Sitting of 27 June 1968

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

PRIVATE BUSINESS
BRISTOL CORPORATION BILL [Lords] (By Order)
Second Reading deferred till Thursday next.

PETITION

  Divorce Reform Bill
  Mrs. Knight: I beg to ask leave to present a humble Petition of the women of the United Kingdom which showeth that in some respects the Divorce Bill is unjust to married women and concludes:
  Wherefore your petitioners pray that Parliament will reject the Divorce Bill at present before your honourable House.
  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

  OFFENCES RELATING TO MOTOR VEHICLES
  Address for Return,
  showing the number of offences relating to motor vehicles in England and Wales, the number of persons prosecuted for such offences, statistics of court proceedings and the number of alleged offences in respect of which written warnings were issued by the police, together with the number of persons concerned, during the year ended the 31st day of December, 1967.—[Mr. Elystem Morgan.]

ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    Handicapped Children (Corporal Punishment)
    Mr. Winnickasked the Secretary of State for Education and Science what letters he has received on the caning of handicapped children; and what replies he has sent.
    The Secretary of State for Education and Science (Mr. Edward Short): I have had 10 letters on this subject. In my replies I have corrected misunderstandings and made the following main points: that I am very much against the corporal punishment of handicapped children but believe that decisions must rest with teachers, in whom I have confidence; that I do not propose to make regulations on this subject; and that the Inspectorate tells me that corporal punishment in schools for such children is very little used now.
    Mr. Winnick: Will the Secretary of State state whether the Association of Workers for Maladjusted Children has written to him expressing its disagreement with his views about his predecessor's policy? Will my right hon. Friend at least consider sending out a circular to local authorities disapproving of the cane being used on handicapped children?
    Mr. Short: I am sure that through my hon. Friend's efforts every local authority will have read about my views on this matter. I believe that I have received a letter from the body my hon. Friend mentions. I have also received communications from such bodies as the A.M.C. and the C.C.A., which are very much against the making of this regulation.
    Mr. Montgomery: Is the Secretary of State aware that he has the support of the overwhelming majority of teachers in the policy he is now pursuing, which is a great improvement on that pursued by his predecessor?
    Mr. Short: I do not think that making a regulation would make any difference. There are black sheep in every profession who, no matter what the regulations are, will over-step the mark. I do not think that making regulations will alter that.

    Schools (Four-Term Year)
    Dr. John Dunwoodyasked the Secretary of State for Education and Science if he will take additional steps to encourage the adoption of the four-term year in schools.
    Mr. Edward Short: Local education authorities are free to decide the number of school terms in any year. I would see no advantage in encouraging a general move to a four-term year, unless changes could be agreed in the timing of public examinations. Three years ago, when my Department canvassed educational opinion on the possibility of holding the General Certificate of Education examinations; in the spring term, the general response was strongly unfavourable.
    Dr. Dunwoody: I thank my right hon. Friend for his Answer. Does he not agree that the present rather long terms impose: a considerable strain on younger primary schoolchildren and that there may, for this category of schoolchildren, be both educational and medical advantages in a four-term year?
    Mr. Short: I agree that there are some advantages. I know that some local authorities are looking at this. They are free to do it if they wish. There are other considerations—for example, the employment pattern in the neighbourhood, the effect on holidays, and so forth.
    Mr. Ronald Bell: I agree with the Answer which the Secretary of State has given, but will he help the present three-term system by trying to influence those responsible for the G.C.E. examinations to hold them a little later in the summer than they are doing at present?
    Mr. Short: All the G.C.E. examinations are now over by the end of June. My predecessor changed the regulations about the summer holiday last year. Local authorities have a fair amount of scope with the summer holidays. They can have them in July, August or September. There is a great deal of scope for staggering. Here again, it so much depends upon the pattern of employment in the neighbourhood.

    Nursery Education
    Mr. Robert Cookeasked the Secretary of State for Education and Science whether he will now permit local educa-
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    tion authorities to allocate available funds as they think fit and cease to restrict the expansion of nursery education.
    Mr. Ellisasked the Secretary of State for Education and Science what steps he is taking to assist local education authorities to provide nursery education facilities in their areas.
    The Minister of State, Department of Education and Science (Miss Alice Bacon): My right hon. Friend would like to extend nursery facilities when the necessary funds and teachers are available. However, at the present time there can be no general relaxation, but I am looking at the possibility of a limited expansion.
    Mr. Cooke: The right hon. Lady would not wish to frustrate local authorities which out of their own resources wish to provide self-financed nursery education, would she?
    Miss Bacon: I am not quite sure what that means. We must consider the teacher position as well, particularly in areas of high population where there is a severe shortage of infant teachers. We are studying all this and I assure the hon. Gentleman that my right hon. Friend and I will be as happy as other Members of the House when we can make some progress.
    Mrs. Renée Short: Will my right hon. Friend now undertake to withdraw the circular which prevents local education authorities with the resources and with the teachers from setting up nursery classes? Will she look again at the whole problem of training nursery teachers with much more urgency?
    Miss Bacon: I could not promise to withdraw the circular. What we might look at is an extension of the circular to bring other classes in.

    Independent and Direct Grant Schools (Properties)
    Mr. John Leeasked the Secretary of State for Education and Science if he will seek powers to ascertain the total value of properties owned by independent and direct-grant schools situated in England and Wales.
    Mr. Edward Short: No, Sir.
    Mr. Lee: Is not this the sort of useful information which ought to be gathered by the Government as a preliminary to the process of incorporating the so-called public schools into the genuinely public sector? Will not my right hon. Friend reconsider his rather negative answer?
    Mr. Short: I have just reconstituted the Public Schools Commission and announced the names. The Commission will now start to look at the independent day schools and the direct grant schools. I have certain powers with regard to these schools, and I can ask them for any information which is relevant to those powers. At the moment, there is no case for extending that.
    Sir G. Nabarro: Does the right hon. Gentleman recall that the Workers' Educational Association, submitting its evidence to the Newsom Committee, concluded that it would be utterly impractical in Britain in the foreseeable future to endeavour to abolish the independent fee-paying school?
    Mr. Short: I shall be publishing the first report of the Public Schools Commission shortly, and the House can make up its own mind on that. As I have said, having now been reconstituted, the Commission is looking at the task of integrating the independent day schools and direct grant schools.
    Sir E. Boyle: Could the right hon. Gentleman give a more precise date for when we may expect the report?
    Mr. Short: Offhand, I cannot, but I shall let the right hon. Gentleman know.

    Secondary Education (Science)
    Mr. Gwilym Robertsasked the Secretary of State for Education and Science if he will seek powers to carry out a pro-science propaganda drive in secondary education; and what steps he is now taking to implement the recommendations made in the Dainton Report to counter the shortage of qualified scientists and mathematicians.
    The Minister of State, Department of Education and Science (Mrs. Shirley Williams): I need no new powers. The Department is conducting a recruiting drive for science and mathematics teachers among students. The Schools
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    Council and the universities have established a joint working party to study the Dainton proposals for the sixth form curriculum. The Schools Council is working closely with the Nuffield Foundation in promoting experiments in new science courses, involving, in the secondary field, 230 schools in 86 areas. New in-service courses for science teachers are to be held at three universities this autumn.
    Mr. Roberts: We all accept that my hon. Friend is treating the matter as one of great national urgency, but will she consider further methods by which early interest could be stimulated among boys and girls, particularly girls, in mathematics and science, perhaps by allowing more visits to Government establishments and even by co-operating to a small extent in Government research projects?
    Mrs. Williams: The second part of my hon. Friend's supplementary question raises an interesting idea, which we shall look into. On the first part, we are endeavouring to encourage periods of working experience, not least in scientific establishments and science-based industry, for both boys and girls.
    Mr. Evelyn King: Is it not better that pupils should make the best use of their natural abilities rather than be pressurised into subjects for which they are not suited?
    Mrs. Williams: The hon. Gentleman will appreciate that we have a much lower proportion of girls taking up mathematics and science than almost any other country in the industrialised world. There may well be other causes apart from the desire not to do science or mathematics.

    Kilburn Church of England Primary School
    Mr. Turtonasked the Secretary of State for Education and Science what representations he has received against the proposed closure of Kilburn Church of England Primary School; and whether he will now hold a public inquiry into this matter.
    Miss Bacon: Objections have been received from a number of local government electors, from the school managers, and from the Thirsk Rural District Council. It is not the Department's practice

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    to hold public inquiries on matters of this kind, but we shall consider carefully all the representations we receive before reaching a decision.
    Mr. Turton: In view of the widespread local concern, will the right hon. Lady consider receiving a deputation on this matter?
    Miss Bacon: If I receive a deputation on one side, I shall have to receive deputations from other parties who take an opposite view. The right hon. Gentleman will realise that we act in a quasi-judicial manner here, and I could not say today what the result would be.

    Nursery Education, Portsmouth
    Mr. Juddasked the Secretary of State for Education and Science what is the estimated population of nursery school age in Portsmouth; how many nursery schools there are in the city; and what is the total number of places available within them.
    Miss Bacon: There were about 10,000 children aged over two and under five in Portsmouth in January, 1967, of whom 726 were attending school. Forty-two of these were in the one nursery school and a Further 81, 12 attending part-time, were in four nursery classes.
    Mr. Judd: Does my right hon. Friend agree that that is an indication of the inadequacy of the service? Ought not every encouragement to be given to extend it as rapidly as possible?
    Miss Bacon: Yes, Sir; my hon. Friend will have heard from an Answer to Question No. 4 that we should like to extend it, but we have to have regard to resources and to teacher supply.

    Lady Manners School, Bakewell
    Mr. Scott-Hopkinsasked the Secretary of State for Education and Science (1) whether the necessary capital expenditure authorisation to adapt and enlarge the Lady Manners School at Bakewell, Derbyshire, has been granted; and if he will make a statement;
    (2) if he will now authorise the required expenditure for alterations to Lady Manners Grammar School, Bakewell, in accordance with the agreed plan for comprehensive education submitted to him
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    by the Derbyshire County Council Education Committee.
    Miss Bacon: As the hon. Member will know, no formal decision has yet been reached on the authority's reorganisation proposals for this area. We have not been able to authorise this project to start this year because of the prior claim of projects to meet more urgent needs.
    Mr. Scott-Hopkins: Does the right hon. Lady realise that many of the secondary schools which are involved in the reorganisation have held back applications for grant or applications for authorisation to extend their own schools, such as the secondary school at Tides well, and will she now, having postponed this particular one, look at the question of whether she could give authorisation for improvements in secondary schools which would have come in with the Lady Manners School if she had authorised it?
    Miss Bacon: As the hon. Gentleman knows, we have set aside £7 million in each of the two years to help reorganisation schemes. For this year, 1968–69, we had to consider applications from those whose reorganisation plans were coming into operation this year or very soon. We still have to consider next year's applications, and I promise that I shall consider this case in the context of next year's £7 million.

    Degrees in Architecture (Part-time Courses)
    Mr. Kenneth Lewisasked the Secretary of State for Education and Science whether he will arrange for part-time students in architecture to take their degrees at polytechnics if they so wish.
    Mrs. Shirley Williams: There are at present no part-time courses leading to a degree in architecture. The possibility of arranging such a course in a polytechnic would initially be a matter for the individual institution, no doubt in consultation with the R.I.B.A. There are four proposals for full-time courses which will have to satisfy the requirements of my Department and of the Council for National Academic Awards.
    Mr. Lewis: Cannot the hon. Lady and her Department influence the institution of part-time courses? Full-time courses do not entirely meet the need. There

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    is a shortage of architects—even Ministries are short of architects—and there are many pupils who would like to take up part-time courses. Why should not they have the opportunity?
    Mrs. Williams: I fully share the hon. Gentleman's concern. We are anxious that in polytechnics, as they are designated, part-time advanced courses should be recognised to be on all fours with full-time courses, but since no polytechnics have been finally designated there is at present none on which one could bring pressure.
    Mr. Christopher Price: Will my hon. Friend counteract the policy of the R.I.B.A. to put all schools of architecture into the universities? Is she aware that many of us feel that architecture is just the sort of subject which is most suitable for study in polytechnics?
    Mrs. Williams: I take my hon. Friend's point, but it is fair to say that in schools of architecture which are not part of universities it is still possible to gain exemption from R.I.B.A. examinations or to take external examinations. I shall bear closely in mind the trend to which my hon. Friend has referred, because it is one which goes wider than the subject of architecture alone.

    International Mathematical Olympiad, Moscow
    Mr. G. Campbellasked the Secretary of State for Education and Science why the Government have refused to support the sending of a United Kingdom team of young mathematicians to this year's international competition to be held in Moscow, after the success of this event in Belgrade last year.
    Mr. John Pageasked the Secretary of State for Education and Science whether a decision has now been reached about sending a team of young British mathematicians to take part in the forthcoming Mathematical Olympiad in Moscow.
    Mrs. Shirley Williams: A team sponsored by the Mathematical Association, with financial help from industry and private individuals, will leave for Moscow to take part in the International Mathematical Olympiad on 7th July. I should
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    like to pay tribute to them both for their public-spirited gesture.
    Mr. Campbell: The House will be glad to learn that the Government have changed their mind. What reason can there be for withholding sponsorship for what has now become a very worth-while annual event, which is linked with the British mathematics Olympiad?
    Mrs. Williams: My right hon. Friend's predecessor's view was that the public expenditure involved was not justified in relation to the academic return to the education system. The Government have reserved their position as regards future years and have helped in making arrangements for the present visit.
    Mr. Page: Is the hon. Lady aware of the great stimulus which this competition gives to the groups of our brightest mathematicians scattered about the country, and will she take it that we are grateful to her for the change of heart in the Ministry since she arrived and took an interest in the matter herself?
    Mrs. Williams: It is a great stimulus, but I hope that schools will not, as it were, treat it as a coaching exercise but treat it as a general stimulus to mathematical study.

    Comprehensive Reorganisation
    Mr. R. C. Mitchellasked the Secretary of State for Education and Science how many local education authorities have not yet submitted schemes for comprehensive reorganisation which envisage the ending of all selection at 11, 12 or 13 years of age by 1975 at the latest.
    Mr. Edward Short: Authorities were not asked in Circular 10/65 to estimate when they would be able to implement their long-term plans but only to say what they expected to accomplish in the three years 1967–70. Reorganisation is already complete or virtually complete in 18 areas and, in addition, nearly 30 authorities have plans approved which seem likely to come into operation in at least a substantial part of their area by 1970. An estimate of progress in the following five years, which will depend very much on future building programmes, is not practicable.
    Mr. Mitchell: Does not that Answer indicate that progress towards comprehensive education is rather slower than certain Ministerial statements and Press handouts would indicate?
    Mr. Short: No, Sir. We have made considerable progress. A total of 111 authorities have now had plans approved. I have in my hands another 23 authorities' plans awaiting approval. Only six authorities have so far refused to submit plans.
    Mr. Molloy: Will my right hon. Friend look at the antics of some local authorities which are prepared to smash up comprehensive schools that result from three years' hard work on purely spiteful and doctrinaire, political lines?
    Mr. Short: I very much regret the withdrawing of viable schools that have been approved. But this is largely ceasing to be a political question in many areas. Indeed, some of the best plans have been submitted by Conservative authorities.
    Sir E. Boyle: Did not the right hon. Gentleman put his finger on the essential point when he referred to the other resources that can be made available? Is it not quite clear that to have schemes which are educationally soundly based must be dependent on adequate resources, bearing in mind the priorities in the education service as a whole?
    Mr. Short: That is quite true. It depends on physical resources being made available, and they will be made available over the years. This will take some time, but it is going along quite satisfactorily.

    University Teachers
    Mr. Evelyn Kingasked the Secretary of State for Education and Science if he will increase the grants to the University Grants Committee in order that university teachers of improved calibre may be secured.
    Mr. Edward Short: There is a standing reference of university academic salaries to the National Board for Prices and Incomes. In the meantime, I have no reason to suppose that the universities are not attracting their fair share of the best talent.
    Mr. King: Do not the standards of a minority of university teachers, whether
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    judged in terms of stability or even loyalty to the institution they serve, sometimes fall below what is tolerable? Is not this unfair to students? Will the right hon. Gentleman consider initiating a study of the demand for university teachers and their supply?
    Mr. Short: The hon. Gentleman is asking a quite different question. I answered the Question he put. I think that the arrangements for a permanent review of their salaries are adequate to ensure that we get people of the highest calibre.
    Mr. Ford: Does my right hon. Friend agree that before we can talk about obtaining university teachers of improved calibre we should have settled rates of salaries? Is he aware that the current claim is seriously delayed, and that that is causing great dissatisfaction in the profession?
    Mr. Short: I think that it is an exaggeration to say that there is serious dissatisfaction among university teachers. There may be some dissatisfaction, but I have not heard of any excessive pressure about this. As I said, the salaries are permanently referred to the Prices and Incomes Board.
    Mr. Jennings: As a small section of university staffs have taken an active part in recent student discontent, would the right hon. Gentleman be prepared to institute a full inquiry into the relationships between students, university staff and university authorities?
    Mr. Short: I am not prepared to institute any such inquiry. I take a very poor view of university staffs allying themselves with illegal action. But, having said that, I think that it is high time the universities put their houses in order as well and gave their undergraduates and junior staffs some say in running the universities. If the universities are to maintain the concept of a self-governing body of scholars, they cannot have second-rate citizens in their community. They must give the junior staff and students a share in the decision-making of all their bodies.

    Secondary Education (Selection)
    Mr. Biggs-Davisonasked the Secretary of State for Education and Science what is now his policy towards local education authorities which have not abandoned 11-plus selection for secondary

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    schooling; and whether he will make a statement.
    Mr. Edward Short: The Government's policy remains unchanged.
    Mr. Biggs-Davison: Is the report correct that the Secretary of State cannot tolerate local education systems which do not move towards the abolition of selection? Was that speech correctly reported? If so, does the right hon. Gentleman intend to legislate?
    Mr. Short: I said in a recent speech that the Government could not indefinitely tolerate areas making no move at all towards a comprehensive system, and that is the Government's policy. If the six areas continue to refuse to submit schemes, the Government will seriously have to consider legislation.
    Mr. Christopher Price: Will my right hon. Friend confirm that he is following his predecessor's policies in not allowing any secondary building projects to those authorities which are refusing to go comprehensive?
    Mr. Short: All the secondary building projects we approve are on the basis of comprehensive reorganisation.
    Sir E. Boyle: At a time when the building programme for the current year has effectively been cut by about £30 million, is not it quite unreal to suppose that we can advance more rapidly in a comprehensive direction if we are to have educationally soundly based schemes?
    Mr. Short: The total educational building programme this year is only very slightly less than last year's. There has been no large cut in the overall building programme. Local authorities got approvals for secondary building and improvements, and these must be used on the basis of comprehensive reorganisation.

    Colleges of Education
    Mr. Silvesterasked the Secretary of State for Education and Science what analysis he has made of the value of the third year in colleges of education; and what reforms he proposes to introduce.
    Mrs. Shirley Williams: Initial teacher training is under continuous review in the colleges, the area training organisations, my Department and Her Majesty's
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    Inspectorate, and the students themselves are playing an increasing part.
    I believe the value of the third year is generally appreciated.
    Mr. Silvester: I appreciate that the Ministry will keep a close watch on this year by year. Is not there a case for examining it over the years since it started, to see what success it has had and whether it is satisfactory or whether those resources could be diverted elsewhere to better educational effect?
    Mrs. Williams: The hon. Gentleman must recognise that the third year has added considerably to the quality of teacher training which many of us regard as a very high educational priority. If the hon. Gentleman wants a general inquiry into teacher training, there is a Question on the Order Paper which puts that specific point and which will be answered by my right hon. Friend. If he is concerned about a review of the third year as part of the existing course, I would refer him back to my original Answer. There is a continuous review of the course.
    Mr. Montgomery: Is the Minister satisfied that sufficient time is being spent in colleges of education on teaching practice, which is of enormous value to their students?
    Mrs. Williams: I am sure that the hon. Gentleman is aware of some of the problems of fitting more teaching practice into schools already absorbing almost as much as they can manage. We would favour more block practice and more experiment with longer periods of practice rather than practice broken up into very short periods.

    Independent Nursery Schools (Staff)
    Mr. Silvesterasked the Secretary of State for Education and Science, in view of the restrictions of the public provision of nursery schools, whether he is satisfied that sufficient control exists over the quality of the staff of private nursery schools; and if he will make a statement.
    Miss Bacon: An independent nursery school, if it has at least five children of compulsory school age, must register under Part III of the Education Act,

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    1944. It then becomes subject to inspection by H.M. Inspectors and my right hon. Friend has power under Section 71 of that Act to require the proprietors to employ staff of a quality to ensure efficient and suitable instruction for the children attending the school. If there are less than five children of compulsory school age it may be registrable under the Nurseries and Child Minders Regulation Act, 1948, and is the concern of my right hon. Friend the Minister of Health and of the local health authorities.
    Mr. Silvester: I am grateful to the right hon. Lady for that explanation of the present position. I believe that some people are disconcerted by the way in which the responsibility for this kind of school or nursery—
    Mr. Speaker: Order. The hon. Gentleman must put a question.
    Mr. Silvester: Is the Minister aware that there is some concern that the responsibility for the care of children of this age group is split between the Ministry of Health and the Department of Education and Science? Could she say something about whether there is sufficient liaison between the two, and whether any changes are envisaged?
    Miss Bacon: The hon. Gentleman is quite right but it is in fact split not in two ways but in three, because the Children's Department of the Home Office also has certain responsibilities in this field. But I agree that there is a split responsibility and perhaps the Seebohm Committee Report will help in that respect.

    Corporal Punishment
    Sir C. Osborneasked the Secretary of State for Education and Science if, in view of the recommendations of the recent Conference of Headmasters, he will re-introduce corporal punishment as a deterrent to insubordination and juvenile crime.
    Mr. Edward Short: I have seen reports of the conference referred to by the hon. Member. But they call for no action on my part since I have already made my views clear. I believe that the decision whether or not to administer corporal punishment is one which must be left to the professional judgment of the teacher.
    Sir C. Osborne: Is the right hon. Gentleman aware that most parents will be grateful to him for reversing the policy of his predecessor? Since 400 headmasters at the Plymouth conference unanimously agreed with him, will he not let his permanent officials deviate from this sensible course?
    Mr. Short: I have not reversed anything. Having answered the Question as I have, I must point out that I do not accept the premise that corporal punishment is a deterrent to insubordination and juvenile delinquency. Violence in any form, whether legalised or not, is a cause of delinquency and not a deterrent. However, I think that the decision on this matter is one for the individual teacher.
    Mr. Whitaker: What new scientific evidence has come to light to reverse the Department's policy regarding schools for the handicapped? Will my right hon. Friend send to participants in the Conference, to headmasters of schools for the handicapped and to the hon. Member for Louth (Sir C. Osborne), copies of the Home Office Committee's report on corporal punishment which concluded that it is not a deterrent but, on the contrary, escalates the tradition of violence?
    Mr. Short: There is no new scientific evidence but a new Minister who does not think that it is a good thing to try and tell other people how to do their jobs.

    Universities (Building Projects)
    Mr. Edward M. Taylorasked the Secretary of State for Education and Science what is the value of capital projects in university building which were commenced in 1967; what percentage increase this represents compared with 1966; and what estimate he has made regarding the value of building projects to be commenced in 1968.
    Mrs. Shirley Williams: The university building programme authorised by the Government for the financial year 1967–68 totalled £31·9 million. This represents a reduction of 20 per cent. compared with the 1966–67 programme of £40 million. The building programme authorised for 1968–69 totals £28·7 million.
    Mr. Taylor: In view of these disturbing figures, could the hon. Lady say, in

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    the light of the right hon. Gentleman's reaction to a recent speech, whether it is the policy of the Department that more emphasis should be put on the primary school building programme as opposed to university building?
    Mrs. Williams: I am glad the hon. Gentleman shares my view of the importance of higher education and not that of the right hon. Member for Wolverhampton, South-West (Mr. Powell). Having said that, I add that it is the view of the Government that, at the present time, because of the numbers of children coming forward to the schools, the primary schools must take a full share of the programme and the cuts must therefore fall more heavily on the later stages of education.

    Single School Leaving Date
    Mr. Marksasked the Secretary of State for Education and Science what progress he has made in his discussions on the single school leaving date; and if he will make a statement.
    Mr. Edward Short: As I said in my reply to my hon. Friend's Question on 2nd May, my right hon. Friend the First Secretary of State and Secretary of State for Employment and Productivity is consulting both sides of industry. She hopes to complete her consultations in the very near future.—[Vol. 763; c. 1277.]
    Mr. Marks: I am grateful for that reply. Will my right hon. Friend assure us that it is still the intention to raise the school leaving age in 1973 and that the single school leaving date is regarded as a logical step towards it? There is concern in educational circles that there may be objections to the single date from Government Departments. Will he consult with his right hon. Friend on this matter?
    Mr. Short: As I have said, we are consulting both the T.U.C., our consultations with which have been completed, and the C.B.I., the consultations with which have not been completed. I agree that this is a desirable thing to do as soon as we can. We should think of the secondary school course in terms of the school year and not in terms of a term. The difficulty, of course, lies in putting the whole year's output of leavers onto the labour market at the same time. The
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    last Government introduced a compromise a few years ago and I hope that we can now take a step forward from that.

    University Students (Voluntary Service Overseas)
    Mr. John Leeasked the Secretary of State for Education and Science how many universities in England and Wales have agreed to permit entrants to post pone the taking up of their places in order to enable them to spend periods of time in the Voluntary Service Overseas and other similar organisations after leaving school; how many students awaiting university courses in the current academic year are engaged in this kind of work; and if he will make a statement.
    The Under-Secretary of State for Education and Science (Mr. Denis Howell): This information is not available in my Department, but I understand from Voluntary Service Overseas that universities generally allowed such postponement for V.S.O. service in 1968–69.
    Mr. Lee: I thank my hon. Friend for that encouraging reply. Does not he agree that the interval between school and university is a useful maturing influence for many students and something to be encouraged in as many cases as practicable?
    Mr. Howell: I agree, and the Government hope to give every possible encouragement in that direction.

    Great Dunmow Secondary School
    Mr. Kirkasked the Secretary of State for Education and Science when he will give approval for the necessary extensions at Great Dunmow Secondary School.
    Miss Bacon: We are unable to authorise this school to start this year because of the prior claim of schools to meet more urgent needs. We will be ready to consider it for the 1969–70 programme but I cannot say at this stage what the outcome will be.
    Mr. Kirk: What is more urgent than a school where the pupils are being taught in corridors, staff rooms and an abandoned primary school five miles away?
    Miss Bacon: The hon. Gentleman must look at the whole of the Essex building programme and bear in mind that this year Essex will be building £2 million worth of school building, including 15 primary school projects costing £871,000 and seven secondary school projects costing £1,154,000.

    Teacher Training
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science how many technical colleges provide courses of teacher training under the aegis of the Council for National Academic Awards.
    Mrs. Shirley Williams: None, Sir. There is a C.N.A.A. course at Enfield College directed towards serving teachers, but it leads to a degree in social science not in education.
    Mr. Hill: Would it not be useful if such a course were started and made available as widening one of the routes not only to professional qualifications but to a degree in those qualifications?
    Mrs. Williams: Yes, I think that it would. Five technical colleges have departments of education and all had the option of choosing these courses or going under university institutes of education. All chose the second route, but it is open to them to choose the C.N.A.A. instead.

    School Building Programme
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science when he will now announce details of the revised major school building programme for 1968–69.
    Mr. Edward Short: I did so last week.
    Mr. Hill: Having studied the programme since this Question was put down, may I ask the right hon. Gentleman whether the cuts are not so severe that they will not only jeopardise any question of reorganisation for many local authorities but will probably put in jeopardy the policy of roofs over head? What is his policy to meet that difficulty?
    Mr. Short: I do not think that there is any possibility of any authority in the country not being able to provide roofs overhead. As I have said, the total overall building programme is roughly
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    the same as last year. All that has happened is that the money which was being made available for raising the school leaving age has been deferred.
    Sir E. Boyle: Is it not the case that anyone reading Circular 6/68 imagines that £88 million of new projects will be allocated this year, irrespective of the value of earlier projects under earlier programmes starting before first April? Is not the decision that only £56 million worth of new projects will be allocated this year causing very widespread dismay among local education authorities?
    Mr. Short: The right hon. Gentleman is one of the few people who understand the school building programme, and he understands it well. The total programme this year is £129 million, which is a lot of money. In addition, there is a vast amount of building being done. The inner London building programme, for example, is not £1·5 million, as I saw stated in an evening paper last week, but £5·6 million this year. At the moment, over £12 million of educational building work is being done in London. We have to get this into perspective.
    Mr. Astor: In view of the inadequacy of the major building programme, would not the right hon. Gentleman agree that it is essential that there should be full use of the facilities available at independent schools? Will he not, therefore, reverse recent Government policies which have been making it increasingly difficult for parents to afford school fees?
    Mr. Short: Of course we should like to make use of the facilities of independent schools. If the hon. Gentleman will use his influence with them, we shall be delighted to integrate them into the national system.
    Mr. Pardoe: Those of us who advocated the setting back of the school leaving age programme did so because we wanted the money spent on primary schools. Does the right hon. Gentleman not agree that the money being spent on them nothing like measures up to the recommendations of the Plowden Report?
    Mr. Short: Money spent on education is never anywhere near what the enthusiasts would like to spend, but people involved in education, like everyone else, must learn to live within their income.

    Schools, Liverpool (Timber Frame Construction)
    Mr. Ogdenasked the Secretary of State for Education and Science (1) if he will state the number of primary and secondary schools in the city of Liverpool whose structure consists of more than 50 per cent. timber frame construction; and if he will list the number of serious fires that have occurred in such Liverpool schools in the past five years;
    (2) what representations have been made to him by the city council of Liverpool to assist the replacement of predominantly wooden schools by safer, permanent buildings; and what reply he has made.
    Miss Bacon: I am informed by the local education authority that the frame construction of 18 schools includes substantial amounts of timber. In the past five years there have been two serious fires in school buildings of part timber construction.
    No representations have been made to me about replacing such schools.
    Mr. Ogden: I thank my right hon. Friend for that reply. Does she not think that two serious fires followed by another serious fire are three fires too many? Will she accept my assurance that after yesterday's council meeting her right hon. Friend will be getting representations from the City of Liverpool? Will she undertake to see that they are given urgent consideration?
    Miss Bacon: I will consider anything from the local authority and we all recognise that if a fire starts, it is worse in a timber building. Nevertheless, I understand that there have been three serious fires in non-timber school buildings in Liverpool. I understand that the local authorities are in constant contact with the fire brigade in Liverpool to minimise the effect of such fires.
    Mr. Fortescue: Does not the right hon. Lady consider that in the present financial stringency replacement of these timber buildings by brick or other solid buildings should have absolute priority over every other form of education expenditure in Liverpool?
    Miss Bacon: I would need the advice of the experts before committing myself so far.

    Secondary Reorganisation, Reading
    Mr. Van Straubenzeeasked the Secretary of State for Education and Science what reply he has sent to the proposals for secondary reorganization submitted to him by the County Borough of Reading.
    Miss Bacon: We have said that Reading's plan as a whole is unacceptable because it makes no proposals for changing the character of the two county grammar schools.
    Mr. van Straubenzee: Did the right hon. Lady hear her right hon. Friend say a moment ago that he did not believe in telling other people how to do their own job? Will she tell him that if he interferes for party political reasons, he will have the fight of his life on his hands?
    Miss Bacon: I agree with my right hon. Friend that in details we should not dictate to people what to do. Nevertheless, it is the general policy of the Government to get rid of selection at the age of 11, and we will not endorse any proposals which leave the grammar schools intact.
    Mr. John Lee: Is my right hon. Friend aware that her reply will be widely welcomed on this side of the House? Will she urge my right hon. Friend to show the robustness in these matters which he has already shown in his dealings with other local authorities which have shown a reactionary attitude?

    University Grants Committee (Chairman)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science when he expects to announce the name of the new Chairman of the University Grants Committee.
    Mr. Edward Short: As soon as I can complete the necessary consultations.
    Mr. van Straubenzee: Does the right hon. Gentleman appreciate the widespread appreciation of the work of the retiring chairman of the University

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    Grants Committee which is shared on both sides of the House? Will he confirm that he will not be restricted to the university world in his difficult task of finding a successor?
    Mr. Short: I agree with what the hon. Gentleman has said about Sir John Wolfenden. The answer to his second question is, "Yes".

    Secondary Reorganisation, Norfolk
    Dr. Grayasked the Secretary of State for Education and Science whether he has now received a plan from the Norfolk County Council to reorganise its educational system on comprehensive lines.
    Miss Bacon: No, Sir.
    Dr. Gray: Will my right hon. Friend urge this dilatory council to some action? Is it not high time that it produced some proposals?
    Miss Bacon: I have been in touch with Norfolk County Council and I understand that it is preparing a plan which I hope to receive in the near future.
    Mr. J. E. B. Hill: Is the right hon. Lady aware that in Norfolk no final decisions about a child's education are taken at the age of 11, that there are all sorts of provisions for late developers and that the urgent priority in Norfolk is to do something about primary education? Is she not aware that Norfolk has a very good network of modern schools, but that the primary system is weak?
    Miss Bacon: Of course primary education is very important, but I understand that Norfolk County Council is preparing a pattern of secondary reorganisation with middle schools for children aged 8 to 12 and upper schools for children of 12 to 18. I fail to see how that can interfere with the provision of primary education in Norfolk.

    Sex Education
    Mr. Christopher Priceasked the Secretary of State for Education and Science if, in the light of the recent dismissal of a medical officer at a Birmingham special school, he will send a circular to all local education authorities, giving guidance as to the duties appro-
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    priate to such officers, particularly in the field of sex education.
    Mr. Denis Howell: No, Sir. Curriculum matters, including sex education, are the responsibility of local education authorities and their teachers; new advice through the revised version of my Department's pamphlet on Health Education will be published on the 31st July. The Birmingham Authority published, in 1967, after consultation with its teachers and doctors, a comprehensive booklet, containing a detailed programme on sex education, upon which it urged action by every school in the city.
    Mr. Price: Is my hon. Friend aware that this particular case is scandalous? Does he not agree that in this sort of residential school for subnormal children something special is required of local education authorities to look after this side of the education of children?
    Mr. Howell: I do not agree with the adjective which my hon. Friend has used in this case, although there are some disturbing features in the evidence to which I am giving close attention.

    PUBLIC BODIES AND COMMITTEES OF INQUIRY (INDUSTRIALISTS)
    Mr. Martenasked the Prime Minister whether he will now review the present policy of appointing industrialists to serve on public bodies and committees of inquiry set up by the Government.
    The Prime Minister (Mr. Harold Wilson): No, Sir. We shall continue to appoint the best people available.
    Mr. Marten: Does not the Prime Minister recall that when the Minister of Technology sacked the two directors from Bristol Siddeley from holding appointments on public boards, he told the House that those who held Government appointments must enjoy public confidence? As it is now clear that there is no public confidence in the Government, why are not the whole Government sacked?
    Mr. Barnett: Will the Prime Minister look at the case of Sir Frank Kearton, who appears to be the subject of victimisation for accepting a Government

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    post, and will he in particular consider the very serious charges which Sir Frank has made against institutions in the City, charges which, if true, could prove to be a major scandal? Will my right hon. Friend consider instituting an impartial inquiry rather than leaving it to the City itself?
    The Prime Minister: I do not think that that statement of Sir Frank Kearton at his Press conference is a matter for me. I am aware that he and his colleagues of the I.R.C. have been subject to serious and unfair attacks because of the activities of I.R.C. It is right to say that he and the whole of the I.R.C. Board enjoy the full confidence of my right hon. Friend and myself and that we support the action which they took, even though it was a matter entirely within their own discretion.

    RHODESIA
    Sir G. Nabarroasked the Prime Minister whether he will now make a further statement on reopening negotiations for a Rhodesian settlement.
    Mr. Hastingsasked the Prime Minister whether he will make a further statement on Rhodesia.
    The Prime Minister: I would refer hon. Members to the speeches of my right hon. Friends the Commonwealth Secretary and the Attorney-General in the debate on 17th June.—[Vol. 766, c 728–45, and c. 840–52.]
    Sir G. Nabarro: Now that the third anniversary of the declaration of independence approaches, has the Prime Minister any new offer to make for an approach to Rhodesia to stop the present disastrous drift in our affairs?
    The Prime Minister: On a number of occasions very fair and honourable offers were made. There is no doubt that Mr. Smith would have liked to accept the "Tiger" settlement, but he was driven out of accepting it by extremists in his regime. When one does business with anyone, it is important to know that he will have the power to carry it through.
    Mr. Hastings: When will the Prime Minister answer the specific charges of Mr. Dean Acheson and Dr. von
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    Hofmannstal, not to mention my right hon. and learned Friends, that this matter is ultra vires the United Nations and that in referring it the right hon. Gentleman has twisted Chapter 7 of the Charter?
    The Prime Minister: That does not happen to be the view of the United Nations members, or the legal advisers of every one of the many countries which supported that resolution. I prefer the legal advice of my right hon. and learned Friend the Attorney-General to any views of the hon. Member.
    Mr. John Hynd: Will the Prime Minister inform the House to what extent the delay in coming to a satisfactory conclusion in this matter has been contributed to by the open support given to Mr. Smith and his colleagues from the other side of the House, including the Front Bench?
    The Prime Minister: I think that at various times he had high hopes about this and believed a lot of the things he was told about things in this country. However, it is only fair to say that many right hon. and hon. Gentlemen opposite and many of their Lordships in another place treated his recent attempt to interfere in our internal affairs with contempt.
    Mr. Turton: Has the Prime Minister read the recent report of the meeting between Mr. Smith and Mr. Jonathan Aitken, in which Mr. Smith declares that he is ready to negotiate? Will he now take a fresh initiative to find an honourable settlement to this unfortunate dispute?
    The Prime Minister: A fair and honourable settlement has been offered for a very long time. It has been refused time and time again. The number of times that we have had this sort of statement that has been made to Mr. Jonathan Aitken is almost beyond counting. When one comes to check, there is always an insistence on some form of braking mechanism.
    Mr. Luard: Would my right hon. Friend not agree that, in view of some recent statements by Mr. Smith and other members of his Government about the kind of constitutional settlement that they have in mind, it is essential to allow the

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    recently imposed sanctions of the United Nations to take effect, before there is any further contact whatever with this régime?
    The Prime Minister: I would agree about the effect of sanctions. The House can make this judgment—the Whaley Commission which, with the wildest stretch of the imagination does not begin to fulfil the six principles, which successive Governments have laid down, was at first endorsed by Mr. Smith, and he was driven off, away from acceptance of that by extremists.
    Sir J. Eden: Would the right hon. Gentleman confirm, that, notwithstanding his policy of sanctions, which so far have not yielded any positive results, it is still his purpose, ultimately, to settle the matter by negotiation and that to this end he is doing his best to keep the door open?
    The Prime Minister: The answer to that question is "Yes".
    Mr. Alfred Morris: Can my right hon. Friend say whether any comparison can be drawn between a piece of paper brought back from Salisbury by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) and a piece of paper brought back from Munich by his distinguished predecessor?
    The Prime Minister: That would not in any sense be an accurate or fair comparison. For reasons stated in the House, the terms of the paper brought back by the right hon. Gentleman have not been disclosed. There is a difference of opinion between us—[Interruption.] At the request of the right hon. Gentleman the details have not been disclosed, for reasons we understand. It would be quite unfair to suggest that it represented any degree of appeasement, even though we put a different interpretation on it from that of the right hon. Gentleman.
    Sir D. Walker-Smith: Could the right hon. Gentleman say whether, in the course of a necessarily busy and perhaps worrying existence, he has yet found time to read the speech of Mr. Dean Acheson to the American Bar Association, referred to by my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings)? If he has not, will he undertake to do so?
    The Prime Minister: I have read that speech. I agree with it no more than I
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    agreed with certain other speeches by that very distinguished statesman. I remember a speech he made a few years ago, with which none of us agreed. His latest speech does not represent the legal advice available to this and most other Governments members of the Security Council.
    Mr. Blackburn: Is there anything to prevent Mr. Smith now informing my right hon. Friend that he accepts the "Tiger" conditions?
    The Prime Minister: There is nothing to prevent him doing that. In some of his statements he has moved towards this kind of position, although in others he is a very long way away from it. The problem is that he was ready to accept the "Tiger" conditions a long time ago, and was pushed off by threats that they would treat him as they treated Winston Field.
    Mr. Whitakerasked the Prime Minister whether he will co-ordinate economic policy between the Board of Trade and Foreign Office to take steps to induce compliance by French, Portuguese and South African companies with the United Nations policy on Rhodesia.
    The Prime Minister: Such compliance would be a matter, in the first instance, for the national governments concerned, Sir. The supervision of the implementation of such resolutions is a matter for the Security Council, which is establishing a committee for that purpose.
    Mr. Whitaker: In order to make sanctions effective should not we and the other members of the United Nations tell those individual companies, such as the Compagnie Pétroles Francaise, who are torpedoeing sanctions, that they must choose between trading with us or Mr. Smith?
    The Prime Minister: Individual companies in a number of countries may have a particular view about their trade with Rhodesia, but I do not think there is any ground for complaint against the French Government in this matter. Now that the sanctions which we have been applying have been applied more widely by other countries, and are being rigorously followed by so many countries, we ought to give more time for these countries to come into line with the United Nations resolution.
    Mr. Drayson: Can my right hon. Friend say which other members of the United Nations have passed through their legislative assemblies orders similar to the one passed by this country? What is the position regarding the Federal Republic of Germany, which is not a member of the United Nations? Has it indicated that it intends to abide by the terms of the United Nations resolution?
    The Prime Minister: The answer to the question about Germany is "Yes, Sir". It has given that indication, but not specifically to me. I should want notice of the question—perhaps my right hon. Friend should answer it—about the number of countries which have taken action, although I am not aware of any other countries, having passed a resolution in their elected House, having to face the tomfoolery which we had to face last week.
    Mr. Boston: Does my right hon. Friend agree that it would be no longer appropriate for Britain to take part in such international events as the Lisbon Trade Fair at which Rhodesia was represented? Can he say what joint action is being secured through the United Nations?
    The Prime Minister: I think that it would be better to leave these matters to the working of the United Nations machinery. I have referred to the committee of the Security Council. I am not certain that it would be for us to take unilateral action of the kind referred to by my hon. Friend in relation to Portugal, which is a fellow member of E.F.T.A.
    Sir C. Osborne: Does the Prime Minister really think that the intensification of sanctions against Rhodesia will produce a new moderate opinion in Rhodesia with which we can deal as an alternative to Ian Smith?
    The Prime Minister: I think that there is increasing evidence in Rhodesia that sanctions are having a very serious effect in bringing home the fact that they are now almost totally morally isolated in the entire world, despite their efforts, and indeed their certainty, that they would be a 9-days wonder, and that their action would be recognised by very many other Governments. The hon. Gentleman
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    should be the last to underrate the effects of sanctions, because nobody in Rhodesia is doing so any longer.
    Mr. McNamara: Is my right hon. Friend aware that in a Committee upstairs the director of a de jure British company, de facto operating from South Africa, was asked directly whether, if it were agreed to transfer the company to South Africa, he would give an undertaking that it would not invest in Rhodesia and that this gentleman refused to give such an undertaking? Does not my right hon. Friend think that this House should facilitate such legislation?
    The Prime Minister: It does not sound to me very specific evidence. If there is anything that my hon. Friend thinks should be drawn to the attention of my right hon. Friend, I am sure that he will do that.
    Mr. Heath: The right hon. Gentleman has always made plain that he and the Government would not enter into any economic confrontation with South Africa over the Rhodesian question. Will he confirm that that is still their position?
    The Prime Minister: There is no change in our policy on that matter or on the other matter about which the right hon. Gentleman was concerned—the use of force.
    Mr. Philip Noel-Baker: Would my right hon. Friend instruct the British delegate to ask for a meeting of the Security Council at which the French Government and other Governments can publicly explain what they are doing to restrain the violation of sanctions?
    The Prime Minister: I do not think that there is any need to rush into further meetings of the Security Council. But, as my right hon. Friend will have heard, I have mentioned that the Security Council is establishing a committee for supervising the implementation of these resolutions. Having taken this decision, we should leave it to them and to that committee.
    Mr. Heath: Now that the right hon. Gentleman has confirmed that fact, is it not nauseating humbug and hypocrisy to pretend that the Government's position is based on any sort of morality whatever?
    The Prime Minister: It was the right hon. Gentleman once who described the Rhodesia issue as a moral issue. We have heard from him before the phrase which he has just used—in December, 1966, after "Tiger", when he supported Mr. Smith and his régime in rejecting the "Tiger" negotiations. If there is any question of hypocrisy, it is the way in which the right hon. Gentleman has struggled for two years to get into a position in which he could get the plaudits of the Marquess of Salisbury.

    IMPORT SAVING (DEPARTMENTAL CO-ORDINATION)
    Sir G. Nabarroasked the Prime Minister what further measures he proposes for co-ordination of Departmental activities to strengthen the economy and reduce imports.
    The Prime Minister: There is already full co-ordination between Departments on these matters, Sir.
    Sir G. Nabarro: Does the right hon. Gentleman recall that nearly six months ago, on 16th January, following his statement, I asked him what special steps he would take to assist British farms to make the maximum contribution to import saving, then assessed at £250 million a year? Is he aware that that figure has now been confirmed by the Economic Development Council, and that no progress has been made in the enlargement of farming? What new steps is the right hon. Gentleman taking to implement the proposals?
    The Prime Minister: That is a fair and important question. The Price Review which followed that statement was itself a contribution to encouraging agricultural production, and therefore import saving. As I told the House before, we are studying all the possibilities of import saving, and what changes might be involved in this area. It is a very important problem which is taking a certain amount of time.
    Dr. David Owen: Would my right hon. Friend look again at the system adopted by the Italian Government when facing a rising import bill, of restricting
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    credit and insisting on cash for all imports?
    The Prime Minister: I have heard of this scheme introduced in Italy and I think it has been used by other countries. On the basis of the latest import figures, while they are still giving some concern, my hon. Friend may feel that there is some sign of the import boom moderating.
    Mr. Heath: As the Treasury has said that imports are still, unfortunately, running at a level well above that implied in the Budget forecast, could the Prime Minister arrange for fresh forecasts for the second half of this year and next year to be given to the House?
    The Prime Minister: I have nothing to add to the successive answers given by my right hon. Friend the Chancellor on Tuesday to the right hon. Gentleman and other right hon. Gentlemen who put that question him. I would remind the House, as my right hon. Friend did, that we went far beyond the practice of any previous Government by making that forecast, and it should be given a longer run to see how these figures turn out.
    Mr. Park: In view of the continuing seriousness of the position, would my right hon. Friend consider again the proposals which have been put to him on a number of occasions from this side of the House that there should be some sort of physical control over inessential imports?
    The Prime Minister: This suggestion has been made a number of times, and on an equal number of occasions I have given the reasons why we do not feel that it would be helpful. As I have said more than once in this House, I have probably more experience of running import controls than almost any other hon. Member, and I assure my hon. Friend that they are not quite the panacea he thinks.
    Mr. Sandys: Has not experience shown that the forecasts of this Government are totally valueless?
    The Prime Minister: We expect better than that from the right hon. Gentleman when he gets up. I seem to remember that he was a member of the Government which said in 1964 that the economic position had seldom, if ever, been stronger.
    Mrs. Renée Short: Will my right hon. Friend bear in mind that many of us are very concerned about the continuing rise in the level of imports, particularly as these reduce the valiant efforts being made by large numbers of firms in this country to improve our export position? Will he therefore undertake to look urgently at the proposals that have been made to introduce selective controls of certain imports in order to correct the balance of payments difficulties that we are now facing? Let us not have another situation of "too little and too late".
    The Prime Minister: I agree with my hon. Friend and the Leader of the Opposition, that there is certainly nothing to be complacent about in the rise of imports, and also in the fact that for the past five, six, seven or eight years, imports of manufactured goods particularly have been rising at the rate of something like 20 per cent. per annum. Many of these are goods that we are perfectly capable of manufacturing for ourselves, if the opportunities are taken. Since devaluation there is an incentive, but it is probably too early for it to show very much in the figures, because many of these imports were ordered before devaluation.

    QUESTIONS TO MINISTERS
    Mr. Moonman: On a point of order. In view of the serious concern felt on both sides of the House about the vicious withdrawal from the C.E.R.N. 300 GeV project reflected in Questions Nos. 43, 45, 46, 48, 49 and 53, would you, Mr. Speaker, say whether the Secretary of State for Education and Science has asked your permission to answer those Questions—or does he feel that they are not sufficiently important?
    Mr. Speaker: I cannot comment on the last part of the hon. Gentleman's point of order. The Secretary of State has not asked Mr. Speaker whether he might answer the Questions.
    Mr. Lubbock: Further to that point of order—[Interruption.]
    Mr. Speaker: Order. The point of order is about nuclear science, not nuclear heat.
    Mr. Lubbock: Further to the point of order. Are you aware, Mr. Speaker, that, despite the fact that some of us consider that this is a matter of very great importance, and since Professor Flowers made an announcement at Geneva last week of the Government's policy which has not been divulged to the House by means of a statement—
    Mr. Speaker: Order. The hon. Gentleman cannot put the supplementary question which he would have put if the Questions had been answered. The Secretary of State for Education and Science has not asked Mr. Speaker whether the Questons might be answered. He can do nothing about that. The hon. Gentleman must take up the matter with the Secretary of State.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next week will be as follows:—
MONDAY, 1ST JULY—Private Members' Motions, until 7 o'clock.
Afterwards, progress on the remaining stages of the Finance Bill.
TUESDAY, 2ND JULY and WEDNESDAY, 3RD JULY—Progress on the remaining stages of the Finance Bill.
THURSDAY, 4TH JULY—Completion of the remaining stages of the Finance Bill.
FRIDAY, 5TH JULY—Remaining stages of the International Monetary Fund Bill, the Overseas Aid Bill, the Swaziland Independence Bill, and the Civil Aviation Bill (Lords).
Motion relating to the Motor Vehicles (International Circulation) (Amendment) Order.
MONDAY, 8TH JULY—Supply (24th Allotted Day):
Debate on a topic to be announced later.
Mr. Heath: Would the right hon. Gentleman kindly tell us what arrangements he is making to carry out the undertaking of the Chancellor of the Exchequer that there would be a separate debate on the national lottery Clause in the Finance Bill, with the House being given the opportunity of a free vote? Secondly, can he say when the Defence White Paper will be published? Thirdly, can he give an assurance that there will be a debate on the Donovan Report before the House rises for the Summer Recess? Finally, is he aware that it has become very urgent indeed that a full statement should be made to the House about the Government's negotiations over the Falkland Islands, particularly in view of the Minister of State's recent statements?
Mr. Peart: First, I understand that it would probably meet the convenience of the House if we were to have a separate debate on the national lottery Clause in the Finance Bill on Monday evening. I am therefore arranging for the necessary Motion to be tabled to take the Bill in this order. We would all hope that there would be a free vote. I note what the right hon. Gentleman said about the Donovan Report. I cannot be specific about promising time for a debate on it. Hon. Members must have time to study the Report very carefully. I also note what he said about the Falkland Islands. I will convey his view to my right hon. Friend. The publication of the Defence White Paper is expected very soon—next week.
Several Hon. Members rose—
Mr. Speaker: Order. I remind hon. Members that there is a lot of business ahead of us today.
Sir G. de Freitas: In view of the evidence given by the Clerk of the House that the Treasury is increasingly interfering with the administration and staffing of the House, when will my right hon. Friend provide time for us to debate this encroachment by the Executive?
Mr. Peart: As my right hon. Friend appreciates, this is a matter for the Treasury—
Hon. Members: And the House.
Mr. Speaker: Order.
Mr. Peart: I hope that right hon. and hon. Members will listen to my reply. I certainly understand the problem, because it affects the working of our Committees. Perhaps my right hon. Friend will have a word with me afterwards. I am afraid I cannot find time next week.
Mr. Heath: I am sure that the Leader of the House realises that this is an important matter primarily for the House itself in relationship to the Treasury and the Government. It is not enough, therefore, for us to be told that the right hon. Gentleman will have a word with his right hon. Friend. We would like a more satisfactory answer. When will the House be able to deal with the matter?
Mr. Peart: I can specifically deal with this matter in the all-party Services Committee of which I am Chairman. I think that would be a suitable body to discuss it.
Sir A. V. Harvey: Can the Leader of the House give us an assurance that, if not next week, certainly before the House rises for the Summer Recess, we will have an opportunity to debate the economy of this country so that we know the real state of affairs?
Mr. Peart: I cannot find time next week. I am sorry.
Mr. Barnett: In view of the serious implications of the American Company's bid for Gallaghers, which would give it 27 per cent. of the British tobacco market, will my right hon. Friend consider asking his right hon. Friend the President of the Board of Trade to make a statement and at least confirm that it will automatically go before the Monopolies Commission under the Act? Will he make a statement or at least allow the House to debate it before anything irretrievable is done?
Mr. Peart: I do not think that I can find time next week, but I will convey the views of my hon. Friend to the Minister concerned.
Mr. Montgomery: In view of the great alarm shown by local education authorities because of the cuts in school building, can the Leader of the House give us any hope of a debate on this matter in the near future?
Mr. Peart: Not next week.
Mrs. Renée Short: Is my right hon. Friend aware that many hon. Members look forward with a feeling of impending indigestion to another undiluted week of Government stodge? Is my right hon. Friend aware that there are many important reports continually coming out? There is the Report on the Trade Unions, the Fulton Report—
Mr. Speaker: Order. The hon. Lady must ask for a debate on only one of them.
Mrs. Short: And there is the Report on Prisons. When are we to have time to discuss these important reports?
Mr. Peart: I am afraid not next week. I would have thought that the Finance Bill was very important.
Mr. Hirst: The Leader of the House has been asked a series of questions concerning the desire of this House to know more about our economic situation. I put it to the Leader of the House that it is not good enough to stonewall that sort of question with the traditional answer "Not next week". A greater assurance is needed in this situation.
Mr. Peart: The hon. Gentleman will remember that next week we are debating the Finance Bill. No doubt he will make a contribution.
Mr. C. Pannell: Reverting to the matter about which the Clerk of the House has complained, is the Leader of the House aware that we are concerned with six Acts of Parliament between 1812 and 1849 designed to secure that this House is not under any Treasury veto in the conduct of its affairs? A report on this matter is very urgent indeed when the chief official of the House takes it upon himself, probably rightly, to lecture the House and the Executive about what is due constitutionally. Might I say that this matter was referred to—
Mr. Speaker: Order. The right hon. Member must ask for time for a debate on the matter he wishes to raise.
Mr. Pannell: As this appeared in the Stokes Report of 1953 in almost the same terms as the Clerk set down, is not the matter over-ripe for consideration?
Mr. Peart: I think I gave an answer to my right hon. Friend. I hope that we shall have a discussion under that procedure.
Mr. Thorpe: If the Leader of the House cannot give time for a debate on this vital issue and as some hon. Members think that the Chancellor is going beyond the scope of his powers, will the right hon. Gentleman indicate that the House of Commons as a whole would like the Chancellor to come down next week and make a statement explaining his view on the matter?
Mr. Peart: I hope that the Leader of the Liberal Party appreciates that there is a special committee where matters of this kind can be discussed. I will certainly consider this and I will make—
Dame Irene Ward: Nonsense.
Mr. Peart: I hope that the hon. Member for Tynemouth (Dame Irene Ward) will restrain herself.
Dame Irene Ward: No, I will not.
Mr. Peart: Then I hope, if she wishes to ask a question, that she will ask it. I will certainly convey these views to my right hon. Friend.
Mr. Heath: Would it perhaps meet the present situation if the Leader of the House gave an undertaking that, when the all-party Services Committee has discussed the matter, which ought to be the first stage, the Committee will report to the House whether it is satisfied and, if it is not, that the House can then debate the matter and pass its own resolution about what should happen?
Mr. Peart: Certainly I shall follow that procedure.
Mr. Winnick: Will my right hon. Friend give a promise that next week there will be a further statement on the position of the Nigerian civil war, and particularly the steps being taken by the British Government to send emergency food supplies to the millions of people starving in Biafra?
Mr. Peart: This is an important matter, and my right hon. Friend has made a recent statement about it.
Dame Irene Ward: If the House gives up part of its time for discussion of Third

821
Reading of the Finance Bill, will the Chancellor come down and tell us all about the economic position? This would be a good quid pro quo. Can the Leader of the House arrange it?
Mr. Peart: Much as I sometimes like the hon. Lady, I could not accede to her request.
Mr. Speaker: Order. I again remind the House that we have a heavy load of business ahead of us today.
Mr. Wellbeloved: Has my right hon. Friend noted Early Day Motion No. 348, standing in the names of a number of my hon. Friends and myself?
[That this House, mindful of the arguments advanced in the debate on the Southern Rhodesia Order that Mr. Smith was prepared to reach a settlement with Her Majesty's Government based on the six principles, calls upon the right hon. Gentleman the Member for Kinross and West Perthshire to disclose to Parliament the details of Mr. Smith's proposals in order that Parliament may give due consideration to them before the order is again laid before the House; and, recognising the claim that the talks held between the right hon. Gentleman and Mr. Smith are confidential, is of the opinion that if the right hon. Gentleman so requests his statement on Mr. Smith's proposals should be made to the House in the absence of strangers.]
Will the Leader of the House remind his right hon. Friends in the Government that, before negotiations are recommenced with Mr. Smith, there should be negotiations with this House? Will my right hon. Friend ensure that, before the Southern Rhodesia Order comes before us again, there is no opportunity for right hon. and hon. Members to be convinced to oppose mandatory sanctions without knowing Mr. Smith's latest proposals?
Mr. Peart: I am aware of Early Day Motion No. 348 standing in the names of my hon. Friend and some of his hon. Friends, but I am afraid there is no time next week to debate this matter.
Mr. Hugh Fraser: Further to the question asked by the hon. Member for Croy-don, South (Mr. Winnick), will the right hon. Gentleman arrange for a statement about the Biafran situation to be made as early as possible, especially in view of
822
the report in the Sun this morning that aircraft are urgently needed, which Oxfam reports elsewhere confirm as being true?
Mr. Peart: Certainly. As soon as my right hon. Friend the Commonwealth Secretary feels that it is necessary to make a statement he will do so, and I will report this to the House.
Mr. Palmer: Will the Leader of the House consider giving time for a debate in the House on the important decision of the Government not to support the European nuclear accelerator project?
Mr. Peart: Not next week, I am afraid.
Sir F. Bennett: The Leader of the House will be aware that the Gibraltar constitutional talks, which have been promised month by month since last September, are still delayed. We were given an assurance recently that they would definitely be held in July and that we would be told when and where they would be held. Can we expect a statement on this matter next week, because we shall then be in July?
Mr. Peart: I will certainly convey the views of the hon. Gentleman to my right hon. Friend.
Mr. Booth: Will the Leader of the House indicate when we will have an opportunity to debate the Prayer against the Prices and Incomes (Temporary Continuation of Standstill) (No. 2) Order?
Mr. Peart: I cannot give a specific time.
Mr. Biffen: Can the Leader of the House confirm that when the Department of Employment and Productivity has concluded its investigation into the salary of Mr. Jocelyn Hambro it will be the subject of an oral statement in this House, and can he indicate whether he would expect such an oral statement next week?
Mr. Peart: I cannot promise that definitely, but I will convey the views of the hon. Gentleman to my right hon. Friend.
Mr. James Johnson: In view of the parlous state of the deep sea fishing industry and the helpful Answers that we had yesterday at Question Time, will the

823
Leader of the House use his good offices with the Chancellor to see whether we can get an answer to the problems in that industry, perhaps some time next week?
Mr. Peart: I think a little later there may be an opportunity to discuss the matter, but not next week.
Mr. Goodhart: Is there any chance that the Government will find extra time for the remaining stages of the Sunday Entertainments Bill?
Mr. Pavitt: As the Government's decision will emasculate the recommendations designed to reduce the cost of prescriptions to the Health Service, may we have an early debate on the Sainsbury Report, and if not next week will my right hon. Friend consider discussinig with the Minister of Health ways and means of reducing the intense frustration felt by many hon. Members on this side of the House when insult is added to injury when this decision is added to the prescription charges?
Mr. Peart: I shall convey my hon. Friend's views to the Minister of Health.
Mr. Dudley Smith: In view of the fact that, regrettably but understandably, Motion No. 3 due to be debated next Monday evening is unlikely to be reached—it deals with the need to reform the present state of Parliament—will the right hon. Gentleman consider implementing the half-promise he made to me a few weeks ago that we should have an urgent and vital debate on this subject?
Mr. Peart: I cannot anticipate how the debate will go on Private Members' Motions. We shall have to wait and see.
Mr. Fortescue: If we cannot have a debate next week on our withdrawal from the nuclear accelerator project, may we have a statement from the Minister
824
responsible explaining why we have withdrawn?
Mr. Peart: There are Written Questions to the Minister, and no doubt there will be Written Answers.
Dr. Broughton: May I draw my right hon. Friend's attention to Early Day Motion No. 335, which seeks to remove the imposition of prescription charges for women aged 60 and over, and which is supported by many hon. Members on both sides of the House.
[That this House, bearing in mind that the age of 60 years has been accepted as the retirement age for women for purposes of social security benefits, is of the opinion that all women aged 60 years and over should be exempt from payment of National Health Service prescription charges.]
Can my right hon. Friend say when the Minister of Health will be able to come to the House to announce the granting of this concession? Failing that, will my right hon. Friend say on which day next week the Motion may be debated?
Mr. Peart: I know that my hon. Friend feels strongly about this matter, and I shall convey his views to my right hon. Friend.
Mr. David Steel: Is the right hon Gentleman aware that those who represent constituencies affected by the Government's proposals for the S.E.T. refund to hotels are alarmed that Schedule 17 of the Finance Bill was not reached in Committee or on recommittal? Will the right hon. Gentleman undertake to protect the interests of such Members by ensuring that the Schedule is reached on Report?
Mr. Peart: I cannot be specific about that. If the hon. Gentleman will have a word with me, perhaps we can have a word with the Treasury Ministers concerned.

