman are not held only on one side of the House.
  Mr. Stanley Orme: Mr. Speaker, I do not doubt that you take full account of the serious view which we hold on the penal Clauses. Some of us wish to vote them out. Amendment No. 3, in the names of my hon. Friend the Member for Derbyshire, South-East (Mr. Park), several others of my hon. Friends and myself, and Amendment No. 6 in the name of right hon. and hon. Members opposite go to the centre of this controversy. In Standing Committee, the penal Clauses were debated for two whole sittings. When they were put to the vote, the Government survived the Division by only one vote.
  Some of my hon. Friends and I feel that this is a matter of such consequence that we must ask you, in all sincerity and in no spirit of personal criticism, Mr. Speaker, knowing full well the difficult job which you have and the criticism which the Chair sometimes receives about its selection, to reconsider the matter on this occasion. We realise that, at the end of the day, you have to make the selection, but we would urge upon you, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has done, that, if it be possible, you should consider the question again.
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  We regard the penal Clauses as the kernel of the Bill in relation to penal sanctions against trade unions. We feel that, in a democracy, the right to express an opinion on the matter and, if necessary, to vote should be allowed. I urge upon you, Sir, the representations which my hon. Friend has made.
  Mr. Robert Carr: Mr. Speaker, we on this side appreciate the difficulty of your task in this matter. I wish only to comment on one point raised by the hon. Member for Ebbw Vale (Mr. Michael Foot) and his hon. Friend the Member for Salford, West (Mr. Orme). I refer to the penal Clauses. The introduction of criminal law into this field is a matter of very great importance. Although it has been debated in previous years and in Standing Committee on the Bill, it is so serious and central that, with great respect, I would ask you to give serious consideration to the need for further debate on that one point.
  Mr. Ian Mikardo: Mr. Speaker, like the right hon. Gentleman the Member for Mitcham (Mr. R. Carr), I had the privilege of being a member of the Standing Committee, and I wish to make a respectful submission to you based on experience in the Committee.
  I am well aware that the general principle which is applied by the Chair— obviously, it has a great basis of sub-Stance—is that matters which have been adequately ventilated in Standing Committee are not as a rule brought before the House on Report.
  Looking through the Amendments which you have selected in your provisional list, I can see that broadly that is the criterion you have applied. I put it to you with great respect that it has not been universally applied. Some Amendments in the names of hon. Members opposite, but none in the names of my hon. Friends, have been selected although they were ventilated in Committee. I make no complaint about that. I am not asking for non-selection of the Amendments of hon. Gentlemen opposite. They are good Amendments and deserve to be considered.
  The Bill is an extension in time of the 1966 and 1967 Acts, but it goes beyond them in a number of respects.

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  It would be wrong if only 35 hon. Members were able to consider the major extensions of those Acts. For the first time, the Bill includes penal provision and the introduction of the criminal law into industrial relations. For the first time, it includes workers covered by wages councils and agricultural wages councils, that is, the lowest-paid workers whom the policy is proposed to protect. The Bill operates more quickly and goes on longer, and the standstills are longer in the previous Acts.
  As my hon. Friend the Member for Ebbw Vale said, some of my hon. Friends put down an Amendment on Second Reading in the hope that we might be able to ventilate and express with our votes our opposition to some of these features. That was prevented, doubtless for good reasons.
  I am opposed to the whole Bill, but there are some of my hon. Friends who, while not opposed to the whole of it are opposed to one or two features. It will be a shame if they were put into the position in which the only way they could express their distaste for some features would be to vote against the Third Reading. There were only two hon. Members from this side of the House who were able to speak and vote that way in Committee, because there were only two who felt like that about the penal Clauses and the inclusion of the agricultural and wages council workers. They were my hon. Friend the Member for Darlington (Mr. Ted Fletcher) and I.
  There are more than 300 hon. Ladies and Gentlemen on this side of the House, and although I think that I am pretty good I would not pretend to be a spokesman for all of them. It would be wrong if consideration of these vital new matters were limited to only two hon. Members on this side, and, for that matter, only 14 Conservative hon. Members and one Liberal hon. Member.
  We are, so to speak, in a situation in which there is a difference of degree so great that it has become a difference in kind. Therefore, I add my voice to those on both sides of the House who have urged you, Mr. Speaker, to be kind enough to have another look at this during the next hour or two, whenever
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  you have the leisure so to do, and give us the benefit of your further consideration.
  Sir Harmar Nicholls: I do not dissent from the points put, and hope that you will be able to give further consideration to the matter, Mr. Speaker. But I was pained to listen to the unparliamentary language in which the hon. Member for Ebbw Vale (Mr. Michael Foot) put his point to you. I do not believe that it should be allowed to stay on the record just because the words which I believe unparliamentary were submerged in a welter of other words. To suggest that the Chair was being outrageous, as he did; to suggest that the Chair acted improperly, as he did; to suggest that the Chair was unfair, as he did; is, I believe, well on the way to making this an assembly where we cannot talk rationally and sensibly on matters which should be properly discussed. While I in no way dissent from the point hon. Members have been trying to make, I believe that the Chair must protect itself from that sort of language when a point of order is put to it.
  Mr. Trevor Park: We are accustomed to the eccentricities of the hon. Member for Peterborough (Sir Harmar Nicholls), and, therefore, I shall not take up any time in commenting on them. The House will know what worth to place on what he said.
  I support the point my hon. Friends have made in asking you, Mr. Speaker, to reconsider the matter. The penal Clauses are central to the Bill's whole purpose. They are extremely controversial and extremely unpopular. In the opinion of many of us, their effects both economically and politically, could well be disastrous. It would be entirely wrong if the House were not afforded an opportunity of debating these Clauses on Report, and I hope that you will look at this point, in particular.
  It is also true that my hon. Friends and I have a distinctive point of view on many other issues connected with the Bill. It was in order to give expression to it that we put down our Amendments. Not one of them have been selected. Therefore, we are in a position where that point of view will not be able to be adequately expressed.

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  You are aware, Sir, as I am, that outside the House, in recent years, there has been a great deal of criticism of its effectiveness. Both its dignity and its reputation have been called into question and increasingly large numbers of people have asked whether the House can any longer be regarded as giving an adequate expression of opinions held outside. It is important that no action of ours should be allowed to give further validity to that point of view. That is why I hope that you will feel able to accept the suggestion of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), and make an announcement when the new Clauses have been discussed.
  Mr. John Biffen: May I associate myself with the point of order of the hon. Member for Ebbw Vale (Mr. Michael Foot). I assure you, Mr. Speaker, as I am sure was the sentiment of the hon. Gentleman and all who have spoken in his support, that this is in no sense in hostility to the Chair, because we appreciate the immense difficulties of reaching the kind of decisions associated with the choice of Amendments on Report.
  I suggest, particularly in view of the immense importance attached on both sides of the House to the penal provisions, and of the present delicacy of relationships between the House and another place, that it might be singularly unfortunate if the only opportunity this House had to debate the penal provisions was in considering Lords Amendments. I hope that that might be among the points that might weigh with you in the reflection suggested by the hon. Member for Ebbw Vale.
  4.30 p.m.
  Mr. Speaker: Perhaps I might deal with all the points of order now.
  I take no exception at all to the raising of these points of order, or anything said by the hon. Member for Ebbw Vale (Mr. Michael Foot) or any other hon. Member. If the hon. Member for Ebbw Vale were to think that Mr. Speaker was in any way unfair in his selection, and that he was actuated by anything other than proper procedural motives, it would be his duty to put a Motion on the Order Paper criticising Mr. Speaker.
  The general issue is exceedingly difficult. The House sends a Bill to Com-
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  mittee, the Committee discusses the Bill, and when the Bill is before the House, in Committee, all kinds of Amendments are in order. The Report stage is quite a different stage from the Committee stage, and, while it would not be in order for the Chair to go seriatim through the Amendments which have not been selected, they have not been selected for the traditional parliamentary reasons which distinguish the consideration of Amendments on Report as compared with Amendments in Committee. I was interested to hear the hon. Member for Poplar (Mr. Mikardo), who seems to have found some Amendments that I have selected which I should not have selected because they are not new. I do not think that that is quite correct. I will of course take note of the representations which have been made to me.
  The difficulty is that there are three strands of opinion in the House. I am quite aware of them. I have studied the Committee Report and each of the Amendments on the Notice Paper. I am aware of the disappointment which hon. Members always feel when their own Amendments are not selected, either in Committee upstairs or on Report. As the hon. Member for Poplar pointed out, there is a point when detail almost develops into degree, when quantity almost becomes quality. We had an example of that when we took on the Floor of the House, on consideration of the Criminal Justice Bill, a matter which had been debated at great length upstairs and which was yet selected for debate on Report.
  I can give no immediate undertaking, but I take note of all the points raised, and if I add to my selection I will let the House know.
  Mr. Michael Foot: I thank you for your statement, Mr. Speaker. I certainly meant no reflection on you. Indeed, I would have no right to make any reflection on your fairness. My reference to a sense of outrage was an accurate statement of the feelings of hon. Members when they saw that, if this procedure were followed, they would be denied the opportunity of speaking and voting on the Report stage on what they regarded as a most essential part of the Bill. If you are to make a further statement, I am most grateful.
  May we take it that your statement will be roughly at about the time that

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  we finish consideration of the proposed new Clauses, so that hon. Members may have the opportunity of seeing what procedure is to be followed? We are particularly concerned about Amendments No. 3, No. 4 and No. 6, and the earlier you were able to make your further statement the more convenient it would be to us.
  Mr. Speaker: I shall be back in the Chair, as is usual, at 6.15 p.m., and probably by that time I will have had the opportunity to consider the points which have been raised.
  I took no offence at the use of the word "outrage". It was political outrage—the outrage of conscience of hon. Members who very much want to discuss at the Report stage what was discussed upstairs in Committee and find themselves unable procedurally to devise a way by which they can do it. They could have perhaps found ways of doing so. But I will look at the whole matter again.

  PRICES AND INCOMES BILL

    New Clause 1
    SUSPENSION OF ORDERS WHERE AFFECTED FIRMS REACH NEW PRODUCTIVITY BARGAINS
    Where a firm employing workers directly affected under an order notifies the Minister that it has reached a new productivity bargain subsequent to the making of the order, then the Minister shall be required forthwith to suspend the order pending a review and report by the N.B.P.I, of the new wage structure involved. No renewal of the order may take place until the N.B.P.I. has reviewed and reported on the change.—[Mr. David Howell]
    Brought up, and read the First time.
    Mr. David Howell: I beg to move, That the Clause be read a Second time.
    The purpose of the Clause is to ensure, perhaps in rather optimistic mood, what the Government mean when they talk of productivity in the context of the Bill. We had a brief and, to many of us, not satisfactory debate upstairs on the subject. Yet it is one on which the Government have said, if not done, a great deal. Indeed, the right hon. Lady the Minister has argued from the first that the Bill has a new economic parentage, that it is different, in ways which I hope will be specified, from the
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    past prices and incomes legislation, having built into it engines for ensuring higher productivity and earnings.
    In an interview with The Sunday Times this week the right hon. Lady said that people in industry were saying that this was the lead they had been waiting for and that the talking had to stop and action taken. She commented:
    "I have been saying this for a long time: we've got to get down to the grass roots."
    And she went on to talk about the services of the new Productivity Division of her Department, which, she said, would snowball.
    We now seek to find out how all this will work. We want to ensure that, when there is all this talk about productivity bargains and criteria for use by the Prices and Incomes Board, sympathetic consideration may be further extended to a time and set of happenings after the application of an Order. In other words, we argue that, after an Order has been placed affecting particular firms or a single firm, there may well be a time when, as a result of new processes or new machinery on the shop floor, it will be necessary to reorganise the wage structure so as to relate it to productivity in new forms through different processes and in many cases to grant substantial wage increases.
    We want to ensure that, if this situation comes—presumably the Government would like it to be brought about—and substantial wage increases are sought for particular workers during a period when an Order is in force, the structure can be reviewed and reported upon. If the Government accept the new Clause, it will show that not only are they serious about trying to encourage productivity bargains at the time they learn about wage increases, but are keeping a continuing watch to ensure that productivity bargains are not frustrated.
    The other aspect is the question of how the new Productivity Division is to work. The right hon. Lady places her major emphasis on productivity in her argument for the Bill. In our brief debate on the matter in Committee, the question was raised of exactly how and when these able men appointed by the right hon. Lady were to get to the grass roots and what they were to do there. It transpired that the main way productivity is to be

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    tackled is through the labour side— through labour productivity and, therefore, through the reorganisation of manpower in particular firms, regardless of the structure and capital structure and management of those firms. I am sure that I am not misquoting the Under-Secretary of State.
    The question was then raised as to which firms were to be helped, and we got no satisfactory answer. The question concerned whether the firms to be helped were those which already have productivity bargains, with high productivity and high wages, or whether this service would be applied to inefficient firms. If it was to be inefficient firms, was this not a rather bizarre misdirection of the right hon. Lady's energies?
    The Joint Parliamentary Secretary argued, in return:
    "… those who are at present employed in efficient firms, because of their efficiency have limited scope for increased productivity, whereas those employed in inefficient firms, because of their inefficiency, have greater scope for increased productivity."—[OFFICIAL REPORT, Standing Committee F, 30th May 1968; c. 406.]
    This would seem to present us with a world in which there are inefficient firms with low-grade or mediocre management, and that it is to these, where there is low productivity and inadequate thrust towards productivity bargains, that the whole attentions of the right hon. Lady's Department should be turned. This seems to be an extraordinary interpretation of the duties of the Government. Productivity is not just to do with the labour side, but is an amalgamation on outcome of the really intelligent and skilful combination of capital, equipment, labour, talent and management skill.
    To move to a firm which is inefficient, with inefficient or mediocre management, and imagine that new ways of organising the labour side will produce efficiency, is to misunderstand what productivity is all about, or what is the outcome of the industrial processes which lead to higher output, with the same or lower resources, and, therefore, lower unit costs. It was this deep doubt among my hon. Friends about the Government's approach to productivity, underlined by the right hon. Lady's talking about going to the grass roots, that led us to put down this Clause.
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    We have always argued that productivity is not something that comes by issuing Girl Guide calls for more productivity all round. It does not come from going to the grass roots and concentrating on one side of industry. It flows from management thrust, from new ideas, innovation, from the application of new skills and talents on all sides. If the Clause were accepted, there would be a chance, where firms managed to mobilise enough incentive to strike productivity deals, that they would not be met with a blank refusal for the very substantial wage increases sometimes involved.
    The famous Fawley agreement is supposed to be the father of these productivity deals. One of the senior executives involved in that deal is on record as saying that if the prices and incomes legislation had existed then, the deal would never have been struck. It is this kind of sentiment which must run through the minds of many managers and trade union leaders who are trying to get changes in wage structures, increases in earnings and a high rate of innovation in industry. Productivity comes from incentives to management, trade union reform of various kinds, but certainly not the kind proposed in the Bill, and as a result of a major and very different economic strategy from that which the right hon. Lady and her colleagues are pursuing.
    Above all, we feel that the Bill is anti-innovation and will slow down the rate at which new techniques are introduced into industry. This will mean out-dated goods being sold instead of up-to-date goods which will help to bridge the export gap. The Clause seeks to ensure that in this case productivity will not be frustrated.
    4.45 p.m.
    Mr. John Peyton: I have not disagreed with a word that my hon. Friend the Member for Guildford (Mr. David Howell) has spoken in his able and thoughtful speech. My difficulty arises in examining the new Clause, which implies some sort of blessing to the Prices and Incomes Board. I should hesitate to give even implied approval to it. I can understand that the objection of the right hon. Lady to the Clause is that it would make the procedure unworkable. There would be nothing to

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    stop firms saying that they had made a new productivity arrangement and the Order would have to be suspended. The process could be continued ad infinitum.
    This Bill is a beastly and brutal thing. It is unjust and unfair, and I do not think that it will work. Where I differ most sharply from the Government and the right hon. Lady, is in the assumption they make throughout this nasty legislation that the Government and the Prices and Incomes Board together can control and oversee in detail the vast complexity of industrial relations. My fear is that they will, by their constant intervention and meddling, vitiate industrial relations rather than improve them.
    They are constantly tampering with details which they cannot possible understand. Their interference with promises made is something which we should not lightly countenance. While I agree with everything said by my hon. Friend, I do not regard the Clause with any enthusiasm, because it involves the constant intervention of some board or other, in this case Mr. Aubrey Jones and his doubt-growing team, in the detailed and intimate affairs of industry. I cannot believe that this is wise or proper.
    I anticipate that the right hon. Lady will invite the House to reject the Clause, for reasons which seem to be deplorable. I want to make it clear that I have reservations as to its value, although I understand my hon. Friend's motives in moving it. This discussion proves what a vain exercise it is for the House of Commons to attempt to improve such legislation. The real trouble is that it is so bad and unpleasant, so vile, that it is beyond improvement. The best we can do is to hack it about and, if possible, destroy it altogether.
    Mr. Peter Emery: May I congratulate my hon. Friend the Member for Yeovil (Mr. Peyton) for placing the right definition on the Bill. Everyone who served on the Standing Committee would agree that there was a general feeling of loathing for the Bill. Our difficulty has been to improve it in the face of the obstinacy that the Government have displayed in allowing any improvements to be made. It has been a case of "Barbara knows best and this is what the Bill is to be." Therefore, the new
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    Clause has some use. I see it as a test of the Government's seriousness and intent.
    If the Government are interested in ensuring that increases in productivity are made, and if they wish to live up to the claims made in their speeches that they want to encourage the making of productivity bargains between trade unions, workers and industry, there can be no reason for rejecting the Clause. It attempts to ensure that when productivity bargains have been struck the Ministry cannot interfere and stop their being implemented, and any Order against pay rises which applied previously shall be ignored until a report has been made by the Prices and Incomes Board.
    I understand the objection to extending the work of the Prices and Incomes Board. One of my condemnations of the Bill is that the Government, time and again, are pushing away executive decisions which should be made by Ministers and trying to get them carried forward in their name by a body which they suggest is impartial. This is a discreditable way of carrying on Government, and it should not be allowed.
    I should like to consider for a moment the criteria of productivity, because they are essential in considering the Clause. In the relevant Statutory Instrument there are approximately eight lines of English which I fail to understand. I have attempted to interpret them in a more direct way by means of a proposed new Schedule, part of which appears on page 11292 of the Notice Paper. In paragraph 31 of the proposed Schedule, I provide that
    "If payments by result or similar incentive schemes are operating and these are able to allow a person to increase his earnings the Government will not interfere yet. However, the N.B.P.I, is being asked to see if some method of interference can be worked out to allow the Government to get into the Act."
    It is expected that the forthcoming report of the Prices and Incomes Board will offer guidance on the application of incomes policies to systems of payment by result. This is exactly what I am trying to point out—that the question of productivity bargains is being shifted from the Government to the Board.
    Sir Edward Brown: This question is exercising the minds of all of us. We heard a statement by the Minister of

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    Transport today bearing directly on this matter. He said that the present dispute would be settled merely by the unions going to the employers and accepting productivity terms for a 10½ per cent. increase.
    Mr. Deputy Speaker (Sir Eric Fletcher): Order. I do not think that we can go into that matter on this Clause.
    Mr. Emery: The relevance of my hon. Friend's intervention—and I shall not pursue it too far—is that it shows that here we have a Minister suggesting a form of agreement to which obviously objection would be taken, whatever the productivity bargain. It is typical of the Government that one Minister does not know what another Minister is doing, and different views are being expressed from the Government Front Bench.
    I will not pursue the question of the criteria for productivity bargains; no doubt we shall refer to them in different guises on other Amendments. The Clause allows the Minister, for the first time, to make a clear and definite statement of her views about increased productivity. If she seriously argues that the Clause will detract from her powers, we must cast great doubt on her intent. It goes in a direction in which the Conservative Party would wish to go, namely, to encourage freely negotiated bargains between employers and employees to increase productivity.
    This is the only way in which major steps forward will be taken. We shall not get anywhere with pleading or by making speeches in the House. What is needed is more money in the pockets of the workers for more work. When an agreement has been made to that effect between employers and employees, any order limiting wage increases should fall. That is the purpose of the Clause.
    Mr. Raymond Gower: I share the view of my hon. Friend the Member for Yeovil (Mr. Peyton) about the quality of this legislation, which enshrines a code which is the antithesis of that operating in the most successful industrial countries. Nevertheless, he will agree probably that the Bill is all we have to work on and that some of us have to patch even the most imperfect garment.
    I should have thought that the Secretary of State would be disposed to wel-
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    come the motive of the new Clause, if not its wording. Soon after her appointment, we all got the impression that she wished to see a breakthrough in productivity and productivity agreements. Whether that impression was created deliberately or inadvertently, I do not know. What can be the objection to the Clause, apart from the objection posed by my hon. Friend the Member for Yeovil? He said that the objection might be that bogus claims might be made concerning agreements of this kind. I cannot feel that that is a serious objection. Companies and firms which wished to benefit in this way surely would put forward genuine agreements.
    Mr. Peyton: My hon. Friend must not misquote me. I did not say that they would be bogus. All that I suggested was that it would be easy to reduce the procedure to a total nonsense by repeatedly saying, "We have made an arrangement".
    Mr. Gower: I should not have thought that matters would develop in that way. Safeguards could be made.
    The objection of the right hon. Lady the Secretary of State might be that acceptance of the principle of the Clause would place people in firms which had achieved productivity agreements in too advantageous a position compared with those in other firms. I should have thought that that was a bad objection. We should instil in the minds of those who are not in such firms or factories a recognition or knowledge of the benefits which will or might ensue from the achievement, laboriously perhaps, of successful new agreements of this kind.
    The Minister might come along with the objection that there are some processes and some kinds of industry where it is more difficult to achieve successful agreements of this kind. I accept and recognise this. But, again, I should not think it a valid objection to the acceptance of this principle, because it would be in the interests of those people, too. If we can achieve over a wide front the working out of many more successful agreements, surely it is not only likely to benefit a particular industry, but it is likely to benefit the whole economy and render shorter the period during which the Government would consider it necessary to sustain this kind of legislation.

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    The more dynamic we can make our economy, even in the mind of this Government, the shorter the period during which we should have to endure this kind of legislation. Therefore, I plead with the Minister to consider this new Clause carefully. Here is the possibilty of putting something good into a sombre background. I hope that the right hon. Lady will look at it with sympathy.
    Mr. R. T. Paget: For the reasons given by the hon. Member for Yeovil (Mr. Peyton), I think that this is obviously a wrecking new Clause. It provides an opportunity for anybody who is subject to an Order from the Board preventing an increase in wages to cancel that Order and make another arrangement to increase wages. It is plainly a wrecking new Clause. I am not necessarily against it for that reason, because I believe that the Bill is a piece of obscurantist nonsense.
    Taking it in this sense and construing the Clause as meaning what it says, that we will stop the Board from cancelling or limiting wage increases, I ask why it should not do that. What is the purpose of trying to prevent wage increases? If we do not give the money to our workers, what do we do with it? Somebody spends it. If somebody spends it, what is the advantage in making provisions preventing the workers benefiting from it? I do not see the sense of this matter.
    This is an attempt by the Government to control things that they cannot control. We cannot control prices. We can push them out of shape by preventing an increase in one direction, but the purchasing power being given by that means merely creates an equal and balancing increase somewhere else to take up that purchasing power. Equally, I do not believe that we can effectively control wages. The things we can control, and which the Government will not control, are our import and export policies and the use of our currency as a general reserve for the convenience of other people.
    These are the kind of Socialist controls which the Government could and should make, but will not. What we cannot do, and what all Governments from the days of Rome onwards have not been able to do, is to create an artificial system of prices and incomes at the same time as
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    we accept prices and incomes as our regulator. We cannot do that both ways, but that is what the Government seem to be attempting to do.
    Mr. Geoffrey Lloyd: I support the new Clause. Far from being a wrecking Clause, it is a very constructive one which will help the House and the country to avoid the great danger in the Bill. The Bill, if it means anything, is an attempt to make wages lower than they would otherwise be. I hold that low wages are a recipe for national industrial stagnation. One of the most important functions of high wages is to force our manufacturers and producers in general into the use of the most up-to-date machinery.
    I do not want to develop my argument at great length, but I should like to approach the matter from three points of view. First, my experience in Birmingham is that whenever there is a boom which is accompanied by high wages that is the time when manufacturers are forced by economic circumstances to instal the latest labour-saving machinery. By doing so, they enable themselves to survive in a competitive atmosphere and they are able to pay those high wages.
    When we were discussing this matter recently, a well-known industrialist—I have not got his permission to reveal his name—wrote to me, saying:
    "One knows from one's own personal experience that again and again it is impossible to justify installation of the kind of automatic machinery commonly used in America because the labour-saving saving that it produces at our wage costs simply is not enough to pay for the machinery."
    I remember putting the argument in another way many years ago when talking to the head of the General Electric Co. I was urging on him the need to instal more automatic machinery of the kind used in America. He said, "Certainly, but I cannot do it. I cannot justify it, because wages here are so much lower than in the United States".
    Knowing the right hon. Lady's intellectual interest in these subjects, I must remind the House that the matter has been approached at a high academic level in a celebrated book on British and American technology in which it is argued—and I have never heard the case rebutted—that one of the reasons for the dramatic surge forward in American

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    production and industry in the 19th century, and the reason fundamentally why British world leadership in industry crossed the Atlantic in the last century, was the pressure exerted by high wages and scarce labour on the whole of the entrepreneurial classes in that country which urged them continually to develop more modern types of production.
    5.15 p.m.
    Mr. Paget: Another example is agriculture. The hon. Gentleman would be astonished at the improvement in the techniques of agriculture.
    Mr. Lloyd: To sum up this part of my argument, this point was made in an interesting way by comparing the performance of various countries in an article in the Financial Times by Mr. Harold Wincott, on 7th September 1965, at an earlier stage of the discussion on an incomes policy. He summed it up in this way:
    " The more you brood over these figures "—
    that is, the figures for this country, Japan, the United States, West Germany and France—
    "the more you are forced to conclude that our economic doctors are making a faulty diagnosis. The symptoms of the English Disease, as it is now known the world over, are not excessive rises in incomes and prices. My charts show plainly enough that most other countries have these symptoms to an even more marked degree than we have. The real cause of the English Disease is poor productivity. If only the T.U.C … would learn the lesson … That lesson, is quite simply, that the three countries where hourly earnings have risen most—Japan, West Germany and France—are the three countries where output per man-hour has risen most."
    It is for that reason that, as a matter of principle, I suggest we should support the Amendment. I know that the right hon. Lady's heart is in the right place, and that she wishes to see an increase in productivity and in wages, but she argues that at the moment she cannot afford that, and, therefore, she uses the blunt instrument of the Bill. Let us provide by the Amendment that the blunt instrument is suspended when a productivity agreement—and it must be a genuine one—can show that an increase in productivity will accompany a rise in wages. In that case, I maintain that it is for the national good that the operation of the Bill should be suspended.
    Sir D. Glover: This is the first time that I have risen to address the House
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    on any part of the Bill. From what I have heard this afternoon, the hon. Member whose views most closely fit mine on the Bill is my hon. Friend the Member for Yeovil (Mr. Peyton). I think that this is a shocking Bill. I agree with the hon. and learned Member for Northampton (Mr. Paget), who said that it was a nonsense. It really is a modern Statute of Labourers, and it will have very much the same effect on our industrial growth and efficiency.
    The Bill is trying to control the uncontrollable. It is trying to put a strait-jacket on something which ought to be free and fluid. It is trying to regulate and put into recognisable form something which is automatically changing day by day. It is putting the emphasis on the established success of today, and hindering the small and developing companies of the present which ought to become the leaders of the future. It is trying to establish the format of an industrial society in a way which will lead the country into far more trouble than it will cure. To me the Clause is like thinking one can help a child who has two paralysed legs by giving it a third artificial leg which is also paralysed, which will, in effect, only hinder its locomotion.
    I should like to hear a good deal more "turkey" talked about what the House means by productivity. It is only too easy to use these catch-phrases. I should like to know what they mean. Every efficient firm ought to be increasing its productivity day by day. Hardly a day should go by without something happening in a large organisation to increase its productivity. It is not every firm which falls into the classic case of the refinery at Fawley which was almost a complete new conurbation of an industrial complex where, starting from scratch, a productivity deal was eventually hammered out after two or three years of negotiation and put into operation. They were dealing with a new complex. Most industrial firms are dealing with—
    Mr. Geoffrey Lloyd: It was not a new complex. The refinery had been there for a long time. They were installing new machinery. It is true that the new machinery was on a large scale, but it was only an improvement on an existing

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    operation which had rendered great service to the country for many years.
    Sir D. Glover: I accept what my right hon. Friend says, and I do not want to over-emphasise what I am saying. I am not saying that there will never be a productivity agreement. There will be many such agreements, but in the bulk of firms and industries there will not be a new dramatic productivity agreement. There will be what I call flowing productivity improvements going on all the time.
    What the Clause is trying to do is to make firms arbitrarily notify the Board that they have produced a new productivity agreement, when in fact they have done something to try to meet orders. After a period of trial and error the agreement may turn out not to be a productivity agreement at all. In other words, it may not bring about increased productivity. The difficulty very often is that one does not know until afterwards whether what is to be done will increase productivity.
    People can sit around a table and say, "If you forgo this we will do that, and if you do that we will do this" and everything is put down in writing, but whatever is agreed has to be translated into practice, not in the boardroom, but on the shop floor, in an enormous number of departments and processes, and it may be that when all the interlocking changes have been operating for six months they produce a disappointing result. It is only by putting into practice what has been done in theory that one can find out whether the advantages which were hoped for are gained.
    I do not think that every productivity agreement will in practice turn out to produce all that the parties to the agreement hoped that it would. I do not mean that there will be no improvement if an agreement is reached which should bring about a 10 per cent. increase in wages following an agreement after a lot of negotiation between a firm and its workers, then after the scheme has been in operation for six or nine months it may be found that the forecasts were too optimistic, and that the figure should have been 5 per cent. instead of 10 per cent. There is no exact science in this, any more than there is in so much of industrial negotiation.
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    We are all working to improve the efficiency of the nation. Here, I agree strongly with my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), because I have always been a strong supporter of a high-wage low-cost economy. I maintain that the best and most likely way to increase the productivity of the nation is to introduce innovations when it is financially desirable for that to happen. People will not put in a vast amount of new machinery if it is still cheaper to employ labour working old machinery.
    One of the reasons against innovation and modernisation in the Lancashire textile industry was that it was cheaper to employ people to work the old looms because these had been written down until they stood in the books at nothing. If, because of high wages, it had been in the interests of firms to put in new machinery, the change would have been very much more rapid than it was.
    The new Clause is an attempt to help the Government, as a result of our having lived with the Bill and become almost foster-mothers over many weeks, to make the unworkable work. I agree that it is the duty of an Opposition to try to make a Bill work. The new Clause is a marginal improvement which makes it more flexible and more likely to work. Therefore, if my right hon. Friend the Member for Mitcham (Mr. R. Carr) decides to divide on it—although I think that its value is marginal but because it gives greater flexibility—I shall vote with him.
    Mr. John Nott: I was not on the Standing Committee and I am, therefore, glad to be able to speak for the first time on the Bill on a new Clause concerning productivity bargaining, one of the most vital aspects of the whole policy and one which has so far been woefully neglected by the Government since their first prices and incomes legislation in 1966.
    Over the last two years, although much heat has been generated on this issue, there has been wide agreement between both sides of the House and among many hon. Members opposite who often appear to be locked in conflict, that a rise in wages should, as far as possible, be accompanied by a commensurate increase in production, that the economy needs to be run at a reasonable level of demand and that the Government's function is to educate the public to realise that persistent rises

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    in wages are self-defeating. There is, therefore, little disagreement among the parties on these fundamentals.
    The shame is that, since the Government introduced their first legislation, their public relations and the marketing of their policy has been so inept. While they could have emphasised the productivity aspect of the policy, all the emphasis has been on the restraint of incomes. Although, lately, the right hon. Lady has been trying to correct this widespread impression, the view still persists that the restraint of incomes is their basic concern. This has happened to the extent that the wage earner believes that the Government have deliberately set out to keep from him wage increases which are his due. The Government have convinced the housewife that the Government can and should hold back prices, whereas everyone knows that that is simply impossible for any Government to do so. Likewise, the unions have become convinced that the Government have set out to destroy the basis of their creation and to disrupt the collective bargaining system.
    This has happened because the Government have persistently refused to emphasise the opportunities for the increase and encouragement of productivity bargaining. If one sets out to restrain incomes, one automatically reaches a point, which the Government reached some time ago, when one must also, as a political quid pro quo, hold back prices. This is the most disastrous thing for any Government to do, because one then removes the only mechanism in the market for bringing demand into balance with supply. The cash flow of efficient firms is disrupted, investment falls back and one is in the vicious cycle of recrimination and frustration which now faces the Government.
    Mr. Deputy Speaker: Order. I must remind the hon. Gentleman that this is not a Second Reading debate on prices and incomes. We are discussing a new Clause.
    Mr. Nott: The way in which the Government can get out of this predicament is by showing that they accept at least the basic reasoning of the new Clause. If it were accepted, it would give firms an incentive to promote productivity bargaining. Then, slowly, the Government could bring the unions and the
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    people to understand that their policy was positive, not negative, and was aimed at encouraging productivity.
    The aim of most productivity bargains is wholly good. My only criticism of the new Clause is similar to that of my hon. Friend the Member for Ormskiric (Sir D. Glover) that, in this form, it could easily be used as an excuse for the complete disruption of the Government's policy, and I cannot see them accepting it in this form. But if they can accept that more emphasis should be placed on encouraging productivity bargains and can show that they recognise that this is easily the most important aspect of their policy, it will have been worth debating.
    Productivity bargains will not be encouraged in the type of atmosphere associated with a compulsory prices and incomes policy of the nature now before the House. In Report No. 36 of the Prices and Incomes Board, on Productivity Agreements, Mr. Aubrey Jones adopted the attitude that a prices and incomes policy creates the necessary atmosphere for the encouragement of such bargains. I believe this to be untrue and that productivity bargains, which everyone, on both sides, desires, can be encouraged and can succeed only in an atmosphere of the maximum flexibility and freedom in industry.
    For that reason, although I see many obvious faults as, I expect, do my hon. Friends, in the wording of the new Clause, I support it because it emphasises the most important aspect of what should be the Government's policy. I hope that whoever sums up will concentrate on why productivity bargaining has not been given the emphasis which it might have been given throughout the past few years.
    5.30 p.m.
    Mr. Philip Holland: Two objections have been made to the new Clause. The first, made by those who object to the whole Bill and to the idea of statutory intervention in wage negotiations, is that because the Bill is bad, everything to do with it is bad, so that no possible proposal would improve it. I agree that it is a bad Bill, but there is always the possibility that, at the end of the day, it will become law because we will not be able to defeat the Government on Third Reading. Thus, hedging our

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    bets on that possibility, we should do all we can to give the Measure a few redeeming features.
    On that basis alone it is worth considering any Amendments and new Clauses that are put forward. In the unhappy event that we will be stuck with the Bill and that it will become law, I urge my hon. Friends, who disagree with every line of it, and the hon. and learned Member for Northampton (Mr. Paget). to think again about this new Clause.
    The second is a wrecking objection. The Clause states:
    "No renewal of the order may take place until the N.B.P.I. has reviewed and reported on the change."
    If the Board has any ability at all, it should have the ability to stop obviously bogus claims. If it is incapable of doing that, it should not be in existence. But even if it does not have that ability and is a complete waste of time—and is an utter smokescreen which is incapable of acting efficiently—we should do what we can to ameliorate the position.
    Even if the Clause would allow wages to go up and even if employers were faced with the prospect of effecting savings elsewhere—perhaps by investing more in new machinery, so increasing their capital investment, thereby increasing their productivity—it should be considered as an incentive. In this negative way it could act as an incentive to productivity. We can by this means, test the sincerity of the Government's desire to increase productivity and encourage productivity bargains.
    The Clause would, therefore, do no more than to give an incentive to companies threatened by an order under the Bill to achieve a productivity bargain. On this basis alone it is worthy of support. The Government should accept it as an earnest of their goodwill and show that they are sincere in saying that they want productivity bargains.
    My remarks do not imply that I support the principle of intervention in negotiations between employer and employee. In the event of our being stuck with the Bill, we must do all we can to give it some redeeming features. I hope, therefore, that if the Government do not accept it, hon. Members will press it to a Division.
    The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): The hon. Member for St. Ives (Mr. Nott) coolly lectured the Government on their failure to put over in the country at large the productivity aspects of their prices and incomes policy. Having done that, he left the Chamber, no doubt feeling that he had done a good day's work. In so far as it is true—and I accept that it is true to a considerable extent—that the people have got a false image of the Government's prices and incomes policy, a very large proportion of the responsibility for that must rest with hon. Gentlemen opposite.
    Sir D. Glover: Rubbish.
    Mrs. Castle: The whole tenor of the speeches of hon. Members opposite has been to repeat the theme which they are glad and delighted to see has caught on in some people's minds: that the policy is designed to hold wages down. They persist in repeating this on every public platform and they have repeated it today. They ignore, and insist on ignoring the fact that wages have risen more than prices in every year under a Labour Government and that real wages and earnings have been rising substantially.
    Above all, hon. Gentleman opposite are desperately anxious to obscure the fact that in this Measure, and in the White Paper, the considerations of which the Bill is putting into force, there is offered to the people a better opportunity of increasing their real earnings by increasing productivity than was ever given by a Government in our post-war history.
    The new Clause was disposed of so effectively by the hon. Member for Yeovil (Mr. Peyton) and my hon. and learned Friend the Member for Northampton (Mr. Paget) that there is no need for me to argue the case against it at length. Of course, it is a wrecking proposal, since it does not make any sense in terms of the purpose of the Bill. Hon. Gentlemen opposite may say that they do not want the Bill, and they are free to oppose it in appropriate ways. But it is not convincing for them to produce a Clause like this and try to argue that it will somehow strengthen the whole battle for higher productivity.
    I prefer the honesty of the hon. Member for Yeovil when he says, "I loathe

    285
    the Bill and everything the Government are doing. We must, therefore, hack it about and, if possible, destroy it." The Clause is a bit of hacking about which would definitely have the result of destroying the emphasis which we are putting behind the importance of productivity, and that is why I ask the House to reject it.
    It does not even specify what Orders it wants covered. One assumes that it deals with standstill Orders which are put on pay increases. Under the Government's criteria and the policy of the White Paper, a standstill will have been put on a pay settlement or claim because it neither satisfies the criterion of helping the lower paid nor fits in with the other criteria, particularly that which specifies that the cost of the increase must be offset by some realistic productivity quid pro quo, the reason why a claim or agreement would be standstilled.
    The new Clause says, in effect, "What about the position in which employers and unions recognise the justice of the Government's original standstill?" That is a nice oblique tribute to the whole policy. "While recognising that the standstill was justified, because the agreement was not really a productivity bargain"— the more hon. Gentlemen opposite talk about the Bill the more they give us our whole case— "we will do what the Government want and work out a genuine productivity deal." In that situation, says the new Clause, the existing Order shall be revoked immediately, pending a review of the new productivity deal by the Board and its report on it.
    The new Clause is supposed somehow to encourage firms to get down to discussing productivity, which the standstill Order said they should do in the first place. To talk as some hon. Members have done about their concern to see greater productivity and then to suggest that I should be compelled to revoke the standstill Order, whatever "phoney" productivity deal might be put to me, is surely double talk of the worst kind. It is obvious that the one thing my Department wants—this was the reason for the standstill Order in the first place—is for management and workers to work out genuine productivity deals.
    I assure the House that we should lose no time in accepting such a deal. We
    286
    want to encourage and attract workers to get away from the old concept of across-the-board inflationary and unjustified action and to get down to discussing real productivity in which my Department is their ally. This is the whole purpose of the new Productivity and Manpower Division that we are setting up. It is to be the ally of workers and management in the attempt to raise wages where those wage increases can be afforded because they have been earned. If anyone had any doubt about that it must have been dispelled by the remarks made by the new head of the division, Mr. George Cattell. He came from working for Rootes with a very fine record of productivity encouragement behind him, a very fine record in the techniques of the more efficient utilisation of manpower.
    That is an aspect of productivity with which my Department is concerned. Mr. Cattell is on record as saying that the British worker should get higher wages. This is the theme. Can hon. Members opposite be so grossly irresponsible as to say at this moment in the country's history that the only way is to give an absolutely all-clear to wage increases regardless of whether they are related to higher production and productivity will follow? That has not been the result in recent years. Because we are working on such narrow margins, and have been since the war, we have to make all wage increases and productivity agreements parallel; not just sit back and hope that production will follow.
    That this can be done, and is done through the influence of my Department, is shown in case after case which is reported and discussed day after day. I draw the attention of the House to a very recent example reported in last Sunday's Sunday Times. It was the article by its labour correspondent, Mr. Stephen Fay, which was headed:
    "Power Gas and the D.E.P. forge a copper-bottomed deal."
    The article described how imperative this was to advance the completion date for the refinery being built for Power Gas for Continental Oil, at Immingham, and how the firm negotiated an incentive deal.
    When we looked at it we could not call it a productivity deal, because there was no productivity built into it. The firm was desperate; it wanted to get its

    287
    completion date reached and it took an easy way out which gave no guarantee. When the agreement came to us we said frankly, "It will not do." We said, "We are sorry. We will have to refer this to the Prices and Incomes Board, unless you sit down with us and see if we can forge a genuine productivity agreement." With the help of my Parliamentary Secretary and my officials we related the bonus to targets for completion.
    5.45 p.m.
    This is absolutely basic, life-saving common sense. At the end of the discussion we were glad to approve the deal. The article ends by saying:
    "After long negotiations with the unions, a new agreement was officially accepted. By last week the labour force had responded and work on the site was going faster than ever before. The agreement has no guarantee of success of course, but it is copper-bottomed enough to satisfy the D.E.P. and it appears to satisfy the workers and it is important because it illustrates a pattern which will become more and more common in the industry in the next 18 months, one of benevolent intervention by the D.E.P."
    I make no apology to the House for that policy. On the contrary, I believe it is one of the most vital elements in our whole prices and incomes policy. That is the approach and spirit which permeates the whole Bill and the powers we ask for in this Bill. It is a spirit of positive help to both sides of industry. It is the basis on which alone we can afford the wage increases that the workers of this country have a right to expect. Because the new Clause—and its movers know it—would take away the power of my Department to continue to examine agreements as they come up until it is clear that the productivity quid pro quo fits in with the policy, it would fatally undermine a very important part of the policy, the positive and creative part and —I say without any hesitation—the patriotic part.
    Therefore, I ask the House to reject the Clause. Hon. Members opposite know that if they were in power tomorrow they would have to face this problem and realise that the country has to become more productive. This is the only way we can get the higher standard of life to which our Government are dedicated.
    Mr. R. Carr: I hope that the right hon. Lady has not begun as she means to go on in these debates. She must learn that "guff", or rhetorical oratory, is no substitute for a properly argued reply. I shall have to remind her, as I had often to say in Committee, that somehow or other machinery, including parliamentary machinery, is inclined to work better when it is given oil rather than acid. To try to reply to a new Clause, non-controversial in purpose even if the Government decided that it was not practicable in its workability, and well-intentioned in purpose, merely by abusing the Opposition—both our motives and our common sense—is not the way in which the Bill should be considered. Nor is it the way in which the people would wish it to be considered.
    Apparently the right hon. Lady has not even troubled to understand the reason why we put forward the Clause. Instead, she accused us of responsibility for the false image which exists in the country of the whole purpose of the Government's prices and incomes policy.
    The right hon. Lady said that it is our fault that the prices and incomes policy is understood throughout the country as being a policy to hold wages down. We could, although I do not suppose you would let us, Mr. Deputy Speaker, have a debate on whether that is not the purpose of the policy. It is difficult to understand what it is if it is not that. Whatever the purpose may be, I cannot believe that the right hon. Lady's hon. Friends, or the trade union leaders and their members outside the House, take their cue from what we say. They are men and women of experience and common sense. They see the effect of the policy, and they judge on that, not what we in the Opposition say, although I have little doubt that they may happen to agree with what we say.
    Having accused us of responsibility for giving the whole policy a false image, the right hon. Lady then accused us of "phoney" double-talking and of being grossly irresponsible, all, apparently, because we have moved the Clause and are fortunate in having it selected for debate.
    Having heard the speech of my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who

    289
    speaks with great experience of industry, and as an ex-Minister, and of other hon. Members of the House, I find it difficult to understand why the right hon. Lady, instead of treating this as a serious subject and as an attempt to raise an important matter, should accuse us of being guilty of "phoney" double-talk, or of being grossly irresponsible. I can only hope that she has not begun as she means to go on.
    Unlike the right hon. Lady, I will address myself to the purpose of the Clause and try to make clear what I should have thought would have been obvious. This policy is always referred to as a prices and incomes policy; indeed, the Bill is, unfortunately, called a Prices; and Incomes Bill. As we have made clear in previous years, we wish that it could be called a Productivity, Prices and Incomes Bill. The policy of the Government is not just a prices and incomes policy, it is really a productivity, prices and incomes policy. We must remember this in a practical form, and try to give expression to it in the Bill.
    My hon. Friend the Member for St. Ives (Mr. Nott) expressed doubt whether a prices and incomes policy helped productivity bargaining. He did more than express a doubt; he expressed an opinion that it would hold it back. My hon. Friend the Member for Guildford (Mr. David Howell), in moving the Clause, referred to the Fawley agreement which, he said, is regarded as the father of all productivity agreements. He quoted the opinion of one of those who negotiated the agreement that, if prices and incomes legislation had existed at the time it would have been impossible to have negotiated the Fawley agreement.
    I cannot help wondering, as we sit here today, what about the railways? Has the existence of prices and incomes legislation helped to expedite, or may it not rather have helped to slow up, the progress of productivity bargaining on the railways, the slowness of which is the reason why the public is, to put it mildly, suffering the inconvenience it is suffering today and will apparently suffer for some days further?
    This legislation, in the view of nearly every practical person inside or outside the House, is perverse and damaging. Since it is so perverse and damaging, it
    290
    is natural to ask whether it is any good trying to improve it. My hon. Friend the Member for Yeovil (Mr. Peyton) thought that perhaps it was not. So, perhaps less severely but almost to the same extent, did my hon. Friend the Member for Ormskirk (Sir D. Glover). The hon. and learned Member for Northampton (Mr. Paget), from the Government side, has said that this was obscurantist legislation because it sought to control things that no Government could control. Nevertheless, at this stage of the debate, we have to contemplate, as my hon. Friend the Member for Carlton (Mr. Holland) said, the possibility that we may have to live under this legislation, however much we dislike it.
    Therefore, I suggest to the House that we are right to try to improve it, even if only slightly, and even although we must seize any and every opportunity to defeat it. We shall certainly seize the opportunity to try to defeat the Bill when it comes to Third Reading, but for the moment we have to work on the supposition that we may, alas, be unsuccessful in defeating the Bill and will have to live under it, and we must, therefore, try to improve it.
    If we are to improve it—and this is the purpose of the Clause—we must put productivity right in the front line. It is no good putting it into the front line merely in speeches, or even in administrative action, if we are to have legislative powers governing this policy. We do not believe that we should, but if there are to be legislative powers then productivity should also appear in the front line of the legislative powers; and at the moment it is not even in the back line, let alone in the front line of the Bill. If we must have a Bill of this kind we want to see the importance of productivity recognised in words in a Clause in the Bill.
    If the legislation is not to be entirely repressive and feeble it ought to be given every chance to act as a lever to bring about progress We believe that the provisions for punishment provided by the legislation should at least have a strong reformatory purpose and content, and that is the purpose of the new Clause. The position envisaged in the Clause is of a group of workers, whether in a company or in a sector of industry involving a number of companies, who have been

    291
    made subject to a standstill order for up to 12 months, because, it is said, the settlement on which they had agreed with their employers did not match the criteria; either it was not a productivity deal at all or, to use the right hon. Lady's words, it was a phoney productivity deal.
    So, within the philosophy of the Bill, it would have been right to impose a freeze Order upon them. What are we to do? Are we to allow the freeze Order to run for a whole year, or are we to give the employers and workers a chance, if I may put it crudely, to reform themselves? They have agreed on something, they have tried to get away with something, which is now not to be acceptable, and a standstill Order is clamped on to them. Having had that Order clamped on them, they repent of their ways, have new negotiations and reach a new agreement, which may be a genuine productivity agreement which it would be in the interests not only of themselves but of the country to implement. Are they, as the Bill at present says, to be prevented from doing something for 12 months merely because sentence has been imposed upon them, or are they to be given a chance to say that they have thought again and have come forward with a new productivity agreement which will give them the chance to have it judged and implemented without them having to work through the hard labour of the 12 months' punishment?
    Mr. Leslie Spriggs: The right hon. Gentleman will have heard some of his hon. Friends call the new Clause a wrecking Clause. Does this not make all he said this afternoon a lot of double-talk?
    Mr. Carr: I am trying to explain the purpose of the Clause because I feel that the Government has not understood it. I hope that what I am saying will convince one or two of my hon. Friends who may have had some doubt, and also the Government, who are really the people who matter. I can assure the hon. Gentleman that there is a good purpose behind the Clause, that it is not irresponsible in its purpose, that it is not "phoney" double-talk and that it ought to be seriously considered, and has not yet been seriously considered by the Minister.
    292
    The purpose of the Clause is to give a chance to people who are subjected to a 12-month standstill, because they have agreed on a deal which does not meet the criteria, to come forward with a new deal. If the proposal contained in the new deal is a genuine productivity bargain, it would be in the interests of the country as well as those concerned, that it should be implemented quickly rather than be delayed for 12 months.
    6.0 p.m.
    Mrs. Castle: Does the hon. Gentleman not understand that a standstill Order is related to a particular agreement? If the original agreement is torn up, and a new one is reached, then the Order ceases to be effective. If it were desired to put an Order on a new agreement, because it was "phoney", then a new Order would be necessary.
    Mr. Carr: This is very interesting news. What we are trying to write into the Bill is not that the Minister should have discretion to do these things, but that it should be written into the Bill in order to put productivity into the front line. We want to bring about the situation whereby, when workers who have had their wage settlement with their employer frozen, who come forward with a new agreement, then the Minister shall revoke the previous Order. We want this to be recognised in the Bill, so that the punishment contained in the original Order may have the chance to have a reformatory effect.
    I realise that in certain circumstances this power could become a wrecking power, and it might be wise to suggest that the powers contained in the Clause should contain a provision to permit this to be done only once. It would be an incentive to people who had made an agreement which did not conform with the criteria, to come forward with an alternative agreement, so that they may have their previous sentence repealed. That is the purpose of the new Clause, and if we have misunderstood the Bill, if the right hon. Lady says that the power is already in the Bill, and we have not understood it, then this might not have been the case, if she had treated us seriously, instead of abusively. On the reply we have had so far I can only advise my right hon. and hon. Friends to vote for the Clause.
    Question put, That the Clause be read a Second time:—

    Division No. 238.]

    AYES

    16 5 p.m.

    Alison, Micheal (Barkston Ash)

    Glover, Sir Douglas

    Montegomery, Fergus

    Allson, James (Hemel Hempstead)

    Glyn, Sir Richard

    More, Jasper

    Astor, John

    Godber, Rt. Hn. J. B.

    Morrison, Charles (Devizes)

    Atkins, Humphery (M't'n & M'd'n)

    Goodhart, Philip

    Mott-Radcluffe, Sir Charles

    Awdry, Daniel

    Goodhew, victor

    Munro-Lucas-Tooth, Sir Hugh

    Baker, Kenneth (Acton)

    Gower, Raymond

    Murton, Oscar

    Baker, W. H. K. (Banff)

    Grant, Anthony

    Nabarro, Sir Gerald

    Baniel, Lord

    Neave, Airey

    Barber, Rt. Hn. Anthony

    Grant-Ferris, R.

    Nichols, Sir Harmar

    Batsford, Brian

    Griffiths, Eldon (Bury St. Edmunds)

    Noble, Rt. Hn. Michael

    Beamish, Col. Sir Tufton

    Grimond, Rt. Hn. J.

    Nott, John

    Bell, Ronald

    Gurden, Harold

    Onslow Cranley

    Bennett, Sir Frederic (Torquay)

    Hall, John (Wycombe)

    Orr, Cant L P s

    Bennett, Dr. Reginald (Gos. & Fhm)

    Hall-Davis, A. G. F.

    Osborn, John (Hallam)

    Berry, Hn. Anthony

    Hamilton, Lord (Fermanagh)

    Page, Graham (Crosby)

    Biffen, John

    Hamilton, Michael (Salisbury)

    Page, John (Harrow W.)

    Biggs-Davion, John

    Harris, Frederic (Croydon, N.W.)

    Pardoe, John

    Birch, Sir Nigel

    Harrison, Brian (Maldon)

    Pearson, Sir Frank (Clitheroe)

    Black, Sir Cyril

    Harrison, Col. Sir Harwood (Eye)

    Peel, John

    Blaker, Peter

    Hastings, Stephen

    Percival, Ian

    Boardman, Tom (Leicester, S.W.)

    Hay, John

    Peyton, John

    Body, Richard

    Heald, Rt. Hn. Sir Lionel

    Pike, Miss Mervyn

    Bossom, Sir Clive

    Heath, Rt. Hn. Edward

    Pink, R. Bonner

    Boyle, Rt. Hn. Sir Edward

    Heseltine, Michael

    Pounder, Rafton

    Braine, Bernard

    Higgins, Terence L.

    Powell, Rt. Hn. J. Enoch

    Brewis, John

    Hiley, Joseph

    Price, David (Eastleigh)

    Brinton, Sir Tatton

    Hill, J. E. B.

    Prior, J.M.L.

    Brown, Sir Edward (Bath)

    Hirst, Geoffrey

    pym, Francis

    Bruce-Cardyne, J.

    Hogg, Rt. Hn. Quintin

    Quennell, Miss J. M.

    Bryan, Paul

    Holland, Philip

    Ramsden, Rt Hn James

    Buck, Antony (Colchester)

    Hordern, Peter

    Rawlinson, Rt. Hn. Sir peter

    Bullus, Sir Eric

    Hornby, Richard

    Rees-Davies w. R.

    Burden, F. A.

    Howell, David (Guildford)

    Renton, Rt. Hn. Sir David

    Campbell, H. (Oldham, W.)

    Hunt, John

    Rhys williams, Sir David

    Campbell, Cordon (Moray & Nairn)

    Hutchison, Michael Clark

    Ridley, Hn. Nicholas

    Carr, Rt. Hrr. Robert

    Iremonger, T. L.

    Ridsdale Julian

    Cary, Sir Robert

    Irvine, Bryant Godman (Rye)

    Robson Brown Sir William

    Channon, H. P. G.

    Jenkin, Patrick (Woodford)

    Rodgers, Sir John (Sevenoaks)

    Chichester-Clark, R.

    Jennings, J. C. (Burton)

    Rossi Hugh (Hornsey)

    Clark, Henry

    Johnson Smith, G. (E. Grinstead)

    Royle, Anthony

    Clegg, Walter

    Jones, Arthur (Northants, S.)

    Russell, Sir Ronald

    Cooke, Robert

    Jopling, Michael

    St John-Stevas, Norman

    Cooper-Key, Sir Neill

    Joseph, Rt. Hn. Sir Keith

    Sandys, Rt. Hn. D.

    Cordle, John

    Kaberry, Sir Donald

    Scott, Nicholas

    Corfield, F. V.

    Kerby, Capt. Henry

    Scott-Hopkings, James

    COstain, A. P.

    Kershaw, Anthony

    Sharples, Richard

    Craddock, Sir Beresford (Spelthorne)

    Kimball, Marcus

    Crosthwaite-Eyre, Sir Oliver

    King, Evelyn (Dorset, S.)

    Shaw Michael (Sc'b'gh & Whitby)

    Crouch, David

    Kirk, Peter

    Silvester, Frederick

    Crowder, F. P.

    Knight, Mrs. Jill

    Smith, Dudley (W'wick & L-mington)

    Cimningham, Sir Knox

    Lancaster, Col. C. G.

    Smith, John (London & W'minster)

    Currie, G. B. H.

    Lane, David

    Speed, Keith

    Dalkeith, Earl of

    Langford-Holt, Sir John

    Stainton, Keith

    Dance, James

    Legge-Bourke, Sir Harry

    Steel, David (Roxburgh)

    d'Avigdor-Goldsmid, Sir Henry

    Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)

    Stodart, Anthony

    Dean, Paul (Somerset, N.)

    LIoyd, Ian (P'tsm'th, Langstone)

    Stoddart-Scott, Col. Sir M. (Rlpon)

    Deedes, Rt. Hn. W. F. (Ashford)

    LIoyd, Rt. Hn. Sehwyn (Wirral)

    Summer, Sir Spencer

    Digby, Simon Wingfield

    Longden, Gilbert

    Tapsell, Peter

    Dodds-Parker Douglas

    Loveys, W. H.

    Taylor, Sir Charles (Eastbourne)

    Donnelly, Desmond

    Lubbock, Eric

    Taylor, Edward M. (G'gow, Cathcart)

    Doughty, Charles

    McAdden, sir Stephen

    Teeling, Sir William

    Douglas-Home, Rt. Hn. Sir Alec

    MacArthur, Ian

    Temple, John M.

    Drayson G. B.

    Mackenzie, Alasdair(Ross & Crom'ty)

    Tilney, John

    du Cann, Rt. Hn. Edward

    Maclean, Sir Fitsroy

    Turton, Rt. Hn. R. H.

    Eden Sir John

    Macleod, Rt. Hn. Iain

    van Straubenzee, W. R.

    Elliot, Capt. Walter (Carshalton)

    McMaster, Stanley

    Vaughan-Morgan, Rt. Hn. Sir John

    Elliott,R.W.(N'c'tle-upon-Tyne,N.)

    Macmillan, Maurice (Farnham)

    Wainwright, Richard (Colne Valley)

    Emery, Peter

    Maddan, Martin

    Walker, Peter (Worcester)

    Errington, Sir Eric

    Marten, Neil

    Walker-Smith, Rt. Hn. Sir Derek

    Farr, John

    Maude, Angus

    Wall, Patrick

    Fisher Nigel

    Maudling, Rt. Hn. Reginald

    Walters, Dennis

    Fletcher-Cooke, Charles

    Mawbay, Ray

    Ward, Dame Irene

    Fortescue, Tim

    Maxwell-Hyslop, R. J.

    Weatherill, Bernard

    Fostor, Sir John

    Matdon, Lt.-Cmdr, S. L. C.

    Webster, David

    Mills, Peter (Torrington)

    Wells, John (Maidstone)

    Fraser,Rt.Hn.Hugh(Sffford & Stone)

    Mills, Stratton (Belfast, N.)

    Whitelaw, Rt. Hn. William

    Galbraith, Hn. T. G.

    Miscamphell, Norman

    William, Donald (Dudley)

    Gilmour, lan (Norfolk, C )

    Michell, David (Basingstoke)

    Wills, Sir Gerald (Bridgewater)

    Gilmour, Sir John (Fife, E)

    Monro, Hector

    Wilson, Geoffery (Turto)

    The House divided: Ayes 241 Noes 284.

    Winstanley, Dr. M. P.

    Worsley, Marcus

    TELLERS FOR THE AYES:

    Wolrige-Gordon, Patrick

    Wylie, N. R.

    Mr. Reginald Eyre and

    Woodnutt, Mark

    Younger, Hn. George

    Mr. Timothy Kitson.

    NOES

    Abse, Leo

    Fitch, Alan (Wigan)

    Mabon, Dr. J. Dickson

    Albu, Austen

    Foley, Maurice

    McBride, Neil

    Alldritt, Walter

    Ford, Ben

    McCann, John

    Allen, Scholefield

    Forrester, John

    MacColl, James

    Anderson, Donald

    Fowler, Gerry

    MacDermot, Niall

    Archer, Peter

    Fraser, John (Norwood)

    Macdonald, A. H.

    Bacon, Rt. Hn. Alice

    Freeson, Reginald

    McGuire, Michael

    Bagier, Gordon A. T.

    Galpern, Sir Myer

    McKay, Mrs. Margaret

    Barnes, Michael

    Gardner, Tony

    Mackenzie, Gregor (Rutherglen)

    Barnett, Joel

    Garrett, W. E.

    Mackie, John

    Baxter, William

    Ginsburg, David

    Mackintosh, John P.

    Bence, Cyril

    Gordon Walker, Rt. Hn. P. C.

    Maclennan, Robert

    Benn, Rt. Hn. Anthony Wedgwood

    Gourlay, Harry

    McMillan, Tom (Glasgow, C.)

    Bennett, James (G'gow, Bridgeton)

    Gray, Dr. Hugh (Yarmouth)

    McNamara, J. Kevin

    Binns, John

    Greenwood, Rt. Hn. Anthony

    MacPherson, Malcoim

    Bishop, E. S.

    Grey, Charles (Durham)

    Mallalieu, J. P. W. (Huddersfield, E.)

    Blackburn, F.

    Griffiths, David (Rother Valley)

    Manuel, Archie

    Blenkinsop, Arthur

    Griffiths, Eddie

    Marks, Kenneth

    Boardman, H. (Leigh)

    Griffiths, Rt. Hn. James (Llanelly)

    Marquand, David

    Boston, Terence

    Gunter, Rt. Hn. R. J.

    Mansh, Rt. Hn. Richard

    Bottomley, Rt. Hn. Arthur

    Hamilton, James (Bothwell)

    Mason, Rt. Hn. Roy

    Boyden, James

    Hamling, William

    Mayhew, Christopher

    Braddock, Mrs. E. M.

    Hannan, William

    Meilish, Rt. Hn. Robert

    Bradley, Tom

    Harper, Joseph

    Milian, Bruce

    Bray, Dr. Jeremy

    Harrison, Walter (Wakefield)

    Milier, Dr. M. S.

    Brooks, Edwin

    Hart, Rt. Hn. Judith

    Milne, Edward (Blyth)

    Brown, Rt. Hn. George (Belper)

    Haseldine, Norman

    Mitchell, R. C. (S'th'pton, Test)

    Brown, Hugh D. (G'gow, Provan)

    Hattersley, Roy

    Molloy, William

    Brown, Bob(N'c'tle-upon-Tyne,W.)

    Hazell, Bert

    Moonman, Eric

    Brown, R. W. (Shoreditch & F'bury)

    Healey, Rt. Hn. Denis

    Morgan, Elystan (Cardiganshire)

    Buchan, Norman

    Heffer, Eric S.

    Morris, Alfred (Wythenshawe)

    Buchanan, Richard (G'gow, Sp'burn)

    Henig, Stanley

    Morris, Charles R. (Openshaw)

    Butler, Herbert (Hackney, C.)

    Herbison, Rt. Hn. Margaret

    Morris, John (Aberavon)

    Callaghan, Rt. Hn. James

    Hilton, W. S.

    Moyle, Roland

    Cant, R. B.

    Houghton, Rt. Hn. Douglas

    Mulley, Rt. Hn. Frederick

    Carmichael, Neil

    Howarth, Harry (Wellingborough)

    Murray, Albert

    Carter-Jones, Lewis

    Howarth, Robert (Bolton, E.)

    Neal, Harold

    Castle, Rt. Hn. Barbara

    Howell, Denis (Small Heath)

    Noel-Baker, Frances (Swindon)

    Chapman, Donald

    Howie, W.

    Noel-Baker,Rt.Hn.Philip(Derby,S.)

    Coe, Denis

    Hoy, James

    Oakes, Gordon

    Coleman, Donald

    Huckficld, Leslie

    Ogden, Eric

    Concannon, J. D.

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    O'Malley, Brian

    Conlan, Bernard

    Hughes, Hector (Aberdeen, N.)

    Dram, Albert E.

    Corbet, Mrs. Freda

    Hunter, Adam

    Oswald, Thomas

    Craddock, George (Bradford, S.)