ORDERS OF THE DAY

  PRICES AND INCOMES BILL
  As amended (in the Standing Committee), further considered.
  3.59 p.m.
  Mr. Speaker: We now go on from where we left off at about nine o'clock this morning.

  Schedule 2
  DEFERMENT OF WAGES REGULATION ORDERS AND AGRICULTURAL WAGES ORDERS
  Mr. Ray Mawby: I beg to move Amendment No. 106, in page 16, line 36, leave out 'by virtue of this Schedule' and insert 'by order'.
  Mr. Speaker: With that Amendment I have suggested that we take the following: Amendment No. 109, in page 17, line 5, after 'may', insert 'by order'.
  Amendment No. 110, in page 17, line 15, after 'may', insert' by order'.
  Mr. Mawby: I do not think that it will take much time to make the main point of the Amendment. The House will understand that we are dealing with the Minister's power not to put into effect an Order made by a wages council. These three Amendments seek to ensure that the Minister is not automatically given that power by virtue of the Schedule, but can take that action only by means of an Order.
  It is not necessary to go into great detail about the wages boards. It is sufficient to say that they are in a peculiar position vis-à-vis any other other negotiating machinery. The purpose of setting up these boards is laid down in the earlier Act. They are set up when it is apparent that there is no other way in which people engaged in these trades or professions can so arrange their affairs, by joining organisations and so on, that they are able to indulge in the normal system of wage and salary negotiations.
  We have heard a good deal from the Government about their intention to look after the lower paid worker. It is therefore obvious that we should pay great attention to any decision by a wages council or wages board. Under paragraph 2 of the Schedule the Minister can
  826
  hold up for three months any decision made by a wages council, and following that there can be a further series of delays if the case is referred to the Prices and Incomes Board. One is therefore liable to indulge in sawing sawdust, because another body is being asked to reconsider issues which have already been decided by one statutory body. I make no complaint about that. My only point is that in these special cases we should not allow the Minister, by virtue of the Schedule, to refuse to carry out the decision of a wages council.
  By inserting the words "by order" the Amendment seeks to make it clear that we are dealing with a special case, and if the Minister believes that a decision by a wages council should be resisted, or at least held up under the terms of the Bill, she should not be allowed to make that decision until the House has been able to discuss her reasons for doing so.
  We are accustomed to dealing with orders under both the affirmative and the negative procedure. Admittedly we often discuss Orders late at night, but such occasions do at least give hon. Members an opportunity of discussing what the Government intend to do, and listening to the Government's reasons for their proposals. I suggest that the Minister should not have power to hold up a wages council order for three months, or perhaps even longer, if she decides to send it to the Prices and Incomes Board.
  Mr. Albert Booth: Will the hon. Gentleman distinguish between the affirmative and negative procedure, because it is only in one or two cases that we have an automatic right to debate the Minister's decision?
  Mr. Mawby: I do not want to go into detail, but we have had long discussions in the past, and no doubt shall have many more in future, about the basic difference between the affirmative Resolution procedure under which the Government put forward a proposal and we debate it, and the negative Resolution procedure under which an Order is laid on the Table, and if it is one of many, hon. Members have to decide which one to pray against within the number of praying days that are allowed to us.
  I should prefer the affirmative Resolution procedure to be adopted, but the

  827
  Amendment does not go as far as that. It proposes to leave it to the discretion of the Minister to decide whether the Order should be introduced under the affirmative or negative Resolution procedure, but at least it will be laid down clearly that if the Minister considers that a wages council Order should be sujected to a standstill she will have to bring in an Order and the House will be able to discuss the pros and cons of her decision.
  As I said earlier, these are special cases which come under a special provision. It may be that in future the recommendation in the Donovan Commission Report to change the basic Act so that wages councils are set up in a different way will be implemented, but the fact is that wages councils exist. They exist for certain purposes, and therefore an order issued by them is a special case. All we seek to do is to ensure that the Minister cannot hold up every wages council order, but only when she believes it to be necessary, and where she is prepared to give her reasons and justify her actions before the House.
  4.0 p.m.
  The Under-Secretary of State for Employment and Productivity (Mr. Harold Walker): The hon. Member for Totnes (Mr. Mawby) has stressed that the purpose of the Amendment is primarily to enable Parliament to scrutinise the actions of my right hon. Friend. I draw his attention to the effect rather than the intention of the Amendment. The effect would be to impose on my right hon. Friend a duty to stop herself doing something, which seems, on the fact of it, a slightly absurd and unnecessary process.
  He described the intention as being to submit the actions of my right hon. Friend to the scrutiny of Parliament, and he said that he found it difficult to understand why she should find it necessary to re-scrutinise something that had already been the subject of careful consideration by a statutory body. The statutory body will reach its decisions and conclusions by entirely different criteria from those contained in the Schedule. It might properly concern itself with carrying out the statutory functions imposed upon it by the wages council, which are not necessarily concerned with prices and incomes. My right hon. Friend will want to
  828
  scrutinise its proposals against the criteria contained in paragraph 34 of the White Paper.
  One can appreciate and sympathise with his intentions, but the criteria are quite clearly laid down. There are within the framework of the Schedule pretty stringent restrictions upon the actions of my right hon. Friend. In any case, the Schedule makes it quite clear that this is not something that she must carry out as a duty necessarily imposed upon her, but something which she may do. I stress the word "may".
  The Amendment would not have the effect the hon. Member is seeking to achieve. He has said that he is not trying to impose the need to pursue the affirmative procedures of the House but, in the terms in which it is drawn, neither does the Amendment impose upon my right hon. Friend the need to expose her decisions to the negative procedures of the House; and it would be necessary to write this into the Amendment. As drafted the Amendment would not invoke the negative procedures of the House, and would not have the effect which he seeks to achieve, and for that reason the Amendment is unacceptable.
  Mr. Robert Carr (Mitcham): The hon. Gentleman concluded his speech by claiming that my hon. Friends and myself have not achieved in our Amendment the purpose which we seek to achieve. While I would accept that as an argument absolute for not accepting these particular words, I would not accept that it is an argument against the purpose. The hon. Gentleman will know that time to consider and work on Amendments in detail has not been exactly unlimited. I hoped that we could decide this matter on the purpose, which my hon. Friend made quite clear, and that the hon. Gentleman would have looked a little more carefully at the purpose. Had he shown more sympathy to the purpose, we would naturally take his advice about the imperfection of the Amendment and would have been happy for him to have undertaken to find the right way to achieve our purpose when the Bill goes to another place. We must press our purpose.
  The hon. Gentleman said that the effect of this, if the mechanism were right, would be to cause his right hon. Friend

  829
  to do something to stop herself from doing something—I think those were his words. Many of us think that anything which makes his right hon. Friend pause and think before she speaks would be a good thing in itself on any subject, but this matter is a special one. Wages council proposals are of their own kind. They are not like other wage settlements. When I say wages council proposals, the House will understand that I am including the proposals of the Agricultural Wages Board. The wages councils are of their own kind, and indeed the right hon. Lady in Committee made the point, not in those words, that they were different from other wage settlements and they must be treated specially. We feel very strongly that they ought not to be brought within the purview of the statutory powers of the Bill, but if they are to be, then at least they should be treated specially.
  It must be remembered that wages councils contain independent members and have an independent chairman. We therefore have some reason to assume that the results of the deliberations of a wages council are not the results of purely selfish considerations within the industry. I do not use the word "selfish in a pejorative sense. The selfish considerations within the industry have been guided by and subjected to the experience, knowledge and responsibility of the independent chairman and other independent members. As I suggested earlier this morning—or it may have been last night—if the Government are in earnest about trying to achieve a voluntary incomes policy, there is a peculiar chance for wages councils to inject the public interest consideration at the formative stage of the proposals. Therefore, when the proposals come forward, they deserve to be treated more specially, more tenderly and with more formality than would be the case with any other proposals. I do not think it is unreasonable to say, if the hon. Lady feels that she must take action against a wages council proposal, first that it shall be a very rare and special event, and second, she should submit to a special process for doing so, and that is basically what we ask in the amendment.
  I remind the House once again, although I scarcely think it is necessary, that the basic purpose of a wages council is to deal with workers who, although
  830
  they may include among their number people who have reasonably high average earnings, also undoubtedly include among their number some of the lowest paid workers in the country. That is another reason for special consideration and special method.
  While I could not begin to argue against the hon. Gentleman in the matter of the Amendment being technically wrong and not achieving the purpose it sets out to achieve, I ask him to think again about the purpose. If he will not, I am afraid that I must ask my hon. and right hon. Friends to divide on policy.
  Mr. Raymond Gower: I would like to press the Under-Secretary on the grounds which have been put forward by my right hon. Friend. I am astonished that the Under-Secretary should have taken such a pettifogging legalistic objection to the wording of the Amendment. All that the hon. Gentleman is saying is that the word "order" does not have the effect that my hon. Friend thought and that we should have referred to either the affirmative or negative procedure. That is a very narrow, pettifogging objection to the purpose of the Amendment.
  Secondly, he is saying, in effect, that it should be left to the Minister to decide when she will object to the finding of a wages council and that she should make up her mind without even the scrutiny of this House.
  For the reasons that my right hon. Friend has just given about the special category of these proposals, I submit that it is reasonable that at least this House should have an opportuntiy of expressing an opinion before the Minister interferes with a decision arrived at after careful consideration.
  Mr. David Howell: I want to make only two points about the Amendment. First, it is a little bizarre, but I suppose not surprising that, on the very day after the Government so gladly accepted the Fulton Committee's Report, with its heavy emphasis on the need for accountability to this House, once again the Government should be running hard in the opposite direction under the cover of Ministerial discretion. One is accustomed to the Government's words and

  831
  deeds diverging at a geometric rate, but this breaks new records.
  Secondly, the Under-Secretary said that we did not need the Amendment because the criteria were quite clear. However, with respect to him, the criteria are not clear in the case of wages councils. That became evident in Committee and, if further confirmation is needed, it can be found in the Donovan Report which makes clear that there are great difficulties in hiving off those parts of a wages council recommendation applying to higher paid workers from those parts applying to lower paid workers.
  In Committee, great difficulty was found in trying to describe the almost byzantine procedure of deciding whether a wages council recommendation applied to the lowest paid, the lower paid and the higher paid workers, whether there might be consequential increases in pay in other spheres, and, if so, whether they should be given at the same time or at a later date, and how one should judge the consequential results of a wages award. Those are very obscure judgments, and they reinforce the need for this kind of decision to be exposed to debate. I am sorry that the Under-Secretary takes the attitude that he does.
  Mr. Ian Mikardo: If the intention of the right hon. Member for Mitcham (Mr. R. Carr) is carried out and the House divides on this Amendment, I am afraid that I shall not be able to support him and his hon. Friends. As my hon. Friend the Under-Secretary has just said, the Amendment does not do what a great many of us on both sides of the House would like to see. However, I would add that I have come to that conclusion with the utmost reluctance, because I think that the powers given to the Minister for unilateral action, not only without accountability but even without explanation, are larger than I am happy to see even as good a Minister as my right hon. Friend exercising in respect of the awards of wages councils and agricultural wages boards. Therefore, I shall have to find a way out of this quandary by not expressing a vote one way or the other.
  4.15 p.m.
  Sir Douglas Glover: I would like an assurance from the Under-
  832
  secretary that he will ask his right hon. Friend to have another look at this Amendment, because I believe that it is a matter of great importance. Everyone who has contributed to the debate has been very unhappy with the hon. Gentleman's reply, including his hon. Friend the Member for Poplar (Mr. Mikardo), who, while I do not agree with him about the Amendment, takes the view that there is a matter of principle involved here. I am sure that he would like the Minister to bring an affirmative Resolution to the House so that a matter of this sort can be debated.
  One point which has been touched on but not nearly strongly enough is the reaction of members of wages councils and agricultural wages boards. If their decisions are overridden by the right hon. Lady and her successors, unless there is an opportunity of debate and explanation in public of the reasons why, the right hon. Lady and her successors will find it increasingly difficult to man these bodies. Speaking for myself, if I were chairman or a member of one of them and our decision was overridden, as it were in secret, and there was no debate in Parliament and no opportunity for a public explanation of the reasons why, the decision had been overridden, I would consider—
  Mr. Speaker: Order. The hon. Gentleman must not widen the debate. It is not a question of overriding but of postponing.
  Sir D. Glover: Yes, Mr. Speaker. But I have to explain why I think that there ought to be an order and that the Minister should work on an order. If the Minister is able to do it, as it were in secret, a great deal of alarm and despondency will be created, and Ministers will find it difficult to persuade people of the right calibre to chair these bodies.
  I think that my right hon. and hon. Friends have been unduly modest in suggesting an order. I would have preferred an affirmative Order. At any rate, the House should have an opportunity of choosing to debate such a decision on a negative order. We are told by the Under-Secretary that he cannot accept the Amendment. If that is the position, is he willing to ask his right hon. Friend whether she will not put in machinery to provide for a debate on

  833
  the Floor of the House in the event of a wages council or board decision being overridden, so that the general public can know on what basis that action has been taken?
  Mr. Harold Walker: Mr. Speaker, with the leave of the House—
  Mr. Speaker: Order. The hon. Gentleman does not need the leave of the House to reply. Mr. Walker.
  Mr. Walker: One or two points have been made which deserve reply. First, it should not be overlooked that in respect of rates of pay, it is the duty of wages councils to establish statutory minima. That does not preclude negotiations within the ordinary framework of industrial bargaining for increases over and above the minima. That is something which happens all the time, and it falls within the normal pattern of the earlier features of this legislation. No one knows that better than my hon. Friend the Member for Poplar (Mr. Mikardo) who is currently in discussion with some people in his constituency in respect of increases over and above the minimum provided by the wages council in the industry concerned.
  The right hon. Member for Mitcham (Mr. R. Carr) said that it was unlikely that a wages council would pursue selfish ends because such councils are responsible bodies with independent members. I agree entirely, but I must point out that it is the normal practice on wages councils for the independent members only to intervene and be involved in the discussions when the two sides disagree. In an industry which is going through a boom period, it is not beyond the bounds of possibility for the two sides to come to some mutually advantageous agreement which none the less may be outside the criteria of the incomes policy. That is why my right hon. Friend is seeking these powers—
  Mr. R. Carr: I am aware of the tradition, which I do not think is an established statutory principle, that an independent Member should behave in that way, but the hon. Gentleman will re-
  member that, about 10 years ago and less, when the Conservative Government had to deal with these matters, and in spite of passionate opposition from his hon. Friends at the time, we thought it preferable to give some guidance to the independent members about the public interest. Even this, in the best of all possible worlds, we would prefer not to do, but I still submit that to have a voluntary incomes policy that way is better than the way which the Government are trying to do it.
  Mr. Walker: I do not challenge what the right hon. Gentleman says, but I was going to refer to the Wages Council Act of 1959, to which I presume he is referring, which itself imposed on the Minister a responsibility to scrutinise the wages councils' proposals. There is written into that Act a duty on the councils to submit their proposals, before they can be given statutory effect, to the Minister, who can refer them back for further consideration, admittedly with other criteria in mind—but they have to be referred to the Minister who has the power to refer them back and there is no provision for the House to scrutinise that decision. If it was right then, surely it is equally right now. The party opposite did not decide to do it then: I draw this to the attention of my hon. Friend the Member for Poplar (Mr. Mikardo), who sees an entirely different situation where no difference exists. That is why I ask the House to reject the Amendment.
  Mr. Mikardo: Before my hon. Friend sits down, may I put it to him that, in his last observations, he was on a false point? There is a difference between past practice and now, since the powers given to the Minister under this Bill are hugely greater than those under the Wages Council Act. It is because they are so much greater that it seems that she should be more accountable for the exercise of those greater powers than she would have been for the exercise of the lesser.
  Question put, That the Amendment be made:—
  The House divided: Ayes 233, Noes 271.

  Division No. 253.]

  AYES

  [4.24 p.m.

  Alison, Michael (Barkston Ash)

  Awdry, Daniel

  Batsford, Brian

  Allason, James (Hemel Hempstead)

  Baker, Kenneth (Acton)

  Beamish, Col. Sir Tufton

  Astor, John

  Baker, W. H. K. (Banff)

  Bell, Ronald

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

  Balrriel, Lord

  Bennett, Sir Frederic (Torquay)

  Bennett, Dr. Reginald (Cos. & Fhm)

  Harrison, Brian (Malcon)

  Orr-Ewing, Sir Ian

  Berry, Hn. Anthony

  Harrison, Col. Sir Harwood (Eye)

  Osborn, John (HalIam)

  Biffen, John

  Harvey, Sir Arthur Vere

  Osborne, Sir Cyril (Louth)

  Biggs-Davison, John

  Hastings. Stephen

  Page, Graham (Crosby)

  Birch, Rt. Hn. Nigel

  Hawkins, Paul

  Page, John (Harrow, W.)

  Black, Sir Cyril

  Heath, Rt. Hn. Edward

  Pearson, Sir Frank (Clitheroe)

  Blaker, Peter

  Higgins, Terence L.

  Peel, John

  Boardman, Tom (Leicester, S.W.)

  Hiley, Joseph

  Peyton, John

  Bottom, Sir Clive

  Hill, J. E. B.

  Pike, Miss Mervyn

  Boyle, lit. Hn. Sir Edward

  Hirst, Geoffrey

  Pink, R. Bonner

  Braine, Bernard

  Hogg, Rt. Hn. Quintin

  Pounder, Rafton

  Brewis John

  Holland, Philip

  Powell, Rt. Hn. J. Enoch

  Brinton, Sir Tatton

  Hooson, Emlyn

  Price, David (Eastleigh)

  Brown, Sir Edward (Bath)

  Hordern, Peter

  Prior, J. M. L.

  Bruce-Gardyne, J.

  Hornby, Richard

  Pym, Francis

  Buttus Sir Eric

  Howell, David (Guildford)

  Quennell, Miss J. M.

  Burden F. A.

  Hunt, John

  Ramsden, Rt. Hn. James

  Campbell B (Oldham, W.)

  Hutchison, Michael Clark

  Rawlinson, Rt. Hn. Sir Peter

  Campbell, Gordon (Moray & Nairn)

  Iremonger, T. L.

  Renton, Rt. Hn. Sir David

  Carr Rt. Hn. Robert

  Irvine, Bryant Godman (Rye)

  Rhys Williams, Sir Brandon

  Carv' Sir Robert

  Jenkin, Patrick (Woodford)

  Ridley, Hn. Nicholas

  Chichester Clark R.

  Jennings, J. C. (Burton)

  Ridsdale, Julian

  Cegg, Walter,R.

  Johnson Smith, G. (E. Grinstead)

  Rippon, Rt. Hn. Geoffrey

  Cooke, Robert

  Johnston, Russell (Inverness)

  Rodgers, Sir John (Sevenoaks)

  Cooper-Key, Sir Neill

  Jones, Arthur (Northants, S.)

  Rossi, Hugh (Hornsey)

  Corfield, F. V.

  JoP"ng, MiChael

  RuS8cll, Sir Ronald

  Costain, A.p.

  Joseph, Rt. Hn. Sir Keith

  St. John-Stevas, Norman

  Craddock, Sir Beresford (Spelthorne)

  Kaberry, Sir Donald

  Sandys, Rt. Hn. D.

  Kerby, Capt. Henry

  Scott, Nicholas

  Crosthwaite-Eyre, Sir Oliver

  Kershaw, Anthony

  Scott-Hopkins, James

  Crouch, David

  Kimball, Marcus

  Sharpies, Richard

  Crowder, F. P.

  Klng, Ev6lyn (Dorest) S.)

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

  Cunningham, Sir Knox

  King, petre

  Silvester, Frederick

  Currie, G. B. H.

  Knight, Mrs. Jill

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

  Dalkeitn, 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

  Steel, David (Roxburgh)

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

  Lcwis, Kenneth (Rutlalld)

  Stodart, Anthony

  Digby, Simon wingfield

  Lloyd,Rt.Hn.Geoffrey(Sut' C'c field)

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

  Dodds-Parker, Douglas

  L|oyd, Ia|] (P,tsm,thj Largstone)

  Summers, Sir Spencer

  Doughty, Charles

  Longden, Gilbert

  Tapsell, Peter

  Douglas-Home, Rt. Hn. sir Alec

  Loveys, W. H.

  Taylor, Sir Charles (Eastbourne)

  Drayson, G. B.

  Lubbock, Eric

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

  Eden, Sir John

  McAdden, Sir Stephen

  Taylor, Frank (Moss Side)

  Elliot, Capt. Walter (Carshalton)

  MacArthur, lan

  Teeiing, Sir William

  Elliott,R.W.(N'c'tle-upon.T,ne,N.)

  Mackenzie,Alasdair(Ross&Crom'ty)

  Thatcher, Mrs. Margaret

  Emery, Peter

  Maclean, Sir Fitzroy

  Thorpe, Rt. Hn. Jeremy

  Eyre, Reginald

  Macleod Rt. Hn. lain

  Trlney, John

  Farr, John

  McMaster, Stanley

  Turton, Rt. Hn. R. H.

  Fisher, Nigel

  Macmillan, Maurice (Farnham)

  van Straubenzee, W. R.

  Fletcher-Cooke, Chaales

  Maddan, Martin

  Vaughan-Morgan, Rt. Hn. Sir John

  Fortescue, Tim

  Maginnis, John E.

  Vickers, Dame Joan

  Foster, Sir Jonn

  Marten, Neil

  Wainwright, Richard (Colne Valley)

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

  Maude, Angus

  Walker, Peter (Worcester)

  Galbraith, Hn. T. G.

  Mawby, Ray

  Walker-Smith, Rt. Hn. Sir Derek

  Gibson-Watt, David

  Maxwell-Hyslop, R. J.

  Wall, Patrick

  Giles, Rear-Adm. Morgan

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

  Walters, Dennis

  Gilmour, Ian (Norfolk, C)

  Mills, Peter (Torrington)

  Ward, Dame Irene

  Gilmour, Sir John (Fifi, E.)

  Mills, Stratton (Belfast, N.)

  Weatherill, Bernard

  Glower, Sir Douglas

  Miscampbell, Norman

  Webster, David

  Glyn, Sir Richard

  Mitchell, David (Basingstoke)

  Wells, John (Maidstone)

  Godber, Rt. Hn. J. B.

  Monro, Hector

  Whitelaw, Rt. Hn. William

  Goodhart, Philip

  Montgomery, Fergus

  Williams, Donald (Dudley)

  Goodhew, Victor

  Wills, Sir Gerald (Bridgwater)

  Gower, Raymond

  More, Jasper

  Grant, Anthony

  Morrison Carles (Devizes)

  Wilson, Geoffrey (Truro)

  Gran -Ferris, R.

  Mott-Radclyffe, Sir Charles

  Wood, Rt. Hn. Richard

  Grieve Percy

  Munro-Lucas-Tooth, Sir Hugh

  Woodnutt, Mark

  Griffiths, Eldon (Bury St. Edmunds)

  Murton, Oscar

  Wylie, N. R.

  Gurden, Harold

  Nabarro, Sir Gerald

  Younger, Hn. George

  Hall, John (Wycombe)

  Nicholls, Sir Harmar

  Hall-Davis, A. G. F.

  Noble, Rt. Hn. Michael

  TELLERS FOR THE AYES:

  Hamilton, Lord (Fermanagh)

  Nott, John

  Mr. Timothy Kitson and

  Hamilton, Michael (Salisbury)

  Onslow, Cranley

  Mr. Anthony Royle.

  Harris, Frederic (Croydon, N.W.)

  Orr, Capt. L. P. S.

  NOES

  Albu, Austen

  Bacon, Rt. Hn. Alice

  Bennett, James (G'gow, Bridgeton)

  Alldritt, Walter

  Bagier, Gordon A. T.

  Bishop, E. S.

  Alien, Scholefield

  Barnes, Michael

  Blackburn, F.

  Anderson, Donald

  Barnett, Joel

  Blenkinsop, Arthur

  Archer, Peter

  Bence, Cyril

  Boardman, H. (Leigh)

  Ashly, Jack

  Benn, Rt. Hn. Anthony Wedgwood

  Boston, Terence

  836

  837

  Bottomley, Rt. Hn. Arthur

  Hazell, Bert

  Oram, Albert E.

  Boyden, James

  Healey, Rt. Hn. Denis

  Oswald, Thomas

  Braddock, Mrs. E. M.

  Henig, Stanley

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

  Bradley, Tom

  Herbison, Rt. Hn. Margaret

  Page, Derek (King's Lynn)

  Bray, Dr. Jeremy

  Hilton, W. S.

  Palmer, Arthur

  Brooks, Edwin

  Houghton, Rt. Hn. Douglas

  Pannell, Rt. Hn. Charles

  Broughton, Dr. A. D. D.

  Howarth, Harry (Wellingborough)

  Parker, John (Dagenham)

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

  Howarth, Robert (Bolton, E.)

  Parkin, Ben (Paddington, N.)

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

  Howell, Denis (Small Heath)

  Parkyn, Brian (Bedford)

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

  Howie, W.

  Pavitt, Laurence

  Buchan, Norman

  Hoy, James

  Peart, Rt. Hn. Fred

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

  Huckfield, Leslie

  Pentland, Norman

  Callaghan, Rt. Hn. James

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Perry, Ernest G. (Battersea, S.)

  Cant, R. B.

  Hughes, Hector (Aberdeen, N.)

  Prentice, Rt. Hn. R. E.

  Carmichael, Neil

  Hunter, Adam

  Price, Christopher (Perry Barr)

  Carter-Jones, Lewis

  Hynd, John

  Price, Thomas (Westhoughton)

  Castle, Rt. Hn. Barbara

  Irvine, Sir Arthur (Edge Hill)

  Price, William (Rugby)

  Chapman, Donald

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

  Probert, Arthur

  Coe, Denis

  Janner, Sir Barnett

  Randall, Harry

  Coleman, Donald

  Jay, Rt. Hn. Douglas

  Rankin, John

  Concannon, J. D.

  Jeger, George (Goole)

  Rees, Merlyn

  Conlan, Bernard

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

  Reynolds, Rt. Hn. G. W.

  Corbet, Mrs. Freda

  Jenkins, Rt. Hn. Roy (Stechford)

  Rhodes, Geoffrey

  Craddock, George (Bradford, S.)

  Johnson, Carol (Lewisham, S.)

  Richard, Ivor

  Crawshaw, Richard

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

  Roberts, Albert (Normanton)

  Cronin, John

  Jones, Dan (Burnley)

  Roberts, Rt. Hn. Goronwy

  Crosland, Rt. Hn. Anthony

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

  Robertson, John (Paisley)

  Crossman, Rt. Hn. Richard

  Jones, J. Idwal (Wrexham)

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

  Dalyell, Tam

  Jones, T. Alec (Rhondda, West)

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

  Darling, Rt. Hn, George

  Judd, Frank

  Rodgers, William (Stockton)

  Davidson, Arthur (Accrington)

  Kelley, Richard

  Roebuck, Roy

  Davies, Ednyfed Hudson (Conway)

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

  Rogers, Ceorge (Kensington, N.)

  Davies, Dr. Ernest (Stretford)

  Lawson, George

  Rose, Paul

  Davies, Harold (Leek)

  Leadbitter, Ted

  Ross, Rt. Hn. William

  Davies, Ifor (Gower)

  Ledger, Ron

  Rowlands, E. (Cardiff, N.)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lee, Rt. Hn. Frederick (Newton)

  Shaw, Arnold (Ilford, S.)

  Delargy, Hugh

  Lee, Rt. Hn. Jennie (Cannock)

  Sheldon, Robert

  Dell, Edmund

  Lever, Harold (Cheetham)

  Shinwell, Rt. Hn. E.

  Dempsey, James

  Lever, L. M. (Ardwick)

  Shore, Rt. Hn. Peter (Stepney)

  Dewar, Donald

  Lewis, Ron (Carlisle)

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

  Dobson, Ray

  Lipton, Marcus

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

  Doig, Peter

  Lomas, Kenneth

  Silkin, Rt. Hn. John (Deptford)

  Dunn, James A.

  Loughlin, Charles

  Silkin, Hn. S. C. (Dulwich)

  Dunnett, Jack

  Lyons, Edward (Bradford, E.)

  Silverman, Julius (Aston)

  Dunwoody, Mrs. Gwyneth (Exeter)

  Mabon, Dr. J. Dickson

  Skeffington, Arthur

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

  McBride, Neil

  Slater, Joseph

  Eadie, Alex

  McCann, John

  Small, William

  Edelman, Maurice

  MacColl, James

  Snow, Julian

  Edwards, Robert (Bilston)

  MacDermot, Niall

  Spriggs, Leslie

  Edwards, William (Merioneth)

  Macdonald, A. H.

  Steele, Thomas (Dunbartonshire, W.)

  Ellis, John

  McKay, Mrs. Margaret

  Stewart, Rt. Hn. Michael

  English, Michael

  Mackenzie, Gregor (Rutherglen)

  Stonehouse, Rt. Hn. John

  Ennals, David

  Mackie, John

  Strauss, Rt. Hn. G. R.

  Ensor, David

  Mackintosh, John P.

  Summerskill, Hn. Dr. Shirley

  Evans, Albert (Islington, S. W.)

  Maclennan, Robert

  Swingler, Stephen

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

  McMillan, Tom (Glasgow, C.)

  Symonds, J. B.

  Fernyhough, E.

  McNamara, J. Kevin

  Taverne, Dick

  Fletcher, Ted (Darlington)

  MaePherson, Malcolm

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

  Foley, Maurice

  Mahon, Peter (Preston, S.)

  Thomson, Rt. Hn. George

  Ford, Ben

  Mahon, Simon (Bootle)

  Thornton, Ernest

  Forrester, John

  Manuel, Archie

  Tinn, James

  Fowler, Gerry

  Marks, Kenneth

  Tuck, Raphael

  Fraser, John (Norwood)

  Marquand, David

  Urwin, T. W.

  Freeson, Reginald

  Gardner, Tony

  Mason, Rt. Hn. Roy

  Varley, Eric G.

  Garrett. W. E.

  Mellish, Rt. Hn. Robert

  Wainwright, Edwin (Dearne Valley)

  Ginsburg, David

  Millan, Bruce

  Walker, Harold (Doncaster)

  Gordon Walker, Rt. Hn. P. C.

  Milne, Edward (Biyth)

  Watkins, David (Consett)

  Gourlay, Harry

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

  Watkins, Tudor (Brecon & Radnor)

  Gray, Dr. Hugh (Yarmouth)

  Molloy, William

  Weitzman, David

  Greenwood, Rt. Hn. Anthony

  Moonman, Eric

  Wellbeloved, James

  Grey, Charles (Durham)

  Morgan, Elystan (Cardiganshire)

  Wells, William (Walsall, N.)

  Griffiths, David (Rother Valley)

  Morris, Alfred (Wythenshawe)

  Whitaker, Ben

  Griffiths, Eddie

  Morris, Charles R. (Openshaw)

  White, Mrs. Eirene

  Griffiths, Rt. Hn. James (Llanelly)

  Morris, John (Aberavon)

  Whitlock, William

  Gunter, Rt. Hn. R. J.

  Moyle, Roland

  Wilkins, W. A.

  Hamilton, James (Bothwell)

  Mulley, Rt. Hn. Frederick

  Willey, Rt. Hn. Frederick

  Hamilton, William (Fife, W.)

  Murray, Albert

  Williams, Alan (Swansea, W.)

  Harper, Joseph

  Neal, Harold

  Williams, Alan Lee (Hornchurch)

  Harrison, Walter (Wakefield)

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

  Williams, Clifford (Abertillery)

  Hart, Rt. Hn. Judith

  Oakes, Gordon

  Williams, Mrs. Shirley (Hitchin)

  Haseldine, Norman

  Ogden, Eric

  Willis, Rt. Hn. George

  Hattersley, Roy

  O'Malley, Brian

  Wilson, Rt. Hn. Harold (Huyton)

  838

  839

  Wilson, William (Coventry, S.)

  Woof, Robert

  TELLERS FOR THE NOES:

  Winnick, David

  Wyatt, Woodrow

  Mr. Alan Fitch and

  Woodburn, Rt. Hn. A.

  Yates, Victor

  Mr. Eroest Armstrong.

  4.30 p.m.
  Mr. Harold Walker: I beg to move Amendment No. Ill, in page 17, line 16, leave out lines 16 to 19, and insert:
  'but so that the order shall be made within the twelve months beginning with the date of submission of the proposals.
  In this sub-paragraph "date of submission" means the date of first submission to the Secretary of State or Ministry or, in the case of proposals resubmitted with amendments for increasing (by comparison with the proposals as previously submitted) any rate of remuneration or holidays, the date of resubmission.'.
  Mr. Deputy Speaker (Sir Eric Fletcher): It is suggested that with this we should take Amendment No. 108, in page 17, line 2, at end insert:
  'so that the total postponement by virtue of this subsection amounts to not more than four months beginning with the date on which the wages regulation proposals were submitted to the Secretary of State or Ministry'.
  Mr. Walker: This rather technical Amendment fulfils two quite different undertakings given in Committee. The first point was raised by the hon. and learned Member for Northwich (Sir J. Foster) who argued that, as drafted, Part I of the Schedule required the Secretary of State not to make a wages regulation Order, but only to proceed to the making of the Order at the end of a 12-months period of postponement. This, he argued, meant from the time it took to proceed to the making of the Order, which would be a postponement for more than 12 months. My colleague the Under-Secretary confirmed that it was our intention that the making of the Order should be within 12 months, and he undertook to see whether we could not write that into the Bill. That is what we seek to do with the Amendment. This is done with the first part of the Amendment to paragraph 2(2) of the Schedule.
  The second undertaking was that which I gave to my hon. Friend the Member for Poplar (Mr. Mikardo) to seek to incorporate in the Schedule an interpretation of the phrase "or finally submitted" in paragraph 2(2). My hon. Friend was concerned that, because the period of 12 months' postponement could run from the date when the wages
  840
  council proposals were submitted, or finally submitted, it would be possible in cases when proposals were referred to my right hon. Friend to count the 12 months from the date of the re-submission and thus achieve a postponement of more than 12 months from the date of submission of the original proposals.
  The Amendment meets my undertaking and allows the date of resubmission to be used as the start of the 12-months' postponement except when the resubmitted proposals represent a larger increase in pay or holidays than did the original submission. This guards against what is admittedly a remote possibility to which I referred in Committee. The Amendment defines the date of resubmission as the date on which the maximum standstill of 12 months shall be calculated when resubmitted proposals are higher than the original submission. This does not mean that in all such cases the 12 months must be so calculated. Where appropriate, the standstill can always be for a period of less than 12 months from resubmission, equivalent to 12 months from the first submission.
  I hope that hon. Members will feel that we have adequately fulfilled our undertaking in Committee and I am happy to commend the Amendment.
  Mr. R. Carr: I am grateful to the Under-Secretary, as his hon. Friends must be, for the effort which the Government have made to deal with this issue which was brought out by both sides of the Standing Committee. This is probably the most important matter on which we have been met, but it is not the only point and it gives us purpose and satisfaction to what are sometimes protracted labours in Committee.
  Amendment agreed to.
  Mr. Mikardo: I beg to move Amendment No. 114, in page 17, line 19, at end insert:
  (3) Nothing in the provisions of this part of this Schedule shall make it unlawful for an employer, at a time when an order giving effect to wages regulation proposals has been made after a period of postponement, to pay any sum in respect of remuneration for employment at an earlier time.
  Mr. Deputy Speaker: It is suggested that with this Amendment we should discuss:
  Amendment No. 131, in page 17, line 19, at end insert:
  (3) Where the Secretary of State or Ministry postpones the making of an order to give effect to wages regulation proposals, nothing in this schedule shall prevent an employer from paying wages in accordance with the wages regulation proposals.
  Amendment No. 132, in page 18, line 10, at end insert:
  6. Where the appropriate authority makes an order directing that an agricultural wages order shall not come into operation, nothing in this schedule shall prevent an employer from paying wages in accordance with the agricultural wages order.
  Amendment No. 117, in page 18, line 37, at end insert:
  (4) Nothing in the provisions of this part of this Schedule shall make it unlawful for an employer, at a time when an order giving effect to wages regulation proposals has been made after a period of postponement, to pay any sum in respect of remuneration for employment at an earlier time.
  Mr. Mikardo: Amendment No. 114 would apply to that part of the Schedule which relates to wages councils and Amendment No. 117 would apply to agricultural wages orders. The other two Amendments, in the name of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), seem to have similar effects.
  I move this Amendment in almost interrogative terms, because the wording of the Schedule is extremely complicated and for anyone who is not an absolute expert almost impossible to follow. I confess my ignorance at once. It is not clear in the wording whether or not the Schedule as drafted gives the Minister powers in respect of wages council workers which he has not got in respect of other groups of workers to prevent backdating of a settlement reached as a result of negotiations. It is not clear to me whether that situation is so or not.
  My hon. Friends and I have put forward this Amendment on the belt and braces principle of making assurance doubly sure and spelling out in terms our absolute opposition to any situation which might arise, if it could arise, under the Bill in which wages council workers were not only brought into the Bill for the first time, as was said in the small hours of this morning, but in a way which dis-
  842
  advantaged them under the legislation even by comparison with all other workers. In considering the Schedule in general—I am sure this goes for other hon. Members—I have had in mind that we are here talking about the determinations of responsible tripartite bodies.
  We are not dealing with a situation in which a small and particularly militant group of workers impose their will on a reluctant but weak or specially vulnerable employer and as a result get away with an absolutely outrageous wages settlement. We are here dealing with the determination of a body on which both sides of an industry are represented and with independent members to hold the balance. Although in general those independent members do not operate when the two sides of the council agree, it is not the case that bodies of this sort make wildly generous wage settlements. If that were so, these wages councils would not be covering the overwhelming majority, practically the whole, of the low paid male workers of the country. So we have this bit of tenderness in mind about these bodies.
  I am not clear about the wording of the Schedule. If it is a fact that workers covered by the Schedule would be dis-advantaged in this way by a prohibition of back dating to the extent that other workers are not, my hon. Friends would have to oppose that to the absolute limit of the powers open to us. I hope that we shall receive such explanations and assurances from my hon. Friend the Under Secretary as will make is unecessary for us to carry out that sort of action. I hope so very much indeed.
  4.45 p.m.
  Mr. Nicholas Ridley: I wish to say a few words about the Amendments in my name. They are similar to those in the name of the hon. Member for Poplar (Mr. Mikardo), but they are not exactly the same. I think they go a little further than the proposal he has put forward. Like his Amendments, they relate first to wages councils' orders and, secondly, to agricultural wages orders. These wages councils and agricultural wages boards were first set up in order to prevent wages in those industries being too low. They were set up in an attempt to establish minimum wages in those industries where traditionally, and for economic reasons which we

  843
  need not go into now, there had always been a tendency for far too low wages to be paid.
  We have here a form of governmental institution designed to keep wages up to a minimum. A paradox in the Schedule is that the Government are trying to use a minimum control to enforce a maximum, because the point of the Schedule is to stop wages going up. This is a contradiction in terms because the minimum wages apply only to the lowest paid. Therefore, if it is simply said that they may not raise the minimum there is no prohibition whatever on employers paying more even though the minimum is not allowed to be raised. The effect of making an order under an agricultural wages council is to raise the minimum by which farmers can employ farm workers, but, if no such order is made, so far as I read the Schedule the effect of the Minister exercising his rights would be no reason why any farmer should not pay as much as the agricultural wages board suggested, or even more, because these orders are minimum orders.
  The hon. Member for Poplar suggested that when an order runs out or when the delaying power of the Minister runs out and a wages council order can come into force, there should be nothing to stop the employees claiming and receiving that which they have lost retrospectively through the action of the control. I go further and say that there is nothing to stop them claiming and receiving that which they have been denied through the currency of the order because the order only prevents the minimum being raised. Incidentally, this makes absolute nonsense of the main ground of defence used by the hon. Member for Birmingham, Spark-brook (Mr. Hattersley) for the inclusion of these low paid workers in the control.
  The hon. Getleman said over and over again that just because there are some poor farm workers or some low wage people in wages councils award areas that does not mean that they should all be given a rise. It would be quite inconsistent for wages councils to be able to make up awards to farm workers, some of whom are getting £20 and £30 a week. All that an agricultural wages board can do is to lift the minimum wages. Therefore, if an agricultural wages order were made it would have the effect of lifting
  844
  the minimum wage for the lower paid and would benefit only the lower paid. It would have no effect on the higher paid unless the differentials were maintained. By a purely legal definition it would benefit only those on the minimum rates.
  If this is correct it should be emphasised that the Bill exercises no control whatever upon farmers or industrial employers who wish to pay more, and who can and do pay more, where an order has been made or a wages council award confirmed as a result of the Bill. If that is so, it is for the convenience of employers and employees that it should be written into the Bill, because everybody would know that the Bill only stops the minima from being raised—in other words, it is a direct attack upon the lower-paid workers—and has no effect to prevent anybody covered by a wages council order from being paid more.
  If that is so, I hope that the Government will accept the Amendments, which make it abundantly clear that, not only retrospective pay as proposed by the hon. Gentleman, but also any increase which comes to the mind of employers, is reasonable, provided that there is not some other way in which the Government invoke the policy to destroy it. There is an area of anomaly here which the Under-Secretary should clear up.
  The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): On what I suspect is either the last, or very nearly the last, occasion on which I address the House on the Bill, it gives me real pleasure to say that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) understands a part of the Bill. The conclusions he drew from it were wildly wrong, but the interpretation he put on the powers we seek to take over wages councils and the Agricultural Wages Board were absolutely right.
  Clause 5 and Schedule 2 seek to do no more than provide my right hon. Friend, or the appropriate Minister, with the opportunity of preventing or at least postponing a wages regulation order from having its effect that the new minimum rate stipulated by the Board should be legally enforceable. Clause 5 and Schedule 2 seek to do no more than that.
  The hon. Gentleman is wrong to conclude that, because Clause 5 and Schedule

  845
  2 seek to do no more than that, they seek specifically and intentionally to hit at the very lowest paid, for any analysis whatsoever of the movement of wages council rates will show the hon. Gentleman that, when the legal minimum is increased, the increase does not go simply to those who are actually on the legal minimum, for they are very few indeed. It reflects itself in the pay of the majority in each industry whose wage basis is the legal minimum and on top of which legal minimum they receive a number of bonus payments or what are called, I understand, enhancements, which, make their take-home pay far above the legal minimum.
  The intention of Clause 5 and of this Schedule is to have some surveillance over those who, whilst not on the legal minimum rate, are affected by it and whose wages, although very substantially greater than the legal minimum rate, in fact move at about the same rate and at about the same amount when the legal minimum is increased.
  Having said that, I once again confirm that the hon. Gentleman is right. All that we seek to do by Clause 5 and Schedule 2 is to postpone the legal en-forceability of a wages council order. This means that individual groups, companies, unions—individuals themselves— can, within an industry for which a wages council order has been postponed, negotiate with management; and they may well obtain a wage increase, although it will not be a statutorily required wage increase.
  Were we to find that situation and were we to believe that it was outside the terms of the policy, and were we to wish to postpone it, all that we could do would be to make an order of a different sort under Clause 2 or Clause 3. I have to say to the House in a moment of frankness that that does not seem to me to be a very likely eventuality, but I also have to say that, if we wanted to postpone a payment, the way it would be done would be under Clauses 2 and 3. Clause 5 and Schedule 2 aim to do no more than the hon. Gentleman says, which is to postpone the operation of the legal minimum as stipulated by a wages council.
  That point is the central issue when I turn to the Amendment moved by my hon. Friend the Member for Poplar (Mr. Mikardo); for I, like him, would regard
  846
  it as indefensible were the Bill to impose on the employees in wages council industries disciplines more rigorous than those imposed on the economy as a whole. My hon. Friend will, I think, conclude that, if the hon. Member for Cirencester and Tewkesbury is right and wage increases as a fact rather than as a legally enforceable requirement can go on, even during the operation of an order under Clause 5 and Schedule 2, the same rules as govern employees in other industries in the matter of retrospection must govern employees in wages council industries.
  This means that, whilst my right hon. Friend and the Government disapprove —I can use no other word—of retrospection, whilst we believe that, as we made clear in the White Paper, the establishment of retrospection as a general rule would certainly be against the nation's economic interests and would erode the purpose and value of a prices and incomes policy, it is not our intention to make retrospection illegal. Since the operation of an order postponing wage increases, postponing the literal increase rather than postponing the operation of the legal minimum, must operate for wages council industries in the same way that it operates for anybody else, retrospection is no more illegal for them than it is for anybody else.
  Having said that, I must say again, for I would be deluding the House were I to say anything other than this, that our disapproval of retrospection means that we hope that when there is postponement in this sector retrospection will not apply. We hope that it will not apply, but the distinction between hoping that it will not apply and preventing it from applying is, I believe, total. I at least confirm that the Bill as it stands puts no legal bar on retrospection for these industries.
  Although we think that that would not be a wise or sensible economic thing to happen, if my hon. Friend the Member for Poplar simply wants me to say again that the provisions in Clause 5 and in Schedule 2 affecting wages council industries do not disadvantage wages council employees as opposed to other groups of workers, inasmuch as retrospection and all that it means in the White Paper and stands for in the Bill applies equally in both sectors, then that is certainly the

  847
  position and I am pleased to confirm it for him.
  Mr. Peter Emery: I have always thought that the Government have been foolishly short-sighted and crassly negligent in the way that they have attempted, and are attempting in the Bill, to take powers to limit the wage increases of the lowest-paid section of workers. All that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) seeks to do in Amendment No. 132 is to ensure that nothing can take place by the Schedule which would stop increases of pay from being given to agricultural workers if that could be done under an agricultural wages order.
  The Government's argument is a terrifying piece of dialectic nonsense. Where an agricultural wages order has been made by the Agricultural Wages Board and where a standstill has been imposed by the Secretary of State, the Minister says that legally the bad employer need give no increase but the good employer will be able, by bonus or other payments, to increase the wages to the equivalent amount—in other words, get round the restriction which has been imposed by the Minister. If that is what the Government want to happen, it is foolish.
  5.0 p.m.
  The point should be made crystal clear. Workers in agriculture are specially affected. In its Report No. 25, the National Board for Prices and Incomes said:
  "We recommend that it is in the interests of the industry and the country that an adequate wage structure for agriculture should be negotiated at the earliest possible date."
  We are trying to ensure that no restriction can be made by the Minister which would stop that development.
  The National Board for Prices and Incomes makes clear that the average weekly earnings of agricultural workers are lower than those of workers in any other industry for which figures are available. Average hourly earnings, we are told, are well below those anywhere else and the concentration of low-paid workers is higher than anywhere else. That is evidenced by the statistic that 86 per cent. of agricultural workers have about £2 5s. less in average weekly earnings than the general body of workers.
  848
  Of the 14 per cent. remaining, who are not sub-divided, it is suggested that no more than 5 per cent. are above the average earnings of workers in the country as a whole.
  Mr. Peter M. Jackson: I do not know where the hon. Gentleman finds his figures, but they are not correct. Figures which I gave in the debate last night show an even more startling difference between the average earnings of male workers in manufacturing and those of male workers in agriculture. I speak from memory, but I think that the figures which I gave are these: average weekly earnings at March, 1967 of workers in manufacturing were £20 15s.; in agriculture they were £14 16s. Thus, the difference is not £2 but is nearer £6.
  Mr. Emery: I was taking the top end of the 86 per cent. While the hon. Gentleman was making his point, I took the opportunity to check the figures in the Board's report. We find that 85·5 of all agricultural workers 'are earning less than 359s. 11d. a week. The national average of weekly earnings for men in all industries, not just manufacturing, is given as £20 5s. That is the right sort of reference.
  These are terrifying figures, yet the Government are doing nothing to encourage the breaking of these low levels of earnings. It is imperative that we take the Amendment to a Division.
  If the Minister's argument is right, what is the point of Schedule 2? Where does it fit in? We want no restrictions in the Schedule which would stop an agricultural worker receiving more than the minimum. Although it is true that the Minister could stop the minimum being legally enforceable, the only one to benefit from that would be the bad employer, and I want nothing to go out from this side of the House suggesting that that is the sort of person which the Conservative Party would wish to protect in any way.
  The whole principle of the Bill is wrong, but the Government are getting it through by their steamroller majority, although it slipped a good deal last night down to 18, 21 and 22, and without any Liberal support for the Government. This is the very last moment when we can make an effort to correct what the

  849
  Government are doing. It is good that our concern at this point should be for the lowest-paid worker, the agricultural worker. We are trying to ensure that some protection is given to him which is not, unfortunately, given to other people in the Bill as a whole.
  Mr. Mikardo: In view of the statement and assurance given by my hon. Friend:he Under-Secretary on the precise point of the Amendment which I moved, than which nothing could have been clearer or fairer and for which I thank him, I beg to ask leave to withdraw the Amendment.
  Mr. Elmery: On a point of order, Mr. Deputy Speaker. If leave is given to withdraw the Amendment, would it be possible for the Opposition formally to move and take to a Division one of their Amendments in the same section?
  Mr. Deputy Speaker (Sir Eric Fletcher): No, that would not be possible.
  The Question which I must now put to the House is, "Is it your pleasure that the Amendment be withdrawn?"
  Hon. Members: No.
  Mr. R. Carr: This took us somewhat by surprise, Mr. Deputy Speaker. I assure you that I shall not make a long speech, but there are one or two matters which must be put to the Minister. I make no complaint about his having intervened at an early stage to deal principally, though not entirely, with the points raised by the Amendment put down by his hon. Friends.
  My hon. Friend the Member for Honiton (Mr. Emery) raised one point which calls for answer. He said that the provisions which the Government ask us to accept mean that whereas the good employer—he instanced the case of agriculture—would be left free to pay his workers as he thought right, by productivity payments and so on, of which we all approve, the bad employer would have no pressure put on him to pay what he ought to pay. If that is right, the Government have some more explaining to do. The point made by my hon. Friend ought not to pass without confirmation or denial, and, if confirmation, some serious comment from the Government.
  850
  In his reply, the Under-Secretary of State used some extraordinary phraseology. He said—I took a note of his words—that the provision which we are discussing does no more than give the Minister power to prevent a wages council order having its intended legislative effect. Those were his words—"does no more than give a Minister power to prevent"—as though it were almost nothing. It shows the cast of mind and habit of thinking and feeling to which three years of compulsion bring people.
  It is not a small thing to take power to prevent something having the long-established legislative effect which the House intended it to have. All that the Minister can say as we draw near the end of the debate on the third annual Prices and Incomes Bill is that when the Government intervene by force they are doing no more than giving the Minister power to prevent something having its intended legislative effect. I am sure that that is not the hon. Gentleman's natural way of thinking, and I do not want to drive this criticism home at him personally. But the House should take note of it, because it indicates the habit and cast of mind and thinking into which compulsory legislation extended over a number of years is inclined to bring one.
  I should like to draw attention to the hon. Gentleman's reply about retrospection. He very honestly told his hon. Friend that while retrospective payment was certainly not illegal, and the Government did not intend to make it illegal, he hoped that people would not indulge in it. He hoped that when they suffered from a delaying power they would accept it, and that when it was at an end they would not undo the economic good to the nation, as the Government see it, by using their legal right to retrospective payment. The hon. Gentleman drew a strange distinction between hoping and preventing, yet, in terms of release of purchasing power into the economy, retrospective payment could undo all the good that the Government are trying to achieve, certainly in macro-economic terms. It is odd that there should be a contrast between the Government's lack of will to take power to prevent retrospective payment and their utter obstinacy in insisting on taking power to delay the implementation of freely negotiated

  851
  settlements. Where is the consistency between those two attitudes?
  I should like to end what is probably my last speech, as the hon. Gentleman's was probably his last, on the detailed consideration of the Bill, with this thought: if only the Government would import hope, influence and persuasion into a genuine attempt to build up volun-
  tary methods in achieving sensible wage settlements, and not only into preventing retrospection, we might all get much further much quicker. Everybody would be happier, and the country would be more prosperous.
  Question put, That the Amendment be made:
  The House divided: Ayes 227, Noes 303.

  Division No. 254.]

  AYES

  [5.13 p.m.

  Alison, Michael (Barkston Ash)

  Gilmour, Ian (Norfolk, C.)

  Macmillan, Maurice (Farnham)

  Allason, James (Hemel Hempstead)

  Gilmour, Sir John (Fife, E.)

  Maddan, Martin

  Astor, John

  Glover, Sir Douglas

  Maginnis, John E.

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

  Glyn, Sir Richard

  Marten, Neil

  Baker, Kenneth (Acton)

  Godber, Rt. Hn. J. B.

  Maude, Angus

  Baker, W. H. K. (Banff)

  Goodhart, Philip

  Mawby, Ray

  Balniel, Lord

  Goodhew, Victor

  Maxwell-Hyslop, R. J.

  Batsford, Brian

  Cower, Raymond

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

  Beamish, Col. Sir Tufton

  Grant, Anthony

  Mills, Peter (Torrington)

  Bell, Ronald

  Grant-Ferris, R.

  Mills, Stratton (Belfast, N.)

  Bennett, Sir Frederic (Torquay)

  Grieve, Percy

  Miscampbell, Norman

  Bennett, Dr. Reginald (Gos. & Fhm)

  Griffiths, Eldon (Bury St. Edmunds)

  Mitchell, David (Basingstoke)

  Berry, Hn. Anthony

  Gurden, Harold

  Montgomery, Fergus

  Biffen, John

  Hall, John (Wycombe)

  More, Jasper

  Biggs-Davison, John

  Hall-Davis, A. G. F.

  Morrison, Charles (Devizes)

  Birch, Rt. Hn. Nigel

  Hamilton, Lord (Fermanagh)

  Mott-Radclyffe, Sir charles

  Black, Sir Cyril

  Hamilton, Michael (Salisbury)

  Munro-Lucas-Tooth, Sir Hugh

  Blaker, Peter

  Harris, Frederic (Croydon, N.W.)

  Murton, Oscar

  Boardman, Tom (Leicester, S.W.)

  Harrison, Brian (Maldon)

  Nicholls, sir Harmer

  Bossom, Sir Clive

  Harrison, Col. Sir Harwood (Eye)

  Noble, Rt. Hn. Michaele

  Boyle, Rt. Hn. Sir Edward

  Harvey, Sir Arthur Vere

  Nott, John

  Braine, Bernard

  Hastings, Stephen

  Onslow Cranley

  Brewis, John

  Hawkins, Paul

  Orr, Capt. L.P.S.

  Brinton, Sir Tatton

  Hay, John

  Orr-Ewing, Sir lan

  Brown, Sir Edward (Bath)

  Heald, Rt. Hn. Sir Lionel

  Osborn, John (Hallam)

  Bruce-Gardyne, J.

  Heath, Rt. Hn. Edward

  Osborne, Sir Cyril (Louth)

  Bullus, Sir Eric

  Higgins, Terence L.

  Page, Graham (Crosby)

  Campbell, B. (Oldham, W.)

  Hiley, Joseph

  Page, John (Harrow, W.)

  Campbell, Gordon (Moray & Nairn)

  Hill, J.E.B.

  Pearson, Sir Frank (Clitheroe)

  Carr, Rt. Hn. Robert

  Hirst, Geoffrey

  Peel, John

  Cary, Sir Robert

  Hogg, Rt. Hn. Quintin

  Percival, lan

  Chichester-Clark, R.

  Holland, Philip

  Peyton, JOhn

  Clegg, walter

  Hordern, Peter

  Pike, Miss Mervyn

  Cooke, Robert

  Hornby, Richard

  Cooper-Key, Sir NeilI

  Howell, David (Guildford)

  Pink R. Bonner

  Cordle, John

  Hunt, John

  Pounder, Rafton

  corfield, F. V.

  Hutchison, Michael Clark

  Powell Rt. Hn. J. Enoch

  Costain, A. P.

  Iremonger, T. L.

  Price, David (Eastleigh)

  Craddock, Sir Beresford (Spelthorne)

  Irvine, Bryant Godman (Rye)

  Prior, J. M. L.

  Crosthwaite-Eyre, Sir Oliver

  Jenkin, Patrick (Woodford)

  Rym, Francis

  Crouch, David

  Jennings, J. C. (Burton)

  Quennell, Miss J. M.

  Crowder, F. P.

  Johnson Smith, G. (E. Crinstead)

  Ramsden, Rt. Hn. James

  Cunningham, Sir Knox

  Jones, Arthur (Northants, S.)

  Rawlinson, Rt. Hn. Sir Peter

  Currie, G. B. H.

  Jopling, Michael

  Renton, Rt. Hn. Sir David

  Dalkeith, Earl of

  Joseph, Rt. Hn. Sir Keith

  Rhys Williams, Sir Brandon

  Dance, James

  Kaberry, Sir Donald

  Ridley, Hn. Nicholas

  d'Avigdor-Goldsmid, Sir Henry

  Kerby, Capt. Henry

  Ridsdale, Julian

  Dean, Paul (Somerset, N.)

  Kershaw, Anthony

  Robson Brown, Sir William

  Digby, Simon Wingfield

  Kimball, Marcus

  Rodgers, Sir John (Sevenoaks)

  Dodds-Parker, Douglas

  King, Evelyn (Dorset, S.)

  Rossi, Hugh (Hornsey)

  Doughty, Charles

  Kirk, Peter

  Royle, Anthony

  Douglas-Home, Rt. Hn. Sir Alec

  Knight, Mrs. Jill

  Russell, Sir Ronafd

  Drayson, G. B.

  Lancaster, Col. C. G.

  St. John-Stevas, Norman

  du Cann, Rt. Hn. Edward

  Lane, David

  Sandys, Rt. Hn. D.

  Eden, Sir John

  Langford-Holt, Sir John

  Scott, Nicholas

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

  Legee-Bourke, Sir Harry

  Scott-Hopkins, James

  Eyre, Reginald

  Lewis, Kenneth (Rutland)

  Sharples, Richard

  Farr, John

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

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

  Fisher, Nigel

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

  Silvester, Frederick

  Fletcher-Cooke, Charles

  Longden, Gilbert

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

  Fortescue, Tim

  Loveys, W. H.

  Smith, John (London & W'minster)

  Foster, Sir John

  McAdden, Sir Stephen

  Speed, Keith

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

  MacArthur, Ian

  Stainton, Keith

  Galbraith, Hn. T. G.

  Maclean, Sir Fitzroy

  Stodart, Anthony

  Gibson-watt, David

  Macleod, Rt. H. lain

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

  Giles, Rear-Adm. Morgan

  McMaster, Stanley

  Summers, Sir Spencer

  Taylor, Sir Charles (Eastbourne)

  Walker, Peter (Worcester)

  Wilson, Geoffrey (Truro)

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

  Walker-Smith, Rt. Hn. Sir Derek

  Wood, Rt. Hn. Richard

  Taylor, Frank (Moss Side)

  Wall, Patrick

  Woodnutt, Mark

  Teeling, Sir William

  Walters, Dennis

  Worsley, Marcus

  Temple, John M.

  Ward, Dame Irene

  Wylie, N. R.

  Thatcher, Mrs. Margaret

  Weatherill, Bernard

  Younger, Hn. George

  Tilney, John

  Webster, David

  Turton, Rt. Hn. R. H.

  Wells, John (Maidstone)

  TELLERS FOR THE AYES:

  van Straubenzee, W. R.

  Whitelaw, Rt. Hn. William

  Mr. Timothy Kitson and

  Vaughan-Morgan, Rt. Hn. Sir John

  Williams, Donald (Dudley)

  Mr. Hector Monro.

  Vickers, Dame Joan

  Wills, Sir Gerald (Bridgwater)

  NOES

  Albu, Austen

  Dunwoody, Mrs. Gwyneth (Exeter)

  Jones, Dan (Burnley)

  Allaun, Frank (Salford, E.)

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

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

  Alldritt, Walter

  Eadie, Alex

  Jones, J. Idwal (Wrexham)

  Allen, Scholefield

  Edelman, Maurice

  Jones, T. Alec (Rhondda, West)

  Anderson, Donald

  Edwards, Robert (Bilston)

  Judd, Frank

  Archer, Peter

  Edwards, William (Merioneth)

  Kelley, Richard

  Ashley, Jack

  Ellis, John

  Kenyon, Clifford

  Atkinson, Norman (Tottenham)

  English, Michael

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

  Bacon, Rt. Hn. Alice

  Ennals, David

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

  Bagier, Gordon A. T.

  Ensor, David

  Kerr, Russell (Feltham)

  Barnes, Michael

  Evans, Albert (Islington, S.W.)

  Lawson, George

  Barnett, Joel

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

  Leadbitter, Ted

  Bence, Cyril

  Fernyhough, E.

  Ledger, Ron

  Benn, Rt. Hn. Anthony Wedgwood

  Fitch, Alan (Wigan)

  Lee, Rt. Hn. Frederick (Newton)

  Bennett, James (G'gow, Bridgeton)

  Fletcher, Ted (Darlington)

  Lee, Rt. Hn. Jennie (Cannock)

  Bidwell, Sydney

  Foley, Maurice

  Lee, John (Reading)

  Bishop, E. S.

  Foot, Michael (Ebbw Vale)

  Lever, L. M. (Ardwick)

  Blackburn, F.

  Ford, Ben

  Lewis, Arthur (W. Ham, N.)

  Blenkinsop, Arthur

  Forrester, John

  Lewis, Ron (Carlisle)

  Boardman, H. (Leigh)

  Fowler, Gerry

  Lipton, Marcus

  Booth, Albert

  Fraser, John (Norwood)

  Lomas, Kenneth

  Boston, Terence

  Freeson, Reginald

  Loughlin, Charles

  Bottomley, Rt. Hn. Arthur

  Gardner, Tony

  Luard, Evan

  Boyden, James

  Garrett, W. E.

  Lyons, Edward (Bradford, E.)

  Braddock, Mrs. E. M.

  Ginsburg, David

  Mabon, Dr. J. Dickson

  Bradley, Tom

  Gordon Walker, Rt. Hn. P. C.

  McBride, Neil

  Bray, Dr. Jeremy

  Gourlay, Harry

  McCann, John

  Brooks, Edwin

  Gray, Dr. Hugh (Yarmouth)

  MacColl, James

  Broughton, Dr. A. D. D.

  Greenwood, Rt. Hn. Anthony

  MacDermot, Niall

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

  Griffiths, David (Rother Valley)

  Macdonald, A. H.

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

  Griffiths, Eddie (Brightside)

  McGuire, Michael

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

  Griffiths, Rt. Hn. James (Llanelly)

  McKay, Mrs. Margaret

  Buchan, Norman

  Gunter Rt. Hn. R. J.

  Mackenzie, Gregor (Rutherglen)

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

  Hamilton, James (Bothwell)

  Mackie, John

  Butler, Herbert (Hackney, c.)

  Hamilton, William (Fife, W.)

  Mackintosh, John p.

  Butler, Mrs. Joyce (Wood Green)

  Hamling, William

  Maclennan, Robert

  Callaghan, Rt. Hn. James

  Hannan, William

  McMillan, Tom (Glasgow, C.)

  Cant, R. B.

  Harper, Joseph

  McNamara, J. Kevin

  Carmichael, Neil

  Harrison, Walter (Wakefield)

  MacPherson, Malcolm

  Carter-Jones, Lewis

  Hart, Rt. Hn. Judith

  Mahon, Peter (Preston, S.)

  Cattle, Rt. Hn. Barbara

  Haseldine, Norman

  Mahon, Simon (Bootle)

  Chapman, Donald

  Hattersley, Roy

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

  Coe, Denis

  Hazell, Bert

  Manuel, Archie

  Coleman, Donald

  Healey, Rt. Hn. Denis

  Marks, Kenneth

  Concannon, J. D.

  Heffer, Eric S.

  Marquand, David

  Conlan, Bernard

  Henig, Stanley

  Marsh, Rt. Hn. Richard

  Corbet, Mrs. Freda

  Herbison, Rt. Hn. Margaret

  Mason, Rt. Hn. Roy

  Craddock, George (Bradford, S.)

  Hilton, W. S.

  Maxwell, Robert

  Crawshaw, Richard

  Houghton, Rt. Hn. Douglas

  Mayhew, Christopher

  Cronin, John

  Howarth, Harry (Wellingborough)

  Mellish, Rt. Hn. Robert

  Crostand, Rt. Hn. Anthony

  Howarth, Robert (Bolton, E.)

  Mendelson, J. J.

  Crossman, Rt. Hn. Richard

  Howell, Denis (Small Heath)

  Mikardo, Ian

  Dalyell, Tam

  Howie, W.

  Millan, Bruce

  Darling, Rt. Hn. George

  Hoy, James

  Miller, Dr. M. s.

  Davidson, Arthur (Accrington)

  Huckfield, Leslie

  Milne, Edward (Blyth)

  Davies, Ednyfed Hudson (Conway)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

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

  Davies, Dr. Ernest (Stretford)

  Hughes, Emrys (Ayrshire, S.)

  Molloy, William

  Davies, Harold (Leek)

  Hughes, Hector (Aberdeen, N.)

  Moonman, Eric

  Davies, Ifor (Gower)

  Hunter, Adam

  Morgan, Elystan (Cardiganshire)

  de Freitas, Rt. Hn. Sir Geoffrey

  Hynd, John

  Morris, Alfred (Wythenshawe)

  Delargy, Hugh

  Irvine, Sir Arthur (Edge Hill)

  Morris, Charles R. (Openshaw)

  Dell, Edmund

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

  Morris, John (Aberavon)

  Dempsey, James

  Janner, sir Barnett

  Moyle, Roland

  Dewar, Donald

  Jay, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Dickens, James

  Jeger, George (Goole)

  Murray, Albert

  Dobson, Ray

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

  Neal, Harold

  Doig, Peter

  Jenkins, Hugh (Putney)

  Newens, Stan

  Driberg, Tom

  Jenkins, Rt. Hn. Roy (Stechford)

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

  Dunn, James A.

  Johnson, Carol (Lewisham, S.)

  Oakes, Gordon

  Dunnett, Jack

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

  Ogden, Eric

  854

  855

  O'Malley, Brian

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

  Tuck, Raphael

  Oram, Albert E.

  Rodgers, William (Stockton)

  Urwin, T. W.

  Orme, Stanley

  Roebuck, Roy

  Varley, Eric G.

  Oswald, Thomas

  Rogers, George (Kensington, N.)

  Wainwright, Edwin (Dearne Valley)

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

  Rose, Paul

  Walker. Peter (Worcester)

  Page, Derek (King's Lynn)

  Ross, Rt. Hn. William

  Wallace, George

  Palmer, Arthur

  Rowlands, E. (Cardiff, N.)

  Watkins, David (Consett)

  Panned, Rt. Hn. Charles

  Ryan, John

  Watkins, Tudor (Brecon & Radnor)

  Park, Trevor

  Shaw, Arnold (Ilford, S.)

  Weitzman, David

  Parker, John (Dagenham)

  Sheldon, Robert

  Wellbeloved, James

  Parkin, Ben (Paddington, N.)

  Shinwell, Rt. Hn. E.

  Wells, William (Walsall, N.)

  Parkyn, Brian (Bedford)

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

  Whitaker, Ben

  Pavitt, Laurence

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

  White, Mrs. Eirene

  Peart, Rt. Hn. Fred

  Silkin, Rt. Hn. John (Deptford)

  Whitlock, William

  Pentland, Norman

  Silkin, Hn. S. C. (Dulwich)

  Wilkins, W. A.

  Perry, Ernest G. (Battersea, S.)

  Silverman, Julius (Aston)

  Willey, Rt. Hn. Frederick

  Prentice, Rt. Hn. R. E.

  Skeffington, Arthur

  Williams, Alan (Swansea, W.)

  Price, Christopher (Perry Barr)

  Slater, Joseph

  Williams, Alan Lee (Hornchurch)

  Price, Thomas (Westhoughton)

  Small, William

  Williams, Clifford (Abertillery)

  Price, William (Rugby)

  Snow, Julian

  Williams, Mrs. Shirley (Hitchin)

  Probert, Arthur

  Spriggs, Leslie

  Willis, Rt. Hn. George

  Randall, Harry

  Steele, Thomas (Dunbartonshire, W.)

  Wilson, Rt. Hn. Harold (Huyton)

  Rankin, John

  Stewart, Rt. Hn. Michael

  Wilson, William (Coventry, S.)

  Rees, Merlyn

  Stonehouse, Rt. Hn. John

  Winnick, David

  Reynolds, Rt. Hn. G. W.

  Summerskill, Hn. Dr. Shirley

  Woodburn, Rt. Hn. A.

  Rhodes, Geoffrey

  Swingler, Stephen

  Woof, Robert

  Richard, Ivor

  Symonds, J. B.

  Wyatt, Woodrow

  Roberts, Albert (Normanton)

  Taverne, Dick

  Yates, Victor

  Roberts, Rt. Hn. Coronwy (C'narv'n)

  Thomas, Rt. Hn. George

  Roberts, Gwilym (Bedfordshire, S.)

  Thomson, Rt. Hn. George

  TELLERS FOR THE NOES:

  Robertson, John (Paisley)

  Thornton, Ernest

  Mr. Ernest Armstrong and

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

  Tinn, James

  Mr. Charles Grey.

  5.24 p.m.
  The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): I beg to move, That the Bill be now read the Third time.
  We have reached the end of an exhaustive and exhausting examination of the Bill both in Committee and on Report. During these days every facet has been dealt with in detail and I do not want to go over the old ground at this stage but merely to answer the question of why we consider this legislation necessary. I say to my hon. Friends that the Government would hardly have gone through the tensions and strains of the past few days if we did not believe that the Bill had a vital part to play in our economic strategy.
  The Government's post-devaluation strategy was made clear at the time of the Budget. It is designed to ensure that this country preserves and exploits to the full the benefits which devaluation can bring but will bring only if we maintain our international competitiveness by keeping down costs. We all know that a successful policy for growth depends upon our mastering our balance of payments difficulties and devaluation as an aid to growth will simply not work if its effects are eroded by rises in costs.
  Nothing that has happened since the Budget in any way reduces the need for
  856
  the powers in the Bill or for the firm policy that these powers are designed to underpin. There is much that is encouraging about the outlook for our exports, but the slow improvement in our external position and the strong pressures for wage increases which are now apparent on every side underline the vital importance of a successful productivity, prices and incomes policy in retaining our international competitiveness.
  I want to pay tribute to my hon. Friends who have loyally supported the Government in getting the Bill through, despite the taunts of hon. Members opposite and despite their own doubts and anxieties. I say to them that this Bill is not an end in itself. It is a means to an end whose whole purpose is not restrictive but positive. This legislation merely holds the ring while we restructure, reshaps and modernise British industry to secure a high wage, high productivity, low cost economy which will bring the opportunity not merely of higher incomes for the individual but the opportunity and the prospect of a continuous advance in our national economic growth.
  I say also to my hon. Friends that the limited powers which the Government will have secured even when this legislation is passed are only meaningful in the context of an essentially voluntary policy. I have said—and I cannot reiterate it too often—that everything in

  857
  the Bill, whether old or new, is essentially a statutory reserve power for use only in support of the voluntary system. It is in essence what I might term "safety belt legislation". It is solely for use in emergency when there is a breakdown in the vast amount of voluntary co-operation which goes on, day in and day out, regardless of any statutory rules or statutory framework.
  But we know full well that we shall only get this voluntary co-operation if the policy is seen to be not only positive in itself but fair to all sections of the community. It is for this reason that we have taken in the Bill the extended and strengthened powers over prices. It is for this reason that, at a time when the individual as a whole is not finding things easy because of the combined effects of devaluation, the Budget and the public sector price increases, we should not allow rents, which account for such a large proportion of individual incomes, to be increased sharply and so disrupt finely balanced family budgets. It is for this reason that we are asking for reserve legislation on company distributions. It is for this reason that we stress that the incomes policy applies just as much to salary increases and to all forms of income increases as to wage increases.
  Much has been said about the duration of the policy. In our debates hon. Members have commented on the fact that the Government are taking powers until the end of 1969, for 18 months, and some rather interesting interpretations have been put on this. I assure hon. Members that there is nothing elaborate, contrived, sinister or pusillanimous about this. The decision to take these powers until the end of 1969 is based on our belief that the next 18 months will be the critical period for the realisation of the opportunities that devaluation has brought to the British economy.
  In the autumn of 1969 we can take a new look to see what our circumstances and prospects then require or do not require. We will have the opportunity to review both our economic situation and the operation of the policy, and to take an informed decision in the light of both.
  It is, therefore, true to say that the Bill is an act of faith—faith in the ability
  858
  of the British people to grasp the size and seriousness of the economic challenge which faces this country, faith in their willingness to co-operate in getting the economy strong again, faith in the potentialities for growth, if only we can get our priorities right, and faith in our capacity to adapt our industries, wage structures and methods of bargaining to meet modern needs. It is because the Bill can help us to all these ends that I ask hon. Members to give it a Third Reading.
  5.32 p.m.
  Sir Cyril Osborne: I find myself in rather a difficult position and I hope that hon. Members on both sides will give me a patient hearing while I state my case. I am greatly tempted to vote for the Bill—[Interruption.] I am on record, in Parliament, in the Press, on television and on radio, as being in favour of a prices and incomes policy. Indeed, I believe that if a Conservative Government were returned to power tomorrow morning they would have no option but to impose some sort of policy of this kind. [HON. MEMBERS: "Hear, hear."] I ask hon. Gentlemen opposite to be patient while I state my case, and I appeal to them to give me a fair hearing.
  The greatest restraint on incomes as well as on prices is vitally necessary if Britain is to survive in the next six months. There are three reasons for my holding this opinion. The first is that I ask those who say "No" to this policy to tell me how on earth they would prevent the cost of living from going through the roof unless there is some restraining on incomes and prices. If the cost of living were allowed to go through the roof, pensioners and others living on small fixed incomes—people for whom I have the greatest regard—would be the first to suffer.
  Secondly, I remind hon. Members that War Loan, which is the premier Government security, has now dropped for the first time to below 46 per cent. If we are not careful, it will become a worthless piece of paper, and we must do everything possible to prevent that from happening. National Savings Certificates, deposits in building societies, investments in the Post Office Savings Bank and all forms of fixed interest-bearing investments will become worthless unless

  859
  there is a check such as the Bill imposes to prevent the cost of living from rising. I make this protest and appeal on behalf of those who save and have been thrifty.
  The third reason is perhaps the most important. I appeal to hon. Gentlemen opposite who may have doubts about what I am saying to bear in mind that I reckon that about five million jobs are directly—I stress "directly" and not indirectly—dependent on exports. If we had a complete free-from-all in wages and salaries, with all that would go with it, those five million jobs would be in jeopardy. We must, therefore, do everything we can to prevent the mass unemployment which many of us fear. These are, from my point of view, the three solid reasons why I would like to support the Bill.
  I remind the House of something else that has happened today. The most alarming bit of news has just come over the tape. It is that sterling has dropped to its lowest ever level. The ugly shadow of a second devaluation is being cast across the exchanges. Whether or not the Government claim that they chose devaluation or whether or not, as we say, devaluation was forced on us, it would be a national disgrace and swindle for anyone to contemplate action of this kind a second time within a few months. Such action would be monstrous and—
  Mr. Deputy Speaker: Order. The hon. Gentleman cannot range so wide in his remarks when we are debating the Third Reading of the Bill.
  Sir C. Osborne: I am doing my best to explain why I find myself in the difficult position of wishing to support the Bill.
  Mr. Deputy Speaker: The hon. Gentleman can do that, but on Third Reading his remarks must be confined to the contents of the Bill.
  Sir C. Osborne: The Bill proposes, through certain penal Clauses, to restrict incomes and wages. I am saying that this is vitally necessary for a number of good reasons.
  Mr. Deputy Speaker: Order. The hon. Gentleman must restrict his comments to the contents of the Bill.
  Sir C. Osborne: I beg you, Mr. Deputy Speaker, to allow me to take only a few seconds to explain how one cannot judge the validity of the Bill without looking at the world circumstances in which it is being produced.
  Mr. Deputy Speaker: The hon. Gentleman may do that, as long as he relates his observations to the contents of the Bill.
  Sir C. Osborne: The Bill is attempting to restore the financial health of Britain, and one of the indications of that health is the rate of Government credit. Another is the value of sterling. Unless we consider all these factors we cannot judge whether or not the Bill will help and I am stating why something like the Measure is vitally necessary.
  The right hon. Lady considers that the Bill will help us to take advantage of the situation resulting from devaluation. She does not seem to realise the immense financial tragedy that may hit us in the next three to six months. Cecil King's warning was a mere nothing compared with what may happen, and that is why I say that a Measure of this kind is necessary, whichever party is in office. [Interruption.] This is a difficult enough speech to make without interruptions.
  The Bill is an attempt to restore confidence in the economy, in sterling and in our financial institutions. At the beginning of this week I asked the Chancellor of the Exchequer why he had drawn the last 1,400 million dollars of the I.M.F. loan. He replied that it was to fund the short-term debts which he could not repay. That shows the position in which we find ourselves. We are a bankrupt nation. [HON. MEMBERS: "Rubbish."] These short-term debts were owed to the central banks. Last Wednesday the right hon. Gentleman had to borrow 1,400 million dollars to bail us out of the dilemma. The Bill is necessary for the simple reason that for many years this nation has been living beyond its means, and it is an attempt to curb the incomes of us all—wages, salaries, rents and profits—and at the same time to allow the standard of living to increase.
  Mr. John Biffen: Would it work?
  Sir C. Osbome: If we were in power, we would have to do the same or something similar—
  Mr. Biffen: I believe that my hon. Friend speaks with great sincerity, but does he not reflect that, on Third Reading of the last legislation along these lines, the 1967 Prices and Incomes Act, it was presented as the legislation which would prevent devaluation. If that did not prevent devaluation, why does he think that this Bill will make devaluation work?
  Sir C. Osborne: That is a fair question. My hon. Friend says that the Bill will not work. What I am asking is what alternative does the Chancellor have?— [An HON. MEMBER: "We could have a change of Government."] No, we could not have it for another two and a half years, because the present Government were elected by the law of the land to stay there until 1971. I beg hon. Members to face reality. Because of the tragedy which faces us—I am sorry that I cannot pursue this, because there are other factors which would justify far more than the right hon. Lady has given us—[Laughter.] It is not a giggling matter, even in Penistone. The hon. Member for Penistone (Mr. Mendelson) should go home and tell the steel workers that he has giggled about this, when they are threatened with unemployment.
  Our economic position is so desperately bad that something like this to restrain incomes and, I hope, prices, to get us back nearly level and living within our means is absolutely necessary—
  Mr. J. J. Mendelson: I was merely suggesting that the hon. Gentleman should write a letter to the Daily Telegraph if he cannot make the point here.
  Sir C. Osborne: I am obliged for the thought, which is by no means original.
  On all the evidence, the Government have lost all moral authority to impose such a stern policy of austerity—[An HON. MEMBER: "Come, come."] For God's sake, listen. Whereas, in 1964, when he first came to power, the present Prime Minister might have done something like this, or in 1966, when he had a big majority, today he has not the support of the nation to do this. This is what in wrong. The evidence is in the by-election results, public opinion polls and the opinions expressed by hon. Members below the Gangway opposite. They have not the moral authority to
  862
  impose this austerity, which is needed to save us if we are to avoid a crisis—
  Mr. Ron Lewis: Neither did the Conservatives have the moral authority to impose Suez, but they did it.
  Sir C. Osborne: I am not discussing that: it is irrelevant.
  Because a very stern policy is needed and because the Government have not the authority to impose it and because I agree with hon. Members below the Gangway that it is monstrous for a Labour Government to threaten trade unionists who are demanding their traditional rights with imprisonment, I could not possibly vote for the Bill. The Tolpuddle Martyrs should come back and haunt the right hon. Lady for doing exactly what they protested so fiercely against.
  The Prime Minister has been questioned many times recently about the Home Secretary's speech at Blackpool, when he said that a policy of this kind was absolutely necessary and that it must be voluntary. Hon. Members below the Gangway must face the fact that, if the T.U.C. will not allow the policy to be accepted voluntarily, some compulsion is necessary if it is to be achieved. This is the dilemma for us all, and because of that, I do not feel that I can vote for the Bill.
  6.45 p.m.
  Mr. E. Shinwell: The general expectation was that this Ball, which has caused considerable controversy, would go out with a whimper, but apparently it is going out with a bang and is causing a split in the Tory Party. That is most regrettable. I should not be surprised to learn in the next 24 hours that the hon. Member for Louth (Sir C. Osborne) has had the Whip withdrawn; he might even be expelled. The Tory Party cannot allow this sort of thing to happen after all the fulminations from their Front Bench, the criticism and catisgation, the bitter and venomous attacks on my right hon. Friend the Minister. They cannot allow the hon. Member to get away with this. It is a reflection on the dignity of Parliament.
  We have just listened to a most momentous announcement. The hon. Member for Louth is going to support the Bill— [An HON. MEMBER: "No, he said that

  863
  he could not."]—well, he said so in the first part of his speech—[An HON. MEMBER: "Only in the first part."] This causes me grave doubts, but I must not be deflected from my purpose.
  There was some frustration among hon. Members on this side on Second Reading when they objected to Privy Councillors monopolising the debates. In the debates this week, I have not been able to take part because I have been trying to soap the stairs for the Tory Party in Nelson and Colne. On Second Reading, I made my position clear. I accepted unreservedly and without qualifications the principle underlying the Bill, the purpose, the objective, the goal which the Government wish to reach, but I confessed that there were some sections of it to which I had some opposition, and that opposition remains.
  But the Second Reading debate is over. Several of my colleagues and myself—or, rather, myself and several of my colleagues—abstained. I understand from my perusal of the OFFICIAL REPORT and the newspapers that several of my colleagues, on Report this week, expressed strong opposition to the penal Clauses and that some of them actually voted against the Government. What I should have done if I had been present, I am unable to say. A great deal depends on the nature of the debate and the arguments adduced.
  Before I venture to tell the House what I propose to do at the end of the debate, I wish to say to my colleagues who have expressed strong opposition and resentment against the penal Clauses of the Bill that they have nothing to apologise for. That is my considered view. I believe, with long experience of trade unionism —this can be noted and used as an argument against myself and the Labour Party —that without the good will of the trade union movement the Labour Party might find it very difficult to retain its political authority in the country. I want no clash with the trade union movement. I have said this in private to Minister and I have said it in public. That was my purpose in abstaining on Second Reading.
  This week, some of my hon. Friends voted against the Government and some of them abstained. The question is: what should we do now? All the arguments have been adduced. The Opposition have made their case. The remarkable feature
  864
  in this debate has been that the Opposition have opposed the Bill at almost all its stages, but, nevertheless, when in office, they were responsible for advocating a price and incomes policy. Why have they departed from that policy?
  Sir Edward Brown: It was voluntary.
  Mr. Shinwell: Was it because a Labour Government revived it?
  Sir E. Brown: Compulsion.
  Mr. Shinwell: Someone is interrupting me from a sedentary position. Perhaps he would be good enough to rise to his feet to interrupt.
  Sir E. Brown: Our sole reason was that we believed in a voluntary prices and incomes policy. What we object to is the introduction by the Government of a so-called voluntary policy alongside means of compulsion which might result in people being put in prison.
  Mr. Shinwell: All this talk about a voluntary policy, coming from the Tory Party, with its history of condemnation of the trade union movement—
  Mr. Biffen Mr. Biffen rose—
  Mr. Shinwell: I will not speak long. I know that the hon. Gentleman is a great authority on almost everything—so I understand. I hope that I have described his reputation accurately and without offence. I wish to express my opinion in as few words as possible.
  For anybody in the Tory Party to talk about continuing the voluntary system—-a free for all—is all very well. But let hon. Members opposite examine their history of condemnation of the trade union movement and of the activities of trade unions. I can remember the Osborne judgement. I can remember the Taff Vale dispute. I can remember the Trade Union (Amendment) Acts. I happen to have read the industrial history of this country and how the Tory Party created the combination laws. [An HON. MEMBER: "In the Bill?"] None of that is in this Bill.
  Do not let us have any talk about a voluntary policy. It is a lot of hypocrisy. I cannot use the word "humbug" because I understand that it is an unparliamentary expression. I shall not

  865
  detain the House long. That will gratify hon. Members opposite. If I run into form, they will hear more castigation from my lips than they have heard for a long time. I had to listen the other day to the right hon. Member for Mitcham (Mr. R. Carr), who was leading for the Opposition. He has now left the Chamber. He bored the House stiff. I saw hon. and right hon. Members on the Opposition Front Bench going to sleep when he was speaking. Nobody goes to sleep when I am speaking.
  I say what I am about to say with what sincerity I can command. "Sincerity" is a much abused term. I have listened occasionally to my right hon. Friend the First Secretary. I worried her a little on Second Reading because of my attitude. However, I must congratulate her on her fortitude. For a woman, she has stood up remarkably well. [Interruption.] That is a concession, is it not? I should not expect my hon. Friend the Member for Rochester and Chatham (Mrs. Anne Kerr) to say otherwise.
  Mrs. Anne Kerr: Thank you.
  Mr. Shinwell: She is a sturdy representative of the female sex—and a very beautiful one, too. Coming from me at my time of life, that means something.
  I have ventured to congratulate my right hon. Friend the First Secretary before. I have sometimes had doubts about colleagues associated with the Left wing becoming members of the Government. I have found in my experience that usually they try to escape from their youthful ideals. But I do not wish to discuss that matter; it is not in the Bill. Nevertheless, I congratulate my right hon. Friend. She has had to stand up to a lot of castigation, and she has done remarkably well.
  We have had fun and games. The penal Clauses have been discussed with the utmost seriousness and gravity. We have had our say, and the Government have had to put up with it. We have nothing to apologise for. If we hold strong views, we should express them. I wish that there were more independence in the House, on both sides. That would not be a bad thing for Parliament. There is talk about Parliamentary reform. The
  866
  best Parliamentary reform would be to have Members who occasionally venture to express their views, despite the Whips. Therefore, as I say, my hon. Friends should not apologise. I applaud them for their activities.
  Now that the Bill has gone through almost all its stages, we have to decide what to do. I venture to tell the House, with no pomposity nor in the expectation of a reward—no cups or medals are likely to be handed out as a result of what I say—that I shall vote for the Bill.
  Mr. Roy Roebuck: Hear, hear.
  Mr. Shinwell: That is a little applause. I expected more. I have been working this up all week. While I was trying to think of speeches in Nelson and Colne, I thought about what I should do, because I was reading what was going on. All I get now is a little cheep from my hon. Friend the Member for Harrow, East (Mr. Roebuck).
  Mr. Roebuck: I am sorry to hear that my right hon. Friend thinks that my cheer was a little cheep. I can cheer a great deal louder. I should have thought that a cheer from me was worth a whole series of cheers from hon. Members opposite.
  Mr. Shinwell: There is a lot in that when I come to think about it. My hon. Friend does not, as a rule, compliment anybody.
  I am grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye. Having regard to all the circumstances, resentful as I have been all along about the penal Clauses going into the Bill, I want to say one more thing to my right hon. Friend. In the course of the debate my right hon. Friend told us that the voluntary system has worked very well and it is doubtful whether the penal Clauses will ever be implemented. My right hon. Friend said that these powers are merely to be kept in reserve. I hope that they will never be implemented. I hope that the trade union movement and employers alike will respond to the needs of the situation. I agree with the hon. Member for Louth about the desire to get the country on its feet. If the Bill helps us towards that goal and we reach our objective as a result, I shall be highly

  867
  gratified. It will be one of the best things that this Government have ever done. In the circumstances, I shall vote for the Bill.
  6.1 p.m.
  Mr. John Biffen: I should like to conform to the promise I gave to speak briefly. I want to speak very much in the spirit of a Third reading and to confine myself to one or two Clauses of the Bill. In particular, I refer to Clause 1 with its reference to Sections 7–22 of the Prices and Incomes Act, 1966. It was about that aspect of the Bill that we had what I think by common consent will be agreed was the most important of our debates during the Report stage. In its way it was a Parliamentary occasion. We had the Tory Party voting against the Treasury Bench, a number of Labour Members of Parliament voting against the Treasury Bench, the Welsh Nationalist voting against the Treasury Bench and the Scottish Nationalist voting against the Treasury Bench. This is extraordinary. What about the Liberals? What makes it so extraordinary is that discussing prices and incomes legislation is an annual occasion. When the penal Clauses were discussed last year the Liberals voted against the Government. So we shall look forward with great interest to the hon. Member for Colne Valley (Mr. Richard Wainwright) telling us what change has overcome Liberal economic thinking concerning penal Clauses which were unacceptable last year but which were not the subject of an adverse Liberal vote this year.
  I thought that the hon. Member for Colne Valley had done ample homework on this matter. I refer the hon. Member to the debate which took place on 11th July, 1967. It is interesting to note that no Liberal took part in the debate. The votes are recorded in cols. 661–4, I will not go through the roll call of honour of those who were then the freedom fighters, except to mention affectionately the hon. Member for Orpington (Mr. Lubbock).
  Why is Clause 1 to important?
  Mr. Richard Wainwright: Is the hon. Member for Oswestry (Mr. Biffen) trying to deny that the Left-wing Amendment on Tuesday night sought to remove from the Bill the whole
  868
  of the Clause relating to incomes? Is the hon. Member pretending that this was solely the one Clause which dealt with penalties?
  Mr. Norman Atkinson: The hon. Gentleman is so pretending.
  Mr. Biffen: I am not.
  Mr. Mendelson: Of course the hon. Gentleman is.
  Mr. Biffen: No. I accept the distinction. I will be grateful to have the hon. Gentleman elaborate, if he can, within the disciplines of a Third Reading debate why he or any of his hon. Friends did not attempt to place on the Notice Paper their own Amendment seeking to exclude just that Clause relating to the penal provisions and not those sections of the Bill which, among other things, included the penal provisions. The penal provisions lie at the heart of those Clauses. By far the most important part of the Bill is that relating to the penal provisions. Without the penal provisions it becomes an exercise in Government sermonising and, therefore, much less offensive to those who value liberty.
  Clause 1 of the Bill is vital, as are Sections 7 to 22 of the Prices and Incomes Act, 1966, to which it refers. It is this provision which has the capacity for providing a continuing statutory regulation of prices and incomes. We need to know much more clearly and categorically than we have so far been told what is the concept of a voluntary policy in relation to the provisions contained in that Clause.
  For example, the right hon. Lady this afternoon talked about holding the reins. Does the right hon. Lady regard these Clauses as essential for holding the reins? The right hon. Member for Coventry, East (Mr. Crossman), whose present occupation I have temporarily forgotten, once talked about long-stop provisions. One can use all kinds of metaphors, but basically these were the reserve statutory powers. Are they to be continued as a perpetual part of the supposedly voluntary policy? This afternoon the right hon. Lady qualified "voluntary" by the word "essentially". These are not small matters of semantics. When the 1966 legislation was introduced, it was never then suggested that this was a necessary statutory requirement for what would

  869
  otherwise be called a voluntary policy. Any Minister who advocated that at that time would have been laughed out of court. He might even have been voted out by hon. Members opposite below the Gangway who have shown in this debate, as in previous debates, that they are not the paper tigers that they are sometimes thought to be.
  We need a clear and categoric assurance on this matter, because it is very much in vogue to talk about the Government evolving towards a voluntary incomes policy. I used to think this was medieval economics or scholastic economics. I realise that I am wrong. It is Darwinian economics; it is the economics of evolution. We are told that this policy is evolving. Is it evolving to a situation where the Government wish to have the powers contained in Clause 1 because they think they can voluntarily proceed without them? Many hon. Members have clearly stated that they do not believe this Government could ever have an incomes policy without those statutory powers. I would not be doing a disservice to the hon. Member for Huddersfield, West (Mr. Lomas) if I said that he probably thought this was going to be a continuing necessity. I am certain that hon. Members not in their places—
  Mr. Kenneth Lomas Mr. Kenneth Lomas (Huddersfield, West)rose—
  Mr. Biffen: I will give way in a moment. I do not think we shall have an opportunity of hearing the hon. Member for Lancaster (Mr. Henig) or the hon. Member for York (Mr. Alexander W. Lyon), although they have both talked about prices and incomes legislation. I gained the impression that both those hon. Gentlemen wanted this residual statutory power, as it were, as a permanent feature of Government incomes policy.
  Mr. Lomas: My feelings about this have been expressed many times. I believe that the over-riding necessity is to get the country's economy right, and the Bill is a vital part of that process. Therefore, the penal Clauses, or perhaps I should say the long stop-powers which the Government have to stop people taking more than they are entitled to are necessary. I also believe that once the economy is right, and once we have a redistribution of income in some sense these legal powers can go and we can
  870
  work successfully on a voluntary incomes policy.
  Mr. Biffen: That is a fascinating revelation as of this time, but tomorrow, and tomorrow, and tomorrow this is a policy which in statutory terms is evolving into eternity. The hon. Gentleman speaks with optimism, but this was the legislation to promote growth, to avoid unemployment, and to avoid devaluation. This was the legislation to make devaluation work. There will always be excuses for this legislation. There will always be excuses for the powers contained in Clause 1. At least, that has been our experience so far. Maybe a change will come about.
  Of course the whole question of evolution is essential in this debate, because we know that under Clauses 2 and 13 the Measure is to expire at the end of 1969. We also know that in the view of the right hon. Member for Belper (Mr. George Brown) the Government were unwise not to have this Bill continued under the expiring laws continuance legislation. This ought, therefore, to be a warning. When we have the Home Secretary talking about the necessity for a voluntary policy, the Prime Minister talking about the necessity for a voluntary policy, and the right hon. Lady herself talking about the desirability of such a policy, the real question turns on whether the voluntary policy they foresee will still require Sections 13 to 22 of the 1966 Act, which are reinforced by and contained in Clause 1. That was the question addressed to the right hon. Lady on 25th June and that was the question to which her instantaneous, and I think understandable, reply was:
  "It will be better if I do not give way because I am trying to evolve an argument."—[OFFICIAL REPORT, 25th June, 1968; Vol. 767, c. 392.1
  We allowed the right hon. Lady to evolve an argument, but it did not evolve an answer, and it is the answer more than anything else which I hope we will get during the wind-up of this debate.
  6.12 p.m.
  Mr. R. T. Paget: I think it was Blackstone who once observed that a sovereign Parliament could do anything but turn a man into a woman or vice versa. I extend that and for the same reason say that Parliament cannot regulate prices and wages within an economy regulated by supply and

  871
  demand, because it is contrary to the nature of that economy.
  If there is a price system, that is, an economy which is regulated by prices, one cannot proceed to regulate the regulator. I believe that to be the experience of 1,000 years of economy. If someone proceeds to control the price of wheat, all that he does is to innate the price of everything else, because no change is made in the total spending power available. All that he does is to distort his price system and discourage the production and distribution of wheat. The end position is worse than the first.
  It is equally a fallacy that low prices produce savings or investment. They never do, and least of all at a time such as the present when people have lost confidence in the value of money. If it is not possible to control prices within this system—and I am sure that it is not— it is equally absurd to say that wages can be fixed, because if one tries a Statute of Labourers and fixes wages, one is ordering employers to pay less than they wish to pay. That does not lower labour costs; it increases them.
  Employers do not wish to pay more for fun. They wish to pay more because they believe that a higher payment will give them a better return. In other words, it will give them better productivity. If employers are condemned to a fixed wage system, they are equally condemned to accept lower productivity, and that is the trouble with the Bill. High wages are the secret of efficiency. If a man has to pay high wages, he cannot afford to have obsolete equipment. He cannot afford inefficient management. High wages impose efficiency on him.
  I have been on the edges of farming for about 30 years. I have seen farm wages multiplying by five, and I have seen farm labour costs fall throughout that period. High wages have imposed astonishing efficiency on the agriculture industry throughout the period.
  Sir C. Osborne: Mechanisation, too.
  Mr. Paget: Yes, but it is high wages which impose the mechanisation.
  Let us consider the American experience. American wages are twice, or even three times as high as ours, but
  872
  their labour costs are generally lower than ours because they manage their labour to produce two or three times what ours produces, and it is this, the efficiency factor, within this system which the Bill tries to tie up.
  That does not mean that the Government cannot control many things. They can control spending power through the Budget, and they can and should control it at a level which will bring a constant increase in general productivity. They can control the exchange rate, and thereby the relative margins of profits on exports and imports, and if they forgot about prestige they could do that to balance our payments. They can control sterling and stop it being used as a gambling currency by other people. Who ever heard of the Russians being forced into unemployment because of a run on the rouble? If one manages one's currency for the purposes of exchange, one does not have to submit to this sort of nonsense. The Government can also manage interest rates. At present these are more or less controlled by the necessity to attract money here to support the pound. They are controlled at levels of about 8 per cent. This would be intolerable without a 5 per cent. inflation, and so one has these interest rates imposing inflation. That is what the Government can control but will not. Instead, they try to control things which they cannot control within this system.
  If one wishes to regulate prices and wages, it is not possible to have prices and wages as the regulator of one's economy. There must be the rationing, and there must be direction of labour. If the economy is regulated in that way, it is possible to regulate prices and wages. It is not possible to regulate wages and prices and then use those prices and wages to regulate the economy. That is the basic lesson and the basic fallacy. This is simple logic.
  I am not opposed to the Bill merely because it is a piece of nonsense. I am much more opposed to it, and this is the grave reason, because it is an act of profoundly bad faith. I am not all that interested in the fate of this Government. I am interested in the fate of the Labour Party. If they kick from under them the support of the trade union movement there will not be a Labour Party, and this is what they are

  873
  doing. I am interested, too, in Parliamentary Government. I think it is profoundly important. If the trade union movement can no longer trust its Parliamentary representatives, if it is betrayed by its Parliamentary representatives, this will lead to unparliamentary methods. In May, the march of the dockers on the House chanting "Up Enoch" was a profoundly disturbing phenomenon.
  Mr. Speaker: Order. Will the hon. Gentleman link what he has to say with the Third Reading of the Prices and Incomes Bill?
  Mr. Paget: Mr. Speaker, I will seek to do so. I was saying that I was opposed to the Bill because I believe that it is a breach of faith that goes to the roots of our economic policy. This is a blow at trade unions. It includes the penal sanction against the trade unions. Parliamentary Government works by a system of representation of interests. If the interests find themselves betrayed, as they do in this Bill, by the representatives whom they send to Parliament, then the Parliamentary system will break down. I believe this to be the real danger of the Bill, and I believe that it is one which we shall experience in future.
  6.21 p.m.
  Mr. John Peyton: I hope that I shall not embarrass the hon. and learned Gentleman the Member for Northampton (Mr. Paget) if I say that he spoke for many people not only in different parts of the House but in many parts of the country. What he said will, I hope, command a wide area of support.
  The speech made by the right hon. Gentleman the Member for Easington (Mr. Shinwell) was, even by his standards, a remarkable one. He adopted his usual tactic of hurling some noisy but more or less harmless fire-crackers at my hon. Friend the Member for Oswestry (Mr. Biffen), got in one or two digs at Ministers and then suddenly departed from character. He paid court to his right hon. Friend on the Front Bench and congratulated her, I think quite rightly, upon her fortitude. He did not congratulate her upon her judgment any more than I can. I would agree with him that the right hon. Lady has shown great courage, one might call it audacity,
  874
  at times during the handling of the Bill, but I wish that I could say something for her judgment in introducing it. The authorship of the Bill earns her nothing for judgment.
  The right hon. Gentleman in a piece of characteristic autobiography described himself as a great lover of independence. He said that it would be a good thing if people in the House were more independent. He expressed himself as being bitterly resentful, as always, of the Bill and the contents of it. Then, astonishingly, he declared it was his intention, conceived in Nelson and Colne, to vote for the Bill.
  With that I shall leave the right hon. Gentleman and remind the House of one pithy line spoken by the right hon. Lady in moving the Third Reading. She described this as safety-belt legislation, not inappropriately, since safety belts are put on when one is anticipating an accident, although I do not believe that this legislation will act as an effective safety belt.
  I remind the House of what I said during the Second Reading debate on the 1966 Bill, for which the right hon. Gentleman the Member for Belper (Mr. George Brown) was responsible. Having previously teetered up to the edge of resignation, he then sponsored the Bill himself. I put to him—he did not of course reply —that Governments are human and, having taken a step down a road which was wrong and bad, would not admit that they had made a mistake; they would simply take further and more serious steps down the same road. We did not have to wait very long for that prophecy to be proved correct. We had the 1967 Bill, and now we have the 1968 Bill which produces a very marked extension of the powers.
  I believe that the Bill is ill-conceived and will not work. I dislike it particularly because I consider it to be oppressive in the extreme. There are few things which I find more obnoxious or more distasteful than the spectacle of the State turning vindictive upon an individual. I believe that the right hon. Lady's Department, or whoever is responsible for the handling of Mr. Jocelyn Hambro's case, has shown the kind of mood which will colour the conduct of the Government in the exercise of these

  875
  powers. I fear, once the Government have these powers, they will be convinced of the purity of their motives, and will yield to the temptation to behave in a vindictive and oppressive manner.
  The hon. and learned Gentleman the Member for Northampton said that the Bill will not work; Parliament cannot do this thing which the Government are now asking it to do. The fruit of our efforts, once upon the Statute Book, will prove totally incapable of achieving the results which the Government have in mind. I do not entirely share the hon. and learned Gentleman's concern for the survival of the Labour Party, but I endorse emphatically his condemnation that this is a breach of faith with the trade union movement. It is not only a breach of faith with the trade union movement; it is a breach of faith with the whole tradition of England. It is a breach of faith with all those who voted for the Labour Party in 1966 in the belief, ill-founded, that the traditional system of the country would be safe in the hands of a Socialist Government. I find appalling the fact that, after the experience that Ministers must have gone through during the past three years, they have learned nothing to modify the grossly flattering conception which they have of their own omniscience. One of the most surprising phenomena of the Government is that they cannot learn from their own mistakes, they cannot even begin to possess themselves of that humility which might teach them how valuable this would be.
  6.30 p.m.
  Mr. Trevor Park: I listened intently and with respect, as I always do, to my right hon. Friend the Member for Easington (Mr. Shinwell). I found myself in a very broad measure of agreement with his arguments, but I did not agree with his conclusion. In my opinion, this Bill is as obnoxious on Third Reading as it was on Second Reading, and I cannot and will not support it.
  I know that I shall be told that it is no longer a matter of the penal Clauses or the unfair treatment of workers on lower wages, against both of which I voted on Report. I realise that I shall
  876
  be reminded, as I have been already by my right hon. Friend, that the Bill contains provisions to control prices, dividends and rents, which I believe should have been brought into operation long ago. Indeed, if I have any criticism to make of this aspect, it is not that the proposals are too strong. I think that they are too weak and that, to be really effective, they need to be greatly intensified and provided with much more effective means of implementation than they possess at the moment.
  I am being presented with a cyanide sandwich, and I am asked to consume it on the ground that, if I do not, I shall starve to death. That is a logic which I cannot accept. Together with a number of my hon. Friends, I have tried to extract the cyanide from the sandwich. Had we succeeded, we would have accepted the bread most willingly. We failed, although I suspect that we gave the Government a fright. I hope that we have succeeded in preventing a repetition of this nonsense at any time in the future.
  If the Government try to seek penal powers over trade unionists ever again, not only will they fail to secure the majority support of the Labour movement, as they have already, but they will not get a majority for it in this House, and all the hosts of Orpington and the Colne Valley will be powerless to rescue them.
  I reject the cyanide sandwich completely. Earlier this afternoon, my right hon. Friend described the Bill as an act of faith. I would describe it as an act of folly of the most disastrous kind. I cannot and will not support it.
  6.34 p.m.
  Mr. Richard Wainwright: While hon. Members on the Liberal bench have not had any real hope that this Bill would contain sensible and practical Clauses on prices and dividends, we believed that the Government had won themselves a great opportunity on incomes. In the run-up to the Bill, they dissociated a vast pool of opinion in industry from the electioneering free-for-all of the Conservative Party, and they had also gained the support of a very large measure of expert independent opinion.
  We regret very much that, on incomes, this opportunity has been missed. It