    Hynd, John

    Owen, Dr. David (Plymouth, S'tn)

    Crawshaw, Richard

    Irvine, Sir Arthur (Edge Hill)

    Palmer, Arthur

    Cronln, John

    Jackson, Colin (B'h'se & Spenb'gh)

    Parker, John (Dagenham)

    Crosland, Rt. Hn. Anthony

    Janner, Sir Barnett

    Parkin, Ben (Paddington, N.)

    Crossman, Rt. Hn. Richard

    Jay, Rt. Hn. Douglas

    Parkyn, Brian (Bedford)

    Cullen, Mrs. Alice

    Jeger, George (Goole)

    Pavitt, Laurence

    Dalyell, Tam

    Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)

    Pearson, Arthur (Pontypridd)

    Darling, Rt. Hn. George

    Jenkins, Rt. Hn. Roy (Stechford)

    Peart, Rt. Hn. Fred

    Davidson, Arthur (Accrington)

    Johnson, Carol (Lewisham, S.)

    Pentland, Norman

    Davies, Ednyfed Hudson (Conway)

    Johnson, James (K'ston-on-Hull W.)

    Perry, Ernest G. (Battersea, S.)

    Davies, G. Elfed (Rhondda, E.)

    Jones, Dan (Burnley)

    Prentice, Rt. Hn. R. E.

    Davies, Dr. Ernest (Stretford)

    Jones, Rt. Hn. Sir Elwyn (W.Ham,S.)

    Price, Christopher (Perry Barr)

    Davies, Ifor (Gower)

    Jones, J. Idwal (Wrexham)

    Price, Thomas (Westhoughton)

    de Freitas, Rt. Hn. Sir Geoffrey

    Jones, T. Alec (Rhondda, West)

    Price, William (Rugby)

    Delargv, Hugh

    Judd, Frank

    Probert, Arthur

    Dell, Edmund

    Kelley, Richard

    Randall, Harry

    Dempsey, James

    Kenyon, Clifford

    Rankin, John

    Dewar, Donald

    Kerr, Dr. David (W'worth, Central)

    Rees, Merlyn

    Dobson, Ray

    Lawson, George

    Reynolds, Rt. Hn. G. W.

    Doig, Peter

    Leadbitter, Ted

    Rhodes, Geoffrey

    Dunn, James A.

    Ledger, Ron

    Richard, Ivor

    Dunnett, Jack

    Lee, Rt. Hn. Frederick (Newton)

    Roberts, Albert (Normanton)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Lee, Rt. Hn. Jennie (Cannock)

    Roberts, Rt. Hn. Goronwy

    Dunwoody, Dr. John (F'th & C'b'e)

    Lee, John (Reading)

    Roberts, Gwilym (Bedfordshire, S.)

    Eadie, Alex

    Lestor, Miss Joan

    Robertson, John (Paisley)

    Edwards, Robert (Bilston)

    Lever, Harold (Cheetham)

    Robinson, Rt. Hn. Kenneth (St.P'c'as)

    Edwards, William (Merioneth)

    Lever, L. M. (Ardwick)

    Robinson, W. O. J. (Walth'stow, E.)

    Ellis, John

    Lews, Arthur (W. Ham, N.)

    Rodgers, William (Stockton)

    English, Michael

    Lewis, Ron (Carlisle)

    Roebuck, Roy

    Ennals, David

    Lomas, Kenneth

    Rogers, George (Kensington, N.)

    Ensor, David

    Loughlin, Charles

    Rose, Paul

    Evans, Albert (Islington, S.W.)

    Luard, Evan

    Ross, Rt. Hn. William

    Faulds, Andrew

    Lyon, Alexander W. (York)

    Rowlands, E. (Cardiff, N.)

    Fernyhough, E.

    Lyons, Edward (Bradford, E.)

    Shaw, Arnold (Ilford, S.)

    Sheldon, Robert

    Taverne, Dick

    Wilkins, w. A.

    Shore, Rt. Hn. Peter (Stepney)

    Thomas, Rt. Hn. George

    Willey, Rt. Hn. Frederick

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Thornton, Ernest

    Williams, Alan (Swansea, W.)

    Short, Mrs, Renée (W'hampton, N. E.)

    Tinn, James

    Williams, Alan Lee (Hornchurch)

    Silkin, Rt. Hn. John (Deptford)

    Tuck, Raphael

    Williams, Clifford (Abertillery)

    Silkin, Hn. S. C. (Dulwich)

    Urwin, T. W.

    Williams, Mrs. Shirley (Hitchin)

    Silverman, Julius

    Varley, Eric C.

    Williams, W. T. (Warrlngton)

    Skeffington, Arthur

    Wainwright, Edwin (Dearne Valley)

    Willis, Rt. Hn. George

    Slater, Joseph

    Walclen, Brian (All Saints)

    Wilson, William (Coventry, S.)

    Small, William

    Walker, Harold (Doncaster)

    Winnick, David

    Snow, Julian

    Wallace, George

    Woodburn, Rt. Hn. A.

    Spriggs, Leslie

    Watkins, David (Consett)

    Woof, Robert

    Steele, Thomas (Dunbartonshire, W.)

    Watkins, Tudor (Brecon & Radnor)

    Wyatt, Woodrow

    Stonehouse, Rt. Hn. John

    Weitzman, David

    Vates, Victor

    Strauss, Rt. Hn. G. R.

    Wellbeloved, James

    Summerskill, Hn. Dr. Shirley

    Wells, William (Walsall, N.)

    TELLERS FOR THE NOES:

    Swingler, Stephen

    Whitaker, Ben

    Mr. Ernest Armstrong and

    Symonds, J. B.

    White, Mrs. Eirene

    Mr. Ioan L. Evans.

    Mr. Speaker: I have a brief statement to make. I undertook to give consideration to requests made by a number of hon. Members that I might have another look at the provisional selection of amendment for consideration on today's Report stage. As I said earlier, I was aware of the issues which hon. Members raised with sincerity and feeling.
    Perhaps I might again emphasise the tremendous difference there is between the Committee stage and the Report stage as far as selection of Amendments is concerned. As the hon. Member for Poplar (Mr. Mikardo) remarked, it is most unusual for an Amendment which has been debated at length and defeated in Committee to be again selected for the Report stage. The principles of selection are different, just as the rules of debate are different. There are various shades of thought in the House about the Report stage. Some hon. Members have thought it unnecessary. Others have thought that too many amendments are being selected at this stage; and others—as today— have felt that too few have been selected.
    The difficulty today is that most of those Amendments non-selected were rejected because they had been debated at length, and negatived, in Committee. Hon. Members seeking to put down Amendments on the Report stage can always count on the advice of the Public Bill Office if they will seek it. What seems clear to me is that it would be impossible to relax the principles governing selection on Report in such a way as to make Report a second Committee stage. I have, however, given very careful and serious thought to the points made earlier in the afternoon and I have decided to add to today's provisional list something from the special point of view of a group of hon. Members on the Gov-
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    ernment side who otherwise, as was pointed out, have no Amendments of theirs selected today.
    I have, therefore, decided to add the following Amendment to my list of those provisionally selected: Amendment No. 3; and also, Amendment No. 67 to be taken separately instead of being discussed on Amendment No. 56 which has already been selected. Amendment No. 118 will now be discussed with Amendment No. 61 and not with Amendment No. 56, as originally listed.
    Mr. Michael Foot: May I thank you very much, Mr. Speaker.
    Mr. Park: May I add my thanks to you, Mr. Speaker, and ask you whether you could give us guidance as to the point at which Amendment No. 3 will be taken?
    Mr. Speaker: In its right place on the Order Paper. We simply follow the Paper chronologically and geographically. We come now to new Clause 4. Mr. Graham Page.

    New Clause 4
    APPEAL PROCEDURE
    Where following a reference to the National Board for Prices and Incomes an order is made under any of the provisions of the Prices and Incomes Act 1966, the Prices and Incomes Act 1967 or this Act to require reduction of prices or charges, to defer wages regulation orders or agricultural wages orders, a petition may be presented to either House against the order within twenty-one days from the day on which the order was laid.
    The petition shall be referred to the Chairman of Ways and Means or the Chairman of Committees and may either—

    (a) pray for particular amendments to be made to the order, or

    (b) object generally to the order.

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    Within seven days of the presentation of the petition the Minister concerned may deposit a memorial on the matter contained in the petition and the petition shall be referred to a Special Committee who shall have the same powers as given under a Special Procedure Order. If after consideration the committee are of the opinion that the order ought not to have been made or should be altered they shall report to the House within twenty-eight days of the presentation of the petition.—[Mr. Graham Page.]

    Brought up, and read the First time.
    Mr. Graham Page: I beg to move, That the Clause be read a Second time.
    May I digress for a moment before launching on this Amendment to thank you, Mr. Speaker, from this side of the House for your consideration of the further Amendments.
    This new Clause is headed "Appeal procedure". I am not sure that that is quite the right title but it is a nice, succinct one. It deals with the Parliamentary procedure on the exercise of the Ministerial power to make Orders under this Act, and indeed under the two previous Prices and Incomes Acts. When I say that it deals with Parliamentary procedure, that means that it deals with the rights of right hon. and hon. Members, especially with their rights to represent the views of their constituents and, on occasion, to protect their constituents against the Executive.
    A characteristic of many of the Orders under the Prices and Incomes Acts of 1966 and 1967 has been that they affect particular interests. They are not so frequently Orders affecting everyone in the country, but they deal with particular interests, employees or firms making certain charges.
    In new Clause 4 and in offering a proposal for dealing with this type of Order, we have in mind those which deal with separate interests. Under the previous Acts, the House will remember that we have had such narrow Orders as that dealing with the employees of Rockware Glass, that dealing with the pottery employees of Joseph Bourne & Son Limited and that dealing with laundering and cleaning charges, all of them narrow Orders dealing with particular interests.
    For a matter of 500 years it has been a principle of legislation in this House that, when we are dealing with a Bill —and I recognise that we are dealing
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    with Orders in this Amendment, but the principle is similar—if it is a Bill
    "which affects a particular private interest in a manner different from the private interest of other persons or bodies of the same category or class."—[OFFICIAL REPORT, 10th December, 1962; Vol. 669, c. 45.]
    it should be treated as a Private Bill. Those are the words of Mr. Speaker Hylton-Foster.
    What is meant by treating a piece of legislation as a Private Bill and applying the Private Bill procedure to it is that the individual who may be affected by the Bill has the right to have his case heard by Parliament through the Private Bills Committee, and it is necessary to go through all the procedure for Private Bills so that one ensures that anyone affected to a greater degree in his private interests than others has the right to petition Parliament and have his case heard. Standing Orders go so far as to prevent the House from proceeding with a Public Bill if it includes some infringement of private interests and is what we term a Hybrid Bill.
    We have no exactly similar procedure for the greater number of Ministerial Orders which are approved by the House from time to time. In a Statute, normally we give the Minister the power to make an Order by Statutory Instrument and, if that Order affects private interests to a greater extent than it affects the general public, there is no right for the individual to petition the House which he would have if it were included in a Private Bill. In another place, there is a special procedure for referring private interests in an Order to a special Committee to consider the effect of the Order. We have no such procedure here except by an Act giving a Minister power to make Orders.
    When Ministerial Orders are likely to affect private interests, the parent Statute in many cases had said that the Minister must make his Order by a special Parliamentary procedure which is laid down by the Statutory Orders (Special Procedure) Act, 1945, as amended by the Act of 1965. Under that procedure, no Order is made until certain publication of it has been made and the service of notices on those affected, until objections have been considered and possibly until a public inquiry has been held. When the Order is made and laid before Parliament,

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    those affected may petition Parliament within 21 days, and their petition will be heard by a Joint Committee of both Houses.
    With that form of procedure, we recognise what Parliament has recognised for 500 years in relation to Private Bills; that is, the right of the individual who is affected by legislation to petition Parliament so that his case is heard. That is the sort of procedure which we on this side of the House think ought to be applied to Orders under the Prices and Incomes Act.
    Up to the present time, the special Parliamentary procedure has been used mainly in connection with encroachments on property rights, certain compulsory purchase orders, and the acquisition of minerals, coast protection, and so on. However, in Orders with which we are concerned under the prices and incomes legislation, how much more are private interests concerned, as we have seen in the Orders in the past, when it is not merely a matter of encroachment on property rights, but of encroachment on the rights to produce and to earn?
    In paragraph 30 of its Sixth Report, the Select Committee on Procedure recommended to the House in the following words:
    "The attention of Your Committee was drawn to a discrepancy in the procedures of the two Houses in the treatment of Statutory Instruments that specially affect private rights and interests. The House of Commons has no procedure for considering petitions from affected parties against such hybrid instruments, and Your Committee recommend that a Joint Committee should be proposed to consider whether a procedure similar to that for Special Procedure Orders might be applied to these Instruments."
    That is exactly what we suggest in new Clause 4. We suggest it by saying that the parent Statute can do exactly what the Select Committee recommended to the House and provide a form of procedure whereby there will not only be an inquiry before the Order is made, but a chance for the person affected by the Order to petition the House and make his case known.
    The procedure does not delay the effect of the Order. If this Bill is to operate effectively, I appreciate that the Minister may have to make an Order quickly which will be effective at once. This form of procedure does not prevent that. The Order can come into force and effect
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    at once. The procedure merely provides an opportunity for the individual to make his plea to Parliament that the Order be annulled or amended. That plea will provide the House with the facts and arguments upon which it can eventually decide whether the Order should stand or be annulled.
    It must be true that Orders under the Prices and Incomes Act are, in an unprecedented way, affecting individual interests rather than the public in general. That is the whole point of the Orders which are made under the Act. They are to stop a certain firm, group of individuals or number of employees or employers from breaching the principles laid down in the legislation.
    It may be that this form of legislation cannot operate without Orders which affect particular private interests. If that be so, I ask the Government generously to recognise it. They will lose nothing by that recognition; they will cause no delay in the exercise of their power to make Orders. Here is an opportunity to adopt the recommendation of the Select Committee on Procedure, without damage to the principles of the Bill but with recognition of natural justice and the rights of the individual which the procedure of Parliament has always sought to preserve.
    6.30 p.m.
    Mr. Emery: Certain aspects of an appeal procedure or the possibility of appeal against Orders made by the Government were briefly discussed in Committee, and we have drafted this new Clause in an attempt to overcome the arguments which the Government then advanced. We accept that, under the Bill as it stands, an individual may make an approach to Ministers, but tthis is nothing like good enough. In Committee, the Under-Secretary of State said,
    "What safeguards are needed are there".
    That was his view, but the only safeguard is that the aggrieved person may put in a written representation to the Minister, the very Minister who has agreed that the Order should be made. It was suggested that inspectors should be appointed, and the Under-Secretary's response to that was to say,
    "…hon. Members would not like the inspectors any more than they like the N.B.P.I."—[OFFICIAL REPORT, Standing Committee F, 30th May, 1968; c. 440.]

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    I did not accept that argument at the time, but one can see at least some fairness in it. Therefore, to overcome that objection, we have attempted to provide a procedure by which the appeal is made to the House and can be considered by the House. From that point of view, it makes sense.
    I emphasise that the proposed appeal procedure would not stop an Order coming in or allow the House to refuse it. However, if a Committee of the House reported against it, there would be strong moral persuasion, I imagine, and the Government would probably think it right to take action themselves. But control is left with the Government. I should like the new procedure to be more forceful, but I recognise that there would be no chance of the Government accepting it in that form. With the idea of persuading the Government to accept the principle of what we propose, we have put down the new Clause in this form, still leaving power in the Government's hands.
    The new Clause applies only to the new matters introduced in the present Bill, not to those dealt with in the previous Acts. I should be happier if the appeal procedure could be applied to everything, including the matters dealt with in previous Acts, but the new Clause refers specifically to Orders requiring a reduction of prices or charges, or deferring wages regulation orders or agricultural wages orders. Although we make the general point that we should like it to apply to everything, the new Clause is specifically limited to those three matters which are new in the present Bill.
    Mr. Paget: Is it the conception that the petitioner should be represented by counsel before the Committee and that he should call evidence?
    Mr. Emery: Yes, that is the view. We want the procedure to follow as closely as possible the present Special Procedure Order procedure.
    We believe a right of appeal to be essential because, for the first time, the Bill will give punitive powers to the Government. An Order to reduce prices, made purely on a recommendation of the Prices and Incomes Board, could affect a company's profitability and its ability
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    to stay in business. Arguments put before the Board might be misunderstood. If a recommendation were made by the Board in such circumstances and an Order to reduce prices followed, the company could go out of business. Yet there is no appeal which the individual can make save that he may write a letter to the Minister. The Minister does not even have to give a statement of his reasons for rejecting the written representations. As this Order-making power could be punitive, and as the Government would be over-riding a decision, for instance, of the Agricultural Wages Board which had gone into the matter in the fullest possible way, the individual must have a right of appeal.
    The criteria on which the Prices and Incomes Board give a verdict and then make a recommendation for a reduction in prices can be altered by the Government by Statutory Instrument. The Government are able to alter the law by which someone may be ordered to reduce his prices. They have only to change the criteria or introduce new ones by Statutory Instrument subject to 90 minutes' debate in the House. To take a reductio ad absurdum argument for a moment, it would be possible for the Government to decide that anyone who had had a price increase in the last five years should automatically be allowed no further price increases. The Minister shakes his head, but that is possible.
    If a decision of that kind were made by the Government in exercise of punitive powers against the individual in any other sphere, there would automatically be a right of appeal, not just an appeal by letter to the very Minister who had made the Order. There is good sense in ensuring that the laws of natural justice should apply so as to allow the individual to come to Parliament and put his case.
    There could well be a weakness in the wording of the Amendment. We are not the most expert draftsmen, and nobody will want to press it if the Government will accept the general principle behind it. If they will accept that we do not believe that an appeal merely in the form of a letter to the Minister is enough, and will make any alterations they feel necessary in the Amendment and introduce it in another place, I should welcome that.

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    The Prices and Incomes Board cannot be controlled by anybody, once the criterion has been set. Therefore, if it recommends a price reduction and the Government follow the recommendation through with an Order, it as fair and proper that people should have some right of appeal. That is entirely, and only, what the new Clause sets out to do.
    Mr. Paget: The suggestion in the new Clause is misconceived. It is an attempt to impose a judicial decision on what is in effect an executive decision. I do not say that that does not sometimes happen, but it is wrong in principle when it occurs, and it is nearly always a piece of whitewashing.
    The Prices and Incomes Board is not a judicial body. It must take an executive decision. It must decided whether an increase is justified from an economic point of view, and that is a value judgment. To have a Committee of the House to sit judicially upon that executive decision would not work. One would be trying to impose a worse judgment on a better one, and with no real basis for arriving at that judgment.
    Mr. Emery: The whole of the hon. and learned Gentleman's argument falls to the ground, as this procedure is already used in planning. An appeal can be made to such a House of Commons Committee under the Special Procedure Order on certain planning matters.
    Mr. Paget: And does it work? That is a singularly bad example, which one should not take any further. I cannot think of any instance where that procedure has had a beneficial result. I think that I shall have the hon. Member for Crosby (Mr. Graham Page) on my side in saying that. It has never worked, and it is not a particularly happy example to take here.
    I do not know to what extent the new Clause has been thought out. The petitioner could apparently be heard before the Committee, and that means that he must be heard through counsel and must call evidence. Who is the respondent? Is it the Prices and Incomes Board? Is the Board to appoint counsel? Is it to call evidence? Will there be a judicial procedure in which on the one side there is the appellant petitioner and on
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    the other side the defendant? How else would it be worked? If it is not the Board which will be the respondent, how will there be a trial? This is a half-baked and ill-thought-out proposal.
    6.45 p.m.
    Mr. Emery: The hon. and learned Gentleman is using some strong arguments, which are partly misplaced. I do not wish it to become a judicial body, and I am not suggesting that. We make it quite clear that it is an administrative tribunal dealing with an executive decision.
    Mr. Speaker: Order. We are on Report. The hon. Member must make a brief intervention, not a speech.
    Mr. Emery: I wish it to be a brief intervention, Mr. Speaker. We suggest that if anybody is to be the respondent it is the Minister. Under the Clause, he or she shall deposit the memorial which the Committee shall consider, so it is not the Board.
    Mr. Paget: But if on the one hand one has the petitioner represented by counsel and calling evidence, is one to have on the other merely a written representation, which is not by the Board—the people who made the Order one is opposing— but by the Minister? If so, how does the appellant cross-examine the witnesses called? How does he present his case? Is a written memorandum deposited either before or after his case has been presented a sufficient answer? That is what I mean by saying it is a half-baked Clause.
    Sir D. Glover: It is not usual for me to quarrel with the hon. and learned Member for Northampton (Mr. Paget), but I think that his was one of those speeches in which one puts up an Aunt Sally deliberately to knock it down. I agree that perhaps the special procedure is not the most ideal way of dealing with those people who feel that they have not had justice. All that is sought in the new Clause is that virtually the same procedure shall apply for cases referred to the Prices and Incomes Board as has applied in planning cases. The hon. and learned Gentleman is entitled to say that the present arrangements about appeal to the House in planning are not good. I think that I should agree, but at least the procedure is the best we have; it may be

    307
    inadequate, but it is the only thing we have.
    I congratulate my hon. Friends on the new Clause. If they could start from scratch and produce an entirely new system they would probably like to suggest it. But they probably very rightly decided that on Report that would not have much chance of being accepted by the Government, but that the Government might conceivably accept something parallel to an existing procedure. The Government could with reason say that they would accept the Clause because it would do no harm. It would introduce an appeal procedure, and they could accept that some form of appeal procedure is necessary.
    One of the things that worries me is the increasing power of one gentleman who used to be a Member on this side of the House, Mr. Aubrey Jones, the head of the Prices and Incomes Board. Bill after Bill, and document after document give the Board more and more power. As far as I can see, he and his staff are working without any control from Parliament or anybody else. Whatever rulings they give appear to have the writ more than of law, of Holy Writ. They are beyond argument or discussion.
    It is only sensible and right, when the Board will make a great many decisions under that Bill, that the House should produce procedure for appeals. As my hon. Friend the Member for Honiton (Mr. Emery) said, a firm might be put out of business. Are we really going to say that Mr. Aubrey Jones and his Committee— because that is what I will call his Board —can issue an instruction that will put a firm out of business and that that firm will have nowhere to make an appeal, apart from writing to the Minister, who may not even grant it the courtesy of a reply? Is this new organisation—it was created only three years ago—to grow and grow and become more and more powerful untrammelled by any appeal machinery whereby people can get things put right? Is the House to have no way by which a person can petition it for redress of wrong?
    If the Government do not wish to see increased the atmosphere which is already present of their being a dictatorial Government, they will say that they
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    accept what the Opposition are trying to do and agree on the necessity for some machinery of this sort. Behind your very distinguished Chair, Mr. Speaker, there is the Petition bag. We have that because any member of the public has the right to petition this House for the redress of wrong. But we are building up outside organisations which have more direct power than many Government Departments, with the general body of the people having no appeal against their decisions.
    Whether or not what is suggested in the new Clause is the most ideal way of dealing with the matter, I am not prepared to argue, but I do argue forcefully that the Government have a case to answer, and I hope that they will answer it by saying that they accept what the new Clause is trying to achieve, that there is reason for disturbance and that they will see that this part of our fears will be taken care of.
    Mr. Biffen: I support the arguments of my hon. Friend, particularly to underline the apprehensions expressed by my hon. Friend the Member for Ormskirk (Sir D. Glover) about the activities of the National Board for Prices and Incomes and the necessity to give to the subjects or the firms affected by its reports some kind of redress. We do not live in an ideal world. This is not an ideal new Clause. But this is not an ideal Bill. When dealing with a piece of legislation of such general sloppiness as this, one is driven into a whole series of second-best considerations and palliatives.
    The most one hopes for from this legislation is that it will not degenerate too much beyond being nonsense. One fears that it may degenerate into being arbitrary and tyrannical, picking out small groups of people. But that is what our experience of this kind of legislation tells us is what usually occurs. The commanding heights of the economy can be impaled by the activities of 15 engineering draughtsmen of Beckman Instruments. Their case was heard in an Adjournment debate. I am sure that Mr. Clive Jenkins would be anxious to use procedures which would be available under the new Clause to challenge some of the interpretations, arguments and inferences of the Prices and Incomes Board.

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    If ever one wanted the case for the new Clause, it was at least hinted at by the extraordinary proposition that perhaps the individual salary of Mr. Hambros is about to be investigated. I find this almost too absurd to consider but that is what this legislation means. It means the picking out of individuals.
    Mr. Speaker: Order. We are not discussing the whole Bill. We are discussing new Clause No. 4, which advocates a right of petition against a decision of the National Board for Prices and Incomes.
    Mr. Biffen: It is because of the narrowness and intensity of the effect of the Board's recommendations that there should be a right of appeal. Without wishing to stray further into the generality of the subject, which would incur your wrath, Mr. Speaker, I underline the argument of my hon. Friend the Member for Ormskirk about the necessity for some kind of appeal against the judgments of the Board. If ever there was, as it were, an over-mighty feudal baron it is Mr. Aubrey Jones. I quote from a highly respectable source of comment to sustain that argument. Commenting on the Board's Report No. 60, the Royal College of Nursing and the National Council of Nurses of the United Kingdom said:
    "The Royal College of Nursing Council regrets that the National Board for Prices and Incomes involved itself in matters outside the sphere of prices and incomes."
    It is not the first time that kind of comment has been made, and when people's commercial livelihoods are endangered by the consequences of recommendations of the Board, accepted and enforced by the Government, the least this House can ask for is the maximum opportunity for legal appeal.
    The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): Before I turn to the attractive arguments put by the hon. Member for Crosby (Mr. Graham Page), I want to deal with the more general arguments advanced. A word has been used, perhaps in error, which should not be allowed to go unnoticed. The hon. Member for Honiton (Mr. Emery) talked about the Government exercising "punitive" powers under the Bill. He knows very well that punitive powers are powers exercised for the intention of punishment. He also knows that nothing could be further
    310
    from our minds. Whatever else these powers are, punitive they are not.
    Mr. Emery: If the hon. Gentleman does not consider that it is punitive to make a firm or company reduce its prices, he does not understand how industry and business consider this matter. They think that this is a punitive factor.
    Mr. Hattersley: No doubt they will be encouraged to do so if the hon. Gentleman goes on repeating it, but if he thinks for a moment about the proposition he will realise that, whatever else is in the Government's mind, the idea of punishment is far from it. Our objectives, irrespective of disagreement about whether or not we are likely to achieve them, should surely be agreed as having nothing whatever to do with punishment.
    Mr. Biffen: Is the hon. Gentleman seriously suggesting that the sudden interest in the salary of Mr. Hambro is not punishment for his having said rough things about the Government?
    Mr. Hattersley: I say that entirely. I remind the hon. Member for Oswestry (Mr. Biffen) that, for a year, he has been asking us about what attitude we are likely to take towards individual salary increases. Since he has spent so much time urging us to be consistent about them as well as about group increase's, he should be the last to complain about what my right hon. Friend announced yesterday.
    7.0 p.m.
    The second argument deals with the powers of the Prices and Incomes Board, from which hon. Members opposite conclude that it is especially necessary that some sort of appeal machinery should be set up. The hon. Member for Ormskirk (Sir D. Glover) described the National Board as a board that can be controlled by nobody. The hon. Member for Oswestry drew attention to those occasions when it has been claimed that the Board went outside its terms of reference. As I understand the intention of the new Clause, it is not to prevent the Board from making comments which might be controversial, embarrassing or just plain wrong. It is to prevent Orders from being made which have a positive and definite effect.

    311
    It is therefore essential to understand that what we are considering is the procedures that have to be followed before an Order is made. Whether that Order is the result of a report which contains other items which the hon. Gentleman, or perhaps the House as a whole, regards as controversial, extraneous or wrong, is irrelevant. We are interested in the Orders, and in the Orders alone. We are certainly interested, as the hon. Member for Honiton said, in their application to individuals and the possible detrimental effects they might have on individuals.
    There are, I suppose, two possible hypotheses as to how Orders might affect an individual company. The individual company needs the right of appeal, so the hon. Member for Crosby said, lest it be put out of business by the decisions of the Board. The first hypothesis is where an Order is made which affects a specific company and where it is known when the report is written that the company is near the margin of profitability and that a reduction in price might result in its bankruptcy. It is inconceivable that this will happen, but I will come to that later.
    I suspect that the hon. Member for Honiton fears that a more likely case of bankruptcy, and therefore a more appropriate case for appeal through this machinery, is where an Order is made reducing prices throughout an entire sector, in which there may be individual companies imperilled by that general Order because they are nearer the margin than other companies.
    If that is what the hon. Gentleman is saying, I am sure that he will concede that there are many occasions when Parliament takes a general industrial decision which affects disastrously people at the margin of profitability. I will take what I believe to be the hon. Gentleman's favourite Bill—the Resale Prices Bill, 1964. That Bill put out of business many retailers at the margin of profitability. I take an example which is particularly potent, because it is the converse of the case the hon. Gentleman quoted. I take the case when an agricultural wages Order is made, not under the regulations written into the Bill, which I hope will become law, but under the regulations now operating. This is an Order which is in no way susceptible to Parliamentary process. It is not made
    312
    by my right hon. Friend. It is made by the Agricultural Wages Board. We hope that we shall be granted powers to postpone the effect of such Orders, if that seems to be appropriate.
    When such an Order is made insisting that farmers throughout the land pay a new level of minimum wage, I am sure that many farmers complain that, as a result of the Order, which has been the subject of no scrutiny whatsoever, they are likely to be put out of business. It is of the nature of general industrial decisions facing large sectors of the economy that those at the margin may well be affected in this adverse way.
    Sir D. Glover: Surely in farming cases it is an agreement right across the board. Here we may be dealing with one firm.
    Mr. Hattersley: I said that there were two arguments. One concerned the industry and one concerned individual companies. I said that I accept the hon. Gentleman's point that the arguments are different in those two respects. I hope in a few moments to turn to the arguments in so far as they relate to individual companies.
    Having said that and having, I suspect, at least hinted that I am not altogether enamoured of the Clause, perhaps I should say why I describe it initially as attractive and attractively proposed by the Opposition Front Bench. I say this because I hope that the House will accept that the Government are sensitive to our obligation to preserve the civil liberty aspects of the prices and incomes policy and certainly anxious that there should not be the sort of breach, the sort of hardship, and the sort of difficulties, which hon. Members opposite have feared might be the case.
    I ask my hon. Friends to reject the Clause, because I believe that the civil liberty aspects to which the hon. Gentleman referred are in no small degree already covered. I turn again to the duties and powers of the National Board and to our obligation towards them. It cannot be said too often that, except in two very special cases to which I shall refer, when the National Board makes a recommendation—let us say that a price should be reduced or that a standstill on wages should be prolonged—then that recommendation can be given effect to

    313
    and enforced only if it is supported by an Order made by the Government. That Order is subject to all the negative procedures of the House.
    The final responsibility must be with my right hon. Friend. Her responsibility must involve hon. Members opposite, and occasionally some of my hon. Friends, drawing her attention to what they believe to be the shortcomings of her decision, exposing her to whatever criticism and ridicule they think are necessary and appropriate. There is this very potent and, qua Parliament, fundamental safeguard that the Ministerial decision to make an Order, which must supersede a report by the National Board, is subject to those potential embarrassments, potential difficulties, and potential limitations that the negative Order procedure puts on my right hon. Friend.
    I will remind the House briefly of what those procedures are and how they relate to the Bill. The hon. Member for Honiton said specifically that the Clause was intended to cover only the new powers we are given in the Bill. I rather assumed from the hon. Member for Crosby that he intended the Clause to cover all orders and that that is why the Clause mentions the Acts of 1966 and 1967.
    Mr. Graham Page: By reference to Clause 4, whose rubric is
    "Power to require reduction of prices or charges"
    we refer back to the previous Acts.
    Mr. Hattersley: Having had at least one of my suppositions confirmed by the hon. Gentleman, I will remind the House of the procedures which must operate if an Order prolonging a standstill is to be made in that way. If the Government wish to operate a standstill, and if they wish to prolong it as a result of their investigations, they first must do so as a result of a published report by the N.B.P.I. This, in itself, puts the Government right in the line of public opinion. They are operating on criteria which are published, reported and known. Not only that, but that report is subject to limitations. It must be a report written within the terms of the Government's current policy on prices and incomes, a policy which is established as a result of an order which can be, and often is, debated in the House. In this case it
    314
    was debated for eight hours in Committee.
    Even the criteria by which the Board operates are subject to Parliamentary control. When the Board has taken a decision on those criteria, if the Government choose to make an Order prolonging a standstill because of an adverse report after a case has been examined against those criteria, once again that Order is specifically subject to Parliamentary control and can be debated, and invariably has been debated, in the House.
    Mr. R. Carr: We have heard much about the safeguards of the negative procedure. In particular, the Undersecretary has just said that the criteria which the National Board must use must come before the House. He will recollect that so crowded was Government business that we had no opportunity to pray against the current General Considerations Order, which lays down the criteria. So what safeguard is that?
    Mr. Hattersley: Although the right hon. Gentleman is right in saying that no Prayer was laid against that Order—
    Mr. Carr: It was laid. There was no chance to debate it.
    Mr. Hattersley: In a previous year hon. Members opposite forgot to table a Prayer against the General Considerations Order. There was a debate on the criteria this year, however. The right hon. Gentleman took part in that debate. It took place in the debate on devaluation or in the general Budget debate—one of those debates which goes on for day after day, one of which was devoted to the criteria, whether the White Paper was published in its previous form or not. He had many things to say about 3½ per cent. and the other criteria. If the House has not debated the White Paper, it has certainly debated the criteria included therein. That is only one of the safeguards.
    There are other safeguards which the hon. Gentleman asked the House to consider and which the hon. Gentleman says are perhaps inadequate. But these offer the individual who may be affected by an Order the opportunity to make representations to the Prices and Incomes Board and to the Government, and require the Government to publish their intentions in

    315
    the appropriate gazettes in order that individuals who feel that representations are appropriate are given notice and warning that the time for representations has come, apply not only to the extension of standstills under previous Acts but to the entire apparatus for price reductions under this Bill. They apply under paragraphs (a) and (b) of Clause 4(2) and under Clause 4(3) and they list very carefully those procedures which must be gone through before a prices Order can be made and which are intended to safeguard the rights of the individual.
    That leads naturally to the point about which the hon. Member for Honiton asked—the case of the individual company or firm about which the Prices and Incomes Board might make an adverse report and about which the Government might make a price reduction Order. This is legitimate debate, but it is reasonable only if we assume that the Government and the Board would take decisions according to the most bizarre principles. The Board is required to examine all cases according to criteria.
    If a company is so near to the margin of profitability that the requirement that a price reduction should be made would put it out of business, for the Prices and Incomes Board to recommend a price reduction would almost certainly be going outside the criteria. I cannot believe that the extreme case which the hon. Gentleman suggests could or will happen. I hope that the House will not consider the efficacy of the new Clause on such a wild hypothesis.
    I hope that hon. Members will consider the very reasonable point made by my hon. and learned Friend the Member for Northampton (Mr. Paget). He said —and I must agree with him—that he could not visualise a Committee of the House being an appropriate body to make the sort of inquiry and investigation which these individual cases imply. They are not simply matters of civil liberty. In fact, in the event, they would turn out to be something very different. They would turn out to be the examination of economic principles, of industrial statistics, of the state of the market and of people's views on where productivity was to be found and how prosperity was to be achieved.
    316
    The examination of such a set of principles seems to me an operation which a Committee of the House would not do to best advantage. It would not be in the interests of the House, nor in the interests of the people who made the appeals. We are conscious of the need to safeguard those people who may, because of the operation of this policy, feel that they are at least potential sufferers. We hope that that safeguard is in the Bill. We hope that the ultimate safeguard is the obligation to debate each Order if the Opposition choose to debate it and that the House will rest content with that.
    Mr. Geoffrey Lloyd: I do not think that the Under-Secretary has removed our anxieties, which were the reason for the new Clause. The Bill makes no provision for appeals.
    I understand the hon. Gentleman when he says that it is in the nature of general industrial legislation of this kind that people at the margin may find themselves in difficulties and may get hurt. But this is an important thing for us to understand when we represent people at the margin who may get hurt. I appreciate the argument that the big organisatians in industry have powerful associations which can put their case. I am much more concerned with the small firm and individuals in a small way of business.
    7.15 p.m.
    I accept that the hon. Gentleman is sincere when he says that he has not the slightest intention of using the powers in the Bill in an oppressive way. But it is interesting that our new Clause, which makes provision for appeals, should be debated on the day when, perhaps unluckily for the hon. Gentleman, his right hon. Friend has referred an individual under the powers which he already possesses.
    Mr. Hattersley: I did not wish to pursue this point, but since it has been raised a second time perhaps I should deal with it. The right hon. Gentleman should not be confused by the headline in one newspaper. My hon. Friend the Under-Secretary of State said yesterday that the report made to the First Secretary would be examined. He did not say that it would be referred to the Board. Those are two very different things.
    Mr. Lloyd: Perhaps there is a difference, but it is clear that the hon. Gentleman did not say that his right hon. Friend had not the power to do this. It has been shown that she has the power to do it. It is widely accepted in the country that she has the power to do it. My point is that the new Clause proposes that, if she did it and if the body which was mentioned earlier took a decision which, whatever the Parliamentary Secretary says, was penal in its effect on individuals or small firms, there would be provision for an appeal. Whether the Order results in an enforced reduction of income for an individual or in an enforced reduction of price for a firm, particularly a small firm, all the elements which the hon. Gentleman mentioned might be relevant, but for the individual it would be penal. It is like an enormous fine. We have heard of fines large enough to put a business right out of operation.
    I referred earlier to the case concerning Hambros Bank in which an individual is powerful. This is where the question of appeal might arise. This is a man who can defend himself, but, nevertheless, the comment throughout the Press has been that action has been taken by the Government because he attacked the Government and made a substantial contribution to the funds of the Conservative Party. It may or may not be right, but because we feel that there should be the right of appeal to an impartial body the new Clause is very important. The abuse may not be so great in the case of a powerful personality who can rely on powerful elements in the body politic and the City of London to rally to his defence. But what about the small man in the provinces of whom nobody has heard?
    This is the danger of operating this gigantic system of control which the Government are erecting in a way which may stifle the business life of a man and yet provides for no appeal. This is why I support the new Clause.
    Mr. Graham Page: With leave, may I briefly answer some of the points made by the Under-Secretary.
    318
    The procedure which the hon. Gentleman outlined of representations to the Board, to the Minister, and so on, is a procedure of appeal to the Minister, Ministerial body or administrative body. That is quite distinct from what we are asking for, namely, the right of appeal, when an Order has been made, of an individual particularly affected by the Order. Written representations to the Minister are wholly insufficient. It is for the House to protect the individual by applying a procedure which is already recognised. It is no good saying that the individual will be protected by the Minister, who is judge and jury in his own cause.
    Another point made by the hon. Gentleman was that the procedure for annulment of an Order is sufficient. I agree that if the Order is of general industrial application it is right that the House as a whole should debate it. Indeed, it would no doubt do so by way of a Prayer against the Order. But the negative procedure is a matter of hit or miss in this House at present. There are occasions when it is impossible to get the time to Pray against an Order. It may be that if the Order affects only one small firm or one individual the House will not find time for a Prayer against it.
    We are proposing a special procedure which is already in existence, which has worked, despite what was said by the hon. and learned Member for Northampton (Mr. Paget), and which has been extended in recent legislation: the Water Resources Act; the Countryside Bill; the Gas Act; the Pipelines Act; and the Forestry Act. This procedure has been used in connection with property interests, but how much more important it is to use it in connection with private interests affected by this Bill. This is not, as the hon. Gentleman said, a procedure to prevent an Order being made or for anything to be done before an Order is made. It is to apply an appeal machinery which is already recognised by Parliament. This is not only a matter of Parliamentary procedure. It is a matter of constitutional importance that the House should continue to preserve the right of the individual to protect himself against the Executive.
    Question put. That the Clause be read a Second time: —

    Division No. 239.]

    AYES

    [7.22 p.m.

    Alison, Michael (Barktton Ash)

    Glyn, Sir Richard

    Mitchell, David (Basingstoke)

    Allason, James (Hemel Hempstead)

    Godber, Rt. Hn. J. B.

    Monro, Hector

    Astor, John

    Goodhart, Philip

    Montgomery, Fergus

    Atkins, Humphrey (M't'n & M'd'n)

    Goodhew, Victor

    Morrison, Charles (Devizes)

    Awdry, Daniel

    Gower, Raymond

    Mott-Radcliffe, Sir Charles

    Baker, Kenneth (Acton)

    Grant, Anthony

    Munro-Lueas-Tooth, Sir Hugh

    Baker, W. H. K. (Banff)

    Grant-Ferris, R.

    Murton, Oscar

    Balniel, Lord

    Gresham Cooke, R.

    Nabarro, Sir Gerald

    Barber, Rt. Hn. Anthony

    Grieve, Percy

    Neave, Airey

    Batsford, Brian

    Griffiths, Eldon (Bury St. Edmunds)

    Nicholls, Sir Harmar

    Beamish, Col. Sir Tufton

    Curden, Harold

    Noble, Rt. Hn. Michael

    Bell, Ronald

    Hall, John (Wycombe)

    Nott, John

    Bennett, Dr. Reginald (Gos. & Fhm)

    Hall-Davis, A. G. F.

    Onslow, Cranley

    Berry, Hn. Anthony

    Hamilton, Lord (Fermanagh)

    Orr, Capt. L. P. S.

    Biffen, John

    Hamilton, Michael (Salisbury)

    Orr-Ewing, Sir Ian

    Biggs-Davison, John

    Harris, Frederic (Coryodon, N. W.)

    Osborn, John (Hallam)

    Birch, Rt. Hn. Nigel

    Harrison, Brian (Maldon)

    Page, Graham (Crosby)

    Black, Sir Cyril

    Harrison, Col. Sir Harwood (Eye)

    Page, John (Harrow, W.)

    Blaker, Peter

    Harvey, Sir Arthur Vere

    Pearson, Sir Frank (Clitheroe)

    Boardman, Tom (Leicester, S.W.)

    Hastings, Stephen

    Peel, John

    Body, Richard

    Hay, John

    Percival, Ian

    Bossom, Sir Clive

    Heald, Rt. Hn. Sir Lionel

    Peyton, John

    Boyle, Rt. Hn. Sir Edward

    Heath, Rt. Hn. Edward

    Pike, Miss Mervyn

    Braine, Bernard

    Heseltine, Michael

    Pink, R. Bonner

    Brewis, John

    Higgins, Terence L.

    Pounder, Rafton

    Brinton, Sir Tatton

    Hiley, Joseph

    Powell, Rt. Hn. J. Enoch

    Brown, Sir Edward (Bath)

    Hill, J. E. B.

    Price, David (Eastleigh)

    Bruce-Gardyne, J.

    Hirst, Geoffrey

    Prior, J. M. L.

    Bryan, Paul

    Pym, Francis

    Buck, Anthoy (Colchester)

    Hogg, Rt. Hn. Quintin

    Quennell, Miss J. M.

    Bullus, Sir Eric

    Holland, Philip

    Ramsden, Rt. Hn. James

    Burden, F. A.

    Hordern, Peter

    Rawilnson, Rt. Hn. Sir Peter

    Campbell, B. (Oldham, W.)

    Hornby, Richard

    Rees-Davies, W. R.

    Campbell, Gordon (Moray & Nairn)

    Howell, David (Guildford)

    Renton, Rt. Hn. Sir David

    Carr, Rt. Hn. Robert

    Hunt, John

    Rhys Williams, Sir Brandon

    Channon, H. P. G.

    Hutchison, Michael Clark

    Ridley, Hn. Nicholas

    Chionester-Clark, R.

    Irvine, Bryant Godman (Rye)

    Ridsdale, Julian

    Clark, Henry

    Jenkin, Patrick (Woodford)

    Robson Brown, Sir William

    Clegg, Walter

    Jennings, J. C. (Burton)

    Rodgers, Sir John (Sevenoaks)

    Cooke, Robert

    Johnson Smith, G. (E. Grinstead)

    Rossl, Hugh (Hornsey)

    Cooper-Key, Sir Neill

    Jones, Arthur (Northants, S.)

    Royle, Anthony

    Cordle, John

    Joplin, Michael

    Russell, Sir Ronald

    Corfield, F. V.

    Joseph, Rt. Hn. Sir Keith

    St. John-Stevas, Norman

    Costain, A. P.

    Kaberry, Sir Donald

    Sandys, Rt. Hn. D.

    Craddock, Sir Beresford (Spelthorne)

    Kerby, Capt. Henry

    Scott, Nicholas

    Crosthwaite-Eyre, Sir Oliver

    Kershaw, Anthony

    Scott-Hopkins, James

    Crouch, David

    Kimball, Marcus

    Sharpies, Richard

    Crowder, F. P.

    King, Evelyn (Dorset, S.)

    Shaw, Michael (Sc'b'gh & Whitby)

    Cunningham, Sir Knox

    Kirk, Peter

    Silvester, Frederick

    Currie, C. B. H.

    Knight, Mrs. Jill

    Smith, Dudley (W'wick & L'mington)

    Dalkeith, Earl of

    Lancaster, Col. C. G.

    Smith, John (London & W'minster)

    Dance, James

    Lane, David

    Speed, Keith

    d'Avigdor-Goldsmid, Sir Henry

    Langford-Holt, Sir John

    Stainton, Keith

    Dean, Paul (Somerset, N.)

    Legge-Bourke, Sir Harry

    Stodart, Anthony

    Deedes, Rt. Hn. W. F. (Ashford)

    Lewis, Kenneth (Rutland)

    Stoddart-Scott, Col. Sir M. (Ripon)

    Digby, Simon Wingfield

    Lloyd, Rt. Hn. Ceoffrey(Sut'nC'dfield)

    Summers, Sir Spencer

    Dodds-Parker, Douglas

    Lloyd, Ian (P'tsm'th, Langstone)

    Tapsell, Peter

    Donnelly, Desmorld

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Taylor, Sir Charles (Eastbourne)

    Doughty, Charles

    Longden, Gilbert

    Taylor, Edward M.(C'gow, Cathcart)

    Drayson, G. B.

    Loveys, W. H.

    Teeling, Sir William

    du Cann, Rt. Hn. Edward

    Lubbock, Eric

    Temple, John M.

    Eden, Sir John

    McAdden, Sir Stephen

    Thatcher, Mrs. Margaret

    Elliot, Capt. Walter (Carshalton)

    MacArthur, Ian

    Thorpe, Rt. Hn. Jeremy

    Elliott, R. W. (N'c'tle-upon-Tyne, N.)

    Mackenzie, Alasdair (Ross&Crom'ty)

    Tilney, John

    Emery, Peter

    Maclean, Sir Fitzroy

    Turton, Rt. Hn. R. H.

    Errington, Sir Eric

    Macleod, Rt. Hn. lain

    van Straubenzee, W. R.

    Eyre, Reginald

    McMaster, Stanley

    Vaughan-Morgan, Rt. Hn. Sir John

    Farr, John

    Macmillan, Maurice (Farnham)

    Wainwright, Richard (Colne Valley)

    Fisher, Nigel

    Maddan, Martin

    Walker-Smith, Rt. Hn. Sir Derek

    Fletcher-Cooke, Charles

    Marten, Neil

    Wall, Patrick

    Portescue, Tim

    Maude, Angus

    Walters, Dennis

    Foster, Sir John

    Maudling, Rt. Hn. Reginald

    Ward, Dame Irene

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Mawby, Ray

    Weatherill, Bernard

    Galbraith, Hn. T. G.

    Maxwell-Hyslop, R. J.

    Webster, David

    Gibson-Watt, David

    Maydon, Lt.-Cmdr. S. L. C.

    Wells, John (Maidstone)

    Gilmour, Ian (Norfolk, C.)

    Mills, Peter (Torrington)

    Whltelaw, Rt. Hn. William

    Gilmour, Sir John (Fife, E.)

    Mills, Stratum (Belfast, N.)

    Williams, Donald (Dudley)

    Glover, Sir Douglas

    Miscampbell, Norman

    Wills, Sir Gerald (Bridgwater)

    The House divided: Ayes 241, Noes 300.

    Wilson, Geoffrey (Truro)

    Woodnutt, Mark

    Winstanley, Dr. M. P.

    Worsley, Marcus

    TELLERS FOR THE AYES:

    Wolrige-Gordon, Patrick

    Wylie, N. R.

    Mr. Jasper More and

    Wood, Rt. Hn. Richard

    Younger, Hn. George

    Mr. Timothy Kitson.

    NOES

    Abse, Leo

    Edwards, Robert (Billton)

    Lee, Rt. Hn. Frederick (Newton)

    Albu, Austen

    Edwards, William (Merioneth)

    Lee, Rt. Hn. Jennie (Cannock)

    Allaun, Frank (Salford, E.)

    Ellis, John

    Lee, John (Reading)

    Alldritt, Walter

    English, Michael

    Lestor, Miss Joan

    Allen, Scholefield

    Ennals, David

    Lever, Harold (Cheetham)

    Anderson, Donald

    Ensor, David

    Lever, L. M. (Ardwick)

    Archer, Peter

    Evans, Albert (Islington, S.W.)

    Lewis, Arthur (W. Ham, N.)

    Armstrong, Ernest

    Fernyhough, E.

    Lewis, Ron (Carlisle)

    Atkinson, Norman (Tottenham)

    Fitch, Alan (Wigan)

    Lomas, Kenneth

    Bacon, Rt. Hn. Alice

    Fletcher, Ted (Darlington)

    Loughlin, Charles

    Bagier, Cordon A. T.

    Foley, Maurice

    Luard, Evan

    Barnes, Michael

    Foot, Michael (Ebbw Vale)

    Lyon, Alexander W. (York)

    Barnett, Joel

    Ford, Ben

    Lyons, Edward (Bradford, E.)

    Baxter, William

    Forrester, John

    Mabon, Dr. J. Dickson

    Beaney, Alan

    Fowler, Gerry

    McBride, Neil

    Bence, Cyril

    Fraser, John (Norwood)

    McCann, John

    Benn, Rt. Hn. Anthony Wedgwood

    Ffeeson Reginald

    MacColl, James

    Bennett, James (G'gow, Bridgeton)

    Galphern, Sir Myer

    acDermot, Niall

    Bidwell, Sydney

    Gardner, Tony

    Macdonald, A. H.

    Binns, John

    Garrett, W. E.

    McGuire, Michael

    Bishop, E. S.

    Ginsburg, David

    McKay, Mrs. Margaret

    Blackburn, F.

    Gordon Walker, Rt. Hn. P. C.

    Mackenzie, Cregor (Rutherglen)

    Blenklnsop, Arthur

    Gourlay, Harry

    Mackie, John

    Boardman, H. (Leigh)

    Gray, Dr. Hugh (Yarmouth)

    Mackintosh, John P.

    Booth, Albert

    Greenwood, Rt. Hn. Anthony

    Maclennan, Robert

    Boston, Terence

    Grey, Charles (Durham)

    McMillan, Tom (Glasgow, C.)

    Bottomley, Rt. Hn. Arthur

    Griffiths, David (Rother Valley)

    McNamara, J. Kevin

    Boyden, James

    Griffiths, Eddie

    MacPherson, Malcolm

    Braddock, Mrs. E. M.

    Griffiths, Rt. Hn. James (Llanelly)

    Mallalieu,J.P.W.(Huddersfield,E.)

    Bradley, Tom

    Gunter, Rt. Hn. R. J.

    Manuel, Archie

    Bray, Dr. Jermy

    Hamilton, James (Bothwell)

    Marks,, Kenneth

    Brooks, Edwin

    Hamling, William

    Marquand, David

    Brown, Rt. Hn. George (Belper)

    Hannan William

    Marsh, Rt. Hn. Richard

    Buchan, Norman

    Hatterley, Roy

    Mendelson, J.J.

    Buchanan, Richard (G'gow, Sp'burn)

    Hattersley, Roy

    Mikardo, Ian

    Butler, Herbert (Hackney, C.)

    Hazell, Bert

    Millan, Bruce

    Butler, Mrs. Joyce (Wood Green)

    Healey, Rt Hn. Denis

    Millan, Bruce

    Callaghan, Rt. Hn. James

    Heffer, Eric S.

    Miller, Dr. M. S.

    Cant, R. B.

    Herbison, Rt. Hn. Margaret

    Milne, Edward (Blyth)

    Carmicheal, Neil

    Herbison, Rt. Hn. Margaret

    Mitchell, R. C. (S'th'pton, Test)

    Cartor-Jones, Lewis

    Hilton, W. S.

    Molley,William

    Castle, Rt. Hn. Barbara

    Houghton, Rt. Hn. Douglas

    Morgan, Elystan (Cardinganshire)

    Chapman, Donald

    Howarth, Harry (Wellingborough)

    Morris, Alfred (Wythenshawe)

    Coe, Denis

    Howarth, Robert (Bolton, E.)

    Morris, Charles R. (Openshawe)

    coleman, Donald

    How le, W.

    Moyle, Roland

    Concannon, J. D.

    Hoy, James

    Mulley, Rt. Hn. Fererick

    Conlan, Bernard

    Huekfield, Leslie

    Murray, Albert

    Corbet, Mrs. Freda

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Neal, Harold

    Craddock, George (Bradford, S.)

    Hughes, Emrys (Ayrshire, S.)

    Newens, Stan

    Crawshaw, Richard

    Hughes, Hector (Aberdeen, N.)

    Noel-Baker, Francis (Swindon)

    Cronin, John

    Hunter, Adam

    Oakes, Gordon

    Crosland, Rt. Hn. Anthony

    Hynd, John

    Ogden, Eric

    Crosoman, Rt. Hn. Richard

    Irvine, Sir Arthur (Edge Hilt)

    O'Malley Brian

    Cullon, Mrs. Alice

    Jackson, Colin (B'h'se & Spenb'gh)

    Oram, Albert E.

    Dalyell, Tam

    Janner, Sir Barnett

    Orme, Stanley

    Darling, Rt. Hn. Ceorge

    Jay, Rt. Hn. Douglas

    Oswald Thomas

    Davidson, Arthur (Accrington)

    Jeger,i George (Goole)

    Owen, Dr. David (Plymouth, S'tn)

    Davies, Ednyfed Hudson (Conway)

    Jeger,Mrs.Lena(HIb'n&St.P'cras,E.)

    Page Derek (Kins's Lvnn)

    Davies, G. Elfed (Rhondda, E.)

    Jenkins, Hugh (Putney)

    Palmer Arthur

    Davies, Dr. Ernest (Stretford)

    Jenkins, Rt. Hn. Roy (Stechford)

    park Trevor

    Davies, Ifor (Gower)

    Johnson, Carol (Lewisham, S.)

    Parker, John (Danenham)

    de Freitas, Rt. Hn. Sir Geoffrey

    Johnson, James (K'ston-on-Hull W.)

    Parkin, Ben (Paddlngton N )

    Delargy, Hugh

    Jones, Dan (Burnley)

    Parkyn, Brian (Bedford)

    Dell, Edmund

    Jones,Rt.Hn.SirElwyn(W.Ham,S.)

    Pavitt Laurence

    Dempsey, James

    Jones, J. Idwal (Wrexham)

    Pearson, Arthur (Pontypridd)

    Dewar, Donald

    Jones, T. Alec (Rhondda, West)

    Peart., Rt. Hn. Fred

    Dobson, Ray

    Judd, Frank

    Pentland, Norman

    Doig, Peter

    Kelley, Richard

    Perry, Ernest G. (Battersea, S.)

    Driburg, Tom

    Kenyon, Clifford

    Prentice, Rt. Hn. R. E.

    Dunn, James A.

    Kerr, Mrs. Ann (R'ter & Chatham)

    Price, Christopher (Perry Barr)

    Dunnett, Jack

    Kerr, Dr. David (W'worth, Central)

    Price, Thomas (WesthoughtonV

    Dunwoody, Mrs. Gwyneth (Exeter)

    Lawson, George

    Price, William (Rugby)

    Dunwoody, Dr. John (F'th & C'b'e)

    Leadbitter, Ted

    Probert, Arthur

    Eadie, Alex

    Ledger, Ron

    Randall, Harry

    322

    323

    Rankin, John

    Skeffington, Arthur

    Wellbeloved, Junes

    Rees, Merlyn

    Slater, Joseph

    Wells, William (Walsall, N.)

    Reynolds, Rt. Hn. G. W.

    Small, William

    Whitaker, Ben

    Rhodes, Geoffrey

    Snow, Julian

    White, Mrs. Eirene

    Richard, Ivor

    Spriggs, Leslie

    Whitlock, William

    Roberts, Albert (Normanton)

    Steel, Thomas (Dunbartonshire, W.)

    Wilkins, W. A.

    Roberts, Rt. Hn. Goronwy (Caernarvon)

    Stonehouse, Rt. Hn. John

    Willey, Rt. Hn. Frederick

    Roberts, Gwilym (Bedfordshire, S.)

    Strauss, Rt. Hn. G. R.

    Williams, Alan (Swansea, W.)

    Robertson, John (Paisley)

    Summerskill, Hn. Dr. Shirley

    Williams, Alan Lee (Hornchurch)

    Robinson, Rt. Hn. Kenneth (St.P'c'as)

    Swingler, Stephen

    Williams, Clifford (Abertillery)

    Robinson, W. O. J. (Walth'stow, E.)

    Symonds, J. B.

    Williams, Mrs. Shirley (Hitchin)

    Rodgers, William (Stockton)

    Taverne, Dick

    Williams, W. T. (Warrington)

    Roebuck, Roy

    Thomas, Rt. Hn. George

    Willis, Rt. Hn. George

    Rogers, George (Kensington, N.)

    Thornton, Ernest

    Wilson, Rt. Hn. Harold (Huyton)

    Rose, Paul

    Tinn, James

    Wilson, William (Coventry, S.)

    Ross, Rt. Hn. William

    Tuck, Raphael

    Winnick, David

    Ryan, John

    Urwin, T. W.

    Woodburn, Rt. Hn. A.

    Shaw, Arnold (Ilford, S.)

    Varley, Eric G.

    Woof, Robert

    Sheldon, Robert

    Wainwright, Edwin (Dearne Valley)

    Wyatt, Woodrow

    Shore, Rt. Hn. Peter (Stepney)

    Walden, Brian (All Saints)

    Yates, Victor

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Walker, Harold (Doncaster)

    Short, Mrs. Renée(W'hampton,N.E.)

    Wallace, George

    TELLERS FOR THE NOES:

    Silkin, Rt. Hn. John (Deptford)

    Watkins, David (Consett)

    Mr. Joseph Harper and

    Silkin, Hn. S. C. (Dulwich)

    Watkins, Tudor (Brecon & Radnor)

    Mr. Ioan L. Evans.

    Silverman, Julius

    Weitzman, David

    New Clause 7
    DUTY OF NATIONAL BOARD FOR PRICES AND INCOMES TO CONSIDER EFFECT OF CHANGES OF PRICE, &C, ON EXPORT TRADE
    6. Where under section 2(1) or 2(3) of the Prices and Incomes Act, 1966, as amended by this Act, any question is referred to the National Board for Prices and Incomes concerning prices for the sale of goods or charges for the performance of services, including charges for the application of any process to goods, or any awards or settlements relating to terms or conditions of employment, the Board shall consider the effects of any proposed changes in such prices "or" charges, or awards or settlements on the export trade (that is to say the provision of goods and services for persons not resident in the United Kingdom): and where the Board is directed under Section 4(1) of this Act to consider making recommendations for the reduction of prices or charges, the Board shall consider and report to the Minister or Ministers on the effects that such reduction in prices would, in its opinion, have on the export trade.— [Mr. Tom Boardman.]
    Brought up, and read the First time.
    Mr. Tom Boardman: I beg to move, That the Clause be read a Second time.
    Mr. Speaker: I have suggested that with the new Clause we can take Amendment No. 47 in Clause 4, page 4, line 33, at end insert:
    (7) None of the provisions of this section shall apply to a company which exports 75 per cent. or more of its products by value.
    Mr. Boardman: The Clause requires the Board, on a reference to it for prices or charges, or for awards or settlements, to consider the effect on the export trade.
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    I am sure that it measures up to the right hon. Lady's criteria, and certainly measures up to what she said earlier about being patriotic.
    The Clause is in conformity with the White Paper, which spelled out that the object of the Government's policy was the
    "transfer of resources from home consumption to producing goods for export and import saving …"
    The remarkable thing is that after that one passing reference to the development of our export trade no mention was made of it in the White Paper, in the Statutory Instrument which followed it, or in the Bill. It is the balance of our exports against imports which is critical and which is said to be the reason for these stern measures.
    It may be that the Minister will rely on Section 9(1) of the 1966 Act. That section enables the Minister to make certain alterations if it appears that any directions made may impede the export trade, but there are certain objections to the section. First, it does not apply to awards or settlements. It applies only to orders or directions relating to prices or charges.
    Mr. Speaker: Order. It is difficult for the hon. Member to address the House against a loud and sustained dialogue.
    Mr. Boardman: It may be that an Order could be made against an award or settlement which was helpful to the export trade, and the Clause seeks to enable the question of exports to be taken into account when dealing with awards and settlements.

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    My main objection to any contention that Section 9 of the 1966 Act meets the purpose of the Clause is that it gives the Minister and not the Board, power to make the final judgment. When we discussed the promotion of exports in Committee, the Under-Secretary of State said:
    "There are times when the success of the export trade depends on the volume of domestic sales, but that is not invariably so. I know that the Committee has some reservations about this, but it is an opportunity for the Minister to use his or her judgment, as he is obliged to do. Clearly, it is variable, but when he believes that the application of prices policy domestically might impair export prospects, he must ensure that this does not happen. It is a matter of Ministerial judgment."—[OFFICIAL REPORT, Standing Committee F; 11th June, 1968, c. 658.]
    The whole question of pricing is one of delicate complications for management decisions. It is impossible for the Minister to make the decisions, and that is why the Clause puts the onus on the Board to consider the merits of the export case. I share the feelings expressed earlier this afternoon that the Board is incapable of making decisions which only managements are able to make because the question of costing and pricing, when balancing between export prices and home prices, cannot be considered in isolation. It must be considered in the context of the overall costs of the group or company.
    Many of the complications which are involved were highlighted in the Mallory Battery case, which is well known to the House. Referring to the problem of export prices, the Prices and Incomes Board Report No. 64, said, in paragraph 13:
    "Unless the prices are uniform it is difficult to preserve the integrity of one market as against another: with different prices products from the European factories might … enter the U.S.A. through a third party…
    It ended:
    "… in the light of the complexities involved … each case will need to be looked at on its merits."
    That, of course, is so. It is a matter of deciding whether one promotes exports on the basis of a firm home market. When a product is selling well at home, the firm has to decide whether it should accept a lower price on exports supported by the home price. There are also cases in which one is creating a new product for the overseas market.
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    In this case, this country should concentrate more on being market-orientated rather than production-orientated, which means looking for the product which the market requires. Then, the decision must be whether product A should carry an over-price so that the exportable product B can be developed and marketed. These are complex matters, requiring management decisions, and must not be left to the judgment of a Minister which cannot be challenged. In my constituency, where large numbers of shoes, engineering and hosiery products are exported, there is a constant and delicate balance in management between export prices and those for home market products. If a Ministry were to fix a price aribtrarily, that could distort the whole pattern of this type of export trade.
    Amendment No. 47 would exclude from the power of price reduction a company whose exports were 75 per cent. or more of its total production, and this must be right. If a price reduction is imposed on such a firm, it will obviously be self-defeating, leading either to a two-tier price, lower at home than for exports, with all the problems described in the Mallory Batteries case—and if the overseas customer realises that he is paying more, that will cause problems—or to a price reduction right across the board, with the value of exports, 75 per cent. of production, being reduced. If a firm can sell 75 per cent. of its products overseas, it should surely be immune from the risk of a price reduction Order. Decisions in this matter should be based on considerations of exports.
    7.45 p.m.
    Mr. Biffen: My hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) argued his case cogently and I support him, especially in his arguments about the Mallory Battery Company, because the heart of the new Clause are the words:
    " the Board shall consider the effects of any proposed changes in such prices ' or ✶ charges or awards or settlements on the export trade …"
    That is one way in which we can express our own doubts about the extent to which the Prices and Incomes Board has borne those considerations in mind in its recommendations so far.
    It is important that we should take this opportunity, because the Mallory

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    Batteries case was referred to the Board after the original price change had been accepted, on notification, by the Ministry of Technology. In other words, it was a politically motivated reference following a certain amount of perfectly understandable outcry and political pressure. The Board's Report shows how politically sensitive a body it is. This lies at the heart of so much of our opposition, that it should have so much control and authority in determining economic factors. This is why a Clause like this, which seeks to represent our feeling that export trade considerations should loom much larger is of such vital importance.
    This is especially so over one reference since the Mallory case, namely, the computer charges by I.B.M. When one considers how much we wish to see this country the centre of international companies operating a price structure which will often, and of necessity, be common through that part of the world market which they hope to control, it is essential that they shall not be manoeuvred into the two-price structure through sheer political motivation. The evidence so far available in the Mallory case, must, I fear, sustain the doubts which my hon. Friend has expressed. I fully support his argument and the necessity for voting on the new Clause.
    Mr. Nicholas Ridley: I support my hon. Friends the Members for Leicester, South-West (Mr. Tom Boardman) and Oswestry (Mr. Biffen), although both found themselves in a difficulty in trying to fit the delicate economics of the price mechanism into the extraordinary political policy of this Bill. The two are, of course, flatly incompatiable. As I said earlier, it is like trying to mend a wristwatch with a crowbar. The result is. inevitablv damage to the mechanisms upon which a free market economy operates.
    This problem is not immediately apparent on the home industrial scene: it is only when one begins to consider exporting that the glaring anomalies in forcing down and holding down prices by an Order under Clause 4 become evident.
    We then have this curious invitation to a double standard on prices, if one considers exports. The Parliamentary Secretary went some way towards admitting this in Committee when he said
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    that it would be possible for there to be higher prices for exports and lower prices for identical goods in the home market. The tenor of his speech on that occasion tended to encourage the belief that if one could get more money for one's goods abroad, that was all right because it would mean more foreign exchange, but that if one tried to get more for the identical goods in the home market, one might have an order issued against one.
    The economics of the situation point in the opposite direction. We should be trying to keep home market prices up so that we can export more by taking a smaller margin of profit on the exported goods. This is the basis of the argument of, for example, the motor industry; that we need a strong home market before we can export. This must mean that we should have a buoyant home market to enable firms to subsidise, as it were, their export customers and so compete with other countries.
    In so far as this policy is valid—and I will not go into the merits or demerits of it now—it is obvious that the Government's policy will secure the reverse, with higher prices for exports and lower prices in the home market. The result will be that the goods produced by, for example, the car industry will be sucked into the home market at a price which is too low, with the result that the profits will not be high enough to enable the motor firms to make the necessary investment in plant. The result of that will be that the industry's growth prospects will be damaged, resulting in a choking off of investment in plant, with a consumer boom at home and with prices in the home market being kept low. Yet this is precisely what the Government are trying to do. Through a political motivated policy, they are window-dressing the fact that they are keeping down prices when what they really want to do is to clobber wage increases and pretend to the world that they are being fair.
    What will happen if a firm successfully exports more and manages to force up its prices in export markets? Will it be entitled to pay its workers more for that reason alone? In other words, if there was no increase in productivity, would the mere fact that a firm has doubled its income by greater export effort entitle

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    it to pay, say, 20 per cent. more in wages? If not, the laudable policy of not wanting to put a limit on export prices will mean increased profits and share capital for exporting firms, while no benefit will go to the workers.
    The conclusion which one must draw from studying the whole problem of what should be the policy governing export prices is the fundamental one that we live in a trading system consisting of a large number of countries which all operate free enterprise market economic systems. We have E.F.T.A., the Common Market and North America. If one country in the system goes in for a Statecontrolled system of prices, wages and so on, we begin to face a number of difficulties. One cannot establish a rigid, bureaucratic, centralised economic system in a country which trades with a large number of free enterprise market econimies. The difficulties are legion and one of the Socialist Government's economic difficulties about trade and exports has stemmed from the central fact that they are trying to put a pseudo-Communist system into a free enterprise world. It would be easier for us to trade with the Communist bloc if we were to adopt this type of policy than for us to continue to trade with the free world.
    Be that as it may, the difficulty here is an absolute exposition of the unwisdom of trying to control one part of the market mechanism, which is prices for export, in isolation. The Parliamentary Secretary will, therefore, agree with the principle of the new Clause, even if he resists the Clause in total. If so, he is admitting the principle that one cannot satisfactorily combine a State-controlled prices and incomes policy with trading in a free economic system.
    Mr. Kenneth Lewis: I support the new Clause. Even if the Minister cannot accept its drafting, he should accept its principle. We are dependent on an export boom and everything we do should be geared to that boom. It is of vital importance that we take note of the part of the new Clause which refers to
    "… awards or settlements relating to terms or conditions of employment …"
    since his right hon. Friend decided yesterday that she might put the question of Mr. Harnbro's rise to the N.B.P.I. The
    330
    hon. Gentleman will have noted that the firm in question has said that this rise is geared to the productivity of the company and that the individual is concerned in that the firm is concerned with exports and that, in so far as it is earning very heavy invisibles for this country, it would be reasonable that, arising out of those earnings, those who are involved in the direction of the firm should get a share of the reward.
    In any event, the right hon. Lady will be in some difficulty in arguing the case against this rise if she bears in mind that the Chancellor is at present forcing directors of close companies to give themselves rises. She might, therefore, like to put my case to the N.B.P.I. since I have to give myself a rise of several hundred £s this year from my company. I did not wish to do so, but I was obliged to do so because the Chancellor told me that, as the director of a close company, I had to give myself a rise so that he could get it back, mostly by way of Income Tax and Surtax. I see the Minister shaking his head, presumably in disagreement, but I assure him that what I have said is correct and that it applies to directors in a similar position throughout the country.
    Mr. Hattersley: The hon. Gentleman is wrong. My right hon. Friend would have been happy to have taxed the hon. Gentleman as if he had got the rise, even if he had not paid it to himself.
    Mr. Lewis: I assure the Minister that he is wrong. He should be aware that if the money had been left in the company, as I would have wished, the Chancellor would have got a good deal less by way of tax than he gets as a result of directing me to pay myself more. The same can be said of directors not in their hundreds but in their thousands throughout the country.
    If the Minister is reluctant to accept the new Clause because he does not think that we should relate these matters to exports, I remind him that, from the dividend point of view, we are apparently relating the matter to exports. His right hon. Friend has complained about Mr. Hambro, but the hon. Member for Buckingham (Mr. Maxwell) has increased his dividend by 8 per cent. this year. He increased it when we had a prices and incomes policy last year and he increased it the year before that'. The hon.

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    Member for Buckingham is a good free-enterprise industrialist who is earning a lot of money for Britain. He is increasing his business year by year and is therefore enabled to increase his dividend, which encourages his shareholders, who in turn will always provide him with more money when he wants to expand his business. He has increased his dividends this year by 8 per cent., having very large family holdings in the business, and he has had permission from the Treasury to do so. I hope the right hon. Lady will think it right and proper that as the hon. Member for Buckingham can increase his dividend by 8 per cent. and get a large increase for his family holdings, it is equally right for Mr. Hambro to increase his salary if it is justified on the ground of productivity.
    8.0 p.m.
    The Government are getting into a muddle because they are mixing politics with the real functions of the Ministry. The right hon. Lady is very good at politics and therefore, I suppose, in certain offices in the Government, and certainly in Opposition. From the action she has taken in the last 24 hours I think she has been a disaster as a Minister. Can anyone imagine anything worse during a go-slow than to draw the attention of people who are told they cannot have more money to a director who can have more?
    Mr. Deputy Speaker (Mr. Sydney Irving): Order. I am having some difficulty in relating what the hon. Member is saying to the new Clause, which is concerned with prices.
    Mr. Lewis: I accept that rebuke. If we want to increase exports, and that is the aim of the new Clause, Ministers must stop playing politics. They have to try to act as Ministers in order to get increased productivity. They not only have to act, but they have to talk on that basis.
    Mr. Keith Speed: I find myself in some problem because, like some of my hon. Friends, I regard particular parts of this Bill dealing with price reductions as nonsensical for pricing is a more sophisticated arrangement. Nevertheless, it is our duty to try to
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    improve the Bill, although we regard large parts of it as completely unacceptable.
    On the question of exports, there are some important points on which I hope the Minister will go along with us, even at this late stage. In the 1966 Act there was reference to exports, but not to price reductions. In Committee the Joint Parliamentary Secretary went a little way to acknowledging the fact when I raised problems of export policy of companies which are dependent on the home market. There has been argument about the motor trade in which 50 per cent. of the products may be exported. That trade from time immemorial has argued that it needs to have a strong home market to act as a springboard for its exports.
    From time to time some of us have been a little suspicious about certain industries which have said that they need to have a secure home market so that they can export and then, as soon as hire purchase controls or other controls have been eased, we have found that the home market gets bigger and bigger and exports fewer and fewer. I am particularly concerned, and I declare a constituency interest, with industries, such as the cycle industry, which export a large amount of their products. In their pricing and marketing policy companies engaged in a high proportion of exports have to consider their total production. They tend to have different prices for different countries to which they are sending their products and the total production for this country has to fit into the overall marketing and pricing scheme.
    In Committee the Parliamentary Secretary said that this is a question of Ministerial judgment. He is a politician, as I am, and from time to time political considerations might cloud his judgment. For example, there could well be a situation in which prices are rising particularly fast, we have the Index of Retail Prices and there is a clamour in the Press about "Mr. Rising Price" and so on. Then it might be convenient to have price reduction orders confirmed. If the Prices and Incomes Board were empowered to make observations and an assessment on the effect on exports of price reductions and if a company exporting more than 75 per cent. of its products by value were exempted, that would give some margin to companies—

    333
    of which by definition there will be a comparatively small number engaged in exports—in their pricing and marketing policies.
    This proposal would give a safeguard to a part of the Bill which will be extremely difficult to work, if it is not unworkable for these companies. I therefore hope that the Minister will accept the new Clause.
    Mr. Hattersley: Whenever we debate the prices provisions of the Bill, particularly when we consider powers to impose price reductions, we have a charming interlude in which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) gives us a rather simple account of the theory of perfect competition. I am sure that he remembers that Professor Galbraith described it as, "unfortunately not sanctioned by reality". On that basis we have to begin to consider the sort of proposals made by the Opposition.
    The hon. Member, having drawn our attention to the delicate mechanics of the price mechanism on which a free market operates, went on to say that the free market would be unbalanced or upset if the Government imposed a system of rigid price control. We have said many times, but it is still not accepted in some places, that the Government do not claim to be mounting a system of rigid price control. My right hon. Friend has said, and the Chancellor of the Exchequer has said, that all we can seek to do, all we can do, and all that it is economically possible in practice to do, on occasions when there are individual key prices whose increases seem to us to be unjustifiable, is to examine them and maybe seek to prohibit an increase or insist on a reduction. That is not a system of tight price control. This debate must be judged against that background.
    As hon. Members opposite have said, I conceded—if "conceded" is the right word—in Committee, and I am happy to concede again tonight, that there is an absolute obligation on all those operating prices and incomes policies to make sure that any decision they make and any orders they make in this policy are not detrimental to the Government's policy of encouraging exports. Two possible difficulties which hon. Members opposite fear were perhaps best set out by the hon. Member for Meriden (Mr. Speed) who,
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    I thought, by implication at least drew two sorts of possible problems.
    The first was the literal economic problem where a company feels that its export base in Britain must be sufficiently prosperous for it to mount and sustain the sales drives and all the other things that go into sales abroad. The second, I suppose, is a psychological problem—and this was also referred to by the hon. Member for Cirencester and Tewkesbury —the idea that the buyer abroad is sceptical of the value of a product if that product has had its price reduced on the home market as a result of Government intervention.
    We understand exactly that the first problem exists. It was I in Committee who rashly conceded—rashly not in terms of the Committee discussion but in terms of general industrial policy—that it might be argued, and perhaps I was slightly influenced in my capacity as a Member of Parliament for the City of Birmingham, that a substantial domestic market had some relevance to the number of motor cars sold abroad. I accept that possibility, and I accept that the Government must take it into account when determining the price policy for motor cars, or for any other sector of the economy.
    I do not take so readily to the argument that foreign buyers will be disenchanted at the prospect of buying British goods if they discover that the price they are paying is substantially smaller than the price that has been insisted upon in the home market by the Government. The hon. Member for Merideo talked about motor-cycle manufacturers in his constituency, all of whom have carefully graded prices which are intended to accommodate exactly what each foreign market would buy. No doubt, and I speak without experience, it would be a little more in Germany than in Italy and a little less in France than in Italy. I do not think he is arguing that buyers in Germany are put off because motorcycles are less expensive in Italy, or that buyers in France are put off because they are a little more expensive in the other two countries.
    If there is to be an exporting prices policy, with a price geared to each individual national market, a price which the exporter has calculated is what the

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    market can bear, then there will be distinctions in prices from market to market, and I cannot believe that the export effort will be undermined if one of those distinctions is between the home market and individual foreign markets. Indeed, such distinctions clearly already exist, not by Government policy but by volume of sale abroad, transport costs and many other things.
    It is a very sophisticated foreign buyer who says that the Meriden motorcycles —I hasten to tell the people in Meriden that I hypothesise wildly; I have no reason to assume this would be the case —were judged by the Government and by the National Board for Prices and Incomes to be 4s. 6d. over-priced and, since they have been reduced by that amount in Birmingham, they will not be bought in Rome, Berlin and Paris unless they are reduced by a similar amount. I do not believe that will operate, and I suspect by the look on his face that the hon. Member does not think that will operate either.
    What he believes, and I agree with him entirely, is that in deciding our prices policy, and when we examine prices with a view to reducing them, we must take into account the export requirements. When I say "we must", I mean not only in common sense and reasonableness, but I remind the House that, under the powers by which the Prices and Incomes policy is operated, we are required statutorily to take that into account.
    The hon. Member for Leicester, South-West (Mr. Tom Boardman) warned the House that I would refer to Section 4(1) of the 1966 Act, by which the current White Paper on Prices and Incomes policy is incorporated into the parent Act as a Schedule of criteria which must be taken into account when decisions are arrived at by the National Board for Prices and Incomes. His warning was absolutely right. That White Paper refers to the overriding need to stimulate exports. The National Board for Prices and Incomes in making its decisions must statutorily take that White Paper into account, and the White Paper makes it absolutely clear that its judgments must in some ways be guided by that consideration.
    8.15 p.m.
    Similarly, with the First Schedule to the 1968 Act, which lists the provisions in
    336
    previous Acts which we must take into account when considering the possibilities of price reduction and the warning of the hon. Member for Leicester, South-West, enables me to remind the House that Section 9(1) of the 1966 Act imposes an additional obligation on my right hon. Friend. If we assume, and I do not assume it for one moment, that the National Board for Prices and Incomes has ignored this requirement to examine all prices and all potential reductions in the light of the White Paper, and has therefore made an Order for a price reduction which is in flagrant breach of that undertaking and disregards the export implications, then my right hon. Friend is required to exclude from a prices Order, as she sees appropriate, anything that might be regarded as detrimental to the export trade.
    When I said in Committee that this was to a degree a subjective decision, and something which must be done by her, I thought and I hoped that I was making a point that was no more than the semantic obvious, that if she is required to take into account all the things which seem to her appropriate for the encouragement of exports, I was doing no more than concede that what appears to be appropriate might vary from individual to individual. All that I could assure the Committee, and all that I can assure the House today, is that my right hon. Friend will operate that system according to her judgment and according to her ability. I do not believe that any possible price reductions which could be recommended by the National Board for Prices and Incomes, and which could be confirmed by way of an Order debated in the House, could be to the detriment of our export trade. We are required by Statute to take that into account. We are required by obligations inherent in the White Paper to make allowance for these things.
    Nothing could be more arbitrary than an Amendment which seeks to exclude firms which have an export trade amounting to 75 per cent. of their turnover. From time to time my right hon. Friends and I are chided for our lack of industrial experience, but my industrial experience leads me to believe that it is not possible to point to a firm or group of firms who through time have 75 per cent. of

    337
    their business going to export. Sometimes it may be 74 per cent.; sometimes it may be 77 per cent. How one could make that calculation, how one could possibly say that this firm is above the 75 per cent. level and that firm is just below, I do not know.
    Mr. John Page: It springs to mind at once that there are many commercial firms, as opposed to manufacturing firms, to whom this must apply, firms who concentrate entirely on export business.
    Mr. Hattersley: Were I to make that point in another context, the hon. Gentleman would be the first to say to me that it is not enough to say that there are some firms we can describe in this way, since this requires the exercise of Ministerial judgment. He would say what he is worried about is how the Minister makes judgments about those firms around the margin. That is what I too am worried about in that context. I do not believe that the Minister could make that judgment, and I hope that the House will not try to impose that judgment upon us. I assure the House that we are most conscious of the export obligations; the White Paper and the Bill require us to remain conscious of them and that consciousness will continue.
    Sir John Foster: The hon. Gentleman at the beginning of his answer said that it was wrong for my hon. Friends to say that a rigid system of price control was being imposed. My first observation is that obviously the Government are taking the power to impose a system of rigid price control.
    He then went on to say, and he said also in another context, that the Government would act wisely and do this and that according to the best principles. He must realise that we have no confidence in the Government. We do not believe them when they say they have the intention to do this or that. If they mean it at the time they alter their intention within a very short time. Therefore, since we cannot rely upon their intentions, we submit that we need an Amendment which fetters their discretion.
    The arguments on the Amendment have drawn attention to the fact that there may be two price structures. There may be a reduction of price ordered by the Government, and there may be a higher export price.
    338
    In the case of Mallory Batteries, it was the company trying to increase its price. The National Board for Prices and Incomes said that it did not think that the increase should take place and that, if there was a difference between the home price not raised and the export price raised, one of the ways of taking care of that was by putting on a conditional restriction.
    That is a very naive suggestion. To put on a restriction to customers in the United Kingdom that they shall not resell the product abroad at a higher price and cut into the suppliers' own market is quite unreal. It shows that, apart from commercial considerations, by ordering a price reduction which brings the home price below the export price, some harm to the export trade must ensue.
    As the National Board for Prices and Incomes adopted that view, when the right hon. Lady takes into account, as statutorily she must, the damage or otherwise to the export trade, we do not believe that she will apply the right principles. All that the Statute says is that she shall do her best according to her own subjective judgment. If she thinks that restrictive conditions imposed on the customers of a United Kingdom supplier will achieve the object of keeping the distinction between the home and the export prices, she is very much mistaken. We do not believe that she will use the right criteria when she performs her statutory duty of trying to protect the export market, and we do not believe that the intention of the Government will remain as it is today. It will change overnight.
    Question put, That the Clause be read a Second time: —
    The House proceeded to a Division—
    Mr. John Wells(seated and covered): On a point of order. Is it in order for a Teller on the Government side, in the Aye Lobby, to prevent hon Members from getting out of the Lobby?
    Mr. Deputy Speaker: I must inquire into this. I am unaware of the circumstances. I will inquire into the matter.
    Mr. Wells(seated and covered): Further to that point of order, Mr. Deputy Speaker, have you now made your inquiries?
    Mr. Deputy Speaker: I have been having inquiries made. There was some difficulty because the Division was proceeding. The reply to the point of order raised by the hon. Member for Maidstone (Mr. John Wells) is that, I understand the Tellers did put their arms across the door but it was to prevent any difficulties arising over counting and was merely to facilitate the flow so that counting could be carried through effectively. I am satisfied that no hon. Member was prevented from coming out of the Lobby on that account. Therefore, I take the Division to be perfectly regular.

    Division No. 240.]

    AYES

    [8.22 p.m.

    Allson, Michael (Barkston Ash)

    du Cann, Rt. Hn. Edward

    Joseph, Rt. Hn. Sir Keith

    Allason, James (Hemel Hempstead)

    Eden, Sir John

    Kaberry, sir Donald

    Astor, John

    Elliot, Capt. Walter (Carshalton)

    Kerby, Capt. Henry

    Awdry, Daniel

    Elliott, R.W.(N'c'tle-upon-Tyne,N.)

    Kershaw, Anthony

    Baker, Kenneth (Acton)

    Emery, Peter

    Kimball, Marcus

    Baker, W. H. K. (Banff)

    Errington, Sir Eric

    King, Evelyn (Dorset, S.)

    Balniel, Lord

    Eyre, Reginald

    Kirk, Peter

    Barber, Rt. Hn. Anthony

    Farr, John

    Kitson, Timothy

    Batsford, Brian

    Fisher, Nigel

    Knight, Mrs. Jill

    Bell, Ronald

    Fletcher-Cooke, Charles

    Lane, David

    Bennett, Dr. Reginald (Gos. & Fhm)

    Fortescue, Tim

    Langford-Holt, Sir John

    Berry, Hn. Anthony

    Foster, Sir John

    Lewis, Kenneth (Rutland)

    Biffen, John

    Fraser,Rt.Hn.Hugh(St'fford & Stone)

    Lloyd,Rt.Hn.Geoffrey(Sut'C'dfield)

    Biggs-Davison, John

    Galbraith, Hn. T. G.

    Lloyd, Ian (P'tsm'th, Langstone)

    Birch, Rt. Hn. Nigel

    Gibson-Watt, David

    Lloyd, Rt. Hn. selwyn (Wirral)

    Black, Sir Cyril

    Gilmour, Ian (Norfolk, C.)

    Longden, Gilbert

    Blaker, Peter

    Gilmour, Sir John (Fife, E.)

    Loveys, W. H.

    Boardman, Tom (Leicester, S.W.)

    Glover, Sir Douglas

    Lubbock, Eric

    Body, Richard

    Glyn, Sir Richard

    McAdden, Sir Stephen

    Bossom, Sir Clive

    Godber, Rt. Hn. J. B.

    MacArthur, Ian

    Boyle, Rt. Hn. Sir Edward

    Goodhart, Philip

    Mackenzie,Alasdair(Ross&Crom'ty)

    Braine, Bernard

    Goodhew, Victor

    Maclean, Sir Fitzroy

    Brewis, John

    Gower, Raymond

    Macleod, Rt. Hn. lain

    Brinton, Sir Tatton

    Grant, Anthony

    McMaster, Stanley

    Brown, Sir Edward (Bath)

    Grant-Ferris, R.

    Macmillan, Maurice (Farnham)

    Bruce-Gardyne, J.

    Gresham Cooke, R.

    Maddan, Martin

    Bryan, Paul

    Grieve, Percy

    Maginnis, John E.

    Buck, Antony (Colchester)

    Griffiths, Eldon (Bury St. Edmunds)

    Marten, Neil

    Bullus, Sir Eric

    Gurden, Harold

    Maude, Angus

    Burden, F. A.

    Hall, John (Wycombe)

    Maudling, Rt. Hn. Reginald

    Campbell, B. (Oldham, W.)

    Hall-Davis, A. G. F.

    Mawby, Ray

    Campbell, Gordon (Moray &Nairn)

    Hamilton, Lord (Fermanagh)

    Maxwell-Hyslop R. J.

    Carr, Rt. Hn. Robert

    Hamilton, Michael (Salisbury)

    Maydon, Lt.-Cmdr. S. L. C.

    Channon, H. P. G.

    Harris, Frederic (Croydon, N.W.)

    Mills, Peter(Torrington)

    Chichester-Clark, R.

    Harrison, Brian (Ma'don)

    Mills, Stratton (Belfast, N.)

    Clark, Henry

    Harrison, Col. Sir Harwood (Eye)

    Miscampbell, Norman

    Clegg, Walter

    Harvey, Sir Arthur Vere

    Mitchell, David (Basingstoke)

    Cooke, Robert

    Hastings, Stephen

    Monro, Hector

    Cooper-Key, Sir Neill

    Hay, John

    Mortgomery, Fergus

    Cordle, John

    Heald, Rt. Hn. Sir Lionel

    Morrison, Charles (Devizes)

    Corfield, F. V.

    Heath, Rt. Hn. Edward

    Costain, A. P.

    Heseltine, Michael

    Mott-Radclytfe, Sir Charles

    Craddock, Sir Beresford (Spelthorne)

    Higgins, Terence L.

    Munro-Lucas-Tooth, Sir Hugh

    Crosthwaite-Eyre, Sir Oliver

    Hiley, Joseph

    Murton, Oscar

    Crouch, David

    Hill, J. E. B.

    Nabarro, Sir Gerald

    Crowder, F. P.

    Hirst, Geoffrey

    Neave, Airey

    Cunningham, Sir Knox

    Holland, Philip

    Nicholls, Sir Harmar

    Currie, G. B. H.

    Hornby, Richard

    Noble, Rt. Hn. Michael

    Dalkeith, Earl of

    Howell, David (Guildford)

    Nott, John

    Dance, James

    Hunt, John

    Onslow, Cranley

    d'Avigdor-Goldsmid, Sir Henry

    Hutchison, Michael Clark

    Orr, Capt. L. P. S.

    Dean, Paul (Somerset, N.)

    Irvine, Bryant Godman (Rye)

    Orr-Ewing, Sir Ian

    Deedes, Rt. Hn. W. F. (Ashford)

    Jenkin, Patrick (Woodford)

    Osborn, John (Hailam)

    Digby, Simon Wingfield

    Jennings, J. C. (Burton)

    Page, Graham (Crosby)

    Dodds-Parker, Douglas

    Johnson Smith, G. (E. Grinstead)

    Page, John (Harrow, W.)

    Doughty, Charles

    Jones, Arthur (Northants, S.)

    Pardoe, John

    Drayson, G. B.

    Jopling, Michael

    Pearson, Sir Frank (Clitheroe)

    Mr. Wells(seated and covered): No hon. Member was prevented from coming out because I happened to be stronger than the hon. Member concerned. But is it not disgraceful that an hon. Member on the Government side should use physical force to restrain an hon. Member on the Opposition side from coming out of the Lobby?
    Mr. Deputy Speaker: The hon. Gentleman did succeed in getting out. I understand that no one was prevented from getting out. Therefore the Division must stand.
    The House divided: Ayes 235 Noes 307.

    Peel, John

    Sandys, Rt. Hn. D.

    Wainwright, Richard (Coine Valley)

    Percival, Ian

    Scott, Nicholas

    Walker-Smith, Rt. Hn. Sir Derek

    Peyton, John

    Scott-Hopkins, James

    Wall, Patrick

    Pike, Miss Mervvn

    Sharples, Richard

    Walters, Dennis

    Pink, R. Bonner

    Shaw, Michael (Sc'b'gh A Whitby)

    Ward, Dame Irene

    Pounder, Rafton

    Silvester, Frederick

    Weatherill, Bernard

    Powell, Rt. Hn. J. Enoch

    Smith, Dudley (W'wick A L'mington)

    Webster, David

    Price, David (Eastleigh)

    Smith, John (London & W'minster)

    Wells, John (Maidstone)

    Prior, J. M. L.

    Speed, Keith

    Whitelaw, Rt. Hn. William

    Pym, Francis

    Stainton, Keith

    Williams, Donald (Dudley)

    Quenneil, Miss J. M.

    Stodart, Anthony

    Wills, Sir Gerald (Bridgwater)

    Ramsden, Rt. Hn. James

    Stoddart-Scott, Col. Sir M.(Ripon)

    Wilson, Geoffrey (Truro)

    Rawlinson, Rt. Hn. sir Peter

    Summers, Sir Spencer

    Winstanley, Dr. M. P.

    Rees-Davies, W. R.

    Tapsell, Peter

    Wolrige-Gordon, Patrick

    Renton, Rt. Hn. Sir David

    Taylor, Sir Charles (Eastbourne)

    Wood, Rt. Hn. Richard

    Rhys Williams, Sir Brandon

    Taylor, Edward M. (G'gow,Cathcart)

    Woodnutt, Mark

    Ridley, Hn. Nicholas

    Teeling, Sir William

    Worsley, Marcus

    Ridsdale, Julian

    Temple, John M.

    Wylie, N. R.

    Rodgers, Sir John (Sevenoaks)

    Thatcher, Mrs. Margaret

    Younger, Hn. George

    Rossi, Hugh (Hornsey)

    Tilney, John

    Royle, Anthony

    Turton, Rt. Hn. R. H.

    TELLERS FOR THE AYES:

    Russell, Sir Ronald

    van Straubenzee, W. R.

    Mr. Jasper More and

    St. John Stevas, Norman

    Vaughan-Morgan, Rt. Hn. Sir John

    Mr. Humphrey Atkins.

    NOES

    Abse, Leo

    Davidson, Arthur (Accrrington)

    Healey, Rt. Hn. Denis

    Albu, Austen

    Davies, Ednyfed Hudson (Conway)

    Heffer, Eric S.

    Allaun, Frank (Salford, E.)

    Davies, G. Elfed (Rhondda, E.)

    Henig, Stanley

    Alldritt, Walter

    Davies, Dr. Ernest (Stretford)

    Herblson, Rt. Hn. Margaret

    Allen, Scholefield

    Davies, Ifor (Gower)

    Hilton, W. S.

    Anderson, Donald

    de Freitas, Rt. Hn. Sir Geoffrey

    Houghton, Rt. Hn. Douglas

    Archer, Peter

    Delargy, Hugh

    Howarth, Harry (Wellingborough)

    Atkinson, Norman (Tottenham)

    Dell, Edmund

    Howarth, Robert (Bolton, E.)

    Bacon, Rt, Hn. Alice

    Dempsey, James

    Howed, Denis (Small Heath)

    Bagier, Gordon A. T.

    Dewar, Donald

    Howie, W.

    Barnes, Michael

    Dickens, James

    Hoy, James

    Barnett, Joel

    Dobson, Ray

    Huckfield, Leslie

    Baxter, William

    Doig, Peter

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Beaney, Alan

    Driberg, Tom

    Hughes, Emrys (Ayrshire, S.)

    Bence, Cyril

    Dunnett, Jack

    Hughes, Hector (Aberdeen, N.)

    Benn, Rt. Hn. Anthony Wedgwood

    Dunwoody, Mrs. Gwyneth (Exeter)

    Hunter, Adam

    Bennett, James (G'gow, Bridgeton)

    Dunwoody, Dr. John (F'th A C'b'e)

    Hynd, John

    Bidwell, Sydney

    Eadie, Alex

    Irvine, Sir Arthur (Edge Hill)

    Binns, John

    Edwards, Robert (Bilston)

    Jackson, Colin (B'h'se & Spenb'gh)

    Bishop, E. S.

    Edwards, William (Merioneth)

    Jackson, Peter M. (High Peak)

    Blackburn, F.

    Ellic, John

    Janner, Sir Barnett

    Blenkinsop, Arthur

    English, Michael

    Jay, Rt. Hn. Douglas

    Boardman, H. (Leigh)

    Ennals, David

    Jeger, George (Goole)

    Booth, Albert

    Ensor, David

    Jeger, Mrs. Lena (H'b'n & St.P'cras,S.)

    Boston, Terence

    Evans, Albert (Islington, S.W.)

    Jenkins, Hugh (Putney)

    Bottomley, Rt. Hn. Arthur

    Evans, loan L. (Birm'h'm, Yardley)

    Jenkins, Rt. Hn. Roy (Stechford)

    Boyden, James

    Fernyhough, E.

    Johnson, Carol (Lewisham, s.)

    Braddock, Mrs E. M.

    Fitch, Alan (Wigan)

    Johnson, James (K'ston-on-Hull, W.)

    Bradley, Tom

    Fletcher, Ted (Darlington)

    Jones, Dan (Burnley)

    Bray Dr Jeremy

    Foley, Maurice

    Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)

    Brooks Edwin

    Foot, Michael (Ebbw Vale)

    Jones, J. Idwal (Wrexham)

    Brown, Rt. Hn. George (Belper)

    Ford, Ben

    Jones, T. Alec (Rhondda, West)

    Brown, Hugh D. (G'gow, Provan)

    Forrester, John

    Judd, Frank

    Brown, Bob (N'c'tle-upon-Tyne,W.)

    Fowler, Gerry

    Kelly, Richard

    Brown, R. W.(Shoreditch &F'burn)

    Fraser, John (Norwood)

    Kenyon, Clifford

    Buchan, Norman

    Freeson, Reginald

    Kerr, Mrs. Anne (R'ter & Chatham)

    Buchanan, Richard (G'gow, Sp'burn)

    Galpem, Sir Myer

    Kerr, Dr. David (W'worth, Central)

    Butler, Herbert (Hackney, C)

    Gardner, Tony

    Lawson, George

    Butler, Herbert (Hackney, C.)

    Garrett, W. E.

    Leadbitter, Ted

    Butler Mr,. Joyce (Wood Green)

    Garrett, W.E.

    Leadbitter, Ted

    Ginsburg, David

    Ledger, Ron

    Cant, R. B.

    Gordon Walker, Rt. Hn. P. C.

    Lee, Rt. Hn. Frederick (Newton)

    Carmichael, Neil

    Gourlay, Harry

    Lee, Rt. Hn. Jennie (Cannock)

    Carter-Jones, Lewis

    Gray, Dr. Hugh (Yarmouth)

    Lee, John (Reading)

    Castle, Rt. Hn. Barbara

    Greenwood, Rt. Hn. Anthony

    Lestor, Miss Joan

    Chapman, Donald

    Cray, Charles (Durham)

    Lever, Harold (Cheetham)

    Cm, Denis

    Griffiths, David (Rother Valley)

    Lever, L. M. (Ardwiok)

    Coleman, Donald

    Griffiths, Eddie

    Lewis, Arthur (W. Ham, N.)

    Concannon, J. D.

    Griffiths, Rt. Hn. James (Llanelly)

    Lewis, Ron (Carlisle)

    Conlan, Bernard

    Gunter, Rt. Hn. R. J.

    Lomas, Kenneth

    Corbet, Mrs, Freda

    Hamilton, James (Bothwell)

    Loughlin, Charles

    Craddock, Ceorge (Bradford, S.)

    Hamilton, William (Fife, W.)

    Luard, Evan

    Crawshaw, Richard

    Hamling, William

    Lyon, Alexander W. (York)

    Cronin, John

    Hannan, William

    Lyons, Edward (Bradford, E.)

    Crosland, Rt. Hn. Anthony

    Harrison, Walter (Wakefield)

    Mabon, Dr. J. Dickson

    Crossman, Rt. Hn. Richard

    Hart, Rt. Hn. Judith

    McBride, Neil

    Cullen, Mrs. Alice

    Haseldine, Norman

    McCann, John

    Daly en, Tarn

    Hattersley, Roy

    MacColl, James

    Darling, Rt. Hn. George

    Hazeil, Bert

    MacDermot, Niall

    Macdonald, A. H.

    Owen, Dr. David (Plymouth, S'tn)

    Small, William

    McGuire, Michael

    Page, Derek (King's Lynn)

    Snow Julian

    McKay, Mrs. Margaret

    Palmer, Arthur

    Spriggs, Leslie

    Mackenzie, Gregor (Rutherglen)

    Pannell, Bt. Hn. Charles

    Steele, Thomas (Dunbartonshire, W.)

    Mackie, John

    Park, Trevor

    Stonehouse, Rt. Hn. John

    Mackintosh, John p.

    Parker, John (Dagenham)

    Strauss, Bt. Hn. G. B.

    Maclennan, Robert

    Parkin, Ben (Paddington, N.)

    Summerskill, Hn. Dr. Shirley

    McMillan, Tom (Glasgow, C.)

    Parkyn, Brian (Bedford)

    Swingler, Stephen

    McNamara, J. Kevin

    Pavitt, Laurence

    Symonds, J. B.

    MacPherson, Malcolm

    Pearson, Arthur (Pontypridd)

    Taverne, Dick

    Mahon, Peter (Preston, S.)

    Peart, Rt. Hn. Fred

    Thomas, Rt. Hn. George (Cardiff,W.)

    Mahon, Simon (Bootle)

    Pentland, Norman

    Thornton, Ernest

    Mallalieu,J.P.W.(Huddersfield,E.)

    Perry, Ernest G. (Battersea, S.)

    Tinn, James

    Manuel, Archie

    Prentice, Rt. Hn. B. E.

    Tuck, Raphael

    Marks, Kenneth

    Price, Christopher (Perry Barr)

    Urwin, T. W.

    Marquand, David

    Price, Thomas (Westhoughton)

    Varley, Eric G.

    Marsh, Rt. Hn. Richard

    Price, William (Rugby)

    Walden, Brian (All Saints)

    Mason, Rt. Hn. Roy

    Probert, Arthur

    Walker, Harold (Doncaster)

    Maxwell, Robert

    Randall, Harry

    Wallace, George

    Mayhew, Christopher

    Rankin, John

    Watkins, David (Consett)

    Mellish, Rt. Hn. Robert

    Rees, Merlyn

    Watkins, Tudor (Brecon & Radnor)

    Mendelson, J. J.

    Reynolds, Rt. Hn. G. W.

    Weitzman, David

    Mikardo, Ian

    Rhodes, Geoffrey

    Wellbeloved, James

    Millan, Bruce

    Richard, Ivor

    Wells, William (Wasall, N.)

    Miller, Dr. M. S.

    Roberts, Albert (Normanton)

    Whitaker, Ben

    Milne, Edward (Blyth)

    Roberts, Rt. Hn. Goronwy

    White, Mrs. Eirone

    Mitchell, R. C. (S'th'pton, Test)

    Roberts, Gwilym (Bedfordshire, S.)

    Whitlock, William

    Molloy, William

    Robertson, John (Paisley)

    Wilkins, W. A.

    Moorman, Eric

    Robinson, Rt. Hn. Kenneth(St.P'c'as)

    Willey, Rt. Hn. Frederick

    Morgan, Elystan (Cardiganshire)

    Robinson, W. O. J. (Walth'stow, E.)

    Williams, Alan (Swansea, W.)

    Morris, Alfred (Wythenshawe)

    Rodgers, William (Stockton)

    Williams, Alan Lee (Hornchurch)

    Morris, Charles R. (Openshaw)

    Roebuck, Roy

    Williams, Clifford (Abertillery)

    Morris, John (Aberavon)

    Rogers, George (Kensington, N.)

    Williams, Mrs. Shirley (Hitchin)

    Moyle, Roland

    Rose, Paul

    Williams, W. T. (Warrington)

    Mulley, Rt. Hn. Frederick

    Ross, Rt. Hn. William

    Willis, Rt. Hn. George

    Murray, Albert

    Rowlands, E. (Cardiff, N.)

    Wilson, Rt. Hn. Harold (Huyton)

    Neal, Harold

    Shaw, Arnold (Ilford, S.)

    Wilson, William (Coventry, S.)

    Newens, Stan

    Sheldon, Robert

    Winnick, David

    Noel-Baker, Francis (Swindon)

    Shore, Rt. Hn. Peter (Stepney)

    Woodburn, Rt. Hn. A.

    Noel-Baker, Rt. Hn. Philip(Derby,S.)

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Woof, Robert

    Oakes, Gordon

    Short, Mrs. Renée (W'hampton,N.E.)

    Wyatt, Woodrow

    Ogden, Eric

    Silkin, Rt. Hn. John (Deptford)

    Yates, Victor

    O'Malley, Brian

    Silkin, Hn. S. C. (Dulwich)

    Oram, Albert E.

    Silverman, Julius (Aston)

    TELLERS FOR THE NOES:

    Orme, Stanley

    Skeffington, Arthur

    Mr. Joseph Harper and

    Oswald, Thomas

    Slater, Joseph

    Mr. Ernest Armstrong.

    Clause 1
    CONTINUATION OF PART II OF PRICES AND INCOMES ACT 1966
    Mr. Park: I beg to move Amendment No. 3, in page 1, line 7, leave out '22' and insert '12'.
    This is perhaps the most important, certainly one of the most important, Amendments which we shall discuss. Its purpose is to delete the reference to those Sections in Part II of the 1966 Act which relate to terms and conditions of employment, and in particular to delete from the Bill the reference to what has become known as the punitive Section—Section 16—especially Section 16(4), which subjects trade unions and trade unionists to legal penalties for carrying out the policies and purposes for which trade unions exist.
    There are many reasons for the Amendment. I shall not deal with them all. I have no doubt that some of my hon. Friends who will fellow me will find
    344
    no difficulty in rectifying any omissions I may make. I will confine myself to two points. First, it is a basic infringement of the liberties of a democratic society to subject to the penalties of the criminal law the right of trade unions to seek to maintain and improve the living conditions of their members.
    This Section of the 1966 Act threatens to make criminals of trade union officers who are paid by their members to work on their behalf. It puts the clock of freedom back nearly 100 years. It invokes memories of the harsh and repressive legislation of the early years of the 19th century. It gives the Government the stigma of imposing an attitude of authoritarianism which was out-dated even before the end of the 18th century.
    That the Government should have introduced this kind of Measure in 1966 was almost inconceivable. That, having introduced it, and having aroused the anger and distrust of those who had previously been their most loyal supporters, they should now seek the extension of

    345
    these powers passes the bounds of credibility. Do not the Government realise that the policy of imposing an incomes policy by punitive legislation has been roundly condemned by the Trades Union Congress, by one individual trade union after another, by the vast majority of trade union members, and, last but by no means least, by the electors whose interests we are supposed to represent here?
    Why, then, must the Government persist with a policy which has been so clearly rejected? Having persisted in the policy, do the Government believe that the policy can work? I do not believe that it can. If the Government seek to implement this provision, they will propel themselves headlong into a major clash with the trade union movement and with the millions of people whom that movement represents.
    If the Government do not believe that, if they do not realise that the danger of a clash with the trade union movement exists, I recommend them to read again the report of the conference of trade union executives in February this year. One trade union leader after another came to the rostrum not simply to condemn the Government's approach, not just to say that the punitive clauses were disastrously wrong, but to make clear that they intend to defy legislation of the kind which we have here.
    Are the Government willing to pay the price of their determination to persist in the coercive approach? Are they willing to fine trade unionists, and to throw them into prison if they refuse to pay the fines? Are they willing to break up and destroy the unity of the political and industrial wings of the Labour movement? Are they willing to jeopardise all our hopes of economic recovery by a wave of industrial unrest affecting some of our vital export industries? I do not believe that they are. If they reach the brink, the Government will tremble but they will not go over it. They will capitulate first.
    I commend to the Government's attention what happened in the Republic of Ireland only a few months ago. The Irish Government introduced legislation to outlaw strikes in electricity supply. A few months later they fined some strikers, and, when the strikers did not pay the fines, they put some of their leaders in prison. As soon as this happened, the
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    whole electricity industry in that country was threatened with standstill. Then the legal processes were thrown violently into reverse. The situation ended with the Government's legal powers thoroughly discredited and the electricity board paying the strikers' fines.
    If a comparable situation were to occur in this country, Government and Parliament alike would be put in an utterly invidious position. We should have passed a law which, at the first moment of major challenge, we dare not apply, and even, perhaps, had no intention of applying at the time we passed it. If that be the position, why go to all the trouble of trying to pass it in the first place? Would it not be more sensible to drop the thing now, when it can be dropped honourably, rather than face a position of total retreat and lack of dignity at a later stage? Why cannot the Government acknowledge the realities of the situation? Why cannot they say at this stage that they recognise that they are trying to push through the House a Bill, or a section of a Bill, which will prove to be totally inoperative?
    Time and again, the Government have told us that they seek a voluntary incomes policy, that legislation is only a long-stop, a reserve power, and they hope that it will not be necessary to renew it. One cannot run a voluntary policy in double harness with coercive legislation. It just will not work.
    8.45 p.m.
    You cannot convince someone of your friendship by threatening to knock him over the head with a mallet if he does not agree with you. It is just not on. I want to see a voluntary incomes policy work no less than my right hon. and hon. Friends on the Front Bench. I want to see a voluntary policy based on the planned rise of living standards, and there is only one way in which the Government can give that policy a chance to succeed. That is by accepting the Amendment, even at this late stage. If they are not prepared to accept it, on an issue of such crucial importance my hon. Friends and I will not hesitate to divide the House.
    Mr. Ray Mawby: I very much agree with what the hon. Member for Derbyshire, South-East (Mr. Park) has said. It brings us back again to the basic point we discussed in Committee

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    on the whole question of principle. The right hon. Lady said in Committee that the leaders of the T.U.C. were men of standing in the community concerned with the future of the nation, and not only the interests of their own members but the industry in which they worked. She paid great tribute to them, but she treated them rather as a sergeant-major treats his men. In other words, she said, "We hope that you will make voluntary agreements, but if you do not the chopper will fall and I, as Minister, will take legislative action to make certain that you do what we believe you should do."
    The Sections which the hon. Gentleman and his hon. Friends wish to leave out of the 1966 Act are those which deal with the whole question of legislative control of incomes. This is very important. Either the Government believe in free collective negotiation or they do not. If they do not, they should say so, and if they introduce this sort of legislation they should be prepared to say, "We believe that the accepted free negotiating system as we have known it has now gone, and the Government will decide what shall be the wages or incomes of employed people throughout the country, regardless of all the conditions that have applied before."
    But that is not what the right hon. Lady is saying. She is saying that we should ask all those engaged in industry to meet to negotiate, and hope and keep our fingers crossed that voluntarily they will not negotiate any wage or salary increases of more than 3½ per cent. But if they do, we shall use the chopper and say, "Regardless of your free negotiating arrangements, the Government will prevent you from doing it."
    The important point here is Section 16(4) of the 1966 Act. This makes it quite clear that
    "If any trade union or other person takes, or threatens to take any action, and in particular any action by way of taking part, or persuading others to take part, in a strike, with a view to compel, induce or influence any employer to implement an award or settlement …"
    which is in contravention of the present view of the Government, there can be on summary conviction a fine not exceeding £100 or on indictment a fine
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    which, if the offender is not a body corporate—and we are not at present dealing with bodies corporate—shall not exceed £500.
    The hon. Member is on an important point. Section 16 of the 1966 Act creates a situation in which any trade unionist or group of trade unionists deciding to use the right to free collective bargaining, to independent arbitration and to strike if they believe there is no other way of solving their problems—a right which the Government say they are entitled to use—can, if they have the audacity to exercise that right, make themselves liable to a fine not exceeding £100 or, on indictment, £500.
    In this case, other legislation has caught up with us. The person concerned, if he is fined £100 but refuses to pay, could have an attachment of wages order applied against him under which the fine would be deducted weekly from his wages. It will give no satisfaction to an employee if instead of his going to jail for refusing to pay the fine, it is deducted from his wages. Of course, the Government could put in the bailiffs, but again it would be no consolation to the individual that, instead of going to jail, he would have his television or front-room suite taken away.
    These are the facts of the Bill. The hon. Gentleman is right in seeking to delete this provision. If the Government want to retain it, then the right hon. Lady must tell us that the Government do not believe in free negotiation, arbitration or the right to strike. If she does, then at least we shall see honest government for the first time from the present Administration. Unless she is prepared to do it, I am prepared to go into the Lobby in support of the Amendment.
    Mr. Eric Heffer: Like many other hon. Members, I am a little tired of having, on various occasions, rather like a long drawn out period of intense agony, constantly to speak against the Government's policy in relation to this Bill. If it were not so serious a matter, it would be totally hilarious. But it is terribly serious. It can affect the whole future of industrial relations and the trade union and Labour movement. I support the Amendment because it is concerned only with excluding the wages control and the penal

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    Clauses connected with it. It does not deal in any way with the control of prices or dividends—a fact which I am sure commends itself to hon. Members opposite.
    I hope that on this occasion they will be prepared to support my hon. Friend's Amendment. This would make a mockery of much of what they have said about other legislation which they would bring in if, God forbid, they ever regained a majority in the House. I have four reasons for supporting the Amendment. Let us look at the wartime experience when there was legislation containing penal provisions, and which put a number of trade unionists in prison. All hon. Members will have waded through the document called the Royal Commission on Trade Unions and Employers' Associations. At the end there is an extremely well-written passage, the most hilarious thing that I have read for a long time, written by Sir Harold Emmerson, K.C.B., K.V.O. on mass prosecution in war time. He says that a strike took place at Betts-hanger Colliery in Kent in December, 1941. About 4,000 people were idle.
    As a result of this strike, and against his advice and that of the Department the Government decided that they must take strong action, by way of prosecuting some of the people. They had to ask the union to agree that only a few should be prosecuted, because they realised that it was impossible to prosecute the whole 4,000. The union was very decent about it. It said, "All right, you can have a few test cases." The secretary and chairman of the local branch were prosecuted and imprisoned. What happened? The workers remained on strike—they were more determined than ever before. What a position!
    Ministers of the Crown had to go down and negotiate with the imprisoned men in order to get agreement for the men to return to work. The Minister of Mines had to consult the Home Secretary to find a way of getting the men out of prison. If ever there was any prosecution under this; current Measure the same thing would happen. Immediately after the war then; was the mass strike by the dockers, the great campaign against Order 1305. How did they destroy Order 1305? By going on strike. When their leaders were imprisoned they were more determined than ever to carry on with the
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    strike. It is not as though we have not had experience of what happens when action of this kind is taken.
    We have had these provisions in the two previous Bills and until now there has not been a challenge. I thought that we would see a challenge when the Liverpool bus men came out on strike. The Ministry of Labour was either exceedingly clever or hopelessly inept. They asked the local authority to refer the award to the Prices and Incomes Board, but they did not put an Order on it. Therefore, for 13 weeks the Liverpool bus men were on strike, but they were not striking illegally because there was no Order. Had there been an Order and prosecutions, I do not believe that the Liverpool bus men would have been back to work yet, unless the sort of action taken in relation to the coal mines was taken.
    9.0 p.m.
    I wish to go a little deeper into this matter. Since I was 16 years of age, I have been a member of a trade union and a member of the Labour Party. I have always rejected the theory of elitism. I have always believed that democracy was based on what people wanted from below. There has always been a current of thought in our movement, unfortunately, which has tended to argue— and this was very much the thinking of the Webbs—that certain things had to be introduced that were good for the people, whether they wanted them or not. I remember the old story about the chap, speaking in Hyde Park, who said, "When you get Socialism you will all have a car". Someone said, "I do not want a car", and he said, "You'll have it and like it".
    That has never been my concept of Socialism. My concept has been the very opposite. People will create what they want on the basis of their actions and activity and not on what a small group of people, no matter how clever they are, believe is good for them. I have analysed this very interesting theory. It is not a Fascist theory, as I have heard argued by some hon. Members opposite. It is a corporate state theory in the sense of democratic control and the belief that everybody has his rightful place. This is why some of my hon. Friends think that the rightful place of the workers is to have their wages controlled. I am not prepared to accept that argument.

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    It is true that we are not arguing about putting people in prison—not immediately, anyway. I hope that the Clause will not go through and that people will never be put in prison for this sort of thing. Just imagine the scene. Is there to be distraint on the workers? If we do not stop something out of their wages, will we go to their house and take out their bathroom suite? Will we put all their furniture in the street? I ask my hon. Friends to consider the scene which there would be on one of the working-class estates in Liverpool. First, we should have to train some pretty hefty fellow in order to get the furniture out. But, having got it out on to the street, I can imagine every docker on the estate getting the stuff back in again. There would be a riot. This is absolutely ludicrous. The whole thing is hilarious. It does not work, and it cannot work.
    My hon. Friends on the Government Front Bench have boasted about the policy time after time. They have said, "We have not introduced many Orders because the trade unions have voluntarily applied the policy". Of course they have. If they had not done so, it would not have been successful at all.
    The trade union movement does not want penal Clauses. It has stated quite clearly that it is prepared to give a go to the voluntary system. To do what? I think George Woodcock said, whenever necessary, to have a shabby compromise and to do the best we can. We will get no more than that. That is what the Government have to do concerning the control of wages and so on. We must do the best we can.
    I make one last appeal to my hon. Friends on the Front Bench. Drop this Clause. Do not put us in the position of having constantly to argue and vote against our own party on matters of this kind. If we have to, we have to. But at the last minute I appeal to my hon. Friends to drop it now and do the most sensible thing concerning prices and incomes that can possibly be done.
    Mr. Emery: There is little doubt that this Amendment is causing the most searching investigation of conscience that any hon. Member of this House can possibly have.
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    The hon. Member for Liverpool, Walton (Mr. Heffer) and I do not often agree, but I agree with him when he tells the Government that they cannot, by whatever action they like, control the free action of people, whether members of a trade union or not, when free and collective barganing has been brought about. If the Government believe that they can stop this kind of action they could not be more wrong.
    The Government are attempting to ride a tiger, which is uncontrollable. They are trying to give directions to those who have no intention of listening to what the Government wish to propound. This seems to expose more clearly than at any time the complete nonsense forming the basis of the thinking of the Government in this matter.
    The hon. Member for Derbyshire, South-East (Mr. Park) talked about the long-drawn-out agony. It certainly has been. Time after time we have heard speeches from different Ministers—they have always differed—year in and year out giving pledges that there is only this bit more, only that bit extra. Indeed, today they are saying that this Bill is all that they need. It is like the geometrical equation that, once started, gets greater and greater. Once we start on the path of controls which the Government are suggesting, there will be no stopping until there is ultimate control. That is why I support the Amendment.
    I do not agree with the hon. Member for Walton when he suggests that we just let wages out and not affect prices and dividends. I suggest that if we go that far we have to go further. This Amendment, if carried, makes it apparent that the Government have to rethink their policy. This is why I go along with it, although it would leave certain parts of the Bill, which I think are repugnant, perhaps even more repugnant.
    I turn now to a number of points in the Amendment which have not been covered. The Amendment is extremely wide. It refers specifically to the control of incomes, but in fact it goes to the heart of the Prices and Incomes Act, 1966. It deals not only with pay and other claims, but with awards and other settlements. This has not been mentioned so far. It deals with all aspects of the standstill, and therefore the Government would be deprived of any power to

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    institute any form of standstill at any time. That is what the Amendment sets out to do.
    It also deals with the terms and conditions of employment, and with enforcement, but certain conditions of employment would still be affected if the matter involved a summary conviction or conviction on indictment. It deals with employment under the Crown, and finally it deals with offences to which this part of the 1966 Act refers.
    This is a battle about free and collective bargaining and the hon. Member for Walton was right in asking whether, even for a short period, the Government wish to condemn the results of free and collective bargaining. I shall not represent my party and stand for that. It is clear that this issue transcends party politics in many strange ways, and it is as well that the country should realise that. It is of the greatest importance that the message should go out from this House tonight that we believe that no Government have the right to condemn to imprisonment those who organise trade unions to better the working conditions of their members. [Interruption.] Hon. Gentlemen opposite may not like some of the people who support them, but they should realise that the feelings of others are as deep as their own.
    I suggest that hon. Gentlemen should realise that they are not the only sincere people in this House, and that when Members other than themselves make speeches they mean what they say. I think the hon. Member for Poplar (Mr. Mikardo) knows that I do not readily say anything which I am not willing to defend at any time. We ought to make it clear that, irrespective of party, we believe that the concept of free collective bargaining should continue, and that there should not be control by the Government. That is what the Amendment is about.
    Mr. Michael Foot: Mr. Speaker, I thank you for having arranged that this Amendment should be called. We greatly appreciate the consideration you gave to our representations.
    The hon. Member for Honiton (Mr. Emery) at the beginning of his speech said that the Amendment was so comprehensive that if carried it would wreck the Government's prices and incomes policy. I do not take that view. I agree that
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    the Amendment is extremely comprehensive, but if the House decided to accept it I do not believe that consequence of that vote would be the wreckage of the Government's prices and incomes policy. In a sense, the Government would be able to start afresh, to rebuild that policy in much better circumstances. I should like to explain, therefore, what would be the consequences of accepting the Amendment.
    9.15 p.m.
    It would not mean the destruction of all the ideas behind the Statement of Intent agreed about two years ago or of the prices and incomes policy upon which this party was elected at two General Elections or of any plan for having an incomes policy. What it would mean is that the Government would have to revert to a voluntary prices and incomes policy or at any rate a voluntary incomes policy. They would be able to keep the compulsory part dealing with prices and dividends, which I think would be a good thing, but would have to revert to a voluntary policy for incomes.
    No hon. Gentleman or hon. Lady on the Front Bench can say that that is an impossible situation, because that is the position which the Prime Minister himself took up during the last General Election. He did not say then that he would have a system of legislative control. Even as recently as the period immediately after devaluation, the Government, and the Prime Minister in particular, were talking in terms of a voluntary incomes policy. The Government themselves say that they wish to return to a voluntary incomes policy as speedily as possible. If they accepted this Amendment, they would get it even more speedily than they had hoped. They will still be able to return to a voluntary policy.
    Therefore, the argument of the hon. Member for Honiton does not stand up. I understand the attraction from his point of view, but he must recognise our position. Our position on this Bill—or certainly mine—is that I am in favour of a prices and incomes policy, but a voluntary one, and I believe that the compulsory element will help to wreck the possibility of an effective voluntary policy. That has been the case which many of us have sought time and again

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    to urge on the Government in circumstances which would have prevented this debate taking place.
    It is a most melancholy state of affairs that we should have ever reached a debate on this issue under a Labour Government. It has not been for lack of warning from some hon. Members on this side. We have sought to warn the Government on every conceivable occasion that we could debate this matter and therefore the Government should not be surprised about their present predicament. It is one which they have chosen for themselves, despite all the warnings. Therefore, if their policy has to be, not wrecked, but fundamentally altered by a decision of the House of Commons, it will be their choice that it has been in the House that the matter has had to be settled.
    Let me turn to the argument which appears to be the most substantial one which my right hon. Friend the Secretary of State puts on this matter. She may argue, as she has in Committee, that this Amendment raises the whole question of an incomes policy. I have sought to argue that a voluntary policy could perfectly well follow after this Amendment was carried. No one, I believe, can deny that. If it were carried, we would reach the situation which the Government say that they wish to see at a later stage. But my right hon. Friend has argued that the incomes policy for which she now argues depends in present circumstances upon possessing these reserve powers and has gone on to argue the whole incomes policy case on those grounds. She could do so again today. So could we.
    I am opposed to the incomes policy as it has operated. The same view is held by a growing number of people throughout the country because it has operated in a grossly unjust way. It has applied primarily to people who are organised in trade unions. The incomes of people outside trade unions are not affected to anything like the same degree, and the reference of the single salary of Mr. Hambro is a prime example of the case that many of us have been making for months.
    The hon. Member for Oswestry (Mr. Biffen) has been stressing that many salary
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    increases are not being referred to the Board. That hon. Gentleman has raised this matter on numerous occasions and has asked when the Government intend to take action to deal with the salaries of lots of people who have had increases which have never been reported. This is another reason why I regard the policy as it has operated as unjust.
    Mr. James Turn: Would my hon. Friend agree that this disadvantage, if that is what it is, would also apply under a voluntary system? Since he would welcome a voluntary prices and incomes policy—and he has stressed the voluntary aspect of it—does he intend to support Amendments standing in the names of hon. Gentlemen opposite which would modify the policy affecting prices, rents and dividends?
    Mr. Foot: One step at a time. As for measures affecting rents and prices, I am in favour of the Government having powers to deal with them and I have no objection to those powers being strengthened. But that is another question and there is a great difference between Government intervention to deal with price levels and rents—these have been long-standing matters dealt with by former Governments—and Government intervention in collective bargaining, in the dealings of trade unions, backed by sanctions of a penal nature. This is an entirely different state of affairs. If my hon. Friend fears that this might be carried further—to the powers dealing with rents and prices—he need have no fear because when we come to discuss those matters later he can vote accordingly. Meanwhile, he can vote for this Amendment and raise his voice to sustain those later parts of the Bill, as many of us will be eager to do.
    My right hon. Friend's other defence of the step she is taking is that she is in a dilemma. Partly, she argues, these reserve powers are essential for the maintenance of the Bill, but when my hon. Friends follow the argument through and question—as they did in Committee and in previous debates on this subject—the consequences of the reserve powers being brought into operation, my right hon. Friend says that they are being alarmist. She says that we are raising fears that may never arise. I agree that they may

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    never arise, but it should be remembered that in Committee she said:
    "My hon. Friend said that the powers had not been used, and the Government could not use them. I would say to him that the reason the powers have not been used is that when it comes to it, the vast majority of the people of this country, and certainly the vast majority of trade unionists are law abiding. The penal powers have not been used because no one has struck against the standstill. They have not struck against the standstill for reasons that I have given, that when it comes to it, it is a very serious decision indeed for anyone to have to make, that he will deliberately defy legislation which has been enacted by Parliament."—[OFFICIAL REPORT, Standing Committee F, 29th May, 1968; c. 156.]
    That is a tautological argument. It is saying that people will not defy the law because they do not like doing so. That is true. Once a law has been passed, people do not like defying it, but we must decide whether the law is just, is right or is unjust. We must also decide whether it is likely to be defied. My right hon. Friend can say that so far, on experience—because it has not been defied—one can say, arguing the position backwards, that the elements of justice in it can be proved and that that is why people have accepted it. I can understand her argument, but I do not think she should carry it that far.
    Industrial disputes have a way of blowing up in places where they are least expected. I doubt whether my right hon. Friend would have expected that the Report stage of this Bill would be before the House at a time when the major industrial dispute was on the railways. At one time my right hon. Friend made great play of the fact that the Government's incomes policy was supported by the N.U.R. Many of us warned a predecessor of hers that he should not count too much on that vote in support of the general policy, because when it came down to particulars he might find that the union was opposed to it. I warn the Government that they cannot be certain how the possibilities of the application of penal sanctions are likely to occur.
    They could occur in a case that they may not have foreseen. The right hon. Lady may say that the Government have to give the Order and the Attorney-General has to agree to the prosecutions, and therefore these afford some protec-
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    tion. The Government may get into a position where they are forced from one stance to another, and eventually have to resort to the sanctions in the Bill. Once they are forced into such a situation, all the circumstances described by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will emerge, and the Labour Government would be faced with a hopeless situation in which they would either have to proceed with the prosecutions, with all the hilarious, but tragic, consequences described by my hon. Friend, or they would have to retreat.
    The very fact of having to retreat in those circumstances would be more serious than having to retreat now. This is what some of us have tried to warn the Government about for months. We have said, and no one can deny it, that we are heading for very serious troubles. We have evidence all around us. I do not say that the cause of these troubles is the prices and incomes legislation, although I believe that the situation has been considerably aggravated by the rigidity of the legislation and will become more so. The Government are facing several months of very serious industrial disturbance, and we are debating this question at a moment of very serious industrial trouble. No Government can prophesy how fax that will proceed, or when they will have to invoke the powers which they say are so essential for the maintenance of this legislation. We are trying to rescue them before they get any deeper into this trouble. We are asking why do they not revert to the policy which they were saying was the better policy a few months ago, and which they prophesied would be a better policy a few years hence?
    Why is there something so critical about this moment in our affairs that we must have this special form of legislation? Or why is there something so critical in the affairs of this country, as compared with other countries, that we have to have a form of penal legislation dealing with the trade unions which exists in practically no other country? Why are our circumstances so unique? Is it because in the Letter of Intent sent to our international creditors, it was agreed by the previous Chancellor that some form of prices and incomes legislation