  877
  is true that this is not the wholly negative legislation which was presented to us in 1966, but it is still very confused and liable to lend itself to arbitrary operation. Liberals regret this, because we believe that the orderly growth of real wages in our type of society requires firm Stale intervention from time to time. It is no good even talking about that unless one is willing to tolerate, even though in the far background, some measure of sanctions.
  An Hon. Member: That sounds very Liberal.
  Mr. Biffen: I am interested in the phrase
  "tolerate, in the far background, some sanctions".
  The hon. Gentleman will recall that, a year ago, it was precisely the sanction contained in Section 16 of the Prices and Incomes Act, 1966 (Terms and Conditions of Employment Enforcement) against which he and his hon. Friends voted. If the sanction must still remain, why was he against it a year ago and in favour of it now?
  Mr. Wainwright: I am sure that I made it plain just now that we do not claim that the present Bill is wholly negative, as was the legislation of 1966 and 1967. Therefore, although we shall oppose the Third Reading of the Bill in a spirit of disappointment, we are not saying that it is the worst possible Bill that could have been presented to the House for Third Reading, because, for a few moments on Tuesday night, we had a most extraordinary vision of a Bill which was very much worse and in which the whole of the provisions about Prices —
  Mr. Speaker: Order. In this Third Reading debate, we are discussing neither the earlier Acts nor the Bill which might have happened on Tuesday night.
  Mr. Wainwright: I am sorry, Mr. Speaker. I was led into that by earlier contributions, to which I would have liked to reply.
  Mr. Mikardo: I am listening with breathless interest to the hon. Gentleman's explanation of the thinking of the six Liberal hon. Members who voted against our Amendment
  878
  because they thought that it created a condition of anarchy. Would the hon. Gentleman kindly explain now—
  Mr. Speaker: Order. We are not debating the Amendment now. We are on Third Reading.
  Mr. Mikardo: Since the penal sanctions are in the Bill, and since the hon. Member for Colne Valley (Mr. Richard Wainwright) has been discussing them; may I not ask him to explain the thinking of the six Liberal hon. Members who were paired with Government supporters and who therefore had the effect of voting for the Amendment, because clearly they thought that the penal sanctions were a gross infringement of civil liberty—
  Mr. Speaker: Order. This may be most fascinating, but we are discussing the Third Reading of the Bill.
  Mr. Eric Lubbock: On a point of order, Mr. Speaker. The hon. Member for Poplar (Mr. Mikardo) who, as I understand it, is leading the Conservative Party at present, asked my hon. Friend the Member for Colne Valley (Mr. Richard Wainwright) a direct question, and you did not pull him up while he was putting his question. In view of that, surely my hon. Friend has a right to reply.
  Mr. Speaker: Order. The recollection of the hon. Member for Orpington (Mr. Lubbock) is singularly incorrect. I did call the hon. Member for Poplar (Mr. Mikardo) to order when he was putting his question. Mr. Wainwright.
  Mr. Wainwright: I am sorry that the rules of order prevent me from pursuing the point. I would like to have dwelt upon the fact that the unholy alliance on Tuesday night made—
  Mr. Speaker: Order. In a debate on Third Reading, we cannot have an inquest on an Amendment.
  Mr. Wainwright: In deference to your Ruling, Mr. Speaker, I must return to the Bill. In building terms, it attempts to cover four quite different storeys of a building with only one ceiling. It is an attempt which is doomed to failure. As we pointed out on Second Reading, in their White Paper leading up to the Bill

  879
  the Government spelt out accurately that there are four entirely distinct levels at which most wages are settled—plant level, district level, company level and national or industry-wide level. We asked them—and have never received any satisfaction—how, in the mechanism of this Bill, the Government could possibly contain the totality of all these distinct negotiations within the one ceiling of 3½ per cent. We have never received, either informally or in the House—and we have put the matter in a variety of ways—even an attempt at an answer—
  Mr. Ted Fletcher: I am trying to follow the hon. Member's argument, and he says that he has put this point of view in a variety of ways. Will he comment on the fact that the representative of the Liberal Party on the Committee attended, to my knowledge, only twice and both times for very short periods, yet this was an opportunity to put that point of view? Could he explain—
  Mr. Speaker: Order. We are not discussing the attendance of hon. Members in Committee. We are discussing the Bill on Third Reading.
  Mr. Wainwright: This Bill and the opportunity which the Government have created would have given them the chance to make it clear to all who are naturally and legitimately seeking the best possible pay bargain for themselves that, in future, they cannot look to industry-wide or nation-wide settlements to satisfy their claims. That could have been spelled out clearly in the Bill, as we asked, or put in later, but the Government have neither answered our questions nor provided the type of legislation which we were prepared to back. For this reason, and because we never began to have any faith in the prices or dividends parts of the Bill, we must, with a feeling of disappointment, vote against it.
  6.43 p.m.
  Mr. Sydney Bidwell: The contribution of the hon. Member for Colne Valley (Mr. Richard Wainwright) is the perfect historical explanation of why the Lib-Lab alliance was wound up and the Labour Party began at the beginning of the century. I do not like to withhold my vote from the Government and therefore from support of my
  880
  right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary, for whom I have the highest regard, without an explanation to the House.
  I have paid close attention to the problems of incomes policy in my short time in the House. When my right hon. Friend undertook her present massive job, she rightly emphasised the need for a positive policy on incomes, prices and productivity on which Britain's future depends, but she and her right hon. Friend must recognise that incomes policy by itself, whatever the interpretation we make of it, can never be considered in isolation and that we must bear in mind the need to recast Britain's economic national and international resources, which means cutting the arms burden. But I realise that, if I pursued that line, you would soon declare me out of order, Mr. Speaker.
  The Bill and its punitive Clauses must be related to the fundamental capitalist economic order in which we live. I hope that our presence on this side of the House is to help to fulfil the purpose of so many trade unions, to change the character of society to prepare for the emergence of a democratic Socialist society. Very few in the trade union movement, which I understand so well because of my background, are interested in illusory wage increases. The whole truth over a vast field of employer-worker relationships is that what does not go in wages and salaries goes to employers. That is how the matter is seen in the country.
  Alas, the Government so far have succeeded only in turning the attention of the workers away from the employers and on to themselves. As regards this legislation, for many in the Labour movement the proof of the pudding is in the eating. This is where the views of my hon. Friend the Member for Hudders-field, West (Mr. Lomas) are fundamentally wrong, because they are ventured against what is happening to the low-paid workers. I refer to the change of attitude by the agricultural workers— [Interruption.]
  Mrs. Anne Kerr: On a point of order. We are trying to listen to a very important speech and it would be helpful if hon. Members could be quieter.
  Mr. Speaker: I concur entirely with the hon. Lady's comments.
  Mr. Bidwell: I want to draw attention to the current struggles taking place in industry and the change of attitude of agricultural and railway workers. The N.U.R. has been a most loyal supporter of the whole idea not only of a voluntary incomes policy but of a statutory one at the same time. Now, railway workers feel obliged to vote with their feet in this matter and to take industrial action because they have not been given the justice which is their right.
  I must issue certain warnings to the Government. The trade union movement and the vast majority of trade unionists who support our party and long for the success of a Labour Government understand what my right hon. Friend the Member for Easington (Mr. Shinwell) has said. Although he said that "humbug" is not a permitted word in this House, that is what it adds up to. Although restrictive measures are now to be imposed by the Bill, they are chickenfeed compared with those which the Opposition have up their sleeves when they take power again.
  As it stands, the Bill is fundamentally bad. It still retains the punitive Clauses which are obnoxious to the trade union movement. If I told my local trade unionists and supporters that I had voted for the Bill, with these Clauses, and that the Government had steadfastly refused to budge on the issue of the minimum wage—I have in mind that the lowest-paid adult railway worker at 20 years of age is earning £11 6s. a week—I would not be serving these people. I must abstain, unless the Under-Secretary gives a convincing reply, and I see in this abstention that I am carrying out the true interests of the people whom I came here to serve.
  6.48 p.m.
  Mr. Stanley R. McMaster: It gives me great pleasure to follow the impressive speech of the hon. Member for Southall (Mr. Bidwell) and that of the hon. Member for Derbyshire, South-East (Mr. Park). I remember that, on an accasion which was not unlike this, when a former Chancellor, my right hon. and learned Friend the Member for the Wirral (Mr. Selwyn Lloyd) introduced a payroll tax, I also felt strongly and felt obliged to oppose my party. I therefore know the difficulties which the hon. Gentleman has had in taking this action,
  882
  because he believes that deeper issues are involved than just one small Bill.
  Like him, I am totally opposed to the penalty provisions in the Bill against men who exercise their fundamental right to strike. Not only are those parts of the Bill fundamentally wrong, but the Measure as a whole will not achieve its purpose. It is an entirely bad Bill.
  It was said when Income Tax was first introduced that it would be a temporary measure. The same was said of the 1966 Act which preceded the 1967 Act and this Bill. I fear that legislation of this kind will become as permanent as Income Tax. Measures of this kind impede the growth of the economy, as the right hon. Member for Easington (Mr. Shinwell) pointed out. They foster the growth of bureaucracy and make the economy less flexible and adaptable in an age when it must adapt. They encourage inefficient companies to stay in business by keeping wage levels down.
  The management of wage rates is the function of business management. An interesting report appears in today's newspapers telling of a group of American economists who have given their views of business management in Britain. If there have been faults in the past 10 to 20 years—and nobody can deny that there have been—they have been due to the inefficiency of business management to keep wages and prices within reasonable levels and so enable us to be competitive in world markets. It is not the job of Government to impose wage levels throughout the economy. By attempting to do so they are perpetuating the faults which have existed since the war.
  I vividly recall the promises made by my Labour opponent in the 1964 General Election in Belfast, East. Between 1962 and 1964 the Prime Minister condemned the Conservative Party by saying that in the growth stakes Britain was falling far behind the rest of the world—
  Mr. Speaker: Order. This is a tempting subject to follow, but not in this debate.
  Mr. McMaster: Four years after those promises were made in 1964 we have the third prices and incomes measure. Is this what Labour supporters voted for in 1964 and again in 1966?

  883
  The Bill must be considered in conjunction with the Chancellor's Budget statement because it is an instrument designed by the Government to achieve the Chancellor's aim of reducing the standard of living of every British citizen by between 1 per cent. and 2 per cent. I fear that the right hon. Gentleman's estimate of what would happen following devaluation was very much an underestimate. What are economic conditions like after four years of Labour rule? To begin with, we have growing unemployment.
  Mr. Speaker: Order. The hon. Gentleman has every right to say all this, but not on the Third Reading of this Bill.
  Mr. McMaster: I apologise for constantly wandering out of order, Mr. Speaker.
  The Bill applies, with the exception of Part III, to Northern Ireland. Its effect will be felt by my constituents, who are now witnessing unemployment at the rate of 7 per cent.—this in mid-summer.
  Mr. Speaker: Order. The hon. Gentleman must listen to what the Chair is saying. He can discuss unemployment in Northern Ireland on the appropriate occasions. I remind him that we are debating the Third Reading of the Prices and Incomes Bill.
  Mr. McMaster: As the Bill is part of the Chancellor's logic and must be considered in conjunction with the Budget, I was relating what its effect will be on the already depressed state of the economy, not only in Northern Ireland but throughout the country. The effect of this Measure and its two predecessors will be disastrous. It will be bad for business morale, it will damage investment and it will be ruinous for savings. In short, legislation of this kind must be a complete disaster for Britain. In its place we need something which will encourage flexibility, adaptability and efficiency. A long drawn out freeze, of which this Measure is the last step, is the worst possible medicine that Britain could be given for its economic ills.
  6.55 p.m.
  Mr. Atkinson: I am anxious to comment on the Powellite mythology so eloquently demonstrated by the hon. Member for Owestry (Mr. Biffen). First, how-
  884
  ever, I wish to endanger the chances of my hon. and learned Friend the Member for Northampton (Mr. Paget) becoming a member of the Government by congratulating him on his accurate analysis of the wage situation.
  At the outset of our discussion today on the Bill I said that I thought that Confucius had once been an hon. Member. My right hon. Friend the Member for Easington (Mr. Shinwell) commented that he thought that Machiavelli had been here at some time. From my experience this week and having listened to the speeches on this Measure, I believe that there is a great deal of truth in what my right hon. Friend said. This has been an extremely traumatic experience for many of my hon. Friends.
  It is dreadful that we should be faced with the situation of the hon. Member for Louth (Sir C. Osborne) honestly presenting his opinion of the Bill and being jeered by his hon. Friends—not because of the emptiness of his argument but because he is prepared to defy the Whips and managers of his party. [Interruption.] That is why there was so much noise from the benches opposite when the hon. Gentleman said that he would like to have supported the Bill and that if the Tory Party were returned to power—if such a dreadful occurrence took place— it would, of necessity, have to pursue a prices and incomes policy of this kind, including penal Clauses. The hon. Gentleman was jeered by his hon. Friends for saying that.
  My right hon. Friend the Member for Easington commented on our democratic practices. It seems that we have now reached the stage—this was clearly demonstrated this week—when the Opposition is impotent in the absence of argument on this side of the House. Likewise, the Left of the Labour Party has been accused of its impotency in the absence of hon. Members opposite voting against the Government. Thus, as a result of the voting pattern in the House this week, the British Press has been presenting a picture of an unholy alliance between the extreme Left and Right in the House which had as its object the defeat of the Government. To print such things is to confuse the argument.
  Sir D. Glover: On a point of order. Are the hon. Gentleman's comments

  885
  about an unholy alliance relevant to the Third Reading?
  Mr. Speaker: I was waiting for the hon. Gentleman to relate his comments to the Bill, which I think he was about to do.
  Mr. Atkinson: That is absolutely true, Mr. Speaker, because by analysing some of the logic of the voting pattern which we have seen in the House one can try to understand why certain Clauses have remained in the Bill. In other words, I want to consider the Bill as it stands following the discussion of a number of Amendments and the voting pattern which has emerged.
  This matter is of concern to all hon. Members. It has been suggested that there is a curious grouping in the House and that certain sections have joined together to defeat the Government. I am arguing that the opposition to the Government in certain matters has arisen for totally different reasons, reasons which are distinctly opposite—
  Mr. Speaker: Order. I said earlier that I hoped that the hon. Gentleman's remarks about an unholy alliance would be related to the Third Reading. He is now referring to Amendments which were debated at an earlier stage of the Bill. We are now discussing the Third Reading of the Bill and he must relate his comments to that.
  Mr. Atkinson: I was about to turn to the Powellite mythology of which I spoke earlier.
  What we have tried to do in this debate has been, not only to argue that penal legislation is against the interests of the Labour movement, that it is anti-trade union, but that it is bad economics. This is where the extremes of the House divide. The whole of our case on Amendment No. 3, asking that all references to wages should be taken out of the Bill separated us from hon. Members opposite because we were arguing for all references to be taken from the Bill, not only those parts which refer to the penal Clauses. The official Amendment by the Opposition related only to Clause 16 and referred to the penal Clauses. We were arguing a case for changing the character of the Bill.
  Mr. Speaker: Order. We cannot repeat the debate we had the other day on the removal of or attempt to remove, certain parts of the Bill. We have the Bill now. The hon. Member can denounce it, but he cannot amend it.
  Mr. Atkinson: I am commenting because, as the Bill now stands, by the defeat of those Amendments the country has been denied legislation which could have been positive instead of negative, which could have been pro-trade union instead of anti-trade union and could have been in favour of growth instead of having the restrictive qualities which now stand as a result of the Bill. We wanted to change its character. None the less, despite our argument, all reference to wages still remains in the Bill. Therefore, the country is to be denied the positive policy which could have resulted had we taken the references to wages out of the Bill.
  Why are we arguing logic in this way? It is because if we had now not a Prices and Incomes Bill but a Bill dealing with prices, dividends and rents we would have compelled workers and management to negotiate wage claims against price maxima. If that had been the situation and climate in the country, employers would have been compelled to concede wage advances only at the expense of undistributed dividends.
  Mr. Speaker: Order. We are on Third Reading of a Bill. On the Third Reading of a Bill one discusses what is in the Bill, not what would be in another Bill which the hon. Member would like to see.
  Mr. Atkinson: I thank you, Mr. Speaker, and I draw my remarks to a close. Because we have this totally different approach from other sections of the House we argued the case on Amendment No. 3 in the way we did. As the Bill now stands with all the references to wages within it, employers will not have to concede wage advances in the absence of greater investment. Were it the other way round, employers would be compelled to invest much more in plant and equipment to concede the wage advances negotiated. It is from the positive aspect of looking at the whole economic strategy that we have tried to contribute a point of view to this debate.

  887
  My hon. Friends have adequately made clear their arguments about the effect on the British trade union movement. We on this side of the House have tried to be consistent in positively and constructively arguing that there is an alternative economic strategy available to this country which could be delivered by a united Labour movement if we had this approach to our problems of the moment. Therefore, on this Third Reading there is a degree of sadness about our conclusions. Because these Clauses have remained in the Bill the country will be denied the tremendous opportunities that maximum growth could give and which could increase the living standards of the working people.
  7.5 p.m.
  Mr. R. Carr: There is indeed an alternative economic strategy for this country, an alternative quite different from that contained in this Bill. Of course we on this side of the House and hon. Members opposite would not agree about what the alternative strategy should be. There are big differences, but we can and do genuinely and sincerely agree that the contents of this Bill are wrong. That agreement is complete and sincere just as our disagreement about the alternatives would be equally deep and equally sincere.
  We oppose this Bill, as we have opposed previous Bills with similar contents, because it is bad in principle and ineffective in practice. This is no longer an opinion but indeed a fact of experience. This is the third time round for Bills with contents of this kind. We have seen now that such little short-term effects as they may have—if they have any, and it is doubtful if they have any—are more than counterbalanced by the long-term damage done by putting off a real tackling of the economic and social problems which need to be tackled if we are to be prosperous and healthy as a society.
  Above all, because in the long-term a Bill of this kind will damage, just as the previous two have damaged, responsible voluntary action within industry—and if we are to have a free country it is only by encouraging rather than killing responsible voluntary action—it is unlikely to succeed. We all respect the sincerity of the feeling of my hon. Friend the Member
  888
  for Louth (Sir C. Osborne) about the need for something to be done. There would be some substance in his arguments if only there were any evidence that the sort of measures in this Bill worked, but at the beginning of the third year of this sort of legislation we can definitely say that it does not work, and there is no evidence that it will work.
  All independent studies have proved this in this country, as have those carried out by people in other countries. In The Times only today there is another study, carried out on this occasion by the Brookings Institution of the United States—
  Mr. Shinwell: On a point of order. Is something which appeared in The Times today about an institution in the United States in the Bill?
  Mr. Speaker: Order. I did not hear the reference. I shall listen carefully now.
  Mr. Carr: What I am about to quote is a very short quotation. I hope that you, Mr. Speaker, will feel that it does bear directly in comment on the merits and contents of this Bill. This is what the Brookings Institution inquiry says:
  "Incomes policy does not guarantee a reconciliation of full employment with price stability or with a manageable balance of payments. It is more likely to forestall a worsening of the payments situation than to effect an improvement."
  That is the judgment of a pretty highly rated institution on the effect of the contents of this Bill on the balance of payments situation which we are now told is the main purpose of the Bill to secure.
  What is the purpose of legislation of this kind? Very similar contents two years ago were to provide the alternative to unemployment. Now, although unemployment, thank goodness, is well within the concepts of what only 20 years ago would have been regarded as very full employment, it is nevertheless higher at this time of year than it has been for almost 30 years. So much for an alternative to unemployment. Last year, with very similar contents, the purpose was to prevent devaluation. Then came November. This year we are told that this legislation is designed to make devaluation work.

  889
  The right hon. Lady—I am sorry that she should not be here—described it, in moving the Third Reading, as an act of faith. With that record behind, I will say that it is an act of faith! One sees the faith shining out of the eyes of hon. Members opposite. The right hon. Lady went on to advocate the Bill in her usual manner, with mere rhetoric rather than with argument. She used high-sounding phrases about its being to encourage expansion, to re-shape our industry, to re-structure our industry. Even now she says that the purpose and the effect of the Bill are to bring about a high-wage, high-productivity, low-cost economy. That is certainly what we must have, but I could not have explained better than the hon. and learned Member for Northampton (Mr. Paget) why the Bill is the wrong way of going about it.
  All I want to do is to draw attention very briefly to four features of the contents of the Bill. First, this legislation in its 1968 style proves the point we have made every year about the inevitability of escalation—how, if the Government are going in for legislation of this type, the powers will never be adequate for the task as it develops and each year the powers will have to be greater and spread over a wider range of activities. The contents of the Bill prove that.
  The period of the Bill also proves it. In 1966 we were told that legislation of this kind would be needed for one year only, once and for all. In 1967 it was more guarded; it was hoped that one more year would be enough. In 1968 we are told that it has to be at least 18 months and the best promise for the future that the right hon. Lady could make today was that in the autumn of 1969 an informed decision will be made in the light of circumstances at that time.
  When pressed, as she was by my hon. Friend the Member for Oswestry (Mr. Biffen), to say whether Sections 13-22 of the 1966 Act, which are imported by Clause 1 into the Bill, and which are a feature of what the Government euphemistically like to call a voluntary policy, are likely to be permanent, no answer was forthcoming. Of course no answer was forthcoming, because either the Government must go back to freedom or again next year they will have to go forward to much more compulsion.
  890
  The second feature of the contents of the Bill is that they cry out aloud to us in proof that, if there is any merit or any effect in powers of this type, it will be only because they become a permanency in our economy and society and they cannot have any worthwhile effect on a temporary basis. This, too, has been brought out in previous years, and not only from this side of the House. These powers, if they are to be of effect, must be permanent; and, if anything, they must be increasing in power the whole time.
  The third thing—this I will touch on very briefly—brought out by the contents of the Bill is that it exposes finally the schizophrenia of Labour Socialist policy, because in the end a distinction must be drawn between planning and freedom. Planning is inherent in the Bill, and the right hon. Lady believes that it must involve planning of incomes and, in the end, in some form or other, planning of employment as well. This, too, has become clear in the features of the Bill and in the context of previous Bills.
  Mr. Park: Some of us would repudiate the view that the Bill spells the failure of Socialist policy. The trouble is, not that Socialism has been tried and found wanting, but that it has been found difficult and not tried.
  Mr. Carr: I must leave doctrinal arguments about various forms of socialist faith to members of the Labour Party. I am sure, Mr. Speaker, that you would not allow me to go into them today. In practice, we are seeing the schizophrenia deyeloping in the Labour Party enshrined in its approach to how incomes can be planned whilst maintaining free, independent trade unionism and the right of free collective bargaining unin-terfered with by the State, on which free, independent trade unionism must in the end depend for its life.
  The fourth and final feature of the contents of the Bill to which I want to draw attention are those contents which we can only describe as the window dressing or sugar coating Clauses. This is well known to some hon. Members opposite. The prices, the charges, and the dividends side of the Bill have hitherto been phoney. They may possibly be a little less phoney if the right hon. Lady has her way over the next year, anyhow

  891
  qua dividends. The irony of it is that, in so far as the right hon. Lady makes the sugar coating part of her Bill less phoney, she will be putting back the day when there is any hope of a return to free collective bargaining and to a high-earning, high productivity, low-cost economy which she pretends to support.
  It is very easy and superficially popular to say that dividends should be limited. When dividends are limited by artificial, administrative means, a direct penalty is put on the growing, more adventurous, more efficient companies, whether they be large or small at the moment, because these are the capital-hungry companies which must be able to attract more capital if they are to grow and turn the potentiality of their growth into reality.
  Similarly, by limiting dividends the flow of new investment capital to industry must be reduced. Only by encouraging the growth points and the flow of new capital into industry can we move towards the high-productivity, high-earning, low-cost economy which we deserve. In so far as that part of the Bill is not pure window dressing and sugar coating, it is positively inimical to the purpose which the right hon. Lady claims.
  Similarly, prices. The White Paper criteria admit that shop prices cannot be controlled, because there are too many. Yet it is shop prices which the ordinary consumer is interested in. The full window dressing nature of the powers of the Bill were exposed when it was made quite clear that the criteria by which price reductions can be brought about do not include the ability to reduce retail margins. They are not included in the criteria in the Bill at the moment. This is very largely a phoney.
  It is only right that, if we in our capacity as income earners are to suffer restraint, there should appear to be fairness. For that reason, we see the psychology of the attempt to talk about prices and dividend control. The only way in which a proper control of prices and dividends can be achieved, to get the fairness which is necessary, without at the same time damaging the sources of new growth in the economy, and therefore the sources of a high-earning, low-cost, high-productivity economy, is by incentive and competition. There we
  892
  come to the alternative strategy which Britain needs.
  7.19 p.m.
  Mr. Hattersley: We have heard again from the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) the same romantic analysis of the economy which he has made so many times, the economy in which the good are rewarded and the bad penalised and in which the efficient inherit the earth. If it were like that, the problems from which this and other industrial nations have suffered during the past 20 years would not be problems of the sort which we still face tonight.
  I turn to the more realistic analysis of our problems which was made by some of my hon. Friends, whose conclusions about the Bill are fundamentally different from mine but who have throughout our debates attempted to analyse in a realistic and practical way the problems which we face. I turn at once to the description of the Bill which came from my hon. Friend the Member for Derbyshire, South-East (Mr, Park)—a "cyanide sandwich". He said that in the past he had been, and no doubt, in the future would again be, reminded of the price elements, the rent elements and the dividend elements and be asked to eat the sandwich because the cyanide interior was obscured by the bread of popular policy.
  I do not ask my hon. Friend to vote for the Bill because parts of it are good. I ask him to vote for it because all of it is necessary, vitally necessary. That is the only justification which I have ever claimed for the Bill. In my view, it is the most potent justification there can be, and a justification sufficiently substantial to commend it to thinking people. I have never claimed—this is the answer to the first question asked by the hon. Member for Oswestry (Mr. Biffen)—that a prices and incomes policy with statutory backing as specified and embodied in the Bill was a permanently desirable feature of economic policy.
  When the hon. Gentleman asks what our intentions are about Clauses 1 to 3 and the perpetuation of those provisions in earlier Measures to which Clauses 1 to 3 refer, I can only ask him again to read virtually every speech on this subject made by my right hon. Friend the

  893
  First Secretary of State, made by the Prime Minister, and—if I may humbly suggest it—made by me on Second Reading. Those speeches stated that our intentions as regards continuing the powers under Clauses 1 to 3 were exactly matched to the necessities of the situation. If in eighteen months the problems which we face are the same, then, obviously, we must reserve the right to apply what remedies we believe to be necessary. If, on the other hand, in 18 months, as we hope and believe, the situation is radically changed, there is not on my part and certainly not on the part of the Government any doctrinal wish to preserve those provisions and powers because we believe them to be good in themselves.
  Mr. Biffen: May we take it as a categorical statement from the hon. Gentleman, presumably endorsed by the Home Secretary, the First Secretary of State and the Prime Minister, that the voluntary policy to which the Government are evolving is one which will no longer require the statutory principles in Part II of the 1966 Act?
  Mr. Hattersley: I have said before— I am sure that the hon. Gentleman accepts it—that it is not my practice to invent Government policy spontaneously at the Dispatch Box—at least, not a practice which I would operate twice. My reply to the hon. Gentleman is that, while it is our hope and intention that economic recovery will make these provisions unnecessary, it is equally our intention to reserve the right to apply whatever remedies seem necessary if that recovery is not possible. That is an unequivocal statement of our position.
  I make an equally unequivocal statement in answer to the hon. Gentleman's second question. How, he says, can we claim that Clause 3 represents an essentially voluntary policy? I say again, as I and my right hon. Friend have said before, that Clauses 1 to 3 cannot operate successfully if a majority of trade unions and trade unionists withhold their voluntary co-operation. Those Clauses do not say that, unless a majority of trade unions and trade unionists co-operate willingly, they will be subject to the penal sanctions, as they have been called. What they say is that, in the knowledge that an overwhelming: number of trade unions and trade unionists will co-operate voluntarily, we take power to ensure that those few
  894
  who insist on special privileges and special advantages at a time when their comrades and colleagues are exercising voluntary restraint should not be allowed to do so. That is very different from taking or implementing powers with the intention and object of using them widely and totally.
  Next, I turn to the very real and proper concern which many of my hon. Friends have expressed about the lowest-paid workers. Formally within the powers we ask to be conferred upon us is the obligation, the legal obligation, to pay special regard to the lowest-paid and to give them special protection during the stringent time still ahead. This principle is embodied in the Schedule to the parent Act. It is our essential intention. If hon. Members want to know how successful we expect that intention to be, I ask them to do no more than examine the record of the prices and incomes policy during the past two years, years during which the lowest-paid—I shall not weary the House with examples—have been to a measure subject to these exemptions and have to a measure benefited when other groups have not benefited. The Bill provides us with a continuing power in that respect, and it is our intention to use it.
  The right hon. Member for Mitcham asked the rhetorical question: how can we hope, when the policy has failed in the past, that on the third occasion it will succeed? The right hon. Gentleman must not continue to ask questions which are flagrantly at variance with the facts. The facts show from the way wages have moved, earnings have moved and prices have moved that the previous Prices and Incomes Acts have played a notable part in much of the economic progress which has been made.
  On Second Reading, I told the right hon. Gentleman that the present Bill had two objectives. The first I described as the maximum objective, namely, a realignment of attitudes in British industry and a willingness to calculate and organise wage increases on more rational and more productive lines. The powers which it gives my right hon. Friend are powers to assist her in stimulating her already successful drive towards more and more productivity agreements. I said that the Bill had a minimum aim, a minimum aim which the right hon. Gentleman almost conceded on Second Reading, namely, that during the next

  895
  18 months effective demand may be held back by 1, 1£ or 2 per cent.
  While I believe that the maximum aim will be achieved, I insist at the same time that the minimum aim is not insignificant. Its outcome will, perhaps, be a reduction of effective demand of about £200 million. To me and, I believe, to many of my right hon. Friends, this is a far more palatable way of doing it than any of the other measures at the Government's disposal.
  I commend the Bill to my right hon. and hon. Friends for two reasons. The
  first is that it goes some way to meet the economic necessities of our time. The second is that embodied within it are the just and compassionate provisions which one would expect this Government to make for the lowest-paid workers. Combining those two attributes of the Bill, I believe that it deserves the support of my right hon. and hon. Friends in the Lobby tonight.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 280, Noes 238.

  Division No. 255.]

  AYES

  [7.30 p.m.

  Albu, Austen

  Dewar, Donald

  Hunter, Adam

  Alldritt, Walter

  Dobson, Ray

  Hynd, John

  Allen, Scholefield

  Dunn, James A.

  Irvine, Sir Arthur (Edge Hill)

  Anderson, Donald

  Dunnett, Jack

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

  Archer, Peter

  Dunwootly, Mrs. Gwyneth (Exeter)

  Janner, Sir Barnett

  Armstrong, Ernest

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

  Jay, Rt. Hn. Douglas

  Ashley, Jack

  Eadie, Alex

  Jeger, George (Goole)

  Bacon, Rt. Hn. Alice

  Edelman, Maurice

  Joger,Mrs.Lena(H'bn&St.P'cras,S.)

  Bagier, Gordon A. T.

  Edwards, Robert (Bilston)

  Jenkins, Rt. Hn. Roy (Stechford)

  Barnes, Michael

  Edwards, William (Merioneth)

  Johnson, Carol (Lewisham S)

  Bence Cyril

  English, Michael

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

  Benn, Rt. Hn. Anthony Wedgwood

  Ennals, David

  Jones, Dan (Burnley)

  Bennett, James (G'gow, Bridgeton)

  Ensor, David

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

  Binns, John

  Evans, Albert (Islington, S.W.)

  Jones, J. Idwal (Wrexham)

  Bishop, E. S.

  FaUlds, Andrew

  j0nes, T. Alec (Rondda, West)

  Blackburn, F.

  Fernyhough, E.

  Judd prank

  Blenkinsop, Arthur

  Fitch, Alan (Wigan)

  Kelly, Richard

  Boardman, H. (Leigh)

  Foley, Maurice

  Kenyon, Clifford

  Boston, Terence

  Ford, Ben

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

  Bottomley, Rt. Hn. Arthur

  Forrestor, John

  Lawson, George

  Boyden, James

  Fowler, Gerry

  Leadbitter, Ted

  Braddock, Mrs. E. M.

  Fraser, John (Norwood)

  Ledger Ron

  Bradley, Tom

  Freeson, Reginald

  Bray, Dr. Jeremy

  Garrett, Tony

  Lee, Rt. Hn. Frederick (Newton)

  Brooks, Edwin

  Garrett, W. E.

  Lee, Rt. Hn. Jennie (Cannock)

  Broughton, Dr. A. D. D.

  Ginsburg, David

  Lestor, Miss Joan

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

  Gordon Walker, Rt. Hn. P. C.

  Lewis, L. M. (Ardwick)

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

  Gouray, Harry

  Lewis, Ron. (Carlisle)

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

  Gray, Dr. Hugh (Yarmouth)

  Lipton, Marcus

  Buchan, Norman

  Greenwood, Rt. Hn. Anthony

  Lmas, Kenneth

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

  Gregory Arnold

  Loughlin, Charles

  Butler, Herbert (Hackney, C.)

  Grey, Charles (Durham)

  Luard, Evan

  Butler, Mrs. Joyce (Wood Green)

  Griffiths, David (Rother Valley)

  Lyon, Alexander w. (York)

  Caliaghan, Rt. Hn. James

  Griffiths, E. (Brightside)

  Lyons, Edward (Bradford, E.)

  Cant, R. B.

  Griffiths, Rt. Hn. James (Llanelly)

  Mabon, Dr. J. Dickson

  Carmichael, Neil

  Gunter Rt. Hn. R. J.

  McBride, Neil

  Carter-Jones, Lewis

  Hamilton, James (Bothwell)

  McCann, John

  Castle, Rt. Hn. Barbara

  Hamling William

  MacColl, James

  Chapman, Donald

  Hannan, William

  Macdonald, A. H.

  coe, Denis

  Harper, Joseph

  McGuire, Michael

  Coleman, Donald

  Harbison, Walter (Wakefield)

  McKay, Mrs. Margaret

  Conian, Bernard

  Hart, Rt. Hn. Judith

  Mackenzie, Gregor (Rulherglen)

  Corbet, Mrs. Freda

  Haseldine Norman

  Mackie, John

  Craddock, George (Bradford, S.)

  Hattersley, Roy

  Mackintosh, John P.

  Crawshaw, Richard

  Hazell, Bert

  Maclennan, Robert

  Crosland, Rt. Hn. Anthony

  Healey, Rt. Hn. Denis

  McMillan, Tom (Glasgow, C.)

  Crossman, Rt. Hn. Richard

  Henig, Stanley

  McNamara, J. Kevin

  Dalyell, Tam

  Herbison, Rt. Hn. Margaret

  MacPherson, Malcolm

  Darling, Rt. Hn. George

  Hilton, W.S.

  Mahon, Peter (Preston, S)

  Davidson Arthur (Accrington)

  Houghton, Rt. Hn. Douglas

  Mahon, Simon (Bootle)

  Davies Ednyfed Hudson (Conway)

  Howarth, Harry (Wellingborough)

  Mallalieu.J.P.W. (Hudderfield.E.)

  Davies Dr. Ernest (Stretford)

  Howarth, Robert (Bolton, E.)

  Marks, Kenneth

  Davies, Harold (Leek)

  Howell, Denis (Small Heath)

  Marquand, David

  Davies, Ifor (Gower)

  Howie, W.

  Marsh, Rt. Hn. Richard

  de Freitas, Rt. Hn. Sir Geoffrey

  Hoy, James

  Mason, Rt. Hn. Roy

  Delargy, Hugh

  Huckfield, Leslie

  Maxwell, Robert

  Dell, Edmund

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Mayhew, Christopher

  Dempsey, James

  Hughes, Hector (Aberdeen, N.)

  Mellith, Rt. Hn. Robert

  Millan, Bruce

  Randall, Harry

  Thomson, Rt. Hn. George

  Miller, Dr. M. S.

  Rankin, John

  Thornton, Ernest

  Milne, Edward (Blyth)

  Rees, Merlyn

  Tinn, James

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

  Reynolds, Rt. Hn. G. W.

  Tuck, Raphael

  Molloy, William

  Rhodes, Geoffrey

  Urwin, T. W.

  Moonman, Eric

  Richard, Ivor

  Varley, Eric G.

  Morgan, Elystan (Cardiganshire)

  Roberts, Rt. Hn. Goronwy (Caer'v'n)

  Wainwright, Edwin (Dearne Valley)

  Morris, Alfred (Wythenshawe)

  Roberts, Gwilym (Bedfordshire, S.)

  Walden, Brian (All Saints)

  Morris, Charles R. (Openshaw)

  Robertson, John (Paisley)

  Walker, Harold (Doncaster)

  Morris, John (Aberavon)

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

  Wallace, George

  Moyle, Roland

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

  Watkins, David (Consett)

  Mulley, Rt. Hn. Frederick

  Rodgers, William (Stockton)

  Watkins, Tudor (Brecon & Radnor)

  Murray, Albert

  Roebuck, Roy

  Weitzman, David

  Neal, Harold

  Rogers, George (Kensington, N.)

  Wellbeloved, James

  Noel-Baker, Francis (Swindon)

  Rose, Paul

  Wells, William (Walsall, N.)

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

  Ross, Rt. Hn. William

  Whitaker, Ben

  Oakes, Gordon

  Rowlands, E. (Cardiff, N.)

  White, Mrs. Eirene

  Ogden, Eric

  Shaw, Arnold (Ilford, S.)

  Whitlock, William

  O'Malley, Brian

  Shinwell, Rt. Hn. E.

  Wilkins, W. A.

  Oram, Albert E.

  Shore, Rt. Hn. Peter (Stepney)

  Willey, Rt. Hn. Frederick

  Oswald, Thomas

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

  Williams, Alan (Swansea, W.)

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

  Short,Mrs.Renée(W'hampton,N.E.)

  Williams, Alan Lee (Hornchurch)

  Page, Derek (King's Lynn)

  Silkin, Rt. Hn. John (Deptford)

  Williams, Clifford (Abertillery)

  Palmer, Arthur

  Silkin, Hn. S. C. (Dulwich)

  Williams, Mrs. Shirley (Hitchin)

  Pannell, Rt. Hn. Charles

  Skeffington, Arthur

  Williams, W. T. (Warrington)

  Parker, John (Dagenham)

  Slater, Joseph

  Willis, Rt. Hn. George

  Parkin, Ben (Paddington, N.)

  Small, William

  Wilson, Rt. Hn. Harold (Huyton)

  Parkyn, Brian (Bedford)

  Snow, Julian

  Wilson, William (Coventry, S.)

  Pavitt, Laurence

  Spriggs, Leslie

  Woodburn, Rt. Hn. A.

  Peart, Rt. Hn. Fred

  Steele, Thomas (Dunbartonshire, W.)

  Woof, Robert

  Pentland, Norman

  Stonehouse, Rt. Hn. John

  Wyatt, Woodrow

  Perry, Ernest G. (Battersea, S.)

  Strauss, Rt. Hn. C. R.

  Yates, Victor

  Prentice, Rt. Hn. R. E.

  Summerskill, Hn, Dr. Shirley

  Price, Christopher (Perry Barr)

  Swingler, Stephen

  TELLERS FOR THE AYES:

  Price, Thomas (Westhoughton)

  Symonds, J. B.

  Mr. Ioan L. Evans and

  Price, William (Rugby)

  Taverne, Dick

  Mr. J. D. Concannon.

  Probert, Arthur

  Thomas, Rt. Hn. George

  NOES

  Alison, Michael (Barkston Ash)

  Crowder, F. P.

  Harrison, Brian (Maldon)

  Allason, James (Hemel Hempstead)

  Cunningham, Sir Knox

  Harrison, Col. Sir Harwood (Eye)

  Astor, John

  Currie, G. B. H.

  Harvey, Sir Arthur Vere

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

  Dalkeith, Earl of

  Hastings, Stephen

  Awdry, Daniel

  Dance, James

  Hawkins, Paul

  Baker, Kenneth (Acton)

  d'Avigdor-Goldsmid, Sir Henry

  Hay, John

  Baker, W. H. K. (Banff)

  Dean, Paul (Somerset, N.)

  Heald, Rt. Hn. Sir Lionel

  Balniel, Lord

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

  Heath, Rt. Hn. Edward

  Batsford, Brian

  Digby, Simon Wingfield

  Higgins, Terence L.

  Beamish, Col. Sir Tufton

  Dodds-Parker, Douglas

  Hiley, Joseph

  Bell, Ronald

  Donnelly, Desmond

  Hill, J. E. B.

  Bennett, Sir Frederic (Torquay)

  Douglas-Home, Rt. Hn. Sir Alec

  Hirst, Geoffrey

  Bennett, Dr. Reginald (Gos. & Fhm)

  Drayson, G. B.

  Hogg, Rt. Hn. Quintin

  Berry, Hn. Anthony

  du Cann, Rt. Hn. Edward

  Holland, Philip

  Biffen, John

  Eden, Sir John

  Hooson, Emlyn

  Biggs-Davison, John

  Elliot, Capt. Walter (Carshalton)

  Hordern, Peter

  Birch, Rt. Hn. Nigel

  Emery, Peter

  Hornby, Richard

  Black, Sir Cyril

  Errington, Sir Eric

  Howell, David (Guildford)

  Blaker, Peter

  Eyre, Reginald

  Hunt, John

  Boardman, Tom (Leicester, S.W.)

  Farr, John

  Hutchison, Michael Clark

  Body, Richard

  Fisher, Nigel

  Iremonger, T. L.

  Bossom, Sir Clive

  F1etcher-Cooke, Charles

  Irvine, Bryant Godman (Rye)

  Boyle, Rt. Hn. Sir Edward

  Fortescue, Tim

  Jenkin, Patrick (Woodford)

  Braine, Bernard

  Foster, Sir John

  Jennings, J. C. (Burton)

  Brewis, John

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

  Johnson Smith, G. (E. Grinstead)

  Brinton, Sir Tatton

  Galbraith, Hn. T. G.

  Brown, Sir Edward (Bath)

  Gibson-Watt, David

  Jones, Arthur (Northants, S.)

  Bruce-Gardyne, J.

  Giles, Rear-Adm. Morgan

  Jopling, Michael

  Buck, Antony (Colchester)

  Gilmour, Ian (Norfolk, C.)

  Joseph, Rt. Hn. Sir Keith

  Bullus, Sir Eric

  Gilmour, Sir John (Fife, E.)

  Kaberry, Sir Donald

  Burden, F. A.

  Glover, Sir Douglas

  Kerby, Capt. Henry

  Campbell, B. (Oldham, W.)

  Glyn, Sir Richard

  Kershaw, Anthony

  Campbell, Gordon (Moray & Nairn)

  Godber, Rt. Hn. J. B.

  Kimball, Marcus

  Carr, Rt. Hn. Robert

  Goodhart, Philip

  King, Evelyn (Dorset, S.)

  Cary, Sir Robert

  Goodhew, Victor

  Kirk, Peter

  Chichester-Clark, R.

  Gower, Raymond

  Kitson, Timothy

  Clegg, Walter

  Grant, Anthony

  Knight, Mrs. Jill

  Cooke, Robert

  Grieve, Percy

  Lancaster, Col. C. G.

  Cooper-Key, Sir Neill

  Griffiths, Eldon (Bury St. Edmunds)

  Lane, David

  Cordle, John

  Gurden, Harold

  Langford-Holt, Sir John

  Corfield, F. V.

  Hall, John (Wycombe)

  Legge-Bourke, Sir Harry

  Costain, A. P.

  Hall-Davis, A. C. F.

  Lewis, Kenneth (Rutland)

  Craddock, Sir Beresford (Spelthorne)

  Hamilton, Lord (Fermanagh)

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

  Crosthwaite-Eyre, Sir Oliver

  Hamilton, Michael (Salisbury)

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

  Crouch, David

  Harris, Frederic (Croydon, N.W.)

  Lloyd, Rt. Hn. Selwyn (Wirral)

  898

  899

  Longden, Gilbert

  Page, John (Harrow, W.)

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

  Loveys, W. H.

  Pearson, Sir Frank (Clitheroe)

  Summers, Sir Spencer

  Lubbock, Eric

  Peel, John

  Tapsell, Peter

  McAdden, Sir Stephen

  Percival, Ian

  Taylor, Sir Charles (Eastbourne)

  MacArthur, Ian

  Peyton, John

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

  Maclean, Sir Fitzroy

  Pike, Miss Mervyn

  Taylor, Frank (Moss Side)

  Macleod, Rt. Hn. lain

  Pink, R. Bonner

  Teeling, Sir William

  McMaster, Stanley

  Pounder, Rafton

  Temple, John M.

  Macmillan, Maurice (Farnham)

  Powell, Rt. Hn. J. Enoch

  Thatcher, Mrs. Margaret

  Maddan, Martin

  Price, David (Eastleigh)

  Tilney, John

  Maginnis, John E.

  Prior, J. M. L.

  Turton, Rt. Hn. R. H.

  Marten, Neil

  Pym, Francis

  van Straubenzee, W. R.

  Maude, Angus

  Quennell Miss J. M.

  Vaughan-Morgan, Rt. Hn. Sir John

  Mawby, Ray

  Ramsden, Rt. Hn. James

  Vickers, Dame Joan

  Maxwell-Hyslop, R. J.

  Rawlinson, Rt. Hn. Sir Peter

  Wainwright, Richard (Colne Valley)

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

  Rees-Davies, W. R.

  Walker, Peter (Worcester)

  Mills, Peter (Torrington)

  Renton, Rt. Hn. Sir David

  Walker-Smith, Rt. Hn. Sir Derek

  Mills, Stratton (Belfast, N.)

  Rhys Williams, Sir Brandon

  Wall, Patrick

  Miscampbell, Norman

  Ridley, Hn. Nicholas

  Walters, Dennis

  Mitchell, David (Basingstoke)

  Ridsdale, Julian

  Ward, Dame Irene

  Monro, Hector

  Robson Brown, Sir William

  Weatherill, Bernard

  Montgomery, Fergus

  Rossi, Hugh (Hornsey)

  Webster, David

  Morrison, Charles (Devizes)

  Royle, Anthony

  Wells, John (Maidstone)

  Mott-Radclyffe, Sir Charles

  Russell, Sir Ronald

  Whitelaw, Rt. Hn. William

  Munro-Lucas-Tooth, Sir Hugh

  St. John-Stevas, Norman

  Williams, Donald (Dudley)

  Murton, Oscar

  Sandys, Rt. Hn. D.

  Wills, Sir Gerald (Bridgwater)

  Nabarro, Sir Gerald

  Scott, Nicholas

  Wilson, Geoffrey (Truro)

  Neave, Airey

  Scott-Hopkins, James

  Wood, Rt. Hn. Richard

  Nicholls, Sir Harmar

  Sharples, Richard

  Woodnutt, Mark

  Noble, Rt. Hn. Michael

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

  Worsley, Marcus

  Nott, John

  Silvester, Frederick

  Wylie, N. R.

  Onslow, Cranley

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

  Younger, Hn. George

  Orr, Capt. L. P. S.

  Smith, John (London & W'minster)

  Orr-Ewing, Sir lan

  Speed, Keith

  TELLERS FOR THE NOES:

  Osborn, John (Hallam)

  Stainton, Keith

  Mr. R. W. Elliott and

  Page, Graham (Crosby)

  Stodart, Anthony

  Mr. Jasper More.

  Bill accordingly read the Third time and passed.

  RESTRICTIVE TRADE PRACTICES BILL
  As amended (in the Standing Committee), considered.
  7.40 p.m.
  Mr. Speaker: I have had published on the notice board, as is my custom, for the benefit of the House a list of the selective Amendments.

  RESTRICTIVE TRADE PRACTICES BILL

    Clause 1
    EXEMPTION FROM REGISTRATION OF CERTAIN AGREEMENTS OF NATIONAL IMPORTANCE
    The Minister of State, Board of Trade (Mr. Edmund Dell): I beg to move Amendment No. 1, in page 1, leave out line 19 and insert:
    "substantial importance to the national economy".
    Those hon. Members who served on the Standing Committee will recall that, in responding to an Opposition Amendment to line 19, I said I was prepared to consider whether we should not substitute for the words "national importance" some other phrase. I suggested that perhaps the phrase "of substantial importance to the national economy" would be appropriate. I explained that we should be looking for words which would be restrictive in the sense of limiting the availability of exemption but which would also indicate the sort of case we have in mind. On consideration, I have concluded that the words
    "substantial importance to the national economy"
    would be appropriate.
    Mr. A. G. F. Hall-Davis: We had a lengthy discussion on this point in Committee and I am glad that the hon. Gentleman has brought forward an Amendment so close to the terms of what were the second thoughts of the Opposition in Committee. We do not quarrel with his choice of words as opposed to those we suggested. The main argument for the Amendment is that it makes clear that it will be possible for operations on a somewhat smaller scale than the vast, grandiose
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    "prestige projects"—what we described in Committee as products of the fertile mind of the Minister of Technology— which would receive exemption under Clause 1.
    This is important not because we wish to see the Clause widely used. It was made clear in Committee that there is a considerable measure of agreement that it will be used infrequently and for very specific undertakings for which a strong case has been made for exceptional treatment. Having written an escape hatch into the Bill, it was important that it should be available to enterprises of less than the vastest scale. It was suggested that the Clause as drafted would restrict its operation to enterprises on a very large scale. The words
    "substantial importance to the national economy"
    are a little less grandiose than the reference to "national importance".
    I welcome the new wording in another respect. It gives the Government the opportunity to make smaller mistakes instead of large ones, to which it would have been confined under the original wording. It is important that they should have every opportunity to confine their interventions to minor activities, where the damage they do will be of a comparatively minor nature. I hope that when the queue of applicants presents itself at the Board of Trade for exemption orders under the Clause, Ministers will bear in mind one of the elementary rules of commercial judgment—that there is always another avenue in which to invest one's money, almost certainly as profitably.
    Mr. Speaker: Order. We cannot debate the Clause. We are substituting some words for some other words. That is what we are talking about.
    Mr. Hall-Davis: I accept your reminder, Mr. Speaker, and I would merely add that it is quite likely that the smaller projects will be every bit as worth examining as the large ones, and Ministers should be prepared to look over a long period for possible small but worthwhile projects and not feel compelled always to operate the Clause just because they feel something should be done to justify it.
    Amendment agreed to.
    7.45 p.m.
    Mr. Dell: I beg to move Amendment No. 2, in page 2, line 5, at end insert:
    "and in considering the national interest for the purposes of paragraph (e) of this subsection the Board shall take into account any effects which an agreement is likely to have on persons not parties thereto as purchasers, consumers or users of any relevant goods'.
    In Committee, the Opposition put down an Amendment designed to ensure that, in considering proposed agreements for exemption under Clause 1, the Board of Trade should take into account the interests of consumers. I was unable to accept the Amendment as drafted but I accepted it in principle and agreed to consider whether an appropriate Government Amendment indicating the importance of consumer interests could be tabled on Report. Amendment No. 2 is designed to ensure that, in considering the national interest, the Board must take into account the interests of purchasers, consumers or users who are not party to the agreement.
    Perhaps I should add that the Board of Trade would have had regard to the consumer interest in considering the national interest even had this Amendment not been put down. However, the Amendment makes this duty explicit and I hope, therefore, that it will be acceptable to the House.
    Mr. David Crouch: I am glad to see this Amendment. But it seems strange that it has taken so long for such a provision to get into the Bill. The Bill has not had a rough passage. It has had a fairly generous welcome by the Opposition and we have been constructive in our observations. But it has taken a long time to get the consumer interest and consumer protection point written in. The main objective of the Clause is to seek to serve projects of substantial importance to the national economy. The idea
    "… is to promote efficiency in a trade or industry, or to create or improve productive capacity in an industry;"
    One of the criteria is that the object cannot be achieved or achieved within a reasonable time except by means of an agreement. Now we have this last proviso of the consumer interest, which means that it must also be taken into account along with the other matters concerned. The consumer interest has a proper place in the consideration of restrictive trade practices.
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    I said in Committee that I viewed the whole subject of restrictive trade practices from the background of industry as well as the background of the House in which I have some specialised interest in consumer matters and consumer protection. In Committee, the Minister of State made the point of the importance which the Board of Trade attached to giving industry an opportunity to make itself efficient and competitive. I referred to the importance of giving opportunities to make industry competitive in not only the home market, but the international market. When each industry attempts to make itself competitive in a world economy, consumer interests may well be forgotten. I hope, therefore, that the addition of this Amendment will ensure that that is not so.
    Mr. Hall-Davis: Again I welcome the fact that the Amendment is very close to the spirit, if not to the exact letter, of an Amendment which the Opposition moved in Committee. I also reinforce what my hon. Friend the Member for Canterbury (Mr. Crouch) has just said, that, despite the Minister of State's statement that the Board of Trade would take consumer interests into account, in view of the explicit terms in which consumer interests were written into the 1956 legislation— and our Amendment closely followed that wording—it is extraordinary that we should have had to raise the issue before the Board of Trade was able to feel that, on balance, the consumer interest was not something which should be left to its implicit judgment, but was something to be stated explicitly in the Bill as an interest to which regard should be paid when considering whether to make an Order under Clause 1.
    In our view, this is a key Amendment, because it puts into the Bill in a way which cannot be overlooked or ignored a vital element which was lacking in the original Bill, the element of specific protection of the consumer. Reading the Amendment, it occurs to me that there is still one element of the composite factors of the economy which is still lacking and that is producers of any activity in respect of which an order may be made.
    Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman is now straying from the Amendment.
    Mr. Hall-Davis: I hesitate to resist your judgment in any way, Mr. Deputy Speaker, but the Amendment relates specifically to the interests of persons
    "not parties thereto as purchasers, consumers or users of any relevant goods".
    Mr. Deputy Speaker: Order. The hon. Gentleman is perfectly correct, but I understood him to refer to producers, who are not in one of those three categories.
    Mr. Hall-Davis: I was seeking to draw attention to the fact that the dog did not bark in the night.
    There was another element which the Minister of State mentioned in Committee and to which the President of the Board of Trade referred on Second Reading. It was said that there might be a danger of a conflict of jurisdiction between the Board of Trade and the Restrictive Practices Court if an Amendment on the lines which we moved in Committee were introduced. I am glad that the Minister of State has felt able to introduce this Amendment without in any way causing such a conflict of jurisdiction.
    It is clear that there is no danger of such a conflict in operating the Amendment, because the Board of Trade will have overriding jurisdiction, because if it appears to the Board of Trade that the conditions set out in subsection (2) apply, it may by Order approve the agreement. Admittedly, this is a subjective judgment, but it is an overriding power. I am glad that what appeared to be an unnecessary impediment to introducing a much needed Amendment has now been put on one side. It seemed extraordinary that an element fundamental to the whole of the underlying thinking to the Bill should have been omitted from the conditions for the granting of an Order. I am extremely glad that it has now been inserted. This is an action of some significance. I think that we shall see this operating in future despite the Minister of State's statement that this would have been the Board of Trade's attitude with or without the Amendment.
    Amendment agreed to.
    Mr. Dell: I beg to move Amendment No. 4 in page 2, line 23, at end insert:
    'but no order revoking an order under this section approving an agreement shall be made
    906
    by the Board by virtue of paragraph (a) or (b) of this subsection unless the Board have given to each of the parties at least twenty-eight days' notice of their intention to revoke the order'.
    Hon. Members who served on the Standing Committee will recall that an Amendment was moved to require the Board of Trade to give statutory notice of its intention to revoke an exemption Order made under Clause 1. For a number of reasons, I was unable to accept the Amendment as tabled, but I agreed to consider putting down a Government Amendment on Report designed to give effect to as much of Opposition Amendment as the Government was prepared to accept.
    The purpose of the Amendment is to honour the undertaking which I gave to the Committee. Its effect is to require the Board of Trade to give one month's notice of revocation of an Order under Clause 1, except when the grounds for revoking the Order are that the Board becomes aware of circumstances which, if it had known them at the material time, would have led the Board to refuse to approve the agreement. The Amendment is linked with Amendment No. 8 which provides that when a trade association is involved notice need be given only to the association and not to each of its members.
    In Committee I was asked to consider whether a period of one month was appropriate and to have any necessary consultations to establish that. I have, therefore, consulted both the Confederation of British Industry and the Association of British Chambers of Commerce about the length of notice of revocation. Both have asked for a period of notice of three months. It has been suggested to me that a period of three months is necessary to enable the parties to represent to the Board that the agreement should not be revoked.
    I consider, however, that a period of three months is too long, for the following reasons. This Amendment will give parties to an exempted agreement at least one month's notice of revocation; they will then have a further period of one month from the date of the revoking order, as provided by Clause 6(1)(b), in which to register the relevant agreement. Even if the Registrar should decide to refer the agreement to the court at once,

    907
    a period of several months will then elapse before the parties have to take any active steps to defend their agreement before the Restrictive Practices Court. I consider that these periods taken together will give the parties ample time to make up their minds whether to defend their agreement and, if they have decided not to defend it, either to determine it, or remove its restrictions. As the exemption Order will have been revoked, because—and I stress this—the object of the agreement is not being achieved, or because it is being used for purposes other than that for which it was approved, that additional delay is undesirable.
    The argument for a longer period of delay based on the desirability of enabling parties to make representations to the Board of Trade seems to be based on a misconception. It is implicit in the concept of paragraphs (a) and (b) of subsection (4) that if the Board of Trade were considering revocation of an order, it would be in close touch with the parties of the agreement to which the Order related. They would have had an opportunity to make representations before a notice of revocation was issued. This would merely be the penultimate step in the formal procedure of revocation.
    Perhaps I can draw hon. Members' attention also to the fact that the revocation of an Order does not necessarily imply that the whole of the relevant agreement may have to be determined. All that parties will be concerned about are the restrictions in the agreement which would have made it registrable.
    I should like now to turn to another aspect of this matter. Hon. Members will observe that the requirement to give notice of revocation applies only in the circumstances set out in paragraphs (a) and (b) of subsection (4) and not in the circumstances envisaged by lines 21 to 23 on page 2:
    "if the Board become aware of circumstances by reason of which, if known to them at the material time, the agreement would not have been approved".
    In Committee I indicated that by the use of these words I had in mind particularly deliberate concealment. My attention was drawn to the fact that the words in lines 21–23 were equally applicable to circumstances which were outside the
    908
    cognizance of the parties which had made their agreements in good faith. I recognise this. However, the power to revoke will mainly be used where there has been deliberate concealment. It will be difficult to provide different procedures for this and for accidental non-disclosure. I can, however, assure the House that it would be exceptional for the Board to use the power contained in lines 21–23 where there had been no deliberate concealment.
    8.0 p.m.
    Mr. Hall-Davis: We discussed this question at some length in Committee, and I will not reiterate the arguments. When the Minister was seeking to justify the fact that a period of one month's notice was sufficient to give to the parties concerned he said that a period of several months would elapse before an agreement would be brought before a court. Experience may prove that this is the case, but I have no doubt that those who made representations for a longer period of notice felt that it was no guarantee that this would be so.
    This would be very largely within the judgment of the Registrar to do with the speed at which he was proceeding, and the complexity of the issues involved. The Government should use this argument sparingly—that because it is likely that administrative procedure will lead to some delay, then this is a reason for not granting a request for a longer period of warning to those who feel that they need that longer period to decide their course of action, or to see that their interests are properly represented before the Restrictive Practices Court.
    The administrative aspect of the Bill is very important for the parties to these agreements. The preparation of cases is expensive, and requires the activity of senior members of the undertakings. While, on balance, I believe that the Minister of State is probably justified in his assertion that a month's notice is sufficient, I think, nevertheless, that the grounds on which he justified it, that there would be an administrative hiatus following the revocation of the Order, is an argument to which we should not give too much weight, and which should be used comparatively sparingly.
    He has dealt with the question of the trade association in Amendment No. 8.