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    would be introduced, and the Government now have this albatross round their neck?
    The Government must explain to us, as they have not explained before, why it is so essential at this time to have legislation of such a rare character, which the Government abhorred a few months ago, and which they will abhor in a few months' time. Now they say that we must have it, otherwise the whole economy of the country will be wrecked. I do not believe that. If the House were to throw out this part of the Measure tonight, the Government would have to revert to the voluntary incomes policy and it would do a great deal of good to the House. The authority of the House would be greatly enhanced; our international creditors, and I give them credit when I can, would be able to understand the situation, and the protest which had brought about this changed state of affairs.
    What would be best of all would be for the Government to say that they would give the voluntary system another chance, that they would remove this threat and revert to the voluntary system. Above all, I believe that it would be in the interests of the Government. A Labour Government can survive only if it sustains its links with the trade union movement. No member of the Government can doubt that the relations between the Labour Party and the trade union movement of this country have been more deeply strained in recent months than in generations past.
    The Government should be seeking to repair those relations. If they were prepared to revert again to the voluntary system I believe that they would make a start in repairing those relations, they would get better results from the point of view of the economy and they would get all the productivity agreements which my right hon. Friend talks about and more. I believe that the Government could begin to regain an upsurge of popular support. This country can be governed only with the popular support of the people, it can be governed only with the willing co-operation of the trade union movement, it can be governed only by persuasion; it cannot be done by force. So I hope that the Government will think before it is too late.
    9.30 p.m.
    Mr. Gower: The hon. Member for Liverpool, Walton (Mr. Heffer) in his early remarks expressed his anxiety at the possibility of a Government from this side of the House introducing some form of trade union legislation. It is true that at different times we on this side have put forward our ideas on that basis, but at no time have we ever contemplated introducing legislation such as we are now discussing, and at no time have we ever thought of putting on the Statute Book legislation which would so basically prejudice the democratic rights of the parties in industry as this Bill does.
    The hon. Member for Walton went on to utter a strange invitation to us on this side to support him and his colleagues in the Lobbies. He hoped that he would have our support, and that was an unusual request to come from below the Gangway. I hope that he will have the support of all hon. Members on this side, not because we wish to embarrass the Government—we have ample opportunities for doing that—but because we feel that the implementation of the Bill in its present form would be prejudicial not only to the future relationship of the parties in industry but to the welfare of our industry and our economy. Like the hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot), I appeal to the Government to have further talks about this. We go further than did the hon. Member for Ebbw Vale. He, apparently, objects chiefly to penal enforcement. We object to the whole paraphernalia behind it.
    Mr. Speaker: We are discussing an Amendment which refers to incomes.
    Mr. Gower: The hon. Member for Ebbw Vale objects to the Clauses which are discussed in the Amendment, and the Amendment relates chiefly to enforcement. We share his abhorrence, so we will support the hon. Gentleman who moved the new Clause, we will support the hon. Gentleman the Member for Walton and we will support the hon. Gentleman the Member for Ebbw Vale. I hope that the Secretary of State for Employment and Productivity can feel that she has what is perhaps a very last-minute chance to alter this legislation. By accepting this new Clause she can at

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    least remove one of the most obnoxious aspects of it.
    Mr. Raphael Tuck: I have the misfortune to disagree with what has been said by my hon. Friend the Member for Derbyshire, South-East (Mr. Park) and many others of my hon. Friends for whom I have the greatest regard. I do it with deep regret.
    My hon. Friend the Member for Derbyshire, South-East would have us believe that the Government should change their policy and that, if they do not, the trade unions will make it very hot for them. However, a Government who based their decisions not on their Tightness or wrongness but on the effect which they might have on a section of the community and the actions of that section, would be in for a very bad time, and I would hesitate to give my support to such a Government.
    This is not a question of whether or not collective bargaining is desirable, which is what my hon. Friend would have us believe. We have reached a point where it is vitally necessary that the increase in incomes should not outstrip the increase in productivity—
    Mr. Mikardo: The lawyers as well?
    Mr. Raphael Tuck: The lawyers as well. It is vitally necessary that we control both ends of the economy, not only incomes, but prices and dividends as well. I hope that my right hon. Friend will remember that.
    Mr. Mikardo: I agree that there ought to be a balance between both ends of the economy, but has my hon. Friend caught up with the fact which came out in Committee that applications for dividends above the norm are dealt with in 72 hours, whereas applications for wages above the norm can hang about for 14 months? Does he think that that is dealing with both ends of the economy?
    Mr. Raphael Tuck: I would not go so far as to say that every Clause of the Bill is a model of perfection, but I feel that this Bill is dealing with both sections of the economy. The penal powers can only cause one year's delay, in any case.
    I was grateful to my hon. Friend the Member for Ebbw Vale (Mr. Foot) for making my point for me, because I was about to mention the chairman of
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    Hambros Bank. Without statutory powers covering all claims and awards, those undergoing trade union vetting will be restrained, but there will be no control of those outside organised labour. I am grateful to my hon. Friend for making that point for me.
    Mr. Paget: Where does my hon. Friend think the £4,000 that is not paid to Mr. Hambro will go?
    Mr. Raphael Tuck: It is not a question of where the £4,000 goes. It is a matter of the principle of the whole Bill.
    My hon. Friend the Member for Derbyshire, South-East says that all this should be left to voluntary action, but suppose that voluntary action does not work? Then, my hon. Friends say, so much the worse. What happens then is that the whole economic policy of the Government is frustrated. The increase in wages outstrips the increase in productivity. Inflation follows. The balance of payments position worsens. The country faces economic collapse. I ask if the Government ought to risk that.
    Mr. Arthur Lewis: My hon. Friend the Member for Poplar (Mr. Mikardo) interjected a point with regard to lawyers. Evidently my hon. Friend agreed that this was right. Is he aware of the fact that I put a Question to the right hon. and learned Gentleman the Attorney-General pointing out that at the Aberfan inquiry £76,000 was paid out over 17 days in legal fees? I would ask my hon. Friend to whom that sum was paid?
    Mr. Raphael Tuck: I am sorry I am not in a position to tell my hon. Friend that. It is a matter for my right hon. and learned Friend the Attorney-General, not for me. But the principle of this Bill remains. I should love to see a voluntary incomes policy. I should love to see a voluntary Income Tax policy. But it will not work; and if it does not work it is necessary that there should be measures for the Government to take, no matter how unpleasant those measures may be. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) told us what the Government ought to do, as the trade unions were not convinced. May I, in reply, suggest that he and his hon. Friends, instead of denigrating the Government should do their utmost to

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    convince the trade unions that in the final analysis, not in the short term, it is in their own interests [Interruption.]—
    Mr. Mikardo: To go to prison.
    Mr. Raphael Tuck: It is not in their own interests to go to prison, just as it is not in my short-term interests that I should go to prison for evading Income Tax. In the long term it is in their interests that this Measure should be passed.
    Finally, I want to say a word about the honeyed accents in which my hon. Friends have received support from the Opposition. In my view, this comes ill from Members of a party which passed the Trade Disputes Act, 1926.
    Mr. Biffen: I would like to make only four comments on this particular Amendment, because I know that a very large number of hon. Members wish to take part in what, for many of them, will be the most significant of the debates we shall be having on this Report stage. I would like to comment first on the contribution of the hon. Member for Ebbw Vale (Mr. Michael Foot), because I believe he very rightly identified what is at the core of this Amendment in its relation to what we are pleased to call a voluntary incomes policy; because the effect of this Amendment, by eliminating Sections from Part II of the Prices and Incomes Act, 1966, effectively destroys the whole of Part II of that Act, inasmuch as it relates to incomes. It is quite important that we should understand that the hon. Gentleman believes that to be a voluntary policy, because I suspect we have been conditioned by the Acts of 1967 and 1968 to suppose that a fallback to the 1966 Act would be a return to a voluntary policy. The hon. Gentleman knows that that would be a deceit on the part of his own Front Bench and he fears that it is exactly the kind of deceit they may have in mind. I am certain that that lies behind a great deal of the very pertinent reasoning with which he addressed himself to this Amendment.
    Secondly, I would like to comment on what would be the consequences if this Amendment, which I welcome, were passed. It would effectively de-fuse the
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    incomes part of the prices and incomes policy. It would permit us to return to a situation of Ministerial weekend exhortation, except I suspect that with the right hon. Lady it would be weekend Ministerial admonition—vinegar this weekend for Mr. Hambro, chastisement the following weekend for the National Union of Railwaymen, and so on; a series of Ministerial weekend exhortations.
    Although I find that a nonsensical proposition, and we have far too much Ministerial exhortation, that is better than the system of penal powers contained in Part II of the 1966 Act which are being sustained by the Bill we now have before us.
    9.45 p.m.
    My third point concerns the whole question of the industrial relations and what is very generally called industrial discipline. This is not the first time that the House has addressed itself to the whole philosophy of what is contained in Part II of the 1966 Act. I quote from the speech made by Mr. Cousins during the proceedings in Committee on the 1966 Bill. Referring to the Part II provisions which the Amendment seeks to delete, Mr. Cousins said:
    "This proposal, however, is more rigid than anything there is anywhere else in the world outside the totalitarian societies. I do not easily reconcile the idea that we have probably the most advanced trade union movement in the world and yet the most restrictive Governmental edict as to what it can or cannot do."
    The question to which the Secretary of State must address herself is whether she concurs with that judgment of Mr. Cousins. If she does not, she must tell us what has happened in the two years since that speech was made which makes her wish to persist in a policy which she knows is acutely embarrassing to the Government and which could well lead to a House of Commons event tonight, in the sense that the Government majority could be in jeopardy, for there must be some tangible reasons which have not been revealed to the House as to why the Government are determined to persist in this policy.
    Surely the implication of Part II, as the hon. Member for Liverpool, Walton (Mr. Heffer) rightly said, is that it undermines conventional and, in many cases, the most responsible of trade union authority. In a sense, it is the potential Trotskyite charter, the potential charter for

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    any troublemaker who wants to take advantage of the martyrdom that could be implicit in this kind of legislation.
    My fourth point is that the Amendment rightly challenges the whole philosophy that it is the Government who know what is the right wage to be paid and when it shall be paid. The Amendment challenges the whole philosophy of economic interventionism. The hon. Member for Walton was right to draw attention to the clash which is implicit in this between the traditional trade union support within the Labour Party and what he was pleased to call élitism.
    I hope that the right hon. Lady will not think that I am seeking to become an unofficial paid-up member of the Transport and General Workers' Union if I again quote something that Mr. Cousins said during the Committee proceedings on the 1966 Bill and which I believe to be profoundly true:
    "I have said that we must have a method of ensuring that there is a growth of the economy and an improvement in the standard of living. The place to get this is not in Parliament. One cannot do this in Parliament. The complex problems of industrial relations and understanding between the two sides of industry cannot be solved unless one is working in industry."—[OFFICIAL REPORT, Standing Committee B; 2nd August, 1966, c. 267–68.]
    Is it not time that there was some blinding flash of humility about this place and a realisation of just what are the functions that Parliament can reasonably discharge and what functions it cannot? Is there not a realisation that, the Government having persisted with their policy as exemplified by the Part II provisions, we have not seen any of the advantages it was supposed to have brought about? Industrial unrest is rife. None of the supposed economic advantages which were to flow from the policy are yet tangible. I do not want to widen the debate by mentioning all the things which were supposed to be avoided by the policy but which have inevitably followed as a result of it. The hon. Member for Derbyshire, South-East (Mr. Park) has, consciously or otherwise, cast himself in the rôle this evening of an economic freedom-fighter. He said that he was prepared to go into the Lobby in defence of that faith. I shall be delighted to join him there.
    Mr. Ted Fletcher: On this Amendment we are considering
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    whether we can force through the House legislation which is opposed by 9 million organised trade unionists, and whether, if this Measure goes through, it can be effective in face of the hostility of the organised trade union movement.
    There is no doubt that the Government are relying upon experience with the 1966 and 1967 Acts, but on those occasions the T.U.C. said that it reluctantly agreed to co-operate with the Government. On this occasion, however, the organised trade union movement has said in emphatic terms that it is not prepared to co-operate in the operation of a prices and incomes Measure such as this.
    A few weeks ago there was a meeting at Croydon of the national executives of all the trade unions affiliated to the T.U.C. There were only two propositions before the conference, one that the T.U.C. was prepared to recommend voluntary cooperation with the Government, the other an amendment which was hostile in every sense to co-operation with the Government. There was no motion enthusiastically supporting the provisions of this Prices and Incomes Bill.
    Every trade union conference which has met since the White Paper—the shop-workers, the clerical workers, the amalgamated engineers, the draftsmen and many others—has roundly condemned the penal clauses in this Bill. The latest came only a few days ago when N.A.L.G.O., the organisation of local government officers, which no one could accuse of having revolutionary tendencies, unanimously rejected the penal clauses.
    My hon. Friend the Member for Derbyshire, South-East (Mr. Park) instanced what happened in the electricity supply industry in Ireland, but he did not tell the end of the story. After the men had been arrested and the electricity board sent representatives down to pay their fines in order to free them from prison, they said, "We do not want to go now. It is midnight, and we have no means of travelling home. We intend to stop in prison for another night". The electricity authorities said, "For God's sake, you must go back. You must be at the power plant in the morning". So the electricity board paid for a fleet of taxis to take the workers from prison.
    During the war, we had many instances, Regulation 1305 and so forth, in which the policy of compulsion failed. My

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    right hon. and hon. Friends on the Front Bench learn nothing from history. All they learn is to learn nothing from history. If organised trade unionists say that they will not be compelled by penal legislation, they will not be compelled, and the law is held in disrepute.
    I raised this matter in Committee with my right hon. Friend, and she replied that my fears were groundless. She said that it was not the Government's intention to send anyone to prison and that people would have great difficulty in getting into prison because of the Criminal Justice Act. Apparently, it is quite a job to get into prison nowadays. All that would happen would be that people would have to pay the fine. If they had not the money, they would have their goods sold, the bailiffs would be called in, and so on, but they would not be sent to prison. She said that this has not happened in the past and will not happen in the future. But if it is not the Government's intention to send people to prison, why do they include the provision in the Bill? Are they asking for a provision they do not intend to use? If it is their firm intention not to send trade unionists to prison, there is no need for any reference to penal sanctions in the Bill.
    Therefore, the position is that we are faced with hostility from the organised trade union movement, and we cannot get an effective prices and incomes policy without its co-operation. I know that there are all sorts of economic arguments that it is necessary to force a prices and incomes policy through, but we must ask whether the policy is politically feasible. It is not, when the people the Government are asking to co-operate with them are refusing to do so.
    I have listened very intently to the contributions by hon. Members opposite. We simply cannot believe the newfound enthusiasm of the Conservative Party as the standard bearers of trade unionism. We know their history, right from the Combination Acts to the Osborne and Taff Vale judgments and the 1927 Trade Disputes and Trade Unions Act. We have read their pamphlets about what they will do when they return to power.
    It may well be true that the Government are trying to handcuff the trade
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    union movement, but if hon. Members opposite return to power it will have a rope around its neck before it can say "knife", and the trade unionists know this. Whatever the trade unionists might think about the Labour Government— and there is a good deal of resentment about the Government's attitude towards them—they will always have an allegiance to the Labour movement and the Labour Government, because they fear what will happen to them if hon. Members opposite ever return to power.
    Therefore, I am not asking hon. Members opposite to come into the Lobby with me when I support the Amendment. I do not care a damn what they do. If they like to come in, that is up to them. But this is an Amendment submitted by people who have the true interests of the trade union movement and the Labour Government at heart. We profoundly believe that our Government, who have done many admirable things, are making a mistake over the penal Clauses. Even at this late hour, will not they think again about this headlong confrontation with the trade union movement? It will destroy our Labour movement if it is permitted to happen. Therefore, even at this eleventh hour I appeal to my right hon. Friend to think again and let us go forward with a prices and incomes policy acceptable to those whom it will most concern.
    Mr. Peter Hordern: I intervene only briefly to ask the Minister one question, because I observe that the Financial Secretary to the Treasury is present. The hon. Member for Ebbw Vale (Mr. Michael Foot) raised a very interesting point when he said the Letter of Intent referred to the prices and incomes policy which was to be introduced by the Government. Can the right hon. Lady give a clear assurance, before the House considers its attitude to the Amendment, that there was no pledge that there would be a compulsory statutory prices and incomes policy in order to gain a loan from the International Monetary Fund or any similar body?
    Mr. Kenneth Lomas: My hon. Friend the Member for Darlington (Mr. Ted Fletcher) made the point that he could not give a damn what the Opposition did tonight. Of course he could give a damn, because

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    this is why some of my hon. Friends have put down the Amendment. They want to defeat the Government and therefore they want Tory support. [Interruption.] They have my support when I think that Government policy is wrong.
    Mr. Mikardo: What about prescription charges?
    Mr. Lomas: That was a completely different issue.
    It being Ten o'clock, the debate stood adjourned.
    Ordered,
    That the Proceedings on the Prices and Incomes Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Ioan L. Evans.]
    Question again proposed, That the Amendment be made.
    Mr. Lomas: The objective of the prices and incomes policy is to protect the lower-paid worker. [Interruption.]
    Mr. Speaker: Order. The House wants to hear both sides of the question.
    Mr. Lomas: It is also to try and control the mavericks who exist in unions as much as in big business. No one from either side of the House has yet told me how it is possible to control people who are not prepared to accept the T.U.C.'s voluntary policy. That is the crucial issue.
    The Government have not used the power it was given to imprison trade unionists since the 1966 Act was passed. I remember the speeches made at Labour Party Conferences and elsewhere at the time about how trade unionists would rot in jail and the rest of it. But it has not happened because, with the reserve powers in the Act, the majority, indeed all the trade unions, have seen the light. They have seen that they cannot go beyond that which is fair and proper.
    If we did not have these provisions in the Bill certain trade unions—and my hon. Friends know to which I refer— because they are in a militant position and are strong, because they can bring the economy down, could hold the nation to ransom. They could get ahead while those at the bottom end of the scale would suffer.
    Mr. Peter M. Jackson: Do my hon. Friend's remarks
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    refer to the National Union of Agricultural Workers?
    Mr. Speaker: Order. Will the hon. Gentleman address the Chair? Then the Press can hear.
    Mr. Jackson: Would my hon. Friend apply his remarks to the National Union of Agricultural Workers? He has spoken of certain militant trade unions, I draw his attention to Part II of Schedule 2, which gives the Government power to restrict the orders of agricultural wages boards. I had not previously understood that members of the N.U.A.W. were regarded as militant or that they could hold the nation to ransom.
    Mr Speaker: Order. I apologise for the word "Press". I meant the Parliamentary Press, the Parliamentary Reporters.
    Mr. Lomas: I thought for a moment I was back on the Countryside Bill. Of course one can include agricultural workers among the lower paid. The objective of the Government's policy is to ensure that those at the bottom of the scale are lifted up. This is what my union, the National Union of Public Employees, has recognised. It realised the value of the Prices and Incomes Board as far as the ancillary workers in the health services are concerned.
    Surely the Government and the nation are trying to level up, to even out the differences. We are trying to ensure that those who are strong and militant should not merely use their power in their own interests. That is what these provisions are about. They are to try and restrain people who are in a position of strength and who will use their militancy to take that to which we do not think they are entitled while others are left at the bottom.
    Unless we have these Clauses, and I address myself to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and any other hon. Members who think in that way, how on earth are we to control people who are not prepared to play the game according to the voluntary system? We have to have these provisions, written into the Bill, as a longstop. The Government have no intention of implementing these Clauses if the trade unions will work the voluntary

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    system. We want them to do this, we have asked them, appealed to them to do so. Provided this voluntary system can be worked out between themselves, and provided that they will accept the decision of any T.U.C. vetting committee that might be set up, there is no reason why the Government should intervene at all.
    If there is a union which deliberately sets about violating the regulations or the decisons of the vetting committee, it follows that the Government must have the reserve powers to stop this happening, to stop people breaking through when they are not entitled to do so. This is why we want these Clauses in the Bill. I ask my hon. Friends to be very careful indeed when they are applauded by the party opposite. I do not believe in the synthetic support for the trade union movement from the benches opposite. If hon. Members on this side of the House are to divide tonight, they should not think that they have struck a blow for Socialism by taking that rump apposite into the Lobby. I would seriously ask them to consider what the alternative to this policy is.
    What is the real way in which we can make the Measure effective? Unless and until we get the economy right, and unless and until we ensure that the lower paid worker is cared for, looked after, and ensure that people are not allowed to break through, we will get nowhere. I know that there is a hard core on this side of the House which will divide tonight, but there are some who should think again before going into the Lobby against the Government and who should bear in mind the benefits conferred upon the working people by this Labour Government in the past 3½ years before enlisting the support of the Tory Party, in their effort to bring down the Government tonight.
    Mr. J. J. Mendelson: I want to address myself to my right hon. Friend who is responsible for this legislation and who represents the Cabinet in this debate. Like other hon. Members I am fully conscious of the fact that she has inherited this policy. I do not say that she has not got her own good reason for supporting it, otherwise I am certain that she would not try to pilot it through the House. The historical fact is that she has
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    inherited the legislation, and there are other senior members of the Cabinet responsible for its introduction.
    I begin with a simple point concerning the policy put forward by the two major parties at the last two General Elections. The party opposite has for some years put forward, sometimes rather half-heartedly, and sometimes a little more brazenly, a policy which includes a legal framework to enshrine the trade union movement and its major action. The party opposite is on record as wishing to isolate the trade union movement, and it has no case to make for a free trade union.—[HON. MEMBERS: "Rubbish."]— I do not mind hon. Members shouting "Rubbish", particularly those who know very little about the subject, especially the policy of their own party. I notice that those who have taken part in working out the policy are not saying "Rubbish." I have made my point.
    Mr. R. Carr: Would the hon. Gentleman tell the House, in view of what he has said, whether he regards the trade unions in Sweden, Germany or the United States as not being free, because they operate under a system of civil law, which is very different from the law that the Government are talking about?
    Mr. Mendelson: If I were to engage now in a dissertation about trade unions in those countries I would be out of order and would not fulfil the purpose of my speech. I say to the right hon. Gentleman and to those who worked out this policy that they are intending to introduce a legal framework of compulsion to frustrate and control the main functions of the trade unions, and, when we fight the next round on this subject, we shall see how their proposals have been received by the trade union movement.
    In contrast to the Conservative Parly, the Labour Party and all the members of the Cabinet, in the 1966 and 1964 elections, put no proposals containing penal clauses and sanctions before the electorate. That cannot be controverted by any of my colleagues who fought on the same platform on which I fought those two elections. Moreover, the substance of this Clause was the subject of many questions put to us as Parliamentary candidates. There are many Press reports from the Sheffield area, for instance, where trade unionists put this

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    very point to me, and I was able to reply on the basis of our policy as put forward jointly by the Cabinet and the National Executive Committee that such clauses and such intentions were not part of our policy.
    It is, therefore, clear that what we are debating on this important Amendment is an issue which goes to the heart of our policy and principles. The introduction, without any mandate from the electorate, never mind only the trade union movement, although it is most directly concerned, of a Clause which, for the first time in over 60 years, seeks to put the criminal law on trade unionists and trade union officers who are following their normal industrial course is something which a Labour Government must not do.
    I turn to the case, as far as I know it, made in the last few weeks by my right hon. Friend, because obviously, when she replies to this debate, there will be an easy opportunity to refer to her policy. On the other hand, I am convinced that unless one follows my right hon. Friend and her Cabinet colleagues on their own ground one will not have done justice to the importance of this debate.
    My right hon. Friend needs no lecturing from me or from any other hon. Member about the important economic consequences involved in this matter. She knows as well as many of us that if, in this period of economic recovery which we are beginning to enter—[HON. MEMBERS: "Oh."]—I realise that hon. Members opposite do not know much about this, but my right hon. Friend does. There is, for instance, the fact, which is of great importance to trade unionists in my area, that production in the steel industry has gone up from 74 per cent. to 85 per cent. of capacity. We are making similar advances in other industries. Hon. Members opposite who are interrupting me and opposing that point of view are gloating, as usual, in the hope that we shall not make an economic recovery. That is their normal attitude and policy. It does not surprise anyone on this side of the House.
    10.15 p.m.
    My right hon. Friend the First Secretary knows very well that if we have a summer and autumn in which there is
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    great dissension in the trade union movement and in industry, in which, ipso facto, the Government by virtue of this Clause will have to make the final decision about whether penal sanctions will be invoked—the employers will not be in a position to do that; this is a right exclusively reserved to the Government— then, instead of concentrating on productivity agreements and on advancing our economic policies, we shall be involved in countless quarrels and disagreements which will endanger our economic advance.
    The reason the Government are tying themselves to these sanctions is very straightforward. Over the last few years many senior members of the Government —in my opinion wrongly, but it is a matter of fact—have been exaggerating the importance of an incomes policy in their discussions and negotiations with bankers abroad, with members of the International Monetary Fund, with the Secretary of the Treasury of the United States, and with other Governments. Many senior members of the Government —and we must pay attention to this dilemma, otherwise we would not be doing justice to the debate—feel that they are committed to a continuation of this policy, including the penal Clauses to retain the Government's credibility internationally in the economic and political sphere in the eyes of those with whom they have entered into many engagements.
    That is why, Mr. Speaker, with your approval, some of my hon. Friends and I made several attempts to move for an emergency debate on the Letter of Intent. I am not saying that the Letter of Intent contained a sentence saying that on such and such a day we commit ourselves to introduce a Bill containing a Clause which is punitive in its intent. Of course not. But the understandings that have gone on for several years now make the Government feel that if they were to say, "We will abandon part of this policy", their credibility would be seriously affected. They, therefore, feel that they have no room in which to move.
    I hope to some extent that I have fairly stated what is in the minds of many senior Ministers. I believe that they are profoundly mistaken. If, in a democratic country, the trade union movement and its large majority having declared that it

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    does not wish to support this policy and if, on many occasions, it has been proved that the Government's standing with their most constant supporters, as has been proved in by-election after by-election, is going disastrously downhill, the Government deliberately takes account of these movements of opinion and says to the House of Commons and to the country, "We are taking note of these aspirations and expressions of opinion and we will modify our policy", and makes a stand on a modified policy, this will not be disastrous for the Government's international standing, it will not be disastrous for the Government's credibility, and it will in no way impair the prestige of the Government. But it will do one important thing. It will bring back to the support of the Government many major sections of the trade union movement— [Interruption.]—It is all very well hon. Gentlemen opposite saying "Ah". I know that they are dedicated to the proposition that we should do nothing to bring back the support of the trade union movement to the Government. But I am giving advice to my right hon. Friend, not to the enemies opposite of the trade union movement.
    My last point is that there is now a special situation which makes this policy and its enforcement, with the help of the criminal law, even more unacceptable to our supporters and to trade unionists in general.
    In Committee my right hon. Friend said:
    "The whole approach is to increase the standard of living and the share of the good things of life for the working people. Therefore, I point out that the principle is certainly not all on one side in this situation."— [OFFICIAL REPORT, 29th May, 1968; Standing Committee F, c. 146.]
    We are now in a position where, on the admission of the Treasury and of people like Mr. George Woodcock and others, there will be, at least in the view of the Government, an increase in the cost of living of 5 per cent. According to Mr. Woodcock, it will be 7 per cent. Some of these increases, on the Government's admission, are completely inevitable.
    We are therefore in a situation—and I should like my hon. Friends to pay particular attention to this in view of what has been said during the debate—in
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    which, after the enactment of the Bill if it is accepted with this penal Clause, we will for the first time in many years have at least a 1 per cent. cut in real wages. It is in that situation that my right hon. Friend proposes to have this Clause included in the Bill. This means that, for the next 12 months at least, this punitive Clause will be one of the reinforcing agents of a policy which is responsible for a cut in real wages. That is what is new compared with the debates of twelve months and two years ago.
    I remind my right hon. Friend of the position of railwaymen, many of whom are in the Penistone area. They were the first to suffer under the standstill in July, 1966, when they had a 3½ per cent. claim in. They are the workers who are always lagging behind, and under this legislation if a group of trade unionists get together and try to persuade their employers, or try to put some pressure on them to grant an increase, they will be acting illegally.
    It is on those grounds that I urge the Government to take note of what is being said in the trade union movement outside, to take note of what is being said by a large section of the electorate, and to take note of what is being said by hon. Members in this House who, like my right hon. Friend, have the future of the movement at heart, and not to insist in going on with this Clause.
    Mr. James Hamilton: It was not my intention to take part in this debate, but after listening to some of my hon. Friends, I felt, as an active trade unionist, that the trade unionists' point of view had to be put, and put clearly.
    As one who attended the Croydon Conference and participated in the discussions, and was there when we arrived at a conclusion—and the trade union movement, as it went on record, took a decision that it would agree to a voluntary policy —I can tell the House that on every occasion without exception virtually every trade union has agreed to accept a voluntary policy.
    I should like my right hon. Friend to tell the House whether she dissociates herself from the policy of the Government. I do not think that it is good enough that some of my hon. Friends should be making the point that the Minister responsible for presenting this

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    policy to the House should not be in favour of that policy, and I hope that when my right hon. Friend replies to the debate she will make this very clear to each and every one of us.
    I am a member of one of the most militant trade unions affiliated to Congress.—[Interruption.]
    Mr. Speaker: Order. The hon. Member is addressing the House.
    Mr. Hamilton: We bend the knee to no union in the movement when it comes to the question of wages. Nevertheless, over the years we have realised that the lower paid workers had fared badly under any policy put forward in respect of wages. Perhaps I might give the House an example of something which happened only last Monday involving my own trade union. We negotiated with the employers in Grangemouth. At the end of the negotiations we came out with a productivity agreement which gave our members on the Grangemouth site an increase in wages of close on £9 per week, provided there was the necessary increase in productivity.
    My members, in the main, construct power stations, which of course are paid for by the taxpayers of this country. They realised that many of the lads who are responsible for the fabrication of the materials used in the construction of these power stations are lucky if they go home with £13 a week, whereas in many cases the lads responsible for the erection work make as much as £50 a week. The money is coming from one cake, but the difficulty is that some of the lads are receiving a very small portion of the cake, while others are receiving a mammoth share of it. This, of course, is grossly unfair.
    Much has rightly been said about the penal Clause. I have never believed that any such Clause should be in the Bill. I said so at the Parliamentary Labour Party meeting, I have said it at virtually every trade union meeting upstairs and at trade union conferences. Why, oh why? the Government have it I cannot understand. This has been in operation since 1966 and on no occasion have the Government had to resort to the penal Clause.
    I have implicit faith in the trade union movement. Trade unionists are accepting
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    the prices and incomes policy, providing that it is equally applied to everyone. But the Government tell us that if there is any difference of opinion about dividends, the matter will be solved within 72 hours. But it is a different matter for wages. The Federation of Engineering Unions put in a wage application on which negotiations have been going on for ten months. It took a day's token stoppage by the engineering unions to bring the employers to their senses, and negotiations have now been reopened. By the time that they are concluded, 14 or 15 months will have elapsed. Thus, dividends disputes can be settled in 72 hours but wages disputes cannot be settled in 14 or 15 months. This is why the trade union movement is justifiably dissatisfied.
    Under no circumstances do the Government intend to invoke the penal Clause, because they know that, if they tried to do so with one union, the whole of the trade union movement, without exception, would align itself with that union and there would be a strike similar to that in 1926. Therefore, I plead with the Government to measure up to the points of view put so forcibly by many of us on this side, who cannot, under any circumstances, in our hearts accept the penal Clause.
    I advise my hon. Friends, however, that, if they are prepared to divide the House, and if the Opposition follow them, as there seems no doubt they will, and if by some strange circumstances the Government should be defeated, I have no hesitation in saying that the whole trade union movement will condemn them for ever for bringing to their knees a Government dedicated to carrying out a Socialist policy, a Government who will, given the chance, carry out the policy upon which we were elected, a Government who will, of course, carry out an incomes policy which will be acceptable to all of us. I am asking my hon. Friends, if they are genuinely behind the Government, to refrain from voting this evening, because, if they align themselves with the Tory Party, who have never been the friends of the trade union movement, for ever they must hang their heads in shame for having brought this Government, once again, to the floor.
    10.30 p.m.
    Mr. Peyton: The hon. Member for Bothwell (Mr. James Hamilton) made a remarkable speech. He commanded a good deal of support when he asked why the Government needed to import penal sanctions into the Bill. But just when many of us were beginning to feel that he was right, he turned on his hon. Friends and warned them not to carry their opinions, or his, too far. I assure the hon. Gentleman that to do the same thing as one's political opponents does not mean that one is open to permanent condemnation. There are honourable hon. Members on both sides of the House who deeply value freedom and who are far more concerned, as I have no doubt he is, with the future of this country than with any sectional interest.
    Coming from an hon. Member who I know to have the virtues of common-sense and fairness, I found it difficult to swallow his sectional approach, along with the cheap threat which he lodged against his hon. Friends; that if they vote with their convictions they will for ever more have to hang their heads in shame in the company of good trade unionists. In adopting that sentiment the hon. Gentleman did himself less than justice.
    I regret that, because I was in some personal difficulty—[Interruption.]—I was not able to be present for the beginning of the speech of the hon. Member for Penistone (Mr. Mendelson), who made it clear that the Government were taking a step which no Labour Government should ever take. If one looks back three or four years, to the time when the sun was rising on Socialist prospects—to the dogmatic statements of the Prime Minister, the right hon. Member for Belper (Mr. George Brown) and others about how a compulsory wages policy was a complete anathema—one recalls that had the suggestion ever been made that a Labour Government would be introducing penal Clauses in such a brutish Measure, anybody making such a suggestion would not even have got a hearing.
    The hon. Member for Penistone made it clear that this is something which a Labour Government must not do. As this is a matter of conscience and deep
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    conviction, one wonders how many hon. Gentlemen opposite will bow to the party whip. And when one considers whether or not the Government are credible— leaving aside the question of the credibility of back bench spokesmen—one must accept that the credibility of the Government Front Bench is very low sunk.
    Although I do not share the Minister's convictions, she does not lack courage. She has the most extraordinary ability to battle through, carrying with her an almost impossible case, along with the odium of responsibility for having pushed down the throats of hon. Gentlemen opposite a policy which must be an anathema to them all. But while I pay tribute to her ability, even her eloquence and ability are not sufficient to explain to the opponents of this policy, and even to those who are prepared to go along with her, how this policy will work.
    If penal clauses of this kind are put into the Statute Book, it must mean that there is a real possibility of enforcing them, and yet which one of us believes that this Government would be prepared to prosecute trade union leaders? As the hon. Member for Bothwell said, why do the Government need this when they have never used it during the period while this legislation has been in force? The right hon. Lady, not by one of her storms of eloquence but in simple monosyllabic terms, if she can bring herself to such a thing, must try to explain why the Government need these penal Clauses when they have not yet seen fit to use them; and under what circumstances they would possibly do so.
    The hon. Gentleman the Member for Penistone referred to the fact that the workers of this country face a prospect of a minimum of a 1 per cent. cut in real wages. I believe that that is a gross underestimate, and that his estimate was a very modest one.
    Many hon. Members on this side of the House will agree with me when I say that we do not accept that it is right or practicable for Governments, no matter how well intentioned, to interfere in the detailed complexities of industrial affairs, and when they do so without the means of making that interference effective a heavy price in national terms will have to

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    be paid. They will vitiate the atmosphere of industrial relations by causing promises to be broken, which is a dangerous thing to do in the world in which we live. The Government carry a heavy load of responsibility for interfering in a sphere which they can never hope decisively or beneficially to influence. I hope the right hon. Lady will listen, not to my pleas— she is well defended against them—but to what her hon. Friends behind her have said. Although they may doubt the conviction with which I say it, I have no doubts about their sincerity. I know how strongly they feel on this issue. I respect their convictions and believe they are right, and I hope that at this late hour the Government may change its normal habit of obstinacy and yield to common sense and to justice.
    Mr. Paget: The hon. Gentleman the Member for Yeovil (Mr. Peyton) prefers his vanity to his cause; I do not propose to follow him; I shall be very short indeed. I cannot support the Government in their policy of attempting to control wages and prices. I regard this as a piece of archaic obscurantism; it is something the Government cannot do.
    I will refer shortly to an experience in the middle period of this policy, that of the Emperor Julian in the 4th Century. He summoned a meeting of the chief people of Antioch and ordered them to find a remedy for a prevalent distress of inflation. During three months their deliberations had no effect. At the end of that time, Julian took the matter into his own hands and drew up a list of prices. Inflation continued and the hoarding continued. Julian had another meeting with the Antiochians, which ended in the whole body of his senators, over 200 in number, being ordered into custody.
    I do not say to my fellow senators that we are in immediate peril, but I am not prepared to support a proposal that trade union officials shall be gaoled or victimised for doing that which their fellow members have elected them to do, and I shall say so in the Lobby tonight.
    The Government of this country and the Persians have one feature in common, and that is a process of surviving by
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    threatening their supporters with suicide. I may think a good deal about our Prime Minister, but I do not regard him as a suicidal type. If the Government are beaten tonight, I think that it will do Parliament good, because Parliament has been impotent for far too long. I think that it will do the Government good, and I can assure my hon. Friends that the Prime Minister will not resign.
    Mr. Orme: I want to deal with a couple of very valid points which have been raised in the course of the debate by my hon. Friend for Huddersfield, West (Mr. Lomas) and my hon. Friend the Member for Bothwell (Mr. James Hamilton), who are not in their places, unfortunately.
    My hon. Friend the Member for Both-well is a trade union sponsored hon. Member, and I have a great personal regard for him. He warned those of us on this side who have expressed the intention of dividing the House that the Opposition probably will go into the Division Lobby with us. But why are we in such a situation? That is what we have to ask ourselves. Who introduced punitive legislation against the trade unions which is anathema to the whole trade union movement?
    It will not be the trade union movement which will castigate us tomorrow if we take the punitive legislation out of the Bill. That movement will be the first to thank us, and we shall be doing the Government a very great service. We will be removing the abscess from the body, and it has to be cut out.
    I have not heard any of my hon. Friends defending the punitive Clauses in the sense of saying how necessary they are and how pleased they are that a Labour Government have introduced them. What my hon. Friends have said is that they do not like them.
    This, surely, is the whole crux of the argument about prices and incomes. We have been involved in the argument ever since the Labour Government came into power in 1964. We set off on the basis of a voluntary policy. I remember what my right hon. Friend the Member for Belper (Mr. George Brown) said in the Letter of Intent about his desire to get a voluntary policy. But then we became aware that the Government more and more were making prices and incomes the

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    central theme of their economic policy. We have gone from one form of legislation to another.
    10.45 p.m.
    The interesting point about legislation is that when it was first introduced in 1966 we were told that it was to be for a short period. When it was supplemented in 1967, we were told that that was the last time we would see such legislation. In 1968 we see it extended for the longest period since the legislation was introduced. We cannot get any undertaking from the Government that at the end of 18 months they will not introduce further legislation. My right hon. Friend the Home Secretary said that he wants to see no more of it and that he thinks that this is the end. My right hon. Friend the Prime Minister will not give that assurance, though he has been pressed consistently.
    Some of us on these benches have tried, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, to get some agreement on this policy which would take it out of the cockpit of party politics or internal politics within the House and within the Labour Party in particular, but we have not been successful. Those of us who are opposed to penal legislation refrained from voting against last year's Bill because we were almost given an assurance that that would be the last time we would see such legislation. Unfortunately, that was not true.
    In all honesty, and out of loyalty to what the trade union movement believes in, the Amendment has been put forward. If the House accepts it, it will not be a disaster for the Labour Government. I have never heard such nonsense. The Labour Government will be left with a voluntary prices and incomes policy which they will have to try to make work. My hon. Friend the Member for Hudders-field, West spoke of having some sanctions against the type of trade unions which would take advantage if sanctions were not available. He was hinting at certain militant unions.
    Mr. Mikardo: Airline pilots.
    Mr. Orme: I will give a far better example. The people who are at the moment challenging the incomes policy are in one of the unions that voted for it
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    —the National Union of Railwaymen. If the Minister desired, an order could be made, because of the National Joint Council decision. My hon. Friend the Member for Huddersfield, West went further and said that this is to protect the lower-paid worker against the higher-paid worker and those that would exploit the position. The railwaymen are amongst the lower-paid workers.
    Mr. Ron Ledger: Not all of them.
    Mr. Orme: A large section of them. I could mention many workers who get much more than railwaymen do. My hon. Friend must explain to the railwaymen that they are not amongst the lower-paid. They are, generally, a lower-paid section. [Interruption.] I would ask my hon. Friend the Member for Leicester, North-East (Mr. Bradley), who is from another railway union, not to interject like that, because I might have to give him a pretty straight answer. I am talking about the National Union of Railwaymen and the question of lower-paid workers and whether it is essential to have penal Clauses to implement agreements.
    The provisions in Section 16 have not been implemented. True, we have gone two years without their being implemented, but these clauses have been a constant irritant to the trade union movement ever since they were introduced, and everyone from George Woodcock to the leaders of every major trade union has said so.
    The powers have not been used, and it is said that we all desire a voluntary policy to be implemented. There are many views on what a voluntary policy should be, whether we should have one, and whether it is possible to operate it. There are differences of opinion on this side of the House about that. But there is hardly any difference of opinion about the central issue of penal clauses. It is alien to all our traditions and beliefs that a Labour Government should introduce such legislation. It is alien to the British trade union movement. This is one of the issues which take trade unionists' minds away from the aims of which my right hon. Friend talks, growth, productivity and all the other things. But the trade union movement does not feel free to think about those other things

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    now because it is bound by certain pieces of legislation which could, in some circumstances, be implemented against it.
    Mr. Lomas: Will my hon. Friend explain what would be the consequence if a trade union went beyond what had been agreed with the T.U.C. vetting committee or settled in any other voluntary agreement? If it went beyond that, what action would he suggest should be taken in the interests of the people below those militant individuals?
    Mr. Orme: The same as there is now.
    Mr. Ledger: That is no answer.
    Mr. Orme: Just a moment. I am answering my hon. Friend the Member for Huddersfield, West. He asks what action I would take. What action is taken against the many people who are not in trade unions, the many employees in private industry in small firms, solicitors, barristers and the rest? It is impossible to go round chasing 26 million employed people. My hon. Friend knows as well as I do that, if we are to have a successful incomes policy, we must have a redistribution of income, and all the other factors falling into place.
    In a mixed economy and the type of society in which we live, it is impossible to implement statutory powers against trade unions. This legislation is directed against trade unions more than against any other sector. In many instances, it operates against the larger unions which are easily identifiable. It operates more particularly against those whom one can loosely call Government employees and people working in the nationalised industries because the Government provide, through taxation, some of the finance.
    If my hon. Friend is thinking of the nice little tidy policy which he talks about, I ask him to cast his mind back to what happened before there were such ideas. How much difference will the present policy make? It is estimated that, at the outside, it could have a 1 per cent. or 1½ per cent. effect on the economy. In my opinion, that is absolute nonsense. As Mr. Frank Cousins said on the earlier Bill, when he was a member of the Standing Committee, what is needed is growth in the economy, an expanding economy and a planned
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    growth of incomes in the sense that incomes really go forward.
    A policy of that kind would take away the dissatisfaction which has been expressed by working people throughout the country. That is the way to approach it. It is not possible to put people into a straitjacket in the way my hon. Friend suggests.
    Mr. Lomas: I now understand why the Conservative Party will join some of my hon. Friends in the Lobby. They all believe in a free-for-all society.
    Mr. Orme: My hon. Friend knows that that is not true. He knows as well as I do that my hon. Friends and I have advocated economic policies far more radical than have been implemented by the Government, policies which hon. Members opposite do not like and will never accept. In present economic circumstances, he knows that what he is asking to be implemented is impossible and will not work. The British trade union movement, of which he is a member, as I am, has overwhelmingly rejected it. The trade unions have not rejected their share in planning, in development, in growth and in a say in industry. I want to see some things far more radical than my hon. Friend would accept take place in the economy, but this is not the place to debate them.
    The case we have made tonight is that this policy will never work and that the Government are being side-tracked by allowing this to remain in the Bill. There is no need for the Tories to come into the Lobbies with us. The Government have the opportunity of recognising the validity of our argument and withdrawing the penal Clauses. They know that there is overwhelming demand in the movement for this.
    At this eleventh hour this is the way to avert the vote tonight: withdraw the penal clauses, and see how we get on with a voluntary prices and incomes policy.
    Mr. R. Carr: The Amendment is in line with Amendments to similar Bills which we have moved in previous years from this side of the House, and moved in Committee to this Bill. In voting for it tonight, we shall therefore be following a long and firmly established line of policy.
    Mr. Norman Atkinson: The right hon. Gentleman made a policy statement. Is he now saying that the party opposite supports the policy of restraint on prices and dividends only, excluding wages completely, which is the purpose of the Amendment? The party opposite has never tried to introduce legislation restraining prices and dividends only.
    Mr. Carr: If I deal with all those points I shall be going well beyond the Amendment. But I think that I shall not be called to order if I remind the hon. Gentleman, if he needs reminding, that we have consistently voted against this and previous Prices and Incomes Bills in toto. Our position is well known, and has been consistent. We would have none of the Bill, and none of these powers.
    All we can talk about at present is the subject of the Amendment, which is powers, particularly penal powers, over incomes. We are absolutely consistent in our attitude to this. It may be said by the Government that if they accepted the Amendment they would be destroying the whole of their prices and incomes policy in effect. Like hon. Members on both sides, I ask them even at this late stage to reconsider that belief. I do not think that it is correct. The hon. Member for Ebbw Vale (Mr. Michael Foot) and my hon. Friend the Member for Oswestry (Mr. Biffen) are two examples of hon. Members who doubt their proposition. There is more chance of getting a successful incomes policy by voluntary means than by statutorily controlled means, and the use of penal sanctions or the threat of their use.
    11.0 p.m
    We have made absolutely clear our position on incomes policy. We have said we recognise that a Government in modern conditions must have a view on incomes and their movement, and must try to influence that movement. But we have also made absolutely clear, over and over again, that the means of trying to achieve that influence must be voluntary and that we will have nothing to do with statutory control, compulsion and penal sanctions.
    We believe that statutory control, and penal sanctions in particular, under-
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    mines the basic authority and influence of the constitutional union leadership, and that, in 99 cases out of 100, is the most responsible leadership there is to call on. If once one begins to undermine that influence, then one undermines the very hope of responsible voluntary action and of a voluntary incomes policy.
    I believe that the Government underestimate the very real danger of compulsion becoming an irreversible process, because compulsion feeds on itself. The whole experience now provided by three years and three Bills is that every time one has to have another Bill the compulsion threatened has to be greater and has to cover a wider field, and so the need for compulsion gets greater, it can become an irreversible process, and it can make a responsible voluntary policy less possible rather than more possible.
    One thing which one cannot help noticing—anyone at least who sits through these debates at length on this subject—is that all the substantial arguments used by the Government in favour of their particular type of policy are arguments for it on a permanent and not a temporary basis. The hon. Member for Ebbw Vale drew attention to this when he said that the Government had made clear a year or two ago that they did not want to have this, and they also continually made clear that they did not want or expect to have it in the future.
    It is, for some peculiar reason, only at the particular moment at which they are speaking that it is apparently going to be necessary. But as that particular moment moves from the present into the future they still find a need for maintaining compulsion, and so they will go on doing. Therefore, we believe that this House must make a clear and clean break with compulsion and penal sanctions. The Amendment, of course, goes much wider than this question, but the debate has concentrated on penal sanctions and I want to do the same.
    In conclusion, I want to repeat our view, which we have held for a long time, that the criminal law ought not to be brought into the field of industrial relations. We say to the Government, even at this late stage, why have these

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    powers? Why have these penal sanctions?
    The right hon. Lady in Standing Committee—and for all I know she will do the same tonight—made a great point of the fact that these sanctions would be applicable only in the most exceptional circumstances. She keeps making the point that the great majority of people will abide by law passed by this House, and will abide by Orders and directions. But there will be exceptional circumstances, and what does one do then?
    The right hon. Lady in Standing Committee seemed to go a stage further and to say that even in exceptional cases the chances of these powers being used were very remote. But if they are not going to be used, why have the powers at all? Why bring a penal law into this field of activity if it is never intended to use it? Either in exceptional circumstances the Government intend to use these powers, and will have to do so, or they do not intend to use them, in which case they would be far better off without them.
    We do not accept for one moment that the only way to persuade people is by holding a pistol to their heads, and least of all by the discovery at the end of the clay that it is a pistol that has got no shot in it. If there is to be a pistol, 1st it be a real one.
    But better by far not to have any pistol at all. Therefore, we urge the Government to think again and to agree to remove these penal powers from the Bill. We do not believe that they will fail in their objective if they do so. On the contrary, we believe that they will increase their chances of success. These powers are wrong. They have not worked and will not work. If they are ever used, they will do enormous damage not only to the prices and incomes policy but to other things far more precious as well.
    Mrs. Castle: Having listened with great care and attention to what has been a protracted debate, it is essential for me to get clear first what this legislation does and exactly what it is we are being asked to vote about. On the points of order which were raised with the Chair earlier, demanding a discussion on this and other Amendments, a claim was advanced that some entirely new principle
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    was being introduced through this Bill and that it would be intolerable for the House not to debate it on Report—the new principle of penal legislation against trade unionists.
    Indeed, it was very moving to hear the right hon. Member for Mitcham (Mr. R. Carr) saying—and he has repeated it —how iniquitous it is to take trade unionists to court. That was rather cool coming from the author of "A Fair Deal". It does not lie in his mouth to talk about principle in this matter. But, of course, this is important. I am not just making a play on words or a debating point.
    Mr. R. Carr: I am sure that the right hon. Lady wishes to be fair both to me and to my party's proposals. Here we are talking about penal law, the criminal law. There is nothing in our proposals which brings the criminal law anywhere near this field. We refer entirely to civil law.
    Mrs. Castle: The right hon. Gentleman knows that the distinction between his recommendations and those of the Donovan Report is that the Report thought that these matters were not appropriate to be taken into court— which is the phrase I used and I stand by it.
    The Bill introduces no principle which has not been embodied in the two previous Acts. [Interruption.] I listened with great care to the development of some very difficult arguments and I have had to think through my own position. I hope the House will allow me to express it in my own way. It is not a question of importing penal sanctions into this Bill as a new development. I stress this because, listening to some speeches, one might think that that was so, that somehow we were at a great turning point in the history of trade unions and of industrial relations. If that were so, then I can well imagine the anxiety that many would express about the unknown. But my starting point is that what Clause I does is to renew the powers of the 1966 Act. [AN HON. MEMBER: "Once for all."] The hon. Gentleman is not correct. There has never been a once-for-all pledge given. If he would read the speech of my right hon. Friend last year, he will find that he took very great care to tell the House that there could be

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    no categoric pledges that these powers would never be renewed.
    This renews powers taken in 1966 and debated then, taken in 1967 and debated then, and now being taken again. In other words, we shall continue to operate on the same basis as we have done, with the power of statutory notification and statutory standstill as reserve powers. This is important, because hon. and right hon. Gentlemen opposite have to make up their minds. Is the complaint that we have operated the prices and incomes policy, or is it that we have not? People are asking: "Why take these powers, they are totally irrelevant and have never been used?"
    Colonel Sir Tufton Beamish: Address the Chair.
    Mrs. Castle: The argument has been that we are breaking the movement in two, and breaking the hearts of people for something which is irrelevant and unnecessary, because it has never been used.
    Mr. Deputy Speaker(Mr. Sydney Irving): Order. I must ask the right hon. Lady to address the Chair.
    Mrs. Castle: The complaint of hon. Members is not that we have had a policy that was meaningless, but that we have been operating a policy which trade unionists did not like. The whole burden of my argument is that the reasons why trade unionists are unhappy are very different from those advanced, poignantly, by my hon. Friends. They do not like the prices and incomes legislation, for economic and not deep philosophic reasons. The policy has not, up to now, delivered the economic goods that they would like. This is important.
    It means that we have operated a policy, yet we have done it without exercising the penal provisions, and without even having to use the basic statutory powers. It is central to the argument that it has never been necessary to use the power to make an Order requiring a statutory notification of a pay or price increase. Never once. [An HON. MEMBER: "Why do the Government need it then?"] One might as well ask why one needs any statutory power in a law-abiding country, just because it is law abiding. The complaint of my hon.
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    Friends has not been against the power of statutory notification. This is not a great principle. They want to continue this. There is no question of individual liberty here. They want to continue the power of statutory standstill on prices. There is no great issue of human liberty there. Therefore, I repeat that the objection has not been basically to the statutory power of notification or standstill.
    Mr. Biffen: I should like to raise an important point of substance which turns on the point the right hon. Lady is making. Are we to assume that when the Government say that they are working towards a voluntary incomes policy they foresee a situation in which they will still keep in being Sections 13 to 22 of the Prices and Incomes Act, 1966?
    11.15 p.m.
    Mrs. Castle: It will be better if I do not give way because I am trying to evolve an argument. [HON. MEMBERS: "Answer."] I will come to that part of my speech when I am ready. I am sure that the hon. Gentleman will understand that I am trying to follow through a thread of thought. We have had a debate on a high level, and I have tried to follow through and answer the arguments as logically as I could.
    It is of great significance that it has never been necessary to make an Order requiring statutory notification. The matter has been dealt with voluntarily. Yet massive numbers of notifications are taking place. In only three cases out of more than 80 have we had to order employers not to pay an increase while the Board was investigating the matter. In the rest of the cases the standstill has been voluntary. Why has that been so? If there were the sense of outrage that some people have tried to express, I am convinced that it would not have been possible to get this amount of voluntary collaboration. If people had felt that we were doing violence to some vital and key principle, we should not have had this amount of voluntary collaboration.
    The reason for that is this. First, the trade union movement and the employers' movements agreed on the initial purposes of the policy. They agreed on what the policy was all about. These are powers to enforce something which was collectively and jointly agreed in

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    its aims and purposes. In drawing up the Declaration of Intent, they agreed to interfere with the principle of free collective bargaining. This is the historic fact which we must all take on board and from which my hon. Friends, despite the sincerity of their distress about the development of the policy, are running away. I have had to listen to hon. Members opposite and some of my hon. Friends talking about the sacredness of free collective bargaining. But the simple fact is that this policy would not have been launched and we would not have had a single Prices and Incomes Bill if it had not been for the Declaration of Intent, when the two great organised sides of industry said, "Free collective bargaining is not enough in our modern economic conditions".
    That is the starting point. Some of my hon. Friends may not have liked some of the developments on the way, but I repeat that we could never have launched a single piece of this legislation if there had not been an agreed and voluntarily accepted starting point.
    Mr. R. Carr: The right hon. Lady says that this flows from the Declaration of Intent. Therefore, can she say why, on 6th October, 1966, 18 months or thereabouts after the Declaration of Intent, the Prime Minister promised the country that there would be no further legislative powers after August, 1967?
    Mrs. Castle: Yes. The policy has evolved. I am not running away from that. [Interruption.] Certainly. We are dealing with another piece of evolution of it in this Bill. We are dealing with the extension of the powers over prices and dividends. [An HON. MEMBER: "And rents."] Yes, and rents. Certainly the policy has evolved. It has evolved in some directions which my hon. Friends like and in others which they do not like. I repeat: there would have been no legislation at all if it had not been for the agreed starting point.
    The reason we have had this massive amount of voluntary acceptance is that the trade unionists recognise that there is all the difference in the world between reserve powers to back up a policy they have voluntarily accepted and penal legislation to undermine and weaken trade unionism.
    During the debate, some hon. Members have tried to suggest that the Government
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    are outlawing the strike weapon. Heavens! That is not my experience in the last few weeks. Anybody who could suggest that we are in a situation in which the trade unionist has been robbed of the strike weapon could not have been keeping abreast of things that have been happening in my sphere. It is not a question of outlawing the strike weapon. It could never be. It is that powers could be used only in very precise and limited circumstances, not where a union is using the strike weapon to press a wage claim in the normal processes of rough and tumble with an employer, but where it is using it with deliberate intent to pressurise an employer into committing an offence. That is a different situation. It is a situation which I believe will never happen and it is a reason why the penal powers have never been used.
    If this Amendment were carried, what would be the consequences? As has been pointed out, the powers over incomes would drop and the powers over prices would be retained. That will not stop hon. Gentlemen opposite from voting, despite the illogicality of the position in which they find themselves. They are prepared to surrender their logic in pursuit of the embarrassment of the Government.
    My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said that this would be a very happy situation, because we would be back to a voluntary policy. He spent a lot of his speech in stressing what he called our dilemma in this situation. I suggest, in all sincerity, that he and his hon. Friends are running away from facing their dilemma because they say, and the hon. Member for Derbyshire, South-East (Mr. Park) repeated, "We favour a voluntary policy". My hon. Friend the Member for Ebbw Vale said, "There is no question of going back to the Statement of Intent." He says that we may have to face the consequences of our policy, or to retreat. I say to him that so may he, because one consequence of the voluntary policy is that it is an interference with free collective bargaining and that is why large sections of the trade union movement are opposed to it.
    There was a man at the A.E.F. Conference only the other day who supported a motion throwing out of the window the T.U.C. policy and said, "I

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    will have nothing to do with it because it is interference with free collective bargaining." What will the hon. Member do with his voluntary policy when it is defied? Will he retreat? Although no evolution of a prices and incomes policy is easy, I think he is making a big mistake if he imagines that some easy alternative flows in his direction through the operation of a voluntary policy.
    Frankly, I believe that the consequences of the passing of this Amendment tonight would be that a prices and incomes policy, voluntary or compulsory, would be left in ruins and the country would be back with no economic alternative. Let me tell my hon. Friends why I am supporting this Bill. My hon. Friend the Member for Bothwell (Mr. James Hamilton) asked if I was not an unwilling victim of the circumstances. I would make it clear to him and to other hon. Members on both sides of the House that this is not merely a Bill which I invented; it is a Bill which I endorse, and I do so for the very simple reason that I do not believe that the trade union movement of our country thinks that there is a great issue of principle here. I say that because I believe that that movement is not so concerned about the statutory powers taken for this or that as about the level of its members' pay and, what is perhaps more important, about the level of their real earnings. So far as the suggestion that this policy is taking their minds off growth and productivity is concerned, then, on the contrary, I support this policy because it concentrates their minds on these things. —[Laughter.]—Right hon. and hon. Members opposite may have their mirth, but I can tell them that anyone who has been dealing with this pay and productivity question knows that the trade unions, and managements, are becoming productivity minded in a way which has never before been known in this country.
    That is a fact which is incontrovertible. There is no doubt that our discussions have been difficult. As the processing of this policy has gone on, we have found that the prices and incomes policy has compelled us to talk in terms of productivity in a way which has not happened before. I support this Bill because we cannot have the real improve-
    396
    ment in the pay and conditions of our trade union members unless we do relate prices, incomes and productivity.
    I have been challenged, but I say unequivocally to hon. Members that it is not true to suggest that this Bill represents some secret or overt commitment to the I.M.F.—[AN HON. MEMBER: "Isn't it?"]—no, it is not. The Letter of Intent was written well before the Government decided on the introduction of this Bill. We decided that it was necessary, in the light of our own assessment of our economic needs, to introduce this Bill. We decided that in the light of our own assessment of what was necessary in the way of prices and incomes guidance in order to strengthen the competitive advantage which devaluation had given us.
    Indeed, Mr. Speaker, I believe that there is a far better, and a far stronger, case for the Bill than for the two previous Acts which were introduced by this Government on prices and incomes —[Interruption]
    Mr. Speaker: Order. The House has listened to both sides of the case until now.
    11.30 p.m.
    Mrs. Castle: Because it is set in the context of an economic policy of expansion—indeed, it is the best way of enabling that expansion to take place without our running into balance of payments difficulties again—I support the Bill. I urge the House to reject the Amendment, because I believe that it is integrally linked with whether one believes in the need for a prices and incomes policy at all, voluntary or compulsory, and because it is integrally linked with whether we are seeking an economic alternative to the kind of free-for-all which brought this country into its present desperate straits.
    Sir Harmar Nicholls: It will be within the recollection of the House that the right hon. Lady promised to answer a question put to her by my hon. Friend the Member for Oswestry (Mr. Biffen) relating to Clauses 13 to 22. Is the right hon. Lady not going to fulfil her promise?
    Hon. Members: Sit down.
    Sir Harmar Nicholls: It is obvious that the right hon. Lady does not intend

    397
    to reply. In that case I claim my right to have the Floor. The right hon. Lady, in the course of her speech, promised that she would answer a question put to her by my hon. Friend the Member for Oswestry. That question was relevant to the point that the right hon. Lady was making in her speech. The First Secretary has now sat down without making any reference to the question. That is cheating the House.
    Mr. Sandys: The right hon. Lady's promise has evolved. [Laughter.]
    Sir Harmar Nicholls: To maintain her own credibility in the very difficult task that she has to pursue, will the right

    Division No. 241.]

    AYES

    [11.32 p.m.

    Alison, Michael (Barkston Ash)

    d'Avigdor-Goldsmid, Sir Henry

    Higgins, Terence L.

    Allason, James (Hemel Hempstead)

    Dean, Paul (Somerset, N.)

    Hiley, Joseph

    Allaun, Frank (Salford, E.)

    Deedes, Rt. Hn. W. F. (Ashford)

    Hill, J. E. B.

    Astor, John

    Dickens, James

    Hirst, Geoffrey

    Atkins, Humphrey (M't'n & M'd'n)

    Digby, Simon Wingfield

    Hogg, Rt. Hn. Quintin

    Atkinson, Norman (Tottenham)

    Dodds-Parker, Douglas

    Holland, Philip

    Awdry, Daniel

    Doughty, Charles

    Hordern, Peter

    Raker, Kenneth (Acton)

    Douglas-Home, Rt. Hn. Sir Alec

    Hornby, Richard

    Baker, W H. K. (Banff)

    Drayson, C. B.

    Howell, David (Guildford)

    Balniel, Lord

    du Cann, Rt. Hn. Edward

    Hughes, Emrys (Ayrshire, S.)

    Barber, Rt. Hn. Anthony

    Eden, Sir John

    Hughes, Roy (Newport)

    Batsford, Brian

    Elliot, Capt. Walter (Carshalton)

    Hunt, John

    Beamish, Col. Sir Tufton

    Elliott,R.W.(N'c'tle-upon-Tyne,N.)

    Hutchison, Michael Clark

    Bell, Ronald

    Emery, Peter

    lrvine, Bryant Godman (Rye)

    Bennett, Sir Frederic (Torquay)

    Errlngton, Sir Eric

    Jackson, Peter M. (High Peak)

    Bennett, Dr. Reginald (Gos. & Fhm)

    Evans, Gwynfor (C'marthen)

    Jeger, Mrs.Lena(H'b'n&St.P'cras S )

    Berry, Hn. Anthony

    Ewing, Mrs. Winifred

    Jenkin, Patrick(Woodford)

    Biffen, John

    Eyre, Reginald

    Jennings, J. C. (Burton)

    Biggs-Davison, John

    Farr, John

    Johnson Smith, G. (E. Grinstead)

    Birch, Rt. Hn. Nigel

    Fisher, Nigel

    Arthur (Northants S.)

    Black, Sir Cyril

    Fletcher, Ted (Darlington)

    Jones,Arthur (Northants, S.)

    Blaker, Peter

    Fletcher-Cooke, Charles

    Jopling, Michael

    Boardman,Tom (Leicester, S.W.)

    Foot, Michael (Ebbw Vale)

    Joseph, Rt. Hn. Sir Keith

    Body, Richard

    Forstescue, Tim

    Kaberry, Sir Donald

    Booth, Albert

    Foster, Sir John

    Kelley, Richard

    Bossom, Sir Clive

    Fraser,Rt.Hn.Hugh(St'fford & Stone)

    Kerby, Capt. Henry

    Boyle, Rt. Hn. Sir Edward

    Galbralth, Hn. T. G.

    Kerr, Mrs. Anne (R'ter & Chatham)

    Braine, Bernard

    Gibson-Watt, David

    Kerr, Ruseel (Fltham)

    Brewis, John

    Giles, Rear-Adm. Morgan

    Kershaw, Anthony

    Brinton, Sir Tatton

    Gilmour, Ian (Norfolk, C.)

    Kimball, Marcus

    Brown, Sir Edward (Bath)

    Gilmour, Sir John (Fife, E.)

    King Evelyn (Dorset, S.)

    Bruce-Gardyne, J.

    Glover, Sir Douglas

    Kirk, Peter

    Bryan, Paul

    Glyn, Sir Richard

    Kitson, Timothy

    Buck, Antony (Colchester)

    Godber, Rt. Hn. J. B.

    Knight, Mrs. Jill

    Bullus, Sir Eric

    Goodhart, Philip

    Lancaster, Col. C. G.

    Burden, F. A.

    Goodhew, Victor

    Lane, David

    Campbell, B. (Oldham, W.)

    Gower, Raymond

    Langford-Holt, Sir John

    Campbell, Gordon (Moray & Nairn)

    Grant, Anthony

    Lee, John (Reading)

    Carr, Rt. Hn. Robert

    Grant-Ferris, R.

    Legge-Bourke, Sir Harry

    Channon, H. P. G.

    Gresham Cooke, R.

    Lewis, Kenneth (Rutland)

    Chichester-Clark, R.

    Grieve, Percy

    Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)

    Clark, Henry

    Griffiths, Eldon (Bury St. Edmunds)

    Lloyd, Ian (P'tsm'th, Langstone)

    Clegg, Walter

    Gurden, Harold

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Cooke, Robert

    Hall, John (Wycombe)

    Longden, Gilbert

    Cooper-Key, Sir Neill

    Hall-Davis, A. G. F.

    Loveys, W. H.

    Cordle, John

    Hamilton, Lord (Fermanagh)

    MacArthur, Ian

    Corfield, F. V.

    Hamilton, Michael (Salisbury)

    Maclean, Sir Fitzroy

    Costain, A.P.

    Harris, Frederic (Croydon, N.W.)

    Macleod, Rt. Hn. lain

    Craddock, Sir Beresford (Spelthorne)

    Harrison, Brian (Maldon)

    McMaster, Stanley

    Crosthw.iiie-Eyre, Sir Oliver

    Harrison, Col. Sir Harwood (Eye)

    Macmillan, Maurice (Farnham)

    Crouch, David

    Hastings, Stephen

    Maddan, Martin

    Crowder, F. P.

    Hay, John

    Maginnis, John E.

    Cunningham, Sir Knox

    Heald, Rt. Hn. Sir Lionel

    Marten, Nell

    Currie, G. B. H.

    Heath, Rt. Hn. Edward

    Maude, Angus

    Dalkeith, Earl of

    Heffer, Eric S.

    Maudling, Rt. Hn. Reginald

    Dance, James

    Heseltine, Michael

    Mawby, Ray

    hon. Lady keep the promise she made, within the recollection of the House, about 10 minutes ago and answer the question put to her by my hon. Friend the Member for Oswestry? The question is relevant and important, and it should be answered in the context of the right hon. Lady's speech.
    Hon. Members: Answer.
    Mr. Speaker: Order.
    Question put, That the Amendment be made: —
    The House divided: Ayes 263, Noes 281.

    Maxwell-Hyslop, R. J.

    Pike, Miss Mervyn

    Stoddart-Scott, Col. Sir M. (Ripon)

    Maydon, Lt.-Cmdr. S. L. C.

    Pink, R. Bonner

    Summers, Sir Spencer

    Mendelson, J. J.

    Pounder, Rafton

    Tapscll, Peter

    Mills, Peter (Torrington)

    Powell, Rt. Hn. J. Enoch

    Taylor, Sir Charles (Eastbourne)

    Mills, Stratum (Belfast, N.)

    Price, David (Eastleigh)

    Taylor, Edward M. (G'gow,Cathcart)

    Miscampbell, Norman

    Prior, J. M. L.

    Teeling, Sir William

    Mitchell, David (Baslngstoke)

    Pym, Francis

    Temple, John M.

    Monro, Hector

    Quennell, Miss J. M.

    Thatcher, Mrs. Margaret

    Montgomery, Fergus

    Ramsden, Rt. Hn. James

    Tilney, John

    More, Jasper

    Rawlinson, Rt. Hn. Sir Peter

    Turton, Rt. Hn. R. H.

    Morrison, Charles (Devizes)

    Rees-Davies, W. R.

    van Straubenzee, W. R.

    Mott-Radclyffe, Sir Charles

    Renton, Rt. Hn. Sir David

    Vaughan-Morgan, Rt. Hn. Sir John

    Munro-Lucas-Tooth, Sir Hugh

    Rhys Williams, Sir Brandon

    Walker, Peter (Worcester)

    Murton, Oscar

    Ridley, Hn. Nicholas

    Walker-Smith, Rt. Hn. Sir Derek

    Nabarro, Sir Gerald

    Ridsdale, Julian

    Wall, Patrick

    Neave, Airey

    Robson Brown, Sir William

    Walters, Dennis

    Newens, Stan

    Rodgere, Sir John (Sevcnoaks)

    Ward, Dame Ircne

    NichollS, Sir Harmar

    Rossi, Hugh (Hornsey)

    Weatherill, Bernard

    Noble, Rt. Hn. Michael

    Royle, Anthony

    Webster, David

    Norwood, Christopher

    Russell, Sir Ronald

    Wells, John (Maidstone)

    Nott, John

    Ryan, John

    Whitelaw, Rt. Hn. William

    Onslow, Cranlcy

    St. John-Stevas, Norman

    Williams, Donald (Dudley)

    Orr, Capt. L. P. S.

    Sandys, Rt. Hn. D.

    Wills, Sir Gerald (Bridgwater)

    Orr-Ewing, Sir Ian

    Scott, Nicholas

    Wilson, Geoffrey (Truro)

    Osborn, John (Hallam)

    Scott-Hopkins, James

    Wolrige-Gordon, Patrick

    Page, Graham (Crosby)

    Sharpies, Richard

    Wood, Rt. Hn. Richard

    Page, John (Harrow, W.)

    Shaw, Michael (Sc'b'gh & Whitby)

    Woodnutt, Mark

    Paget, R. T.

    Silvester, Frederick

    worsley, Marcus

    Park, Trevor

    Smith, Ductley (W'wick & L'mlngton)

    wylie, N. R.

    Pearson, Sir Frank (Clitheroe)

    Smith, John (London & W'minster)

    Younger, Hn. George

    Peel, John

    Speed, Keith

    Perclval, Ian

    Stainton, Keith

    TELLERS FOR THE AYES:

    Peyton, John

    Stodart, Anthony

    Mr. Ian Mikardo and

    Mr. Stanley Orme.

    NOES

    Albu, Austen

    Crosland, Rt. Hn. Anthony

    Gourlay, Harry

    Alldritt, Walter

    Crossman, Rt. Hn. Richard

    Gray, Dr. Hugh (Yarmouth)

    Allen, Scholefield

    Cullen, Mrs. Alice

    Greenwood, Rt. Hn. Anthony

    Anderson, Donald

    Dalyeil, Tam

    Grey, Charles (Durham)

    Archer, Peter

    Darling, Rt. Hn. George

    Griffiths, David (Rother Valley)

    Ashley, Jack

    Davidson, Arthur (Accrlngton)

    Griffiths, Eddie

    Bacon, Rt. Hn. Alice

    Davidson,James(Aberdeenshire,W.)

    Griffiths, Rt. Hn. James (Llanelly)

    Bagier, Gordon A. T.

    Davies, Ednyfed Hudson (Conway)

    Gunter, Rt. Hn. R. J.

    Barnes, Michael

    Davies, G. Elfed (Rhondda, E.)

    Hamilton, James (Bothwell)

    Baxter, William

    Davies, Dr Ernest (Stretford)

    Hamling, Wiiliam

    Bence, Cyril

    Davies, Ifor (Gower)

    Hannan, William

    Benn, Rt. Hn. Anthony Wedgwood

    de Freitas, Rt. Hn. Sir Geoffrey

    Harrison, Walter (Wakefield)

    Bennett, James (G'gow, Bridgeton)

    Delargy, Hugh

    Hart, Rt. Hn. Judith

    Binns, John

    Dell, Edmund

    Hattersley, Roy

    Bishop, E. S.

    Dempsey, James

    Hazell, Bert

    Blackburn, F.

    Dewar, Donald

    Hazell, Bert

    Blenkinsop, Arthur

    Dobson, Ray

    Healey, Rt. Hn. Denis

    Boardman, H. (Leigh)

    Doig, Peter

    Henig, Stanley

    Boston, Terence

    Dunn, James A.

    Herbison, Rt. Hn. Margaret

    Bottomley, Rt. Hn. Arthur

    Dunnett, Jack

    Hilton, w. s.

    Boydcn, James

    Dunwoody, Mrs. Gwyneth (Exeter)

    Houghton, Rt. Hn. Douglas

    Braddock, Mrs. E. M.

    Dunwoody, Dr. Jonh (F'th & C'b'e)

    Howarth, Harry (Wellingborough)

    Bradley, Tom

    Eadie, Alex

    Howarth Robert (Bolton, E.)

    Bray, Dr. Jeremy

    Edelman, Maurice

    Howell, Denis (Small Heath)

    Brooks, Edwin

    Edwards, Robert (Bitston)

    Howie, W.

    Brown, Rt. Hn. George (Betper)

    Edwards, William (Merioneth)

    Hoy, James

    Brown, Hugh D. (G'gow, Provan)

    Ellis, John

    Huckfield, Leslie

    Brown,Bob(N'Ctie-upon-Tyne,W.)

    English, Michael

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Brown, R. W. (Shoreditch & F'bury)

    Ennals, David

    Hughes, Hector (Aberdeen, N.)

    Buchan, Norman

    Ensor, David

    Hunter, Adam

    Buchanan, Richard (G'gow, Sp'burn)

    Evans, Albert (Islington, S.W.)

    Hyna, John

    Butler, Herbert (Hackney, C.)

    Evans, loan L. (Birm'h'm, Yardley)

    Irvine. Sir Arthur (Edge Hill)

    Butler, Mrs. Joyce (Wood Green)

    Faulds, Andrew

    Jackson, Colin (B'h'se & Spenb'gh)

    Callaghan, Rt. Hn. James

    Fernyhough, E.

    Janner, Sir Barnett

    Cant, R. B.

    Fitch, Alan (Wigan)

    Jay, Rt. Hn. Douglas

    Carmichael, Neil

    Fletcher, Raymond (Iikeston)

    Jenkins, Rt. Hn. Roy (Stechford)

    Carter-Jones, Lewis

    Foley, Maurice

    Johnson, Carol (Lewisham, S.)

    Castle, Rt. Hn. Barbara

    Foot, Rt. Hn. Sir Dingle (Ipswich)

    Johnson, James (K'ston-on-Huff W.)

    Chapman, Donald

    Ford, Ben

    Jones, Dan (Burnley)

    Coe, Denis

    Forrester, John

    Jones,Rt.Hn.SirElwyn(W.Ham,S.)

    Coleman, Donald

    Fowler, Gerry

    Jones, J. Idwal (Wrexham)

    Concannon, J. D.

    Fraser, John (Norwood)

    Jones, T. Alec (Rhondda, West)

    Conian, Bernard

    Freeson, Reginald

    Judd, Frank

    Corbet, Mrs. Freda

    Gardner, Tony

    Kenyon, Clifford

    Craddock, Ceorge (Bradford, S.)

    Garrett, W. E.

    Kerr, Dr. David (W'worth, Central)

    Crawshaw, Richard

    Ginsburg, David

    Lawson, George

    Cronin, John

    Gordon Walker, Rt. Hn. P. C.

    Leadbitter, Ted

    Ledger, Ron

    Morris, John (Aberavon)

    Silkin, Rt. Hn. John (Deptford)

    Lee, Rt. Hn. Frederick (Newton)

    Moyle, Roland

    Silkin, Hn. S. c. (Dulwich)

    Lee, Rt. Hn. Jennie (Cannock)

    Mulley, Rt. Hn. Frederick

    Skeffington, Arthur

    Lestor, Miss Joan

    Murray, Albert

    Slater, Joseph

    Lever, Harold (Cheetham)

    Neal, Harold

    Small, William

    Lever, L. M. (Ardwick)

    Noel-Baker, Francis (Swindon)

    Snow, Julian

    Lewis, Ron (Carlisle)

    Noel-Baker,Rt.Hn.Philip (Derby, S.)

    Spriggs, Leslie

    Lomas, Kenneth

    Oakes, Gordon

    Steele, Thomas (Dunbartonshire, W.)

    Loughlin, Charles

    Ogden, Eric

    Storehouse, Rt. Hn. John

    Luard, Evan

    O'Malley, Brian

    Strauss, Rt. Hn. G. R.

    Lubbock, Eric

    Oram, Albert E.

    Swingler, Stephen

    Lyon, Alexander W. (York)

    Oswald, Thomas

    Symonds, J. B.

    Lyons, Edward (Bradford, E.)

    Owen, Dr. David (Plymouth, S'tn)

    Taverne, Dick

    Mabon, Dr. J. Dickson

    Page, Derek (King's Lynn)

    Thomas, Rt. Hn. George

    MacBride, Neil

    Palmer, Arthur

    Thomson, Rt. Hn. George

    McCann, John

    Pannell, Rt. Hn. Charles

    Thornton, Ernest

    MacColl, James

    Pardoe, John

    Tinn, James

    MacDermot, Niall

    Parker, John (Dagenham)

    Urwin, T. W.

    Macdonald, A. H.

    Parkin, Ben (Paddington, N.)

    Varley, Eric G.

    McGuire, Michael

    Parkyn, Brian (Bedford)

    Wainwright, Edwin (Dearne Valley)

    Mackenzie, Alasdair (Ross&Crom'ty)

    Pavitt, Laurence

    Wainwright, Richard (Colne Valley)

    Mackenzie, Gregor (Rutherglen)

    Pearson, Arthur (Pontypridd)

    Walker, Harold (Doncaster)

    Mackie, John

    Peart, Rt. Hn. Fred

    Wallace, George

    Mackintosh, John P.

    Pentland, Norman

    Watkins, David (Correett)

    Maclennan, Robert

    Perry, Ernest G. (Battersea, S.)

    Watkins, Tudor (Brecon & Radnor)

    McMillan, Tom (Glasgow, C.)

    Prentice, Rt. Hn. R. E.

    Weitzman, David

    McNamara, J. Kevin

    Price, Christopher (Perry Barr)

    Wellbeloved, James

    MacPherson, Malcolm

    Price, Thomas (Westhoughton)

    Wells, William (Walsall, N.)

    Mahon, Peter (Preston, S.)

    Price, William (Rugby)

    White, Mrs. Eirene

    Mahon, Simon (Bootle)

    Randall, Harry

    Whitlock, William

    MalIalieu, J.P.W. (Huddersfield, E.)

    Rees, Merlyn

    Wilkins, W. A.

    Manuel, Archie

    Reynolds, Rt. Hn. G. W.

    Williams, Alan (Swansea, W.)

    Marks, Kenneth

    Rhodes, Geoffrey

    Williams, Alan Lee (Hornchurch)

    Marquand, David

    Richard, Ivor

    Williams, Clifford (Abertillery)

    Marsh, Rt. Hn. Richard

    Roberts, Albert (Normanton)

    Williams, Mrs. Shirley (Hitchin)

    Mason, Rt. Hn. Roy

    Roberts, Rt. Hn. Goronwy

    Williams, W. T. (Warrington)

    MaxwelI, Robert

    Roberts, Gwilym (Bedfordshire, S.)

    Willis, Rt. Hn. George

    Mayhew, Christopher

    Robertson, John (Paisley)

    Wilson, Rt. Hn. Harold (Huyton)

    Mellish, Rt. Hn. Robert

    Robinson, Rt. Hn. Kenneth (St.P'c'as)

    Wilson, William (Coventry, S.)

    Millan, Bruce

    Robinson, W. O. J. (Walth'stow, E.)

    Winstanley, Dr. M. P.

    Miller, Dr. M. S.

    Rodgers, William (Stockton)

    Woodburn, Rt. Hn. A.

    Milne, Edward (Biyth)

    Roebuck, Roy

    Woof, Robert

    Mitchell, R. C. (S'th'pton, Test)

    Rogers, George (Kensington, N.)

    Wyatt, Woodrow

    Molloy, William

    Rose, Paul

    Yates, Victor

    Moonman, Eric

    Ross, Rt. Hn. William

    Morgan, Elystan (Cardiganshire)

    Shaw, Arnold (llford, S.)

    TELLERS FOR THE NOES:

    Morris, Alfred (Wythenshawe)

    Shore, Rt. Hn. Peter (Stepney)

    Mr. Joseph Harper and

    Morris, Charles R. (Openshaw)

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Mr. Ernest Armstrong.

    Further consideration of the Bill, as amended, adjourned.—[Mr. O'Malley.]
    Bill, as amended, to be further considered Tomorrow.

  ASSOCIATED STATES (GIFT OF A PARLIAMENTARY LIBRARY)
  11.50 p.m.
  The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): I beg to move,
  That Mr. Frank Tomney and Mr. David Webster have leave of absence to present, on behalf of this House, a Parliamentary Library to the Legislatures of the Associated States of St. Christopher, Nevis and Anguilla, Antigua, Dominica, St. Lucia and Grenada.
  The House will recall that on Tuesday, 21st May, it approved of the presentation of an independence gift to the Associated States. The Motion gives leave of absence to a small delegation to present the gift on our behalf. The House may wish to know the composition of the delegation arranged with you, Mr. Speaker, and that it will be accompanied by Mr. David Pring, a Clerk of the House.
  Question put and agreed to.

  SCOTTISH REGIMENTS (FUTURE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
  11.52 p.m.
  Mr. Hector Monro: It is a happy coincidence that today the new Scottish Division was formed officially and the new divisional commander, Maj.-General F. Graham, raised his flag in Scotland. This debate takes place in face of another White Paper that may reduce again the number of Scottish regiments. We view this with grave concern. The timing of the debate may be inconvenient to the Government because of the White Paper which is coming out in a few weeks' time, but it is essential that the Minister understands the strong feeling of hon. Members and of the Scottish people. From bitter experience, we have found that it is no use trying to influence the Government after a White Paper is published; we must make our impression now.
  The Army has been reducing in size for a long time, and we accept that this may have been necessary to suit modern conditions, but amalgamations and disbandments in the past are no argument
  404
  for continuing this policy in the future. We think that this has gone far enough and at the present point we make our stand.
  Governments in the past have decreed that strengths must be reduced, but we contend that the limit has been reached, and that in any event Scotland has lost disproportionately too many regiments. It is true to say that in times of stress it is always the infantry that bears the brunt, and there are never enough foot soldiers available. However, the past is past, including, tragically, the Cameronians, and on 1st July we have the new Scottish Division, in which separate identities are retained, and this is important.
  In the Lowland Brigade we will have the Royal Scots, the Royal Highland Fusiliers and the King's Own Scottish Borderers. In the Highland Brigade we will have the Black Watch, the Queen's Own Highlanders, the Gordon Highlanders, the Argyll and Sutherland Highlanders and there will still be two battalions of Scots Guards, and, in the Royal Armoured Corps, the Royal Scots Greys.
  Within the Scottish Division there will be great flexibility and cross-posting, which has happened frequently in the past. There will be an interchange of officers and friendly competition, yet they will retain their own tartans, their individual traditions, the regimental areas and the common bond of being Scots.
  The Minister must realise that these things mean something in Scotland. He should have seen the welcome home of our regiments from service overseas. I remember well the King's Own Scottish Borderers returning from Malaya. All of us in Scotland have been tremendously impressed with the welcome home of the Argyll and Sutherland Highlanders from Aden, and this shows how out of touch are those who advocate large regiments, of a single Highland regiment, a single Lowland regiment or, indeed, of a corps of infantry.
  The regiments in the Scottish Division have an exceptional record of efficiency and recruiting. In most regimental areas, recruiting amounts to about 60 per cent., and in the case of the Black Watch, it is exceptionally high, with 90 per cent. However, in view of the very serious fall in recruiting to the Army generally, which was announced yesterday in reply to a

  405
  Question by my hon. Friend the Member for Ayr (Mr. Younger), the Scottish achievements must sound like pipe music to the Minister's ear. Scotland's efforts in recruiting must not be overlooked, and if recruits want to join Scottish regiments, those regiments ought not to be disbanded.
  In reply to a Question by my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), who is tonight in his own regimental area, the Minister set out the organisation of infantry as from 1st July, 1968. There will be six divisions and 56 battalions. That represents an average of just over nine per division. Of those 56 battalions, 39 are English, four are Welsh, four are Irish and nine are Scots, the latter figure including the two Scots Guards battalions which are not in the Scottish Division.
  Statistically, if two or three battalions are to be disbanded, it would seem right that they should come from the 39 English infantry battalions which, it must be said, do not appear to be as concerned about their future as those of the Scottish regiments.
  Looking at the divisions, the Guards Division has eight battalions, the Queen's has 12, the King's has 11, the Prince of Wales' has 11, the Light—a rather special —Division has seven and the Scots has seven battalions. So we are again below average.
  I turn to the Royal Armoured Corps and particularly the Royal Scots Greys, which is the only Scottish cavalry regiment and certainly the most famous. There are 20 regiments of the Royal Armoured Corps. Surely Scotland is entitled to one of them. To amalgamate the Greys with an English regiment would immediately destroy its unique and special character. It is the best recruited regiment in the British Army, and that was confirmed again today in reply to a Parliamentary Question by my hon. Friend the Member for Ayr.
  It is because of its remarkable recruiting that frequently it has been able to lend squadrons to other cavalry regiments which are short-handed. To the extent of 80 per cent., it is recruited from the regimental area. That must be exceptional in the Royal Armoured Corps. Efficiency is very high. It was chosen to represent the Army in the N.A.T.O. Tank Gun-
  406
  nery Competition this year. If the Royal Armoured Corps is to have another reorganisation, surely a new individual rôle should be found for this outstanding regiment. I cannot over-emphasise how much this fine regiment means to Scotland.
  On 11th May, 1967, the Minister of Defence announced changes in the infantry, and perhaps I might quote three extracts from his replies. Talking about regiments retaining their separate identities, the Minister said:
  "I should like to make it clear that this new organisation does not affect the separate identity of the individual regiments."
  Secondly, he said:
  "I am glad to confirm that battalions will retain their existing names."
  Thirdly, dealing with another Question from my hon. Friend the Member for Moray and Nairn, he said:
  "I recognise that very well, and would point out that regimental and battalion identities are not affected by this regrouping."—[OFFICIAL REPORT, 11th May, 1967; Vol. 746, c. 1714– 116.]
  That seemed a clear indication. However a few weeks later the Cameronians were scrapped. It is interesting, too, in mentioning this fine regiment that is no more, that all the officers and men have been posted to other regiments in the Scottish Division. There are 18 officers and 80 other ranks in the King's Own Scottish Borderers now. Would it not be intolerable if those officers and men had to face another amalgamation or another disbandment? That would be asking too much of any soldier.
  This concern about the future has been heightened by The Times leading article on 17th June. I hope that it was not an inspired leak. It was full of foreboding and contained a threat that, if the regiments did not become more flexible, it would result in a corps of infantry. How can this attitude promote confidence in a career structure? The Army thinks that its regimental future has been jeopardised for administrative convenience. This thought must certainly have been prominent in the mind of Colonel Colin Mitchell of the Argyll and Sutherland Highlanders when he sent in his papers last week. His own future seemed to have reached a full stop and the future of his regiment is in grave doubt.

  407
  The public sees it in this way. Here is a born leader, a very gallant officer. Many think him to be quite the best battalion commander in the Army. Yet, despite promises specifically made by the Secretary of State earlier this year that his promotion would not be retarded, he has been driven from the Army. Leaders of this calibre are all too few. What Colin Mitchell did for his country in Aden, for his regiment and for the Army should be proclaimed from the roof tops, and accelerated promotion should be his. On no account should the Army and Scotland lose his services. I hope that the Under-Secretary will say something about this, because the feeling in Scotland is very strong indeed, particularly in the light of the Secretary of State's assurance earlier this year.
  The regimental system is the envy of every other army in the world. It harnesses together local and family pride, and particularly so in Scotland. This interest in the regiment is backed up by local recruiting and reciprocated with efficiency and performance by the soldiers themselves. It is interesting to recall how very many senior Army officers have come from Scottish regiments. Lord Wavell was one of the most progressive field marshals. He said this 20 years ago:
  "The regiment is the foundation of everything, and nowhere is the regimental spirit stronger than in the Highlands. It is the fashion today in some quarters to seek a soulless uniformity in all things and decry any individual tradition and spirit. It will be a sad day and an evil day for the British Army if the reformers ever succeed in weakening or destroying the regimental tradition."
  That was very true then. It is equally true today, but the situation is very much more serious.
  I have stressed flexibility and accepted the necessity for reorganisation. Surely this can be done without demolishing that essential enthusiasm built up through this tradition. Military success depends on character, morale and leadership. It takes years to develop, yet can be destroyed overnight by political decision.
  I hope that I have shown the strong case for the retention of the complete Scottish Division, with each regiment retaining its separate identity, and for
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  the retention of the Royal Scots Greys in the Royal Armoured Corps. On every count—statistically, on recruiting, and on efficiency—the Government should keep their hands off Scotland's regiments, which are providing a rich dividend for the Army. Let the Government take heed of Scotland's feelings. I say this to the Minister with great sincerity, and let him realise that a weak reply tonight and any sheltering behind a forthcoming White Paper will not be acceptable in Scotland. I hope that he will be more forthcoming and give an encouraging reply that certainly where regiments mean something they will be retained.
  12.5 a.m.
  Mr. Malcolm MacPherson: I am glad of the opportunity to speak for a minute or two in this short debate. The hon. Member for Dumfries (Mr. Monro) has spoken with a feeling for the Scottish regiments and the Scottish tradition in soldiering which we all share. I have no quarrel with him on that. The traditions of the regiments and the Scottish part in the British Army have for a long time played a considerable part in Scottish life. But I feel that the hon. Gentleman has spoken too much about the past and too little about the problems of the future. One cannot think of this sort of situation simply in terms of our tradition, no matter how distinguished and admirable the tradition is. One must see it in terms of necessary reorganisation in face of a different kind of defence, a different kind of defence policy and a different kind of defence organisation.
  I shall not refer to the Royal Scots Greys, but I am concerned with the Highland Brigade and, in particular, with the regiment which has its headquarters in my constituency, the Argylls. I am not sure whether the hon. Gentleman was talking with knowledge when he spoke of Colonel Mitchell being driven from the Army. If he was, he knows more than we do. Perhaps my hon. Friend the Minister will comment on that. I have been much concerned about Colonel Mitchell, but I have no knowledge that that is the situation, and I shall be glad if my hon. Friend will say something to clear the matter up.
  The tradition of the Argylls and of other Scottish regiments is likely to be

  409
  preserved. In any case, we know from our past history that not only in recent years have there been military reorganisations which have lost something which had great tradition and glory in the past. This is not the only period, not even the only century. It has happened before. It is part of our continuing process. I look forward to Scotsmen playing just as strong a part in the defence of this island as in the past.
  12.7 a.m.
  Mr. Gordon Campbell: I support my hon. Friend the Member for Dumfries (Mr. Monro), who has admirably expressed the feelings of all Scottish Members and the feelings of Scotland itself in this matter. Scotland has been able to provide a supply of great military manpower, and Scotland also has a military tradition which the Government should not lightly cast aside. In recent years—I speak of the very recent past—Highland battalions in particular have demonstrated the truth of that in Brunei, Borneo and Aden, where they have carried out tricky and most successful operations.
  British infantry, and Scottish infantry in particular, have a special ability to cope with and settle difficult political and military situations. Their special ability will be needed in the future. It is needed now in the United Nations force in Cyprus, and it will be needed hereafter either under United Nations auspices or in other circumstances. But, once destroyed, as my hon. Friend said, it is well nigh impossible to recreate military formations of this kind.
  Last year, within a day or two of the event, I drew from the Secretary of State for Defence a tribute to what the Argylls had done in reoccupying Crater. Also, as my hon. Friend said, I obtained an assurance from the right hon. Gentleman that the identities of the Scottish regiments would be retained. Unfortunately, since then there has been one disbandment. I ask the Government to ensure that those identities continue to be retained and that there are no further disbandments. The Government should consider carefully the special contribution which Scotland can give to Britain's defence.
  12.10 a.m.
  Mr. Hector Hughes: I am grateful to the hon. Member for Dumfries (Mr. Monro) for having chosen this subject for debate. I have had on the Order Paper for a long time a Motion to very much the same effect, but I was not as fortunate as he was in the Ballot for an Adjournment debate.
  It is entirely wrong that the Scottish regiments should be left in doubt about their future. They are gallant regiments which have rendered great service to the State. Their officers and men are good citizens with families in Scotland, and it is right that their families should not be left in doubt. Therefore, I ask my hon. Friend the Under-Secretary of State to make a definite statement about the future of these gallant gentlemen who have been left in the undignified position that they and their families do not know what their present is and what their future will be. I strongly support the hon. Member for Dumfries.
  12.11 a.m.
  The Under-Secretary of State for Defence for the Army (Mr. James Boyden): I am most grateful to the hon. Member for Dumfries (Mr. Monro) for raising the question of the future of the Scottish regiments tonight. I go a long way with him in paying tribute to the efficiency, courage and military splendidness of the Scottish regiments. There has been a good deal of discussion in the Press about the effect which the White Paper, which will appear next month, might or might not have on the Scottish units. I am very glad that we have had an opportunity tonight for Scottish hon. Members to express their views on the matter. Those views are passionately held, as the House has seen tonight, and very rightly held.
  I am not insensitive to the strength of feeling associated with the Scottish regiments. I know that they command very fierce local pride and tremendous loyalty. I can go a long way back to the 1914 war, when one of the joys of my heart as a child of four and five was to hear the Scottish regiments go past my door on the way to France. This spirit is the basis of the Scottish fighting record, which has played a magnificent part in the history of the British Army and of Scotland.

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  Because the future of these regiments arouses such emotion it is right and proper tonight to look at it against the wider background and perspective of the Government's overall defence policy. As a result of the cut in our commitments outside Europe, we announced last July that the Army would be reduced in size by 15,000 all ranks by 1971. As we said in the White Paper, this meant the disappearance of 17 major units, including eight infantry battalions and four armoured units. That is a slight correction to what the hon. Gentleman said about the infantry taking the brunt of the cuts. Many of these are regiments —Scottish, Irish, Welsh and English regiments—with long and distinguished histories. But much as we regret their disappearance a reduction in major units follows inevitably from the Government's decision to reduce the number of tasks to be undertaken by the Army by concentrating our future defence effort mainly in Europe and the North Atlantic area.
  As my right hon. Friend the Prime Minister announced to the House last January, the whole of our defence expenditure was again reviewed against the background of our commitments and alliances. The defence decisions taken at this time were summarised in the Statement on Defence Estimates, 1968. They will lead to big changes—and this is the essence of the matter tonight— in the role, size and shape of the Forces, their equipment and support.
  For the Army their immediate effect has been to accelerate the rate of rundown and the disbandment or amalgamation of major units. As I have told the House on many occasions over the last few months, a list of the further reductions in major units will be announced in the supplementary statement which the Government will present to the House next month. It is naturally very sad to have to make these reductions, but they follow inevitably from the Government's decision to cut defence commitments and expenditure. I can assure hon. Members that they will have a very good opportunity to debate this very soon. I can assure the House that the Army that will be left when the cuts have been made will be a good Army, with a good career for officers and men,
  412
  and well able to carry out its rôle effectively in the 1970's.
  Hon. Members will appreciate that for the reductions announced last July, the selection of particular infantry battalions and other regiments for reduction was a most difficult and painful task for the Secretary of State and the Army Board. We did not go into the exact criteria for our selection then, nor do I intend to do so now. It would only exacerbate the inevitable pain caused by the reduction, as well as providing the opportunity for endless and fruitless arguments, which would not get anywhere, on the comparative merits of individual battalions and regiments.
  I agree with the kind of remarks which the hon. Member made about particular regiments. I could certainly make out a very good case for the D.L.I., and everyone can make a case for these particular regiments because they are splendid regiments and we are very proud of them.
  I think the Army Board has done a very good job in the way it has faced up to this difficult task. We took many considerations into account, especially the strong national feeling in Scotland and I might add in Wales, Ireland and Durham. We have weighed all these factors with the greatest care, and the aim the Army Board set itself was to arrive at a solution which would be in the best long-term interests of the infantry as a whole.
  I am confident that we achieved this aim, and I have no reason to doubt that the majority of the infantry have accepted these cuts with their traditional loyalty, and will accept the decisions to come.
  Following the cuts announced by the Prime Minister last January, the Government are again faced with the difficult task of selecting further major units for reduction. The final decisions have not yet been taken, and this is why the debate tonight is so useful. I can give the House the assurance that what has been said, and the strong feeling in Scotland, will be taken fully into consideration by my right hon. Friend. I am confident that we shall again reach a solution which will be fair and in the best interests of the infantry as a whole.
  I should like to remind right hon. and hon. Gentlemen opposite that this Government are not alone in making cuts in

  413
  Scottish regiments. The Scottish regiments did not remain immune from the reductions initiated by the party opposite in 1957. At that time the Royal Scots Fusiliers and the Highland Light Infantry amalgamated to form the Royal Highland Fusiliers, and the Seaforth Highlanders and the Queen's Own Cameron Highlanders amalgamated to form the Queen's Own Highlanders.
  Moreover, there is no evidence that over the years Scotland has been unfairly treated in the matter of reductions. The cuts announced last July reduced the number of Scottish battalions—and I include the two battalions of the Scots Guards—from 12 in 1950 to nine, a decrease of 25 per cent. The comparable decrease in English battalions is from 54 in 1950 to 34 last July, a decrease of 27 per cent.
  Mr. G. Campbell: But would the hon. Gentleman bear in mind the particular point that recruiting in Scotland, which the Government badly needs, is so much better?
  Mr. Boyden: Yes. This is one of the factors fully taken into consideration.
  I should make it clear that the Scottish regiments are not being singled out and being asked to take more than their fair share of cuts in major units. Equally, however, there is no reason why units drawn from the rest of the United Kingdom should bear the brunt of amalgamations and disbandments.
  I should like to take the opportunity of commenting on the point made in The Times article recently on infantry reorganisation. This was not an inspired leak. The reorganisation will not lead to the introduction of a corps of infantry,
  414
  and regiments will continue to retain their names and identities within the larger divisional framework.
  On the question of Colonel Mitchell which has been raised, I came quite objectively to the system of promotion in the Army, and I found it completely fair. In the case of Colonel Mitchell, I took the rather unusual step of asking the Military Secretary to assure him that he had a satisfactory career in the Army and that he should very carefully consider any steps he was taking. I do not think I should go further. But the idea that Colonel Mitchell has been driven out of the Army by establishment "nabobs", either Ministers or "brass hats", is false.
  Mr. Tam Dalyell: Will my hon. Friend also take this opportunity to confirm that the bestowing of honours is a matter for the military authorities and not for politicians?
  Mr. Boyden: Promotion and awards and so on should be left to the military authorities in the way it has traditionally been done. It is a fair system and I do not want to make further comment on that aspect.
  I hope that I have been able to convince hon. Members, although I have not had much time, that the selection of units for amalgamation or disbandment is fair and that Scotland is being treated fairly. I cannot anticipate the White Paper and the debate and I have to say, as hon. Members chided me not to say, "Please wait a little longer until the debate."
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes past Twelve o'clock.

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Preamble
The House met at half past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield

PASSPORT REVIEWING COMMITTEE
BARONESS EMMET OF AMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government—

(1) whether there was no suitable woman to appoint to the Passport Reviewing Committee;

(2) in view of the fact that humanitarian factors are going to be taken into consideration, whether it would not be eminently suitable to add a woman member to the panel.]

THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, I thank the noble Baroness for her suggestion. But the members of the Advisory Committee, who were chosen on account of their judicial and administrative experience, have already been appointed and I understand that they are about to start their work.
BARONESS EMMET OF AMBERLEY: My Lords, may I ask the Minister whether, to avoid this happening in future, a direction can be given to the Department that when these appointments are made women's names are sent up as well as men's? It is very boring to have to bring this matter up over and over again.
LORD CHALFONT: My Lords, I think that the noble Baroness may be under some slight misapprenhension. Of course, the names of men and women are considered equally on these occasions. I should regard it as being just
1248
as offensive to a woman to appoint her to a Committee like this because she was a woman as to reject her because she was a woman. Of course, men and women are regarded, and their names are considered, as equals in these cases. It just so happens that in this case—
SEVERAL NOBLE LORDS: Oh!
BARONESS EMMET OF AMBERLEY: My Lords, am I to understand from the Minister that women's names were considered? Also, is he telling me that there are no women with judicial qualifications who would have been suitable?
LORD CHALFONT: My Lords, I am sure that if a woman could be found with suitable qualifications she would make a most valuable contribution to the work of this Committee. I assure the noble Baroness that my right honourable friend will bear her suggestion in mind if there should be any need to reconstitute this Committee in the future.
BARONESS SUMMERSKILL: My Lords, could my noble friend tell me why the examining of passports calls for such brilliant intellectual qualifications not possessed by any women in the country?
LORD CHALFONT: My Lords, nobody knows better than I do that women have the most brilliant intellectual qualifications, and I assure my noble friend that women were considered equally with men in setting up this Committee. There has been no discrimination of any kind, particularly of a sexual kind.

BUSINESS
LORD BESWICK: My Lords, may I take this opportunity of reminding your Lordships that dinner will be available between 7 and 8.30 p.m.
I hope that if we make progress on the Transport Bill, bearing in mind the transport difficulties outside, we can adjourn again around 10 o'clock.
LORD NEWTON: My Lords, may I ask the noble Lord whether there will be dinners for both sexes to-night?
LORD BESWICK: My Lords, I understand that in this field there is equality of sacrifice.

MERSEY DOCKS AND HARBOUR BOARD BILL [H.L.]
Read 3ª, and passed, and sent to the Commons.

EDUCATION BILL [H.L.]
2.41 p.m.
BARONESS PHILLIPS: My Lords, I beg to move that the Commons Amendments to the Education Bill be now considered.
Moved, That the Commons Amendments be now considered.—(Baroness Phillips.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill [53] as first printed for the Commons]
[Nos. 1–3]
Clause 1, page 1, line 17, after ("made") insert (", in the case of a college of education,")
Clause 1, page 1, line 17, after ("authority") insert ("with the approval of the Secretary of State, and in any other case by order of the local education authority")
Clause 1, page 1, line 17, line 19, leave out ("that authority") and insert ("the local education authority or, in the case of a college of education, that authority with the approval of the Secretary of State")
BARONESS PHILLIPS: My Lords, with permission I will take Amendments Nos. 1 to 3 together. I beg to move that this House doth agree with these Amendments. Taken together, they produce the result that instruments of government for colleges of education, but not other establishments to which the Bill applies, are to be subject to the approval of the Secretary of State for Education and Science.
Clause 1(2) of the Bill as introduced provided that the instrument of government for any institution to which Clause 1(1) applied, namely, a maintained college of education or other institution of further education, should be made by order of the local education authority and that the body of governors to be constituted under it should consist of such number of persons, appointed in such manner, as that authority might determine. In its application to colleges of education this provision gave effect to the recommendation of the Weaver Report, and it was the intention of the Government that other institutions of
1250
further education should be treated in the same way. The absence of any requirement that the instruments of government for the colleges of education should be approved by the Secretary of State was criticised both in your Lordships' House and in another place when the Bill had its Second Reading. The Government have considered the position afresh in the light of this criticism, and have come to the conclusion that it would be right to provide that the instrument of government for the maintained colleges of education should be subject to the approval of the Secretary of State. This is achieved by the three Amendments that I now commend to your Lordships' approval.
Moved, 'That this House doth agree with the Commons in the said Amendments.—(Baroness Phillips.)
LORD NEWTON: My Lords, we are much obliged to the noble Baroness. Of course, these Amendments are quite acceptable.
On Question, Motion agreed to.

AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL
2.43 p.m.
LORD BESWICK: My Lords, I beg to move that the Commons Reason for disagreeing to one of the. Lords Amendments to the Agriculture (Miscellaneous Provisions) Bill be now considered.
Moved, That the Commons Reason be now considered.—(Lord Beswick.)
On Question, Motion agreed to.

COMMONS REASON FOR DISAGREEING TO ONE OF THE LORDS AMENDMENTS
[The reference is to Bill (66) as first printed for the Lords. The Commons Reason is printed in italics]

LORDS AMENDMENT
After Clause 19, insert the following new Clause:—
Landlord's power in certain cases to require tenant to purchase holding
"In any case in which, in pursuance of the foregoing provisions of the Part of this Act, a landlord is precluded from giving an incontestable notice to quit to a tenant who has acquired right to the lease of an agricultural holding, the landlord may give notice to the tenant requiring him to purchase the holding and in any such case the tenant shall purchase the holding at such price as may be agreed

1251
between the parties or, in the case of dispute, as may be fixed by the Scottish Land Court who shall fix the said price on the basis of what price the holding would realise if offered for sale in the open market with vacant possession.")
The Commons disagreed to this Amendment for the following Reason:
Because the Amendment is at variance with the purposes of Part III of the Bill which is designed to give security of tenure, as a tenant, to a successor to an agricultural holding in Scotland who is a near relative of the deceased tenant.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, this matter was debated in another place on June 13, when I think it is fair to say that the Opposition, while continuing to express their dislike of the provisions of Part III of this Bill, did not appear to have much enthusiasm for the proposed new clause. We have discussed the proposal in the clause at much length, at both the Committee and the Report stages of the Bill in your Lordships' House, and I think your Lordships already know why the Government have opposed it. The Commons have stated that their Reason for disagreeing with the Lords Amendment is that it
"is at variance with the purposes of Part III of the Bill which is designed to give security of tenure, as a tenant, to a successor to an agricultural holding in Scotland who is a near relative of the deceased tenant."
I beg to move that this House doth not insist on the Amendment to which the Commons have disagreed.
Moved, That this House doth not insist on the Amendment to which the Commons have disagreed.—(Lord Hughes.)
THE DUKE OF ATHOLL: My Lords, I hope that this House will agree with the Commons in regard to this matter, but I should like to ask the noble Lord, Lord Hughes, one question. The Under-Secretary of State in another place, when giving the Government's reasons for not accepting this Amendment, said that he felt that this particular difficulty was already covered by the agricultural legislation relating to Scotland. I wonder whether the noble Lord, Lord Hughes, could elaborate on this point, because I feel that it is still not covered in any previous agricultural Act. In not insisting on this Amendment I should be
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much happier if I felt that it was covered in some previous agricultural Act and that in fact the provision I suggested in this Amendment is more or less unnecessary.
LORD HUGHES: My Lords, at this point I can do no more than repeat what I have already said to your Lordships in Committee and on Report stage, and I would refer the noble Duke to what I then said.
THE DUKE OF ATHOLL: But, my Lords, it seemed to me the Under-Secretary of State in another place went much further than the noble Lord has gone here, and I wondered on what the Under-Secretary of State was basing his statements.
LORD HUGHES: My Lords, so far as I am aware, all my honourable friend the Under-Secretary of State in another place said was that he was referring to the landlord's right to apply on hardship grounds. If the noble Duke thinks that my honourable friend has gone further than I did, I would advise him not to look a gift horse in the mouth.
On Question, Motion agreed to.

HEARING AID COUNCIL BILL
Read 3ª, with the Amendments, and passed, and returned to the Commons.

TRANSPORT BILL
2.47 p.m.
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Stonham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Schedule 5 [Passenger Transport Authorities and Executives]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 41:
Page 213, line 40, leave out ("with the approval of the Minister").
The noble Lord said: The point of this Amendment is simply that as the Bill stands the chairman of the Passenger Transport Authority can take office only if, first, he is elected by the members of the Authority and, secondly, his appointment receives the approval of the Minister. Yesterday the noble Lord was at considerable pains to stress that the Authority was a local authority body, and in that case it seems difficult to justify requiring that the chairman of the Passenger Transport Authority should need the approval of a Minister. I do not know whether the noble Lord will be able to quote other cases of local authority bodies where the chairman, who is normally elected, requires the approval of the Minister. If we put in this requirement it plainly reduces the independent status of the Authority. I should have thought this was something that ought to be reinforced rather than reduced. I do not know whether the noble Lord can give a precedent for this, but it seems to me that it would be a bad precedent to set, that a local body should require the approval of the Minister before it is allowed to have its own chairman, the chairman the body itself has chosen. I beg to move.
LORD STONHAM: I find this a quite extraordinary Amendment and even more extraordinary the speech of the noble Lord, Lord Drumalbyn, in moving it, because I, too, recall yesterday an Amendment in which he referred to this Authority as a weak local authority. I also recall that in another Amendment he was urging that the membership of this Authority should be so large that it could be described, as I thought, as a mass meeting. Now the noble Lord is suggesting that this allegedly weak local authority must nevertheless have complete power; that the Minister should be excluded from any power with regard to the appointment of its chairman. I also find it remarkable that in moving this Amendment the Conservative Party appears to be stealing the Liberals' clothing, because a precisely similar Amendment to this was moved by the Liberals and debated in another Place.
Originally in the early stages of preparation of this Bill it was proposed that the Minister should appoint the chairman. The Bill as it stands at present provides in effect that the Authority shall
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appoint the chairman with the Minister's approval. This change was made in response to representations by local authorities; and since this change to Ministerial approval was made the County Councils Association have approved this, though somewhat reluctantly, and the Association of Municipal Corporations has also approved it but have asked that the requirement should no longer apply if in due course the P T.A.s are merged back into large local authorities that would have the provision of passenger transport as one of their main functions. Probably the noble Lord is aware that my right honourable friend the then Minister of Transport, Mrs. Castle, said, "I readily accept that and give that assurance".
The present proposal is, in our view, of value, and it is helpful in the somewhat unique circumstances with which we are confronted. In the discussions on this Part of the Bill I have made it clear that we are concerned that action should be taken urgently with regard to Passenger Transport Authorities in four conurbations, and in effect this is what we are primarily concerned with on the point which this Amendment raises. Clearly, if the local authorities were unanimous in wanting to appoint a certain person, then the Minister would indeed have to have very strong reasons indeed, which of course he would explain to the local authorities, if he did not appoint that person.
We appreciate that not only is it crucial to the success of the whole concept of the P.T.A. that the chairman should be the very best man for the job (and this is why we think the Minister should have this right of approval, because it gives the Minister, as it were, a statutory locus in the discussions) but also we appreciate that the Minister could not and would not force his preference through against the wishes of the majority of the Authority. Indeed, if the Minister were foolish enough to attempt to do so, he could not expect that the chairman would he any use, or very much use, if he did not have the support of the majority of the Authority. So the point we are discussing here is that the power which we are asking should be retained in the Bill would not be likely to do more than offer the chance to persuade the Authority not to appoint the member having the

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highest possible factor of acceptability whether or not he was the best possible choice for the job of chairman.
The noble Lord, Lord Drumalbyn, with his very extensive knowledge of local government, will, I am sure, appreciate that it is essential, if we are to get the best possible man from among those, as it were, elected to represent these local authorities, comprising the P.T.A., that there should be this element of discretion, which really is discretionary advice, left to the Minister. In view of that explanation, I hope your Lordships will agree that this is a useful provision and that it should be retained in the Bill, and that the noble Lord will see fit to withdraw his Amendment.
LORD NUGENT OF GUILDFORD: May I first apologise for missing the opening words of the noble Lord's speech replying to my noble friend on this point. We regard this as an important point. I have listened with care to the noble Lord's explanation of how the Minister would proceed. I am bound to say that the further he went in explaining what considerations the Minister would have in his mind, when there was a strong wish expressed by the majority of the members of the P.T.A., the more I wondered why the Minister needed to take this power. I believe I am right in saying that the Minister has moved his position, or previously, her position, somewhat since this was originally conceived; that the Minister's original intention was to appoint the chairman and, as a result of very powerful representations from the A.M.C.; has now moved to the present position where the Minister wishes to approve the chairman; in other words is reserving to himself a power of veto. I am quite sure that the noble Lord, Lord Stonham, and his right honourable friend, recognise that there is great force in this point. He himself said that it is necessary that the chairman of the Authority should carry the support of the majority of the Authority. This is obvious, and if indeed the Minister tried to appoint somebody who was not the choice of the majority he or she would simply be regarded as a "stooge" and would be put in the weakest possible position for coping with the many difficult and onerous tasks the P.T.A. will undoubtedly have.
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My noble friend Lord Drumalbyn pointed out that there is no precedent for this because the P.T.A. is unique, and I feel this would be a very bad precedent. It is an impractical one. We most earnestly hope that the noble Lord will think again about this. I need not reiterate the line we emphasised yesterday, the absolute necessity of complete local government responsibility to make the P.T.A. a success and get effective public accountability. The chairman is the most important person of all.
The Minister has already gone some way in the direction of meeting the strong feelings of local authorities, and I hope that the Minister will go just that little extra distance and agree that it is far better that the elected members from the local authorities, or the appointed members, whichever it is, should choose the chairman themselves. In that way, you will get far the best P.T.A.
LORD STONHAM: Certainly, I will accept the invitation of the noble Lord to think again about this matter, but without any commitment. May I ask him also to think about it again and to imagine the position of eighty local authorities in the difficult task of deciding between themselves how twenty-five representatives on the P.T.A. shall represent all of them? That, in itself, is a task which will involve a good deal of negotiation and thought among the local authorities, and perhaps some friction. No doubt it will eventually be resolved. But then we come to the question as to who is to be the chairman and the local authorities' proposals for the job, and I can foresee a situation where deadlock can almost arise. A sort of local power politics as to who should be the chairman then appears; whereas our concern, and the concern of your Lordships and the Minister is which person among those twenty-five would make the best chairman of the Passenger Transport Authority and is likely to do the best job.
In such circumstances it would be of great value if the Minister had the statutory right to approve the chairman. It could resolve a situation of deadlock, and I think that once the chairman was appointed, once the local dams of political feeling, if you like, were burst open, the local authorities would then support the chairman in the knowledge that he

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was the right man for the job. That is our thinking in the matter. I should like to ask the noble Lord also to think along those lines before the Report stage.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for his reasonable approach to this idea, and of course recognise the practical difficulties here and in the case that he so graphically described to us of 80 local authorities battling to get their man or lady as chairman, and all the possible frictions or conflicts that may occur. But the noble Lord must recognise that the Minister, in moving from his first position, that he was going to appoint the chairman, has recognised that this simply would not do and has now agreed that he will simply have the right of veto. So the noble Lord, Lord Stonham, has already accepted that, whatever pulling and pushing there may be between local authorities in deciding who it is they want as chairman, the Minister wishes only to reserve the power of veto in the case of somebody he does not like. So he has really gone nine-tenths of the way.
I recognise the possibility of deadlock. We all know how difficult these things can become. Is it not possible to meet both the noble Lord's point and our point, by giving the Minister reserve powers, so that if there were a deadlock then the Minister would appoint? Under his veto he would have to. This would be far more valuable than the power of veto which now exists in the Bill. Is it not reasonable to leave the appointment of the chairman to the normal process of choice, and to put in the Schedule a reserve power to the Minister whereby in the case of a deadlock he would then appoint?
For myself, I would certainly accept that as being a practical solution, and I think that local authorities would accept it as well. I think that almost invariably they would be able to agree on a choice and would, between them, elect the right person. But in the event of their not doing so, there is a reserve power to break the deadlock. I would certainly advise my noble friends to accept such a solution. May I ask the noble Lord, Lord Stonham, who seems to be in a most pleasantly receptive mood this afternoon, which I hope will continue as the day wears on, whether he would
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give some thought to this idea, with his advisers; and perhaps before the Report stage we could have a word about it to see whether it is possible to agree, and put down an Amendment to the Schedule in those terms.
LORD STONHAM: I think the noble Lord, Lord Nugent, has made a most useful and reasonable suggestion and certainly one that my right honourable friend the Minister and I shall be glad to look at. But he will appreciate that it would be a matter of careful drafting. You cannot just say, "Put in the Bill a stipulation that if there is deadlock we will do so-and-so". You must define the kind of circumstances in which the Minister's power will be used. It may well be that there is little between us, and certainly between now and the Report stage we will try to find a solution acceptable to everyone.
LORD DRUMALBYN: In view of the way in which the noble Lord has approached this problem, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.7 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 43:
Page 213, line 47, at end insert—
(" .Subject to the provisions of paragraph 4 of this Schedule, each member of the Authority shall hold office for such period as may be fixed by the council by whom he is appointed and shall be eligible for reappointment.")
The noble Lord said: With this Amendment should go Amendment No. 44A, to leave out paragraph 4 at page 215. The point of this Amendment is simply that so far as local authority bodies are concerned, in the normal way it is for the appointing local authority body to fix the period of office for which a particular appointment is held in respect of anybody appointed to any joint authority. It is difficult to see why the same should not apply in this case.
This is really a probing Amendment to see what the Government have in mind. We think it would be regrettable if the Minister were to take upon himself the duty of fixing the periods of appointment and generally regulating the membership of the Passenger Transport Authority. In Part III, paragraph 4 is a matter which

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may be dealt with by order under Section 9(1). Paragraph 4 reads:
"The terms on which and period for which the members of the Authority are to hold office, and the vacation of office by those members."
As I say, so far as the Authority is concerned, inasmuch as the appointments are made by all the different local authorities, either singly or jointly, within the Passenger Transport Area, it seems more appropriate for the local authorities themselves to regulate the period of the appointment for each person whom they choose to appoint.
Now the period would normally be three years, and this may be all that the Government intend to lay down in the Order, if indeed they intend to lay down anything about it at all. As I say, this is a probing Amendment, and the noble Lord will by now have appreciated our strong feeling that the Passenger Transport Authority should be left as independent as possible and should be in a position, so far as possible, to represent the local authorities which appoint it. I beg to move.
LORD STONHAM: I thank the noble Lord, Lord Drumalbyn, for his explanation and for indicating that this is a probing Amendment. I appreciate that Amendment No. 44A would be consequential on the Amendment which he is now moving, and that paragraph 4 would have to be deleted, but I should like first to see what the position would be if this Amendment were accepted. It would have the effect of enabling each of the councils in the constituent area to decide the terms on which their appointee shall serve on the Authority. But if, as we have already decided, there is not to be individual representation for councils of constituent areas, it will not in our view be possible for each council to decide how long members shall serve.
LORD DRUMALBYN: May I ask the noble Lord why not?—because some of the members are to be appointed jointly by certain councils and those councils could decide jointly, in the same way as they appoint jointly, how long the period should be.
LORD STONHAM: In that case the Amendment would have to read that some of the councils would decide how long their appointee should serve, but
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the Amendment says that each member of the authority shall hold office for such period as may be fixed by the council by whom he is appointed. In some cases one member will represent perhaps four councils. He cannot be appointed by them. I am not trying to be clever about this; I am trying to work through the matter with the noble Lord and with the Committee.
LORD DRUMALBYN: Would the noble Lord forgive me again? He will appreciate that this Amendment was drafted in conjunction with the previous Amendment which we did not press. That Amendment would have meant that each of the main authorities, the authorities covered by Clause 9, would appoint at least one member, so I quite agree that certainly this Amendment is now inappropriate. But, as I say, this is a probing Amendment and I quite appreciate that it is now not absolutely appropriate for the purpose intended to be served.
LORD STONHAM: I did not think it necessary to explain that, because it is a well-known fact that all Members of this Committee are so completely informed on this subject that it was totally unnecessary to explain this to them, or even to tell them, that my brief, which I am not consulting, was written before we had any idea of yesterday's events. Therefore, I am dealing with the situation as it is now, in which we decided, yesterday, that we were not going to have a member on the Authority from every constituent local authority. But the real crux of the matter is that, in our view, this Amendment is intrinsically undesirable because the really important thing, and this was implicit in what the noble Lord said, is that there should be continuity; continuity of appointments of members of the Authority.
If, under this Amendment, for example, on an appointed day a council appointed one of its members as its representative, he might have only a year or two years to go as a member of that Authority. He might lose his place, perhaps become ineligible for membership, or perhaps they would not want him on it any longer. In other words, no sooner had he played himself in and made himself useful as a member of the authority than he would no longer be eligible to be a member. We all agree that that is a quite undesirable situation and that the sensible thing

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to do is for this term of appointment not to be decided as is suggested in the Amendment, but to be decided by the Minister in accordance with the Schedule.
The noble Lord suggests that the Minister should make appointments for a definite period, say for three years. I have no doubt that the Minister will appoint for a definite period. The person would be subject to reappointment when the term ends. This is a sensible and logical thing to do, and it is almost common form, and it is all provided for, or can be done, within the Schedule as it now stands. It enables us also to take account of the consensus of opinion in an authority. Of course, we are not going to ignore that opinion. We will certainly take account of that consensus, and I give an assurance that we will consider what the noble Lord has said about the term of office, which must be a reasonable one. I think that what he has suggested may well prove such a term, but I cannot anticipate the precise term. However, I can give a categorical assurance that the local councils will be consulted before the terms of office of the Authority members are fixed in any Order that the Minister makes. So really we shall proceed by agreement and, at the same time, achieve the continuity which might not otherwise be achieved if we accepted this Amendment.
LORD DRUMALBYN: I appreciate the noble Lord's argument on the need for continuity here, and I presume from what he has said that this would require that the initial Authority would have different periods of appointment for different members so that a certain number, let us say perhaps eight, would retire each year. But as these are members of local authorities it will be quite impossible to fix terms with certainty because, as the noble Lord himself has said, if a member loses his seat on a local authority and if he is elected by virtue of being a member of a local authority, then under paragraph 4 here he is eligible for reappointment. May I draw the noble Lord's attention to this point: that I think he will have to look at those words, too, because those words then should read "eligible for reappointment for the remainder of his term"; otherwise you are going to get out of phase in the phasing of appointments over a period of years. But I think he
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has made a case for saying what the periods of appointment should be and how they are to be "rotated", if that is the right expression, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 44:
Page 214, line 40, at end insert:
"Provided that no member of the Executive shall be removed from office except by a resolution of the Authority passed by not less than two-thirds of the members present at a meeting of the Authority specially called for the purpose by a circular addressed to the members of the Authority not less than forty-eight hours or more than fourteen days before the meeting."
The noble Lord said: On this Amendment we are confronted by a real issue of principle. I should like to refer once again to paragraph 4 on page 215 of the Bill which refers to
"the terms on which and period for which the members of the Authority are to hold office, and the vacation of office by those members."
The Executive is intended to be subject to local authority control in regard to its proposals for the organisation of its business, and in particular perhaps in regard to the deficit which it is allowed to incur and which will be a subject of a precept on the rates. It is also under a statutory duty in regard to precept. Paragraph 35 of page 39 of the annex to the White Paper Public Transport and Traffic says:
"The Executive will be under a statutory duty to earn sufficient income to meet its expenditure, and so cannot carry out any policy envisaging a trading loss unless the Authority agree to provide for the loss by means of a precept."
What happens if the Executive fail in that duty? What is the sanction, and who applies it? Plainly, the Executive must be held responsible if it incurs an unauthorised deficit. The Authority are in effect the shareholders and should have the shareholders' right to dismiss the Board. As I read the Bill, there is just the possibility that the Minister might deal with the matter of the vacation of office of the chairman and members of the Executive in the order. In other words, to put it bluntly, it could say in what circumstances they should be dismissed or sacked. We want to hear from the Minister in what circumstances the Executive can be dismissed, and by whom. We believe that the Authority should be

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the masters, and that if the Executive does not serve the Authority properly then the Authority should have the right to dispose of the chairman and the members of the Executive. This is the purpose of the Amendment. For want of a better precedent, the Amendment corresponds to the way in which a town clerk in Scotland can be dismissed. This seems to be a very fair and practical way of going about it. I beg to move.
LORD STONHAM: This Amendment would have the effect of making it impossible for the Authority to remove any member of the Executive unless a two-thirds majority of members of the Authority resolved on this at a special meeting called for this purpose. The Amendment would make it very much more difficult to achieve what the noble Lord has in mind, and on which I think we are agreed; that is to say, that the Authority must have the shareholders' right to dismiss the board. The Authority must be the boss. But the Authority is very much the boss in the Bill as it stands at present.
The provision for which the noble Lord asks in his Amendment is unprecedented in local government or in the nationalised industries. The Bill provides that a member of the Executive shall hold and vacate his office in accordance with the terms of his appointment by the Authority. He is appointed by the Authority, which means that the Authority is, and remains, the boss. The exact terms of the appointment will be a matter for negotiation between the Authority and the individuals whom they wish to appoint members of the Executive, including the Director-General. There is the parallel, but not exactiy similar, case of the joint water boards. The board (of local authority representatives) may remove their chief officers, and indeed any other officer at the Board's pleasure. It is effected by a simple majority at a properly constituted Board meeting, called at three clear days' notice and with the quorum present. So that there would be very little difficulty in that respect. There is that parallel in existence, although the relationship between the Authority and the Executive which is now proposed is different. Nevertheless, there is the same boss-
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employee relationship and the Authority can discharge members of a Board.
This matter will have to be considered and discussed with those who are likely to be concerned on both sides on the basis that we desire to leave the Authority as much discretion as possible in relation to appointments to the Executive. We have in mind that the potential applicants for posts on the Executive will want to be assured of a square deal. In other words, there would be a contract entered into by the Authority and by those whom they engage as members of the Executive. If the terms of that contract are infringed by the members of the Executive, then the Authority, which has power to hire, will have power to fire under the terms of the contract.
The noble Lord, Lord Drumalbyn and his noble friend Lord Nugent have had experience as Ministers, and they will appreciate that there is strong objection to writing into the Bill a provision of this kind. If the provision proposed in the Amendment were to be written into the Bill and were to become unsuitable in any way, it would mean that we should need legislation to alter it. It might be found to have hamstrung a particular Authority or to have handicapped the general purpose which we have in mind. We should then have to find Parliamentary time in order to introduce alternative legislation. Therefore, although I appreciate the noble Lord's fears and his reason for introducing the Amendment, I hope that I have been able to give him a complete answer and that he will feel that the Bill is much better left without the Amendment.
LORD DRUMALBYN: We have had an interesting discussion on this matter. It is important that we should know exactly how the thing stands. I began from the standpoint that the Government appear to want the Executive to be in a particular position and would want rather more security of tenure, so to speak, for the Director-General and Board of the Executive than would be normal with, for example, a board of a company. I took what seemed to be a reasonable parallel as showing rather more than the usual security of tenure. If the Minister, in the course of discussions with the local authorities, comes to the conclusion that rather more security of tenure is required