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    Everyone would feel that the giving of notice to parties to an agreement which has been discussed by the Board of Trade, before it is the subject of an Order is just. The Minister again relied on an undertaking given by him to reassure parties to these agreements that lines 21–23 of the Clause in subsection (4) would not be operated where there had been bona fide ignorance, due to no unreasonable lack of diligence in examining the question by the parties concerned. At this stage we have to accept his comment, that it will be difficult to embody this in the Bill. We are unhappy when this type of protection is given verbally rather than included in legislation, because of drafting difficulties. This approach too must be sparingly used. There is no doubt that the Amendment is a substantial improvement on the Bill as originally drafted.
    Amendment agreed to.
    Mr. Walter Clegg: I beg to move Amendment No. 19, in page 2, line 33, at end insert:
    (6) Any order made under this section may approve an agreement notwithstanding that a similar agreement has already been registered under the Act of 1956.
    This is in the nature of a probing Amendment, but I hope that it will be unnecessary, because if I have judged correctly a later Amendment, No. 9, will deal with the point that I have in mind. The matter arises out of our proceedings in Committee when the Minister of State was discussing the impact of Clause 1 on different exemptions. One of these was in the building industry where there would be a standard form of contract under the recommendations of the Banwell Committee. Doubts were expressed by the effects of existing orders made, with regard to contracts, in 1962, for the Birmingham group of builders.
    My hon. Friend the Member for More-cambe and Lonsdale (Mr. Hall-Davis) expressed concern about this in col. 557. He said:
    "Will there be some machinery for disposing of the orders of the Restrictive Practices Court that are enforced?"
    The Minister replied by saying:
    "We shall have to consider that problem later in the Bill."—[OFFICIAL REPORT, Standing Committee H, 16th May 1968; c. 57.]
    If I am right, and Amendment 9 takes into account the fears in the building
    910
    industry that previous decisions of the Court might prevent it from operating fully an exemption granted under Clause 1, I would not take this any further.
    Mr. Dell: The hon. Member may rest content. If the point about which he is worried is that of possible conflict of existing Orders of the Court, this is covered by Amendment No. 9. As the hon. Gentleman's Amendment is worded, it would enable the Board of Trade to give exemption for existing registered agreements, which we do not want to do. We want agreements that we are to exempt to be new, made after discussion with us. I would therefore not wish to accept the additional power contained in the hon. Member's Amendment.
    Mr. Clegg: I am grateful to the Minister and thank him for making this clear, because the building industry was very worried about this. In view of what he has said about Amendment 9 I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Clause 2
    EXEMPTION FROM REGISTRATION OF AGREEMENTS HOLDING DOWN PRICES
    Mr. Dell: I beg to move Amendment No. 6, in page 3, line 14, at end insert:
    (6) This section applies to agreements made before as well as after the commencement of this Act.
    This Amendment makes it clear that the exempting powers of Clause 2 can be used in relation to agreements made before the enactment of the Bill as well as in relation to agreements made after its enactment. One might reasonably argue that the Clause as drafted allows this to be done. But I think it desirable that the subsection set out in the Amendment should be added and that the House should be given an explanation as to why it is thought that there may be occasion to exempt agreements which have already been made.
    The Government's prices and incomes policy has been in operation for more than two years. Industry has voluntarily assisted in its implementation throughout this period and Ministers and

    911
    officials have made a number of agreements and arrangements with industrial undertakings and with trade associations in connection with its implementation, particularly in relation to the early warning system. Many of these agreements and arrangements clearly fell outside the 1956 Act. For example, an agreement between a Minister and a single supplier about prices can never fall within Section 6 of the 1956 Act because it would not involve two or more suppliers. But the question whether or not particular agreements fell within the 1956 Act was not closely examined because we were advised that the doctrine of Crown immunity applied in relation to the 1956 Act.
    Those Members of the House who are members of the legal profession will be aware of the decision on which this advice was mainly based—that of the Court of Appeal in the Telephone Apparatus Manufacturers' Agreement case. The doctrine of Crown immunity is, I am advised, a rule for construing Acts of Parliament. Its effect is that no Act is to be construed as prejudicing the prerogative, rights or interests of the Crown unless there is clear evidence of an intention that they should be affected. In the Telephone Manufacturers' case the court held that immunity extended to an agreement to which the Crown was not a party but which was necessary in order that the parties could carry out an agreement they had made with the Crown, acting through the Postmaster-General.
    Because of this view, no general power was taken in the Prices and Incomes Act, 1966, to exempt from the 1956 Act agreements implementing the prices and incomes policy. The very limited provisions of Section 24 of that Act for exempting agreements was designed to deal with cases where it was thought Crown immunity was not available, because the Crown would not be a party to the relevant agreement.
    We have since been advised that for the doctrine to apply, the interest of the Crown in an agreement must be a commercial one and that the Government's interest in the implementation of the prices and incomes policy is not sufficient to attract Crown immunity.
    912
    Since we received this advice, no agreements have, of course, been made in reliance on the doctrine of Crown immunity. We have also carried out some inquiries designed to discover whether there are in existence agreements made before that time in reliance upon the doctrine of Crown immunity. We think that there are some and that it would be unfair to expect the commercial interests who entered into these agreements in the belief that they were not registrable now to register them and be faced with a possible choice of defending them before the court or not defending them and thus letting them be condemned.
    I think it would be rather absurd not to take powers to exempt any existing agreements. If they could not be exempted and were registered, there would be nothing to stop the parties abandoning them, and, when the Bill comes into operation, being requested to make and making identical agreements which could be immediately exempted under the Clause as now drafted. The Registrar would not, of course, be under any obligation to refer the abandoned agreements to the court because of the provisions of Clause 9(1) of the Bill.
    I would make it clear that there is no question of our exempting Government Departments from any obligation to register. They are not subject to the compulsory registration procedures of the 1956 Act. Indeed, in those cases where Departments asked trade associations to agree that they would make recommendations there is no question of the Crown even being a party to a registrable agreement. What is registrable is the constitution of the trade association and the recommendation by it to its members in implementation of its agreement with a Government Department.
    8.15 p.m.
    Mr. Peter Emery: The Minister of State referred to the Court of Appeal case concerning the telephone apparatus manufacturers in which the argument about Crown immunity was rejected. Since that time, when it was realised that Crown immunity did not apply, have they continued to operate this, knowing that Crown immunity was not applicable? I can understand that they would want to take action to cover

    913
    agreements so affected between 1956 and then.
    Mr. Dell: The hon. Gentleman misunderstands the position. It was on the basis of the Telephone Apparatus Manufacturers' Agreement that we were advised that these agreements were subject to Crown immunity. The advice which we have received since is to the effect that if the Government are to benefit from Crown immunity they must have a commercial interest in the agreement and not a policy interest.
    Mr. Emery: Obviously I did misunderstand, and I am glad that the hon. Gentleman has cleared up the point.
    On being advised that Crown immunity no longer existed, have the Government contracted any other orders or taken any other action which has to be covered? This immediately introduces an aspect of retrospection which would be wrong. I can agree with the Government, on thinking that they were acting in good faith, in taking action to cover their good faith.
    Mr. Hall-Davis: This is not just a small technical Amendment, because it touches on some basic attitudes to the question which we are discussing.
    At the commencement of our discussion in Committee on Clause 2, I said that the Minister of State was defending the indefensible. I am sure that since he has found it necessary to move this Amendment he will be even less enamoured of the Clause than I suspect he was when he originally found it in the Bill. Under the Amendment, the Minister of State finds himself obliged to rectify an extraordinary omission which, for all the deep legal considerations which he has put before us, amounts to a most extraordinary oversight—I put it no stronger in view of our discussions on the Bill—by the Government.
    What are we to make of a Government who introduce a Bill with a provision in it which makes liable to an action for civil damages parties to an agreement which is registrable and which the parties have failed to register and who then discover that their own Ministers and greatest Departments of State have been entering into agreements which have been, by non-registration on the part of the other parties, in default of the 1956 Act and that this situation has arisen from the implementation of Government
    914
    policy in not only a major but a highly controversial field?
    I am moved to ask the Minister what the Government would have done if the Bill had not been conveniently passing through the House and presented the opportunity for the Amendment to be introduced without any prior indication by the Government that they were aware of the need for it.
    My hon. Friend the Member for Honiton (Mr. Emery) asked whether the Government have been entering into agreements when they knew that they were, as it were, in default or that the other party was in default. I take the point that it is not the Government who are in default, but the other party. I will say a word about that later. My hon. Friend asked over how long these agreements had been entered into since this knowledge dawned on the Government. The Minister of State cleared that up. Apparently the Government have only recently realised the situation.
    As far as I can see, for some two years the various Departments of State have been actively securing the agreement of parties to a course of action which should have been registered and which has not been registered. We are entitled to ask, when considering this Amendment for a retrospective piece of legislation, what is the moral, the significance, of this sudden discovery, which comes at a time when pressure is being brought on private citizens to observe the terms of the 1956 Restrictive Trade Practices Act by another Clause in the Bill, that the Government have not been carrying out or seeing that the people with whom they are in close contact carried out the terms of the 1956 Act which the Bill seeks to secure will now be carried out by all other parties.
    The moral is clear. It is that the Government and Ministers do not understand that the obscurantist policy, which they have labelled "prices and incomes policy", has led them into a gigantic conspiracy in restraint and suppression of competition. This is why these agreements were registerable and should have been registered. It is no minor technical Amendment.
    That it has been necessary to introduce this Amendment throws into vivid relief the fact that prices and incomes

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    restraint on industry, on employers and employees, is as much a restriction of the free play of competition as any restrictive agreement designed to secure a sheltered and profitable existence for the parties to it.
    I have asked if the Minister will make clear for how long any of these agreements, which have not been registered and should have been registered under the 1956 Act, have been in existence.
    But there is another question on which the Minister touched, I thought with a pleasant ingenuousness, which will, alas, be tested in time by developments, so perhaps I may ask him to be more explicit before we leave this point. I refer to the question of how many of these agreements the Board of Trade consider exist or have existed. The Minister made it clear that this Amendment does not seek to deal with the situation where only one party, besides the Government Department, was involved in an agreement. But, as was made clear by the President of the Board of Trade during discussion of the Clause on Second Reading, and as was made clear in Committee, this Clause, and the Amendment we are now considering, arises from the operation of the early warning system. I think that it is ingenuous for the Minister of State, although perhaps the Board of Trade is spared to some extent deep involvement with the early warning system, to suggest that some other Departments should shoulder the burden of it. It is ingenuous for him to suggest that most early warning agreements are operated in any other way than by trade associations. I suggest that the Minister may find on examination that the majority of early warning systems are certainly not operated directly with an individual party.
    I refer here to Command 3590, "Productivity, Prices and Incomes Policy in 1968 and 1969", where, in Appendix 1, are listed the industries and the various sponsoring Departments concerned with the operation of the early warning system. It is headed,
    "Appendix 1. Part A. Goods and Services Subject to Early Warning Arrangements."
    Right hon. and hon. Members of this House have not been exactly idle and footloose in the last week, so I will not weary the House by mentioning them
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    in detail, but there are in fact 98 industries in that Appendix. I suggest that it is conceivable that in every industry listed there there have been one or more agreements which will need the protection of this Clause, because the early warning system consists of secret pressures secretly applied. It is the modern version of the medieval thumbscrew in economic terms.
    The Minister of State said:
    "… I can see that there is an argument here for greater publicity for what the Government are doing. I agree that it is sufficiently known how much the Government are doing in bringing prices under control."—[OFFICIAL REPORT, 14th May, 1968, Standing Committee H; c. 32.]
    I do not think he suspected that perhaps the way that that publicity would be created would be by a need for Orders to be made to exempt agreements already in existence to operate the early warning system. But he at least gave us a firm commitment that they would be available at the Office of the Registrar of Restrictive Trade Practices.
    So, when these retrospective Orders are made under the powers which the Board of Trade is seeking in the Clause, we shall have an opportunity of testing the Minister of State's somewhat ingenuous introduction of the Amendment against the true situation as to how many agreements exist.
    I suggest to the Minister that verbal agreements are registerable; not just those that are committed to writing. Therefore, the Departments of Whitehall, if they are to play fair with their victims, or partners, whichever expression one likes according to one's attitude to the early warning system, must search their memories as well as their files. I think that there will be a scurrying in Government offices to see that all agreements operated through trade associations in connection with prices and incomes policy are covered by Orders. It is not only in Whitehall that there should be a scurrying. Now that this situation has been revealed by the Government, one must bear in mind that if there are agreements not operated on a bilateral basis with a single company which have not been registered and are not rapidly given an exemption Order or registered, the firms who are holding down prices will be in default, under Clause 7(2), and I suspect, although I am no lawyer, will be

    917
    exposed to the possibility of civil proceedings for damages.
    I cannot say now who is likely to take that action, but it is not inconceivable that it could be the shareholders or the employees because the matter is full of uncertainties as the Government have shown by their very inability to grasp the significance of this early warning or price fixing agreement.
    8.30 p.m.
    I should like the Minister to give a categorical assurance, again following the point made by my hon. Friend the Member for Honiton. It seems almost beyond the bounds of credibility that not one Government Department realised that it was leading parties into a situation in which they were in default under the 1956 Act. It is very dangerous to hold oneself up in this House as a prophet, as someone who has seen something which other people have not seen, because I suspect that if one does that and then drives out of the gates of the Palace of Westminster one can find oneself driving the wrong way up a one-way street, having tempted Providence too far.
    The Government were apparently misled on this point for about two years, but in Committee apparently we were not unaware of the possibilities, even during the duration of a brief Committee sitting. I said on one occasion:
    "If he wants the power to run for more than the one year that we want,"—
    that was referring to the power to make Orders under this Clause—
    "is it because he thinks, and is advised, that an agreement to enter into the 'early warning' system at all—the acceptance by an industry, a trade association"—
    I was fairly close to the mark there—
    "or an individual concern"—
    I was wrong there—
    "of an obligation to give 'early warning' notice—constitutes a registrable agreement? Having listened to him, this is the only basis I can see for having more than one year."
    Earlier on I had said:
    "What this Clause is needed for is to make legal undertakings involving price regulation administered by a trade association"—
    I was specifically on the point there—
    "secure under the 'early warning' system, and that is what the Amendments seek to stop the Clause doing."—[OFFICIAL REPORT, Standing Committee H, 23rd May, 1968; c. 180 and 160]
    918
    It seems extraordinary that if a layman puts that point to the Minister of State no comment comes from him in Committee, and we now find that every Government Department and every Minister had overlooked this vital point. I hope we can have a direct answer from the hon. Gentleman that it was overlooked right up to this late hour, because one cannot help feeling that there must have been a strong temptation for the Government, if they had realised this sooner, not to put it in the original Bill where it would attract publicity and show that they had failed to understand the implications of the policy they were operating, but to put it in the Bill by way of an Amendment on Report. We wish to be certain that we can exonerate the Minister of State from any such deep-laid plot, and I should welcome an assurance that it was literally at the eleventh hour that they were able to introduce the Amendment because it was then that the true situation in which the parties to these agreements were placed came to their notice, that the light penetrated after the first Government Amendments on Report were tabled.
    It is true to say that bad policies soon make themselves look foolish. The Amendment and the oversight that it shows, and the lack of appreciation which existed, make even more ludicrous the Government's handling of their prices and incomes policy.
    Mr. Dell: I admire the enthusiasm of the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) in wishing to continue to debate the prices and incomes policy even after the last two or three days. He repeated the graphic words he used in Committee about secret pressures, secretly applied. I then pointed out to him—and I do not intend now to go into this in great detail—that, on the contrary, secrecy is avoided by the wording of the Clause because subsection (5) makes it clear that any exempted agreement will be available for public inspection. The hon. Gentleman will therefore be able to have full information, and to rejoice in it.
    The hon. Gentleman said that all these agreements were registerable, and should have been registered. I can only humbly compliment him on his legal knowledge. We were given contrary advice, and we acted on it in good faith. When that advice was changed, when we

    919
    were advised that these agreements would not benefit from Crown immunity, as I said when I moved the Amendment, we immediately stopped making such agreements. The hon. Gentleman the Member for Honiton (Mr. Emery) asked me when we were given that advice. We were given that advice last November, and since then no such agreements have been made. The word "retrospective" has been used—
    Mr. Hall-Davis: Would the Minister of State explain why the matter was not in the Bill as originally drafted?
    Mr. Dell: I am coming to that. I have noted all the hon. Gentleman's questions and I am sure if I do not answer all of them he will tell me so.
    The hon. Gentleman used the word "retrospective", which is an emotive word. I do not think this provision is retrospective. It only permits Departments to exempt from registration in future agreements which have not yet been registered. It does not give them power to exonerate any past failure to register. No exoneration is necessary because a failure to register does not at present involve any sanction. This Amendment will allow Departments to protect parties to an agreement from the sanctions against failure to register imposed by Clause 7 of the Bill. It is not in any sense retrospective because the pro-vision is in favour of the subject. It does not impose any duty or penalty retrospectively.
    The hon. Gentleman the Member for Morecambe and Lonsdale asked me how many agreements had been made in reliance on the doctrine of Crown immunity, and he expected to see a flood of exempted agreements choking the doors of the registrar's office. I would caution him to this extent. Many trade associations which were asked to assist in the implementation of the prices and incomes policy merely acted as post offices, passing on Government statements and exhortations, and where trade associations so acted there will be nothing to register because the association will not have made a recommendation.
    As to how many there were, I can give him no figure. A considerable
    920
    number of agreements and arrangements have obviously been made by industry and trade associations in connection with the prices and incomes policy. Few, if any, will have been made very formally. Some may have been made orally. It will be necessary, as the hon. Member suggested, to make a considerable study of departmental records. An examination of the files of one major branch of the Board of Trade with responsibilities for a number of industries produced four possible cases. Only in one case, however, is it thought that there could be obligation to register because Crown immunity is not applicable. This case involves a recommendation by a trade association to its members which was made in fulfilment of an agreement with the Board of Trade.
    The hon. Gentleman also asked me, and has just repeated the question, why the new subsection was not included in the original Bill. The answer is that it was thought that Departments should start de novo and not simply frank existing agreements. This view has now been altered, because it is thought that it would be undesirable to leave the present agreements and recommendations still liable to be registered.
    Amendment agreed to.
    Mr. Emery: I beg to move Amendment No. 7, in page 3, line 19, at end insert:
    (7) No order under this section shall be made after 31st December 1969.
    Since I have been in the House for about 21 hours out of the last 28 hours dealing with the Prices and Incomes Bill, it may be thought that it is purely coincidental or, on the other hand, that it is only my just reward, that the Amendment I move is one dealing entirely with prices and incomes. The Clause allows exemption from registration of agreements which hold down price, and allows the Government to arrange a voluntary scheme to secure acceptance by an industry of price restraint. Were an industry to be involved, it would obviously be possible for such an agreement to be registrable under the present law.
    Powers are given in the Clause to exempt from registration agreements on price reductions made at the Government's request. Accordingly, they would

    921
    be exempted from the normal legal position. The exemption lasts for a period of two years plus two years. On Second Reading, the President of the Board of Trade said on 30th April that the Clause is purely to follow out the pricing policy which the Government wish to pursue in their overall prices and incomes policy. That being the case, we say that, as the Government have decided that their prices and incomes policy will come to an end in December, 1969, then, logically and reasonably, the powers in this Bill should terminate. It is to do that that I move this Amendment.
    I have never believed that the Restrictive Trade Practices Bill was the right place in which to follow out further action in pursuance of the prices and incomes policy. Legally, it is both misleading and wrong. It should not be encouraged. We attempted to do something about it in Committee, without success. Therefore, as the Government are determined to retain this specific Clause, it is right and proper that the powers should be limited.
    One of the basic reasons for ensuring that the powers are not held for ever is that it is possible for this sort of power to be used to restrict the normal free movement in the competition of prices, contrary to what the Bill is trying to allow. To have these exemptions left in the Bill after the policy for which it is meant to work has come to an end seems not only an anachronism but a specific danger. It allows the Government to have extra powers and, as I have said frequently, I believe that I am returned to Parliament not to make more and more laws but to codify existing ones and make them better understood.
    One of the dangers is that before long, maximum prices turn out to be minimum prices. That is exactly what the Bill wishes to discourage and what we on this side of the House wish to discourage. Accordingly, if these powers are not to be terminated, they may be extended. I can understand the Government saying that they will follow my argument for a while but that it is just possible that they will need to extend the present prices and incomes policy. There is a direct deviation of opinion in the Cabinet. The present Home Secretary, for example, thinks that it would be wrong, that we
    922
    have had a third one, and that no more must be allowed. The Secretary of State for Employment and Productivity—I almost said"Labour and Productivity ", but the two do not go together under the Labour Party—is willing to extend the Bill if necessary, so the Minister might say that, if it were necessary to extend the Bill, these integral powers would, under the Amendment, have to come to an end. I spent over 70 hours in Committee on the Prices and Incomes Bill and I do not know how many this week on Report and Third Reading and not once was this aspect of the policy of limiting prices ever mentioned. It does not seem to be a very important part—[An HON. MEMBER: "Humbug."] As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) says, it is humbug; it is control for control's sake. It would therefore be no loss to the Government.
    8.45 p.m.
    Let us give them the benefit of the doubt. They say that they want to end the Bill at the end of 1969. Let us help them. If we had had our way, we would have ended it in the Division an hour and a quarter ago. Three different terminologies have been used about controls. The right hon. Lady referred to the extra powers and the three different Bills in the now classic phrase as "the evolution of policy". The hon. Member for Poplar (Mr. Mikardo), who came in for a fleeting visit in this debate to get his papers and then walked out, referred to the escalation of powers. He was talking of wage control, but the argument is just as true over price reductions. I have called it geometric progression, because once powers are taken for specific jobs general powers have to be taken to close the loopholes which they create.
    We are going a little far and I accept that this is only a small part, but it is a part, unless the President of the Board of Trade misled the House on Second Reading. We claim that, as we have not been able to get rid of this in Committee, we are doing the Government a service by allowing them to show their good faith to the country by assuring it that they will work to see that the prices and incomes policy and Bill come to an end by the end of December, 1969. By accepting the Amendment, they will show

    923
    this faith to the country on the same day as the Third Reading of the Prices and Incomes Bill.
    Mr. David Lane: I am glad that we have returned to this subject because, having re-read the discussion in Committee, I find the Minister's reasons for objecting to a similar Amendment completely unconvincing.
    I have two reasons for supporting the Amendment. The first is that we should keep in line with the time-scope of the prices and incomes legislation, since this provision is linked with the early warning arrangements. The arguments adduced by the Minister in Committee against our arguments were not compelling, since I understood him to say that to accept our proposal would discourage people from making agreements for holding down prices.
    That should not carry much weight in view of my second reason in favour of the Amendment, which is that we should put this Measure on the Statute Book with the minimum possible exceptions to the full rigour of the 1956 Act. Competition should be the general principle and the fewer untidy loose ends we leave hanging round that general principle the better. I hope, therefore, that the Minister will have second thoughts and accept the Amendment.
    Mr. Dell: I am sure that my hon. and learned Friend the Solicitor-General listened with rapt attention when the hon. Member for Honiton (Mr. Emery) said that his one ambition was to make laws which could be better understood. That is also my ambition and I am sure that it is the ambition of my hon. and learned Friend. However, it is not an ambition that we frequently fulfil.
    The hon. Gentleman speculated on the argument that I might use. In fact, he mistook the argument because I fear that I must merely repeat what I said in Committee, although I appreciate that it is likely to be considered by hon. Gentlemen opposite to be just as unpalatable now. I assure the hon. Member for Cambridge (Mr. Lane) that it is compelling to me, if it is not to him.
    There are time limits within the prices and incomes policy and they refer to the compulsory elements of the policy.
    924
    Those compulsory elements terminate under the Bill, which we have recently been considering at length, at the end of 1969. That, apparently, has led hon. Gentlemen opposite to make the end of 1969 the date of termination of this power in this Measure. There are, however, voluntary aspects to the prices and incomes policy and these are permanent. We hope that we will continue to have a voluntary policy and that the legislation which we have introduced will be the basis of a continuing voluntary policy.
    The Clause is essentially part of a voluntary prices and incomes policy and it can operate only by voluntary agreement. It enables the Government to exempt agreements which are designed either to prevent or restrict increases or to secure reductions in prices from registration. These agreements must be voluntarily entered into. There is no more reason for a termination date in respect of this power than there is a reason for a termination date on, for example, the life of the N.B.P.I. These are all parts of the voluntary and continuing prices and incomes policy which we are trying to develop.
    Mr. Emery: Is the hon. Gentleman aware that he is only partially correct and that he is misleading the House in one respect? Is he aware that Clause 2 refers to securing reductions in prices and that the action of price reductions, if carried through by Clause 4 of the Prices and Incomes Bill, terminates in 1969? In that respect the Minister is not correct.
    Mr. Dell: The hon. Member is mistaken in thinking that I am even unintentionally misleading the House. These are agreements to secure reductions in price. That is what we are exempting. These are not powers to secure reductions in price. The power is to exempt from registration agreements to secure reductions in price.
    The hon. Member argued that this is the wrong Bill. I have explained in Committee why it is not the wrong Bill. This is a Bill which gives an administrative power to exempt from certain elements in the 1956 Trade Practices Act. This is the right Bill to contain this power and I think it a valuable power which the Government should continue to possess indefinitely. For this reason I recommend

    925
    the House to reject this Amendment. I confess that I used the same arguments in Committee. If the hon. Member found them lacking in compulsion, I regret it. To me they are compelling because in this country we need a continuing voluntary prices and incomes policy.
    Mr. Hall-Davis: At least we secure revelation if not agreement or conviction in our discussions on this Clause. It has been made quite clear that it is no accident or oversight that this particular question of timelessness is in the hands of the Board of Trade which may consider itself a Department with a more settled long-term prospect than other Departments.
    The Minister of State has been frank and told us that the voluntary policy is to continue and this is to be just a more interesting statement, a continuing element. By "this" I mean the operation of the early warning system. I think the hon. Gentleman did less than justice to the question of securing stability in the British economy when he suggested that the early warning system should necessarily be equated with the continued existence of the Prices and Incomes Board. Most people would not think that exactly the link for this Government's or any other Government's, form of prices and incomes policy.
    We have concluded that the early warning system is intended to become a permanent feature of this Government's policy for managing the economy. I thought that the hon. Gentleman would tell us that the economic crisis would be a continuing element of this Government's policy and that is why these powers should be timeless. I believe time will prove that the early warning system has disadvantages and objectionable features which outweigh any advantages it may have. This is another reason for accepting the Amendment.
    The early warning system involves pressures applied in private. Not only are they applied in private, but they are shielded from examination by this House and from comment by the Press. The Government do not disclose what has transpired at these discussions and industry or individual firms are most reluctant to do so because they fear that they may prejudice their relations with the sponsoring Government Department,
    926
    which under the present prices and incomes legislation has a great control over the profitability of those undertakings.
    The prices and incomes early warning system can be justified only if at all by dire economic emergency. I hope that by the end of 1969, if that is still a continuing situation in the British economy, we shall have a new Government. This Amendment should be accepted. It would be in line with the rest of Government policy. The arguments which my hon. Friend the Member for Hbniton (Mr. Emery) advanced are of overwhelming weight in any dispassionate survey whether the Amendment is viewed by a supporter or an opponent of the Government's prices and incomes policy.
    9.0 p.m.
    Mr. Emery: I did the Minister of State an injustice. I thought that in answering the debate he would not revert to his old hackneyed arguments. As he is a man of intelligence and some ingenuity, I thought that he would find some new arguments. That is why I tried to deal with some of them before he raised them. I am disappointed. This only shows that the Government are at sixes and sevens with themselves. They do not know what the position is on an incomes policy. I do not feel justified, on that reply, in withdrawing the Amendment.
    Amendment negatived.

    Clause 3
    SUPPLEMENTARY PROVISIONS AS TO EXEMPTED AGREEMENTS
    Mr. Dell: I beg to move Amendment No. 8, in page 3, line 28, at end insert:
    (2) In the case of an order under section 1 of this Act approving a recommendation made by or on behalf of a trade association, the requirement of subsection (4) of that section as to the giving of notice of intention to revoke the order shall be treated as a requirement to give such notice as is there mentioned to the association; and any notice under that subsection which is required to be given to a trade association or to each of the members of a trade association shall be treated as duly so given if it is given either to the association or to the secretary, manager or other similar officer of the asociation.
    The Amendment is linked with Amendment No. 4. It clarifies the position about giving notice of intention to revoke an

    927
    order under Clause 1 in relation to trade association recommendations and agreements to which a trade association is party. Its effect is to require the Board of Trade to give notice to the association, or to its secretary or manager, or to a similar officer of the association, and to make it clear that it does not have to give notice to all the individual members of the association. Membership of some trade associations runs into hundreds.
    I hope that hon. Members will agree that it would be unreasonable to expect the Board of Trade to give individual notice to members of an association. The Amendment will avoid any danger that a failure to give notice to an individual member of an association, of whose membership the Board may not be aware, would invalidate the notice.
    Mr. Hall-Davis: The Amendment is designed to relieve Government Departments of a burdensome administrative chore. Perhaps that is rather colloquial language, but it expresses the intention. The trade associations to which the Minister of State referred represented strongly to us that they were weighed down by a burdensome administrative chore when it came to registering agreements. The hon. Gentleman said in Committee that Clause 8 contains the power to make provisions for the operation of the Bill, when enacted.
    The Government having felt that there is great benefit to them from moving the Amendment, I hope that those responsible for administering the Act will realise that exactly the same considerations apply to trade associations when they are confronted with their obligations in administering the Act. The Government's very creditable intention in tabling the Amendment is a reinforcement of the reasonableness of the plea by trade associations that some reasonable administrative provisions should be made.
    Amendment agreed to.
    The Solicitor-General (Sir Arthur Irvine): I beg to move Amendment No. 9, in page 4, line 14, at end insert:
    (6) No order made by the Court in proceedings under Part I of the Act of 1956 for restraining any person from making an agreement or recommendation, and no corresponding undertaking given to the Court in such proceedings, shall be construed as extending
    928
    to an agreement or recommendation which is exempt from registration by virtue of an order under section 1 or section 2 of this Act
    The purpose of the Amendment is to ensure that the intended parties to any proposed agreement exempted by the Board of Trade under Clause 1, or by the Board or a competent authority under Clause 2, can make and carry out that agreement without fear of contempt proceedings, even though they may be subject to an Order of the Restrictive Practices Court precluding them from making any further agreement to the like effect as an agreement previously condemned by the Court.
    The Amendment achieves this object by declaring that no order of the court under Part I of the Restrictive Trade Practices Act, 1956, shall be construed as extending to any agreement exempted under Clause 1 or Clause 2. This matter arises because, where the court declares all or any of the restrictions in an agreement to be contrary to the public interest on a reference by the Registrar under Section 20 of the 1956 Act, the court usually makes an order against the parties to the agreement or secures an undertaking from them which precludes them from making any further agreement to the like effect. Breach of the order or undertaking constitutes contempt of court.
    Nothing in Clause 1 or Clause 2 inhibits the Board of Trade—or, in the case of Clause 2, any other competent authority—from making an exemption order in relation to a proposed agreement even though one of the intended parties is bound by a court order.
    In Committee, my hon. Friend was asked what would be the position of persons who might wish to make an agreement which was or could be exempted under Clause 1 or Clause 2 but which might be regarded as being to the like effect as a previous agreement to which they were party and which had been condemned by the court. Such persons will normally have given an undertaking to the court or been subject to an order of the court requiring them not to make any further agreement to the like effect. They may well feel that to make the further agreement might lead to the institution of contempt proceedings against them even though it was the subject of an exemption order under Clause 1 or Clause 2.

    929
    The Amendment is proposed to meet that difficulty. We have given careful thought to it. The Amendment is designed to cover this situation by ensuring that the making of the further agreement cannot be regarded as a contravention of any court order made against such a person. The Amendment achieves this purpose by declaring that no court order or corresponding undertaking shall be construed as extending to an agreement exempted under Clause 1 or Clause 2.
    I should make clear to the House in this connection that it may be the case, and in my opinion it probably is, that the Amendment is technically unnecessary, because the reference in Section 20 of the 1956 Act to
    "any other agreement to the like effect "
    should be construed as referring to any other registrable agreement, and under Clause 1 and Clause 2 of the Bill exempted agreements are by definition not registrable. Hon. Members will see that the whole construction of Section 20 is on the basis that it is dealing with registered agreements. In the language employed, there is first a reference to registered agreements and then, in later parts of the Section, a reference to agreements. These latter agreements, I feel fairly confident, must be regarded on a true construction of the Section as either registered or registrable agreements.
    If that view be right, the Amendment may well be unnecessary. But this seems to us to be one of those instances in which it is right and desirable in the general interest to put the matter beyond doubt. That is what the Amendment seeks to do. If I felt that there was in the slightest degree in the proposal any unwarranted encroachment on the order made by the court I should think it right to make that view clear to the House and warn the House about it. But my assessment is that there is no question of any difficulty of that kind, and I recommend the Amendment to the House.
    Mr. Hall-Davis: In many respects the Bill is highly technical, certainly to the layman. Whilst we disagree with the Government on some aspects, the Board of Trade has been most helpful to those of us concerned with considering the Bill on questions of technical clarification. I said not long before the Report
    930
    stage was due to start that I hoped that the Minister would be able to continue the technical explanations that reduce discussion by dealing fully with the matters under consideration. I did not expect that this would be done to such effect that we should have the opportunity of hearing the Solicitor-General on the Clause. I thank him for his very full explanation.
    A number of people feel that they may be in this situation, and this is a matter of considerable interest to them. It was for that reason that the question was raised in Committee. I am sure that they will find both the Amendment and the remarks about it by the Solicitor-General very helpful in clarifying the position.
    Amendment agreed to.

    Clause 10
    PRESUMPTION AS TO PUBLIC INTEREST
    Mr. Deputy Speaker (Mr. Sydney Irving): The next Amendment is Amendment No. 10, with which it may be convenient to take Government Amendments Nos. 11 and 12.
    Mr. Dell: That would certainly be for my convenience, Mr. Deputy Speaker, if it is also for the convenience of the Opposition.
    Mr. Hall-Davis Mr. Hall-Davis indicated assent.
    Mr. Dell: I beg to move Amendment No. 10, in page 4, line 25 after ' quality', insert
    'or arrangements as to the provision of information or advice to purchasers, consumers or users'.
    My attention has been drawn to the existence of a number of arrangements, bearing a close relationship to standards of dimension, design or quality, intended to ensure that when certain goods are supplied to the public, information about their composition or quality or instructions about their use are provided, for example, on the label. Such arrangements might, for example, cover advice about safety precautions.
    I am advised that agreements to implement such arrangements or trade association recommendations about their implementation may be registrable because

    931
    they can be construed as involving a restriction on the supply of goods in question unless the prescribed information or advice is provided.
    I am sure that hon. Members will agree that we should encourage the provision of the fullest possible information to the consumer about the goods he is using. As I have said, these arrangements are akin to standards, and we think it appropriate that they should be dealt with in a similar way.
    The Amendments, therefore, widen the Clause so as to afford an exemption in relation to terms of agreements concerned with implementing approved arrangements as to the provision of information or advice to purchasers, users or consumers.
    Mr. Tom Boardman: The Amendment is similar to a point discussed in Committee about bilateral arrangements. Whilst it goes some way to meet what we then discussed with regard to the supply of information to purchasers, it does not go as far as the Minister perhaps intended, because it does not extend to potential purchasers.
    When we come to the question of information agreements, which, under the Bill, is to be covered by Section 7(3) of the 1956 Act, any arrangement for providing information to potential purchasers as to standards, design, quality or advice would be a registrable agreement provided the necessary order is made.
    9.15 p.m.
    I suggest that what the Minister might well have intended to do here was to ensure that arrangements by which one party agreed to supply information to another about specification, design, standard, quality, and so on, should have the same protection as where a contract of purchase is made. The Amendments fall short of what I understood the hon. Gentleman to say he hoped to achieve. There will be many cases where arrangements are made to provide information on safety precautions, for example, which will be equally applicable. The hon. Gentleman should look again at the wording and see whether it really fulfils the desire he shares to prevent agreements where information leading up to sale is exchanged possibly falling into the category of registerable agreements.
    Amendment agreed to.
    Further Amendments made: No. 11, in page 4, line 26 after ' standards', insert ' or arrangements'.
    No. 12, in line 27 leave out ' prescribed ' and insert:
    'or arrangements prescribed or adopted'.— [Mr. Dell.]

    Clause 5
    INFORMATION AGREEMENTS
    Mr. Dell: I beg to move Amendment No. 13, in page 6, line 15, at end insert:
    (5) The Board of Trade shall, before laying before Parliament the draft of an order for applying Part I of the Act of 1956 in relation to information agreements of any class, publish in such manner as they think appropriate a notice—

    (a) describing the classes of agreements to which the proposed order would apply; and

    (b) specifying a period (not being less than twenty-eight days) within which representations with respect to the proposed order may be made to the Board,

    and in settling the draft to be laid before Parliament shall take into consideration any such representations received by them within that period.
    In Standing Committee, I indicated that the Government accepted the principle at two Opposition Amendments designed to ensure that the Board of Trade should give statutory notice of its intention to call up classes of information agreement. This Amendment is intended to give effect to the undertaking I gave to consider an appropriate Amendment at Report stage.
    In the debate in Committee, it was suggested that any Government Amendment should cover the following points. First, there should be specific disclosure of the intentions of the Order in the statutory notice. Paragraph (a) of the Amendment provides for this.
    Secondly, the period of notice of 14 days in the Opposition Amendment No. 58 was too short. Paragraph (b) of our Amendment provides for a minimum period of 28 days. We think this period is adequate to enable interested persons to make their views known to the Board.
    Thirdly, it was suggested that the Amendment should impose upon the

    933
    Board of Trade the obligation in general terms to listen to representations. The last three lines of the amendment embodies such a requirement. I hope, therefore, the House will accept this Amendment. I beg to move.
    Mr. Hall-Davis: Clause 5 broke new ground—not in itself a cause of disagreement between the parties. It was a step which all found necessary and the intention to move in the general direction of Clause 5, which will be taken by the making of an order to which the Amendment refers, was not a subject of controversy. But there was considerable doubt about the terms in which the Clause was expressed and about the way in which it might be implemented. This Amendment will enable the Government to pick their way with care.
    I think that the Minister of State would not dissent from the fact that, in view of the very wide nature of the agreements which the Government will have power to call up for registration under Clause 5, it is a good thing that they should initially pick their way with care, that they should test the reactions of those affected before they commit themselves to making a Statutory Instrument, and that they should have the benefit of representations from those interested or likely to be affected and also, we hope, from any other expert bodies or individuals who may have comments to make upon the intention of the Government to make orders in the form indicated or which will be indicated as the result of the Amendment.
    As the Minister of State has said, in Committee we put forward an Amendment on very similar lines. There are still considerable doubts about the Clause itself, but I have no hesitation in saying that in the operation of the Clause the Amendment will prove a useful instrument. It will serve to protect the Government from striking unexpected snags or complications and it will enable a fuller discussion to take place than might be possible in the House in the consideration of a Statutory Instrument and, what is much more important, it will enable discussion to take place before the Government finalise the exact terms of the Order.
    I am glad that the Minister has felt able to move the Amendment. I am certain that he will receive many repre-
    934
    sentations as a result of it when the draft indications are given of the terms of an Order to be made, and I am glad that the Board of Trade has felt able to lay upon itself a statutory obligation to take into account those representations before finally laying the Order.
    Amendment agreed to.

    Clause 7
    CONSEQUENCES OF FAILURE TO REGISTER
    Mr. Dell: I beg to move Amendment No. 14, in page 8, line 12, at end insert:
    (4) In relation to an agreement for the constitution of a trade association which is subject to registration in consequence of the making of a recommendation to which subsection (7) of section 6 of the Act of 1956 applies, the power of the Court under subsection (3) of this section shall include power to make such order as appears to the Court to be proper for restraining the association or any person acting on its behalf from making other such recommendations.
    My attention has been drawn to the possibility that the form of an order which the court may make in the circumstances envisaged in subsection (3) will not be appropriate in the case of a trade association recommendation.
    Hon. Members will recall that subsection (3) provides that the Restrictive Practices Court at its discretion may. upon application made by the Registrar, make an order restraining parties to an agreement which has not been registered within the appropriate period from giving effect to or enforcing it, or from giving effect to or enforcing any other agreement which has not been registered within the appropriate period. An order in this form may not be an effective way of dealing with cases occasioned by failures to register recommendations by a trade association. Such recommendations may, of course, fall to be regarded as giving rise to a registrable agreement by virtue of the provisions of Section 6(7) of the 1956 Act.
    The form of order which may be necessary to act as an effective deterrent to a trade association may well involve limiting the right of the association to make further recommendations falling within the ambit of Part I of the 1956 Act. Such additional provision is necessary because it is very difficult to prove that the members of an association are

    935
    complying with a recommendation of such an association—particularly when the recommendation is of a negative character. Moreover, the wording of Section 6(7) of the 1956 Act which relates to trade association recommendations is such that it would seem unlikely, without this provision, that any order could be made under Clause 7 in relation to an incorporated trade association or its officers, but only in relation to its members.
    Amendment agreed to.

    Clause 9
    MODIFICATION OF DUTY OF REGISTRAR TO TAKE PROCEEDINGS FOR INVESTIGATION
    Mr. Lane: I beg to move Amendment No. 20, in page 9, line 18, at end insert:
    'and, if such proceedings have been commenced before the passing of this Act, shall not be required to pursue them and may, if he thinks fit, with the leave of the court, discontinue these proceedings'.
    This is a simple and commonsense Amendment which will help the working of the Act, in smoothing it from the point of view of the Registrar and the parties to agreements, and in avoiding waste of time and money. This is to do with the present wording of Clause 9(1). The present wording removes the rigidity of the 1956 Act. There are cases where an agreement, or the restrictions in it, have been ended, and in those cases the Registrar will not be required to take proceedings although, if he thinks fit, he may do so.
    There may be one or two current cases where agreements, or parts of them, have ended, but where proceedings by the Registrar have begun which would not have begun if there had been an earlier provision similar to that which we are now putting on the Statute Book. The Amendment seeks to make the position crystal clear, so that the Registrar is now empowered to discontinue proceedings in these narrow cases to which I am referring. The Minister may feel that it is unnecessary to add these words, but I am heartened by the reasoning of the Solicitor-General in moving Amendment No. 9, who said he wished to make things clear beyond doubt.
    936
    The addition of these words cannot do any harm and may do a little good by making doubly sure that there is no unnecessary continuation of proceedings by the Registrar. Such a clarification would be welcome in industry. If the Minister sees any difficulties about the words perhaps he would consider it and put forward another Amendment in another place.
    Mr. Dell: I was not clear, on first reading this Amendment that, what the hon. Gentleman might have in mind. Having heard his explanation I do not think there are any cases of the sort that he fears, and therefore his Amendment is redundant. Perhaps the simplest thing to do is for me to agree to consider at leisure what he has said, and if I find that there is anything in it, and there is something not covered in the Bill which should be covered, I can then arrange for a suitable Amendment to be made as necessary.
    Mr. Lane: In view of that assurance, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Clause 10
    PRESUMPTION AS TO PUBLIC INTEREST
    Mr. Dell: I beg to move Amendment No. 16, in page 10, line 12, at end insert:
    (3) Notwithstanding anything in subsection (4) of section 22 of the Act of 1956, leave to make an application under that section for the discharge of a declaration or order of the Restrictive Practices Court made before the commencement of this Act may, if the applicant proposes to rely on the amendment of section 21 of that Act effected by subsection (1) of this section, be granted upon prima facie evidence of the relevance of that amendment to the application.
    This is really a clarifying Amendment. Under Section 22 of the 1956 Act it is open to the parties to a condemned agreement to ask the Court to reconsider its decision or to vary any order made against them. But the provisions of Section 22(4) make it necessary to obtain the leave of the Court in order to proceed with such an application, and go on to say that the requisite leave shall not be granted:
    "… except upon prima facie evidence of a material change in the relevant circumstances."

    937
    There must be some doubt, in the absence of any express provision, as to whether the parties to any agreement condemned before the commencement of the Bill can seek any review of the Court's finding in relation to the condemned agreement or any variation of the order made against them by reference to the new gateway set out in Clause 10(1).
    The Amendment makes it clear that the requisite leave can be obtained by any person who can produce prima facie evidence that the new gateway is relevant to his case. The sort of situation in which this provision will be relevant is one where the parties wish to make an agreement to the like effect as an agreement already condemned by the Court and feel that they ought to be allowed to do so because, in their opinion, the new agreement does not materially affect competition.
    Amendment agreed to.

    Clause 11
    RESTRICTIONS CONFLICTING WITH FREE TRADE AGREEMENTS
    9.30 p.m.
    Mr. Dell: I beg to move Amendment No. 17, in page 11, line 5, at the end to insert:
    (5) For the purposes of this section ' relevant restriction' includes any restriction by virtue of which an agreement would be subject to registration under Part I of the Act of 1956 apart from subsection (8) of section 8 of that Act (exception for export agreements).
    This is a minor drafting Amendment. Clause 13 defines a "relevant restriction" for the purposes of the Bill generally as meaning a restriction which makes an agreement registerable. These words are, however, used in Clause 11, not only in relation to registered agreements, but also in relation to certain export agreements which are exempted from registration from Section 8(8) of the 1956 Act but are required to be notified to the Board of Trade under Section 31 of that Act.
    The definition in Clause 13 is inappropriate to restrictive terms in these export agreements. The Amendment expands the definition of a "relevant restriction" to cover restrictive terms in these agreements.
    Amendment agreed to.
    9.31 p.m.
    Mr. Dell: I beg to move, That the Bill be now read the Third time.
    Although this is a comparatively short Bill and, in many respects, a non-controversial one, we have spent almost 20 hours in discussing it since it received its Second Reading. In that time, many Amendments have been moved and some valuable changes have been made. The Bill has therefore been the subject of long and detailed consideration. Hon. Members opposite have not always felt able to agree with all we wished to do, particularly in relation to the provisions dealing with agreements made in support of the prices and incomes policy. Perhaps that was too much to expect.
    Altogether, we have achieved a good deal. For example, In Clause 1 we have clarified the definition of agreements which qualify for exemption from registration, and we have placed a statutory duty upon the Board of Trade to take account of the interests of the consumer when considering agreements for exemption. I hope, too, that we have given some reassurance to industry by the provision requiring the Board of Trade to give notice before revoking an exemption order.
    We made a useful Amendment to Clause 4, again with the interests of the consumer in mind. We had a particularly useful debate about the provisions relating to information agreements about which there is a broad area of agreement on both sides of the House but about which fears have been expressed concerning the operating mechanism. I hope that the Amendment which makes calling up orders subject to the affirmative resolution procedure and the provision providing for statutory consideration of representations will allay the fears of those who have argued that the Clause will interfere with normal and legitimate commercial activity.
    It might be useful, however, if I were to reiterate that it is not the Government's intention to use the Clause 5 powers to call up beneficial classes of agreement. What we are concerned with is to bring to an end evasion of the provisions of the 1956 Act by the use of agreements which in form have not in the past been registrable.

    939
    Although I have been unable to accept a number of Amendments tabled to Clause 9, I have been able to give an indication, which I hope will be useful to industry and its advisers, of the way in which the machinery of the Clause will be operated.
    To sum up, the Bill contains a balanced package of provisions which, on the one hand, will add flexibility to the operation of the present legislation and, on the other hand, will strengthen the hands of those whose duty it is to ensure its enforcement.
    9.34 p.m.
    Mr. Lane: I support the Bill as a useful step forward in our continuing attempt to find the right balance between competition and rationalisation in the modern industrial economy. I like the later Clauses rather more than the earlier Clauses.
    Will the Government do all they can to make this new legislation comprehensible to industry? This point arose several times in Committee. Modern life gets more and more complex. Many problems arise simply because of lack of understanding or failure of communication.
    Westminster and Whitehall are widely thought to be out of touch with the people of the country. This is a problem to which we can return more widely perhaps on some other occasion. But within this narrow aspect, I believe that the Government, in administering this Bill when it has passed through the House, have the chance to make a modest contribution towards putting it right by sparing a thought for people in industry who have to operate their side of this legislation. Will the Government do everything they can, by means of special leaflets, articles in journals and the like, to make clear to people in industry how the procedures work and what is required of them? This will help considerably in achieving what we all want, namely, that there shall be the maximum good will in industry in the operation of this legislation.
    With this special plea, I support the Third Reading of the Bill.
    9.36 p.m.
    Mr. Tom Boardman: I, too, support the object of the Bill. I acknowledge that
    940
    during the 20 hours in Committee when we discussed the Clauses the Minister showed considerable patience and understanding with the points that we made, although it is also true that he did not, as I am sure he will acknowledge, often feel able to meet them. It is some tribute to the work of my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) that a number of the points which were so fully discussed in Committee have been acknowledged and, to some extent, accepted by the Minister.
    I have some reservations about the Bill. I have already ventilated them in Committee, so I will refer to them only briefly.
    The first is that the 1956 Act set a standard and a procedure which has stood well the test of 12 years. During that period, as one would expect, it has disclosed gaps and weaknesses. The object of the Bill has been to fill those gaps or strengthen those weaknesses. That is something which I commend.
    The Bill established two standards. It established a standard for the competitive society which is spelt out in the 1956 Act and it set out a standard for the non-competitive arrangement contained in Clause 1. The Minister knows that this is something which caused me considerable concern.
    There are two tribunals. Judgment is decided by one of two tribunals. There are those cases dealt with by the Restrictive Trade Practices Court, set up by the 1956 Act, which merit the full rigour of that court; and there are those cases, if I may use the Minister's own words in Committee, which amount to administrative discrimination. In case that should be considered a harsh definition, the Minister used it at col. 249 of the Committee proceedings on 30th May, 1968.
    That is one of my concerns—the two standards and the two tribunals. This is a departure from the practice set up by the 1956 Act.
    Another concern relates to the bringing in of information agreements in Clause 5. I recognise all too well the evil at which this was aimed—price fixing by exchange of information. I have some doubts whether Clause 5, which brings in the whole terms of information agreements—price, conditions, place and all the rest—is not going far too wide. I

    941
    freely acknowledge that the Minister has helped us by saying that those agreements will not be brought in except by order. The Minister has made certain provisions which in some way meet our points in that respect. However, I believe that the provisions of Clause 5 may give cause for trouble in future. The evil in exchange of information is the information exchanged concerning price, which is referred to in Clause 5(l)(a). I think that exchange of information on other matters—I know that this is a view not necessarily shared by all hon. Members on this side—can beneficially be exchanged, provided there is a free for all concerning price. That is the area in which competition really matters.
    I fear that the Bill can be used as a net which may catch little fish, but will enable the big fish to escape. The two standards; to which I have referred may mean one standard for the big fish, and another for the little ones. All too often a net which is dropped to catch large fish catches hundreds of little, innocent ones.
    I hope that I shall not be misunderstood if I use the newspaper industry as an illustration. Something which is set up to catch the big newspaper proprietor might catch all the newsboys and roundsmen who put their heads together and decide which is the most convenient way of pedalling their bicycles and letting each other know when Mrs. Bloggs is out.
    We shall have to wait and see how the Measure works out in practice. I hope that my fears will prove groundless. The 1956 Act was aimed at creating an efficient, competitive and just attitude of mind in both industry and commerce. It would be a tragedy if the Bill with its Ministerial discretion did anything to destroy that. Subject to the reservations which I have expressed, I support the Bill.
    9.41 p.m.
    Sir Keith Joseph: Because of illness I missed the previous stages of the Bill, but I read the HANSARD reports with great interest. I very much admired the efforts of my hon. Friends, led so admirably by my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), to probe, clarify and improve the Bill. I was not there, but
    942
    I acknowledge the apparent courtesy and helpfulness of the Minister of State. The Committee approved eight significant Amendments, of which five were proposed originally by the Opposition. The Bill emerged from Committee better than it was when it went in.
    The Minister called the Bill a non-controversial Measure. I say that it is a latently controversial Measure, because I echo the reservations entered by my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman), particularly about Clause 1.
    I propose to concentrate my remarks on the discretion given to the Government to exempt agreements from the tough Restrictive Trade Practices Act, 1956, which of course was passed by the then Conservative Government. I accept at once that industry may have played its part in the original concept of this and other parts of the Bill, but I suspect that industry found Ministers philosophically susceptible to the arguments it put forward.
    An organised market diminishes competition. We on this side of the House believe that competition is the best safeguard that the consumer has for his interests. We therefore start with a wholehearted presumption against any restraint on competition. The Government to some extent share that view, but I do not believe that they are as wholehearted about it as we are."Little Neddies"set up by the Government woo Ministers with seductive proposals for import substitution and other interventionist doctrines.
    It is only today that the summary of the Brookings Institution Report on the British economy says something extremely appropriate. The Financial Times report says that the Brookings Institution found no logical reason why Government intervention
    "should not move mountains, but also no mountains that have historically been moved."
    We have the greatest suspicion of Government intervention, and we are also sceptical about intervention by the Government to exempt restrictive trade practices from the scrutiny of the courts. We accept that there may be some minor administrative conveniences that may make sense and that should be exempted under the procedures proposed by the

    943
    Bill and that will not diminish competition, but market-sharing agreements such as are envisaged under Clause 1 are a very different matter, and on them we have the very greatest doubt. We are not so dogmatic as to exclude all possibility of a justifiable case, but we are sceptical of any net benefit to the public.
    We on this side well understand that the pressures of decision-making in capital intensive industries are fierce, and growing every year fiercer, but these pressures, which impose sharp dilemmas and awkward choices on entrepreneurs and managers, are the very pressures that guarantee to the public an untiring pursuit by industry of cheaper investment, of improved marketing and of ever closer attention to the demands of the consumer. Where these pressures imposed by competition are relaxed, the price may prove to be high and the consumer, the public, will pay that price. At the end of the road of exemption from the Restrictive Trade Practices Act lies misuse of resources, sluggish response to the interests of the consumer and lack of enterprise.
    We note with appreciation the Government's caution. We have read the cautious Second Reading speech of the President of the Board of Trade. We welcome this caution. We urge them to be extremely cautious. We shall scrutininise any orders under the Bill very critically, we shall put this discretion to exempt agreements from the restrictive trade practice procedure under the very strictest probation and we shall not hesitate to withdraw it if it is abused when we are once again the Government.
    Question put and agreed to.
    Bill accordingly read the Third time and passed.