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rather than the ability to dispose of the board just by a simple vote, it follows that I should not object to that. But I should object if, as a result of the discussions, the right to dismiss the board were taken out of the hands of the Authority. That would be wrong. However, the purpose of putting down this Amendment has been served, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
3.30 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 44B:
Page 215, line 24, leave out from ("by") to first ("of") in line 25 and insert ("the Executive").
The noble Lord said: The effect of this Amendment is simply to remove the words "the Authority" from paragraph 7, so that it will now read:
"The establishment by the Executive of committees and the composition of those committees, including the establishment of advisory committees consisting wholly or partly of persons who are not members of the Authority or Executive."
The effect is to leave the Authority free to establish its own committees in its own way. We are dealing here, in Part III, with the matters which may be dealt with by order under Clause 9(1)—
LORD STONHAM: The noble Lord has just said that the purpose of the Amendment is to leave the Authority free to establish its own committees.
LORD DRUMALBYN: To leave the Passenger Transport Authority, but not the Executive, free to fix its own committees. If the noble Lord looks at the Amendment, I think he will see that that is the effect; certainly, it was intended to be. We think that that would be right. We do not think that the Minister need, or should, interfere with the way in which the Authority works. We think that the Executive is possibly a different matter and that he may wish to have the right, though he may not necessarily exercise it, to lay down what committees the Executive should have and what should be their composition. There is that clear distinction, Once again the Authority is a local authority body, and local authority bodies are normally left to determine what committees they should have, although, of course, they usually require the agreement of the
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Minister. But in this case I should have thought the procedure should be left as flexible as possible for the Authority, which should be left free to establish its own committees and to work out the best way of operating. I beg to move.
LORD STONHAM: I am grateful to the noble Lord for his explanation. I think this Amendment appeared on the Marshalled List only this morning, and he will appreciate that I have not yet had a full opportunity to consider it. I was puzzled by it before I heard the noble Lord's speech, but having heard it I think his feeling is misconceived. He made it clear that the intention of his Amendment was to prevent the Authority, as opposed to the Executive, from appointing committees, including advisory committees.
LORD DRUMALBYN: No, that is not the purpose of the Amendment. We are dealing here with matters which may be dealt with by order. The effect, therefore, would simply be that the order could not deal with the establishment of committees by the Authority. The Authority would be left to deal with those itself.
LORD STONHAM: In fact I was not so much interested in the intention of the Amendment as in its effect. And I am advised that its effect would be to achieve precisely what the noble Lord does not want it to achieve. As he is well aware, there will be occasions when the Passenger Transport Authority, following well-established local authority practice, will want to set up committees dealing with special policy matters. We appreciate that. It would be an essential function of the Authority that they could advise on particular subjects. My understanding of the position is that the Bill as drafted, without the noble Lord's Amendment, leaves the Authority free to appoint committees just as they wish. They have this power now. I shall look at the matter again, in the light of what the noble Lord has said, to see whether there is any fault in our reasoning, but so far as intentions are concerned there is really nothing between us. Certainly we want the Authority to have power to appoint committees to do their work and, so far as we understand our own Bill, they will have those powers under the Bill as now worded and they will not be interfered with.
LORD DRUMALBYN: If I understand the noble Lord's argument aright, it is that unless provision is made in the Order the Authority will not be able to establish committees.
LORD STONHAM: That is right.
LORD DRUMALBYN: In that case, surely, Part III is couched in rather misleading terms, because it says merely:
"Matters which may be dealt with by order …"
It is obvious that, if the Authority and the Executive cannot have committees unless an order is made, the Bill should say that this is a matter which must be dealt with by order. This is unnecessarily misleading, and it is not just a matter of drafting. It is the heading of Part III which is misleading.
LORD ROBERTSON OF OAKRIDGE: I am afraid that I do not understand the purpose of the Amendment proposed by the noble Lord, Lord Drumalbyn. It seems to me that he is expressly asking that the Minister should not have authority to authorise, or not to authorise, committees formed by the Authority, but that he should have authority over their subordinate. That seems to be very curious. The Executive is the subordinate of the Authority, and why should the Minister be given authority over that?
LORD DRUMALBYN: I think the noble Lord has a very good point there. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD STONHAM LORD STONHAM moved Amendment No. 45:
Page 215, line 30, leave out ("their chairman") and insert ("the chairman of the Authority or, as the case may be, the Director General of the Executive.").
The noble Lord said: This is little more than a drafting Amendment, designed to make it clear that the person to whom an Executive can delegate their function is the person appointed Director General, not someone they themselves may elect as their "chairman"—a term which of course has no significance under the Transport Bill. Paragraph 8 of Part III of Schedule 5, with which we are now dealing, was added at the Report stage in another place to enable a Passenger Transport Authority and a Passenger
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Transport Executive to delegate functions either to committees of their members or to their respective "leader". But the head man of the Executive will be appointed with the title "Director General" rather than "chairman", and though he may take the chair at meetings it is more appropriate that functions should be delegated to him under the statutory capacity to which he was appointed (which is what confers on him his powers as leader of the Executive), than under the title of a casual capacity which he may or may not assume.
There can be expected to be occasions on which it will be important for the Director General to have functions of the Executive delegated to him; for example, for the purpose of negotiating on their behalf with outside bodies, such as a trade union, a private operator or the Railways Board, or for the purpose of furnishing confidential information of a personal nature to the Minister in the event of allegations of misconduct by a member of the Executive. I hope that the Amendment makes it clear beyond doubt that the person to whom the Executive can delegate their functions is the Director General—the person appointed as their leader—and not just anyone they chose to elect to the chair at a meeting. I beg to move.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord, Lord Stonham, for explaining this Amendment No. 45 to us? It seems to me perfectly acceptable. I take it that the magic words "as the case may be" are the equivalent of "respectively", so that the chairman and the Director General are not interchangeable. Subject to that very small qualification, I am happy to accept the Amendment.
On Question, Amendment agreed to.
Schedule 5, as amended, agreed to.
Clause 10 [General powers of Executive]:
3.42 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 45A:
Page 15, line 2, after ("power") insert ("subject to the general approval of the Authority").
The noble Lord said: This Amendment seeks to introduce a general power of approval of the exercise of the powers

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of the Executive. The powers of the Executive, I realise, are set out here—they are, more or less, given general powers—and I realise also that in the normal way the exercise of those powers will be subject to the general approval of the Authority in that the plans of the Executive have to be approved. The purpose of the Amendment is simply to ensure that when any of those powers are intended to be exercised the general approval of the Authority shall be obtained before they are exercised. Once that general approval has been obtained, then it will be possible for the Executive to go on exercising those powers.
I appreciate that the purpose of having a clause like this is, in general, simply to define the powers for legal purposes. It is also to give a general indication as to what the Executive is intended to do, but it is mainly for legal purposes. It is rather like the Memorandum and Articles of Association of a company. At the same time we should like to make certain, by inserting these words, that the various powers are exercised only with the general approval of the Authority, in order to keep the Executive in its place—as the noble Lord, Lord Robertson, put it, subordinate to the Authority. I beg to move.
LORD BOWLES: At about a quarter to eight last night I was handed three manuscript Amendments to this Part of the Bill, and I now discover that there are 15 new Amendments to this Part, and these it was possible to get from the Printed Paper Office at only about half past eleven this morning. It is no wonder that my noble friend was unable to answer the noble Lord's Amendment No. 44B—because he had not had a chance to look at it. It does not give the Minister much chance; it certainly does not give noble Lords much chance of knowing which way to vote; and even the Ministry itself, apart from the Minister, finds itself at a disadvantage. So I hope that in the future, if it is at all possible, noble Lords will put down Amendments a little earlier. As a former Chairman of Standing Committees I always used to say that we should never be likely to call starred Amendments at the Committee stage of a Bill, and I think it would not be a bad practice if that kind of procedure obtained
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during the Committee stage in this House as well.
The noble Lord put his emphasis in this particular Amendment on the question of wanting the definition for legal purposes, but perhaps I should point out that the balance of power and responsibility between the Authority and the Executive has been very carefully arranged so as to give the Authority control over general policy and the Executive responsibility for the day-to-day working. Clause 10 gives the Executive enabling powers to do a number of things, and subjects some of them to the specific approval of the Authority. Moreover, the opening words, "Subject to the provisions of this Act", were included as a Government Amendment during the Commons Committee stage to indicate that the powers were not unlimited but would, for example, be subject to the specific approval of the Authority for the items listed in Clause 15. So the point about the general approval of the Authority being necessary, to which the noble Lord referred, so far as it fits in with the designed balance of responsibility aimed to produce the greatest efficiency and effectiveness, is already covered, and we therefore think that this Amendment is unnecessary. So far as it is meant to go any further, it is liable, in our opinion, to upset that balance, and I ask your Lordships to reject it.
LORD DRUMALBYN: I am grateful to the noble Lord for his explanation of this, and perhaps I owe an apology to your Lordships for having put these Amendments down rather late. Equally, I think your Lordships would like an apology for the fact that the Amendments were not available early this morning and that we had to wait for them until 11.30 o'clock. So far as I am concerned, I found that very inconvenient. All this is due, of course, to the immense length and complication of this Bill. So if the noble Lord will undertake that Bills will not be of this length and complication in the future, it may then be possible to give some indication that we shall not be forced to go on looking at the Bill and putting down Amendments up to the last moment.
LORD BOWLES: The noble Lord had plenty of time to put down the Amendments before.
LORD DRUMALBYN: If I may say so, the noble Lord is being a little unnecessarily aggressive on this matter. It was quite unnecessary for him to plough on as he did. I would not have put these Amendments down at the last moment if I could have put them down earlier. We have all been working for a long time on this Bill, and these were Amendments which, for one reason or another, we did not manage to get settled until the last moment. I have given my apology to your Lordships and I hope the apology will be accepted.
LORD REA: Before the noble Lord goes on, may I intervene for one moment? I am not quite sure that I understand this. Is the Minister complaining that this Bill is being rather rushed—rushed by the Opposition?
LORD BOWLES: I thought the noble Lord would not understand. No, the Bill is not being rushed at all. It is the Amendments which are being put down to it after many weeks of consideration and after it had left the other place that are being rushed.
LORD WAKEFIELD OF KENDAL: Will the noble Lord not agree that after discussion on Committee stage points can emerge upon which it may be desirable for Amendments to be put down? After all, if you rush Committee stage after Committee stage day after day, the Government really cannot complain if Amendments are put down at the last moment.
LORD BOWLES: This Amendment was put down in the middle of the Committee stage of yesterday, which was the first day.
LORD NUGENT OF GUILDFORD: I feel that the noble Lord is being a little less than just to my noble friend Lord Drumalbyn and to my noble friends on this side. In fact, the timetable for this Bill in this House has been all too short. The Report and Third Reading in the other place finished just before Whitsun; the Bill was published then, just as we were going away for the ten-day Whit-sun Recess; we had the Second Reading as soon as we came back, and we then had about ten days in which to get our Amendments down. I would say that that sort of timetable for a Bill of this
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size is just about as short as human beings could possibly cope with. We ought to have weeks longer than that in order to get the enormous range of Amendments ready. My noble friend is right in saying that we have spent days and days—all the days that there were —in studying the Bill since the other place finished with it, in order to get our Amendments down. It has been a prodigious job. We have no Government Departments behind us. The noble Lord is being less than just.
LORD BOWLES: I apologise if it is thought that I have been less than just. I was merely asking, for the convenience of the Committee, that noble Lords should, if possible, put Amendments down earlier. I know that the noble Lord, Lord Drumalbyn, works harder than anybody I have ever come across and that the noble Lord, Lord Nugent, is not far behind. They are a great example to us all.
LORD DRUMALBYN: I am sorry if the noble Lord was inconvenienced. Nevertheless, he has given a good answer as to the conclusions at which the Government have arrived and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.52 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 46:
Page 15, line 2, after ("carry") insert ("or arrange for the carriage of").
The noble Lord said: I beg to move Amendment No. 46 in the name of my noble friends and myself. With it goes Amendment No. 48. Both are Amendments to the beginning of Clause 10. The effect of these Amendments would be to allow the Passenger Transport Executive either itself to carry passengers in the buses it was operating or to arrange that they should be carried by some other carrier. We feel that this flexibility would be an improvement on the arrangements now in the Bill which require, as I understand it, that the Passenger Transport Executive, when it is set up, should take over the operation of all the existing bus companies and undertakings in its area. Perhaps I should give a word of explanation of the thoughts behind this Amendment which are different from those

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which activated our honourable friends in another place.
My noble friends and I feel that we have to accept, though with regret, the concept of the National Bus Company. I should say here just how much I regret that noble Lords opposite and their right honourable friends decided, with a very large sum of public money, to buy out the B.E.T. and to lose the outstanding competent management that went with that company. Nevertheless, this is what has happened. The Transport Holding Company now owns all the bus undertakings of B.E.T., and the basis of the National Bus Company has been formed. I think we should accept that situation and do the best we can to make this Bill as workable as we can in terms of that fact.
But, accepting that all that is now water under the bridge, we still think that the Passenger Transport Executive may prefer to leave in the hands of, say, a municipal corporation a bus undertaking that is working perfectly satisfactorily and is already integrating satisfactorily into the general transport arrangements of the area. We think the P.T.E. may wish to leave that undertaking in the hands of the present managers and in the hands of the local authority concerned. Therefore we want to reserve the option for the P.T.E. and the P.T.A. to decide for themselves whether they wish to bring them all into one ownership or to leave a part in one ownership and the rest in the National Bus Company. The purpose of the Amendment is to retain that flexibility so that the choice will remain with the P.T.E.
LORD BOWLES: I think the noble Lord is right in saying that Amendments Nos. 46 and 48 go together. The power in Clause 10(1)(i) enables an Executive to run road services within, to and from their area. The power provided by Clause 10(1)(ii) enables an Executive to carry passengers by any other form of land or water transport between places in that area or between such places and places surrounding that area. The effect of these Amendments to permit an Executive to "arrange for the carriage" of passengers as well as an Executive actually to "carry" them.
Powers to make arrangements to carry passengers by road, by any other form of land transport or by any form of water
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transport are contained in Clause 10(1)(xv). This enables the Executive to make arrangements with other bodies to carry on any activities which the Executive themselves can carry on. I submit therefore that the Amendment is unnecessary.
LORD ST. HELENS: I should like to add my voice in support of my noble friend. It was very cogently argued in the Commons that there is an urgent need for some authority to co-ordinate the passenger transport services. But we do not feel that it is necessary for that Authority to own and to operate the buses, taxis and so on. In most places, services already exist, and they will come under the general umbrella of co-ordination. Where they do not exist, surely it is more economical for the P.T.A. to provide the money to the other services than for them to buy up additional resources.
There is another point which has not yet been made here but which was made strongly in another place when this particular group of Amendments was discussed. Under the permissive authority given to the P.T.A.s, there will be immense national expenditure at a time when surely we should be cut tailing national expenditure. This is a time when we want economy in the nation and not the vast expenditure involved in buying up bus routes which in most cases are already operating satisfactorily.
LORD BOWLES: I wonder whether this is really going further than did the noble Lord, Lord Nugent. The noble Lord, Lord St. Helens, has referred to various debates in the other place. It was, I think, the view of the Opposition there to attack the "operating" role of Passenger Transport Executives. This has been a consistent line of the Opposition throughout the Commons' debates. Though noble Lords have not sought by Amendment to delete the operating, power, they may wish it to be used less fully than the Government intends.
If so, it can be said that it is the Government's view that, while P.T.E.s will have important planning and co-ordinating functions it will be quire impossible for them to provide a properly integrated and efficient system of public transport unless they can also operate transport themselves. So long as all the

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various operators in an area have different viewpoints and different financial objectives, it is not practicable to expect an Executive to be able to reach agreements with all of them to produce the network of services that are needed to meet the complex needs of the travelling public in large urban areas. As it is, an Executive will have to reach agreements about the services provided by the Railways Board, the National Bus Company and private operators. As the noble Lord, Lord Nugent, said, it would greatly add to their already difficult task if, for example, in Manchester they had also to reach agreements with perhaps ten or so different municipal undertakings, with fleets ranging from over 1,300 down to a dozen buses.
Passenger Transport Authorities and their Executives are not being set up only to co-ordinate and operate existing forms of transport; the Government's intention is that they should be the bodies which will plan, build and operate new rapid transit systems. Somebody must own these new undertakings and someone must operate them. These new systems may eventually serve large parts of Passenger Transport Areas. It is self-evident that they should belong to the Passenger Transport Authorities and be operated by them, just as the Underground services in London are operated by the London Transport Board. The wording of the Amendment may be defective to achieve the purpose which the Opposition have in mind (of that I am not quite certain), but in any case I do not feel that the Committee should accept the Amendment and I ask your Lordships to reject it.
4.0 p.m.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord, Lord Bowles, for his further explanation of the point, and particularly for dealing with the point raised by my noble friend Lord St. Helens. I am bound to say that my feelings are very much with my noble friend: that, basically, ownership is not necessary to achieve successful coordination. But the fact is that the purchase by the Transport Holding Company of the B.E.T. meant that the battle referred to by my noble friend, Lord St. Helens, was lost, and the very
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large sums of public money involved, some £40 million to £50 million, were, in my opinion, completely wasted at a time when we can ill afford to waste such huge sums. But as they have already been spent we may as well accept the position and make the best of it. That being so my noble friends on the Opposition Front Bench and I have bowed to the inevitable.
It is evident to me that no one will ever again put up large sums of money to enable public transport to be run by private enterprise. I do not in the least agree with the content of the Government White Paper or that this is an unsuitable activity for private enterprise. I only wish to goodness that private people would put up money to run these extremely difficult undertakings. But I am afraid that, with the buying out of B.E.T. it will never happen again and we have to make the best we can of a situation which has resulted in the loss of very able management and all the financial disciplines that went with it. I have conceded the case to the noble Lord, Lord Bowles, and I advise my noble friend, Lord St. Helens, to do the same. The battle was lost three months ago when Parliament decided on the Transport Holding Company Bill which gave them the extra £70 million to make the B.E.T. purchase and any others they needed.
I return to the Amendment and thank the noble Lord, Lord Bowles, for calling my attention to paragraph (xv) in Clause 10(1), the significance of which, I am bound to say, I had missed. I think that I have read the Bill pretty carefully, but there is a good deal of it, and it is not impossible to miss a piece. I am glad to see that that paragraph provides the flexibility that we feel there should be. This is an important point, and when the Executive goes into action I hope our words will be recalled. But it may very well find that it will do better by leaving some undertakings, especially the big municipal bus undertakings, in the hands of the present management, rather than taking over the ownership itself. So much depends on successful management as well as the co-ordinating aspect if we are to have the success that we hope will be achieved by the B.T.A. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 47A:
Page 15, line 3, leave out ("road") and insert ("stage carriage").
The noble Lord said: I must apologise to your Lordships for the fact that this is a late Amendment which is in substitution for the former Amendment No. 47. It does not make very much difference, but there is a difference in one essential point which is contained in Amendments Nos. 47A, 49 and 49A. We feel that not only should the main function of the Executive be defined clearly in the first paragraph of this clause, but that the functions should be limited to what the Executive ought to perform, what is expected of them. The more they branch off into all kinds of other functions the less likely they are to succeed in their main function, and if we want them to succeed (and if we are to have Passenger Transport Authorities and Passenger Transport Executives we shall want them to succeed) we ought not to allow the Executive to proliferate into all kinds of ventures which would be extraneous to their main functions.
The first Amendment would alter the first paragraph, which says:
"… the Executive for a designated area shall have power (i) to carry passengers by road within, to and from that area"
to the much more specific function, which is their main function under the Bill: to
"carry passengers by stage carriage, within to and from that area".
That sets out straight away the main function of the Executive. Paragraph (ii) goes on:
"to carry passengers by any other form of land transport …".
Then we have Amendments 49A and 50—
LORD BOWLES LORD BOWLES: Amendment No. 50 has gone, has it not? It is now No. 49A.
LORD DRUMALBYN: Yes it is Amendments Nos. 49 and 49A. Amendment 49 would make the paragraph read:
"to carry passengers by any form of land transport"
which of course includes stage carriages. That goes much wider. Amendment 49A would insert:
"other than by hire cars, taxis or vehicles exclusively hired for excursions."
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I might observe, in passing, that for sheer elegance of drafting it would perhaps be better not to say "carry passengers by road" and then to say "carry passengers by other form of land transport", because "road" itself is not a form of transport. I suggest that the word "other" should go out. The main point of this second group of Amendments is to exclude the power to venture into the operation of hire cars, taxis or vehicles exclusively hired for excursions.
It is difficult to see what the justification for such operations can possibly be. I am sure that your Lordships will agree that the Executive are more likely to succeed if they concentrate on their main function. It may be that from time to time they would have to make arrangements for the carriage of passengers by other forms of transport—in cases of breakdowns and so forth. That could be put right by a subsequent Amendment, but I am quite certain that it would be a grave mistake to allow this body to engage in the kinds of activities that this Amendment seeks to exclude—the operation of hire cars, taxis or vehicles exclusively hired for excursions. For one thing, the maintenance of these vehicles would not coincide with the maintenance of the vehicles they are mainly going to operate, that is to say, stage carriages, or even express carriages. I am certain that the more we can streamline and refine the activities of the Executive, the more likely they are to succeed. I beg to move.
LORD BOWLES: I think I understood the noble Lord, Lord Drumalbyn, to say that he is taking this Amendment No. 47A together with Amendments No. 49 and 49A. I was surprised when the noble Lord said he did not think this made much difference. To my mind, the difference is considerable when it is compared with the Amendment it replaces. It appeared to be a little more than a drafting Amendment with no practical effect, but now the revised Amendment would cut out express bus services, excursions and tours and hire car operations, which are clearly allowed under the present wording. We can expect that the Executives will want to run express services, equivalent to the Green Line services of London Transport, and that they will still want to run excursions

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and tours—for instance, trips to the seaside. The Government consider that Executives must have the power to provide services of the kind excluded by the Opposition Amendments in order to ensure that they can secure the provision of an efficient system of public passenger transport to meet the needs of the local travelling public. There may well be cases where the local need for public transport services can be better met by these means than by, say, stage or express services.
The noble Lord implied that the motive behind this is to allow competition which is unfair to private enterprise. It is unlikely that a Passenger Transport Executive will want to go into this business by uneconomically undercutting private firms. The Executive will have a statutory duty to break even year by year. The Passenger Transport Authority will be able to precept on the rates to make sure that the Executive breaks even, while still providing the services the community needs, even if they are in total uneconomic but it will be remembered that the Authority will be composed predominantly of local authority representatives and can be expected to want to keep precepting to the absolute minimum. The Authority is therefore likely to expect the Executive to make profits wherever it can do so, in order to cross-subsidise socially necessary but unprofitable public transport services. An Executive is not therefore likely to have any incentive to go in for uneconomic competition with private firms. Moreover, if it chooses to carry on business of this nature, Clause 16(2) provides that full details of such activities must be given in the Executive's published accounts, and if the charges appear to the Minister to be too low he will have powers under Clause 16(3) and (4) to direct the Executive to modify their conduct of this business or to discontinue it. This is a powerful safeguard against unfair competition by an Executive.
The next revised Amendment is rather more logical than the original one, in that it seeks to exclude hire cars, and so on, from land transport, instead of "any form of transport". This was probably the original intention of the Opposition. But it is just as objectionable as the
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Amendment it replaces, and, for the reasons I have just stated, I think that it should be rejected.
LORD NUGENT OF GUILDFORD: We regard this as an important Amendment, and the arguments which the noble Lord, Lord Bowles, has just put before us do not entirely convince me. When he explained the various safeguards and the unlikelihood of an Executive ever doing this, my reaction was: then why give them the power? There is no getting away from it that the small private hirers and owners of taxi businesses up and down the country are very disturbed about this provision. What is the point of it? These hirers, probably 10,000 of them—nobody has an exact record—are working very efficiently and economically, costing nothing to anybody. In 99 cases out of 100, if an Executive want to arrange any excursion or emergency service, they would be able without the slightest difficulty to find an existing firm whom they could use and who would be only too glad to work for them. In 9 cases out of 10, I believe, the Executives will not want to go into this kind of business. I think I am right in saying that London Transport do not want to do so now. They find it better to turn these things over to private operators.
But so long as this provision is on the Statute Book, it will be objectionable, because it means that the private operators in areas where Executives are set up are at risk of having to compete with the Executive, which has the obligation to do no more than break even. A man running his own business has to make his living, so he has to make some profit out of it. Furthermore, there is this power of the Executive to precept from the rates—rates which the private operators also have to pay. In these circumstances, noble Lords cannot be surprised if these people object. I am sure that no Executive, and certainly no Authority, with locally elected councillors on it, would do this. It would be most objectionable. If that is the case, why put it in the Bill? There is a strong case for taking this provision out of the Bill, and I hope that the noble Lord, Lord Bowles, who has been dealing with this point in a most reasonable way, will see the cogency of this and agree to accept our Amendment.
LORD BOWLES: From the noble Lord's speech I was not quite certain whether he thought the Executives would do this or not. He made the point that if they lost, they would have power to precept on the local rates and that, as the Executive would have to break even, private enterprise would have to do a little better than that. So, in a sense, that might be unfair competition; but only to a very small extent. I will certainly have a word with my right honourable friend about this, but I hold out absolutely no hope. If the noble Lord was not convinced by my argument, I, equally, was not convinced by his. But I extend him the courtesy of saying that I will pass his remarks on to my right honourable friend the Minister of Transport.
LORD NUGENT OF GUILDFORD: I must be thankful for the small mercy of the noble Lord's willingness to pass this point back to his right honourable friend. I realise that it was discussed in another place, and rejected, but I still think that it is an important one and that your Lordships' House is a suitable place in which to debate it. I am willing to accept the noble Lord's undertaking at its face value. We have a brief space of a week between Committee and Report, and if the noble Lord would be good enough to discuss this point with his right honourable friend in the interval, to see whether there is any way in which it could be made acceptable, then we could return to it on Report. On that understanding, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
4.19 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 51:
Page 15, line 13, leave out ("thirty") and insert ("ten").
The noble Lord said: The purpose of this Amendment is to reduce the area within which a Passenger Transport Executive can operate outside its own area from a radius of 30 miles to 10 miles. At an earlier stage of the Bill the word used in this connection was "vicinity". The Opposition objected to that word because it was too vague, and then the Government came up with 30 miles. They might be said to have stretched a point and made the
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"vicinity" 30 miles. That seems to me to be a quite big vicinity and a long way. After all, in terms of passenger transport, it is pretty well an hour's journey, and could be more.
The point here is that the Executive are given the power to operate within 30 miles of their own area. They will be making agreements with other be making agreements with other bodies—for example, the National Bus Company —which will be operating both outside the area and, by agreement with the Passenger Transport Executive, may be operating within the area as well. The Passenger Transport Executive will have the power to exclude anyone from their area, including the National Bus Company, from operating a bus service part of which is in their area. They will get that power once the third Order has been passed; that is, the Order referred to in Clause 19 of the Bill.
According to the White Paper, they will be expected to make an agreement with the National Bus Company—and this Order is unlikely to be made until they have made such an agreement with the National Bus Company. The point is that the Passenger Transport Executive are being given a unilateral right to operate outside their area up to 30 miles, whereas nobody else is going to be allowed to operate within their area without the consent of the Passenger Transport Authority. This seems to me, from the point of view of negotiation, to weight the scales too heavily in, their favour. I recognise that if the Bill were to limit the power to operate, say, only within the area, or only to within ten miles of the area, one consequence could be that the Minister might decide to extend a Passenger Transport Area rather further than otherwise he would do.
We were talking yesterday about the negotiations which the Minister is having with the local authorities in the proposed areas—the consultation that is going on unofficially—and I mentioned that each Authority has been provided with List A, those local authorities that are likely to be included in a Passenger Transport Area, and List B, those that may be included in the area. To give an example of this, I understand that Blythe is 15 miles from Newcastle, and this is a town which is on List B. It might or might not be included in the Tyneside area. Then, Southport is twenty miles from Liverpool,

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and might be included in the Merseyside area. This, too, is on List B. I should have thought that this was about the full extent of the radius that could possibly be regarded as the "vicinity".
It may be that 10 miles it too little. I should certainly think that 30 miles was too large. I hope, therefore, that the noble Lord will be prepared to reconsider this "area of the vicinity", or alternatively, at any rate, justify by arguments and examples why it would be necessary to consider the "vicinity" to be such a wide concept as to be in the radius of 30 miles. I beg to move.
LORD LEATHERLAND: I do not want to enter into an argument on semantics with the noble Lord, Lord Drumalbyn, but I think it can be legitimately argued that his interpretation of the word "vicinity" is not necessarily one which the supporters of the Bill would accept. It might well be said: "I am cruising about in the vicinity of the South Pole." Would the person saying that be denied the right to make a claim of that kind until the very moment when he had got within 10 miles of the South Pole? "Vicinity" is an elastic term and has to be considered in connection with local circumstances. I think the distance of 10 miles which the noble Lord is suggesting is far too restrictive.
I frequently find myself in the county town of Chelmsford. I find myself motoring past the Crompton Parkinson Electric factory, outside which there are a number of notice boards. There is one notice board where people line up for Braintree, another where they line up for Maldon, another where they line up for a place just this side of Colchester and so on. If this 10 miles limit were introduced, any such arrangement as that, made by well-meaning employers for the benefit of their workpeople, would have to go by the board.
LORD DRUMALBYN: Perhaps I may point out to the noble Lord that it is not 10 miles from any particular point; it is 10 miles from the periphery of the area.
LORD LEATHERLAND: Yes: and if the periphery of the area were Chelmsford, all these people would be out of bounds. It is a fact, is it not, that with our present trend in industrial develop-
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ment many large industries are setting up in a number of our towns. Is it not also a fact that many of the people are leaving the farms and villages in order to take employment in those towns? Is it not, therefore, the fact that the bus services must be enabled to incorporate a fairly wide range in order that the workpeople from the villages can make their way into the towns? I think 10 miles would be far too restrictive.
My mind goes back to the days when I used to live in Birmingham, long, long ago, when the Midland Red Bus Service, admittedly a private enterprise bus service, and an extremely efficient one, used to stretch out right into the Black Country with hardly any limits. If that is good under private enterprise, why should not a nationally organised bus service have similar facilities? I hope that my noble friend will not accept this Amendment, which would impose far too many restrictions on the organisations now to be set up.
LORD BOWLES: I am not quite sure that I follow or agree with my noble friend Lord Leatherland. The proposal, to start with, is that four conurbations, West Midlands, Tyneside, Merseyside and Manchester, should have P.T.As. The proposal in the Bill is that buses should be able to go no further than 30 miles from the edge of the area. This is the maximum, but the Minister need not make an order for it to be anything like as far away as that. But this does not apply to London or to Chelmsford. Therefore, with respect to my noble friend, so far as the Bill is concerned I do not think his argument applies.
Clause 10(1)(ii) empowers an Executive to carry passengers (and, by virtue of Clause 10(1)(xv) to arrange with others for carrying passengers) by means other than road transport not only within the Passenger Transport Area, but also between the Area and a "permitted distance" outside it. In the case of water transport the permitted distance may be specified in the order designating the Passenger Transport Area. In the case of land transport other than road transport—and I agree with much of what the noble Lord said—the permitted distance is 30 miles or such lesser distance as may be specified in the designation order.
The effect of these Amendments is to reduce the maximum permitted distance

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for land transport from 30 miles to 10 miles. This would apply to land transport services run by the Executive (except road services) and to any rail services for which an Executive to whom Clause 20 did not apply made payments to British Railways under Clause 10(1)(vi). As the noble Lord said, the Bill did not originally provide for a permitted distance, but merely referred to the "vicinity" of the Area. "Vicinity" is a matter of relativity. You would be within the vicinity of the moon when you were 10,000 miles way; you would not think that was a long way off or very close. "Vicinity" is obviously relative, and therefore the Government in the Committee stage took some notice of what the Opposition said in that connection, and deleted the word "vicinity", when it was suggested that the provision should be instead "20 miles outside the area".
LORD DRUMALBYN: Twenty?
LORD BOWLES: It is in the Opposition Amendment. I said "20" and I mean it. The Minister of State promised to consider this point, and the present wording of Clause 10(1)(ii) was introduced on Report as a result of his consideration.
The difficulty about defining the area over which any Executive can operate is that conditions and needs are likely to vary from one area to another. The noble Lord asked me to try to give some reason for fixing a maximum, and this is it. The needs vary from one area to another. It would obviously be absurd for an Executive to be able to run services only to the boundary of its area, wherever that might lie. For land transport a limit of 30 miles radius around an area would meet all foreseeable cases in the four areas so far proposed—around Manchester, in the West Midlands, Merseyside and Tyneside—though it might he too generous for some future areas. With a permitted distance of 30 miles it would, for example, be possible for an Executive to which Clause 20 did not apply to make arrangements with the Railways Board for services to overspill places located some distance from the main centre from which increasing numbers of people might in future wish to commute.
The distance of 30 miles is a maximum and the limit must therefore be drawn
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widely enough to allow latitude for future transport planning. But the Minister can—and would, if good reason were shown —designate a smaller limit for any particular P.T.A. However, the distance of 10 miles proposed by the Opposition might not even allow a Passenger Transport Executive for the West Midlands, for example (if Clause 20 were not applied to that area), to make arrangements with the Railways Board for services to such nearby places as Royal Leamington Spa, Stratford-upon-Avon, Droitwich and Stafford, all of which are places from which there could in future be substantial commuter traffic.
We cannot agree to reducing the 30 miles to 10 miles, but I rather felt that part of the noble Lord's speech was suggesting the possibility of a compromise. I do not put anything forward, but if, for instance, he felt like withdrawing this Amendment, I could consider with my right honourable friend whether perhaps a fifty-fifty compromise—20 miles—might meet the case put up by the noble Lord. May I hear what he has to say about this?
4.33 p.m.
LORD DRUMALBYN: I am grateful to the noble Lord for his full explanation of this matter. I think, as I indicated, he quite correctly interpreted what I said on this. I was inclined to think that 10 miles was probably a little too mean or too restrictive, but thought that 30 was too much. I would certainly accept 20. But there is one point arising out of what he said, about which I should like to ask the noble Lord. This is due to the way in which these powers are drafted. He correctly pointed out that paragraphs (i) and (ii) deal with the actual power to carry passengers. Clause 15 deals with the power to enter into and carry out agreements, and paragraph (xv) relates the power to enter into agreements with the power to carry out particular activities. As I understand this paragraph, the Executive can enter into agreements only for the carrying out of things which itself has power to carry out. Therefore, of course, this adds a new dimension to it purely and simply because of the drafting.
I think it would be a pity—and I hope that this is not the intention—if the Executive were not in a position to enter into agreements, in particular, for

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example, with the National Bus Company to carry out activities for the carriage of passengers over quite wide areas. I am not quite certain how this will work out in practice. It might well be that the National Bus Company would be able to bring passengers from quite a distance into the area and then, once it got into the area, would be able to drop them, or pick them up, as the case might be, in different parts of the area. I think this would be essential. I am aware, of course, that once the third order has passed all restrictions regarding the picking up and dropping of passengers are automatically removed. But I think your Lordships will wish to know how this is going to work out in practice. That is to say, where the Executive does not carry passengers itself in its own transport, or through its subsidiaries to points outside its own area, but makes agreements with another body, whether the National Bus Company or a private operator, or anybody else, for the carriage of those passengers, it seems to me odd that where it does the second the same limitation of distance should apply. I hope I have made the point clear.
I think that quite different considerations apply here, simply because the Passenger Transport Authority is geared to run transport over a certain distance and will have transport of the kind to run over that distance; whereas, when it is making agreements with other bodies, it will be doing so with bodies whose routes may well be much longer and may have different kinds of transport, kinds of transport adapted to those longer routes. In those cases it would seem odd if the power of the Executive to make agreements for the carriage of passengers by other bodies were subject to the same limitation of mileage as the power to carry passengers on its own account. I hope I have made the point clear, but this arises out of what the noble Lord said in the course of his very lucid exposition. I do not ask him to go into it now; I merely ask him to consider it; and so far as his suggestion is concerned, I willingly accept it.
LORD BOWLES: May I make it quite clear, before the noble Lord seeks the permission of the Committee to withdraw, that I am not making a promise and that nothing is binding. But I will, if my Minister agrees, do something about
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the 20 miles on the Report stage. I cannot promise, however, and the noble Lord will understand my limitations in this position.
LORD ST. HELENS: Before my noble friend withdraws his Amendment, I wonder whether I might ask the Minister one question. A little while ago we were dealing with car hires and excursions, which are of course a form of carrying passengers. Does this mean that the authority would be limited to a range of 20 miles outside the perimeter of (shall we say?) mystery tours, or excursions by motor bus?
LORD POPPLEWELL: Before the noble Lord, Lord Drumalbyn, withdraws, would my noble friend Lord Bowles also take into account that there are contrary views to that expressed in the desire to reduce this mileage from 30 to 20, or 10? Of course, it is admitted by Lord Drumalbyn that probably 10 miles is far too low. I have in mind the Tyneside conurbation area in which this particular clause is likely to be effective. There is a new town being built there at Killingworth. I stand correction on mileage, but I think that is just outside the 20-mile limit.
LORD DRUMALBYN: It depends where the periphery is.
LORD POPPLEWELL: I know. There is also the question of Morpeth, and there is the question of the Ashingtons. This is, as Lord Drumalbyn has said, a most difficult question on which to arrive at a correct definition. Therefore I suggest to my noble friend Lord Bowles that he should not be too anxious to impress upon the Minister the question of reducing this mileage from 30 to 20 or 10, because when one defines a mileage, or anything in this particular direction, there is always the difficulty of those just outside the periphery. One remembers full well that for quite a long time Newcastle City buses, for instance, could not go outside Newcastle boundary although a good many of the inhabitants had gone outside the boundary to the new housing estates. This created a tremendous difficulty. Therefore probably in the discussions the 30-mile figure might be left as it is, with the general desire that this is a maximum mileage and that latitude might be allowed to work within this.

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As the noble Lord, Lord Drumalbyn, indicated, to define mileage accurately is a most difficult and arbitrary thing to do. I would sooner leave it to the good sense of both the Passenger Transport Authority and the Executive to deal with the needs of their area as they arise. They will be a far better judge, and it will be better than fixing a limit at the rather small mileage. Let us give them the latitude to provide the service for which we are setting them up.
LORD BOWLES: I think there must be some slight misunderstanding. The 30-miles limit we are talking of here does not apply to road transport at all. It applies to transport by means other than road transport, and therefore the noble Lord, Lord St. Helens, on his wonderful mystery tours, from which he no doubt gets great excitement, can go a great deal more than 20 miles because he is referring to road transport and not to other forms of transport. There will be no difficulty for the P.T.E., perhaps under arrangement with other bus operators, in providing services over longer distances. The P.T.A. in Tyneside could run buses from Newcastle to London. There seems to be a slight misunderstanding, but in fact the 20 or 30 miles applies only to transport on land other than road transport.
LORD DRUMALBYN: What other form is there?
LORD BOWLES: Hovercraft on a canal, for example.
LORD DRUNIALBYN: If that is so, we have been talking about a matter of rather less importance than we thought. In my view, this emphasises the need to look at the drafting of this particular clause again, because at this point it does not say "land transport other than road transport". I think quite a number of us have been misled by his.
LORD BOWLES: Clause 10(1)(ii) says:
"to carry passengers by any other form of land transport"
whereas the words in paragraph (1) are, "to carry passengers by road".
LORD DRUMALBYN: This is the difficulty with regard to the drafting. In one place it says "carry passengers
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by road", then it says "other form of land transport", and the next time it comes along it is just "land transport". Obviously, I am not the only person who has been misled. All those wit whom I have been working have taken this point. In my view it is a little "recondite" I think is the word, and in my view it should be a little more open.
LORD BOWLES: We will certainly look at it again.
LORD ST. HELENS: I am sorry to say that I have not the appropriate copy of Hansard with me, but I thought this case was clearly argued in another place and it was said that it did refer to road transport. If it does not, why does it say:
"to carry passengers by road within, to and from that area"?
Surely that implies that they are to carry passengers outside the area as well.
LORD BOWLES: That is in Clause 10(1)(i), and not in paragraph (ii)
Amendment, by leave, withdrawn.
4.46 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 53:
Page 16, line 25, after ("provide") insert (", or make available land or premises for the purpose of providing,").
The noble Lord said: It may be convenient for your Lordships to debate Amendment No. 54 together with this Amendment. The effect of Amendment No. 53 is to amend Clause 10(1)(x) which, as set out in the Bill, gives power to the Executive to provide facilities for the purchase and consumption of food and drink, places of refreshment, and other amenities. The effect of the Amendment would be that the Executive could either do that themselves or could make available land or premises for the purposes of such a provision. In other words, the Executive could, if they wished, let out part of their premises so that a private contractor could provide the services for them. This would seem to be a useful flexibility for the Executive to have.
Everyone knows that catering services are notoriously risky and difficult to make solvent, and that usually it is better to get the private caterer to do these things rather than the Authority. Therefore I am sure they would wish—and indeed would be wise—to get a private caterer to do

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the business for them on contract. Our Amendment would leave them the choice. It would not deprive them of the opportunity to provide the services if they so wished or if they could not get a private caterer to do it, but it would allow them the flexibility to use a private caterer on some sort of rental basis. This might be a convenience to them as well as a safeguard for the ratepayers against having to meet a loss if the Executive did their own catering and made a loss. I beg to move.
LORD BOWLES: Clause 10(1)(x) enables an Executive to provide refreshment rooms and so on for their passengers. The effect of these Amendments would be to permit an Executive to make available to other persons land or premises for the purpose of providing these amenities. The Government recognise that an Executive may not wish to arrange for other persons to provide them. But this is covered by, inter alia, Clause 10(1)(x)—which is an important paragraph—page 10, lines 13 to 25, and Clause 10(1)(xvi), page 17, lines 26 to 35, which empower an Executive, first, to enter into agreements for carrying on any activities which the Executive have power to carry on themselves, and, secondly, with the approval of the Authority and the consent of the Minister, to transfer any relevant part of their undertaking or property to arty person with whom they make an agreement of this kind.
It would be silly for the Minister and the Authority to have to approve every little transaction of this sort which the Executive may enter into, and it is the intention that the Minister will give blanket approval in advance to all transactions below a certain size, which will be determined as reasonable in consultation with each Authority and Executive. We hope that the Authorities will take a similar line towards their Executives.
Thus, since the land or premises which will be required for the provision of refreshment facilities are not likely to be of any great significance, the Executive will already have the power to do the things which the Amendments seek to provide for. And to the extent that really substantial property is involved it is preferable that the Authority and/or the Minister should be able to see and approve what is proposed. The Amend-
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ments are unnecessary to achieve the purpose that the Opposition wants, and I feel that the Government and the Opposition are both agreed upon the same thing in this respect.
LORD NUGENT OF GUILDFORD: I must thank the noble Lord for his entirely satisfactory answer. I see, after his explanation, that paragraphs (xv) and (xvi) do in fact give the flexibility that I should like to see there, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
4.52 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 55:
Page 16, line 30, leave out paragraph (xi).
The noble Lord said: I beg to move Amendment No. 55 which is an Amendment of some substance and importance. It refers to paragraph (xi) on page 16, and paragraph (xi), for the benefit of noble Lords who are not familiar with the intricacies of this Bill, gives the Executive power to
"provide a car park, to repair motor vehicles for any persons, and to sell to any persons petrol, oil and spare parts and accessories for motor vehicles, whether or not those persons are using the car park";
In other words, this paragraph gives the Executive power to trade in the garage business in every respect except in regard to the actual sale of cars. This power, I would suggest to noble Lords, is not necessary. It is giving a power that the Executive does not need, and there are great objections to extending the activities of the Executive into this trading field. Plenty of garages already exist; in fact, as noble Lords will know after reading the recent Prices and Incomes Board Report on the garage industry, if anything there are too many garages. Certainly there is no shortage; there are plenty of garages everywhere.
Another point which the Prices and Incomes Board observed was that most garages depend to a very considerable extent on the sale of cars in order to survive; this is apparently an essential element in order to make themselves solvent. This immediately implies that Clause 11 in the Bill would commit the Executive, if it undertook such trading—the setting up of a garage business—to the sale of cars. Otherwise it would almost certainly prove to be an unprofitable, loss-making business, and inevitably

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the P.T.E. would be left with a choice of two courses: one is, for the ratepayers to pay the losses, and the other is to ask that they be given power to sell cars as well. The objections to this would be even greater from the whole of the private enterprise industry, which already covers very fully the particular field of service we are talking about.
My noble friend and I have already made the point that the P.T.E. are going to have an extremely difficult job to do in operating the buses and co-ordinating bus services in the area where a P.T.A. is set up, and undoubtedly they are going to succeed or fail by the ability of the people on the Authority and on the Executive and on their capacity to concentrate on the main job in hand—that is operating the buses. The diversion of their interests into all kinds of subsidiaries, any one of which can cause frightful headaches at any time, would be a most unwise policy.
If I may say so in passing, we have the perfect prototype of the successful State industry to look at in the Dutch rail service, which has, as a matter of policy, got out of every one of its subsidiaries, and it is, so far as I know (unfortunately, we do not have the noble Lord, Lord Robertson, here to corroborate it) the only rail service in the world which is solvent. There may be some connection. They may have other advantages. But in the main it is not a good plan for these public authorities to go into a range of trading subsidiaries, and I make the point roundly that the garage industry throughout the country is very alarmed at this proposal in the Bill. They feel it is quite unnecessary and that to do this represents a serious threat of unfair competition, unfair because at the most the subsidiaries are only being asked to break even, whereas the existing garage business has to try to make a living. If the man is to stay there at all, he must make a profit. Secondly, if the Executive make a loss on a subsidiary of this kind they can precept on the rates, and the local traders, including the local garage men, will have to pay their "whack" towards it. There are great objections, and I can only hope that the noble Lord, Lord Bowles, who has been very reasonable to our Amend-
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ments up to date, will be equally receptive to this one. I beg to move
LORD SOMERS: I should like to support this Amendment strongly, because as a regular user of public transport I feel that there is no precedent for this kind of thing. The London Passenger Transport Board, for instance, have no such activities, and I am among those who wish that the London Passenger Transport Board could organise their services a little more efficiently sometimes. There is no doubt that the organisation of a big public transport service is an extremely difficult task. I feel that if the Executive are going to take on ill these subsidiary activities as well, the less efficiently will they carry out their main task, as I think my noble friend Lord Nugent pointed out earlier on.
LORD POPPLEWELL: I imagine that what the noble Lord has just said with regard to London Transport is correct, but they are not able to provide parking places and garages, or to sell petrol and suchlike. This has proved rather a deterrent to the encouragement of parking on the periphery of London, at the London bus stations and suchlike. That has come out clearly in the Committee on Nationalised Industries that investigated London Passenger Transport working. Those responsible for London Passenger Transport at that time indicated that had they had these facilities undoubtedly they would have been able to provide better parking arrangements that might have assisted in guiding the public to park their cars on the periphery and use public transport to go into towns. Therefore I would suggest to my noble friend Lord Bowles that he ought not even to consider accepting this Amendment, because it aims at curtailing the power of the transport Authorities to provide an adequate service.
We all know that with the development of traffic multi-storey car parks will have to be provided, and I think that to leave it to the goodwill of the transport Authorities to decide whether they will do so or otherwise is quite a good idea. The provision of these multi-storey car parks naturally takes place on very expensive land, and if it is possible to allow the bottom storey of this land to be used as garages, for the sale of petrol or for

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conducting repairs on an ordinary commercial basis, it will be a good step forward and ought to be encouraged.
The noble Lord, Lord Nugent, said that this would be unfair competition. I do not quite understand how this argument always comes out that it is unfair competition when a public authority is deciding to do something that is accepted commercially by private firms. As to accountability, the accounts of the various public authorities can be adjusted to satisfy noble Lords opposite and their colleagues in another place who are quite insistent that each section of publicly-owned undertakings shall be self-supporting and their accounts produced in the balance sheet so that we know exactly where we stand. What can be wrong in allowing public transport authorities to engage in this type of thing? It will greatly assist the services, and assist the authorities in having a viable institution. Therefore, I would suggest to my noble friend Lord Bowles that he ought to resist this Amendment.
Elsewhere in this Bill permission is given for a Passenger Transport Authority, if they so determine, to allow private enterprise to run these garages. They may run them themselves, or alternatively, as has been pointed out by my noble friend Lord Bowles, in another part of this particular clause they are given certain freedom of action to exercise their discretion. Therefore, I think it is common sense to allow this particular clause to remain in the Bill and leave it entirely to the P.T.A. to decide according to how they interpret the wishes and necessities of their particular area.
5.2 p.m.
LORD ST. HELENS: The noble Lord, Lord Popplewell, spoke on the question of accountability. I know that I should be out of order if I followed him far into that question at this stage. But he will remember, if he has read Hansard from another place, that the Government did not there fall in with our request for the type of accountability that we wanted. We wanted stringent accountability, so that there should be out-and-out proof that there was no under-cutting of private enterprise. I can say no more than that because I should be completely
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out of order at this stage of the Bill. But I hope to come back to it later when we are dealing with the accountability clauses.
I and my noble friends will press this Amendment unless we get some reassurances from the Government because, so far as I can see, this subsection is nothing less than a complete blank cheque to the nationalised industry, in every way—through motor stores, petrol, oil and all the rest of it—to undercut private enterprise. I think it is an unfair way. There are men all over the country who, by their own thrift and hard work, through a lifetime, have built up a successful garage or a chain of garages. This clause is going to threaten them. I do not think they should be so threatened. I should be glad if the Minister would accept a later Amendment, to the effect that these facilities should be open only to a corporation's own vehicles. That might be better. But to have an absolute blank cheque like this is unacceptable, so far as I am concerned personally.
VISCOUNT BRIDGEMAN: I should like to look at this matter for one moment from another angle. It may or may not be unfair competition with private enterprise, but to my mind it is certainly most unwise competition from the management point of view. As I understand it, management qualities and management experience in regard to running public transport are quite different from those involved in running the enterprises included in the subsection which we think should be left out. To my mind, managements should stick to their own trade. The people who run garages should stick to that and should not try to run public transport; those who run public transport should stick to that and not try to run garages. If the public transport people start to run garages, sooner or later losses will be incurred because they do not know the trade so well as those experienced in it. Those losses will, in the end, fall upon the public. I put that forward as another reason why this Amendment should be supported.
5.5 p.m.
LORD BOWLES: This is becoming almost a Party argument, and I am not at all surprised. Perhaps I might just remind the Committee that Clause 10(1) (xi) empowers an Executive to sell

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petrol and spare parts, and to provide car-servicing facilities at their car parks. The Amendment would prevent them from providing this service. The provision in the Bill is similar to the one in Clause 48(6)(a) which empowers the Boards and new Authorities to provide similar services at their car parks. Both provisions have been strongly opposed, not only in your Lordships' House but by the Motor Agents' Association and the Society of Motor Manufacturers and Traders, they both having been particularly active in promoting this opposition.
In the Commons' Committee, Mr. Heseltine argued that the P.T.E.s would offer subsidised and therefore unfair competition to the private sector. The noble Viscount, Lord Bridgeman, did not oppose the subsection on that ground. He opposed it on the ground of wisdom rather than of unfair competition. Mr. Heseltine went on to say that without commercial disciplines there could be wrong investment decisions. Thirdly, he said that the private sector provided scope for personal initiatives, incentives and responsibilities, whereas public ownership resulted in bureaucracy. He then said that services of this sort should therefore be put out to tender in order to obtain the best deal that the public sector can get out of private contractors.
Noble Lords must make up their minds whether the P.T.E. is going to make a profit or a loss, because this is rather important. In moving his Amendment, the noble Lord referred to the Prices and Incomes Board report on the garage industry, suggesting that there was little or no profit to be had from the sale of petrol and servicing without the sale of cars themselves. He then went on, I thought rather illogically, to say, "If you only sell petrol and do servicing you will make a loss." I have just read, and he also read, in the P.I.B. Report, that there would be little or no profit unless you sell cars.
There is, in fact, little risk of sub-sidised trading in competition with private firms, or of unsound investment decisions. The Executive will have a duty to break even year by year, and they can be expected to seek to make a profit on ancillary services of this kind wherever they can, in order to offset the inevitable losses on public transport ser-
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vices which are socially necessary but unremunerative. They can be expected to charge commercial rates for their services. In any event, Clause 16(4) provides powers for the Minister to intervene in any case where it may appear that an Executive is indulging in unfair competition with private enterprise. This should be a sufficient safeguard against unfair competition. The Tories love competition, except when it operates against them, when they do not like it at all. All our lives we have heard the old phrase that "dog doesn't eat dog". But amalgamations take place because competition is really nothing like as healthy or as desirable as noble Lords opposite, and the Tory Party, seem to think. Now they are getting rather nervous that they might be effectively competed against by bureaucracy. In this case this argument makes no sense at all.
Merely to provide that Executives should contract with private firms to establish service stations at car parks would not necessarily be to the best advantage of the Executive or the public; it would considerably restrict the Executive's freedom of action to provide facilities where they could be of most assistance to the use of the public transport system and could put an Executive very much in the hands of the garage trade. As car ownership grows, car parks, as my noble friend Lord Popplewell said, are becoming an increasingly essential adjunct to the public transport system. They enable commuters and shoppers to leave their cars outside congested town centres and make the last part of the journey by train or bus. It can be expected that Passenger Transport Executives (and the traffic manage ment authorities) will wish to encourage this by providing car parks under Clause 10(1)(x). A "park-and-ride" car park of this kind is obviously more attractive if the motorist can buy petrol or have his car serviced there while he is going about his business in the town centre. Commercial operators often provide these facilities in their car parks, let noble Lords not forget, and in the Commons Mr. Stainton at least accepted the logic of providing car parks linked with public transport and the consequent logic of selling petrol at them, though he drew the line there.
I advise the Committee to oppose the Amendment on two grounds. First, it

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would prevent Executives from pursuing activities ancillary to—but perhaps important to—their main task, from which they can, on the basis of fair competition, make a profit to offset losses on socially necessary services, bearing in mind that there are safeguards against unfair competition. Secondly, it would restrict the ability of the Authority and their Executive to carry out their general duty of contributing to
"the effective implementation of town planning and traffic and parking policies which can be improved by public transport services which through their…convenience attract persons to use those services…
and I quote from Clause 9(3)(i). I am not surprised that there may be a further debate, and possibly a Division on this point, because it clearly divides the Parties. We do not understand why the Opposition are so keen on showing up, if they possibly can, and making fun of, a loss-making public enterprise. Of course, the Opposition are the protectors of private enterprise; and as this is their political point of view, it is understandable. But we believe in letting the best and most efficient organisation carry out the work that is necessary for the benefit of the public. On that criterion we believe that these car parks should be allowed to supply petrol, to service customers' cars, and to provide any other incidental work.
5.13 p.m.
LORD ROBERTSON OF OAKRIDGE: I have been out of the Chamber for a few minutes, and I have come back apparently to a private Party political dogfight which I do not wish to join. However, I think some consideration should be given to this part of the clause. I remember very well that when I was with the British Transport Commission we had a garage outside, I think it was, York Station and we had to remove a petrol pump. We had to remove it to the great inconvenience of our customers, both rail passengers and those in the hotel, and it really was an unnecessary and a rather monstrous thing, it seemed to me, that we should have to do so. The Bill goes a great deal further than dealing with petrol pumps; it gives permission for repair of cars, and so on. I should not have thought that that was necessary, but that the garage should give the ordinary servicing which any car park gives to its customers
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seems to me a reasonable thing. It ought to be possible to find some words which would put the point in a proper way.
LORD HAWKE: Suppose we deleted this subsection from the Bill, would it then become impossible for the Authority to let out these particular facilities for other people to carry on? I am not quite clear. We provided them with authority to let out the facilities for the provision of food and drink and so on, and I should have thought that in this particular case it would probably be greatly to their advantage to let these spaces out, if they are going to have petrol pumps, to a man who knows how to run them, and to get an annual rental with no cost of labour to themselves.
At the moment, I take it that this will apply to almost all the main line parking stations in the commuter belts of this country, and one can say by and large that they are deficient. It is rare to find one where you are dead certain of being able to get in without a good deal of inconvenience. But I think that Lord Popplewell's tower parks are rather a dream-world, because they are immensely expensive, and I do not envisage any commuter paying 10s. to put his car in a tower park for the day. He will go on to his destination and trust to luck at the other end.
What it really boils down to is, these Executives, using more railway land for the provision of ordinary car parks, and my knowledge of commuters is that it does not worry them very much whether there is a petrol pump on the spot or not. The great thing is for them to have space, and that can be provided only by using up more railway land. I do not think that the very small profits they will get from petrol pumps—and you have to have a very big turnover to make a profit—is going to bring in any outside land at all because the outside land will be expensive land.
LORD BOWLES: As I understand it, anything that the Executive can do they can let out to other people to do privately. If you take away this power, they cannot, I think, enter into any contracts with private garages to do the work which is provided for the Executive to do in Clause 11.
LORD DRUMALBYN: I am sure the noble Lord is right in his interpretation,

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but this is merely as the Bill is now drafted. I think we recognise that if this power were taken away now there would be no power to make agreements, but of course that power, the power to make agreements with others to have activities carried out, could quite easily be put back by an Amendment. I do not think that your Lordships need be distracted, or led into a particular decision, or influenced into a decision by the fact that at the moment, as the things are, you either have car parks with services there or you do not have the services there at all. That, as I say, could easily be put right.
One is bound to have some sympathy with the view taken by the noble Lord, Lord Robertson of Oakridge, on this matter. It is always very awkward to have a facility removed that you have already available. However, I think we have to take a broad view of this matter as to what is the best course to adopt. The crux of this really is whether competition is on a fair basis. The noble Lord said that all this will be all right provided the competition is on a fair basis. But the fact is, of course, that even although the objective of the Executive may be to make some money out of the exercise of these activities in order to cross-subsidise their other functions, in the first place they do not really have to do that, they do not have to make a profit as private enterprise has to make a profit: and, in the second place, they will not really lose anything because they are in a better position to compete for that reason.
I think I am right in saying that no subsidiary will have to pay S.E.T. This will be a plain advantage to the Executive. But even if I am wrong about that, the fact is that in order to compete fairly they would have to be on a completely even basis. That would mean that they would have to make a profit to survive. But they are not on that basis since they do not have to make a profit. The Executive have only to break even. The other safeguards are only paper safeguards.
I agree with my noble friend Lord Bridgeman that they are less likely to make profits than private enterprise, for the very good reason that this is not their business; they are not in business for this purpose. There again, it is less advantageous and therefore less necessary to
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give them this power. I do not disagree that it would be of great advantage to have car parks, but it does not follow that if the Executive want facilities to be provided they should provide the facilities themselves. They quite easily can arrange for the facilities to be provided if an appropriate Amendment is made to the Bill, and we should not object to an appropriate Amendment. It may well be of convenience for somebody to leave a car at the car park, go to work, and come back at the end of the day to find that his car has been serviced and filled up with petrol. But we are saying that the carrying out of these activities is not the primary function of the Executive, that they are not likely to carry them out so efficiently as private enterprise, and that if they do so they will have an advantage over private enterprise because they do not have to make profits For these reasons, we feel that it is undesirable to let the Executive have these powers.
LORD NUGENT OF GUILDFORD: We have on both sides explored arguments with which we are not unfamiliar. I should like to thank the noble Lord, Lord Bowles, for exposing the arguments on his side, although he will not expect us to be in complete agreement with them. I immediately confirm what my noble friend Lord Drumalbyn said, that we realise that if your Lordships agree-to our Amendment being made, a farther Amendment would be necessary on Report stage. It would then enable the P.T.E. to use paragraphs (xv) and (xvi) so that they could make contracts with the garage industry to carry out services which we are now discussing.
There are two arguments on our side which lie behind the reasons why we cannot agree with the Government One was admirably stated by my noble friend Lord Bridgeman that, on the whole, management will do best if it sticks to its own business. Diversifying may bring more profits, but it may bring more losses. There is no automatic profit in diversification. Broadly, we take the view that a public authority will succeed best if, in the main, it sticks to its own business. The second argument concerns the much more controversial area of unfair competition which we foresee coming from a development of this kind where a public authority enters into the trade

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in this way. The noble Lord, Lord Bowles, charged the Tories with being the protectors of private enterprise. This is a charge which I am very happy to wear. Let us make no bones about it. Private enterprise earns this country its living. It makes the exports; it pays for the greater part of all that goes on in the country; indeed, the nation lives by it. And if we are to wear the mantle of the sole protectors of private enterprise, then we are happy to do so. But I hope that noble Lords opposite will recognise that private enterprise is the life-blood of the country. Therefore, it is the responsibility of all of us, wherever we may sit, to see that private enterprise thrives.
The noble Lord, Lord Popplewell, made an interesting intervention, particularly in regard to the arrangements in the G.L.C. into which I will not go at this juncture. He asked why it was that we on this side of the House seem to be sensitive about unfair competition from a public authority as against private enterprise. The answer is simply that private enterprise has to bear the taxes which finance the public authorities, and, furthermore, private enterprise must provide the finance if these public authorities make losses, which they all too often do make. For these reasons, we should be most cautious in loading more burdens on the shoulders of private enterprise by further developments in respect of public authorities entering into trading.
Although we have misgivings on certain aspects of this field of public transport, we accept that it is probably the only way to go about the matter and we feel that, with proper safeguards, it is the best thing to do. But we do not accept the need for, or indeed the soundness of, this new public authority deliberately going into the field of private trading—a field which is very fully covered. It is simply committing further money and resources with a liability to further taxes, in a field where the financial disciplines which operate on private enterprise do not exist for a public authority, and at a time when we are all conscious that we are still facing a financial crisis and seeking an answer to the question: can we pay our
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way as a nation? We look at the figures and we see that we are not paying our way. Yet noble Lords opposite are advocating a course which would take us further into a field where there are no financial disciplines at all. This is a basic difference between us. I hope that noble Lords opposite recognise that they are paying us a compliment which we do not deserve if they say that we are the sole protectors of private enterprise. They, too, must to some extent be on our side in this matter.
LORD BOWLES: Before the House perhaps divides, may I say that I did not say that the Tory Party were the sole supporters of private enterprise. I said that we support private enterprise when we think that it is most efficient for the nation, and public enterprise when we think that is most efficient. I am amazed that the noble Lord's whole case, following on the speech of the noble Lord, Lord Bridgeman, is that private enterprise is so worried by inefficient competition from the P.T.E's. in running garages and serving petrol.
LORD HANKEY: Before we settle this question categorically either for or against, may I cut across this ideological discussion to put in a word for the users? I have for many years been a commuter, and I have long found it highly inconvenient that no station car park can ever pump up tyres, dispense petrol, do the greasing, or any of the other things which are often necessary. I suggest that we might amend the clause so as to provide that instead of the phrase "to repair motor vehicles", we say "to provide facilities for the repair of motor vehicles for any persons and for the sale to any persons of petrol, oil and spare parts". That leaves it open to the transport authorities to do it themselves if they want to. But if they are wise—and I think they probably will be—they will go into cohorts with private industry, which would be the most sensible thing for them to do, and, without danger of loss to themselves, get somebody to instal a pump and make their own profit out of it. This would leave the matter open and common sense would prevail.
5.30 p.m.
On Question, Whether the said Amendment (No. 55) shall be agreed to?

Their Lordships divided: Contents, 127; Not-Contents, 63.

CONTENTS

Aberdeen and Temair, M.

Emmet of Amberley, Bs.

Morrison, L.

Airedale, L.

Erroll of Hale, L.

Mowbray and Stourton L.

Albermarle, E.

Exeter, M.

Newton, L.

Allerton, L.

Falkland, V.

Nugent of Guildford, L.

Amherst, E.

Ferrers, E.

Nunburnholme, L.

Asquith of Yarnbury, Bs.

Ferrier, L.

Oakshott, L.

Atholl, D.

Foley, L.

Pender, L.

Auckland, L.

Foot, L.

Perth, E.

Audley, Bs.

Forster of Harraby, L.

Polwarth, L.

Balerno, L.

Fortescue, E.

Rankeillour, L.

Bannerman of Kildonan, L.

Gage, V.

Rathcavan, L.

Barnard, L.

Glentanar, L.

Ravensdale, L.

Beaumont of Whitley, L.

Goschen, V. [Teller.]

Rea, L.

Belstead, L.

Greenway, L.

Redesdale, L.

Berkeley, Bs.

Grenfell, L.

Redmayne, L.

Bessborough, E.

Hanworth, V.

Rockley, L.

Bethell, L.

Hawke, L.

Ruthven of Freeland, Ly.

Birdwood, L.

Henley, L.

Sackville, L.

Bledisloe, V.

Hives, L.

St. Aldwyn, E. [Teller.]

Boston, L.

Horsbrugh, Bs.

St. Helens, L.

Boyd of Merton, V.

Howard of Glossop, L.

Sandford, L.

Bridgeman, V.

Iddesleigh, E.

Sandys, L.

Brooke of Cumnor, L.

Ilford, L.

Savile, L.

Brooke of Ystradfellte, Bs.

Inglewood, L.

Selkirk, E.

Buccleuch and Queensbury, D.

Ironside, L.

Sempill, Ly.

Burton, L.

Jellicoe, E.

Sinclair of Cleeve, L.

Byers, L.

Kilmany, L.

Somers, L.

Carrington, L.

Kilmarnock, L.

Stamp, L.

Clifford of Chudleigh, L.

Kinnoull, E.

Strange of Knokin, Bs.

Clitheroe, L.

Kirkwood, L.

Strathclyde, L.

Clwyd, L.

Lothian, M.

Swansea, L.

Colgrain, L.

Lovat, L.

Swinton, E.

Conesford, L.

MacAndrew, L.

Teviot, L.

Cork and Orrery, E.

McCorquodale of Newton, L.

Teynham, L.

Craigavon, V.

Margadale, L.

Thurlow, L.

Craigmyle, L.

Massereene and Ferrard, V.

Townshend, M.

Crathorne, L.

Merrivale, L.

Trefgarne, L.

Cromartie, E.

Mersey, V.

Tweedsmuir, L.

Daventry, V.

Milverton, L.

Verulam, E.

Denham, L.

Monk Bretton, L.

Vivian, L.

Dilhorne, V.

Monsell, V.

Wrottesley, L.

Drumalbyn, L.

Montagu of Beaulieu, L.

Wynford, L.

Elliot of Harwood, Bs.

NOT-CONTENTS

Addison, V.

Henderson, L.

Raglan, L.

Archibald, L.

Heycock, L.

Rhodes, L.

Beswick, L.

Hilton of Upton, L. [Teller.]

Robertson of Oakridge, L.

Blyton, L.

Hughes, L.

Rowley, L.

Bourne, L.

Kahn, L.

St. Davids, V.

Bowles, L.

Kennet, L.

Samuel, V.

Brockway, L.

Latham, L.

Serota, Bs. [Teller.]

Brown, L.

Leatherland, L.

Shackleton, L.

Buckinghamshire, E.

Lindgren, L.

Simon, V.

Burden, L.

Llewelyn-Davies of Hastoe, Bs.

Sorensen, L.

Chalfont, L.

Lloyd of Hampstead, L.

Stonehaven, V.

Champion, L.

Longford, E.

Stonham, L.

Chorley, L.

McLeavy, L.

Strabolgi, L.

Crook, L.

Maelor, L.

Summerskill, Bs.

Douglass of Cleveland, L.

Mitchison, L.

Taylor of Mansfield, L.

Gaitskell, Bs.

Moyle, L.

Walston, L.

Gardiner, L. (Lord Chancellor.)

Nathan, L.

Wells-Pestell, L.

Garnsworthy, L.

Noel-Buxton, L.

Williamson, L.

Geddes of Epsom, L.

Phillips, Bs.

Winterbottom, L.

Hall, V.

Plummer, Bs.

Wright of Ashton under Lyne, L.

Hankey, L.

Popplewell, L.

Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

Clause 10 agreed to.

Clause 11 [Financial duty of Executive]:
5.40 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 58:
Page 21, line 13, at end insert—
("Provided that in any exercise of the powers given to such executive by sub-paragraphs (v), (viii), (x), (xi), (xiv), (xxii), of subsection 1 of section 10 of this Act it shall be the duty of the executive to ensure so far as practicable that a profit of not less than 10 per cent. on the capital for the time being invested by the executive in the exercise of such powers is obtained each year.")
The noble Lord said: Perhaps I may be allowed to remove paragraph (xi) from the list set out in the Amendment, as we have just deleted it. Perhaps I may start by reminding your Lordships of the activities to which this Amendment would apply. Paragraph (v) deals with storage; paragraph (viii) deals with letting passenger vehicles out on hire; paragraph (x) deals with providing the facilities, including food and drink and car parks; paragraph (xi) we have just cut out; paragraph (xiv) deals with constructing and manufacturing, purchasing and repairing, and so on, for the purposes of the business; and paragraph (xxii) deals with developing land for use by other persons.
I do not think we need spend very long on this particular Amendment because these are all activities on which those with whom the Executive would be competing in offering these facilities would have to make a profit, and therefore it seems not unreasonable that "so far as practicable", as the Amendment says, a duty should be laid on the Executive to make 10 per cent. on the capital for the time being invested in any of these businesses. That would seem a modest proviso, and I would hope that, in any projects that are submitted by the Executive to the Authority, the Executive would be able to show that there was some likelihood of at least 10 per cent. being made on the capital for the time being employed. I do not think I need go into the arguments here because they are so similar to the arguments we were considering in the previous case. This is slightly different, of course, in that the activities which are mentioned here are often activities in which the Authority is already engaging. This is a kind of overspill of those activities, in
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that, for example, they are making available to the public storage that they are not using for other purposes.
So far as constructing and manufacturing are concerned, here again these are for the purposes of the business of the Executive and not for constructing or manufacturing for outside purposes. One would expect, of course, that they would so keep their accounts that they would be able to show that they were making at least 10 per cent.—and that, of course, would apply to all the activities. I would suggest to your Lordships that the whole basis of this Amendment is to ensure that competition is fair. When we were discussing the last Amendment the noble Lord, Lord Bowles, laid great stress on what he called the basis of fair competition. That is the purpose of this Amendment, and because the noble Lord laid so much stress on it I would think that the noble Lord, Lord Stonham, will be able to accept the Amendment. I beg to move.
LORD STONHAM: The noble Lord, Lord Drumalbyn, said that we need not spend long on this Amendment because there was a duty laid on the Executive to make a profit and it would be reasonable to suggest that this profit should be at least 10 per cent. He also mentioned that my noble friend had laid great stress on fair competition—and I would do nothing to weaken what was said on that. But, of course, it must also be fair to the Executive, whereas the noble Lord appears to be anxious only that it should be fair to anyone who is in competition with the Executive.
The point I want to make is that what is now demanded is a restriction on the activities of the Executive which in many cases is quite unfair and in some, indeed, is even absurd. We expect that in these ancillary activities the Executive will behave, as it were, commercially, and that they will want to make as much profit from them as they can. We can be quite clear and categorical about that. So there should not be any doubt about the fairness with which they will compete with those with whom they are in competition. But surely it is totally undesirable to tie their hands specifically in this way. Let me mention one or two examples of where it would be unwise. Some of the activities covered by the

1309
paragraphs mentioned by the noble Lord in moving the Amendment are so directly and necessarily related to the Executive's main business that they would need to carry them out whether or not they made a profit; and in some of these activities they would not be in competition with a private concern at all.
For example, paragraph (v) provides for the Executive to be able to store goods—in other words, luggage—which have been or are to be carried by the Executive. That means the provision of left-luggage offices. There would not be profit in that. Would the noble Lord suggest that there should not be left-luggage offices simply because they could not be run at a 10 per cent. profit? Also paragraph (xiv) permits the Executive
"to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of their business".
That covers the maintenance and repair of their own buses, which again is not an activity where they should have to show a profit of 10 per cent.
Then, again, the Amendment does not include any definition of what is meant by "profit", although one would expect that it means profit remaining after making all the necessary charges. The Executives are not like a commercial company, in that all their capital is, so to speak, loan capital; they have no equity. Thus they already have as a prior charge the interest on the whole of their capital, whereas an ordinary commercial undertaking would have as a prior charge interest only on part of its capital, and normally a small part, and the profit would be struck before paying "interest", that is the dividends, on the equity part of the capital, which is likely to be much the main part. Therefore a requirement of earning 10 per cent. on this basis would be far more onerous on an Executive than it would be on an ordinary private undertaking. Surely there is no magic in this figure of 10 per cent. There is no reason to fix a minimum. Again it would mean cramping the commercial judgment of the Executive. In some cases 10 per cent. would be too low; in others too high. It is not possible to impose a rigid level right across the board.
Further to that the Executive is expected to provide a public service. They
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may wish to undertake some of these ancillary activities only to the extent that private enterprise has not felt it worth while to provide them for the travelling public. On the other hand, thy may, under paragraph (x), want to provide a car park at a station at unremunerative charges deliberately in order to induce people to leave their cars at that car park and commute to town, just as my noble friend mentioned on an earlier Amendment. In such circumstances one would wish to commend the Executive for enterprise and not to demand that they must either make a profit of 10 per cent. on it or not provide the service at all.
Further, the Amendment makes no allowance for lower profits while trade is building up, or for varying circumstances over periods of time—for example, for variations in interest rates and profitability. The fact is (though the noble Lord may not agree with this) that the fundamental reason for setting up these Passenger Transport Executives is not to make a profit; the obligation en them is to break even. They are to be established for, and with the emphasis on, the provision of a public transport service, and not with the objective of making a profit—although I agree that they must run their ancillary services as commercial undertakings so that they do show a profit, otherwise, overall, they will be in deficit.
I heard the noble Lord and his noble friend say that we are dealing with a nationalised industry. We are not dealing with a nationalised industry; we are dealing with a Public Transport Authority which is a local authority-controlled body with powers concerned only with local government and with the power to precept. He implied that in the light of objectives laid down for P.T.As and P.T.Es, we should apply the same procedure as that applied to a nationalised industry. I am sorry that I have disappointed the noble Lord in that he thought this Amendment could be disposed of quickly. We owed it to him to explain at some length why we feel that it would be quite wrong—and I hope that I have convinced him that it would indeed be wrong—to insert an absolutely rigid instruction that these bodies should make a profit, undefined, of not less titan 10 per cent. on all these ancillary enterprises when it might often be in the

1311
public interest that their first concern should be to provide a public service.
5.55 p.m.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord for explaining the Government's point of view with regard to our Amendment No. 58? May I say a word of further explanation of the view that we take with regard to this particular Amendment?—which really reflects to a considerable extent on the very wide powers in Clause 10 to which, with one exception, we felt we should agree, even though we feel a great deal of anxiety about some of them. Having accepted this very wide range of functions, we feel that it is necessary in the public interest to have some safeguards to make sure that public money is not used wastefully, on the one hand, and that there is not unfair competition, on the other.
The noble Lord made the point that this is not a nationalised industry; but the National Bus Company certainly is a nationalised industry. It is an accretion on to the Transport Holding Company's existing buses. By the time this scheme is completed nearly all the public passenger transport of the country will be under single ownership. While it is true that the actual direction and operation will be in the hands of different P.T.As and P.T.Es, this is, broadly speaking, a nationalised industry; the whole of this vast business becomes public property. This is why we are anxious to see that all the proper safeguards are present to make up for the disciplines of private enterprise which have been lost. Let me remind noble Lords that the B.E.T., when it was trading, always managed to turn in a profit on its bus undertakings. It was not a very big one, but it was a profit. I shall be more than content if in the future the bus operations are able to break even.
I recognise that circumstances are getting more difficult and that the strength of the management in these public authorities will not be anything like comparable to the strength and efficiency of B.E.T. This is why my right honourable friends and I felt such deep regret that noble Lords and their right honourable friends should have bought out B.E.T. However, that has
1312
been done, and we must put up with it. I make the point that we are concerned to see that the disciplines of the market remain, now that a loss made by any of these undertakings is not going to be as fatal to them as it would have been, to a large extent, when they were in private hands. We are very concerned to see that the discipline should be adequate.
This particularly applies with regard to the subsidiaries. The figure of 10 per cent. that we put in the Amendment is a fair one. I think it is less than some nationalised industries are asked to make though more than others. Perhaps the noble Lord has some other figure he would like to suggest. I agree that there could be some flexibility, for some subsidiaries will be more likely to make a profit than others; but in the main I am sure that these Executives will do much better by contracting out than by trading themselves. They will get a rent by letting part of their premises to private contractors; they will do far better in that way than by trying to trade themselves. But if they are trying to trade themselves, then they ought to submit, at least in part, to the disciplines to which private business is subject. This is the motive behind our Amendment. We feel that the noble Lord should at least have as much interest as we have in safeguarding public money and seeing that it is not wasted. If the Executives are required to make 10 per cent., which is less than private-enterprise undertakings would make—normally, they average about 15 per cent—this will ensure that they are not going into trading activities that are wasteful.
As noble Lords who are connected with the world of finance know, there is only a limited amount of capital resources available. When we see that in order to raise long-term loans firms like Rolls-Royce have to offer over 8 per cent. interest, we realise how short is capital in this country, capital needed for many vital purposes. Here, all we are trying to do is to safeguard the spending of public money and to make sure that it is not being diverted into wasteful activities. This is a sound investment, and we give the noble Lord the broad concept of his P.T.A. The noble Lord, Lord Bowles, was very accommodating to us, and reasonable, in listening to our Amendments, and in accepting in good

1313
faith that we are concerned to see that the P.T.A. set-up should succeed. I hope that after reading the report of yesterday's debates again, and perhaps looking again at the Amendments, the noble Lord will see that we are not concerned to wreck this concept but to strengthen it. This Amendment would strengthen it. It would undoubtedly deter the P.T.E. from going into trading activities which it would be wiser not to do but rather to get some private firm to do them under contract. This is the basis of our thought. I am sure that it is sound and in the public interest, and in the interest of the Government as well, and we must press this Amendment.
THE EARL OF SWINTON: May I put one point to the Minister, very shortly? If these safeguards, which I agree are absolutely vital, are introduced, as I sincerely trust that they will be, surely there would be nothing to stop the Minister himself from putting down an Amendment at a later stage to enable the Government to establish a cloakroom or a left-luggage office. I agree that that is not a competitive industry and no one else is going to establish it; but surely there would be nothing to stop the Minister making a proposal, which I feel sure the Committee would accept, that on such a purely non-competitive matter the authority would have it, and that would leave the essential safeguards intact. Surely that would be a very simple way out of the difficulty which the Minister, I must say I think with great exaggeration, has put to the Committee.
LORD MILNE: I am very surprised that the Committee debated earlier these various points about the objects of the Bill and what the Transport Executive could do. This clause seems to me the most important of the whole lot. Here we are giving a blank cheque to borrow money and to break even. To break even means making a loss for certain. Surely the most important thing is not to make 10 per cent.—the figure does not matter. The point of the exercise is that if they make a reasonable profit on these ancillary activities, this is something. But the noble Lord said, "if they break even". Why put in a figure if it is a matter of breaking even? If they make a reasonable profit on the thing, that is the point, but to take power to do something and perhaps lose money on it seems
1314
to me a very odd way of conducting activities.
In private enterprise in the articles of companies you take the widest power possible. We have been debating cutting down powers because of the feeling that everyone has that money is going to be lost. If there was a feeling that the money would not be lost, I do not think that there would be any objection to taking the widest powers on all sides.
LORD BANNERMAN OF KILDONAN: I feel that the noble Lord has emphasised a most important part of this clause: that the Government wish to have an element of public service in this matter. To put on a discipline of 10 per cent. or 5 per cent. would, in my opinion have the effect of diminishing the quality of the public service. We in the North put a percentage on what is virtually a nationalised service, the coast-wise traffic in the North-West, and I can assure the Committee that over the last 30 years the public service has deteriorated in an endeavour to keep to the discipline ceiling put on it originally of 5 per cent. on its capital.
LORD KAHN: I wonder whether I may express the hope that the noble Lord will reiterate and explain to the Committee, so far as it may be necessary, the argument he used in his previous speech that the Authority would incur, as part of its expenses which it has to meet and cover, interest on its capital; and that any additional profit would be over and above the interest charge on its capital?
6.6 p.m.
LORD STONHAM: I am sorry if I did not make myself sufficiently clear when I first spoke, and it is obvious from the remarks of the noble Earl, Lord Swinton, that I did not. The Government's main objection to this Amendment is that it would impose on the P.T.E. a restriction which no private undertaking, Rolls-Royce or anyone else, would be so foolish as to impose on itself; because no private enterprise company would operate under this 10 per cent. rule which noble Lords opposite want to impose on the P.T.E. It would mean shutting down parts of the business which were essential to the whole.
In the case of the Transport Executive it would mean not starting many projects

1315
which would be of public importance and which would render a public service, because it might well not, or might certainly not, be sure of providing this 10 per cent. profit margin. The noble Lord, Lord Kahn, asked me to reiterate and explain the point I tried to make about equity capital and loan capital, and the fact that the Executive had to earn its interest. In a sense, the noble Lord, Lord Nugent of Guildford, emphasised this point when he said that Rolls-Royce had to pay 8½ per cent. to borrow money. If Rolls-Royce were declaring their tax profits, they would declare them before they paid interest on their debentures. It would be part of their profit. But in the case of a Transport Executive—
LORD NUGENT OF GUILDFORD: May I interrupt the noble Lord? Am I right in thinking he said they would declare profits for dividend before they paid the interest on the debentures?
LORD STONHAM: If you look at the returns from Rolls-Royce, you will see they indicate both their untaxed and their taxed profits, and then they show just how the profits are distributed and, of course, when they paid out the interest on the 8½ per cent. debentures, they would pay it less tax, so I am perfectly correct in what I said.
LORD NUGENT OF GUILDFORD: The point I was making was that they do not declare a dividend until they have paid their debenture interest.
LORD STONHAM: If I may say so, I think that here the noble Lord is splitting hairs. You cannot get away from the point that if you took a cafe as an example of private enterprise, it would not have any loan capital, the whole of the capital would be equity capital, and it would satisfy the noble Lord's conditions if it paid 10 per cent., as a private undertaking. If it did, it would be quite a healthy undertaking. If the Executive ran an undertaking of that kind, it would have to earn perhaps 8½ per cent. on its money. That 8½ per cent. would be part of its expenses, and then, according to this Amendment, there would be 10 per cent. on top of that. It is no good the noble Lord shaking his head, because he has not defined profit in the Amendment. We must assume that he means profit after all charges. The noble Lord,
1316
with his great experience of Government, should not put such an Amendment forward without explaining what profit and capital are. I have to put my own proper construction on this.
LORD NUNBURNHOLME: There has to be interest on the capital and amortisation. Can the Minister explain how he is going to meet the amortisation of the capital?
LORD STONHAM: I am getting an enormous amount of help in dealing with this Amendment. I have not mentioned the noble Lord, Lord Bannerman, but I am extremely grateful for his help, and what the noble Lord now asks for is another reinforcement to my argument. I would say to the noble Lord, Lord Drumalbyn, that these are some of the things which should have been explained when this Amendment was presented to your Lordships' House.
LORD STRATHCLYDE: The noble Lord, Lord Bannerman, said that when the condition of a profit of 5 per cent. was laid down for MacBrayne's services to the West coast, the service deteriorated. In these circumstances, why do the Government lay down that the electricity industry in Scotland has to make a profit of 9 per cent. on its net assets? Presumably to deteriorate the service? This is utter nonsense. The Board maintains an excellent and constantly improving service under that system.
LORD STONHAM: It is my experience that when one is making a good case, one is sure to be interrupted by diversions. I mention the noble Lord, Lord Bannerman, because he made an express plea against the rigidity and the regimentation demanded in this Amendment. Would the noble Lord really like me to try to answer his question about the Electricity Board? To come back to the noble Lord, Lord Nugent of Guildford, I do not know whether he means to press this to a Division but if so, I must ask your Lordships not to vote with the Opposition simply because this is an Opposition Amendment. We should be voting against all reasonable financial tenets. Noble Lords who want a public local authority to provide facilities for the public, when it comes to legislation, should not agree to Amendments which would virtually strangle the public authority in performing its functions.

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I repeat that this is not a nationalised industry. The noble Lord referred to the National Bus Company, which will be, of course, a nationalised industry but in this Amendment we are dealing with an instrument of local government, the powers of an Executive set up by an Authority comprised mostly of members of local authorities. The noble Lord says that we must have some safeguard when public money is being spent, maybe in competition with private enterprise. Of course, we must, but will not the local authority members of the Passenger Transport Authority be a safeguard? Are they not throughout the country one of the surest safeguards of the public interest and of the expenditure of public money? These members of local authorities will decide the policies which will give rise to the possibility of precept and they will have to approve any proposals of the Executive for setting up enterprises. They are aware of the consequences of unfair competition. All of them will be ratepayers. They will not permit anything which is stupid, absurd or unfair and they will, I hope, support measures for facilities designed to assist the public.
The noble Earl, Lord Swinton, said that if safeguards were introduced, the Minister could then bring in a proposal which would enable the P.T.E. to provide a left-luggage office. Surely this is not a serious contention. We are talking here about an Executive of expert members which will run and coordinate these undertakings. Surely we are not going to limit them so much that they will have to run to the Minister for authority or sanction for any minor projects they may put forward. We must create a sensible framework in which they can operate. I firmly believe that the suggestion made in this Amendment has not been substantiated. I think that it has been exposed as foolish in some cases, and in almost every way unnecessary and I hope that the noble Lord will withdraw the Amendment.
LORD BANNERMAN OF KILDONAN: May I speak of the wide analogy drawn by the noble Lord, Lord Strathclyde, between the Hydro-Electric Board's provision of electricity and the transport service of MacBrayne. The Hydro-Electric Board undoubtedly have done a great job in the North and West of Scotland, but
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the people who have received a service of electricity have found that the price has been raised considerably since they first got it. But what happened with MacBrayne is that the 5 per cent. made the MacBrayne's boats travel past communities that had been receiving service from these boats previously, with the result that these communities in many parts of the Highlands have died off for lack of continuing communications. That is particularly due to this disciplinary 5 per cent.
LORD KIRKWOOD: May I mike the comment that the conditions imposed in this Amendment are very harsh for any big organisation getting itself reorganised. May I suggest that "a profit of no less than 10 per cent." should be altered to "an adequate return". I feel that this would meet all parties.
LORD DRUMALBYN: I think that it would be as well if I summed up on one or two points. The noble Lord, Lord Stonham, is vastly over-stressing the point, even from his own point of view, when he says that this provision would strangle the Authority. For one thing this provision is not concerned with anything the Authority has to do. They are all activities in which the Authority need not engage at all, not one of them. Therefore, if it is going to engage in these activities and in competition with other industries, surely there should be a proper financial discipline.
The noble Lord makes great play with the phrase, "a profit of not less than 10 per cent.". But I think, with great respect to him, that everybody on this side is well aware of what this phrase is intended to convey, because we know very well the financial disciplines that are laid on nationalised industries. I am not concerned with whether this is a nationalised industry or not; that is another matter. We know what this means, and we know that broadly speaking, they have to show a surplus of 8½ per cent. on net assets, or 12 per cent. on gross assets, whereas normal private enterprise requires to show a surplus of 15 per cent. in order to survive. We are putting this modestly at 10 per cent. Everybody in the Committee knows that, and if this is inaccurate or does not express what we mean n the way the draftsman would like it to be expressed, we could pass this Amendment

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now and the draftsman could quite easily put it right.
We always have this argument as between the Opposition and the Government side. Whoever is in Opposition knows full well that they cannot make a perfect draft. What they have to do is to put an Amendment to the Committee and let the Committee decide on the sense of the Amendment. If it does not exactly coincide from the drafting point of view, then it is up to the Government to put it right.
LORD STONHAM: Does not the noble Lord agree that, if he knows what he means, it is for him to put it in the Amendment so that everybody knows what it means? This is a totally new doctrine: that noble Lords should put down any old Amendment, pass it by a majority of two to one, most noble Lords not having heard the argument, and then say to the Government: "If the Amendment is defective, you put it right."
LORD DRUMALBYN: I am quite certain that I could look up Hansards from the past and find example after example where this argument had been put up by noble Lords opposite when they were over here.
LORD HENDERSON: And rejected.
LORD DRUMALBYN: Of course, it would be rejected by the Party on the other side. But I am certain that we are all well apprised of what is intended here. I think we should reach a decision now, because we all know what we are after. What we are after, quite simply, is that we should set a financial discipline which will govern, "so far as practicable" (those are the words of the Amendment) the conduct of the Executive in engaging in activities in which they do not have to engage, but which they could get, if necessary, and which could be provided elsewhere. We maintain that unless the Executive are able to show that they can provide these services and make the same sort of profit on them as is made by others in providing such services, then they ought not to provide those services.
LORD KAHN: I wonder whether the noble Lord would deal with the argument that part of the cost of providing
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these services is the interest on the capital which has to be covered. When the noble Lord referred to an obligation to earn 8 per cent. in certain circumstances, it is not 8 per cent. on top of the interest on the capital; it is 8 per cent. without any interest.
LORD DRUMALBYN: What is required in nationalised industries is 12½ per cent. on the gross assets and 8½ per cent. on the net assets. I agree with the noble Lord. But I do not see how it alters the circumstances when you take into account what has to be earned by private enterprise in order that they can remain in business.
LORD HAWKE: Before my noble friend sits down, may I say that I am not happy about putting a figure in permanent legislation. Has he any example of this in any other legislation? Otherwise, it would seem to me more practical to put in something on the Report stage to the effect that the Executive shall, so far as practicable, maintain a commercial rate of return on the capital employed. To put in a fixed rate when you are legislating forever—and we have not the slightest idea what the value of money will be in ten years' time—would seem to be impracticable.
LORD STONHAM: I should like to add that, since it has been suggested that the Committee should carry this Amendment and that it should then be altered afterwards, I do not want any figure of profit in it at all. This is the rigidity that I have rejected about this proposal. A suggestion was made by the noble Lord, Lord Kirkwood, earlier, which was highly sensible, that it should be looked at to see whether it is necessary. The case has not been made out, and I think the noble Lord would be doing a disservice to the Committee and to his Party if he tried to steamroller this through.
THE DUKE OF ATHOLL: There is one other point that I should like my noble friend to explain in regard to subsection (1), sub-paragraph (v) of Clause 10, which says:
"to store within that area goods which have been or are to be carried by the Executive…"
I should have thought that this was essentially part of the Executive's function. If we are going to agree to Clause 10. it seems to me almost essential that

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the Executive should be enabled to store the goods which are carried until someone comes to collect them. I should have thought that to expect them to make 10 per cent. on this was being unreasonable, and I should be entirely unable to support my noble friend as long as paragraph (v) is one of those included in the Amendment.
LORD DRUMALBYN: After a considerable number of interruptions. I think I can resume what I was saying. I gathered from the noble Lord that he would be prepared to accept an Amendment provided that there was not a figure in it. But in any case I think it would probably now be the sense of the Committee that we should consider this and put down on the Report stage an Amendment which would not tie the Executive to a particular figure; to try to clarify as far as possible the concept of a profit that we have in mind, and indeed to cover the point made by my noble friend about paragraph (v). This would seem to be the sense of the Committee, and therefore I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.28 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 59:
Page 21, line 23, at end insert—
"( ) If in any accounting period it appears to the Executive that a deficit is likely to occur through an unavoidable specific increase in costs which cannot be offset by an immediate increase in revenue, the Executive shall apply to the Authority for permission to incur a deficit not exceeding the amount of the specific increase in costs which it estimates will be incurred in the remainder of the accounting period."
The noble Lord said: This is an Amendment which is related to the possibility of deficits that may arise during the course of a year. As I understand it, the procedure that is to be adopted is that the deficits are to be settled, so to speak, before the start. A budget is going to be presented, a deficit is to be budgeted for, and that deficit will be met by a precept or requisition on the rates. If that is so, it is quite clear that in the course of the year the budget may be upset by, in particular, specific increases in cost, and this Amendment refers to "unavoidable specific increase in costs".
The sort of case that one has in mind is an increase in labour costs, or it might be an increase in the tax on fuel, or even a strike which has imposed a specific increase in costs. But I have in mind rather the more specific increase in costs attributable to particular increases in the cost of supplies or the cost of labour. In that case, it would seem desirable that the Executive should bring the estimated specific increase in costs for the rest of the year to the immediate attention of the Authority, and that the Authority should decide what should be done for the remainder of the accounting period.
It is my view that in principle the Authority should take steps to see that that deficit does not occur. This Amendment says that
"the Executive shall apply to the Authority for permission to incur a deficit"
where it is not possible to cover an unavoidable specific increase in costs by an immediate increase in revenue. This could happen. Indeed, in the recent report of the Prices and Incomes Board on London Passenger Transport it is argued that in certain circumstances it might not be appropriate to raise, for example, charges for the remainder of the year to cover the cost of the specific increases in costs that have occurred. But there is no doubt whatsoever that this position should be brought to the attention of the Authority at the time and should not simply be brought to the attention of the Authority at tie end of the year with a request then for an increase in precept to meet the deficit, Where the increase in costs is specific, and where in order to cover that a specific deficit has to be incurred, of else charges have to be raised by a specific amount, it is the Authority that must take the responsibility then, at that time, for the decision. That is the point of the Amendment. I beg to move.
6.32 p.m.
LORD STONHAM: The effect of this Amendment, as the noble Lord indicated, would be that if an Executive were suddenly faced with an increase in costs which could not be met by an immediate increase in revenue, such as through an increase in fares, and a deficit would thereby be unavoidably caused in the particular accounting period, then the Executive would be obliged to apply to the Authority for permission to incur that

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deficit. I think that this arises from a misconception, because if the circumstances envisaged by the noble Lord should arise—and they undoubtedly will occur to different Executives—the deficit would arise whether they go to the Authority or not. You cannot prevent the deficit from arising, because it will have occurred through some unforeseen circumstance, such as a strike or a demand for wages which had to be conceded. Therefore, the deficit will occur. They cannot go to the Authority and ask for permission to let it occur.
But if the Executive incur a loss for this or any other reason, and if that loss is more than could be offset by the accumulated profits of the undertaking from previous years, it will then be the duty of the Executive to aim at a sufficient profit in the next accounting period to cover that loss. That is how the arrangement would work. I really cannot understand the objective of the noble Lord in suggesting that they should go to the Authority for permission, presumably with the idea of making a future case for a precept. If that is what is in the noble Lord's mind, I suggest it would be wholly undesirable because it would relieve the Executive of a duty which they would otherwise have of making good that loss in a subsequent period. That would be quite unacceptable to the Government.
The Executive have to behave commercially, and if they have had an unexpected loss in one accounting period then they will have to try to make it good in another accounting period. We just could not contemplate legislating for a situation in which it would be possible for the Executive to carry permanent and possibly increasing losses without the duty being laid on them to try to make those losses good in one way or another. The other alternative is that this proposal could be regarded as a device for making the loss respectable. That again we should find unacceptable. I do not think the noble Lord has really thought out all the implications of this Amendment, and it seems to me that it would provide a situation which is totally contrary to what the noble Lord and his noble friends have been aiming at in all the Amendments we have discussed today. For that reason I hope he will withdraw it and think again about it.
LORD NUNBURNHOLME: Before the noble Lord sits down, could he just define "accounting period"?—because if an accounting period is going on for six months, and it is at the beginning of the accounting period when this exceptional extra cost is incurred, the matter should be put right immediately, not at the end of the accounting period.
LORD STONHAM: I entirely agree. But the case put forward is the very proper one of an unavoidable deficit occurring which could not be made good in the accounting period in question. What I am arguing is that if it could be made good within the period then the case does not arise but if it could not be made good in the period then the Executive should not go automatically to the Authority and get permission, as it were, to incur a deficit which would occur anyway, but it should soldier on into the next year and try to make it good.
LORD DRUMALBYN: These are very difficult matters and we can certainly go on thinking about them, but may I in the meantime put one or two thoughts on the matter? The first is that this Amendment postulates, as I think the noble Lord said, an increase in costs which cannot be offset by an immediate increase in revenue. The noble Lord says that this deficit should be made up in the following year. That is all very fine, but we have such a body as the Prices and Incomes Board, and it may well be that the Prices and Incomes Board will strongly recommend against that being done. It could happen. What I am afraid of is that unless remedial action is taken in the year, the deficit will be allowed to grow from year to year and there will be nothing to stop it.
There may be very good reasons the following year why it is not possible to increase the charges and why, therefore, the Authority might have to agree, or might wish to agree, to an increase in the fares for the following year. It may very well be that they might have to agree to an increase in the fares. But if they do not do that, then there will be a continuing deficit. It was because of this possibility of a continuing deficit, despite the duty that is laid on the Executive in the Bill, that I have raised this

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matter. My view is that the situation should be dealt with at once. Either the charges or the precept should be increased. This kind of deficit-financing from year to year has occurred for established nationalised Boards, despite the duty that has been laid on them not to have deficits and to meet their charges, taking one year with another; and, unless this provision is made, this will occur in the case of these Executives, too.
I would invite the noble Lord to think of that on his side, too, because it is a most important matter. It has been proved quite clearly that the mere fact that a duty not to incur a deficit is laid upon a Board in an Act of Parliament does not in fact prevent a continuing deficit from arising; and that is what I am trying to prevent by this Amendment.
6.40 p.m.
LORD STONHAM: I am afraid that I have to tell the noble Lord that he does not prevent it; he creates instead the possibility of a worse evil. In legislation we try to provide against contingencies, but one contingency we cannot provide against is when authorities do not comply with their obligations under legislation. The case postulated by the noble Lord is one of that kind.
LORD HAWKE: May I point out that if it is desired to insure against this particular contingency another equally likely contingency is not provided against, which is that revenue will decline and costs cannot be cut to match? But I am sure my noble friend is absolutely right in demanding that the matter should be settled straight away. The only discipline of these bodies is that ratepayers must ultimately produce the money. That is going to have a most salutary effect, and the quicker they have to face up to it, the quicker it will be put right.
LORD DRUMALBYN: I am grateful to my noble friend, and I am sure there are a number of other contingencies which could arise. I do not intend to press this Amendment to a Division but I think it is something which should be considered and which needs defining at some stage. I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.42 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 60:
Page 21, line 34, at end insert:
" ( ) An Executive who engages, either directly or through a subsidiary, in any activities authorised by section 10(1)(vii), (ix), (xiv), (xxi), (xxvii) or (xxviii) of this Act shall carry out those activities as if they were a company engaged in a commercial enterprise, or, as the case may be, shall exercise their control over that subsidiary so as to ensure that the subsidiary carry out those activities acts as a company so engaged."
The noble Lord said: This Amendment corresponds with Clause 48(7), and the duty that is laid down in this Amendment is laid upon the Boards and de new authorities in Clause 48. Noble Lords will see that it is to a different set of paragraphs that it is to apply. The Amendment refers to
"An Executive who engages, either directly or through a subsidiary "—
in any act which is authorised by certain paragraphs in Clause 10(1). Paragraph (vii) deals with the provision of air services; paragraph (ix) deals with the activities previously carried on by a transferred undertaking; paragraph (xiv) deals with construction and manufacturing (that is the only one that comes in twice); paragraph (xxi) deals with the developing of land for the purposes of their business, and the next one deals with the developing of land for the purposes of other people. It seems to me that in this; case there is no reason at all why, if the Executive engage in any of these activities, they should not engage in them on the same basis as a commercial enterprise. This Amendment is to bring matters into line, so far as the Passenger Transport Executives are concerned, with the duty laid on the boards and the new Authorities under Clause 48. I beg to move.
LORD STONHAM: This Amendment is the same principle as that in Amendment No. 58, about which we had a long discussion. I say at once that it is less objectionable, in that it does not lay down any specific target, but the activities covered by the paragraphs listed are by no means all purely ancillary activities which anyone could expect an Executive invariably to carry out in the same way as a commercial company would. I am sorry the noble Duke, the Duke of Atholl, is not in the Chamber

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now because paragraph (vii), for example, provides for the making of arrangements with air operators, in which case it is by no means difficult to imagine circumstances in which the Executive might decide that it would be in the best interests of the travelling public in the area that an uneconomic service should be provided and subsidised by the Executive. That would be quite likely to meet with general approval in the area if the circumstances were right. The noble Lord is well aware that there are uneconomic air services in Scotland, and it is quite possible that if a suitable service were not available the Executive might consider it proper to suggest that such a service should be provided. That would not be carrying it out, in the terms of this Amendment, in a commercial way.
Paragraph (xiv) permits the Executive to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of their business. In certain circumstances it would be the ultimate wisdom for the Executive to do some of these things in an uneconomic way if they were required in support of uneconomic services that were needed for social reasons. That is another part of the job of an Executive which could not be called "commercial". Paragraph (xxi) enables the Executive to develop their land for the purpose of their business as they think fit. Again, they might need to set up a free car park to get people to leave their cars while they travel by public transport into town. That would be uneconomic but it would be wise and very much a part of the job of the Executive to relieve traffic congestion.
Paragraphs (xiv), (xxvii) and (xxviii), are perhaps purely ancillary, and if the noble Lord had confined his Amendment to those three paragraphs the Amendment itself might have been unobjectionable; but to pick out certain activities and label them as to be carried out "commercially" carries the dangerous implication that this consideration does not apply to other activities. I have spent most of the afternoon and evening trying to insist that it does, so for what I regard as the most valid reasons, which I hope the noble Lord will accept, this Amendment should be withdrawn.
LORD DRUMALBYN: I do not see how it is at all likely that air services in connection with Passenger Transport Executives would be provided with a subsidy. It is true that air services are provided in the far North, as was said, for social reasons, and they require to be subsidised, but it is most unlikely that we shall see a Passenger Transport Authority in the far North of Scotland. I should find it surprising if a system which is now being invented to deal with the conurbations were applied to the braes. It would probably be desirable for us to try to work this Amendment in conjunction with the one with which we have just dealt, No. 58, and to put down an Amendment at Report stage that will meet what we have in mind. I do not think it would be worth while continuing with this particular Amendment at the present time. As the noble Lord suggested, we may have to look more carefully at particular activities to see whether they fit in with the concept of behaving as a commercial enterprise. So I do not propose to press this Amendment further at the present time, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12 agreed to.
Clause 13 [Power for Authority to precept for Executive]:
6.51 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 61:
Page 23, line 36, after "issue" insert "where a majority by number of the persons appointed by the councils of constituent areas so determine."
The noble Lord said: I beg to move Amendment No. 61. Clause 13 deals with the power of the Passenger Transport Authority to precept on the ratepayers for the Executive. In subsection (1) of Clause 13 the Bill says:
"…the Authority for a designated area may issue precepts to those councils of constituent areas who are rating authorities for the levying of rates by those rating authorities to produce such sums respectively as may be determined by the Authority…"
The effect of this Amendment would be to require that before the Authority for a designated area issues a precept there should be "a majority by number of the persons appointed by the councils of

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constituency areas" so resolving; in other words, that there should be a vote in the Passenger Transport Authority, and the local authority members who, if our ideas succeed, would be all the members, but if the noble Lord's ideas succeed will he only some of them, the majority should vote by a majority in favour of levying the precept. The noble Lord, Lord Stonham, reminded us in a debate on an earlier Amendment (I think it was No. 58) that the safeguard for the public funds incorporated in the P.T.A. is the presence of the local authority members, and that I entirely accept, because we have been stressing it throughout. The Amendment that I am now moving would ensure that no precept can be made except on the resolution of a majority of the local authority representatives on the Authority. I am sure that this is plain common sense. It certainly occurs in other Acts—I can think of at least one. I hope that the noble Lord will accept the Amendment. I beg to move.
LORD STONHAM: This Amendment raises a point which on an earlier Amendment I promised the noble Lord, Lord Drumalbyn, I would have a look at. It appears that I am having a look at it rather earlier than I anticipated. The intention underlying the Amendment—and it is one which of course needs very serious consideration—is that the decision to precept should be made by the representatives of the councils on whom the precept will fall. Because, as I have mentioned, county councils will appoint members to the Authorities, the Amendment would not precisely achieve that purpose, since county councils are not rating authorities, although no doubt they will have a substantial representation on at least some P.T.As. With regard to the Minister's appointees, be they one, two or three, in any P.T.A., I must point out that they will be full members of the Authority; they will not be responsible to the Minister, and will be appointed because of their special value to the Authority. Indeed, they may well have, and I should have thought it highly probable they would have, strong local affiliations. But they must in every way be full members of the Authority, taking full part in the Authority's collective responsibility.
Any decision to issue a precept may be the end product but it is not a decision
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which will be taken in isolation; it will be one link, possibly the final link, in a chain of policy decisions made by the Authority, including the Minister's appointed members, about such matters as major capital expenditure, substantial development or extension of services and facilities, agreements with the Railways Board for local passenger services alterations in the general level of fares and reducing or waiving fares for particular classes of passengers. All the members of the Authority should be involved in deciding these policies, and if the combined effect of these decisions is to make precepting necessary then it is right, in the Government's view, that the members appointed by the Minister should join in making this decision, as well as the decisions I have mentioned which inevitably lead towards it. Otherwise, they would become, as it were, second-class citizens in the Authority, and that I should have thought would have been most objectionable.
These people will be picked because of their knowledge, ability and standing, and their experience could be of great value to the Authority. It could seriously prejudice their willingness to serve on the P.T.A. if they were nevertheless told, "You will be able to take part only in certain decisions". It would also go against the fundamental principle which we accept in most bodies of this kind, that all members, once appointed, are equally part of and responsible to the Authority. I very much hope that the noble Lord will consider these arguments, because they are certainly powerful ones, and if the P.T.As. are to be as effective as they must be then I think the Government's view here is the right one, and the Amendment should not be proceeded with.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for explaining to us the Government's viewpoint on this. I understand that he has already undertaken to my noble friend Lord Drumalbyn to look at this point generally, and I am hopeful that he will at least look at this again. There is quite an interesting conflict here. The noble Lord has cogently urged that, assuming that the Bill takes the form now before us, the Minister's representatives should not be deprived of the right to vote on the important issue of levying a precept

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because it might make them into second-class citizens, and that would go against (I think these were his words) their sense of fundamental responsibility to the Authority.
I agree that that is a point. But what the noble Lord, Lord Stonham, has to match that against is the sense of responsibility, which I feel is fundamental, of the Authority itself to the local people, to the local ratepayers, who are also the local travellers, the local users of the transport services, the local electors, to whom the local government representatives are ultimately responsible. As all of us who have taken part in local government know, local government electors are nowadays more and more conscious of their rate burden; more sensitive, and therefore critical of the councils who lay additional rate burdens on them. This, I feel, is far the most important principle here.
I am quite sure that these authorities are not going to be successful unless there is a clear chain of public accountability from the Authority—from the operating of the buses, through the Authority, back to the local ratepayers and the local travellers, the local electors. If we have that clear chain of public accountability, then I believe that it would be possible to avoid the great and calamitous dangers which have been demonstrated in the Massachusetts Bay Public Transport Authority. So, in weighing one set of considerations against the other—that is, the general sense of responsibility to the the Authority, on the one hand, and the sense of responsibility to the electors, on the other—I suggest that there must be only one answer: that the responsibility to the local electors must come first.
There is a respectable precedent, if I may help the noble Lord, in the case of the river authorities. This is the procedure in the river authorities. The Government appointed members do not vote in regard to the levy and precept. It seems to me that this is a sensible practice. So far as I know, they have never felt themselves to be second-class citizens. Indeed, I am a member myself, and I have never felt that I am a second-class citizen because I have been appointed by the Minister, either the present or any other Minister. I think the appointed members will recognise that this is the direct responsibility of the
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local government members and therefore it is they who should vote on it. I hope that the noble Lord, Lord Stonham, will say that he will look at this matter again. It is a good point. It has respectable precedents, and I am sure that it will make the P.T.A. stronger and healthier if he accepted it. He may not like it in its present form; he may need more time to think about it; but I hope that he will see that there is weight in the argument and will be willing to consider it again.
7.2 p.m.
LORD ILFORD: I think the persons who are most likely to feel themselves to be second-class citizens will be the representatives of the local authorities when they find themselves outvoted by persons who do not represent anybody who has been democratically elected. It seems to me that this is a most serious departure from the usual practice. So far as I am aware, in local government it is the almost invariable practice that persons who represent the districts which have to raise money vote on questions of what sums shall be raised, and so on, and persons who represent districts which are going to benefit by the services are excluded from voting. That is not quite this case, but it is nearly this case, and I am quite sure that the representatives of the local authorities who find themselves outvoted will certainly feel themselves to be indeed second-rate citizens.
LORD STONHAM: I said earlier that I would ask my right honourable friend to look at this matter again, without commitment, and I will do so. I appreciate that there are powerful arguments, but they would, I think, arise largely from a limited area feeling—I hesitate to use the word "parochial". I submit to your Lordships that it is the job of the Authority to hold the balance between the travellers and the ratepayers, these being not necessarily the same people, as I think the noble Lord indicated. The independent Minister's nominees are not representatives, and are perhaps more likely to be able to hold this balance than are the local authority nominees. But, as I have said, I will study what has been said in this debate as in the earlier one.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for expressing his

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willingness to study this Amendment with the earlier point made to him on a similar theme. I thought he showed some reluctance to concede the weight of it, but I hope that on further consideration he may well be persuaded by it. On that basis, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.6 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment N0. 62:
Page 24, line 24, after "amounts" insert ", if any,"
The noble Lord said: This Amendment seeks to introduce the words "if any". Subsection (1) says:
"The authority shall from time to time by notice in writing to the Executive specify the amounts for which the Authority propose to issue precepts under this section in respect of expenditure incurred during any accounting period."
The Amendment would seek to introduce the words "if any" after "amounts", so that it would read:
"The Authority shall from time to time by notice in writing to the Executive specify the amounts, if any, for which the Authority propose to issue precepts…"
I have put down this Amendment because it seems to me that it should not be assumed that every Passenger Transport Authority will allow its Passenger Transport Executive to budget for a deficit for which a precept would have to be levied. Even in those areas covered by Clause 20, which is a clause which deals with railway passenger services, where the Executive may make payments to the Railways Board in relation to their services, it does not follow that if the Executive agree to make payments to the Railways Board a deficit may be incurred. It may well be that the Passenger Transport Authority will insist that the payments to the Railways Board shall be covered by cross-subsidisation from the road services. I do not know what other noble Lords think about the drafting of this particular subsection, but to me the plain but inescapable implication is that every Authority will from time to time incur deficits, and when they do so they have to specify by notice in writing the amounts which they propose should be levied as precepts. It seems to me that the matter should be put
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beyond doubt, assuming there is any doubt.
I hope the Government will agree with me that we should not assume in advance that every Passenger Transport Authority is going to have to levy precepts. I hope that it will be the case that some Executives will pay their way. If that is so, then it would be salutary and advisable to introduce these two little words. I beg to move.
LORD STONHAM: I am most grateful to the noble Lord for explaining his purpose so fully, because I had regarded this as being a purely drafting Amendment. He is perfectly right. There is no obligation on a P.T.A. to precept, and there is no such implication in the Bill. The Authority will specify an amount only when there is an amount to specify. Clause 13(1) does, I think, make it absolutely clear that the Authority may precept; that is, they are not obliged to precept. In fact, Clause 13, as I am sure the noble Lord will recognise, is an enabling provision. In the Government view there is no need to insert "if any" in any reference in the clause to the amount due under the precept. If we did insert the words "if any" in subsection (1) it would imply it should also be inserted wherever a reference to the precept is made, and we should have to insert it in all the other enabling provisions in the Bill, and in other Acts too. This is an enabling provision. It enables the Transport Authority to do this if they think it desirable, and no other change in the Bill is needed. All that the noble Lord wishes to achieve is in fact achieved already, and to insert the words he suggests would, in fact, do harm elsewhere.
LORD DRUMALBYN: This was, as the noble Lord appreciates, a probing Amendment, and I was anxious to know the attitude of the Government to precepts in general. I am glad to hear what the noble Lord had to say on this subject, but it is a little difficult for the layman, when he sees "the Authority shall" to interpret that to mean "may", which is rather contrary to what we are generally told. While that may be so, I willingly accept the assurance that these words are not necessary, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.12 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 63:
Page 24, line 27, leave out "either generally or".
The noble Lord said: These two Amendments, Nos. 63 and 64, come together, and once again they are both probing Amendments. There are two points here. The first is raised because I do not know what the Government have in mind. I am not clear what is meant by "a particular designated area". Is it really intended that the Government should restrict the total sum to be raised for a particular designated area within the area designated as the Passenger Transport Area? If that is not so, then what does "either generally or" mean here? I put down this Amendment to leave out these words to find out what the words meant. I should not have thought it was contemplated that some areas within the designated Passenger Transport Area should be favoured in the matter of precepts at the expense of others, and yet if I understand the drafting of the clause here this would appear to be precisely what is intended: that it would be possible to alleviate the precepts or put a ceiling to the precepts in certain areas—that is to say, certain parts of the Passenger Transport Area. I think the Committee will be glad to have an explanation of it, because it is not clear on the face of it.
The second point is that if precepts are to be restricted, then presumably fares would have to go up. This is if the words "either generally or" are left in. If the Minister, by order, restricts the aggregate amount for which the Authority may issue precepts, then it must mean that the fares will inevitably have to go up. Now it may be that there is an agreement between the Passenger Transport Executive and the Railways Board which might preclude an increase in fares on the railways, in which case a deficit on the railways should not be affected. It seemed to me that while it might well be that the Minister would make an Order in general limiting the total amount—and I take it that "aggregate amount" means the total amount in pounds, shillings and pence for which the Authority may issue a precept—and while that might well apply to the road passenger services, it would be difficult to say that the aggre-
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gate amount should apply to the rail services as well, which are separately negotiated. Perhaps the noble Lord will explain this. However, the point I am trying to make is that the rail services are the subject of an agreement between the Executive and an outside body, although they have, of course, to receive the consent of the Authority at the time. I hope that the noble Lord will be able to explain this point, and perhaps he would also explain why this is not expressed in terms of a rate poundage rather than an aggregate amount. I should have thought that it was more usual, in limiting expenditures which local authority bodies may spend, to express it in terms of a rate poundage rather than an aggregate amount. I beg to move.
LORD STONHAM: I understand the noble Lord thought we might include Amendments 63 and 64 in one discussion. It is on the same point, but I should be grateful if he would allow me to deal with them separately because I think the second one is really on the railways point. The other one is on the general point, if I may put it that way. On the first Amendment, therefore, No. 63, which I should like to deal with first, subsection (4) of Clause 13 empowers the Minister to make Orders restricting the size of the precepts, either generally or for a particular Area. This subsection was included expressly to allay the fears, which had been expressed by local authority associations in particular, that without some power of limitation demands by Passenger Transport Authorities on the rates could soar. There have, I understand, been other experiences that they have had in other fields—not in this one —which have been less than happy.
The effect of the Amendment—and I know it has only been tabled for discussion, for information, for probing if you like, and to get an explanation from the Government—would be to prevent the Minister from making an Order restricting the size of precepts generally, although he could still do so, as the noble Lord pointed out, for a particular Passenger Transport Area; that is, if the Amendment were accepted.
Frankly, we have not had this point raised previously. The emphasis has been on the need for more control rather than for any relaxation. I do not know

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whether the noble Lord fears that the Minister might set the ceiling too high. Is that in the noble Lord's mind? If he did, it would encourage some authorities to raise higher precepts than they might otherwise have done. Conversely, if the Minister set a low general limit, it could force authorities to keep fares high, or take a tough line with unremunerative rail passenger services. If you set it very low you force other consequences than if you set it quite high.
I hope I have indicated to the noble Lord, with respect to the first Amendment, that the provision he proposes to amend has been included at the request of the local authorities and is, as they see it, for their protection, so that it would be wrong to alter it. If assurances are needed, I can give a very firm assurance that local authorities will be consulted through the Association before any general order is made—indeed, this assurance has already been given to the Association of Municipal Corporations by the Ministry. I also give an assurance that the Minister would still use the particular power in an appropriate case, even if he also had the general power which the Bill at present provides.
LORD DRUMALBYN: When I first read this I thought that "the Authority" was to be interpreted as meaning authorities in general, and that the order would be applied generally to the country or to all Passenger Transport Authorities, whereas "a particular designated area" would mean the particular Transport Area. Is that correct, or is it the other way round in that one is dealing with a particular Transport Area and a particular designated area with it? I am not clear whether the general limitation applies to all areas or just to a given Transport Area.
LORD STONHAM: The word "generally" here means all Passenger Transport Areas. "A designated area" means in every case the whole of a particular Transport Area. There would be no limitation on one part of a particular P.T.A. as compared with another part. Is that now quite clear?
LORD DRUMALBYN: Yes.
LORD STONHAM: I now turn to deal with Amendment No. 64, in regard to
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the railways, which relates to the same issue but has a particular specialised significance. The effect of Amendment No. 64 would be to prevent the Minister from restricting the size of precepts, made to cover the costs of rail passenger services for which an Executive is required to make agreements with the Railways Board in P.T.A.s. This is where Clause 20 is applied by order—that is to say to areas where the Minister considers that railway passenger services have a particularly important contribution to make.
The Amendment appears to show a misunderstanding of the way in which an Executive will be expected to manage its finances. Clause 13(2)(a) provides that the sums precepted for will be
"towards any deficit…incurred on the revenue account or the combined revenue accounts of the Executive and any subsidiary of theirs".
It means that the Executive will estimate its net profit or loss across the whose field of its operations, and the Authority may precept to cover any net deficit. It is accepted that cross-subsidisation is the means used throughout the public transport industry to meet, so far as possible, the costs of unremunerative services from the profits on more remunerative ones.
It could, for example, be sound common sense from a traffic management as well as from a public transport point of view for an Executive to subsidise a loss-making rail or ferry service, rather than to replace it by buses. But that particular service might be cross-subsidised, at least in part, by revenue from bus services generally. It is certainly not the intention that precepts on local authorities throughout the Area should be identified with particular rail service agreements. There may be the quite exceptional case where, for particular social or other reasons, an Authority want a service but, because it is so uneconomic and beyond the bounds of normal cross-subsidisation, the Executive are unwilling to provide it. Clause 15(3) provides that in such cases the Authority can direct the Executive to provide it, but in order to bring home to them the cost of what they are doing the Authority must provide a special precept to meet the cost unless the Executive release them from this obligation. It would be wrong to single out rail services for special treatment as regards precepting. Therefore, I oppose the Amendment because

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it undermines the principle of treating the services in an Area as a whole.
The noble Lord will acquit me in advance of wishing to move in any way against maintaining rail services. I have not changed my views about that, but here we are dealing with the Authority and their precepting as a whole. I recognise that as it stands the subsection enables the Minister to set a ceiling which would limit the extent to which an Authority could direct their Executive to make agreements for a grossly un-remunerative rail service which the Executive considered would cost too much in relation to the contribution which it would make to the public passenger transport needs of the Area. But this would not be singling out the rail services for social treatment, and it is right that the Minister should be able to put some limit on unjustifiable expenditure of transport resources including this type. But in any case the Minister—I give this assurance—certainly will consult before imposing precept limits under Clause 13(4). With this explanation I hope that the noble Lord will withdraw the Amendment.
LORD DRUMALBYN: I am grateful to the noble Lord for his patient exposition. I shall certainly study it before commenting to any extent. I should like to ask one question. What does "the aggregate amount" mean. Am I right in thinking that the aggregate amount would be expressed as a poundage rate? I do not see how otherwise it would make sense. The Minister could not by order generally restrict the aggregate amount unless it was a poundage rate if he was doing this generally for more than one Passenger Transport Area. I take it that this must be what is meant; otherwise it would mean that in a general order affecting all transport areas he would lay down a separate aggregate amount for each. I do not think the words could bear that meaning. I am surprised that they have not used a maximum rate poundage, rather than an aggregate amount. Perhaps the noble Lord would consider that point.
LORD STONHAM: The general order would apply to all Passenger Transport Areas, but for specific purposes there could be an order relating to the precept for the whole of one Passenger Transport
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Area. But that was not the noble Lord's question. He asked whether either or both would be expressed as a poundage rate. I will advise the noble Lord about this. My impression is that the answer must be, Yes; but I will confirm it.
LORD DRUMALBYN: I am glad to know that there will be maximum levels which can be imposed by the Minister, should this sort of matter get out of hand. I did not ask whether in this case the word "may" indicates an intention to be carried out from the start. The words are "the Minister may by order make". Often such words mean that the Minister intends to do so straight away. Do they mean here that the Minister will do so only if it appears to be necessary? It may be very difficult to determine an amount to start with, and I should have thought that the second alternative was probably what is intended here. I am glad to have that information and we on this side welcome it without any reservation.
I am also glad to have the information—which I do not think has been expressed before—regarding the aggregating of all the deficits, so that in an area where there are a great many local rail passenger services, and where for that reason the deficits may be high, it will be much less easy for the Passenger Transport Authority to incur deficits elsewhere. In fact, it is quite clear that the railway deficits may exceed the aggregate rate which is allowed, and therefore they may have to be subsidised from the rest of the service. I think we are all glad to learn that, because the general feeling that I have heard in the country is a fear that too much may be laid upon the rates as a result of this. We are glad to note that the Government are conscious of this danger, and are also glad to note the way in which they intend to meet it. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 [Accounts of Executive]:
7.32 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 67:
Page 25, line 19, after ("business") insert ("and that of each of their subsidiaries").
The noble Lord said: It may be for the convenience of the Committee to debate Amendment No. 68 at the same time as this Amendment. Clause 14 provides for the form and conditions in which the Executive for a designated area will be required to present its accounts. The effect of the Amendment would be that paragraph (a) of subsection (1), which now reads:
"The Executive for a designated area shall—
(a) cause proper accounts and other records in relation to their business to be kept"
would read:
"(a) cause proper accounts and other records in relation to their business and that of each of their subsidiaries to be kept".
Then there would be a similar Amendment made to the next paragraph.
The purpose of the Amendments is to ensure that the accounts and activities of the subsidiaries shall be published annually for everybody to see, to make sure that they are being conducted in a satisfactory way. I know that there are certain safeguards in Clause 16, the title of which says:
"Publication of annual report by Authority and Executive and prevention of improper conduct of subsidiary activities."
But the best safeguard of all is the publication of the accounts of the subsidiaries. We have already traversed in some detail, and over a wide range, the proposition of how subsidiaries should be set up and what they should do. It is fair to say that on all sides there is a wish that Executives should have the scope to set up anything they need, but there is also an anxiety that they should set up subsidiaries on a sensible financial basis and should not become engaged in serious loss-making. As I said, the touchstone of this is to see what their annual accounts say. That is the sense of the Amendments, and I hope they will commend themselves to your Lordships. I beg to move.
LORD MITCHISON: I think that this Amendment goes too far. It is not the practice of companies with a number of subsidiaries to publish in their accounts the details of each subsidiary. I should have thought that what was sauce for the private goose was also sauce for the public gander, and that the point would be met by the safeguards to which the noble Lord referred in moving the
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Amendment, and also by the provision about auditing the accounts.
VISCOUNT MASSEREENE AND FERRARD: I should like to support this Amendment and to disagree with the noble Lord who has just spoken. The point is that in the Bill the Transport Executives are being given power to indulge in all these activities at the public expense, and if they make a loss the public will have to pay. Therefore, I should have thought it was extremely appropriate that subsidiaries should have to publish their accounts. I know that the Ministry of Agriculture runs certain farms whose accounts we can never get at, and we can never find out whether they are making a profit or a loss. The accounts are hidden in the vastness of the Department. If the subsidiaries have to publish their accounts, that will make the various Executives far more careful in keeping an eye on their subsidiaries, and in trying to ensure that they do not lose money. It is probably too much to hope that they will run at a profit, but we can at least hope that they will not make a loss.
LORD MILNE: I should have thought there were two points here. The accounts of the Executive and its subsidiaries are the first point, but whether or not they are shown separately is quite another question. Secondly, there is the point of the positions of the Minister, the Authority and the Executive. There was an Amendment down which was not moved, about the Authority for a designated area causing proper accounts to be kept. If the Executive do the accounting the Minister will then get the accounts, but there does not seem to be anything in this clause whereby an Authority will consolidate the accounts of the various Executives in its area. I should have thought that that was far more important from the Minister's point of view. Whether the subsidiaries are showing a profit or a loss is another point entirely.
LORD HIRSHFIELD: I do not see how an Executive could cause proper accounts and other records to be kept of its business, unless it automatically included the subsidiaries. So I should regard these two Amendments taken together as entirely superfluous.
LORD BOWLES: We are taking these two Amendments together, and perhaps

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that is just as well. The first Amendment seeks to oblige the Executive to see that proper accounts et cetera are kept for each of its subsidiaries as well as for itself. Clause 149, which is the interpretation clause, at page 197 of this Bill, provides that "subsidiary" shall have the same meaning as in the Transport Act 1962. Hence, under Section 92 of that Act, each subsidiary of an Executive will be a company subject to the provisions of the Companies Acts. These companies will therefore be statutorily bound to keep their accounts in accordance with the requirements of those Acts. Therefore, existing statutory provisions cover the position fully. So I would ask your Lordships to reject the first Amendment as being unnecessary.
Dealing with the second Amendment, as I have just said, the subsidiaries of each Executive will be subject to the provisions of the Companies Acts. In addition, however, it will be noted that Clause 14(1)(b) provides that the annual statement of accounts of the Executive shall be prepared in such form and shall contain such particulars as the Minister may direct. In preparing his directions it would be the Minister's intention to have regard to the need for appropriate information to be given about the business of the Executive. This would include the need to give a fair view of the position of the subsidiaries. Clause 14(1) is modelled on Section 24(1) of the Transport Act 1962, which imposes similar requirements on the nationalised Boards and the Transport Holding Company without singling out any specific activity, such as the subsidiaries, for attention. We therefore oppose this Amendment, too, and I ask your Lordships to reject it since its object can be secured, so far as it is necessary to do so, by the Minister's directions.
LORD DRUMALBYN: I should like to thank the noble Lord for his explanation here, which has clarified the matter quite a bit, but I wonder whether he would take a slightly different point of view if the words in the Amendment had been "wholly-owned subsidiary". It seems to me that it might perhaps be laying a rather excessive duty on the Executive to include a statement of accounts for each of the subsidiaries.
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I note what the noble Lord has said, and I am glad to hear that it would be the intention to publish the activities. I cannot remember the word he used —I think he said that reference would be made in the accounts to the state of each subsidiary. We do not think that is quite sufficient. We have had this kind of argument very often on legislation in the past. There has been some tendency to provide rather less in the way of accounts.
Noble Lords will probably remember that in the post-war period, when there was a lot of Government activity, the activities of the various companies set up by the Government were published in fair detail—not in full, of course, but there was a statement of accounts in relation to each in the form which the Minister prescribed. I also remember that when we were discussing the Highlands and Islands Bill we had a similar debate, and we were given much the same kind of assurance and told that there might be some cases where the company would be so small that it would hardly be worth while publishing the details about it. But we should like to make it plain that we expect that really informative details of substantial subsidiaries should be published so far as the Executives are concerned. We think that this is necessary, and we should like to press the Minister to make certain that this will be so.
LORD BOWLES: I am quite prepared to give the noble Lord the assurance for which he asks. At the moment I am not in a position to deal with the point about "wholly owned subsidiaries", as he has suggested, because I have not had time to take advice; but in the circumstances I will give the assurance that we will look into it all as he requests.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord, Lord Bowles, for at any rate partially answering the point with which we are concerned here? As my noble friend Lord Drumalbyn has said, we are concerned to see that the activities of the subsidiaries are fully known and published to the public, and while we do not wish to put upon him an impossible burden we should like to have that assurance—and perhaps it can be given at a later stage of the Bill—so that we know just what sort of statement is going to be made about the subsidiaries.