  WAYS AND MEANS
  FINANCE: DIVIDENDS PAID OUT OF PRE-1966–67 PROFITS
  Resolved,
  That further provision may be made as to the method of calculating the three year surplus described in section 85 of the Finance Act 1965— [Mr. Harold Lever.]

  WAYS AND MEANS
  FINANCE: LIFE POLICIES
  Resolved,
  That provision be made with respect to policies of life insurance issued in respect of insurances made on or before 19th March, 1968, and varied after that date so as to increase the benefits secured, or to extend the term of the insurance—

  (a) restricting, for the year 1967–68 and subsequent years of assessment, relief under section 219 of the Income Tax Act 1952 in respect of the premiums payable thereunder, and

  (b) charging, for the year 1968–69 and subsequent years of assessment, gains to be treated in accordance with the provision as arising in connection therewith to surtax, and to tax under section 77 of the Finance Act 1965 (shortfall in distributions of close company).—[Mr. Harold Lever.]

  RETIREMENT PENSION (MRS. WALL)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
  9.49 p.m.
  Mr. Fergus Montgomery: I am very grateful for this opportunity to raise the case of one of my constituents who has suffered great injustice at the hands of the Ministry of Social Security. It is an important case, and I am sure that there must be many other people who are in the same position.
  In this country we have a system of insurance whereby a person who pays sufficient contributions during his working life gets a pension on retirement. If he fails to comply with this rule, or if he fails to make sufficient contributions during his working life, then he will receive no pension when he retires.
  The case I am pleading tonight is that of one of my constituents, Mrs. Wall. This lady worked for most of her life and paid full insurance contributions. As the Minister knows, there are many married ladies today who work and pay a nominal 6d. to cover themselves for industrial injuries but who do not thereby make any provision for pensions in their own right. Mrs. Wall did not come under this category. She paid full contributions in the hope, eventually, of getting a pension which was not dependent on her husband's contributions.

  945
  She retired in 1954 when she was aged 52. On 15th May, 1962, she had her 60th birthday. It was at that time, six years ago, that she should have received a pension that was hers as of right. But at that time she was not contacted by the Ministry of Pensions and National Insurance, as it was then called.
  The argument has been used that she should have applied to the Ministry to claim for her pension. However, she felt that, as she had retired eight years previously, it must be that she had not paid sufficient contributions to qualify for a pension. Therefore, she supposed that her right to a pension rested on the contributions that her husband was making. So for the next five years she did not receive the pension that should have been hers as of right.
  In July, 1967, Mr. Wall, who was at that time approaching his 65th birthday, received a retirement pension form from the Ministry. On that form he included his wife's name and also quoted her National Insurance number. It was when the form was returned that the Ministry, finding that Mrs. Wall had a National Insurance number, checked its records and discovered that she had a yearly average of contributions totalling 28 and, therefore, was entitled to a half pension. To qualify for full pension, one must have a yearly average of 50 contributions. Hers did not come up to that, but she was entitled to a half pension as from 15th May, 1962, her 60th birthday.
  When that was discovered, the Ministry agreed to pay Mrs. Wall her pension as from her 65th birthday, which was 15th May, 1967. By doing that, it deprived my constituent of five years of pension. Of course, she was not pleased at that decision and protested. The result was that she was heard by a local tribunal on 20th February of this year. At the tribunal, the insurance officer claimed that she had not proved that there was good cause for delay in giving notice of her retirement. Her case was that the Ministry was guilty of maladministration because it had failed to notify her just prior to her 60th birthday that she was entitled to a pension and that, because she had received no notification from the Ministry, she presumed that she had insufficient stamps to qualify for a pension.
  946
  The tribunal found that the practice has grown of insured persons expecting to be notified by the Ministry to make a claim when they are entitled to retirement pensions. It is admitted that the usual practice was not followed in this case by the Ministry due to a slip-up. It is not equitable that the claimant should suffer because of this.
  The finding of the tribunal was that Mrs. Wall had not received the pension that was hers because of a slip-up by the Ministry. The tribunal allowed her appeal but said that it was limited to giving her only six months' back pension from the date of her claim. It awarded her a pension as from 15th February, that being six months prior to 15th August, which was the date recorded as being when she first made her claim for pension.
  By appealing to the tribunal, she received a further three months' back pension, but she was still being deprived of four years and nine months of the pension due to her. Not unnaturally, she was still dissatisfied, and she took the process a step further. She felt that she should have her pension back-dated to her sixtieth birthday and, therefore, appealed to the Commission. Her appeal was heard on 14th May of this year. The Commissioner's decision contains some interesting observations:
  "… the claimant must give the Minister of Social Security written notice specifying some date as the date of … retirement. The date specified in the written notice which the claimant gave on 15th August, 1967 was 15th May, 1967 which was in fact the date of her 65th birthday. As I have said, she was unaware that she was entitled to a pension on her own contributions and that 60 is the pensionable age for a retired woman but I am still not clear why she gave the date she did. It may be that she obtained advice from some quarter—it certainly seems that the date, which does not appear to be in her own handwriting, was inserted in the form by someone other than herself."
  The Commissioner closed his decision with these words:
  "The case is already sufficiently confused and I would be reluctant to add anything to the confusion. I should perhaps say however that as I have no jurisdiction to award the claimant a pension for any period before 15tb February, 1967, it would be inappropriate for me to make any comment on her complaint that her loss of pension is due to failures in the administrative machine."
  Certain points in this case need clarification.

  947
  First, would the Parliamentary Secretary explain why Mrs. Wall was not contacted by the Ministry before her 60th birthday? When her case was heard by the local tribunal in February, the insurance officer submitted:
  "Normally, the Ministry invites claims from people approaching pensionable age, but this is not always done."
  Why not? If certain people are contacted, why are others not contacted? Those who are still employed as they reach pensionable age are, it seems, notified, while those who have retired early are not. This is unjust, because many of those who have retired early have done so because of ill-health and are therefore more in need of the money than those who are still working up to retirement age. Is the hon. Gentleman satisfied with this system, which seems to operate in the Ministry, which allows this sort of injustice?
  The second point concerns Section 49 of the National Insurance Act, 1965, which says:
  "… no sum shall be paid to any person... in respect of any period more than six months before the date on which the claim for the benefit is made."
  Again, I should like to know why this stipulation is made. What useful purpose does it serve? Is it that this is some sort of loophole to cover administrative errors so that other cases like Mrs. Wall's can just be fobbed off and told that the Ministry or the local tribunal or the Commissioner can do nothing because the Act stipulates that six months is the most that can be awarded from the date of application?
  I would prefer anyone who had made sufficient contributions during his working life to receive the pension which was his due, back-dated if necessary to the time that it was due. If any person went to a private insurance firm and the firm made a mistake and did not pay at the time agreed, I believe that that firm would have to honour its obligations. I am anxious to know why the Ministry adopts what seems to be a very hardhearted attitude.
  The third point is the question of who filled in on Mrs. Wall's retirement form that the 15th May, 1967, was the date of her retirement. It certainly was not Mrs. Wall, because she left this item blank. The Commissioner noted this in his observations, saying quite clearly:
  948
  "… it will be seen that both the insurance officer and the local tribunal assumed that although in the notice given on 15th August the claimant had specified 15th May 1967 as her retirement date, it was nevertheless open to them—within the statutory six months' limit —to treat her as having been retired at an earlier date … it will be seen that the local tribunal in fact awarded pension from as early a date as the statutes (on that assumption) permit."
  I presume that 15th May, 1967 was inserted because Mrs. Wall's 65th birthday—
  It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
  Mr. Montgomery: I assume that on her birthday, even if she continued to work, she would have been entitled to claim her pension as of right. If this entry had been left blank, would Mrs. Wall have been entitled to receive more than the six months' back pension which she received? I find the whole matter extremely complicated and I feel that the Commissioner kept emphasisine the point that some person incorrectly filled in the date of Mrs. Wall's retirement.
  This is an important case and I trust that the Minister will give satisfactory answers to my questions. It is a sad case because it concerns someone who worked for most of her life and who fulfilled all the obligations required of National Insurance contributions. She is now deprived of money that I believe is due to her and which would be of great help to her now. I am certain that I shall receive a sympathetic reply from the Minister because I know him to be a sympathetic man. In the 1959–64 Parliament we both represented the North-East. In 1964 the political winds were not so kind to me and I was swept out of the North-East and had to make my way back to Parliament from somewhere else. The Minister, as in Tennyson's brook, goes on. I will not predict what may happen at the next General Election—
  Mr. Speaker: Order. I remind the hon. Gentleman that although Adjournment debates are wide, he must keep to the subject which he himself has chosen.
  Mr. Montgomery: I hope that the Minister will be forthcoming in his reply

  949
  and will ensure that my constituent can get her money. Knowing him to be a compassionate man, I am sure that he recognises the injustice which this lady is suffering. Besides receiving a sympathetic reply, I trust that his remarks will be constructive and helpful. If not, then I feel so strongly about this case and my obligation to my constituent that I may feel it necessary to refer the whole matter to the Ombudsman, since I see no reason why Mrs. Wall should suffer because of a failure in the administrative machine.
  10.3 p.m.
  The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Norman Pentland): I congratulate the hon. Member for Brierley Hill (Mr. Montgomery) on the speed with which he has brought to the attention of the House the case of his constituent, Mrs. Wall. I agree with him that this is an unfortunate case and I wish to make it clear at the outset that I am extremely sorry that Mrs. Wall has lost her pension from the age of 60 through failure to claim it until she reached the age of 65, and I appreciate her disappointment. I regret, however, that there is nothing that my right hon. Friend and I can do to help her, as I shall explain.
  The hon. Gentleman referred to the Commissioner's report. It is not for me to speculate on statements made in it. It is my duty to explain, on behalf of my Ministry, how the National Insurance Act covers the kind of case he has raised.
  The minimum pensionable age for a woman is 60 and Mrs. Wall reached the age of 60 in May, 1962. She had paid contributions from 1945 to October, 1953, when she then exercised her right, as a married woman, no longer to be liable to pay them. Although she paid no contributions which counted for pension between October, 1953, and reaching the age of 60, in 1962—a period of nearly nine years—she would have qualified for a reduced rate of pension on the basis of those contributions from her 60th birthday had she claimed one. She did not in fact claim a pension when she reached the age of 60. Nor did she make any inquiries of the Ministry as to whether the contributions she had paid would entitle her to a pension. Indeed as she explained in a letter which she wrote to the local office in November, 1967, she did not claim because she
  950
  thought that she had not paid sufficient contributions to be entitled to any pension. It was extremely unfortunate that Mrs. Wall made no inquiries when she reached the age of 60.
  Mrs. Wall's first approach to the Ministry about a retirement pension did not take place until July, 1967, shortly after she had reached the age of 65. At that time, she made a claim based on the insurance of her husband, who was then also approaching age 65, which is the minimum pensionable age for a man. While dealing with that claim, our local office noted that Mrs. Wall had disclosed that she had a contribution record of her own. The office then invited Mrs. Wall to make a further claim for pension this time on her own insurance. This was done in order to find whether it may or may not have been to her advantage to have her pension on her own right rather than on her husband's insurance. She subsequently made the alternative claim for pension on her own insurance on 15th August, 1967, claiming to be treated as retired from 15th May, 1967, her 65th birthday.
  Mr. Montgomery: One of the points I have been making is that Mrs. Wall was not quite sure of the date on which she retired. She knew that it was in 1954 but she did not know the exact date. This was left blank and someone in the Ministry put in a date.
  Mr. Pentland: It may be that an official, in order to assist Mrs. Wall, did put in a date, but, as the hon. Member will find, according to the Statutes that is irrelevant to the real issue involved in this case. She subsequently made the alternative claim for pension on her own insurance on 15th August, 1967. She claimed to be treated as retired from 15th May, 1967, her 65th birthday and pension was at first awarded on this basis.
  Later, in November, 1967, Mrs. Wall wrote claiming five years arrears of pension, that is from the date of her 60th birthday in 1962, on the ground that the Ministry had a duty to tell her when she reached age 60 that she was entitled to claim a retirement pension and the Ministry was responsible for her loss of pension before May, 1967.
  There are time limits for giving notice of retirement and claiming pension.

  951
  These can be extended where good cause is shown for claiming late but there is an overriding provision in Section 49(4) of the National Insurance Act, 1965, which prevents payment of benefit in respect of any period more than six months before the claim is made. Mrs. Wall's claim that her pension should be awarded back to her 60th birthday has been considered in turn at each of the three stages in the National Insurance system of adjudication and appeal. The insurance officer awarding pension from 15th May, 1967, allowed only three months before the date of her claim. The local tribunal to which Mrs. Wall appealed awarded a further three months' pension, making six months in all. That is the maximum arrears of benefit which can be paid after a delayed claim for benefit, whatever the circumstances leading to the delay. Mrs. Wall then appealed to the Commissioner, who confirmed in his decision published on 29th May, 1968, that Mrs. Wall had received the maximum amount of pension which could be paid by statute, and he dismissed her appeal.
  The hon. Gentleman argued that an absolute time limit of the kind which restricts the period for which arrears of benefit can be paid when a claim is made late but with good cause for delay is out of place in our scheme of National Insurance. This question was recently considered by the National Insurance Advisory Committee, and I cannot do better than refer to some comments included in paragraph 8 of its Report published in April, 1968, Cmnd. 3591. The Committee said:
  "… it is difficult to conceive of a universal insurance scheme (designed to be fair to the generality of contributors) without the occasional case which does not readily fit the rules, and having given all opinions careful consideration, we maintain our view that in the general interest there must be an overriding time limit if nonsense is not to be made of the initial time limits and a strain placed on the good cause condition that it was never intended to carry ".
  However, the Committee concluded that there was, nevertheless, scope for some easement of the existing six months' limit and recommended an extension to one year.
  The hon. Gentleman may be interested to know that the recommendations of the
  952
  National Insurance Advisory Committee are presently being studied by my right hon. Friend, and I cannot at this stage prejudge the outcome. It is, however, clear that this expert and independent Committee endorsed the principle of an overriding limit, and it is also the case that, whatever legislation my right hon. Friend may introduce as a consequence of its recommendations, unfortunately it could not act retrospectively to help Mrs. Wall in any way.
  I come to the main ground of complaint against the Ministry in Mrs. Wall's case. It is contended that, whatever the statutory provisions, she is entitled to an ex gratia payment by way of compensation for loss of pension because the Ministry was responsible for her failure to make a claim when she reached the age of 60. I must say quite firmly that the Ministry had no such responsibility. Section 48 of the National Insurace Act, 1965, states that
  "… it shall be a condition of any person's right to any benefit that he makes a claim therefor in the prescribed manner".
  The Ministry has always made it clear in its leaflets about benefit that responsibility for making inquiries and for claiming at the proper time must rest with the insured person.
  Mr. Montgomery: This is one of the points which I wanted to be clarified. It would seem that if somebody is in full-time work and nearing pensionable age he or she gets a form to fill in but that people who have retired do not. I wonder whether the Ministry could give any guidance about the steps which the Ministry is taking to improve the knowledge of people entitled to pensions to make that claim.
  Mr. Pentland: I am coming to the procedure which we adopt in these matters.
  In practice, the Ministry tries to remind the generality of insured persons likely to qualify for a retirement pension at about four months before they reach minimum pensionable age of their right to claim. They are sent a letter, a claim form and a copy of the Ministry's leaflet on retirement pensions. But this is organised entirely on the initiative of the Ministry as a helpful service incidental in the administration of the scheme. The Ministry is under no statutory obligation

  953
  to provide it. Its existence in no way diminishes the onus placed on the insured person by the National Insurance Act to make a personal claim for benefit. It would be quite wrong, moreover, and unfair to the main body of contributors, for the Ministry to accept any liability for loss arising from failure to claim in any case where for one reason or another the arrangements did not result in an insured person receiving his notice, or where the arrangements were not applied.
  The arrangements did not operate for Mrs. Wall because, as a married woman, she had, many years before she reached the age of 60, taken advantage of the special provisions which enable married women to choose not to be liable to pay contributions. The reminder service is not applied to married women who choose not to contribute for pension under these arrangements and rely for retirement pensions on their husband's insurance. The great majority take advantage of these arrangements and only a small minority have in fact paid sufficient contributions to satisfy the conditions on which a married woman can get a pension on her own insurance.
  I must confirm as strongly as I can that the question of whether or not a reminder is sent cannot affect the insured person's responsibility to claim benefit on time. It is nowhere suggested in our publicity that the Ministry will remind everyone at pension age. The fact that Mrs. Wall was not reminded of her entitlement to claim a retirement pension on reaching age 60 does not make the Ministry liable for the pension she has lost through her
  954
  failure to claim it or make any enquiry about her right to do so, and there are, I am sorry to say, therefore no grounds on which my right hon. Friend could make an ex-gratia payment to her by way of compensation.
  Finally, I must briefly comment on the claim made on Mrs. Wall's behalf—this claim was made to the Ministry before the hon. Gentleman raised the matter on the Adjournment—that her case deserves special treatment because it involves maladministration, which we do not at all accept, and that in another case examined by the Parliamentary Commissioner— the Ombudsman, as the hon. Gentleman called him—where maladministration was found a large sum by way of arrears was paid. It would not be right for me to go into detail on the other case to which reference has been made. It is sufficient for me to say that it can clearly be distinguished from Mrs. Wall's case because there was in that case quite clear and indisputable evidence that the person had been misled by erroneous advice when she had made some enquiries about entitlement to pension. But she had made inquiries. Unfortunately, Mrs. Wall took no steps whatsoever to enquire about her entitlement until she was 65 and, however much one may sympathise with her, and I do, I can only repeat that my Minister cannot accept liability for the pension she has lost.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes past Ten o'clock.

EDUCATION AND SCIENCE
  Comprehensive Schools (Admissions)
  Comprehensive Schools (Admissions)
  Part-Time Teachers (Salaries)
  Part-Time Teachers (Salaries)
  Violence in Television Programmes
  Violence in Television Programmes
  Musical Events (Pupil Participation)
  Musical Events (Pupil Participation)
  Drama Programmes (Schoolchildren)
  Drama Programmes (Schoolchildren)
  Town Planning (Post-Graduate Training)
  Town Planning (Post-Graduate Training)
  British Museum (Microfilm Orders)
  British Museum (Microfilm Orders)
  Lifeguards (Training)
  Lifeguards (Training)
  Immigrant Children (Teacher Quota)
  Immigrant Children (Teacher Quota)
  Primary Schools, Cornwall
  Primary Schools, Cornwall
  Secondary Education, Borough of Redbridge
  Secondary Education, Borough of Redbridge
  CERN 300 GeV Accelerator Project
  CERN 300 GeV Accelerator Project
  Overseas Students (Accommodation Charges)
  Overseas Students (Accommodation Charges)
  Community Centre Projects
  Community Centre Projects
  Catherine Street Infants' School, Leicester
  Catherine Street Infants' School, Leicester
  School Building Programme, Leicester
  School Building Programme, Leicester
  Free School Meals
  Free School Meals
  Higher Education (Student Involvement)
  Higher Education (Student Involvement)
  Private English Language Schools (Inspection)
  Private English Language Schools (Inspection)
  Teacher Training
  Teacher Training
  Students (Awards)
  Students (Awards)
  Teaching Vacancies
  Teaching Vacancies
  Secondary Education, Borough of Barnet
  Secondary Education, Borough of Barnet
  Teachers (Criminal Convictions)
  Teachers (Criminal Convictions)
HOME DEPARTMENT
  Bedfordshire Police Force
  Bedfordshire Police Force
  Advisory Committee on Drug Dependence
  Advisory Committee on Drug Dependence
  Police, Palace of Westminster (Shirt-Sleeve Order)
  Police, Palace of Westminster (Shirt-Sleeve Order)
  Death Penalty
  Death Penalty
  Taxi-Cab Fares (London-London Airport, Heathrow)
  Taxi-Cab Fares (London-London Airport, Heathrow)
  London Taxi-Cabs (Sharing)
  London Taxi-Cabs (Sharing)
  Police Operational Records (Computers)
  Police Operational Records (Computers)
  Sevenoaks Division (Knockholt)
  Sevenoaks Division (Knockholt)
  County Constabularies (Establishments)
  County Constabularies (Establishments)
  Police Amalgamation Schemes
  Police Amalgamation Schemes
AVIATION
  Aircraft Noise, Heathrow (Monitoring)
  Aircraft Noise, Heathrow (Monitoring)
BOARD OF TRADE
  Bank Committee
  Bank Committee
TRANSPORT
  Motoring Organisations (Noise Checking Facilities)
  Motoring Organisations (Noise Checking Facilities)
RAILWAYS
  Edinburgh—Carlisle Line (Closure Proposal)
  Edinburgh—Carlisle Line (Closure Proposal)
COMMONWEALTH AFFAIRS
  Nigeria (Minister's Visit)
  Nigeria (Minister's Visit)
  HOUSE OF LORDS (LEGISLATION)
  HOUSE OF LORDS (LEGISLATION)
  PRICE CONTROL (DEPARTMENTAL CO-ORDINATION)
  PRICE CONTROL (DEPARTMENTAL CO-ORDINATION)
  PRIME MINISTER OF LIBYA (VISIT)
  PRIME MINISTER OF LIBYA (VISIT)
  NIGERIA
  NIGERIA
  SCOTLAND
  SCOTLAND
AGRICULTURE, FISHERIES AND FOOD
  Agriculture's Import Saving Rôle (Report)
  Agriculture's Import Saving Rôle (Report)
  Rural Development Board (Inquiry)
  Rural Development Board (Inquiry)
  Cyclamates
  Cyclamates
MINISTRY OF DEFENCE
  Royal Naval Dockyards
  Royal Naval Dockyards
POST OFFICE
  Letters from Rhodesia (Examination)
  Letters from Rhodesia (Examination)
  Special Stamps
  Special Stamps
HOSPITALS
  Heart Transplant Experiments (Manchester Area)
  Heart Transplant Experiments (Manchester Area)
SCOTLAND
  Nurses (Salary Award)
  Nurses (Salary Award)
PUBLIC BUILDING AND WORKS
  Members of Parliament (Exhibition of Paintings)
  Members of Parliament (Exhibition of Paintings)
SOCIAL SECURITY
  Widows
  Widows
NATIONAL FINANCE
  Companies (Income, Dividends and Taxation)
  Companies (Income, Dividends and Taxation)
WALES
  Re-organisation of Local Government
  Re-organisation of Local Government
  Disabled Drivers (Car Parking)
  Disabled Drivers (Car Parking)
  Derelict Land (Acquisition)
  Derelict Land (Acquisition)
  RHODESIAN PASSPORTS
  RHODESIAN PASSPORTS
  Review Procedure in Passport and Refusal of Entry Cases
  Review Procedure in Passport and Refusal of Entry Cases

Preamble
The House met at three of the clock: The LORD CHANCELLOR Oil the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

WOODWORKERS AND NASAL CANCER
LORD CROOK: My Lords. I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have considered the disclosure in the British Medical Journal of a team of doctors—

(a) that workers in the furniture-making industry at High Wycombe are susceptible to a rare form of nasal cancer which is found 1,000 times less in other workers;

(b) that in their view there is a link between the cancer and such hard woods as beech and oak;

(c) that wood machinists, cabinet makers, and chair makers are extremely vulnerable;

(d) that efforts should be made to reduce the concentration of wood dust in furniture factories;

and whether, in consequence, the Factory Inspectorate may be asked to undertake one of their special valuable inspections into this general matter and into the practicability or otherwise, of the adoption of the wearing of face masks as recommended by Dr. E. D. Acheson, the leader of the medical team in question.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, the Department of Employment and Productivity has been in touch for some time with the authors of the report published in the British Medical Journal on June 8 and gave some assistance in tracing workers and obtaining occupational histories.
Her Majesty's Chief Inspector of Factories has written to both sides of the
1542
furniture-making industry, and also to the industry's research association, suggesting that representatives of these organisations should meet him to discuss the problems raised by the disclosures made in the report. These include determining more precisely the circumstances which gave rise to the risk of adenocarcinoma; establishing to what extent those circumstances still exist, and deciding what measures may be needed to eliminate the risk. The Department regards face masks very much as a second line of defence, suitable generally only to deal with brief exposure: the first line of defence should be properly-applied dust control, generally by adequate exhaust draught.
LORD CROOK: My Lords, may I take the opportunity of thanking the noble Lord for a most satisfactory Answer.
BARONESS SUMMERSKILL: My Lords, while thanking my noble friend for his Answer, may I ask him whether he would consider doing as the doctors suggest; that is, scheduling this complaint as an industrial disease? And could he insist that these dust extractors should be introduced immediately?
LORD HUGHES: My Lords, having regard to the further investigation which is sought—and this would be a matter of urgency and not for the purpose of putting anything off—I think it would be better that we should act on the fullest possible information we may then obtain.

FUTURE OF KENYAN INDIANS
3.8 p.m.
LORD SORENSEN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, whether the anxieties of Indian residents in Kenya who hold British passports have now been allayed; whether they continue without hindrance to follow their professions or avocations; and to what extent applications by Kenyan Indians to settle in the United Kingdom are beyond the restricted allocation for this year.]
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, the relatively

1543
small number of applications from British citizens of Asian origin who are subject to control under the 1968 Immigration Act for permission to settle in Britain suggests an easing of the anxiety on the part of the Asian community about their immediate future. The Kenya Government are continuing to implement, with moderation, their policy of Kenyanisation, which means that when they are able to replace non-citizens with suitably qualified citizens of Kenya, they will do so. Meanwhile, those non-citizens, whether of Asian origin or otherwise, who cannot yet be replaced may continue in their present jobs.
Between March 1 and June 15 this year there were 750 applications for vouchers to settle in Britain, many from people who did not wish to travel in the near future. Of that number, 318 applicants were offered immediate vouchers, but up to June 15 only 194 had called to collect them. These numbers are well within the allocation for this year.
LORD SORENSEN: My Lords, while thanking my noble friend for that very comprehensive reply, which will give some encouragement, I am sure, to those interested in Asians in Kenya, may I further ask whether in his view this means that the Government of Kenya is fully sympathetic to the plight of Asians in Kenya; that they are not likely to make their policy more intense, and that in fact we can now say on the whole there has been an allaying of the grievances they previously felt?
LORD SHEPHERD: My Lords, I think my noble friend is quite correct in this matter. Residents' permits are being granted liberally for up to two years in certain categories of workers, and it would appear that it will be some considerable time before those who might be called in into higher positions or higher grades will be affected by the existing legislation.
LORD BROCKWAY: My Lords, while welcoming the fact that this position has eased, may I ask my noble friend whether it is not a fact that a large number of Kenya Asians have returned to India and that the Indian Government began by indicating that it would not accept those with British passports? Have there been any discussions with the Indian Govern-
1544
ment, and has any agreement been reached on this matter?
LORD SHEPHERD: My Lords, as my noble friend is aware, there have been discussions with the Indian authorities. I understand that some 1,500 persons of Kenya Asian origin have returned to India, and we have no reason to believe that they will not be permitted to remain in that country.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, since the allocation quota has not been taken up, and since some of the places allocated have not so far been taken up either, might it not have been better if the hasty and distasteful legislation brought in had not been brought in at all?
LORD SHEPHERD: My Lords, the noble Baroness is entitled to re-express her view upon recent legislation but if she will look at the Answer I gave she will see that the number of applications, some 750—roughly 50 per cent. of the total for the year—were for applications between March 1 and June 15, which in terms of time is relatively short for the year.

GYRO COMPASSES AND EXPORT CONTROL
THE EARL OF DUNDONALD: 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 why since May 20 this year Board of Trade export licences are required for the sale of commercial marine gyro compasses to all countries apart from the Commonwealth (except Rhodesia), the United States, South Africa and Southern Ireland.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, gyro compasses of specified characteristics are included in the list of goods subject to strategic embargo and are subject to export licensing control for that reason. As a result of an agreement in 1966 with the countries with whom we co-operate in these controls, the scope of the heading concerned was extended.
THE EARL OF DUNDONALD: My Lords, while thanking the Minister for his reply, may I ask him two supplementary questions? Many of the compasses which since May 20 have been subject to export licensing control have been exported to friendly countries, such as Norway, Sweden and Denmark, in the last 10 or 15 years; and does he not think it rather odd to reimpose, one could say, a formality on their going to those parts of the world? Secondly, would he not agree that at a time when manufacturers are being exhorted to export more and more the imposition of this formality on these friendly countries is going to cause delays, more nonproductive paper work and possibly fewer orders?
LORD WINTERBOTTOM: My Lords, I have every sympathy with the noble Earl in his wish to see the British export industry continue to grow in this field, which is an important one. However, as he may know, there have been representations about certain gyro compasses, and as a result the description in the embargo list will be considered in the next review, when any points made by the noble Earl can be taken into account.
LORD RHODES: My Lords, may I ask the Minister whether any of these licences have been refused and, if so, which countries are affected?
LORD WINTERBOTTOM: My Lords, I cannot answer in detail, but I gather from the noble Earl that perhaps such licences have been refused.
THE EARL OF DUNDONALD: My Lords, if I may come back with one further question, it is this. For many years it has been possible to export compasses of this nature to countries other than those named in my Question, and this does not include the Iron Curtain bloc. Why have export licences now been reintroduced in regard to friendly countries such as Norway, Sweden, Denmark and many others? That is the basis of my question.
LORD WINTER BOTTOM: My Lords, I have every sympathy with the point the noble Earl has made and I hope that the point I made about reconsideration will give him satisfaction.
LORD PARGITER: My Lords, may I ask my noble friend whether or not
1546
American interests in British marine gyro compasses had anything to do with the situation?
LORD WINTERBOTTOM: My Lords, that is another question.
EARL JELLICOE: My Lords, I hope that the noble Lord will take this matter back to the Minister concerned. I must confess that I am puzzled. As I understand it, the embargo list is concerned entirely with the Soviet bloc countries; therefore I cannot, for the life of me, see why export licences are required for friendly Western European countries.
LORD WINTERBOTTOM: My Lords, I have a great deal of sympathy with what the noble Earl has said. In point of fact, the embargo related to the strategic controls under the CocoM organisation—that is, the NATO countries, less Iceland, plus Japan. As we all know, Sweden is not part of NATO. But I will, of course, consider the points made by noble Lords and see that the appropriate authorities are informed.
LORD TREFGARNE: My Lords, may I ask whether this requirement for export licences applies to gyro compasses for use in aircraft?
LORD WINTERBOTTOM: My Lords, that is another question.

THIRD LONDON AIRPOR INQUIRY
3.16 p.m.
LORD TREFGARNE: 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 why no representative from the airline industry has been appointed to the Commission of Inquiry into London's Third Airport.]
LORD BESWICK: My Lords, the Government have been fortunate in securing the services of persons representing a very wide field of expertise. Membership of the Commission includes persons eminent in aeronautics and in the business world who are well fitted to understand the particular interests of the airlines in this matter. It would be impossible to include experts in every aspect

1547
of the matter, but the Commission will be free to seek outside advice from whatever source they wish, including of course the airlines industry.
LORD TREFGARNE: My Lords, again I am grateful to the noble Lord for his reply. May I ask whether he honestly believes that this Commission will be able to reach a conclusion, considering all the aspects of the problem, without having the fullest consultation with the people who are going to use this third London Airport? How can he expect that the Commission will be able to reach their conclusions by only calling on evidence which may or may not be available when required?
LORD BESWICK: My Lords, I should have thought that evidence would be available and consultation would be possible on all these aspects; and the President of the Royal Aeronautical Society, for example, will be well versed in certain of the problems which the noble Lord has in mind.
LORD BALFOUR OF INCHRYE: My Lords, arising out of that question and the reply, is it not a fact that a commercial operational experience will be required by the members of the Commission at all stages when witnesses are interviewed? Surely it would strengthen the authority and knowledge of the Commission if the Government would look at this matter again.
LORD BESWICK: My Lords, I do not think there is any question of looking at this matter again. The point is, I think, that on the previous occasion possibly we went too far in the other direction; it was said that too much weight was given to the airline companies. It may well be that on this occasion the pendulum has swung to the other extreme. But these people have been appointed; they have a difficult task in front of them, and I think the best thing to do would be to let them get on with it.
VISCOUNT DILHORNE: My Lords, is it not the case that this Commission will have every power to consult with all the interests, airline interests and others, throughout, from begining to end, and obtain all the information that they require, and will consider all the infor-
1548
mation which these bodies would be likely to submit to them?
LORD BESWICK: My Lords, I am much obliged to the noble and learned Viscount. He has said much more forcefully what I tried to say.
LORD LEATHERLAND: My Lords, would it not be proper that these airline interests should have their views heard at the Inquiry in the role of witnesses, and quite wrong if they were witnesses and judges at the same time?
THE EARL OF SWINTON: My Lords, may I intervene, having had, after all, a good deal to do with these matters? Sending for somebody to give evidence is a very different thing from having somebody who really knows about the matter sitting in with you the whole time. If the Government would reconsider the membership and would put one operator on this body, which is a large body, he would not have the least controlling interest. There is really the whole difference in the world between just sending for somebody when you think you want to ask him a question and having him there with that knowledge. The people we are discussing are the only people who have the knowledge of what is required for air operations, and if a representative of the airline industry were appointed he would be only one among many completely unprejudiced. Take somebody who is not an air operator at the present time—somebody who has had past experience as an air operator. With all the experience I have had, I would beg the Government to reconsider this matter.
LORD BESWICK: My Lords, I cannot disguise from your Lordships that my own personal opinion is that it would have been better to have someone of this kind. Nevertheless, if one looks at the list I am sure the noble Earl will find that it is a representative list of very eminent persons who are quite capable of assessing evidence, including that which they may get from the airline industry. The essence of this matter now is that the Commission should get on with the job, and I think we should put our confidence in the men who have been entrusted to do a difficult task.
LORD TREFGARNE: My Lords, I think I heard the noble Lord right when

1549
he said the interests of the airline operators would be looked after by the President of the Royal Aeronautical Society. Can the noble Lord tell us—I say this without wishing to be impertinent—what particular experience that particular gentleman has, who is, I know, widely experienced in other fields of airline operations.
LORD BESWICK: My Lords, I was not thinking wholly of the airline operators, and if he looks at what I said the noble Lord will see I was not suggesting that Professor Keith Lucas would represent the interests of the airline operators. What I said was that he was perfectly capable of understanding aviation problems.
THE MARQUESS OF SALISBURY: My Lords, what I cannot understand is why the Government can never reconsider a decision they have once reached. From what the noble Lord has said, I understand that he himself is doubtful whether the right decision has been reached. Why cannot they reconsider it?
LORD BESWICK: My Lords, I really do stand abashed at the noble Marquess's raising this point. Surely the only reason we have a Commission is because we have reconsidered a decision, and we have reconsidered it because it was alleged that the airline interests were taken too much into account and that other factors were not. This Commission now is composed so as to give confidence to all concerned and, as I say, I feel that we should stop nagging at them and let them get on with their task.
LORD TREFGARNE: My Lords, does the noble Lord appreciate that his confidence in the competence of this Commission is not shared by the airline industry at large?

PASSPORT REVIEW PROCEDURE ADVISORY COMMITTEE
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I am arranging to circulate in the OFFICIAL REPORT to-day the detailed terms of reference of the Advisory Committee on Passport Review Procedure which I announced on June 17.
Following are the Terms of Reference referred to:

REVIEW PROCEDURE IN PASSPOLT AND REFUSAL OF ENTRY CASES
"The Commonwealth Secretary has appointed a Committee to advise him on the administration of the policy with respect to passports announced in the first paragraph of Mr. A. G. Bottomley's statement of 25th January, 1966, and also on the administration of the measures which are to be taken under Article 12 of the Southern Rhodesia (United Nations Sanctions) Order 1968 in pursuance of paragraph 5(b) of the Security Council Resolution of 29th May, 1968. This Committee is to be presided over by Mr. Justice Cairns; the other members are Sir William Oliver, Sir William Murrie and Mr. F. J. Pedler.
"2. The Committee will have two functions. First, it will be asked to take on the task, as soon as possible after it has been appointed, of scrutinising the cases of all persons in respect of whom a decision has been taken that their passport facilities should be withdrawn or restricted in pursuance of the policy announced on 25th January, 1966, whether or not in any particular case action has yet been taken on that decision. The Committee will also be asked to scrutinise any case arising in the future where such a decision is taken or recommended, or where a decision is taken or recommended that any United Kingdom citizen or other person who would ordinarily be entitled to enter this country freely falls within the class of persons specified in Article 12(1)(b) of the order in Council, and should therefore be denied entry. Except in cases where immediate action is necessary in order to prevent the frustration of the policy of H.M. Government, the Commonwealth Secretary will seek the Committee's advice before such a decision is taken. The Committee will be asked to report to the Commonwealth Secretary as soon as possible on the results of its scrutiny, and the Commonwealth Secretary will review in the light of its report any case where the Committee indicates that such review is desirable.
"3. The second function of the Committee will be to undertake a special re-examination of any particular case which is referred to it by the Commonwealth Secretary, and to report to him whether it considers that he should review his decision in that case. Without prejudice to the Commonwealth Secretary's ability to withdraw instructions issued in respect of any particular person, he will refer to the Committee any case where at any time he considers that a change in circumstances make this desirable. He will in any event make such a reference if he is requested to do so by a person against whom action has been taken, or who has been notified that action is to be taken against him. It will be open to that person to make a first request to have his case re-examined by the Committee at any time after the action has first been taken against him, or after he has been notified that action is to be taken, and he will be able thereafter to make such requests at intervals of not less than six months.
"4. Where the Committee is re-examining a case on a reference made to it at the request of the person concerned, it will take into account any representations which that person wishes to make to it in writing; or, in addition, in person, if he is then in this country, or through a legal representative. Subject to what is said in paragraph one of the Annex, the Committee will also be free to seek the comments (in person, in writing or otherwise) of anyone in respect of whom a decision of the kind referred to in paragraph two above has been taken by or recommended to the Commonwealth Secretary. If the person concerned has been refused entry to this country, he will still be able to make his representations in writing or through a legal representative. In addition, if he wishes to come back to this country so as to be able to appear in person before the Committee the Commonwealth Secretary will be ready, should the Committee advise him that this will assist them in their scrutiny of the case, to arrange for the admission of the person concerned on suitable conditions (as provided for in Article 12(2)(b) of the Order). When the person concerned indicates that he wishes to make representations, the Commonwealth Secretary will inform him in general terms of the nature of the case against him and will, subject to the qualification which follows in the next sentence, also give him any particulars that might enable him to answer that case. But the Commonwealth Secretary may decide that it is necessary to restrict this information if in his judgment this is required in order to avoid damage to the public interest through disclosure of the sources of the evidence upon which the decision was taken. For the same reason, while all the evidence will be placed before the Committee itself, it will not always be possible for this evidence to be disclosed to the person concerned or to his legal representative.
"5. When the Committee has reported to the Commonwealth Secretary on a case which was referred to it at the request of the person concerned, the Commonwealth Secretary will inform that person whether or not the Committee recommended review of his case and, if it did, what action the Commonwealth Secretary has taken or proposes to take on that review. But both in the case of these special references to the Committee and in the case of the ordinary scrutiny by the Committee of decisions taken by the Commonwealth Secretary, the decision must ultimately be one of policy for the Commonwealth Secretary to take and to account for to Parliament. He will therefore not consider himself bound by the recommendations of the Committee, though he will naturally give them very great weight.
"6. A definition is annexed of the categories of people against whom action may be taken by way of restricting their passport facilities and, if they are ordinarily resident in Southern Rhodesia, by denying them entry into this country.
Definition of Categories
"1. Persons whom the Secretary of State has reason to believe to have furthered or encouraged, or to be likely to further or encourage, any activities which are calculated to evade or contravene, or to facilitate the evasion or contravention of, the legislation imposing sanctions against the illegal régime of Southern Rhodesia. In order to avoid the premature disclosure of the fact that their activities are known to the United Kingdom Government, these persons will not be notified that they are considered to be within this category until such time as it is necessary to take action against them.
"2. Persons who, by reason of the offices or positions which they hold or have held, must be regarded as deliberately giving their active support to the illegal régime in Southern Rhodesia. The offices or positions held by the following persons are to be regarded as falling into this category:

(a) those claiming to be holding office as Officer Administering the Government, Prime Minister or Minister under the so-called 1965 Constitution;

(b) the Speaker and the Rhodesia Front members of the legislature in Rhodesia;

(c) leading officials of the Rhodesia Front;

(d) members of the Advisory Committee to the Economic Council of the 'Cabinet';

(e) members of the Board of the Reserve Bank of Southern Rhodesia who have continued to act in that role despite the Board's suspension by Order in Council in January 1966;

(f) the Chairman and Vice-Chairman and senior executives of the Rhodesia Broadcasting Corporation and Rhodesia Television Ltd.;

(g) persons purporting to represent the 'independent state' of Rhodesia in foreign countries;

(h) the senior executive staff of 'Air Rhodesia';

(i) the Officers and senior officials of the 'National Export Council' of Rhodesia;

(j) the Officers and senior officials of the 'Tobacco Export Promotion Council' of Rhodesia, and the 'Tobacco Corporation, of Rhodesia.

Other offices and positions may be added to this list as circumstances may require; any such additions will be made public.
"3. Persons, other than those falling into category one or category two above, whom the Secretary of State has reason to believe to have furthered or encouraged, or to be likely to further or encourage, the unlawful actions of the illegal régime in Southern Rhodesia. When the decision is taken that a person must be regarded as falling within this category, he will be notified and told the grounds upon which this decision has been taken. This will also apply to those persons who are already regarded as within this category but who have not so far been informed that their passport facilities are to be withdrawn or restricted."

SALE OF VENISON (SCOTLAND) (No. 2) BILL
3.24 p.m.
THE DUKE OF ATHOLL: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Duke of Atholl.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Registration of venison dealers etc.]:
LORD BURTONmoved, in subsection (4), to leave out "£20" and insert "£50". The noble Lord said: I feel that this Bill which has now come to us from another place is really not of very much use. It will probably do no harm but, on the other hand, it is unlikely to do much good. These views have been made clear to the Red Deer Commission, but I understand this is the type of legislation they desire. However, there appears to be little point in having any legislation if it is not possible to enforce it. The penalties under this Bill are less than one might be liable to pay if one failed to pay a fourpenny fare on the London Underground. The penalty of £20 suggested is only the value of 1- stag carcases, and with the small chance of detection dealers would have little at risk if they flouted the law. I may say that this is the view of some of the more respectable dealers, and I therefore beg to move that the penalty be raised to £50.
Amendment moved—
Page 2, line 13, leave out ("£20") and insert ("£50").—(Lord Burton.)
THE DUKE OF ATHOLL: I should like to thank my noble friend for raising this point, and since he put down this Amendment I have been having a look at the penalties under the original Deer Act 1959 and also the various penalties which we considered in detail in the Criminal Justice Act of last year to see whether this penalty was in line with them or whether it was way below what most modern penalties have been. Under the 1959 Act the penalty for a first offence against the close seasons—that is, shooting a deer
1554
during that time of the year when it was protected—was £20, and for a subsequent offence it was admittedly £50 or three months in prison. Under that Act the penalty for one person, as opposed to a gang, for poaching deer was also £20.
In the Criminal Justice Act, which is probably the most up-to-date Act we have which contains a lot of penalties because it raised and altered the penalties in many Acts which had been passed during the course of the last 200 years or so, various offences were dealt with which were in some way connected with this one. For instance, fixing, inserting, or exhibiting indecent or offensive matter in the public view was made illegal in 1889 and originally had a £2 fine attached to it; that was raised to £20 last year. Whether a deer carcase would be "offensive matter in the public view" I do not know, but I should imagine that when it got somewhat old it might easily be described in that way.
For allowing cattle to stray unattended in any street you can also now be fined £20, but apparently, so far as I car make out, as regards nearly all other animals it is not an offence, or at any rate it does not appear to be an offence under that Act. The penalty for a refusal or failure to make and deliver the copy of entries in the marriage register book, an offence which was originally dealt with in the 1949 Act, was a fine of £10 This was also raised to £20 last year, and I feel that this has something in common with the offence that we are considering now, as that offence is really the failure to register your deer carcases in your book. What is even more interesting is that the penalty for the disposal of a body—and this is a human body—without a registrar's certificate or coroner's order under the 1926 Act was originally £10, and last year we raised it to £20. I should have thought that to make the penalty for disposing of a deer carcase higher than that for disposing of a human body was perhaps wrong; but maybe other noble Lords have different views on that subject.
Another instance which fascinated me, but which has nothing to do with the case in point, is that of riotous or indecent behaviour in churches, burial grounds, et cetera, and harassing authorised preachers. This was originally an offence under an 1860 Act and the penalty was £5. This, again, was raised to £20 last

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year. I am now worried in case I ever feel like interrupting a right reverend Prelate in the course of his perorations in this House. But seriously, I think, bearing in mind the penalties under the 1959 Act and the others that I have mentioned, that it probably would be out of line if we raised this to £50, though I fully understand my noble friend's concern in this matter, especially when one considers that a stag carcase, as he said, is worth round about £14 or £15 nowadays. At some time in the future we might consider making the penalty £20 for the first offence and raising it to £50, or possibly a term of imprisonment, for subsequent offences. It is possible that the first offence may be committed in ignorance, but with subsequent offences it cannot be a matter of ignorance. Therefore there appears to be a good case for raising the penalty for subsequent offences, but for leaving it at £20 for the first offence.
Having said that, I would point out that if we made this Amendment it would have to go back to the other place for their consideration, and since this is a private Member's Bill they might not find time to consider it. It would be a pity if we risked the whole Bill in order to raise the penalty, which I very much hope will never have to be imposed. I am sure that on the whole the dealers who are going to keep registers are honest men and will do so without any penalty being attached. Therefore, I hope that my noble friend will agree to withdraw the Amendment.
LORD BURTON: The penalty to which I was referring was, of course, the maximum penalty. It may be that a very small penalty would be imposed. Despite the fact that this is probably not a very good Bill, and will not make very good law or be very enforceable—and it is difficult, in spite of the co-operation of some noble Lords opposite, to get any good law while this Government are in power—I feel that it should go through. I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment; Report received.

HIGHLANDS AND ISLANDS DEVELOPMENT (SCOTLAND) BILL
3.33 p.m.
LORD MITCHISON: My Lords, I beg to move that this Bill be now read a second time. It is a short Bill with the object of clarifying, and to some extent enlarging the powers of the Highlands and Islands Development Board given by Sections 6 and 8 of the 1965 Act under which the Board were constituted. Section 6 gave the Board power to acquire by agreement and carry on or set up and carry on any business or undertaking which in their opinion would contribute to the development of the Highlands and Islands. Section 8 provided for grants and loans. In both cases the consent of the Secretary of State and the Treasury is required for any exercise of the powers.
The present Bill enlarges in three respects the powers of the Board. It comes before the House because the 1966 Industrial Development Act, which covered a wider and more contentious field, contained broadly similar powers—powers not expressed in the same language, but wide powers. Doubts then arose as to whether the powers which I have mentioned in those two sections were sufficient and whether there was not a case for doing as the Board wished and enlarging the powers in respects which I will mention in a moment.
The Bill was introduced in another place under the Ten-Minute Rule. The result was that when the Bill came up for consideration both the Bill itself and the Amendments to it had to fall within the Long Title of the Bill, which is:
"An Act to enable the Highlands and Islands Deveolpment Board to acquire equity shareholdings in companies carrying on business in the Highlands and Islands…"
and so on. The 1965 Act did not stipulate that the companies should be in the Highlands and Islands. It provided for the benefits of the Highlands and Islands, but no more. The result was that the amending Bill in that respect was considerably restricted. It is also restricted in another respect, in that only equity shareholdings can be acquired by the Board. In the first place, the Board wish to be able to promote companies—a power which they probably have already in the Bill, but it is felt that this

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matter ought to be made clear. Secondly, they want to be able, in proper cases, to enter into a form of partnership with private interests and take up part of the shares of a company. Thirdly, they do not want to be tied to the geographical location of a company—that it must be located in the Highlands and Islands.
My Lords, that is really all there is to the Bill. It is rather tangled and complicated. I have been describing the Bill as it will be with the Amendments which I hope to introduce if your Lordships give the Bill a Second Reading. The point is that it ought to be made clear that the Board can promote companies. I should have thought there was little doubt about it, but doubts have arisen. This probably means that some critical lawyers have taken perhaps a rather narrow view, but they have, of course, taken proper precautions. Furthermore, they ought to be able to take a part of the shares of the company, not necessarily only the equity shares but the preference shares also. That is a matter for subsequent Amendment, because the Bill as presented is confined to equity shares. In accordance with the original Bill, but not with the Bill I am now bringing forward, there ought to be no insistence on the location of companies inside the Highlands and Islands area.
Your Lordships will have seen recently the interesting report of the Board. I hope that it is the feeling of the House that we wish the Development Board, whatever we may think about any particular one of their activities, to have full powers to do what they think right in a matter of this sort. To avoid any misunderstanding, I wish to make it clear that not only is the consent of the Treasury and the Secretary of State for Scotland required for all these things, but they are matters for agreement between the company concerned and the Board. There is no element of compulsion whatever. I hope that the Bill will commend itself to all those who wish well to the Highlands and who would like the Board to do all it properly can to help the Highlands, which comprise most of Scotland. I have put this matter as shortly as possible. I will not discuss the Bill at great length, because one wants to save time, but other matters can be dealt with at a later stage if the Bill is given a Second Reading this afternoon.
Moved, That the Bill be now read 2a.—(Lord Mitchison.)
3.40 p.m.
THE EARL OF DUNDEE: My Lords, I hope your Lordships may think it right to give this Bill an easy passage. The Highlands Development Board was set up three years ago by the general consent of all Parties, and either the Board or something very similar to it would have been set up if the Conservative Party had been returned in the 1964 Elections. I do not think this Bill provides a suitable opportunity for discussing the general question whether a public body ought or ought not to own equity capital in any undertaking, because it seems to me that the circumstances here are wholly exceptional. The long-term policies which all recent Governments have pursued in seeking to restore economic life and to reverse the tide of depopulation in the Scottish Highlands are bound to take a long time before they can achieve their full results. Meanwhile, we need as many short-term expedients as we can find to prevent as many people as we can from leaving the Highlands within the next five or ten years.
This Bill is most unlikely to have any effect on any big or spectacular industry, like the Wiggins Teape pulp mill which the late Government established near Fort William with the aid of a large public loan, or like whatever development may now be about to start at Invergordon. This Bill is really intended to help new and small undertakings to be started in remote and scattered communities, some perhaps with not more than a few dozen inhabitants among whom the younger people may not be able to see much chance at present of finding anything useful to do and where it may not be possible to start any kind of new occupation without the help of some public capital. If it should be found more practical and expeditious to provide this capital in the form of equity rather than in the form of a loan, I think the Board should be allowed to do so.
Unlike some of the measures now coming before your Lordships, this Bill has been very thoroughly and fully discussed in another place without any guillotine, without any sans-culotte and, so far as I know, without any knitting; and possibly Robespierre has not even

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heard of it yet. While I do not expect that it will do more than a little good, I do not think we ought to have any difficulty in agreeing to the Bill. Indeed, I think it would have been agreed to three years ago if it had not been for those drafting errors which the noble Lord, Lord Mitchison, has mentioned.
3.45 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I would certainly not oppose this Bill. We have had very similar legislation recently, such as the Industrial Expansion Bill, and I presume that this Bill is some sort of child or follow-on of that. But there is one point which I do not quite understand. Clauses 1 and 2 seem to nullify each other, because Clause 1 says that the Board can acquire equity with the consent of the company concerned, while Clause 2 says, in effect, that the Board can acquire equity without the consent of the company. As I read clause 2 the Board can demand that indebtedness to it should be
"discharged wholly or in part by the issue to the Board of shares or stock in the company".
It appears to me that those two clauses rather contradict each other.
The danger of Clause 1 is that if the Board acquire shares only in companies which give their consent they will not be able to acquire equity in good companies, as presumably a prosperous company will not want to sell any equity to the Board. I am rather afraid that if the Board acquire equity under those conditions they will be left with unprofitable enterprises. I should have thought it was far better to help projects by loan, because if the Board had equity and a company did not pay a dividend they would not get their money back. The Board might get no dividend at all for years and then the company might go broke, and the Board would lose the taxpayers money. I really cannot understand the object of the Board's desiring to take equity in companies and it seems unnecessary.
Then, if the Board has shares in a company they might be inclined to favour that company more than other companies, but if the Board had loan stock they would not be so inclined. I should like to know whether the Board has the exper-
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tise and the business advisers to partake in all these companies. They may acquire them gradually, but do they have them now? I should not think they have. I think it is a mistake, as I have often said before, for the Government to start investing taxpayers' money in private companies in a big way, because that is not really a Government's job. It is rather like a Field Marshal bothering himself about a platoon. The Government's real job is to survey the economy from a lofty pinnacle and to give advice on the general economy from afar. If they start investing in companies all over the country they will become too much embroiled in day-to-day business, which is not suitable for the Government.
Having said that, my Lords, there is nothing more I want to say on the Bill. As I have said, I do not particularly praise it. We have had similar legislation: it was a foregone conclusion that we would get this. But I rather deplore this general attitude of the Government, as I have said in previous debates, of risking the taxpayers' money in the equity of companies. It is quite unnecessary for them to invest in equity because they get much of the profits of a company anyway if there is a profit. They get the majority of the profits back through taxation without any risk at all. I have no more to say, but I would re-emphasise that I do not approve the general principle although, as I say, I do not oppose the Bill.
EARL FORTESCUE: My Lords, as public money is involved, would it not be right to discourage the Board from taking preference shares rather than encouraging them, as the noble Lord, Lord Mitchison, has suggested?
3.52 p.m.
LORD STRATHCLYDE: My Lords, I find this a very agreeable occasion in more ways than one. In the first place, I find myself in complete agreement with the noble Lord, Lord Mitchison, which is something that very seldom happens in our association in this House. Further than that, I do not altogether agree with powers such as those mentioned in this Bill being granted broadcast, but I make a complete exception so far as the Highlands and Islands Development Board is concerned. I believe that the Board should have every reasonable power to be able to offer every inducement to get people to come into the Highlands, to

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keep the young people of the Highlands at home and to bring back those who, through lack of employment, have had to go elsewhere to earn their livelihood. When I say "reasonable power", I see that is provided for when it is said that the approval of the Secretary of State and the Treasury has to be obtained. So far as the Secretary of State is concerned, I wish it had been left with him alone and that the Treasury had not been dragged in, because my experience is that the Treasury are sometimes a little bit too concerned. They hold back longer than is necessary, and they are a little (to use a Scottish word) too canny. They do not come away, and they sometimes spoil the whole thing by holding matters up for too long.
May I ask the noble Lord who I understand is to speak on behalf of the Government, the noble Lord, Lord Hughes, if he would reflect for a moment and consider whether he could suggest to his right honourable friend the Secretary of State whether some inducement of some kind, or some power, could be given to the Hydro Board, which of course has a similar kind of duty to that of the Highlands and Islands Development Board, spread over a much wider area. I know from personal experience of many occasions when it appeared that if only the Board could have offered a carrot of some kind they would have got an industry, small or large, to come into their area. It was just because of a lack of any inducement whatsoever outside ordinary business considerations that they failed to get that industry to come in. If the noble Lord, Lord Hughes, could suggest to his right honourable friend that he might obtain some power of this kind and give it to the Hydro Board, I think it would help in the direction in which all of us would like to go. I commend this Bill to the whole House, and I hope it will have a very speedy passage to the Statute Book.
THE EARL OF CROMARTIE: My Lords, I, too, should like to join with my noble friend who has just spoken on two counts; first, that I certainly welcome this Bill, and, secondly, the possibility of Her Majesty's Government helping the North of Scotland Hydro-Electric Board to assist industry. It would make a very big difference. Further, in welcoming this Bill I would reiterate one thing. I
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hope that the Highlands and Islands Development Board will be a little careful with whom they deal, because I would remind noble Lords that within my own county we have had some very unfortunate circumstances. Having said that, I wish them success, and I think this Bill is one which will be welcomed in the Highlands.
LORD BURTON: My Lords, I, too, should like to join my noble friends in welcoming the Bill as a whole. I should like to put one point forward for consideration. I wonder whether there should be any limit on the capital which is to be made available, or at least the proportion of the amount of capital in any one company. I would be worried that virtually a nominee company might be set up and financed entirely by Board money, and I think that this should perhaps be looked at. I should not like to leave an open-ended company which would allow the Board to spend money very much faster than it is doing at the moment.
LORD HUGHES: My Lords, it would perhaps be for the convenience of the House if I indicated the attitude of Her Majesty's Government to this Bill. As my noble friend Lord Mitchison knows, we welcome the initiative which led to the introduction of the Bill in another place, and we are grateful to him for acting as sponsor to it in your Lordships' House. So far as the greater part of the powers are concerned, the position i3 quite simple. The very general powers which were given to the Board in terms a Section 6 of the Act of 1965 were thought to cover the powers which are asked for, but because the wider Act of 1966 spelt out powers in more detail, it has cast some doubt, at least in the minds of some lawyers, as to just exactly how far the general powers go. We are therefore seeking, in that instance, merely to put the position back to what we thought it was in 1965. The Bill also gives the Board powers to give assistance under Section 8 of the 1965 Act by way of taking shares or stocks, and this is a comparable power to that given to the Board of Trade by the Industrial Development Act 1966. The need for industrial development in the Highlands presents itself in a variety of ways, and in the Government's view—and. I think I am correct in saying, in the view of all those noble Lords who have taken part in this debate—the Board, in tackling the task,

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should be equipped with a range of powers which are both comprehensive and flexible.
I was interested, as I always have been and as I think I always will be, in the suggestions which the noble Lord, Lord Strathclyde, put forward to enable the Hydro Board to play a still greater part in helping to bring industry to the Highlands, and I can assure him that I will discuss with my right honourable friends the point of view which he has expressed to-day. My Lords, I commend the Bill to your Lordships.
3.58 p.m.
LORD MITCHISON: My Lords, I rise to thank noble Lords who have received this Bill so kindly and to say to them that I felt I could count on the co-operation of both sides of the House in giving the Board the powers it asked for so far as they involved any extension. It has been a rather confused business, first of all from the point of view of the wording of the original Act, before the 1966 Act came in, and secondly because of the Ten-minute Rule procedure in another place.
I do not think I need take up the time of the House by replying to the debate in detail. I should just like to say to the noble Viscount, Lord Massereene and Ferrard, that I think he will find the consent of the Treasury and Secretary of State stipulated for in the sections which are being amended. I really do not think that this Bill raises any new question of principle at all. It is really a means to the ends which Parliament intended that the Board should have. I should also like to say, in reply to the noble Lord who mentioned preference capital, that I think this is probably a matter for the Board and a matter which must differ in different cases. One ought not to rule it out, though probably, almost certainly, it will not always be required. Again, if I may, I should like to thank the House. May I also take the somewhat frivolous opportunity of congratulating the Board on having got a factory in Barra for making spectacles. To anyone who knows Barra, that is a quite remarkable achievement and worthy of the making.
On Question, Bill read 2a and committed to a Committee of the Whole House.