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The noble Lord referred to the 1962 Act and to what that requires. I agree that we are asking for something more than the 1962 Act seeks in Section 25, but this Bill gives the P.T.A.s and the P.T.E.s, and particularly the P.T.E.s, much wider scope in trading powers than the 1962 Act ever considered. It is because of our anxiety on this account that we feel there is some obligation on the noble Lord to see that the statement which is made is really full enough to tell us just what is happening. But in the light of the noble Lord's undertaking—and, as I say, perhaps he would be prepared to say something rather fuller on the next stage of the Bill—I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Further functions of Authority]:
7.48 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 74:
Page 26, line 12, at end insert ("and such estimates of income and expenditure shall be divided to show the income and costs of each separate service operated by the Executive or any subsidiary of the Executive").
The noble Lord said: This, again, is on the question of accounts. Clause 15 says:
"The Executive for a designated area shall submit to the Authority and obtain the Authority's approval of…all annual or other estimates of income and expenditure prepared by the Executive or any subsidiary of theirs;…".
and then the Amendment would seek to add,
"and such estimates of income and expenditure shall be divided to show the income and costs of each separate service operated by the Executive or any subsidiary of the Executive".
This would mean estimated income and costs, since we are here dealing with estimates.
We have put this Amendment down simply because it would seem that if the Authority are going to make intelligent decisions they must have pretty full information about the various services operated by the Executive or any subsidiary of the Executive. It may be said that the Executive, in submitting the estimates, will give sufficient informa-
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tion to allow the Authority to judge, especially in regard to any services that may be incurring deficits. I do not think that this could be taken for granted, and it would be better if we laid a duty on the Executive to provide this information. It has to be borne in mind that this information must be known to the Executive: otherwise they would not be in a position to comply with the Bill as it is now. Where there is a service which the Executive think cannot be run except at a disproportionate loss, the Executive can now go to the Authority and d say they are going to stop it unless the Authority say that they will meet the deficit—we are coming later to an Amendment on this point—by way of a precept. If the Executive are able to do that, then they must be in a position to do what we are asking in the Amendment; therefore it would be just as well to lay this obligation on the Executive in submitting their estimates and in seeking the Authority's approval of them. I beg to move.
LORD STONHAM: As the noble Lord, Lord Drumalbyn, has made clear, his Amendment would place a statutory obligation on the Executive to submit annually for the Authority's approval an estimate of income and expenditure which would show "each separate service" individually. I entirely agree with him. The Executive must have this information; otherwise they cannot carry out their functions. But I submit to the noble Lord that the way in which the estimates should be broken down is one of those domestic issues which are best left for the Authority and the Executive to settle between themselves. Surely, any self-respecting Authority—and these will be high-powered Authorities, select men and women—will be expected to want to have separately the details of each important part of the Executive's operations if they are going to consider them properly. One would not think it necessary to tell them so in legislation.
Most of your Lordships have had experience of some or other public body—hospitals, for example. I was chairman for six years of a hospital management group. Before that I had charge in a voluntary capacity of about 100 mental hospitals. I should not have been doing my job had I not demanded all this, information and had it not been supplied

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by the executive officers. This is common form. But I should somewhat have resented it if I had been told how to conduct my job. And I imagine that the Authority also would resent it; because, of course, they can refuse approval of estimates which do not give them the detailed break-down which they think is necessary. And the Authority are in a position to see that they do obtain the estimate.
The Government view, however, is that this is not a proper subject for legislation. It could only be done either in vague terms, as this Amendment does it, or else in precise terms, by spelling it out in great detail so as to cover all foreseeable combinations of circumstances. The noble Lord would agree that the latter would be impossible in practice; and I submit that his own very generalised, vague way of doing it is unhelpful and might be confusing. I could give many examples. I will give one. In the Amendment he uses the phrase: "each separate service". What does "service" mean? Does it mean an individual bus service or a group of bus services or does it mean bus services, coach services, and catering services, all combined?
There is also a danger in some of the Amendments of the Opposition. It is that the Authorities—and after all they will predominantly be supporters of the Conservative Party—may come back to Her Majesty's Opposition and say, "What sort of people do you think we are that we should require instructing and dragooning in this way, and that you should tell us our business? Do you think that you in Westminster know it all? We have been running affairs of this kind for years". I should not like the noble Lord, Lord Drumalbyn to have to deal with minor riots of this kind.
What he wants will certainly be done. Unless he begs me not to do so, I will gladly give an assurance that I will bring this debate to the notice of the Authorities when they are set up, so as to make sure that they know what he expects them to do.
LORD DRUMALBYN: I am grateful to the noble Lord for the way in which he has dealt with this matter. I
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think the noble Lord appreciates that he has given a much more satisfactory answer than was given in another place.
LORD STONHAM: That is not unusual.
LORD DRUMALBYN: We appreciate it, anyway, in this case. It is because of the nature of the debate that took place on rather a similar, if not identical, Amendment in another place that I raised the matter here. I very much welcome the assurance that the noble Lord has given. But he will also understand that we have here two statutory authorities which can get at loggerheads unless their respective duties are laid down fairly clearly. I take the point that the Authority have the whip hand; that they can always refuse to give their approval. But unless it is laid down in black and white, the Executive can very well say, "If Parliament had wanted this, it would have said so; and therefore you must be content with what we are prepared to give you." This is the kind of thing that can happen.
I agree that this Amendment is not perfect. I would not wish to press it; but I think the noble Lord might consider whether it is worthwhile laying this down in a little more detail than is done at present. This is essentially a matter of judgment. Having raised the matter, and having got so much better an answer—one which has made it clear that the kind of information we are asking for can and probably will be given by the Executive—we have achieved our objective, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 75:
Page 26, line 22, at end insert ("and no such agreement shall be of any effect until the Authority has signified their approval of it to the Executive and the Railways Board.")
The noble Lord said: In this Amendment we are talking of the Executive for a designated area submitting to the Authority and obtaining the Authority's approval of
"any agreement proposed to be entered into by the Executive otherwise than under section 20(2)(b) of this Act with the Railways Board for the provision by the Board of any railway passenger services within, or to and from, that area;"

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This Amendment would add:
"and no such agreement shall be of any effect until the Authority has signified their approval of it to the Executive and the Railways Board."
The sole reason for putting down this Amendment is that as the Authority must approve any agreement it is as well that that approval should be signified direct to the Railways Board. It is true that any agreement made will not be invalidated purely because the Authority have not given their approval. But that seemed to me to be all the more reason why the Authority should make it known to both parties, to the Executive and to the Railways Board, that the agreement has received their approval. This is a small point but it could be one of the things that could arise.
7.59 p.m.
LORD STONHAM: An Executive has the special duty to make agreements with the Railways Board to secure the maintenance of services when the Minister applies Clause 20 because he considers that rail services have a particularly important part to play. In other cases the Executive may enter into agreements with the Railways Board under Clause 10(1)(xv) and may make payments to the Board under Clause 10(1)(vi). Clause 20 provides that the Executive must obtain the Authority's approval for agreements of the first kind. Clause 15(1)(d) provides for similar approval to be obtained in the second case. The noble Lord's Amendment would apply only to Clause 15 cases and not to Clause 20 agreements. Before the noble Lord made his speech I was not clear precisely what he had in mind by this Amendment. In our discussions over the last Amendment he was kind enough to say that he had received more information than had been previously given. This may be because of the way he framed his question. On an earlier Amendment he said he had been able to get information that had never been given before. That was because the question had never been asked before, and it is a very good reason for the existence of your Lordships' House, because we do manage to deal with points not dealt with elsewhere, and perhaps we are able to put over points in a way in which they might not otherwise have emerged.
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If, as seems likely, the nobly Lord wishes to make sure that the Executive, and particularly the Railways Board, are notified of the Authority's approval, there would seem to be nothing harmful in the extra requirement he suggests. But it appears to cast doubt on the responsibility of or carefulness on the part of those concerned to pass on this information. Some time might elapse between the Authority's prior approval of the Executive's proposals and their approval of the actual agreement after it had been signed. I know that the noble Lord would agree that it would be absurd to have to hold up its effect for what would be a pure formality. If, on the other hand, the noble Lord had in mind the wider purpose—I do not think he had—of stopping the Executive from making agreements, wilfully or by neglect, without seeking the approval of the Authority—agreements which the Authority might not wish to approve —I can tell him that such circumstances are covered by Clause 15(1)(d) and Clause 15 subsection (6) taken together. Subsection (6) is specifically drafted to cover cases where the Executive have done things without getting the approval of the Authority when they ought to have done so. It is intended to protect third parties and to enable the Authority to redress matters so far as is practicable.
In either case it would be strange for the new requirement which the noble Lord now suggests in this Amendment not to apply to Clause 20 cases also Certainly we will consider what the noble Lord has said, but I do not think that he put a very strong case for the Executive, and particularly the Railways Board, being notified of the Authority's approval. But we can look at that part of it again. The present wording is possibly not entirely apt for the purpose he has in mind. I will look at it again but otherwise I do not think that there is any case to meet.
LORD MITCHISON: No doubt the noble Lord, Lord Drumalbyn, intends to withdraw his Amendment and accept the assurance he has been given. May I express the hope that my noble friend will not look at this matter too hard. It seems to be covered by subsection (6) aid it would be difficult to put in this Amendment without upsetting what is contem-plated by that subsection. I am taking

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about Clause 15(6), the clause we are discussing.
I cannot make out the object of some of these Amendments, although I have been listening with care to the debate. They are said to be designed to protect the public. I sometimes wonder whether they are merely to hinder the Authorities constituted under this measure.
LORD DRUMALBYN: I am sorry if I have conveyed that impression. Perhaps I have not explained my Amendments clearly. If I were to thank the noble Lord, I am certain it would come as a pleasant surprise. I am sure that the noble Lord is right in saying that if this Amendment were accepted, it would probably require an alteration to bring in Clause 20(2)(b) and it might require some alteration in subsection (6). But it seemed to me that subsection (6) was really designed to protect third parties and to enable the Authority to put right something which had gone wrong. The purpose of my Amendment is to prevent anything going wrong. I need not say any more than that. The noble Lord, Lord Stonham, has said that he will look at it, and I do not attach great importance to this although I thought it worth raising. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.6 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 75A:
Page 26, line 22, at end insert—
("( ) any consent proposed to be given by the Executive under section 54(2) of this Act;")
The noble Lord said: This is not a particularly important point. If noble Lords will look at Clause 54(2) they will see that it deals with the consent of the Executive to the closure of a railway line. It seemed to me that before the Executive gave such consent it would be well if they obtained the approval of the Authority, if it was a line within their responsibility; that is to say, a line providing passenger transport services within the area of the Executive. There is nothing more to it than that. I beg to move.
LORD STONHAM: The purpose of this Amendment is quite clear; it is to require the Executive to obtain the approval of the Authority before consenting to the publication of a closure notice.
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There is some logic in this, since it is the clear intention of Clause 20 that the Authority should be in a position to have the final decision on which rail services need to be continued. Where the Executive have a continuing agreement with the Railways Board for the provision of a service and the Railways Board decide they want to close that service, the appropriate thing for them to do would be to seek to agree with the Executive to terminate the agreement rather than just to ask for consent to publish a notice of closure.
It is implicit in Clause 20 that the Executive would need to get the approval of the Authority—the "boss's" approval—before they agreed to terminate a continuing agreement. If it was a determinate agreement—for example, one that ended in 1973—the Railways Board would want to give notice a year in advance that when the agreement to maintain a service, or keep open a station, terminated they intended to close it. Having regard to the fact, therefore, that closure procedure takes 12 months or more, they would clearly want to start the machinery going about a year before the termination of the agreement.
The purpose of Clause 54(2) is to provide that in these circumstances the Railways Board must secure the approval of the Executive before they publish a notice of a proposed closure, so that the Executive may have the opportunity of saying something like this: "Although our agreement extends only to 1973, it has been our intention to negotiate with you for a continuance of the service beyond that date, and therefore we do not agree that you should publish notice of the closure."
There are two types of case which could arise. Although the noble Lord dealt with it quite briefly, this is a somewhat difficult matter and a not unimportant one. At least, I have always thought that the closure of a railway was important, as I am sure have the people concerned. Frankly, we have not had time to study the consequences of this Amendment and certainly we have had insufficient time to complete consultations with the various people concerned. So, while I cannot advise the Committee to accept the Amendment now, I can in a very real sense undertake to give further thought to the matter between now and Report.
LORD DRUMALBYN: I have not had an opportunity of apologising to the noble Lord for the lateness of this Amendment and I am glad that he has not taken me to task too severely. I thank him for his explanation and for his undertaking to give this further consideration, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 77:
Page 26, line 41, at end insert—
"( ) It shall be the duty of the Executive to bring to the attention of the Authority any circumstance, including an impeding increase in the cost of supplies or labour, which is likely to cause a substantial deficit in the current or next accounting period."
The noble Lord said: This Amendment is similar to one moved before and we need not debate it because we have more or less covered the ground. I would imagine that the Executive would perform this duty but I think it is important that they should do so. I can see that the noble Lord may not be able to accept these words and I do not know if this is even the right place, but it might be well to put a requirement of this kind in the Bill. I beg to move.
LORD STONHAM: I agree that this is in the same family as the previous Amendment, but this one has implications of particular difficulty. The Executive is the directing arm of the Authority and therefore would carry out all sorts of negotiations. Naturally, an Authority will expect to be kept informed about the factors affecting the Executive's prospects of complying with their financial duty. But it might sometimes be a hindrance rather than a help to impose a statutory obligation on the Executive to make a formal report on a development as soon as they know of it. The Authority is a public body whose proceedings are likely to be reported to the public. The Executive, on the other hand, like any other commercial enterprise must be able to negotiate confidentially about such things as contracts for supplies, and wage agreements. A duty to bring the effects of the possible outcome of these negotiations to the notice of the Authority could be a serious embarrassment to the Executive in their negotiations and could hamper them in their management functions.
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Although the Executive would act sensibly, if they give information confidentially to the Authority there might still be an unwitting leak of information and it could be embarrassing to members of the Authority, in their other capacities, to be aware of the state of play in a particular negotiation in which they might be thought to have an interest. Therefore, though it seems to be an Amendment of the same family which the noble Lord is going to consider bringing forward next time, I think that he should exclude this one, because it has implications of particular difficulty with which we could not agree.
LORD DRUMALBYN: I am grateful to the noble Lord for having put this so clearly. In the light of what he has said I would like to examine this. In the meantime, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
8.17 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 78:
Page 27, line 9, leave out from.("any") to end of line 10 and insert ("deficit attributable to that service.")
The noble Lord said: This is a little more than a drafting Amendment. The effect of this Amendment is that where the Authority require the Executive to provide a particular passenger service which the Authority consider is needed and the Executive are unwilling to provide it, the Authority may give the Executive a direction to provide a service. Then, unless the Executive agree to the contrary in writing, the Authority can give the Executive a written undertaking to issue a precept under Section 13 of this Act to meet
"any cost incurred by the Executive in con-sequence of the direction."
The words which I propose to move instead of these are
any deficit attributable to that service."
I am not clear what the cost incurred by the Executive in consequence of a direction is, and it seems to me that my Amendment is a clearer form of words. Moreover, the cost incurred by the Executive in consequence of a direction might be a good deal more than the deficit attributable to that service. It might include capital costs and things of that description. It seems to me that the

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words in the Amendment are the words to be used. This is precisely what is meant or, in my view, ought to be meant. I beg to move.
LORD MITCHISON: I should find this Amendment much more convincing if I had not just listened to the noble Lord putting forward an Amendment which was intended to oblige someone to divide up estimates of income and expenditure to show the income and costs of each separate service. I listened to my noble friend giving undertakings about this—that is his affair—but I had notions about overhead costs at the back of my mind at the time. Even if there is absolutely no difference between the language of the Bill and the language of the Amendment, the Amendment introduces a concept which I am bound to say is far more obscure to me than the original language of the Bill. I trust, therefore, that this effort at redrafting the Bill, if that is all it is, or this effort to introduce something else, will be made more clear by those putting it forward than it has been made so far. Perhaps I am phenomenally stupid about it, but other people have to read these Acts of Parliament, too, and they may not be so well acquainted with the language that appears appropriate to us.
LORD STONHAM: The last thing one would do would be to accuse my noble friend Lord Mitchison of being phenomenally stupid. Sometimes I think he is phenomenally amusing, but that is not the same thing. The noble Lord, Lord Drumalbyn, said that this was little more than a drafting Amendment. But what does he mean by "little more"—how much? I ask that because the Amendment would substitute "deficit attributable to that service" for "cost incurred by the Executive in consequence of the direction" as that for which an Authority are bound to issue a special precept if they require a particular and especially unremunerative service under Clause 15(3). This means that if the provision of that service did not result in an actual deficit on the Executive's revenue account, but only a reduced surplus, then no special precept would be needed. That is a very important difference. Clearly the Amendment would defeat the intentions of Clause 15(3).
LORD DRUMALBYN: I am sorry to interrupt, but is that really so? This is the "deficit attributable to that service". It is not the overall service, but that particular service. Surely they can calculate out the deficit attributable to that service, even though there is an overall profit.
LORD STONHAM: If the noble Lord will study this again, I think he will find that my interpretation is right. I do not say this in any kind of superior sense, but merely as an example of the confidence that I have in the advice that I have been given. I should like the noble Lord to accept that, because I think the Amendment, if accepted, would defeat the intention of subsection (3) of Clause 15. The intention of that subsection is to put the financial responsibility squarely on the shoulders of the Authority if they want a particular service, perhaps for special and highly commendable social reasons, which the professional Executive considers too costly in relation to the contribution which the service would make to the transport needs of the area, and in relation to the normal basis of cross-subsidisation.
The Amendment would mean that so long as the cost of such a service, however intrinsically uneconomic it was, could be met from the profits on other services without the Executive's going into deficit overall, the Authority could demand that service without having to precept to meet its cost. In my experience of local authorities, it seems to me highly likely that this is precisely what they would do. The effect of that would be to encourage woolly thinking and lack of cost-consciousness in the Authority.
I apologise for constantly reminding noble Lords opposite that this is a commercial undertaking that we are setting up, and that we want commercial principles to be applied. I am constantly having to oppose noble Lords on Amendments which would do the exact opposite. If the Executive are expected to absorb the costs of these highly uneconomic services, they will have to make higher profits than would otherwise he necessary on other services. It could be contrary to the Executive's and the Authority's general duty to secure an efficient service, as they must do under Clause 9(1), with due regard to economy of operation.

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As I say, noble Lords opposite—and I agree with them in this—continually argue for an approach based on the proper use of economic criteria in determining the services to be provided. But this Amendment is completely inconsistent with that approach.
I do not know whether this was one of the Amendments debated in another place, but I suggest to the noble Lord that he should take this back and have a good look at this particular clause, and if he agrees with me that, I suggest, would be an end to the matter. He ought to be grateful to us for putting it as it is in the Bill.
LORD DRUMALBYN: What the noble Lord has explained is what he thinks my Amendment means. What he has not explained is what is in the Bill. This is what I was asking him. I really do not understand what is meant by "any cost". The noble Lord asked me earlier what "profit" meant. What does "any cost" mean? It is not "any cost out of the service", but "any cost incurred in consequence of the direction". That must be wrong. I ask the noble Lord to look at this again. Whether my Amendment is right or not (and it may well be defective in one way or another), I cannot believe that "any cost incurred by the Executive in consequence of the direction", irrespective of the receipts and all the rest of it, should be charged against the Executive. I am sure that that must be wrong. I hope the noble Lord will look at it again, even though he cannot accept my Amendment. But in view of what he has said about my Amendment, I suppose I had better withdraw it.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Publication of annual report by Authority and Executive and prevention of improper conduct of subsidiary activities]:
8.27 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 79:
Page 28, line 22, after "at" insert "including the proportion of total overhead expenses so allocated".
The noble Lord said: Clause 16 has already been referred to; it is the clause which provides safeguards for the preven-
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tion of improper conduct of subsidiary activities. The effect of my Amendment would be to add to subsection (2)(c), which says:
"the method by which any determination for the purposes of paragraphs (a) or (b) of this subsection was arrived at"—
this is in regard to the report of any accounting period—the words,
"including the proportion of total overhead expenses so allocated".
The purpose is quite simple. It is to make sure that in the report which is made of the activities of the Executive or of any subsidiary of the Executive, as subsection (2) says, it shall include an indication of the proportion of the total overhead expenses in the Executive itself which are reasonably attributable to overhead expenses in order to give a fair picture of how the subsidiary has in fact done.
This is a similar point to one which we have advanced from this side before. As noble Lords know, there is a good deal of anxiety about these trading subsidiaries. This Amendment has the support of a large section of industry, who need the assurance here that they are not going to be exposed to unfair competition. I beg to move the Amendment, and I hope the noble Lord can give us a satisfactory answer.
LORD MITCHISON: I rise merely to say that I fail completely to see how anyone could comply with subsection (b) without giving the information suggested in the Amendment. This seems to me to be another attempt, quite unnecessary in this instance, to tie the hands of a public authority on the pretext that it is for the public advantage.
LORD BOWLES: An identical Amendment was put down by the Opposition and debated in the Commons Committee on February 21. It was resisted by the Minister of State on the ground that, while there certainly must be art Allocation of overheads, once one starts to particularise items in the Bill, then all the other items of the account would need to be so particularised. Otherwise it could be held that this implies that they need not be included in the account. The Minister of State's answer is in the OFFICIAL REPORT, columns 936 and 937. But I give an assurance that it is the Government's intention that the

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proportions of overheads will be given where this is appropriate and meaningful; but we cannot accept the Amendment and I ask that it be rejected.
LORD NUGENT OF GUILDFORD: I do not think that I shall put the noble Lord to trouble. The answer he has given, that such information as can be given on the overheads will be given, meets the point. I accept in good faith that that information will be adequate to give the whole picture. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Transfer to Executive of local authority transport undertakings]:
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 80:
Page 29, line 14, after "order" insert "being a date not earlier than six months from the date of the making of the order".
The noble Lord said: This is, I think, quite a simple point. It is to give a sufficient interval between the date of the making of the order and its coming into effect. I do not think it requires any explanation. It relates to the transfer to the Executive of the local authority bus undertakings where this is decided to be done. It is simply to give sufficient time to make the transfer in an orderly way. I beg to move.
LORD STONHAM: I apologise to noble Lords for my temporary absence. I misjudged the eloquence of my noble friend. I thought he would hold the fort sufficiently long to enable me to get there and back. This Amendment—and I understand the noble Lord proposed taking with it Amendments Nos. 81, 82, 85 and 88—deals with Clause 17(1), which provides that the Minister shall make an order transferring to the Executive for each Passenger Transport Authority all the transport interests of constituent councils which are carrying on transport undertakings at the date specified in the order, or, secondly, which were carrying on such undertakings on December 8, 1967, or, if the order is made for five years after that date, on the date five years prior to the making of that order. It also provides for the reversal of transactions placing liabilities on that
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undertaking or taking assets away from it which have taken place since the applicable date in the second provision of this subsection and which were not necessary for the purposes of the undertaking or were unreasonably imprudent. The effect of the five Amendments taken collectively would be to limit to six months the distance which one could look back in identifying the councils which were carrying on undertakings and to throw doubt on how far one could look back in reversing any unnecessary or imprudent transactions.
There is likely to be more than six months between the Minister's first circulating proposals for the designation of an area and the making of the transfer order, because of all the various actions that have to be taken between these two stages: consultation, making of a designation order, appointments to the Authority, appointments to the Executive, and so on. So councils which run transport undertakings would be able, if they wished, to frustrate the transfer of their undertaking to the Executive by selling it off, or perhaps by some other device; and some councils might he greatly tempted to do this, particularly as may often be the case, where the assets of the undertaking exceed the liabilities. Of course, we get the other kind.
But this would be completely contrary to the intention behind the setting up of Passenger Transport Authorities that all the municipal transport undertakings in a designated area should be transferred to the Executive and form the basis of the Executive's operations. In our view, it is essential that the Executive should own and operate these undertakings, and the Amendments would defeat that objective.
The Bill now before us limits retrospection to five years. Originally there was no limit on retrospection, and the five years' limitation was introduced by the Government at the Report stage in the Commons to meet the wishes of the Opposition. Of course, there was no debate on the Amendment making this change because of the guillotine. And apparently now, from what the noble Lord has indicated and from his Amendment, they regard five years as too long a period of retrospection. Nobody can imagine the likely position in five years, but it

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seemed to us a reasonable compromise between having no limit at all for retrospection and allowing a period of, say, two years, which might be short enough to give local authorities a chance to avoid or to frustrate the aims of the Bill.
I have used the word "retrospection" for convenience, but this of course is not retrospective legislation, since the earliest date to which one can look back in making the transfer is December 8, 1967, which is the date on which the Bill was introduced in another place. I submit to the Committee that this is surely the right date if we are to be fair to all. That is the date on which we made our intentions clearly known to everyone, and I think we must adhere to that date if we are not to have the general good frustrated.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Stonham, for explaining why the Government would be unwilling to accept this Amendment and the related Amendments. May I apologise for the haste with which he had to return, and sympathise with his difficulty? I wonder whether, when he answers the points I am about to put to him, he will tell me which Amendments he is taking together, because to some extent my noble friend Lord Drumalbyn was in the same situation as he was, and will be relieved to hear which Amendments we are discussing with Amendment No. 80.
There is a point on which I should be glad to have further elucidation. The noble Lord, Lord Stonham, said very firmly that after an Order has been made and an area has been designated, it is the intention of the Government that all the municipal bus companies should be transferred to the P.T.E. I understood from a debate we had earlier that there is flexibility in Clause 10 to leave the choice with the P.T.E. as to whether or not they take into their own possession all the municipal bus undertakings in the area, or whether they might prefer to leave one or more with the existing local authority bus undertaking and simply to co-ordinate that particular municipal undertaking in their general plan. I hope the Minister of the day is not going to put pressure on P.T.A.s. and P.T.E.s. when the are set up. I feel that they should be left free to decide for them-
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selves. I take the general point made by the Minister about the necessity for the Bill to contain some safeguard in order to ensure that no local authority would frustrate the purposes of the Bill. This is common form in Bills of this kind.
It is rather a matter of degree, over which we might wish to take issue, but I should be grateful if the noble Lord would deal with the two points I have raised. I have no doubt that my noble friend Lord Drumalbyn would like to add a word to what I have said.
LORD STONHAM: With regard to the taking over of the municipal bus undertakings it is the intention of the Bill, and it is the intention of the Minister, that it is to be done with n the P.T.A. area. We regard this as the starting basis of the work of the Executive—and an essential basis. I am glad that the noble Lord accepts the main objective of this clause, which is to that the intentions of the Bill, when it becomes an Act, are not frustrated in a manner which might otherwise be possible, and that by implication the date selected is not only a reasonable one but the only possible one that could be accepted. With regard to the noble Lord's point about all of the undertakings being taken over, I can confirm that that is certainly our intention.
LORD NUGENT OF GUILDFORD: Would the noble Lord be kind enough to repeat the numbers of the Amendments which we are taking togethet with No. 80?
LORD STONHAM: I am doubly regretful about this, but such is the noble Lord's vast experience that I thought he would most certainly feel that Amendments Nos. 81, 82, 85 and 88 were all on the same point and could be discussed together.
LORD DRUMALBYN: It is quite easy to deal with these Amendments together but the points, if I may make them in order, are these: first, there is the Order to appoint the date, and the question is whether the transfer is to take place on that date or whether a period is to elapse before the actual transfer takes place. In other words, will the date appointed by the Order be the date on

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which the Order is published, or thereabouts, or will it be a later date? We thought a reasonable time to elapse would be, say, six months, and that was the point of the first Amendment—that is, six months from the date on which the Order is made.
The noble Lord has dealt with the next two Amendments, which are concerned with the identifying date, and we understand his point of view on this. We are a little surprised that he thinks local authorities will be likely, in the circumstances, to dispose of property in this way, but if he thinks there is a risk of that, I suppose he must take precautions against it. I do not know whether the noble Lord can deal with the point in Amendment No. 80, which is a rather different point from the others. He may have dealt with it already, and if so I apologise.
LORD STONHAM: The noble Lord asked whether the transfer would be immediate. The position will be that, first, the Minister will circulate his proposals for designation. These are proposals which of course must involve consultations, as provided for in the Bill. When, after consultation, he has formally designated an area he then assists in the appointment of the Authority and of the Executive. The actual transfer Order with regard to the undertaking cannot take place until all those stages have been effected. It is no good transferring property and undertakings until the Executive has been formed. We think that more than six months will elapse between the time that the Minister has circulated his proposals for designation and any question of the transfer of the property of the transport undertaking. At this stage I cannot say precisely what that interval will be. This is a matter which must be decided by the Minister, and of course he would be guided in large measure by the time taken for consultations and the other arrangements. There is no question, of course, of there being an immediate transfer the moment an area is designated. There will be proper notice and adequate arrangements so that it can be done in an orderly and proper fashion.
LORD DRUMALBYN: I am sorry, but this is not quite the point. We have
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the first Order, which is the Order designating the area and setting up the Authority. The Authority is then set up, it appoints its Executive, the Executive appoints its staff, it starts to study the problem, and then, once it has a certain amount of organisation in hand, I take it that the second Order will be made. What I am asking is whether there will be an interval between the making of the second Order and the transfer. An interval of six months was suggested here, and the later Amendment, of course, suggests a deferment of the actual transfer for a much longer period.
The grounds for the second Amendment are on rather a different point. It is not really necessary for the Executive to have everything transferred to them before they start to study the problem and, as we know, they have to study the problem with the Authority and, within twelve months from the establishment of the Authority, they then have to publish their statement of the financial state and the prospects, and so forth. Then later on, within two years of the establishment of the Executive, they must publish their prospects for the future. Our view was that at that stage, when the whole thing had been got into hand, it would be the appropriate time to make the transfer of the property; that in the meantime the thing would be bound to be ticking over to a certain extent while they were making their plans. We are dealing now with the second order, which is the date of the transfer of the property. The point of the first Amendment was to find out whether notice would be given of the date of the transfer and the order, or whether the order and the date of the transfer would coincide. That is the only point of the first Amendment, to try to explore that point. If the noble Lord cannot give us the information to-day, we should like to be able to see the programming for the future on a later occasion and as to the identifying date, I suppose we simply have to accept that.
8.52 p.m.
LORD STONHAM: I think that I can give the noble Lord most of the information he wants. The date of the actual transfer would be after the making of the order and not coincidental with it, and the date—this is why I oppose the

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Amendment for six months—would be one decided by the Minister after consultation with the Executive, and with the municipalities who at present own and run the buses. Of course they must be brought into it, and there will be all sorts of practical business details to be settled first which will determine the actual date when the Executive, instead of the municipality, will run the buses. As the noble Lord has said, once the Executive are appointed they have to start getting in business, making arrangements and considering the problem. I am not talking about the plan; I am talking about the immediate future after their appointment.
But the municipalities also have to be brought into this, and there will be differences in the point of time between the making of the order and the transfer, depending on the circumstances obtaining within the P.T.A. area. Some may come more quickly; it might well happen that a period of less than six months after the making of the order would be more convenient both for the Executive and the municipalities. If we accepted an Amendment to make it not less than six months it would frustrate the possibility of an earlier transfer if it was convenient for all concerned that such an earlier transfer be made. I think that really covers the point. This sort of business has to proceed through consultation. It would be in the highest degree absurd if we were to attempt, or if the P.T.E. were to be allowed—not that it is likely—to proceed before the undertaking could be taken over in an orderly fashion and in a way that would ensure there was no disruption of any kind, either in the service provided or in the work of the staff. We do not want to have a fixed limit as to time.
LORD DRUMALBYN: I am grateful to the noble Lord for his explanation. This Amendment was a probing Amendment more than anything else. In view of the explanation he has been able to give and the way he thinks things will go, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 80A:
Page 29, line 15, leave out from "on" to "an" in line 16
The noble Lord said: This is a series of Amendments, and with the eave of the House may I suggest that it would be worth while discussing all the starred Amendments—80A, 82A, 84A, 84B, 84C and 84D. The Amendment I am moving is an Amendment put down for information, because it seems to be another question to which everyone may know the answer but it does not appear to have been put before. I am wondering what these bodies are—that is to say, a body
"which is carrying on an undertaking which either is at that date a road passenger transport, ferry or railway undertking or was on the identifying date…"
and
"any of the members of any such…body fall to be appointed by the council…"
I do not know what those bodies are. I do not know whether they are publicly owned. I do not know whether they are likely to be compensated or whether they will just be taken over and their property transferred. It is very difficult to judge of these matters without that information, and I should be grateful if the noble Lord would supply it. I beg to move.
LORD STONHAM: I appreciate the noble Lord's reason for tabling these Amendments, and it is a matter which we all regret that some of these questions were not put before.
LORD DRUMALBYN: May I answer that particular point? I had been trying to get the information but had failed. I would not have put down these Amendments if I had got the information.
LORD STONHAM: At any rate, I am very glad to have the opportunity of conveying the information that has net been made available before. Clause 17 provides for the transfer to the Executive of the transport undertakings carried on by individual municipalities and also of the interests which the council may have in a transport undertaking carried on for example by a joint board such as the undertaking carried on by the Stalybridge, Hyde and Dunkinfield Joint Board, which comprises those local authorities and which it seems very likely will be included in the Passenger Transport Authority for Manchester and the surrounding districts.

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The effect of the first Amendment No. 84A, would be to omit such joint boards from transfer, which we should regard as quite undesirable, and the other Amendments are consequential upon it. I do not know whether, as I think may be the case, noble Lords would prefer a controlling type of Authority with the operation carried out by joint boards. If the Bill provided only for individual undertakings to be taken over but not joint boards, then of course it would encourage the formation of joint boards. That would in large measure frustrate the intentions of the Bill in setting up Passenger Transport Authorities as we envisaged them.
It is the Government's view that the Executive must own and operate all municipal assets and then decide how best they can be organised objectively. We feel that if this Amendment were accepted the arrangements would then be left to the play of local politics to decide who joins with whom. As I indicated in the discussion yesterday, we think that that would be quite disastrous. It is not the shadow of co-operation that we want in this matter but the actual substance of it—co-operation applied to the best and most efficient management organisation as we see it, and as viewed objectively, and not from purely single local authority considerations. Therefore, we think it would be quite wrong to exclude joint boards from our arrangements, and it is our firm intention to include them.
LORD DRUMALBYN: I am most grateful for the information, both on its positive side and on its negative side. I was aware that there were joint boards, but I was afraid that there might be some other form of body on which there sat members appointed by the council in their capacity, obviously, as members of a local council. From what the noble Lord has said, I gather that that is not so, that we are talking here purely about joint municipal boards. That being so obviously this is part of the pattern, and one would have to assent to that. We could not make an exception of joint bodies merely because they were "joint" if they were wholly local authority bodies. For that reason, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn
9.2 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 83:
Page 29, line 25, after ("appointed") insert ("which shall not be before two years from the date of the establishment of the Authority.")
The noble Lord said. This is what one might call a dilatory Amendment, in the sense that it would not defer the original Order or prevent the Executive from being set up, but would merely defer for two years the time for the passing of ownership from the local authorities to the Executive in the case of local authority passenger transport undertakings. The reason for the Amendment is, that in the planning stage the Executive would have their hands full with planning without having to run services. The services could well tick over in the meantime, and it would be better to allow their ownership and day-to-day running to remain in the hands of the local authorities and other bodies concerned. The Executive would obviously have to maintain a general view of the whole thing, but it seems to me that the more sensible approach would be for the Executive to achieve the fullest possible acquaintanceship with the various bodies before starting to reorganise. It seemed to me that two years from the setting up of the Authority would be about the right time and that the first period of 12 months' study could take place, though I recognise that that provision might need some amendment in detail.
The period of two years from the setting up of the Authority to the actual transfer of the ownership of the local authority passenger transport undertakings would, I think, be quite convenient, and would probably enable a better job to be made of the ultimate reorganisation, once the Passenger Transport Authorities had been taken over by the Executive. I beg to move.
LORD STONHAM: As the noble Lord said, the effect of this Amendment would be to delay the transfer of local authority transport undertakings to the Executive until two years after the Authority had been appointed. In our view, this is far too leisurely a time scale. The ownership and operation of the municipal undertakings within its area is a crucial part of the functions

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of the Executive. I submit to the noble Lord that it is out of the question that we should postpone the transfer for two years. Indeed, if I did not know full well that the noble Lord was completely without guile, I should regard this as a device by the Opposition to postpone any transfers until after the next General Election. But, knowing the noble Lord, I know of course that such thoughts could not possibly come within his ken.
I must say to him that, in practice, the kind of time scale we have in mind, which we hope to achieve for the first four Passenger Transport Authorities, is that the Authority would be established in the spring of 1969, and that the Executive should be appointed within a month or so afterwards, even if on a temporary, acting basis. The appointment of the Executive, of course, falls to be made by the Authority, but we hope to do everything we can to assist them to act speedily. Then, if that is achieved, the transfer of the assets could well take place 12 months or so from now, in the middle, or a little after the middle, of the year.
That being the timetable we have in mind as from this moment, quite obviously we could not contemplate accepting an Amendment which would mean that the Executive could not even start until two years after the establishment of the Authority which we hope to see take effect in the spring of 1969. Here again, I expect I am giving the noble Lord information, but it is information that I gladly give because I think it fair that the Government's intentions should be made known as soon as possible.
LORD DRUMALBYN: I would not agree that the Executive could not start because it could obviously get into harness and plan what it was going to do as soon as it took over and operated, but I do not propose to press this Amendment. I am grateful to the noble Lord for the information, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 84:
Page 29, line 25, leave out ("Executive") and insert ("Authority").
The noble Lord said: This is an Amendment which we thought we ought to put down. To a large extent, of course,
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it covers the ground we discussed yesterday on the subject of the transfer of the assets. As the noble Lord will appreciate, we have not followed this through, and this is just to state the point of view that we think it would have been better if the assets had been handed to the Authority and that the Authority owned the assets and the Executive managed them. We should have thought this would be the right division. We would then have had something of the order of a joint authority undertaking which would have been able to own all the assets as and when they were taken. We felt bound to put this Amendment down. We thought this was the right place to put it. The noble Lord may wish to make some passing comment on it but we do not intend to press it. I beg to move.
LORD STONHAM: I think I ought to comment on this. It stems from the different conception the Opposition have, the conception, as it were, of joint local authority boards; whereas the conception in the Bill is of a Passenger Transport Authority composed of local authority representatives up to a minimum of six-sevenths of the total membership of the Authority, and an Executive appointed by them to conduct the business The Amendment is quite contrary to our conception. We see the Authority as the body which controls the general policy in such matters as major reorganisation, substantial capital expenditure, changes in the levels of fares and so on. The Executive is the professional managing and operating body in full charge of the day-to-day working of the undertaking. Obviously, and I hope the noble Lord will agree with this, if you accept that arrangement, then the Executive must own the assets so that they may have a full sense of responsibility for them, and so that they do not have to go back to the Authority whenever they have to take a minor decision, for example on disposals, acquisitions, modifications, and so on. I hope I have made that quite clear to the noble Lord.
LORD DRUMALBYN: I do not think that anybody running a business on behalf of somebody else would necessarily not have delegated to them powers to make the minor acquisitions the noble Lord has mentioned. On the other hand, given the noble Lord's conception of this and the attitude the Government has taken,

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we certainly do not want to pursue this any further and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 86:
Page 30, line 38, leave out ("resumption") and insert ("assumption").
The noble Lord said: These are purely drafting Amendments and the noble Lord may think that they are a bit finicky. But the fact is that "resumption" means to take something back that you have had before. The Executive has never had this before, and therefore it seems to me that even though the goods were in the possession of the person from whom the main body of the goods have been taken, that is not a good reason for calling it "resumption". It is an "assumption" not a "resumption". I beg to move.
LORD STONHAM: I agree that these Amendments appear to be purely drafting Amendments, but nevertheless they are drafting Amendments which are apparently based on a misconception. It seems to me that the thought behind them is that the property rights and liabilities referred to in Clause 17 have never been the property of the Executive, but only the property of the municipal undertaking which is being transferred to the Executive and that it is, therefore, more correct to speak of assumption by the Executive rather than resumption, which might be said to carry the implication that the Executive have had possession of these property rights and liabilities at some time in the past. On the other hand, we think that "resumption" has a better flavour of bringing back into the fold assets which have been temporarily removed from it, whereas "assumption" has the flavour of the Executives pre-empting something which they have never had before and which there is a faint suggestion they have no real right to.
As the noble Lord said, this is only a matter of drafting, a matter of choice as to which word to use. This is our Bill, and we feel that to "resume" instead of to "assume" more clearly states what we have in mind. I know that if the noble Lord, Lord Airedale, was in the House he would not take this from me, but I hope that sweet reason will prevail and that the noble Lord, Lord Drumalbyn,
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will agree that if he were standing where I am standing he would be saying the same thing.
LORD DRUMALBYN: If I were standing where the noble Lord is standing, perhaps I would have prevented the word coming in in the first place. However, as it is there, I suppose it had better stay. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 89:
Page 31, line 11, leave out from (undertaking") to end of line 13.
The noble Lord said: The words which are dealt with in this Amendment were in the 1947 Act. They then applied to private enterprise undertakings which were being taken over. I do not know whether the noble Lord feels it necessary to include them here in relation to local authority undertakings. I should have thought there was no danger of an act of "unreasonable imprudence" in disposing of assets. And even if there were "unreasonable imprudences", this would be a decision of an Authority, and in any case would be a question of subjective judgment as to whether there was imprudence and, if there was, whether it was unreasonable. I beg to move.
LORD STONHAM: The effect of the noble Lord's Amendment would be to remove from the Minister the power taken in the Bill in respect of transactions which the Minister merely thought were unreasonably imprudent. In some cases the transport undertaking represents a valuable asset. Its transfer to the Passenger Transport Executive is, in our view, defensible on the grounds that it has been built up to its present value on the basis of fares paid by the travelling public. It has not been built up by the ratepayers because they are not necessarily the same body of people as the travelling public. The Executive will hold and operate the undertaking for the benefit of the travelling public.
If this philosophy is accepted, as I think it should be, it would be wrong to allow a council to saddle its undertaking before transfer with unreasonable liabilities or to transfer away from its undertaking some valuable part of its assets, thereby depriving, so to speak, the travelling public of the benefits which have

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been accumulated through the fares it has paid, and handing them over to the ratepayers who have, generally speaking, not so contributed. For example, where an undertaking has built up reserves against hard times the council owning the undertaking might transfer those reserves to its general rate fund and leave the undertaking with the liability of a sizeable bank overdraft. It is all very well to say that this would not happen, but it could happen, and the Bill is designed to prevent its happening.
Again, the undertaking might own some land which could possibly be developed as a depot and the council might transfer that from the ownership of the undertaking back to the general purposes of the council. It may be that it would be used for a youth club or something of the sort. That might be thought to be highly commendable and indeed a piece of good business, but we do not want it to happen.
In some cases, the first ground for objection, "…not reasonably necessary…", will clearly apply. In others, there could be reasonable doubt about this, but nevertheless, if the transaction was clearly "unreasonably imprudent", it ought to be possible to reverse it. For example, a council, realising that in 12 months' time it would be giving up its undertaking, might become, perhaps even for political reasons, completely careless and irresponsible in relation to its undertaking knowing that it was to be transferred away. Noble Lords may say that this is a far-fetched conception and that none of these councils, particularly now that so many are Conservative-controlled, would ever dream of doing anything like that. But we want to make quite sure. That is why these provisions are in the Bill and why the Government will fight to see that they stay in.
LORD DRUMALBYN: I must say that, apart from the last observation of the noble Lord, that, in effect, a council might become irresponsible in its management, everything that he said would have been covered by the words already in the Bill; that is, that the action
"was not reasonably necessary or expedient for the purposes of the undertaking".
Because, clearly, the assets attached to the undertaking could not be transferred away to something else. That would not
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be "necessary or expedient". Therefore it is very difficult to see what is the need for these words. A man concerned with a private undertaking might just lock the door and go away, but that cannot happen with a public undertaking and I should have thought these words could have been dispensed with. Also, I should not have thought they were worth fighting very hard to maintain. Perhaps the noble Lord could just think about this and see whether they are really necessary, as it does not seem to me that they are. I beg leave to withdraw the Amendment.
LORD STONHAM: Before the noble Lord withdraws the Amendment, may I say—since a nod of the head is not recorded in Hansard—that I will look at it.
Amendment, by leave, withdrawn.
9.21 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 89A:
Page 31, line 19, leave out ("otherwise") and insert ("arbitration (or, in Scotland, an arbiter)").
The noble Lord said: The White Paper said that any question of doubt would be settled by arbitration. The words "or otherwise" go very much wider than arbitration. A dispute could be settled by the Minister, for example. As an assurance was given on this point in the White Paper, I should have thought it should be fulfilled in the text of the Bill. I beg to move.
LORD STONHAM: The words "or otherwise" certainly permit the Minister to provide for arbitration, and tint will be provided for wherever it is appropriate, but the wording also permits disputes to be decided in other ways, without going through the full and sometimes lengthy procedure of formal arbitration. The Clause 17 transfers are likely to be complicated, although we hope that the bulk of them will be settled by agreement, and there may be a whole range of details which will require a different approach for different categories. For example, there might be matters which could be decided by someone with special knowledge or experience, or by the Minister himself. We do not want to preclude the possibility of settling matters in that way. We do not want to have to go to arbitration every time and we

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want to maintain flexibility. Without flexibility there could be the infinite possibilities for delay which we wish to avoid. For that reason I ask the noble Lord not to press his Amendment.
LORD DRUMALBYN: What the noble Lord has said may be the result of second thoughts. But paragraph 12 of the Annex to the White Paper says quite clearly:
"If there is any dispute about which assets and liabilities should he transferred, the matter will be settled by arbitration."
I should have thought the circumstances likely to arise which the noble Lord has put forward were not strong enough to overcome that undertaking, and I ask him to have another look at this matter before the next stage of the Bill.
LORD STONHAM: I am afraid that I may have misled the noble Lord. There is no question that arbitration cannot still apply. The effect of the noble Lord's Amendment is to limit the settlement of a dispute to a court or to arbitration under the procedure laid down in the Arbitration Act 1950, and we think that it would be unduly restrictive for all such difficulties to be settled in this way. But the retention of the words in the Bill which the noble Lord wants to change does not in any way take away from what was promised in the White Paper. I will look at it again, but I do not think there is anything in the point at all.
LORD DRUMALBYN: The fact is that the words in the Bill would leave the options wide open. If what the noble Lord intends is some kind of arbitration, all I am asking for is that that should be specified in the Bill. A dispute could be settled in any way whatsoever unless, of course—and I do not know this—the word "settlement" is a term of art. If the word "settlement" is a term of art, then of course it might be otherwise. But I think we can leave this at the moment, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
Clauses 18 and 19 agreed to.
Schedule 6 [Provisions as to Existing Operators and Services on Making of Order under S. 19(1)]:
9.28 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 92A:
Page 220, line 46, after ("Act") insert (for a period of not less than five years").
The noble Lord said: Paragraph 14 says:
"An existing operator shall not be entitled to the grant by the Executive of a consent under this Schedule with respect to any existing service if the operator has entered into an agreement with the Executive with respect to that service under section 19(2) of this Act;…"
This Amendment would then add that the period for which he has entered into such an agreement would have to be "for a period of not less than five years".
The point about this Amendment is that it seems to me—and I am not sure if I am right about this—that in entering into an agreement the operator would lose his right to compensation, the right that he has under consent, on the revocation of that consent. If he is to lose that right, the quid pro quo should obviously be an agreement for a substantial length of time. It should not be just a short-term agreement if it is in fact going to deprive him of his right to compensation. That is the point of the Amendment. I hope I have explained it correctly. I beg to move.
LORD STONHAM: The consent for a continuation of an existing service is intended to be a temporary arrangement, in order both to enable the operator to continue that service and also to give him a firm base from which to negotiate an agreement with the Executive which is intended to cover the provision of services by that operator in the longer-term. The agreement will then supersede the consent. You have a temporary arrangement which is the consent and then, by joint negotiations between the operator and the Executive, you have an agreement. The purpose of paragraph (xiv), which the noble Lord wishes to amend, is to make that clear. Apparently, it was not quite clear.
The Amendment which he proposes would permit the consent to continue if

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the agreement were for a period of less than five years and, as the noble Lord has made clear, it is designed to protect the operator. But the agreement which follows the consent, the temporary arrangement, will be freely entered into by the operator; and if he chooses to reach an agreement for less than five years—which I think highly unlikely—it is up to him. But certainly it would not be appropriate to have the consent and an agreement operating side by side; because the agreement follows the temporary arrangement which arises from the consent. I hope that is clear to the noble Lord.
LORD DRUMALBYN: Just to complete the picture may I ask the noble Lord whether, once the agreement has been made, the right to compensation on the revocation of the consent is permanently lost? What happens on the termination of an agreement? If an agreement is made and terminated, then the man is put into exactly the same position as if the consent were revoked—except that it occurs later. For that reason he should also receive compensation on the termination of the agreement. That is certainly so if the agreement is short; if the agreement is longer perhaps different considerations arise. But, at any rate, there is the difficulty that once you pass from consent to agreement any possibility of compensation on the termination for any reason of the agreement is lost. Is that so?
LORD STONHAM: This is certainly not my understanding. It is a matter we shall have to look into. I should not like to give an authoritative statement; but I should have thought in equity that the kind of situation which the noble Lord envisages would be entirely wrong. It would be one that could not be supported. I will certainly look into it.
LORD DRUMALBYN: I am grateful to the noble Lord. I thought there was this distinction and I wanted to preserve the position. In view of the noble Lord's undertaking I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 6 agreed to.
Clause 20 [Special duty of certain Executives with respect to railway passenger services]:
9.35 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 93:
Page 35, line 18, leave out subsection (1).
The noble Lord said: It may be for the convenience of the Committee if we were to discuss with this Amendment Amendments Nos. 94 and 95. Clause 20(1) provides that the Minister, where he considers that railway passenger services have a particularly important contribution to make to an efficient transport system in that area, may by order direct that this clause shall apply to that area. Frankly, we are doubtful whether it is a wise arrangement that the Minister should initiate the matter in this way. We take the view that it would be far better if the P.T.A. took its own initiative. After all, no one will know better than the P.T.A. what rail services they want to keep.
There is another aspect. Suppose the P.T.A. has to consider a rail service which British Railways wish to close down on economic grounds but the P.T.A. consider there are social benefit grounds for keeping it open. Suppose the P.T.A. take such a decision and make themselves responsible for the operating loss, which would have to fall on the local ratepayers by the precept. It would be a slightly dangerous situation for the P.T.A. because they would have no control over the operating loss of British Railways who would continue to operate the service. In our personal lives we would try to avoid a situation where we might find ourselves responsible for a loss made by someone else and over which we had no control. I would ask the noble Lord to take into account that the local authority, at any rate, would see the Minister as having a responsibility for the finances of the railways and therefore to some extent as an interested party. That being so, it would be all the more invidious for the Minister to take the initiative in this matter of designating circumstances where an order should be made and rail services taken over in this way.
These are thoughts on this matter. Naturally, I would not suggest that these

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Amendments, and the subsequent Amendments, are entirely satisfactory; but it seems to us that the concept of the P.T.A. making themselves responsible would be more satisfactory if the Authority were allowed to take the initiative. Then the consequences would result from their decision and there would be no invidious reflections on the Minister. I feel that there is substance in my suggestion. No doubt the Minister will tell me whether or not the Amendment would achieve precisely the thing we desire, but I feel this is a point of some importance, which should be dealt with.
9.38 p.m.
LORD STONHAM: As the noble Lord has indicated, Clause 20 lays down in some detail a special procedure which is to be followed by the Executive and the Authority where the Minister considers that railway transport services have a particularly important contribution to make to the needs of an area. It is provided that the Minister shall apply this clause to such areas by Order. The effect of the Amendment would be to make the provisions of the clause apply to all P.T.A.s and not just to those where the railway services had a particularly important part to play. I can tell the noble Lord right away that it is the intention of the Minister to apply the provisions of Clause 20 to all four P.T.A.s which are to be set up initially—Merseyside, Greater Manchester, the West Midlands and Tyneside. Regarding the United Kingdom generally, we think we must adhere to the procedure set out, and deal with the P.T.A.s, once they are set up, according to particular circumstances.
The detailed procedure set out in Clause 20 is important for those areas where railway passenger services play a specially significant part in the public transport system of the area. It ensures that those services are properly surveyed and places squarely on the Executive and the Authority the responsibility of deciding which services need to be provided in the general interests of the area. They provide that the Executive may make payments in respect of the losses sustained by such services. But, perhaps most important of all, subsection (8) provides that the Minister may make grants to the Executive towards expenditure incurred in meeting the railway losses under
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Clause 20 agreements. In the White Paper it was stated that initially these grants will be 90 per cent., although they will be subsequently tapered away in the light of the developing circumstances in the area. This provision for grants cannot apply to all P.T.A.s irrespective of whether the railway services are of sufficient importance for Clause 20 to be applied to them or not.
This seems to boil down to a question of definition. Where the Minister considers that the railway services have a particularly important part to play, then he will expect the Executives to support them, and it is right that the Minister should have to help towards this support until there has been time for the Executive to be able to influence the general pattern of transport in the most economic way. But where the rail services are not of particular significance, Executives will have a more genuinely free choice as to whether they need to be maintained or not. In our view, it would tend against the public interest to bias the Executive in their choice by making the losses on the rail services the subject of ministerial subsidy while any equivalent bus services would need to be wholly financed by the Executive.
I hope that what I have said about the Minister's immediate intention, which is very important in this respect, will make it clear how important we regard this matter, and I hope that the noble Lord will agree that at this stage it would be wrong to agree to the discontinuance of this double standard and make the Minister responsible throughout the country in all circumstances.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for explaining the intention here. His explanation is helpful and interesting. I did not know that the Minister intended to apply Clause 20 immediately to all four P.T.A.s as soon as the Bill is on the Statute Book and the P.T.A.s are designated. I wonder if the noble Lord would tell us whether the passenger rail services in these four areas are already in such a precarious economic situation that this immediate action has to be taken. The general impression that the noble Lord has conveyed is that the Minister is entirely taking the initiative in this matter. Indeed, he said that the

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Minister will expect the conurbations to accept the responsibility for these rail services and to support them—with, of course, the substantial grants that the Minister is going to make to start with. But although the 90 per cent. grant to start with is substantial and attractive, it is, as the noble Lord said, going to taper off fairly fast, and it may leave the local P.T.A.s with a substantial burden in the future.
I wonder whether this is quite the right balance on this rather difficult problem. It looks as if the P.A.T.s are being completely bulldozed into accepting these rail liabilities in these four initial Areas, with the Minister taking the initiative entirely himself. It would seem to me desirable that the P.T.A.s should take some initiative and should realise that these rail services are necessary for the local people. I feel a little uneasy about the approach here, and perhaps the noble Lord, Lord Stonham, could say a further word which would help us to understand why, in his opinion, the urgency is so great that it would warrant the Minister's taking this rapid action.
9.47 p.m.
LORD STONHAM: In some respects my personal information is nearly four years old. The noble Lord may remember that until I became a Minister at the Home Office I was President of the National Council of Inland Transport, and indeed, was its founder. I had an intimate knowledge of the railway situation and of these four conurbations, and addressed many meetings in all of them. The local authorities were keenly interested and gave strong support; and the position then was that they would have been more than grateful for the Minister's help in this matter.
Unfortunately, conditions have not improved since that time, and all local rail services (and we are dealing here with local rail services) in all the four conurbations which we propose to designate as Passenger Transport Areas are losing money heavily. Therefore the Minister, who is aware of these facts, has decided that his help will be needed as a matter of urgency. I am sure that the local authorities, and certainly the commuters who live in the area, will be very glad that this speedy help is to be forthcoming for improving, and indeed in
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some cases for saving, services which are highly needed in the areas.
LORD NUGENT OF GUILDFORD: I must thank the noble Lord, Lord Stonham, for this further elucidation of the urgency and, while still expressing some anxiety about the situation in which the local authorities will find themselves as these grants taper off in the future, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.50 p.m.
LORD DRUMALBYN: I understand that the line references in Amendments Nos. 96 and 97 as printed are wrong. No. 96 should refer to line 37 and the next one to line 39. Perhaps I may move a manuscript Amendment. No. 96 is really a drafting Amendment, and I do not think I need comment upon it. It is a fact, of course, that the Authority will have had to approve before any further action can be taken. Therefore, I think the correct formula is "have approved" and not "may approve". It is a very minor point.
Amendment moved—
Page 35, line 37, leave out ("may approve") and insert ("have approved").—(Lord Drumalbyn.)
LORD STONHAM: I am sorry that the mistake about the lines was not spotted before, but it does not make any basic difference to either of these drafting Amendments because they are without any particular effect.
LORD DRUMALBYN: I am moving only the first one at the moment.
LORD STONHAM: The first Amendment would change the wording from:
"to enter into such agreements"
(with that Board)
"as the Authority may approve …"
so that it would refer to such agreements
"as the Authority have approved …".
But for my high regard for the noble Lord I should have thought there was no reason for that Amendment except pedantry. The second Amendment would make the words:
"such railway passenger services as the Authority decide to be necessary —"
read
"as the Authority decide from time to time to be necessary".
LORD DRUMALBYN: I am not moving that Amendment at the moment. I would rather defer that for the moment.
LORD STONHAM: I have dealt with the first one. It may have been the earlier mix-up that is responsible for my misapprehension, but I rather thought that the noble Lord mentioned the alterations to both Amendments, and I therefore thought he was going to deal with the two Amendments together. I will deal with the first one first. This one achieves nothing, and I hope it will not be persisted in.
LORD DRUMALBYN: If the noble Lord does not consider it necessary, I will not persist in it, but if I had happened to be right it would not have been pedantic to make the alteration.
LORD STONHAM: No.
LORD DRUMALBYN: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: Amendment No. 97 is not intended to be a drafting Amendment; it is intended to be an Amendment of substance. At any rate, it should be an Amendment of clarification and it is a probing Amendment. The purpose of the Amendment is to insert after the word "Authority" in line 39, on page 35, the words "from time to time"; so that paragraph (b) of subsection (2) would read:
"without prejudice to the general powers of the Executive under section 10 of this Act, to enter into such agreements with that Board as the Authority may approve for securing that the Board provide such railway passenger services as the Authority from time to time decide to be necessary …".
The point about this Amendment is that the Authority will obviously have to make a decision in the initial stages in regard to all the railway passenger services in each of these Areas, as to whether the services are to be continued or not—I wonder whether I might have the noble Lord's attention because it is a little distracting to talk to him otherwise.
What is not clear is exactly what discretion the Minister is leaving in the hands of the local authority to start with; and secondly, what further discretion the Authority will have to discontinue the services later. As the clause is now
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drafted, it could be taken to read, and it appears to me to imply, that the Authority must decide once and for all whether or not the services are to continue. The Authorities certainly have to make an initial decision as to how much of the services, however particularly important the Minister may think the contribution they have to make to the area is, are to be retained by the railways in agreement with the Executive. Perhaps they retain a proportion. After that, it has to be decided from time to time whether these services are to be continued. This is the point I want to be quite clear about.
The noble Lord shook his head when I said that the Authority had to make up their mind once and for all. I take it from that that the agreement will be made on a fairly short-term basis with the Railways Board, so that there will be an opportunity for the Authority from time to time to decide whether the agreement should be renewed. Otherwise there is an agreement there, and that is that. This is important, and I think one should get it clear, because after ail, the Government are going to give a considerable subsidy—as the noble Lord said, starting at 90 per cent. of the cost and then diminishing. There is the danger that the Authority might take advantage of the early stages of the grant and then discontinue it later. But the purpose of the grant is to enable the services to be improved and so to attract more passengers on to those services. If that falls, whether or not there has been a grant, plainly the services should be discontinued, and it should be a matter for the Authority to judge whether or not the Executive is to be allowed to go on paying money to the Railways Board in respect of these services. This is the way I understand it, and I hope the Minister can confirm that this is so. It is a matter of considerable importance.
It seems to me that the first stage is a choice as to which of the services is to be retained; then there is an attempt to improve them and to attract more traffic back to them, and one has to see how that goes; but, as I understand it, the discretion of the Authority to continue or not to continue the services has to remain absolute. Is that so?—because this is the point of the words "from time to time". I understood from the noble

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Lord that these words were not really necessary and that the Authority could change its mind from time to time as to whether these services were required. If that is so it is not entirely clear from the drafting of the clause as it now stands. I should be grateful for the noble Lord's explanation of that. I beg to move.
Amendment moved—
Page 35, line 39, afer ("Authority") insert ("from time to time").—(Lord Drumalbyn.)
LORD STONHAM: This Amendment would make the words
"such railway passenger services as the Authority decide to be necessary"
read
"as the Authority from time to time decide to be necessary".
I confirm that the original wording does not bind the Authority to make one decision which shall thereafter be binding on it for all time. I also confirm my shake of the head, that the Authority will not have to make up its mind once and for all, for all time. The noble Lord asked what discretion the Authority would have to discontinue services later. They will have discretion to do this having regard to agreements they have entered into, the needs of the area, the particular circumstances of the needs for these railway services, their costs, and so on. Various considerations will enter into it and must affect their consideration in the future.
With regard to this particular Amendment and the words "from time to time" which the noble Lord wished to add, those words in fact add nothing to the powers that the Authority will now have. They can change their mind from time to time without having the words "from time to time" in the Bill. Whether or not the words are added, the Authority's subsequent decisions about these services must always be made against the knowledge that agreements will have been entered into as a result of the original decisions. For example, if the Executive have entered into an agreement with the railways to provide the services for seven years, and this may have involved certain capital or other expenditure, then the services—subject to any agreement with the railway that they could be suspended, which is always possible—would have to continue for the period of the agreement. It is exactly the same with any
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other undertaking. But at the end of the agreement, or indeed in practical terms it would be before the agreement was ended, they could come to another decision and give due notice to the railways in accordance with the terms of the agreement, and that is precisely provided for in the Bill as it now stands.
LORD DRUMALBYN: I am very grateful to the noble Lord for the explanation he has given. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD STONHAM: I beg to move Amendment No. 98. This is a drafting Amendment, required by the interposition during the Report stage in the Commons of subsection (3), to make it clear that the agreement referred to in subsection (4) of Clause 20 is an agreement made under that clause. It is purely drafting. I beg to move.
Amendment moved—
Page 36, line 4, leave out ("such agreement") and insert ("agreement under this section").—(Lord Stonham.)
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 99:
Page 36, line 21, at end insert—
"Provided that any dispute in connection with the amount of any payment under subsection (4) of this section shall be referred to arbitration or in Scotland an arbiter appointed by the Lord President of the Court of Session."
The noble Lord said: This is an Amendment which the noble Lord may think is perhaps unnecessary, but it seemed to me that in view of the fact that the Minister would have a certain interest one way or the other—and I think one way—in the outcome of disputes in connection with the amount of any payment under subsection (4), that is, any payment by the Executive to the Railways Board in connection with the services, it would be better if that particular dispute were settled by arbitration rather than by the Minister. It is always undesirable, when the Minister appears to have a possibility of a bias one way rather than the other, that the Minister should decide it. I think probably he would prefer to have it settled by arbitration. This is a question really as to amounts of payments, and since the

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Minister is involved, from the point of view of any grant I think it would be better if he kept out of the settlement of the dispute. I beg to move.
LORD STONHAM: The effect of this Amendment would be that if there should be a dispute between the Executive and the Railways Board about payment which ought to be made in respect of an agreement, this dispute must be submitted to arbitration. The intention of Clause 20 is that the Executive shall review the railway passenger services in and around their area, and shall decide which they wish to see maintained and shall make agreements with the Railways Board, subject to the approval of the Authority, for the running of those services and for the payment by the Executive of any losses. Subsection (6) provides that if any dispute arises between the Executive and the Railways Board in connection with these agreements it shall be referred to the Minister, and the Minister can give such directions as he thinks fit. Since the agreements, specifically through subsection (4), can include provision for payment by the Executive, then clearly disputes about the amount of payment are intended to be referred for settlement to the Minister, which I think is right, because the Minister is well versed in these matters, since he himself will be making similar payments to the Railways Board in connection with services other than those in and around P.T.A. areas. In addition, the Minister will have interests in both parties and can be expected to hold the balance between them. Thus, provision for arbitration in the particular matter of the amount of the payments is, in our view, undesirable and unnecessary.
Therefore, I hope that the noble Lord will not spoil his excellent record to-day by persisting in the Amendment. But, as
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always, I should like to give him some satisfaction, and I can give an assurance that my right honourable friend would never use the power in subsection (6) to direct an Executive to make a payment it did not wish to make.
LORD DRUMALBYN: I am grateful to the noble Lord for his answer. I thought this was a rather disagreeable sort of Amendment on which to end the day, but he has dealt with it kindly and has given me an assurance with which I am quite content. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 20, as amended, agreed to.
Clauses 21 to 23 agreed to.
LORD STONHAM: I feel that we have done our stint to-day. We have got through about 24 per cent. of the Bill, and I think we might go home. I beg to move, therefore, that the House be resumed.
House resumed.

MEDICINES BILL
Brought from the Commons; read 1a, and to be printed.

COUNTRYSIDE BILL
Returned from the Commons with certain of the Amendments agreed to; with one Amendment agreed to with an Amendment; with one Amendment disagreed to, but an Amendment to the Bill proposed in lieu thereof, and with the remaining Amendments disagreed to, with Reasons for such disagreement.
House adjourned at eight minutes past ten o'clock.