PRICES AND INCOMES (No. 2) BILL [H.L.]
LORD BESWICK: My Lords, I beg to move that this Bill be now read a second time. First, I should like to thank the Opposition for their co-operation in using this somewhat irregular and admittedly unsatisfactory procedure of a No. 2 Bill in order to make possible the consideration of the Prices and Incomes Bill within the timetable dictated by circumstances. It would be difficult to call this a popular measure. Indeed, if ever there was a case of a Government determined to do their duty, as they see it, in the interests of the nation, and regardless of electoral consequences, then this is such a case.
But although there is this sustained opposition, and bitter opposition, to certain parts of the Bill, it is also true to say that the basic purpose of the Bill commands widespread support; and, moreover, the Government readily admit that the policy behind this measure cannot succeed without the voluntary cooperation of all concerned. Moreover, all experience so far suggests that this voluntary co-operation will be forthcoming. After all, this is not the only feature of our political and social scene which depends entirely on voluntary support for its success though provision is made for statutory penalties.
Every motorist in this House, I imagine, stops at a red traffic signal. We do so voluntarily. No one is physically compelled to pull up. We accept this retriction on our personal liberty because we know that by so doing we enjoy a wider freedom. But co-operation is much more readily forthcoming because we know that the occasional anti-social character will be punished if he does not co-operate. My Lords, let us face the fact that the courts just could not cope unless the overwhelming majority were prepared to play fair. This Bill is intended to give the vast majority encouragement and confidence that their cooperation with this part of the Government's economic policy is not abused by a minority. It sets out to do what is socially just as well as economically right by covering prices, dividends and rents, as well as pay.
My Lords, let me now outline how the Bill seeks to achieve these objectives. The

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recent White Paper on Productivity, Prices and Incomes policy pointed out that, unless renewed by Order in Council, Part II of the Prices and Incomes Act which empowered the Government to require statutory notification of increases in prices and incomes, would expire on August 11 of this year. Similarly, those parts of the Prices and Incomes Act 1967 which extended the three months mark-time period for pay or price increases to a six months period, if the National Board for Prices and Incomes found they were against the national interest, would also expire.
This Bill seeks first to maintain those reserve powers until the end of 1969 and to reinforce them for the same period in five ways. First, to lengthen the maximum period of delay on pay and price increases from the present seven months to twelve months, subject to a reference to, and adverse report from, the National Board. Each period includes the initial month during which the Government are allowed to examine particular proposals. Secondly, to make Wages Councils' and Agricultural Wages Boards' decisions subject to a similar maximum period of delay, again in the context of a reference to and report from the National Board; thirdly, to require reductions in existing prices where the National Board recommend they should be cut; fourthly, to require the notification of increases in dividends and to prevent excessive distributions; and, fifthly, it sets out to moderate and fix increases in house rents.
That is what this Bill, which has caused so much controversy, is about. Turning to the new powers, three are proposed in relation to incomes, as distinct from dividends. First, as I have already indicated, to extend the maximum period of standstill to 12 months, subject to a reference to and adverse report from the National Board; secondly, a transitional power to make an amending Order in respect of a standstill under the 1967 Act that might still be in operation when this new measure becomes law; and, thirdly, a new provision in relation to Wages Councils' and Agricultural Wages Boards' Awards. I should like to say a little more about this provision because of the concern that has been aroused.
From the beginning the Government's productivity prices and incomes policy
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has always been especially concerned with the position of low paid workers. Historically, this was the purpose of Wages Councils. But they hive no obligation to take account of the consequences of their recommendations on other workers whom they cover who may not be low paid. And not all workers covered by Wages Councils are low paid. The First Secretary is, however, statutorily bound to accept their proposals and to enforce them by law. Thus what this Bill seeks to do for its duration is to avoid a situation in which the Government have to enforce decisions of Wages Councils and Agricultural Wages Boards, even though they may not be in line with criteria applied to other pay claims outside the Wages Councils' field. The Government will still not be able to amend the proposals of these bodies, but they will be able to refer them to the National Board for examination and, only when the proposals are subject to an adverse report, will the Government be able to delay their implementation. It is not expected that this is a power of delay and reference that will need to be used often.
The rest of the Bill deals with prices, dividends and rents. On the prices side there are two new powers. The first, as I have already indicated, extends the maximum period of standstill, as in the case of incomes, to 12 months—again subject to a reference and report from the National Board—and the second requires the reduction of an existing price, again subject to a positive recommendation from the same independent body.
My Lords, I think that it is proper to pay tribute to the voluntary cooperation of manufacturers in the field of prices, including the deferring or reduction of price increases as a result of consultations with Government Departments under the early-warning system. But it is right also to take into account the fact that there may be cases where prices ought to be reduced—as, for example, where great technological advances are being made and productivity is rising rapidly. But I must emphasise that this power is not exercisable at the whim of Government, but only after the process of the independent advice of the National Board for Prices and Incomes after a thorough examination.

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Part II of the Bill deals with company distributions and provides a statutory backing for the application of the 3½ per cent. ceiling to increases in dividends. This complements the powers in relation to wages and salaries. The voluntary scheme of dividend restraint which has been operating since March 19 is working well. The Government intend that it shall go on working in this way, on the lines of the published guidance to companies which has been given in the White Paper and in statements by the Treasury. The powers set out in Part II of this Bill are reserve powers only; they will not be used unless the voluntary system appeared to be breaking down, and the Government have given assurances that there would be consultations with representatives of the company sector before the first exercise of any of these statutory powers.
The essential reserve power is in Clause 6 of the Bill. In the unlikely event of the need arising, the Treasury could make orders or directions requiring companies not to distribute higher ordinary dividends than in a past year without first obtaining consent. The guidance which has been given on the voluntary scheme makes it clear that there could be circumstances which justified increases in the amounts of distributions of more than 3½ per cent. above last year—for example where new subscribed capital had been introduced, or where a company was recovering after a fall in profit and distributions.
The greater part of Part II is then taken up with spelling out the various definitions which would be necessary to make the basic power workable, and with straightforward provisions for the mechanics of orders and directions and offences and penalties. But the wording of Part II of the Bill does not in itself alter the essential present voluntary scheme of dividend restraint.
My Lords, Clause 9, in Part III, gives the Government power to make regulations subjecting certain increases in rent to a scheme of staging, or moderation, for a limited period. The rents concerned are those of certain tenancies given protection by the Rent Act 1965 and known as "regulated tenancies". Fair rents can be fixed for such tenancies by
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rent officers and rent assessment committees, and in some cases—for example where a rent fixed several years ago comes up for review on the expiry of a tenancy agreement—there can be sharp increases in the maximum rent. The Government do not propose to interfere at all with the way in which fair rents are fixed, but they think it right, at a time when incomes are subject to restraint, to require that sharp increases in rent of this kind should be reached by steps, and not in one jump.
The scheme, which will be incorporated in regulations, provides that where registration of a fair rent takes place between the coming into effect of the Bill and its expiry at the end of 1969 then the maximum increase in the year following registration shall be 10s. a week. If the Bill is still in force at the end of that year, and there is a significant balance of rent increase still to be made, that increase will be spread over two instalments, so that the full fair rent will be reached, at the latest, at the beginning of the third year after registration. There will be exemptions from staging for increases due to the rise in the cost of services provided by the landlord, and for rises in rates that he bears. The regulations will come into force immediately the Bill becomes law.
If private rents are to be regulated in this way, it is surely only fair that local authority rents should also be moderated. The Government are not, however, taking powers to set rent levels. They are solely concerned that increases should not be steeper than necessary. The Government are, in effect, saying that local authorities will continue, as in the past, to decide the level of rents for their tenants, but that if the new level is very much higher than the existing level they must get there in stages and not in one fell swoop. Housing Ministers have already announced that they will not normally accept rent increases averaging more than 7s. 6d. a week in any one financial year, or more than 10s. a week for any individual house. Ministers recognise, however, that where housing costs are rising, some rent increases are necessary and reasonable.
Clause 10 deals with rent increases taking effect after enactment of the Bill. Clause 11 deals with rents that were increased between April 1, 1968, and the date of enactment, and also with rents

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referred to the National Board for Prices and Incomes even if the increase took effect before April 1 last. In practice, the story here again is one of voluntary co-operation. Most authorities are expected to co-operate voluntarily with this policy. The formal use of statutory powers to compel authorities to reduce rents will probably be required only for a relatively small number of cases where the authority refuses to fall into line with the majority.
My Lords, the policy behind the Bill is not a formula for a wage freeze and certainly not one for economic stagnation. Provided that we can hold down, or reduce, unit costs, then increased earnings are welcome. Of course, productivity is the key to this. Noble Lords in all parts of the House, not least those with long experience in trade unions, are well aware of the practical problems involved in the negotiation of worthwhile productivity agreements. But it is greatly encouraging to see the efforts now being made in industry to tackle these problems. The Government are anxious to respond effectively. This is why the First Secretary is pressing ahead with the new Manpower Planning and Productivity Division in the Department of Employment and Productivity. This Division will unite the Department's long experience and expertise in industrial manpower matters with those from industry, under the direction of Mr. George Cattell, who has been seconded to the Department from Rootes.
I ought to refer again to the duration of the Bill, which is dealt with in Part IV. The Government hope that it will not be necessary to ask Parliament for a renewal of the powers they are seeking in this Bill. But as the Prime Minister has made clear, they cannot responsibly give an absolute assurance that they will not be renewed. The Government have, however, given an assurance that any renewal, should it be judged to be necessary, would not be done under the Expiring Laws procedure.
It would be idle to pretend that there will not be difficulties in the next 18 months in applying this policy. It would of course be much easier to sit back and let pay claims take their course. For a time in the public service increased wage costs could be met by increased taxes; local authorities could meet higher wage
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bills by higher rates; given present demand, most of industry supplying the home market could recover extra costs in higher prices. All have a short-term remedy save the exporters, and the manufacturer who is competing with imports. And of course it is precisely the success of this sector of our economy that will decide whether we sink or swim as a nation. There are to-day encouraging signs. One industry after another is proving by results that our competitive position abroad has improved.
My Lords, I think it would be an act of supreme folly if we let slip this opportunity to get our economy right because we failed to keep down unit costs. We all know in our hearts that a Bill along these lines is needed. I hope your Lordships' House will discuss it constructively—and pass it decisively. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Beswick.)
4.19 p.m.
LORD ERROLL OF HALE: My Lords, it is my pleasant duty to thank the noble Lord, Lord Beswick, for having given us such a concise and clear description of the Bill now before your Lordships' House. It is a long and complicated Bill and I should like personally to congratuate him on having given us the essential points with clarity and brevity. I must say that we are in a rather artificial situation this afternoon, since we are discussing a Bill which will be no more on Monday and for which there will be substituted another Bill from another place. Furthermore, we were assured when this procedure was adopted a year ago that it would never be done again. We had a bit of fun with the Bill on that occasion. We called it a "White Bill", and I think it became known in the end as "Shepherd's Pie". This Bill I can only describe as "Beswick's Breakfast"—eaten quickly and soon forgotten, to be followed by a more substantial meal on Monday with the real Bill that is going to come to us from another place.
I am sorry that while the noble Lord was kind enough to pay some tribute, to the Opposition for tolerating this position, I must protest against the extreme inconvenience this change of timetable has caused to noble Lords. Not only have those of us interested in this Bill had to prepare ourselves much more

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rapidly than we had intended, but a great deal of inconvenience has been caused to noble Lords who wished to debate the Transport Bill to-day and now find that they are going to have to do it on Monday instead. There has been insufficient time for us to prepare ourselves for a proper Second Reading. I regard it as a great honour to speak from this Box to your Lordships, and while my speeches may not be very good, I do try to prepare them as thoroughly as possible. I set aside this coming week-end for that purpose. Only on Monday afternoon I learned that the Pill was to be on this Thursday. I am not prepared to cancel every other engagement I have during a busy week in order to prepare for a Bill whose timing has been changed purely because of the Government's inability to organise their own timetable. My noble friend Lord Dundee, who is winding up, was planning to go back to Scotland tonight—not a very easy thing to do, thanks to the co-operation of British Rail with Government policy. He has had to cancel his sleeper and hopes to get air transport to-morrow. The planes will be overcrowded, because there are going to be no rail services working over the week-end. It is fortunate that he is not trying to fly to Scotland by B.O.A.C., because that would be impossible.
While trying to keep my mind on the subject of the Bill and how I should address your Lordships, I find all the time that the newspapers are full of what is going on in another place regarding this very Bill. While one is trying to think in terms of a Second Reading one is unavoidably caught up in the Report stage—I think it is Report stage that they have got to in their discussions, but it is hard to tell—in another place. That is not the way business should be conducted in your Lordships' House. The whole purpose of our Chamber is that when a matter has been discussed in another place we should be able to look at it dispassionately after a decent interval of time and form our own mature opinions. That is not possible on this occasion and I regret it very much, particularly because the noble Lord, Lord Beswick, and the noble Lord, Lord Shackleton, whom I should like to congratulate on his new appointment, has steadfastly refused to tell your Lord-
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ships why this Bill is so urgently required.
As they have refused to say it in public and similarly refused to tell me in private, I shall be delighted to tell your Lordships why they are in such a hurry. It is because unless they get the Bill on the Statute Book by a certain date there will be a gap between the present powers and the new powers which this Bill will give the Government; and they are so "windy" of their trade union friends, because they know they would use that gap to push through some pay increases which they otherwise would be prevented from doing, that they are determined to get the Bill on the Statute Book to avoid that gap. That is the reason, and I think your Lordships should know why we are being hustled in this undignified and unnecessary way. We are told that the Government know how to run the country, but they cannot even run their own legislative programme.
LORD BESWICK: My Lords, before the noble Lord gets too much satisfaction out of this disclosure, may I say that apparently he was not in the House earlier this week when my noble friend Lord Shackleton said much the same thing in somewhat different words.
LORD ERROLL OF HALE: My Lords, I was in the House earlier this week, though not due to any spirit of cooperation from the noble Lord the Leader of the House who, although he knew I was in charge of the Bill, failed to let me know that he was going to make a statement on Monday. But I was here and I listened to him. I read it and reread it in Hansard and thought it was so obscure that it was necessary for me to give a more precise and clear explanation to your Lordships. I am going to get on with it, as the noble Lord, Lord Shepherd, says. I am sorry that when I was making reference to my Shepherd's Pie I did not say that I am delighted to see him back from Nigeria. I hope that his Biafran Beefsteak has been more successful.
LORD SHEPHERD: My Lords, if the noble Lord will permit me to say so, I wish I could reciprocate.
LORD ERROLL OF HALE: My Lords, I should like to say a few more words about the general proceedings to-day. I

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recognise that this Bill is considered by Her Majesty's Government to be a central feature of the Government's post-devaluation policy. Therefore it would be very proper for us to have a wide-ranging debate over the economy. Indeed, if any noble Lord so wishes, I am sure there is nothing to prevent it; but I am not going to set that example this afternoon. I am going to limit myself to discussing certain features of the Bill and I am not going to take up your Lordships' time by outlining the constructive alternative of the Conservative Party. So I hope that noble Lords opposite will not afterwards criticise me for not being constructive. The Conservative Party's alternative was extremely well explained by my honourable friend Mr. Robert Carr on the Second Reading of the Bill in another place and it is all there on the record. So in confining my remarks, I hope you will please not think that I am not capable of offering a constructive alternative.
In my opinion this is an extremely badly constructed Bill, because it makes reference back to other Acts. It may surprise noble Lords opposite to know that companies and other organisations do read Government Acts with great care and try to operate in accordance with their provisions. Therefore it is of importance that though legislation should be couched in correct legal terms, it should be possible to understand it without having to refer back to a lot of other documents. When I came to read the Bill, I found that Clause 1 says
"So long as this section has effect, sections 7 to 22 of the Prices and Incomes Act 1966 shall continue in force…"
So I was not able to do any more homework on that clause, because I did not have the 1966 Act with me. I went on to Clause 2 and I found there that
"For sections 6(3) of the Prices and Incomes Act 1967 there shall be substituted:—
"(3) Sections 1 to 3 above shall cease to have effect at the end of the year 1969,…"
So before I even turned the first page of this new Bill, I had to have in my possession two earlier Acts. It was typical of the efficiency of the Printed Paper Office that I was able to get them within a few seconds and was able to refer back to what is laid down in those two Acts. It makes for very hard work on the part of all those whom the Government hope
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are going to co-operate voluntarily with them in their policy. It is a badly constructed Bill, quite apart from the rest of its contents.
A great deal was made by the noble Lord, Lord Beswick, of the fact that these were only reserve powers in the main and that it is going to be a voluntary system. He had the temerity, if I may say so, to make the analogy of the red lights at a traffic intersection. I rather like to use analogies and comparisons myself, but I find it a dangerous practice, and the noble Lord certainly made a bad analogy in this case, because it is an offence to cross an intersection when the lights are at red. It is not just a matter of obeying voluntarily. So it is in fact with this Bill. While we are being told that it is a voluntary affair, we are told that if we do not play ball, we are "for it"; we shall be sent to the headmaster's study and given the cane. This is not my idea of a voluntary system. What we are witnessing, if this Bill goes through—and this happened in the other two Bills—is a completely new meaning being given to the word "voluntary". Voluntary means "by free and willing consent". There can be no case at all for saying that the things that are going to be done in future to carry out this prices and incomes policy will be done freely, willingly, voluntarily. If you do not do them, you are going to get smacked—smacked by the reserve powers is this Bill.
I want to mention two general points in connection with this Bill. The first point is the revision of principles. I think it is a very dangerous thing, in a Bill which is to have only a limited life, as the noble Lord was good enough to explain to us, that the Government can at arty time within the 18 months period of the Bill, by means of an Order subject only to the Negative Resolution procedure, vary the criteria by which the proposed changes in income, prices and charges are o be judged. If we are to have this sort of system, let us at least have a criteria fixed for the period of operation of the Bill.
Secondly, I am rather concerned about appeal procedures. Under this Bil1 the various Ministers have a great deal of discretionary power. They can select A, B or C and put the claim, the firm or the individual through the hoop, or not, as they feel inclined. I think that when

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such a wide discretionary power is being provided for in the Bill, there should be some right of appeal in respect of those who are unlucky enough to be selected by the Government as their particular targets. We shall refer in terms, of course, to these two general matters in Committee, when we may well propose Amendments which I hope Her Majesty's Government will see fit to accept.
In the Bill there are a number of important features. I propose to refer to prices, incomes and dividends. As regards prices, I should be the first to agree with the noble Lord that the so-called "Early warning system" has had a certain effect on the slowing down of the rate of price increases of those 147 items (I think it is) which are subject to the "Early warning system". But this is only a small minority of prices which are involved in the daily economy of this country. There are hundreds of thousands of other prices which the Government cannot hope to control, and which it would be impossible for them to try to control.
I think that a much more potent way of getting the co-operation of the community would be if the Government themselves set a good example. Everybody has to keep prices down, but the Government are allowed by their actions to force prices up. I will give just two examples. First of all, by putting up purchase tax so savagely in the last Budget a large number of prices will inevitably have to go up by a considerable amount. The Government may reply that these increases are not on necessities. But who are the Government to decide what is a necessity and what is a luxury? To most young women, and older ones, too, cosmetics are far more of a necessity than bread, meat and milk, and many a young woman will go without her breakfast—even Beswick's breakfast—for the sake of having enough money to buy herself a lipstick. These prices are going up because of purchase tax.
The Government's savage increase on the selective employment tax, due to come into operation in September, will certainly force up prices on a wide range of products and services quite unnecessarily. And these increases will be passed
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on to the customer. Indeed, it is common form now in many nationalised industries providing catering services to put at the bottom of the bill: "5 per cent. surcharge for S.E.T.". And it is now accepted that everybody has to pay. Why cannot the Government set a good example in this field of price restraint, instead of aggravating what is an already difficult situation?
Secondly, the Government are taking an elaborate power to reduce prices. They can act only if they have a recommendation from the Prices and Incomes Board. The Bill itself will last only 18 months, and it will be some months before they have discovered some price which ought to be reduced. They will then have to decide whether they will refer it to the Prices and Incomes Board; the Prices and Incomes Board will deliberate and recommend, and then the Government will think again, and by that time the Act will no longer be extant. I suggest that this Part of the Bill is nothing more than window-dressing, and will be completely ineffective. I am not suggesting that noble Lords should reject it on the Committee stage. I would only remind noble Lords that I think this Part of the Bill is a complete and utter waste of time.
Turning now to incomes (and I want, if possible, to match the noble Lord's brevity and not keep your Lordships for too long), let us be quite honest about this. The earlier legislation has had relatively little effect in keeping down the increase in incomes. The interesting thing is that during the period when we did not have any income restraint incomes of all sorts generally rose rather less than during the periods of operation of the 1966 and 1967 Acts. I met a distinguished industrialist the day before yesterday who is at the present time engaged in a rather difficult wage negotiation with his workpeople. He told me that he is having to concede more now, under the present White Paper, by way of wage increase than he has ever had to do before in the history of the company. The answer is quite a simple one: the maximum becomes the minimum, and when he could have secured a smaller increase in a truly free negotiation, he now has to start off on the basis of accepting that the maximum is the minimum.

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I am a little disturbed by the fact that Wages Councils and Agricultural Wages Boards are to be subject to the provisions of this Bill. This is a matter to which I prefer to return on the Committee stage, but I do not go along with the noble Lord, Lord Beswick, in his statement on this matter. It is a difficult situation, I appreciate, but I think the Government are being unnecessarily harsh on the Wages Councils and the Agricultural Wages Boards.
There is one new development which I think should be mentioned, in passing—and I do not want to make too much of it this afternoon. It is the question of salary increases to what one might call the higher paid workers; namely, the chief executives, chairmen and managing directors of large companies. This topic has been rather highlighted by the development in the last few days in regard to a particular individual. On Tuesday, May 28, the chairman of a merchant bank, Mr. Hambro, announced, when the accounts were published, that his company were giving £10,000 this year to the Conservative Party, as against £1,000 in the previous year, and he added by way of comment—and I quote from the Yorkshire Post:
"I believe we have the worst Prime Minister of this country since Lord North. It is in the best interests of our shareholders"
et cetera.
Whether one agrees with what he said or not is not for me to argue to-day. But on June 24—last Monday—a BackBencher in another place asked a Question as to whether the increase in salary of this particular chairman should be referred to the Prices and Incomes Board. The reply was given by the Parliamentary Secretary to Minprod., who said (OFFICIAL REPORT, Commons, col. 33):
"My right honourable friend is having this particular case investigated."
Well, Minprod. can do what it likes—and I am sure will, without any advice from me. But what I should like to point out to Noble Lords opposite, and particularly to Her Majesty's Government, is that this is the first case in which the remuneration of a single individual has been brought in for investigation.
I want to ask whether it is the Government's intention to refer the salaries of single individuals, whether they be engine drivers or company directors, to the
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Prices and Incomes Board at the behest of a Back Bench Question in another place. I would point out that it was an unfortunate case for the Government to choose, because there have been other increases of greater magnitude in the last few months which have passed without any investigation being announced. Have Her Majesty's Government been actuated by political malice?—that is what is being widely said. Personally, I do not think so.
LORD CARRINGTON: I do.
LORD ERROLL OF HALE: I bear a voice behind me say, "I do". I should much prefer it if they were actuated by political malice, because then we should know where we stood. What I think has happened is that they are just plain stupid. It never occurred to them that they were doing something stupid by referring this case of all cases. By all means have a few chaps along and investigate them. But why take for your very first case the one where you can be accused of being actuated by political malice? Why choose the one which will, of course, do the Conservative Party funds a great deal of good? A lot of people will say: "Look here, the Conservative Party"—but I need not go on to that side of the argument. But this strikes me as another case of Government stupidity.
That is why I hope that when the noble Lord, Lord Shackleton, comes to reply we shall have a proper answer to this particular matter. Are individuals to be hauled up? If they are, are the Government going to publish the result of their investigations into individual salary increases? Have they the power to do so? I tried to find out by reading the Acts, but of course they are all interrelated and it is practically impossible to find out whether there is power to do so or not. I should be grateful for the assurance that there is in fact power to do so, and for the actual references in the relevant Acts.
I am not suggesting that there should be any exemption for directors or company chairmen as a class from the provisions for this legislation, but I suggest to Her Majesty's Government that if they think an investigation is necessary it should be to investigate the class of chief executives or the class of managing directors, and individuals should not be singled

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out for separate and individual treatment. If they do so decide to investigate a class—and they will have the opportunity to do so as regards public companies because the accounts now being published show what these salaries are and what the increases are—I suggest they should appreciate, and I hope they will, that such increases to company chairmen are irregular and usually very late in the day. It is unusual for a company chairman to get a salary boost every year. He is usually the last person in the whole company structure to get a rise; it is usually only after about four or five years. And here I am not arguing the merits of the Hambro case or otherwise; I am arguing the general case. It is usual for a company chairman to be the last to get a rise, and then only when his colleagues say, "Look here, we think it is about time that your services to the company were recognised".
Then, as regards the amount, I should like to point out to Her Majesty's Government that while the growth figures may seem very large in respect of increases, when these increases are net of income tax and surtax they are very, very much smaller; and they should have regard to the net value of the increase, in the case of the engine driver and in the case of the company chairman. I will not say more about the subject at the moment because I do not want to over-exaggerate its importance, but I look forward to receiving a satisfactory answer from the noble Lord, Lord Shackleton, when he comes to wind up.
As regards dividends, I think that this is probably the only part of the so-called policy which will be fully observed, for two reasons: first of all because companies will as collective enterprises do their best to follow the policy; and secondly, because this is the only part of the policy where approval is required in advance. In prices and incomes one goes ahead and may be hauled up later; but although it is called "a voluntary dividend-limitation policy", in actual fact one is asked to consult the Treasury before announcing a dividend increase, and so if one carries out those consultations one is effectively stopped from making the increase thought to be necessary in advance. So it will be effective. One naturally expects the Government to be
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toughest of all on dividends because they do not like dividends; they do not understand them. But do not let them claim credit for its being a voluntary policy.
I do not want necessarily to be personal this afternoon, but it so happens that I am on the board of a company which had decided its dividend yesterday, and knowing that, as from 4 p.m. to-day, I was going to speak within 24 hours on this subject, I thought it would be interesting to watch how one particular company did finally determine its dividend. The company (and I do not mind mentioning its name if anyone wants to know) had raised its interim, as it was quite entitled to do, and it was therefore made clear that, assuming the profit trend continued in the same way, the final dividend would also be raised. There is a very good case for an increase in dividend.
The chairman of the company wrote to the Dividends Division of the Treasury and put forward an extremely good case, and got a very quick answer—I must say that for the Dividends Division: one does get an answer—and the answer was, of course, "We must ask you not to put up your dividend". The result was that it was put up by only the requested maximum amount of 3½ per cent. There was no question of this being a voluntary action on the part of this board of directors. They were not acting voluntarily. That is a point I want to come back to. I think we must get away from the use of the word "voluntary" in this context. There was nothing voluntary about the decision of the board of directors, of whom I happen to be deputy chairman. We complied with the Government's request because we know that, if we did not comply, when this Bill became law we should have retroactive orders made against us. That is why we complied.
We had also (this is perhaps not such an important matter), in making the announcement of the dividend, to go to no fewer than 3 places of decimals to convert 3½ per cent. of a 1 per cent. increase two years ago into the exact decimal equivalent. I am glad to see that the noble Lord, Lord Fiske, who is Chairman of the Decimal Currency Board, is here this afternoon. He loves decimals and so he is probably very pleased; but it makes it very difficult when announcing a final dividend if

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you have to go, while we are still on £ s. d., to three places of decimals. This is what we are having to do, and at any rate one board regard it as a compulsory act which we must perform, and there was nothing voluntary about what we did.
Of course, it also leads to a lot of fun. Crosby Spring Interior Limited, recommended a dividend for 1967–68 of 28½per cent., a distribution of about £61,500 and an increase of about 3½ per cent. Well, approximations are not good enough for the Dividends Division of the Treasury. On the direction of the Treasury—and I call it a "direction" because that is what it is—the company had to reduce its distribution by £81, out of over £61,000. The company now has therefore paid out in dividends £61,479, which is a figure that is precisely, to the last recurring decimal place, 3½ per cent. over last year's. The gross dividend per share is thus reduced by 0·01 pence per share. Great fun, all this! Think of the amount of work it causes, when we are told to consider productivity, for the sake of £81. But then, of course, we have to accept that we have a Government who do not like private enterprise, do not understand it, and think dividends are dirty and profits are worse; and so we have to put up with this kind of thing. But do not at the end of the day tell us that this is a voluntary policy, because it is not. A noble Lord behind me says it is the road to serfdom. However beastly the Government get, we are not going to cave in to them: I can assure my noble friends of that.
I have tried to deal with several points, and I have taken my time. There is much more I could say, but I think I have given a general impression of the attitude of my noble friends towards this measure. Noble Lords will have gathered from what I have said that we on this side of your Lordships' House are opposed to the Bill, and that is indeed correct. It is clear that Her Majesty's Government have no electoral mandate for this, its third Prices and Incomes Bill since the last Election, and we should be fully entitled to vote against the Bill which is coming to us on Monday next on that ground alone. But were we to defeat Monday's Bill on Second Reading it could not be re-presented to your
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Lordships for a number of months. Rightly or wrongly—wrongly in my opinion—the Government have made this Bill the cornerstone of their economic policy for the immediate post-devaluation period. They have persuaded foreign Governments to lend Britain money on the assurances that prices, and particularly incomes, would be kept under control. Whether the Bill will achieve that is another matter, but the fact is that overseas confidence in Britain would be profoundly shaken if this Bill failed to become an Act, and we must take into account the consequences of what we contemplate doing.
There has been a good deal of political commentary on our attitude, as it might be, to this Bill. Political franc-tireurs, if I might so describe them, have suggested that a defeat on this Bill would force the Government to resign, thus bringing about a General Election, which the Conservative Party would then win. My Lords, I do not think that that is realistic reasoning. In the first place, we do not suppose that the Government would resign however many of their Bills we rejected on Second Reading. They are so deeply wedded to office that it would take much more than that to bring them to a confrontation with the British people.
In the second place we believe that rejection of this Bill, the provisions of which are already being honourably observed by responsible organisations in this country, could, given the unpretty pass to which this Government have brought our economy, cause sufficient further disruption in the present working of our economy to bring about damage to Britain's immediate future and, more particularly, a loss of confidence in Britain abroad, with serious consequences for the pound sterling. Constituted as our House now is, it is the duty of your Lordships, I suggest, to weigh in the balance our dislike of this Bill with the consequences for the nation of our having rejected it. Having deeply and carefully studied the whole question I must, regretfully but unhesitatingly, advise your Lordships to accord the "Monday" Pall a Second Reading.
4.51 p.m.
LORD HENLEY: My Lords, the noble Lord, Lord Erroll of Hale, made, as

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usual, one of his splendid, racey speeches—"great fun", in his own words, and I agree; I always enjoy it. But except for what he said at the end, that he was not going to advise his noble friends to vote against the Bill, I am not sure that there was really very much in it. It started off with five minutes about the Government's conduct of Business. I always enjoy this; it is splendid. But we have had so much of it from the Conservative Party in the last few weeks that it shows how very thin their opposition is. The noble Lord then went on to explain why the Government are in such a hurry about this Bill, that is, to prevent a gap into which the trade unions can pop a quick wage claim. His honourable friends in another place on Tuesday night did their best to enable such a state of affairs to take place. Then he drew attention to his honourable friend's admirable speech, I thought, on policy on Second Reading of this Bill in another place, and he explained why he did not intend to go into details about the Conservative philosophy. I am sorry he did not do that, at any rate in some measure, because it seems to me that at Second Reading stage this is something we want to hear about.
The noble Lord then went on to say what a badly constructed Bill this was, and in many respects I agree. Then we had a defence of Mr. Hambro, at some length, and a defence of a board on which the noble Lord sits. I am not complaining about this; it was a good speech, lively and entertaining, and I think we all enjoyed it although, as I have said, I do not consider there was anything in it. What there was in it, particularly about the difficulties of the Bill being made to work, I am bound to say that in no small measure I agree. There is much in the Conservative criticism of this Bill and its ethos with which I could go along, but I can only go along with it if the premise on which it rests is still acceptable to me, and it is not. The premise on which the whole Conservative approach to this Bill and what lies behind it rests, is that competition works. I think this is an illusion; it no longer works. It may have done once but it does not now, and as I and my noble friends see it—and indeed as the Government see it—some measure of direction and intervention is necessary.
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High Tories have recognised this in the past. It is part of the high Tory tradition. It has been high Tory doctrine ever since the end of the 17th century that even if it was too paternalistic for old-fashioned Whigs—and I cannot understand why this High Tory doctrine has disappeared from the Conservative Party—this was part of the old difference between Whig and Tory, that the Tories believed in some degree of intervention and direction, and it has vanished. I cannot help feeling that the low Tories (if I may say it, although not in a pejorative sense, of course) have taken over the Conservative Party, and I think this is a pity. They are men who want a free-for-all in which the weakest go to the wall, and it seems to me that in our complex society if we have a free-for-all it may end up with all of us going to the wall.
The Liberal Party supported the first Prices and Incomes Bill (this is the third) because we felt the situation demanded some measure of State intervention on incomes, and because we do not believe that untrammelled collective bargaining is sacrosanct. My honourable friends voted against the second Bill, which has been referred to as "Shepherd's pie"—which is a good name to remember it by—because we thought it feeble. I use the word "feeble" in the schoolboy sense of the word: it was irresolute. But we did not vote against it because it was interventionist, as the Conservative Party did. We come to this Bill to-day —"Beswick's breakfast" Bill, to give it the convenient name again, invented by the noble Lord, Lord Erroll. We are not happy about this third Bill either, any more than the Conservatives are; and in fact my honourable friends in another place voted against it. We do not like the prices section of it at all, and we look with a great deal of doubt on the dividends section. The noble Lord, Lord Erroll, pointed out that this was the one section that would be obeyed. It will be obeyed by the payers of dividends because it does not do them much harm. This money finds its way into reserves in one way or another. But from the point of view of the wage earner it does not give a very good image. How to get over this problem I do not know; it is an extremely difficult problem.

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Thirdly, we are not very hopeful of the way in which the Government will use the incomes part of the Bill. As the noble Lord, Lord Erroll, said, it is a muddle. I suppose it could be less of a muddle, but this is one of the difficulties of trying to resolve this situation. It is something which has not been done much before, and probably we are all feeling our way and learning. Nevertheless, when that is said the Government are trying to get wage negotiation at plant level instead of nation-wide increases across the board, and I think that is to be commended. As I say, it is dubious how the Government are going to use the incomes part of the Bill. However, they are trying to go on the lines on which we in the Liberal Party think they ought to go; namely, to get negotiation at plant level and try to avoid the nation-wide increases across the board, which is much the same as a monopoly price ring. If you get the two of them together, a nation-wide increase across the board and another increase at plant level, this is where you get a wage drift which can get out of control.
We accept the penal provisions in the Bill, although I am sure the noble Lord does not. As a matter of fact, they are not very penal anyway, are they? The penalties seem to be remarkably small, and my honourable friends voted with the Government on Tuesday, against the Opposition, who evidently, under the leadership of the Labour ultra Left Wing, moved an Amendment designed to de-dare unequivocally that trade unions are above the law; and hence eventually, and by extension, big business, too. At least that is the only reason I can presume why the Conservative Party should have fallen in behind the leadership of the ultra-Left Wing of the Labour Party.
We have always stood for the control and regulation of great aggregations of power, whether it is the over-mighty State or the over-mighty subject, and we maintain that positive Government intervention on pay and productivity, backed by realistic sanctions, is the proper price for full employment. Anyway, we do not see why wages and salaries should be an exception. If there is going to be regulation for other things why should there not be regulation for salaries and wages as well? And of course this goes for Mr. Hambro, too.
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The Labour Party have been unlucky, but remember what Napoleon said about unlucky Generals: he would have none of them; they were accident-prone, as we would say. I think that if the Government from the beginning had been bold and resolute none of this succession of unfortunate Bills would have been necessary. We might have got the kind of State intervention, the kind of wage negotiations, the kind of growth for which we are all so desperately seeking now. This has not happened. The Government lost their nerve.
My honourable friends opposed the Bill on Second Reading with disappointment and with regret, and, although they have not told me so, I imagine that their regret must be even greater since the Tory Party followed the utterly irresponsible lead of the Labour Left Wing on Tuesday. We do not oppose Bills on Second Reading in your Lordships' House—at any rate, not very often so may I invert, as it were, and welcome the Bill, but also with some disappointment and some regret.
LORD BESWICK: My Lords, may I just say this, in order to avoid misunderstanding? The noble Lord, Lord Erroll of Hale, referred on a number of occasions to the "Monday" Bill. I ought to say that the original understanding was that if the Bill came here from the other place to-night it would be given a First Reading this evening, and we should have a formal Second Reading to-morrow—Friday, not Monday.
LORD ERROLL OF HALE: I am most grateful to the noble Lord, I thought it was to be Monday. I shall have to alter all my diary engagements yet again.
THE PAYMASTER GENERAL (LORD SHACKLETON): My Lords, the noble Lord is always so busy thinking of witticisms that he does not listen. He told us he was in the House, and we announced in the House that it would be on Friday.
LORD ERROLL OF HALE: My Lords, the Bill has not yet been through all stages in another place, and it may not be available for transport from one end of the Palace of Westminster to the other to-day. I think the noble Lord is being unduly optimistic.
LORD SHACKLETON: My Lords, in that case the noble Lord should be very careful what he puts in his diary.
5.5 p.m.
LORD BLYTON: My Lords, I listened to the noble Lord opposite, speaking on behalf of the Conservative Party, and I was nearly in tears at the terrible plight that he portrayed of his business associates: I hope they do not land on the National Assistance Board in the near future. He also referred to Mr. Robert Carr, speaking on behalf of the Shadow Cabinet in another place in the debate on the Second Reading of the Prices and Incomes Bill. Mr. Carr said, speaking on behalf of the Conservatives:
"We are convinced that the people will never tolerate the degree of compulsion required to make the Socialist planned economy work. For that reason, we base our policies on freedom, incentive and competition, and that is why we reject this Bill."—[OFFICIAL REPORT, Commons, 21/5/68, col. 328.]
All my life I heard that philosophy and I suffered under it. One would think that this doctrine will give us the Promised Land. What freedom had we under this doctrine over the years? Always two unemployed men looking for the job of the man inside the factory. And this corrective in our economy was to see a large unemployment market as a stimulus to prevent the employed man asking for more wages, irrespective of what his firm was earning. The freedom we had was to accept low wages or unemployment. What we are being asked by the Conservative Party to do now is to go back to where we were in the 1920s and 1930s when this doctrine operated, with all the inevitable misery that arises from it—people out of work and those in work poorly paid.
What do the Conservatives mean by incentives? Is the incentive they have in mind a margin of unemployment sufficiently high to keep trade unionists not only in a state to fear the loss of their job but to be content on low wages? Competition is another of their cures. I know that the more monopoly there is the less competition there is; and that is the main purpose of monopolies. Under this doctrine of competition the working people had their wages pulled down to a very low standard, on the basis that costs of wages had to be reduced to allow us to compete in the international world. We had well over a million
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unemployed; unemployment benefit was reduced; means tests were introduced; sons left home so that their parents could get some assistance. As trade unionists we were crippled by the Conservatives under this policy, and we were very weak. The whole State apparatus was used against us, and the repugnant Trade Disputes Act was brought in against us.
So, my Lords, I say to my trade union friends outside the House, "Do not be misled by the Conservatives' sudden interest in you to-day; you will know about it if they get power, which is all at the present time they are concerned about". So far as I can discover, the Conservative policy on trade unions will be more severe than anything proposed in this Bill. You will probably find that a man going on unofficial strike will be penalised, and in some cases, if damages are awarded in the courts, trade union funds will be attached.
It must also not be forgotten that the Conservatives operated a wages freeze when the right honourable gentleman Mr. Selwyn Lloyd was Chancellor of the Exchequer. There was no free negotiation then. Nobody got anything. There was a real clamp-down on wages. In the public sector those running the machinery for increasing wages were told by the Government of the day (the noble Lord opposite, I believe, was a member) that the Government would not pay any increased award made by the machinery. And I never forget the nurses, who in those days were poorly paid, demonstrating in the Central Lobby and being offered 6d. per day. They had done wonderful work for the nation, but the Tory Party gave them no sympathy. In the private sector, employers followed the Government's lead. Unrest followed, and unemployment reached a high level. So to all trade unionists my advice is: do not go back with the Tories with their free-for-all policy, or you will find, like we did, that the weakest—that is the lower paid man, and those on fixed incomes, like old-age pensioners—will go to the wall.
The Government to-day are attempting to maintain full employment and at the same time bring about the economic survival of the country and end the crises we have faced since the end of the war, no matter what colour the Government may be. The increased benefits we want

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for our people, and their social wage can come only from increased productivity. We all know that it can come only from that, and also we know that we cannot afford huge increases in wages if we do not earn them nationally.
In a free-for-all the strong unions will get the wage increases while those who are not organised will be at the end of the queue. At least this Bill tries to bring a little order into that position. I believe that this Bill will give the lowest paid workers a chance, where possible, to close a little the gap in industry in the margin between the highest paid and the lowest paid.
For years, our Party has believed in planning. Planning does not mean just control of industry, the location of industry or regional development. It means also having a policy and having a plan, and having an attitude to dividends, profits, rents and to prices and incomes. We cannot divide prices from incomes—they are inter-related. If prices are kept level then the demands for wage increases will be fewer. I am pleased therefore that the Bill intends to deal with prices.
The Bill is intended to deal with unnecessary price increases. One of the strongest arguments for the powers of the Bill is that for the first time the opportunity is given for the Government to require price reductions as well as stabilised prices. I know that there is great feeling in the trade unions about the powers of the Government under this Bill. I have some sympathy with their views, and I understand their feeling. They say that the T.U.C. shares the aims of an incomes policy, and that they should be left to operate their voluntary policy without any reserve powers by the Government.
The T.U.C. cannot give an assurance that its vetting machinery can work, and certainly would not claim that it can make unions accept what they do. One remembers at the Conference of Trade Union Executives at Croydon the size of the majority in favour of the Economic Statement and the size of the opposition to it. This does not give any absolute assurance that the T.U.C.s policy of voluntary vetting can be made to work properly in the circumstances.
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Until assurances can be given tint the policy can be made to work, the Government's view is that statutory backing is required.
The Bill is to apply for 18 months. It is my sincere hope that the T.U.C. vetting policy will be successful and that the statutory powers contained in the Bill will not be needed. But we hive to face the fact that the T.U.C. machinery is not yet strong enough to work without these powers, as some unions reject T.U.C. vetting policy. After all, since 1964 under the Incomes Bill there have been no prosecutions, there have been no fines and no one has gone to prison. I regard these powers as reserve powers for minorities who can make it difficult for the majority.
How can trade unions deal with anyone who goes astray on their vetting policy? Again, I heard the noble Lord opposite poke fun at the voluntary system of the Bill. Surely he must know that a policy of this kind cannot work if the people involved refuse to operate it. Therefore, we must be dependant upon the support, the good will and the cooperation of the trade unions. Most trade union leaders will seek to expand real incomes and go for a stable economy. The powers, therefore, are to ensure that, because the Government need the support of the trade unions, and the acceptance by them of these powers, leap-frogging by unsympathetic minorities is dealt with.
There is another matter which ought to be cleared up. This is not a Bill to establish a wage freeze or a 'wages clampdown. Paragraph 34(1) of the White Paper makes provision for productivity agreements. Sub-paragraph; (2) and (3) make clear the position where existing wages and salary levels are too low to maintain a reasonable standard of life, and also where there is widespread recognition that the pay of groups of workers has fallen behind. The White Paper at page 9 spells out that there can be above ceiling increases for low paid workers, under a settlement which, through covering a wider group of workers, is within the ceiling. I believe that this will protect thousands of people who, in the past, have always come off worst; namely, the lower paid workers.

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None of us who have lived our lives in the trade union movement relish these powers, but one has to ask: can the T.U.C. do it by themselves? The answer is, I think, No; not until they are unanimous that a prices and incomes policy is essential to our economy, and the trade unions themselves will accept the T.U.C. General Council's decisions in relation to vetting policy. The fact that the powers have never been used or invoked, and that it has never been necessary to make an Order requiring statutory notice of a pay or price increase, shows the success in the past of voluntary notification. It is because of this, and the fact that the Government will not, I believe, go out of their way to penalise or cripple the trade unions, that I support the Bill.
It must also be remembered that the Declaration of Intent on Productivity, Prices and Incomes is still valid. It was signed by everyone who had responsibility in industry, trade and commerce. It was signed by the chambers of commerce, the British Employers' Federation, the Federation of British Industry, and the National Association of Manufacturers (as they were at that time), as well as by the T.U.C. and the Government. Up to now, none has repudiated or renounced that Declaration. We know that the Conservative Party did not accept it, although while they had power both Mr. Selwyn Lloyd and Mr. Maudling always said that an incomes policy was necessary to the economy.
No doubt in all this controversy the Conservatives expect to make political capital out of the differences that exist in the trade unions on this issue. I would advise them, "Do not bank on this too much. The trade unionists have long memories of how they were treated by Conservative Governments over the years, and when the Election comes, in two and a half years' time, you will find the trade union ranks will have closed." I can never imagine trade unionists regarding the Conservative Party as their saviour.
The other Part of the Bill deals with powers over prices, dividends, and rents. During the last two years the Government have begun to strengthen their watch over prices. They have had co-operation from manufacturers, and a watch has
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also been kept by the Ministry of Agriculture over food prices, with some success. But I urge the Government to be more watchful over prices, rents, and dividends. Increased prices and increased rents create demands for wages. And at the same time, regardless of what the noble Lord opposite said, if high dividends are paid while the worker is kept to the ceiling under the White Paper, it will turn him against any idea of cooperation in a productivity, prices and incomes policy.
The choice, as I see it, is whether we should try to have a planned economy, living within our means, and the end of free-for-all in trade union negotiations, or the Tory Party returned to power with its policy of freedom, competition and incentives, which we all have lived under. My choice is to support the Government and not to return to a state of society of years ago, when a person was a hero to live in it, when we had competition, so-called "freedom", on unemployment benefit, hunger, and the incentive of "the sack" if we asked for more wages. I do not believe for one moment that even those in our Party who are critical of the Bill will accept this Conservative doctrine that has been put forward. Because I believe that the Bill is necesary, it will will have my support.
LORD SIEFF: My Lords, before offering my contribution to the debate, I think I have first to declare an interest. For over fifty years I have been connected with a large retail organisation. Throughout this time prices have been my constant preoccupation. Hardly a day passed in which I did not have to wrestle with rising costs and the results of increased taxation. I had to devise ways in which these could be offset by higher productivity in manufacture or distribution.
Now we have heard a great deal about a "prices and incomes policy" and about "productivity". There are people who might be under the misapprehension that these concepts have just been invented. I do not need to tell your Lordships that this is not true. I recall that as far back as April 30, 1930, Mr. William Graham, the Labour Minister for the Board of Trade, introduced a Consumers' Council Bill in the other place. This was to enable the Board of Trade to regulate by

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Order the prices to be charged for certain commodities, and to investigate all questions relating to the production, distribution, supply or price of any commodity.
I must say that it is to the credit of the Labour Administration that, having learned from the lessons of the war-time and post-war controls, they do not even contemplate a detailed regulation of prices. We are all too sophisticated today for that approach. The Prices and Incomes Bill, which is the third one in succession, has a long ancestry. Like all its predecessors it was born out of temporary predicaments and its life span was always and will always be uncertain. Its temporary powers are certainly very vague indeed.
My Lords, prices and incomes actually control economics and business. It is what they mean. This is what directors, executives, merchants and public administrators are concerned with. Take out this preoccupation with the right price for the right product, with the right reward for the right job for the right man, and there is no real problem left at all. The success of a business, the efficiency of public administration and the economic prosperity of the country depend on the soundness of the decisions concerning mainly prices, incomes and margins. That is true, and it is also true that the public discussion and the legislation we are debating show that there is now a dissatisfaction with the state of our economy. We must, however, be careful to attack the cause of the disease and not the symptoms. We must not upset those parts of the common economic body of the nation which are healthy and working well.
My Lords, who is to decide the right level of prices, incomes or margins? These problems do not arise in a vacuum. Prices which are not related to quality are meaningless figures. Earnings must be taken in the whole context of human relations, welfare and personal involvement. Distributive margins depend on the functions performed by the retailer, both in quality and in scope. In the last four years the official policy towards retailing has been motivated by intellectual prejudice, if I may say so. The theoretical justification of the selective employment tax, enshrined in the Cam-
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bridge University Inaugural Lecture, has now passed into folklore. But the selective employment tax remains and is to be raised in the autumn, as your Lordships know, by 50 per cent. A new, complementary thesis of cash margins has now been accepted by the Government. This states that the cash margin in distribution should remain unchanged when the price goes up. Of course, the cost of goods for special reasons may rise much faster than that of distribution, but sometimes the opposite is the case. As a general principle there is no more reason for percentage margins to be lowered when prices are increased than for margins to be increased when prices are lowered. In the latter case, the opposite is more likely to happen.
My Lords, even a first-year student of economics does not believe in the concept of "economic man", whose life is motivated by gain. Yet many people who should know better believe in the concept of the "shrewd business man" who will do anything for quick profit. Where these people exist in real life they are not very impressive or successful. The great majority of business people have a long-term business objective; namely, to promote growth. They have to exercise prices and incomes control within the constraints of the changing market situation. They have to ask themselves some basic questions. What do the customers want? How can their requirements as to qualities and prices be met? These are the central problems which face the retailer. As I have said, I have, along with my colleagues, asked such questions and had to find the answers over five decades.
Our approach has been to study the customers' needs for goods where we have mastered special marketing and technical expertise so that we can offer exceptional quality and value. Specifications and costings are worked out jointly with the producers, and are based on large turnovers and continuous production. A high volume of sales, boil for home trade and for export, is essential to generate greater productivity and lower prices. But in almost all cases our technologists and production engineers make further contributions to improved values. Higher costs and taxes are absorbed, and whenever possible prices are lowered and quality value increased.

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To be attractive to the customer, the price point must be compatible with the highest quality attainable, and must cover costs of manufacture and distribution. Naturally, the retail margin must take into account the cost of writing down prices where, for one reason or another, goods fail to sell. And fashion, weather and women are notoriously fickle. Allowing for such special circumstances, all goods should make their contribution to profits. No article should be promoted at the expense of others. In fact, the customer decides what is purchased. Indeed, long-term growth of a retailing business is truly consumer-orientated.
There is another important consideration. Margins should be set at the level which, allowing for stringently controlled expenses, will result in the net profit required to provide a long-term and continuous growth of business. Where there is lack of continuity the long-term objectives suffer. Perhaps our debate to-day and the Prices and Incomes Bill are a clear example of this happening before our eyes. I do not claim that all businessmen are following long-term policies and that these are all in the national interest. There is waste and inefficiency in many places. There are businesses which, through inefficiency or lack of vision, are in need of practical advice. Good advice is seldom entirely wasted, though I know from experience that what people need is not norms, ratios or blueprints but the understanding of how to go about their task. Of course it is true that there are businessmen who are not prepared to accept advice.
For instance, the Government could well look again at the area which they directly control: the nationalised industries and the whole of the purchasing in the public sector, accounting for nearly one-half of national products. Are these goods and services well purchased and well distributed? What are the margins, and are they growing? The Civil Service is a kind of margin on national resources. It is costing the nation nearly £600 million in pay bill alone, an increase of 28 per cent. in four years.
The Prices and Incomes Board was established with more manageable terms of reference than the abortive Consumers' Council of 1930. It is to its credit that an impressive volume of reports have been
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published, and a body of consistent theory which places emphasis on productivity. Yet essentially the problem of regulating prices is as insoluble to-day as it was in 1930, 38 years ago. If I may use a mathematical concept, the Board is still grappling with the answer to an equation with too many variables. Without fixing prices, margins or profits, how can one regulate the relationship between them? If we do not know whether the price was originally too high or too low, how do we know whether the change is justified? If we cannot say what is the right level of profit, how can we justify a change in prices or margins to preserve it? But, my Lords, what is the right price, the right margin or the right profit?
The Prices and Incomes Board, to its credit, has from its inception endeavoured to lay considerable emphasis on productivity rather than get involved in these abstract considerations. A greater understanding of the relationships between productivity, prices and incomes is, of course, important. But to many businessmen who often have to walk a tight-rope between profit and loss words of encouragement, advice or command, as it were from the ground, are of little help and can be a handicap in their balancing act. My Lords, I am in favour of anything which will make our country more efficient and will remove obsolete ideas and attitudes in industry. I believe that in business, as in government or politics, one should put national and community interests first. But it is in our national interest that commercial and technical decisions are taken by men on the spot in the light of their knowledge and experience.
5.37 p.m.
LORD CHAMPION: My Lords, if anything would justify the continuance of this House it is surely the last two speeches to which we have listened, one by an eminent trade unionist who knows the difficult problems from a particular angle, and the other by the noble Lord, Lord Sieff. It is not the first time that I have followed him in debate and every time I have listened to him with the care which the position he holds as the head of a great retail organisation justifies. I can only say that if all businesses and labour relations were conducted as they are conducted in the organisation over which the noble Lord still presides, I do

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not think that to-day we should be discussing a third Prices and Incomes Bill.
This is the third time we have had such a Bill before us—one each year, as we have been reminded. We have been told that this Bill is intended to run until the end of 1969. Unless a miracle occurs, in June or July of next year we shall again be discussing a Prices and Incomes Bill. I cannot believe that an annual Act of this sort is a good thing for the nation or for Parliament. I believe that the Government ought to have taken the bull by the horns and to have made the decision that a Bill of this sort, when it becomes an Act, should run until at least the end of 1971. Clearly the difficulties which this Bill sets out to deal with cannot disappear by the end of next year. They can disappear only if, by some awful mischance, some great evil, we have sudden, massive unemployment. That is the only way it could change within the period to such an extent as to justify not having some control between now and 1969, the period for which the Bill is intended to run. I believe that the Government could, without any greater difficulty than they have had to face from their own friends and others, have introduced a Bill which would run for at least the period I have mentioned.
We are to-day discussing something that is the accompaniment of a great good namely, full employment. On the wages and salaries side—and I shall deal chiefly with that side—it arises from the tremendous power that full employment places in the hands of the trade unions. For at least a century these trade unions have been extremely important bodies, but in conditions of full employment they have in some ways become the most powerful bodies in the land. It is surely a truism to say that these powerful bodies have a responsibility to society as a whole at least equal to their responsibility to their members. That is a nice easy phrase, which embodies a truth which is capable of complete acceptance when it applies to the other trade union officer or his union, but it is far from easy of acceptance or implementation when you or your union are involved. Only those who have experienced the pressures that build up behind trade union leaders, officers, executives, know how hard it is to resist those pressures. They come from people
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who pay them. They also come from people whose future depends on you and whom you are determined to help.
I believe that the time is certainly here when we have to do again what the First Secretary of State said, and that is to assist the trade union officers in the work they have to do by a Bill of this sort, which is a checking Bill. As Mrs. Castle said, it is a matter of statutory underpinning. Without something of this sort, some element of compulsion, the leap-frogging, the playing off of one union against another and one industry against another, will inevitably continue unchecked. This is what our experience has taught us. Surely everybody who has ever looked at this subject from any angle, and knows something about it, realises this. So no one should make any mistake about its importance and about how understandable it is that trade union officers find it difficult to work a wholly voluntary system.
I think of what my attitude would be it I were a railway driver at this moment, imposing certain restrictions on the use of me and my time by my employer—your Lordships will notice that I do not use the term "working to rule", because I am firmly of the opinion that railway-men ought always to work to rule, and if the rules are wrong and by working to them the system becomes inefficient then they should be changed. Incidentally, when I was a railway signalman I always worked to rule so far as it was humanly possible, simply because I realised that the rules were devised and designed to protect the people who were temporarily in my care when they were passing my box or approaching it. But, as I was saying, if I were a railway driver responsible during long periods of my working; day for the lives of 800 or 900 people behind me, I could not remain unaffected in my attitude to my wages when I see that B.O.A.C. pilots are said to have turned down a wage increase of £1,500 a year and that the lowest paid of them gets some £100 a week. I am bound to say that I should be asking myself, "Why should I be content with a 3½ per cent. increase provided that I accept a productivity agreement?"
I am not saying it is right for the N.U.R. and A.S.L.E.F. to be taking the action that they are taking at this time, but I can understand it. I can understand the pressures, the feeling of "Well,

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if they are getting this, why not me? Why can't I get a bit more?" Incidentally, the noble Lord, Lord Erroll of Hale, talked about the Hambro's £4,000. I should think a little about that, too. Of course it is bound to come into my consideration. I do not care whether it is Hambro's or whoever it is. If these things are happening, why can I not share in them? That is the attitude adopted by most trade unionists that I know, and understandably so. Much of what I have just been saying is perhaps by the way, but it is all part of the problem posed by our discussion of the Prices and Incomes Bill.
I cannot accept the saying which is popular in some parts of the Labour movement that an incomes policy is imposed upon us by our creditors, the so-called "Gnomes of Zurich". The fact is that the restraints of an incomes policy are imposed upon us by the hard irrevocable fact of our economic relationship with the rest of the world. In that relationship the root of our problem is not that our wages and prices have risen faster than those in any other industrialised countries, but that output and productivity have risen slower in this country than in most comparable countries. I believe that we could become a very high wage economy if our production were brought up to the best in the world.
I prepared these words yesterday, but when I read this morning's Press I was glad to find confirmation of them in the statement taken from a book by 11 distinguished economists of the United States and Canada, in which they told us that our industrial efficiency is low compared with that of our competitors. The striking figure to support their charge about us is that if American efficiency is rated at 100, these economists rate British efficiency at 66. If we could only close that 34 point gap, what a vast difference it would make! We should not be worrying about the policy that is before us at the moment. We should be enjoying the fruits of it, or at least those who do the work of the country would be enjoying the fruits of it. Given an improvement in managerial standards and real co-operation between management and men, a really high wage economy is capable of achievement in a few short years. That seems to be very much what the White Paper and this Bill are saying to
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trade unionists and others; that is, "Demonstrate clearly that you are prepared to make a real and not a phony productivity agreement, and the money will soon be in your wage packet". That is how I understand it.
I was going to talk about the two systems of negotiation mentioned by the Royal Commission in its Report; that is, the informal system and the formal one. I shall not speak at any great length upon this subject, except to say that it is quite clear from the Report that the informal system of collective bargaining, as they call it, is to some extent causing the runaway of earnings that is causing some of the difficulty which we are talking about to-day; not so much the formal, nation-wide agreements, but the agreements that are taking place at shop level. I would only say about this, and I say it to my noble friend who is going to reply and to the Government, that they must watch this aspect of the matter. Those of us who work in industries which have only nation-wide agreements are not for ever going to be content to see other industries and trade unionists getting very much higher earnings, purely as a result of this informal system of bargaining.
I should just like to mention the dividend point, which was referred to by the noble Lord, Lord Henley, and the noble Lord, Lord Erroll of Hale. I know that this is something which is worrying some of my trade union colleagues. Speaking of company distributions to shareholders, Mrs. Castle said at column 312 of the Commons OFFICIAL REPORT on May 21, 1968:
"That is why the Chancellor announced in his Budget speech that the 3½ per cent. ceiling for increases would apply to dividends as much as to wages and salaries".
What we as trade unionists see is this: that if a possible dividend increase is withheld by a company in one year the money is either ploughed back into the undertaking, which has the effect of increasing the value of the shareholders' property, or it is placed in such a position that it can be distributed when the climate is a little kinder. That is felt by many of my trade union colleagues to be so unfair as to cause them to say to themselves: "Why should we, when they don't? If I am deprived of a wage increase for 12 months it is lost for ever; but if a dividend increase is withheld and it is ploughed back into my undertaking,

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then, as a shareholder, I shall get it eventually, either as a capital distribution or as a cash dividend when the time comes".
There is much more that one could say about this Bill, but I am bound to end by saying that, despite expressing some doubts about some aspects of the policy that we have before us, I see no alternative to it at the present time—and here I completely support my noble friend Lord Blyton. We in the trade union movement know of the difficulties of some of these things when they have to be explained at branch level; when we have to explain away some of the things I have been talking about. There is no alternative at this time, and I join with those who have given this Bill a welcome and hope that it will succeed as it ought to succeed.
5.52 p.m.
LORD MOLSON: My Lords, I think that the Government are right in claiming that this is a very courageous measure intended to give effect to their economic policy, but I was very glad that two spokesmen of the trade union movement, Lord Blyton and Lord Champion, looking at it from the trade union point of view with an enlightenment which I think is becoming widespread in that movement, are coming to realise that it is in the interests of the workers themselves that there should no longer be a complete "free-for-all", with those who are in the strongest bargaining position obtaining the largest increases. When the criticism is made that compulsion runs all through this Bill, it seems to me to be reasonable to have compulsory powers in reserve, even though one recognises that if it is to work satisfactorily it is essential there should also be a voluntary system.
My noble friend Lord Erroll, when he was speaking and deprecating the compulsory powers that apply as regards dividends, complained that if he or any company was not prepared, as he said, to "play ball" there was the compulsory power in reserve. My Lords, surely that is eminently reasonable in dealing both with wage negotiations and with dividends. If it is possible to get agreement, well and good; but it surely would be most unfair that those who are willing to "play ball" should accept the disadvantages of this policy and those who are not prepared to "play ball" should
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get the advantage. Therefore, much as I dislike in theory the idea of compulsion, and fully as I recognise how far preferable a voluntary system is, I can see nothing at all unreasonable in underpinning a voluntary system with compulsory powers. Indeed, I would say that it would be impossible for any voluntary system to last for long unless there were compulsory powers.
In the very remarkable speech that we heard from Lord Sieff, with his 50 years of experience of business and, as other speakers have said, his responsibility for an organisation which has been of immense value in raising the standard of living of everybody in this country, he expressed his natural doubts as to how effective these calculations could be. I am quite sure that he is right in expressing doubt whether it is possible for anybody, however wise Mr. Aubrey Jones and his colleagues may be, to arrive at anything which is theoretically perfect, but I believe that it may very well be useful for there to be some independent body which looks at matters front the point of view of the consumer. I think we must entirely reject the idea that the benefit of the nation is necessarily going to be assured if there is bargaining between capital and labour. There is only too much evidence in the last fifty years that when capital is organised, on the one hand, and labour is organised, on the other, it is possible for them to come to arrangements which provide for high wages for the workers and high profits for the employers but that that is obtained at the expense of the public as a whole.
I have for long believed that it would be necessary for the Government to intervene in the general interests of the consumer as a whole, and in a few words I should like to say why it is that I feel that what you might call the classic economic system of Ricardo, even if it worked 150 years ago, cannot be ralied upon at the present time. There is in fact at the present time no free negotiation with regard to wages. There is never a reduction in wages: there is never even a reduction in earnings. The monolithic organisation of the trade unions means, as the noble Lord, Lord Champion, pointed out, that in a great many cases you have exactly the same wage all over the country, and that has had a great deal to do

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with the creation of depressed areas, where the costs of production may be higher than they are in other places. In the classic economic system, that was taken into account by the wages that were negotiated. At the present time the same wages are being paid in, for example, Northern Ireland as are paid close to the great markets of England, and it is largely for that reason that there is so much unemployment in Northern Ireland.
We all are resolved that there shall never be a return to the high unemployment that there was before the war, but that does not mean that it is possible to run an economy without a sufficient reserve of unemployed labour to provide the labour that is needed for new enterprises and for expansion. If, every time that there is a new enterprise and new expansion, labour can be obtained only by inveigling it away from existing concerns, there will be the same kind of spiral of wages which has been taking place ever since the war and which, with the rigidity of the cost system in this country, was the real, underlying cause of devaluation.
To what extent are we taking advantage of devaluation? I am bound to say that, some six or seven months after devaluation, many of the symptoms are extremely alarming. One would have thought that after devaluation of nearly 15 per cent. the pound sterling would be pressing against a new ceiling. Instead of that, the day before yesterday it reached the lowest point at which the pound sterling has ever been, and unless there is a great and sudden improvement, which we all hope for, then indeed the outlook for the future is extremely serious. I hope and believe that this Bill which the Government have introduced is a clear indication that they are prepared to take a firm line in order to try to ensure, not that wages shall not go up—we hope that with increasing productivity they will go up—but that the costs of production of what we have to export shall not only not rise but (and this is essential if we are to pay off the vast debts that we have contracted during the last few years) shall come down.
I believe that this Bill cannot possibly be one hundred per cent. effective in its administration; but I believe that it is of the utmost importance that the
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Government and Parliament should indicate that this is the policy which is going to be adopted. There are already indications, in the case of the railways and of B.O.A.C., that the Government are taking a firm and, I believe, a thoroughly wise and statesmanlike line. Even more serious than these matters is the claim, already in the pipe-line, for a great increase in engineers' wages; and engineering, after all, is the basis of the greater part of the exports on which we all depend. I therefore believe that, in its general principles, this is a necessary and wise Bill, and for my part I shall certainly support it.
My Lords, I am bound to say that I do not agree with Part III. I think it is quite unnecessary to bring in these restrictions upon increases in rates. I have said that the Government's Rent Act of 1965 was a courageous measure. It has been working well. Answers given to Questions on this subject that my noble friend Lord Kinnoull and I have put show that it is working as well as it was expected to work. I think it a great mistake to interfere, as this Bill does, with the working of that measure. I am quite sure that on a sound rent basis depend not only improvements in the housing of this country but also a limitation on the ever-increasing expenditure of local authorities and of the Government.
I do not in any way criticise the powers that are being taken by the Government to control in some measure what is done by the local authorities in the matter of charging rents. I have tried in the past to persuade Conservative Ministers of Housing to introduce legislation (I see that my noble friend Lord Brooke is in his place: I urged it upon him when he was Minister) which would prevent the subsidising of tenants in good, modern council houses at the expense of the ratepayers, many of whom are in houses which they own and most of whom are in houses that are inferior to those which are being subsidised. It would have been far better if the Government, when adopting this measure, had taken powers also to insist upon a proper increase in rents in the case of those local authorities who choose, as I think most unfairly, to subsidise the rents of the more fortunate tenants at the expense of those whose accommodation is inferior and often more costly.

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Generally speaking, therefore, I support this Bill. I hope, however, that it may be possible at some later time for what I regard as the serious defects in this measure to be dealt with by comprehensive legislation.
6.5 p.m.
LORD ROWLEY: My Lords, the economic problems with which this Bill seeks to deal following the Prices and Incomes Acts of 1966 and 1967 are not economic problems which originated three, four or five years ago, or even during the 13 years of Tory rule. I must say that I was a little disappointed that the noble Lord, Lord Erroll of Hale, who made the opening speech for the Opposition, should have marred what I thought was an otherwise constructive speech by having a go at the Government and referring to the pass to which the present Government had brought our nation economically. This problem did not begin in 1964, or even in 1951 when the Conservatives took over: the problem has been with us for more than 50 years.
I am old enough to remember the time when I was a student before World War I. We then had no problem of trade deficits. It is true that our visible imports exceeded our visible exports; but we were able to balance, by the interest we received on something like £4,000 million of overseas investments, our maritime insurance and our freight charges. That was the position prior to World War I. During World War II we had to hypothecate all those overseas investments to pay for the supplies that we needed to carry on our war effort. During the inter-war years we were able to manage, except for occasional crises, without running into trouble on the foreign exchange as a result of a trade deficit.
But, of course, during all this time we were glad to know that the standard of living of our people was beginning to rise. It is true that during the inter-war years the policy was largely one of deflation, with unemployment reaching an average of something like 2,000,000 a year and with social economic injustices throughout the land which none of us would ever wish to see return. Then we went into World War II; and I doubt very much whether we could have carried on from the economic viewpoint if it
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had not been for the Lease-Lend project that was thought out and put into operation by President Roosevelt.
After World War II, some of us on these Benches remember the £1,100 million loan that was made to us by the United States, and the gift of 1,000 million dollars from the Canadian Government as a token of their appreciation of the great services our country had rendered to the freedom of the world. Ever since World War II we have had these recurring crises which we sought to manage by "Stop-Go" or by loans from the so-called "Gnomes of Zurich", from Washington or from elsewhere. And we have managed to stagger along with these recurring crises.
But, again, since World War II the standard of living of this country has gone up to such an extent that it is probable that we have to-day the second or third highest standard of living in the world. I was reading the other day a speech delivered in July 1957 by the then Prime Minister, Mr. Harold Macmillan, in which he said that most people in this country had "never had it so good". In a sense that was true. There were more motor cars, more television sets, more radios in the homes and more people owning their homes, than ever before. In a sense, therefore, it was true. But I have always regretted that statement, because I consider that it fostered a feeling of complacency and a false sense of economic security throughout the length and breadth of our country. It is true—and I wont to be fair about it—that Mr. Macmillan said in the same speech that the problem of the day was inflation. I agree that it was the problem of the day in 1957; and it is now in 1968. Mr. Macmillan's remedy, as those of us who were in the other place at the time know full well, was increased production.
Well, my Lords, presumably there were industries where, as a result of the appeal of the Prime Minister, there has been increased production. But all along during those years right up to the present time the trade deficit was mounting, until in 1964 it was something like £750 million a year. To-day, in spite of the efforts of the present Government, it is something like £400 million to £500 million a year. That is the problem which our country has to solve. We can have

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all our domestic arrangements, but we have to face the fact that we have been living, in one sense, beyond our means. I do not believe that we can blame the "Gnomes of Zurich" or Wall Street, or even the City, if we get into these recurring crises. Eventually the responsibility will rest fairly and squarely on the shoulders of every one of us who belongs to this great British nation.
Like other noble Lords I fully support this Bill. As I have tried to point out, I think we have to look at the international position and our vulnerability as an island. Apart from Japan there is no island community in the world which is so vulnerable to the economic tendencies and trends as is this island. We have to import something like 60 per cent. of our foodstuffs and 70 per cent. of our raw materials, and I know of no other nation in the world which is in the same position, except Japan. The United States, Germany, France—none of these industrial countries has the same threat to its standards of living that we have.
I agree with my noble friend Lord Champion that our workmen may be compared with the workmen of any other country in the world. But we read statements made by visitors to this country, and it may be quite right for them to calculate that our industrial efficiency is only 64 per cent. compared with 100 per cent. in America. I believe that it would be possible for us to increase our efficiency and productivity. If we do not, we shall be in a very serious situation.
I understood the noble Lord, Lord Sieff, to be sceptical (and so was the noble Lord, Lord Erroll of Hale; he is not in the Chamber, but I think this was his point) about the possibility of controlling prices because the prices of such a wide diversity of articles are reflected in the cost of living index. He said that the Government could make their contribution by, for example, reducing purchase tax. I would ask my noble friend who is to reply whether the Government are satisfied that the powers they are taking in Clause 4 of the Bill will be adequate and strong enough to enable them to control prices. I do not believe that it is any good expecting the workers of this country and their wives, to accept restrictions on wages if prices get out of control. I refer to all workers, whether
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by hand or by brain, because it applies to us all. I can think of nothing more likely to open the floodgates to wage demands and increases than an unrestrained increase in prices. With all respect to the Government, I believe that to be the crux of this Bill. Are the Government going to be able to control the prices of everything necessary for the welfare of families in this country? If that is not possible, I think we have a bleak outlook ahead. Time is running short. I believe that the next 18 months will be crucial. I believe that the position for this country will be desperate if we are not able, more or less, to wipe off this trade deficit during the next 18 months or two years, and I earnestly beg my noble friend who is to reply for the Government to reassure us, if he can, that the Government are satisfied with the powers they are taking to control prices.
My Lords, may I say in conclusion that I think we have to put Party politics on one side for the time being regarding our economic future. I believe that the future of our country is at stake and that it is the responsibility of us all, whatever may be our political views, not to stand back, but to do everything we can to strengthen the Government in their attempts to restore our economy. I believe that the historian will pay tribute to the courage and determination of the present Government who, for the first time in the history of this country, have taken an unpopular line. We all know from the by-elections that the Prices and Incomes Policy is unpopular; but in spite of that unpopularity, they are going ahead with this policy because they believe, as I believe, that there is no alternative.
6.19 p.m.
LORD DOUGLASS OF CLEVELAND: My Lords, I should like to take up some of the history from where my noble friend Lord Rowley left off. He went well back, but I shall go back to 1960–66. It was during this period that the need for action was made manifest. Earnings went up at that time by over 45 per cent., and industrial output by under 20 per cent. I say to noble Lords opposite who, I think, are opposing this Bill—I am not quite sure—that this happened during a period when they were in control. If, as Mr. Robert Carr said in another place, they believe in high wages, high profits,

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high dividends and high productivity—I felt that he was a high-flying man when he went on to all these things—it would have been interesting if they had shown some willngness to take action during those years. After all, profits were high. Dividends were high. And under the Conservative Government of that time they could be paid out. The noble Lord opposite would not have had any bother about it—not even about the 48 or 50 per cent., about which he was talking. But during that time wages dropped to the lowest in Europe. if the Conservative Government believed in high wages, why did they refuse wage demands put forward? Actually, the T.U.C. was asking for wage restraint in order to help the Conservative Government to make a success of the economy. The response was high profits, high dividends and low wages.
When the noble Lord, Lord Erroll of Hale, expressed sympathy with Mr. Hambro, my heart bled for him. I wonder whether that increase went before a vetting committee of the employers, as a wage claim would go before the vetting committee of the T.U.C., and what they said about the question. I hope that in his reply my noble friend Lord Shackle-ton will give the noble Lord the assurance that the next time engine drivers get a £4,000 increase we will submit it to the vetting committee under the prices and incomes policy, whether it is an individual or a collective increase. I thought that the noble Lord brought this debate down to a fatuous level by arguments like that, Indeed, his flippancy was such that I was going to compliment him. I wish he had stayed, but no doubt he has left to appear as a comedian on the B.B.C. No doubt he will be as successful there as on those Benches. This is not a subject for flippancy. It concerns the future of the country, whichever Government is in power.
I have been associated with the construction of this Bill since it started and I should like to have a look at how it started. The Conservative Government had their problems, and the T.U.C. met them from time to time and argued with them about what should be done to get this country out of the economic mess we were in. That was when Mr. Macmillan was saying, "We never had it so good". To say that, when we were battling with a trade deficit and balance-
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of-payments problems, was the reverse of the truth. If the noble Lord, Lord Erroll of Hale, thinks that this Bill is a "Shepherd's Pie", I think that the idea they had at that time was cold potato. It was the "Three Wise Men", who were to decide what was good in the interests of the nation. But what is the nation? Is it the trade unions or the employers or the bankers, who are doing pretty well at the present time with a 7½ per cent. bank rate? That was what they had to offer the T.U.C. at that time—cold potato.
Then they came forward with a good idea, which was promptly taken up, as are all good ideas from wherever they emanate. It was suggested that we should have a National Economic Development Council, on which would sit the employers, the Government, the T.U.C. and individuals who could be expected to contribute to the discussions and to the solution we were trying to find. The Conservative Government started off the idea that a combined effort should be made by all concerned, irrespective of class, in order to find a common solution to the economic problems facing the country. It was an acceptance of the fact that urging greater productivity had not succeeded in pulling the country out of the mess. Exhortation had come to the end of its tether because it had been unsuccessful.
The question was asked: what do we do? And from the employers came the answer: unless the trade unions controlled wages, unless wages were prevented from escalating as they had been doing over the past ten years, then; was no hope for the economy of the country. The T.U.C. retorted by talking about profits and prices, and we agreed that we would not only look at this problem but deal with it, because we knew there was no future for this country unless we did. These things are not easy to get over to the ordinary man and woman in the street, particularly when the effort to control prices was not responded to from the employers' side. Prices are difficult to control, but would the Government not have been better able to control them if the C.B.I. had set up a vetting committee to give a lead, like the T.U.C.? What lead did they give in the control of prices? They said that it was not possible. If we had had a vetting committee

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on the other side, we should have had discussions between the T.U.C. and the C.B.I. which would have been much more profitable for the future of the country. If we now must have legislation to deal with prices, whom should we blame? Do we blame the Labour Government or "Neddy", where the idea was first conceived, or do we blame the people who were really responsible?
When we are dealing with trade unionists we have a human problem. Most trade unionists follow the lead that is given by the shop stewards and the officials above them. I can remember many years ago, in an enthusiasm for education, arriving at an arrangement with an employer to have an education officer in the works who discussed not only vocational education but anything else he liked, including Communism, and that was written into the arrangement made. After two years I went back one day and asked the employer why he was looking so sad. He replied, "I have just been talking to that gang of steel welders and I put a problem to them. The answers they gave were so foolish that I told them, 'For heaven's sake, why don't you think?'. 'What do you think we pay trade union officials for?', was the reply". That shows the burden which trade union officials, from the shop steward up to the general secretary, are carrying at this time. They have to convince their people that the activities they are engaged in are for their good. That is not easy while we are restraining wages.
In order to learn what was happening on the wages front throughout the world we moved about a bit. I have not time to tell you all that I learned, but I will tell you some of it. I went to Sweden in an unofficial delegation. We met the Swedish T.U.C. and the Swedish Employers' Association and discussed their methods of dealing with economic problems. Quite simply the Swedish T.U.C. decide each year how much they think the country's economic situation will allow for wages, how much will be allowed to go to profits and how much for reinvestment. When they make that decision, that is it; it is accepted. And by using that system over the years they have been able to achieve the highest wages in Europe; by a system of wage
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restraint, they have achieved the highest wages ever achieved in Europe.
One might think that such an example is to be followed, but life is not quite so simple as that. In Sweden there is a total population which is less than the population of London. There is a T.U.C. which is all-powerful. It is given the powers to deal with these matters, to make decisions and to carry them out. That is possible with a small country like Sweden. I was disturbed to read in the Press some time after I came back that Sweden also had more millionaires per thousand of population than any other country in the world; and I am wondering: are we going to object to having all these millionaires if at the same time we have the highest wages in Europe? That I should have to think about. I am telling your Lordships this so that you do not believe that in Sweden they have the solution to all these problems.
We went into Germany; and I was in Germany on a number of occasions from 1945 onwards. In Germany they do not have the problem because they know the evils of inflation. If we had had a Hitler in this country we should not need to talk about inflation to-day. Everybody would be so afraid of it that they would deal with the matter as we are trying to deal with it to-day; that is, by an orderly method. But they did more than that in Germany—and I pass this on to noble Lords opposite for their consideration. There they said, "Unless we can involve the trade unionists in the management of industry they will never appreciate the problems, and we shall never have an economic success".
They set up what they called co-determination. This means that in a company there are two levels of directors: an executive level of directors, as we have in this country, with precisely the same responsibilities, and, above that, another level of directors who decide policy. Those directors consist of five representatives from the trade unions and five representatives from the employers. Between them they elect a chairman; and sometimes he is a trade union representative. When I heard about this I said, "With a trade union chairman it is six to five that you get your own way". But did it work? The system has gone on, and the people have had

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a say in the decisions that have been made about policy in the industry. And because they have had a say in the decisions, they have had to take the responsibility as well. That, coupled with the fear of inflation, has made Germany a prosperous nation. In addition, she does not have to carry the burdens that we have to carry, burdens which some of our noble friends objected to our casting on one side just a week or two ago because there are limits to the burdens a country of this size can carry.
But perhaps the most important country that we visited was America, because there you have an economic strength unequalled, I think, in the world. We found that they had their own trade union troubles. I do not want to go into them all, but I must say this. People who feel that an industrial trade union movement will solve our problems must remember this: that in America they have their contracts, which run with one union in the industry for a period from three to five years, and it has become habitual that at the termination of the contract you expect a strike. They stockpiled for the purpose, and the unions collected food to distribute during the anticipated strike, which they expected would last for a month to six weeks. Earlier on I was horrified at this, because I felt that one day this anticipation of a month or six weeks would break down under the stress of industrial relations when a strike was expected. This happened, as your Lordships know, in the iron and steel industry in America. They had a strike which nearly crippled America, with all its strength, and the industrial organisation that some people think would put us right in this country.
The end of that story was that when they had the next contract coming up President Johnson got the representatives of the trade unions and the employers in the White House and, as one newspaper put it, locked them in a room with enough food and drink to keep them going for a month, and dared them to come out without a solution—and a solution within 31 per cent. He popped in from time to time to see if they were getting on all right, and they came out with a 3½ per cent. overall agreement.
What I am saying to your Lordships is that even in a strong country like
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America they cannot escape the economic necessity of keeping profitability in balance with wages. These stories can be told at length, and if somebody wants to know more about them maybe one day I will write a book; but it may then be too late, because by that time this Bill may have been thrown out and our economic success will not be assured.
When we talk about full employment (and I shall finish on this, much as I should like to go on) we in the trade union movement have always advocated full employment. Now we demand full employment. In America they wanted full employment, but they also wanted price control. They achieved price control for a number of years in America. They kept prices steady, but it was at the expense of a 5 per cent. unemployment figure. And because of pressure—and your Lordships have seen what pressures have been; they do not always stop at democratic activities; violence occurs—they have brought down the unemployment figure to 4 per cent.; and as soon as they brought the unemployment figure down to 4 per cent., prices began to go up. This is the experience of our country, and the reason why this Bill must be supported.
When it comes to the voluntary side, people do not expect men in the workshop to understand that by refusing to take high wages they are going to be better off. In Sweden, they send the shop stewards on courses for a month, full-time. There is not one shop steward in Sweden who has not spent at least a month on such courses in order to learn the economic facts of life and take them back to the people. This is where the T.U.C. have the power to do these things. We are in the process of teaching our people in the trade union movement that to use the power they have is not to be successful, but to use wisdom will bring you sufficient amount of money in the economy that will enable you to get not only high wages but full employment, and also reinvestment in industry in such a way that full employment for the future is assured.
But, my Lords, full employment does not stop at men. Full employment means full employment for money. In this country it did. What has happened is that over the past two years we have been battling for an incomes policy, and it has been tough going, with very little help from either the employers or our Opposition friends. That tough going

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is resulting in some success. It was early this year that we were told by the President of the Board of Trade that this year engineering expects a 20 per cent. increase in exports; and it is getting it. Chemicals are going up by 13 per cent.; and they have nearly done that now. Beatle building will go up 35 per cent.—and everybody knows of the optimism that exists in the beatle building industry to-day. These are the success stories at the end of the day. In the export credits guarantee, which is helping exports, we have 8 per cent. more money being paid out in loans at the present time than we had a year ago. Many employers are helping us with exports, and helping us well.
The British National Export Council have done a great job so far as exports are concerned. This year they are going into invisible exports. They are setting up a permanent committee on invisible exports with the British National Export Council, which has on it Government employees and trade union members. Invisible exports were 60 per cent. of visible exports. When you remember the effect that invisible exports have on the economy of this country you will see the need for setting up that committee. They have done good work. They have done work which has been of a co-operative character with the trade unions, with the employers and with the Government. I only wish that the reflection of that work could be seen in this Chamber today, and that we could have our Opposition friends talking, not about the weakness in the Labour Government but about the weakness in the economy and the best way of getting it straight.
6.41 p.m.
LORD ARWYN: My Lords, it is not easy to follow my noble friend Lord Douglass of Cleveland with his wide experience. My speech is liable to be something of an anti-climax, especially as I speak as a company director of some forty years' experience whose fights have not been so furious and varied as those of my noble friend. I shall look forward to reading the book he has promised to write. I apologise for having had to leave the Chamber after the first five speeches, and if what I have to say proves to be a repetition of what has been said in my absence, I hope it will be regarded as an emphasis. My right
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honourable friend the Secretary of State for Employment and Productivity said in her speech on the Second Reading in another place that this
"new Bill has, therefore, a very different economic parentage from the previous ones".
The right honourable lady went on to say:
"We are no longer asking the people to hold down wage increases as part of an overall reduction in the level of economic activity. We are rather asking them to help us exploit the new opportunities which devaluation has brought to get our economy expanding again—not through a consumer-led boom, such as we had under the Conservatives in 1964, with the disastrous results of which we are all aware—but on a basis which will at last give us the economic independence that we have not enjoyed for half a century".—[OFFICIAL REPORT, Commons; 21/5/68, col. 301.]
This is an appeal for a new attitude of mind on both sides, and I have no hesitation in supporting the Bill on that basis.
In to-day's newspapers we have extracts from a 500-page report published in the United States by a team of 11 American and Canadian economists. We are labelled as a country where
"don and docker alike prefer leisure, tradition and stability to efficiency".
We are called "economic failures". We are accused of trailing behind Europe in productivity and efficiency. American companies, we are told, operating in Great Britain have shown profit margins almost 50 per cent. higher than those of British firms. We are rated eighth in Europe, with the United States as top and ourselves 34 per cent. below. My Lords, if this report is accurate, then the need for drastic change in attitude is an urgent matter if we are not to lose the benefits we can get from devaluation.
It is far too late for management to shift all the blame on to trade unions either now or in the past, or for trade unions to put all the blame on management. There may be as much fossilised thinking among trade unionists as there is, I believe, among boards of directors. My noble friend Lord Douglass of Cleveland has indicated how defossilisation can proceed. Before we can phase out old technologies and policies, a new attitude is absolutely essential. The tragedy is that new attitudes require confessions that the old ways and patterns of thinking are wrong, and their continuance is fatal for the welfare of our country. Most of us

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in your Lordships' House have experience of resistance to change among colleagues on boards or at trade union meetings. Too many have an in-built inability to confess they have been wrong to continue a policy which has been a failure, and legislation of this kind can provide a release and a "face-saver". It can also provide an adequate reason for more enlightened colleagues to rid themselves of the obsolete and stubborn in their midst.
We must either accept the need of a major industrial transformation and change in our attitudes in every facet of industry, or justify the label now tagged on us that we are all alike, preferring tradition and the old methods, whether we are trade unionists or executives in industry. I sincerely hope that these epithets which are hurled at us from across the Atlantic will make us all see ourselves as others see us, although they might be a little exaggerated.
The powers being sought in this Bill are to last for a period of 18 months. There is a provision for renewal, thank goodness!, because the 18 months is brief enough time to change ingrained attitudes. This Bill is urgently needed. There are parts of it, I agree, to be swallowed with difficulty. Let us accept it as a bromide, and not refer to its restrictions and penal clauses or the wide powers of ministerial discretion and hindrance. Legislation in some form is needed. I have little faith in any voluntary system of restriction regarding prices and incomes. Like my noble friend Lord Blyton, however, I am much more concerned about our low-paid workers than the emoluments of company directors, of whom I happen to be one. My Lords, let us accept this Bill as an opportunity to discard our old prejudices. Once we do that the problem of prices and incomes could very well settle itself. If your Lordships' House is to set a pattern, let it be one which embraces the need to adopt new tolerant attitudes and to discourage obsolete philosophies.
6.48 p.m.
LORD AUCKLAND: My Lords, the discussion this afternoon has ranged over very wide topics, and at times, because the discussion ranged over a great many economic matters, I could not help feeling that we had almost lost sight of the Bill. That I think is no bad thing in the present climate of opinion. But it seems to me that, whether my noble friends on
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this side of the House or noble Lords opposite accept this Bill or not, one thing is absolutely certain. That is that no incomes policy will ever work if we adopt a kind of "us" and "them" attitude. If those who work in the City of London (and I have worked there for nearly twenty years, not as a company director) are always suspicious of trade unions and trade-union activities, the activities of the Co-op. and so on, and if trade unionists are always suspicious of the City of London, we can never hope, under any Government, to get this country on a sound footing.
This Bill is without doubt necessary. I agree with my noble friend Lord Erroll that it is a badly drafted Bill, but it has been in existence for so short a time that I, for one, have barely had time to study it, so I do not want to go too far into that aspect. However, I want to make reference for one moment to the remarks made about Mr. Hambro. Mr. Hambro's remarks about the Prime Minister may have been intemperate (that is a point of view which could be accepted in some circles), but I think my noble friend Lord Erroll was quite right when he made reference to the criticism of Mr. Hambro in another place. My noble friend was not seeking to defend Mr. Hambro's increase in salary. I listened to his speech most carefully, and I believe—and I think most people on reading Hansard will take the view—that he was stating merely t rat one man had received an increase in salary but that it might well be that many others, in all walks of life, may have the same in the future. In any case, it will be interesting to know just how much increase Mr. Hambro will get after taxation. It is also not unreasonable to ask how much the bankers, who are so often attacked by the Party opposite—or at least by some members of the Party opposite—do for exports. I believe that in that connection we should look a little more constructively at this particular Bill.
I would also mention, in passing, that the City column of to-day's Daily Mail sets out the losses made by Lloyd's of London, where I spent 18 years as an ordinary worker in Lloyd's (as a broker and an underwriter, though not as a director, so I have no axe to grind there), and six years as a working member of Lloyd's. Therefore I myself have suffered from this, but I think it is fair

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to point out that these losses will not be borne by the taxpayer. They are borne by every member of Lloyd's, and it is a condition of becoming a member that a man is responsible for the last halfpenny when these losses occur. I think this is a fair point to make, in view of some of the attacks that are occasionally made on private companies.
I do not want to rub in too much salt, but it is fair to say that nationalised undertakings are able to write off losses of this kind, as we have seen in the Transport Bill. Here again I am not necessarily criticising this. For example, the railways have faced enormous difficulties over the years, and I am certainly not going to suggest that in pre-nationalisation days the railways were absolutely perfect, any more than they are now. But we must get rid of these prejudices and try to judge things on their merits.
I want to refer briefly to labour disputes in relation to this particular Bill. It is hoped, and I think this is one of the policies of devaluation, to help our exports, and I believe that all Parties wish this to happen. I support the Government in the line which they are taking regarding the railway dispute, and I think the House will have listened with great interest and with broad agreement to the speech made by the noble Lord, Lord Champion, even though those who, like myself, use the Southern Region every working day, do feel rather frustrated when our train is stranded outside a station for an hour or so, as I have experienced.
This Bill will work only if we have a climate of opinion which will not direct itself solely to those like Mr. Hambro, and others—who, after all, have worked for long years for this country, and many of whose profits go to our export fields—and at the same time always blame the trade unions when things go wrong on the labour front. It is my belief (and we have many examples in this House) that most trade unionists are responsible people, and they have given many years of loyal service to this country. It is vital that there should be, as in other countries, particularly in Scandinavia, which I visited recently, far more communication between the two sides.
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One of the problems in this country, both at managerial level and at trade union level, is that there is too much distance, not only between the two sides but within the sides themselves, both at trade union level and at managerial level. Whatever else comes out of this Bill, about which I and others have a good many reservations—and I would point out to those who have criticised the Party to which I belong for the attitude we have taken in these Prices and Incomes Bills over the years, that it is largely certain Members in another place who have provided the bulk of the hostility towards the provisions concerned—I believe that all of us in this House, where-ever we sit and whatever views we may hold, want to see an incomes policy work. But we also want the climate of opinion and the wherewithal to make it work—something we shall not have while there exists the kind of rancour that is so often fostered by extremists.
LORD HIRSHFIELD: My Lords, before the noble Lord sits down, I am not too sure whether this is completely relevant to the subject we are debating, but I seemed to follow that he was saying that underwriters at Lloyd's have been making serious losses for which they do not get relief. If that was what he was saying, surely the fact is that they were making considerable profits in the past, they have been making losses in the past year or two, but they will soon be drawing substantial income tax repayments because of those losses.
LORD AUCKLAND: My Lords, at this hour I do not want to go into a discussion about Lloyd's. I am well aware that profits have been made in the past and these have been taxed. The amount received by way of compensation for these losses, as I understand it, will be relatively small in comparison to the losses made, but I do not think that this is an hour to get too embroiled in that particular matter.
7.0 p.m.
LORD POPPLEWELL: My Lords, this has been an interesting debate, and I think it has been interesting because of the number of speakers and the various positions they occupy in this House. Apart from the last speaker, the noble Lord, Lord Auckland, it is interesting to note that there has been only one speaker

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on the other side, the noble Lord, Lord Erroll of Hale, who opened this debate. I think he enjoyed himself thoroughly for about 31 minutes, and he has been conspicuous by his absence from the House, except for a very brief interval from time to time, from then till now. I think it is just as well that we should put this on record, particularly because of the attitude adopted by the noble Lord, Lord Erroll, who did not deal seriously with the merits or demerits of this Bill but enjoyed a rough knockabout and attempted to protect Mr. Hambro.
The noble Lord objected very strongly indeed to the attitude taken by the Government in suggesting that Mr. Hambro's £4,000 increase in salary should be referred to the Prices and Incomes Board. This also worried the noble Lord, Lord Auckland. The noble Lord, Lord Erroll, in particular, drew attention to the fact that this £4,000 increase was before taxation. My noble friend Lord Champion very rightly pointed out what the reaction of the railway driver, earning £12 or £15 a week, would be to the £4,000 increase of Mr. Hambro. I would remind noble Lords that the railway driver's wage of £12 or £15 a week is before taxation. All the wage rates that have been submitted to the Prices and Incomes Board are before taxation. The analogy here is that it as well for all of us to take some particular note of these figures, because I think that particular line is not at all edifying in a serious discussion of this description.
To me the prices and incomes policy that is being followed by the Government is one of the most important events that has taken place in our industrial relations and in our economic structure for many generations—or many decades, at any rate. It is quite understandable that sections of the Labour Movement, some of our trade unions, may be very disturbed because they are being asked to alter completely their line of approach, that is, making demands for increased wages irrespective of the consequences. Now they are asked to ensure that any increased wages given to them are married up with an increase in productivity. That is indeed a very big change because previously any increase in productivity was not normally followed by increased wages. That increase went in
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certain directions until the trade unions became so strong that they demanded their share.
Naturally, the trade unions are very concerned with regard to the reserve compulsory powers in the Bill, because they fear that although, as has been pointed out, during the two previous Ells the compulsory power has never been exercised, should there be a change of Government they may very speedily see a quick change in this direction. Therefore, to get over and explain away this problem, and to get the co-operation of the trade unions to accept this, I think the Trades Union Congress General Council has done a wonderful job of work for which they have not received sufficient credit anywhere. To get together the executives of the trade unions in that famous meeting some 18 months or so ago and to discuss this question of prices and incomes, even involving reserve compulsory powers, and to get that adopted (with a very small majority though it was) was an indication of the statesmanlike attitude the General Council of the T.U.C. were taking in approaching our economic difficulties in a realistic manner.
Would that the Confederation of British Industry had shown half the, statesmanlike attitude the General Council of the T.U.C. have shown, because the Confederation of British Industry, instead of accepting a responsible attitude towards vetting machinery so far as prices and dividends were concerned, threw up their hands and said, "Ours is a loose confederation, and we have no power at all to institute such a line". The T.U.C. had no power, the General Council had no power. The free-for-all of the trade union movement and the industrial movement set up in this country did not give and has not given any overall power to the General Council of the T.U.C. They took the responsibility of attempting to get the trade unions to forgo some of their sovereignty and to hand it over to the General Council in order to vet wage claims, in order to try to ensure that there was a restraint, or, alternatively, that the part the trade unions were playing would be in accordance with the best wishes and the best needs of this nation, instead of the distinctly individualistic line of approach that prevailed previously. This is a big step forward indeed, and all credit should be

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given to the trade union movement for the attitude they have adopted.
It is not surprising that there should be certain individual trade union leaders who have not "played ball" with the rest of their colleagues. Do not let us be mealy-mouthed about this. Frank Cousins and Clive Jenkins have not done the trade union movement a great deal of good. But that is a point of view; it is a point of view based upon their past experience, and I am sorry that they have not been sufficiently forthright to realise how essential this is if we want to get out of the economic difficulties which this nation has had to face for a variety of reasons.
The noble Lord, Lord Rowley, rightly pointed out the difficulties that have occurred since the First World War. There is another difficulty that he did not mention, but it has a bearing. Since we have dispersed our Colonial Empire and we have many other nations springing to life with their own self-nationhood, much of the wealth that we were attracting from those particular areas, which assisted us with our invisible balance of payments, is no longer there available to us. This, combined with the other matters that have been mentioned, is a burden that we have had to bear. As we all know, it culminated in our living beyond our means—like the housewife who, instead of budgeting each week according to the income she receives, spends more from time to time and the reckoning day arrives. That reckoning day has arrived here, and this Bill is one of the measures that this Government are taking to try to plan the economy of the country to ensure a better standard of life for all by increasing our productivity effort in order to pay for our imports and to meet all our balance-of-payments difficulties. We may object to the "Gnomes of Zurich" or whatever they may be, but the bare, stark fact is that we have been living on borrowed money for far too long and under the 13 years of Tory rule no real effort was made to adjust the balance. It is this effort that we are now making to repay those loans and, as it were, to get away from the clutches of the moneylenders; and it is essential that we should ensure the success of this prices and incomes policy.
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We have been subjected to a tremendous attack from the Press from time to time, and also, in the main, by our political opponents who have been condemning us because of devaluation. This was something that was brought about. We have had many political gibes against us for adopting devaluation. We were told it was not going to be successful. We were told that we shall have to devalue again at some other time. We may do; I do not know. But the result that we can see at the present moment is an increase in our shipbuilding orders. We now see our shipping lines placing orders for the building of British ships in British yards instead of, as they have been doing in the past, building ships for British shipping lines in foreign countries—in Japan, Germany and Scandinavian countries. Devaluation is one of the means by which our shipbuilding order books are now being filled, and it is being of material assistance in helping us to meet our difficult balance-of-payments problem. We also see the tremendous increase that is taking place in our car exports and in the other goods mentioned by my noble friend Lord Douglass of Cleveland.
This is indicative of a general line of approach. It is indicative of the honesty and sincerity of this Government, and of their determination to place this country on a proper economic basis, and in not being afraid to adopt stern and unpopular measures for our own people in a desire to see the nation's interests put well to the fore. These are difficult matters. Many of our people, particularly trade unionists and many of our so-termed Left-wing Labour Movement, condemn the Government because we have not been able to control prices in the way that has been mentioned. It is the easiest thing in the world to say this. It is acknowledged by all, I think, that we should like to control prices. We should like the control of prices to be as effective as some of the wage restraint measures that we have had to adopt, but, as one noble Lord said earlier, there are thousands of different prices. It is to the credit of the Government that they have referred to the Prices and Incomes Board so many suggested price increases of a general character. The fact of their having been referred to the Board has been sufficient to influence those concerned, and the price increase in some

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instances has been postponed for a considerable period of time. That is something of which the nation is not taking sufficient cognisance. It is something that is not seen easily by our people as a whole. They see the varying retail price levels, and they ask for a control of prices.
Our economic distributive set up is a difficult hotch-potch. We have small individual shop keepers, small individual traders, massive self-service stores, and big engineering amalgamations as against small engineering firms. To try to achieve a common-sense level of prices in all those matters is extremely difficult; and the Government are to be commended for by this Bill attempting to strengthen the Prices and Incomes Board in the work of investigating some of the prices, so that in future they will be able to make a recommendation that some prices will be reduced.
This is forward thinking. I know there is urgency attached to an adjustment and that in the next few months—not in an 18 months' period, as was suggested by one noble Lord, but in a much shorter period—we must be on a firmer foundation so far as our balance of payments is concerned. Once we have achieved that and we get the full impact of the policy that we are now following, let us hope that in that period of 12 to 18 months we may be receiving some of its greater benefits. By that time I am certain that the nation will respond accordingly and pay credit to this Government for not having been afraid to adopt unpopular measures for the general wellbeing of the nation.
7.18 p.m.
THE EARL OF DUNDEE: My Lords, I cordially agree with the last speaker Lord Popplewell, in saying that we have listened to a large number of extremely interesting speeches in this debate, including particularly, if I may be allowed to say so, his own to which we have just listened. Another good point about all of them, I think, has been that they have been—
LORD ROWLEY: Short.
THE EARL OF DUNDEE:—remarkably short; and, considering the late hour at which we began the debate, we have got through 12 speeches in an
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unusually short space of time. I do not think that there is now any danger that other business will have to be taken after the conclusion of this debate; therefore perhaps your Lordships will forgive me if I try to be fairly short, too, as I want to be, because I am afraid I cannot say anything favourable about this Bill and I hate having to indulge in a long disparagement. The only good thing I can say about it is that we do not intend to vote against it, because the Government, I think mistakenly, have put this Bill forward as the central feature of their economic policy. If your Lordships' House were to refuse a Second Reading to a measure which the Government regard as the most important part of their policy and which has been approved by the House of Commons, they would really have something genuine to complain about—very different from the transparently fabricated constitutional non-crisis which they invented the week before last.
May I say first just a word about the incomes policy in general, and then I hope another not very long word trying to indicate where and why I think the Government have gone wrong. I and most of my friends, in both Houses, have always been in favour of a voluntary incomes policy. In 1962 we set up the National Incomes Commission, which was an advisory body, and also a number of economic development councils to co-ordinate with it. We did not receive any support from the Party opposite, or from the trade unions, who refused to join with us in trying to work an incomes policy, because, they said, it was designed only to restrict wages and not to restrict profits. That only showed they had not read the White Paper or the Order in Council under which "Nicky" (as the National Incomes Commission was called) was set up, for it clearly required the National Incomes Commission to give advice concerning the restriction of profits as well as the restriction of other incomes.
However, when the change of Government took place I think that we gave the present Government far better support than they had ever given us. When the Prices and Incomes Board was set up, in substitution for the National Incomes Commission, we recognised that because it had the support and co-operation of the trade unions it was, therefore, a stronger and more efficient instrument

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for carrying out its job than the National Incomes Commission had been. I do not think the opposition from our side to the present Government's incomes policy at that time was any more formidable than it was on their own side. We had Mr. Enoch Powell, who did not quite approve of it, and they, in the Cabinet, had Mr. Frank Cousins, who openly expressed disagreement with his colleagues; and now both these distinguished public figures have decided that it is not useful for them to remain in co-operation with their former colleagues.
But until about 18 months ago, so far as I can remember, it was always understood by all Parties that our policy in this regard was a voluntary one. That was made perfectly clear in the 1966 Election by the Prime Minister, when he pointed out that a statutory incomes policy would mean embarking on a very slippery slope, and that there was no question of doing so. It was only three or four months after the Government had secured their present majority that those former undertakings were abandoned and the principle of statutory compulsion was introduced—a principle which I have never been able to support and which I think most of our Party have never been able to support, either.
I listened with interest to the speech of the noble Lord, Lord Champion, today. It was a most charming account, and very relevant to our discussion, particularly his recollections of his work in the signal box and his feelings at that time. But I wonder whether, 18 months or two years ago, he would have got up and recommended that the compulsory statutory powers for controlling incomes should be continued for more than three years from now until 1971. I do not think the noble Lord would have done that at that time. I doubt very much whether Mr. George Brown would have done so, although he too has now demanded that we should have a longer period than up to the end of 1969 for the duration of these statutory powers.
My Lords, there were other prominent members of the Party opposite who made rather different comments on this compulsory element in the incomes policy very soon after it was introduced in 1966; and I think it is relevant to refer to them because they go a long way to explain how the rift has taken place between the
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Opposition and the Government over the whole question of incomes policy. Mr. Crossman, in September, 1966, just about a couple of months after the first statutory element was introduced, took quite a different view from those who said that this was only a temporary measure to get through a very bad period, and that after that we must go back to the voluntary system. He said that the July measures were not a last-ditch defence of Government policy, but a last-minute dash for freedom, a break-through into new patterns of industrial relations and new experiments in co-operation between State planning and collective bargaining, and he rejoiced that we had abandoned what he called the "rusty old tool" of laissez-faire, economic bargaining.
Just about a week later the present Minister for Productivity, Mrs. Castle, said at Bolton:
"Economic planning in a democratic socialist economy cannot operate sucessfully if wage-fixing is left either to the arbitrary decision of a wage-stop or to the accidents of unco-ordinated sectional bargaining."
She said she was quoting from the pamphlet Keep Left, which had been written some years before. She went on to say:
"The members of that group, Dick Cross-man, Ian Mikardo and myself among them, had no doubt then that in a planned society incomes must be planned along with everything else. We called it 'socialisation of the wages sector' and declared that to make it happen we needed the recognition by the trade union movement that wages in any industry are no longer the business only of the employers and the workers in that industry but of the whole nation."
And she said that it would call for something more effective than collective bargaining between employers and employed.
My Lords, I respect the views of people who believe this, but I do not think that they are views which I could ever accept, and I think they go a long way to explain why so many people in the country do not really believe that the Government want only a temporary emergency statutory power, with penal sanctions, and will afterwards go back to a voluntary system.
On this side of the House my noble friend Lord Molson (who apologised for not being able to stay until the end of the debate) supported the principle of compulsion. He made one interesting exception; he excepted that part of the

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Bill which deals with rents, which he said ought not to be controlled. He gave a closely-reasoned argument showing that the result of controlling rents would be that we should have less housing and that the housing problem would not be solved. But if you are not going to control rents by statutory compulsion, and if you are going to prevent wages from rising by statutory compulsion, what will the workers then say and think? Will they accept this statutory prohibition on increasing their wages while the local authorities are allowed to put up their rents? I do not think they will. This shows how one kind of compulsion must always lead to another. The sequence of compulsion will have the effect of restricting the economy so severely that growth, which is the ultimate objective, will be impossible. There one has what seems to be a vicious circle. The aim is to have more economic growth; one is afraid that this will be prevented by inflation; and to prevent inflation one starts restricting wages and rents, and controls everything. The result is that one does not get economic growth.
I have always said, and I think it is true, that an incomes policy will succeed only on three conditions. One is that there must be much more competition in industry than at present is the case. That is one reason why after we set up our incomes policy machinery in 1962–63, we soon afterwards introduced the abolition of retail price maintenance, which was not at all popular but which we thought was necessary to make the incomes policy work. The next condition is that one must put an end to restrictive practices. I was interested to hear from the noble Lord, Lord Douglass, an account of the journeys he had made to different countries. I am grateful to him for giving us his account of his travels, but in order to make our economy work properly we must look at the trade union organisation in countries like Sweden, Germany and the United States which he visited, where that organisation is not nearly so prehistoric and out of date as ours. That is all I will say on that point at the moment.
The third necessary condition for an incomes policy to succeed is economic growth. That is what the Government by their general policy are preventing. I know that they do not believe this. I know that their desire is to achieve greater
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economic growth and I know that they do not always believe us when we try to tell them that putting up taxation to about 40 per cent. of our gross national product (it was only 32 per cent. three years ago) and imposing the prohibitions which they have put upon investment abroad are measures which in themselves restrict growth to such an extent that this vicious circle is inevitable. That is one reason why instead of having what we were always quite rightly criticised for having, alternate periods of "Stop" and "Go", in which the "Go" was sometimes rather longer than the "Stop", under this Government we have nothing but "Stop-Stop" the whole time and no "Go" at all.
I do not want to take up arty more time. May I conclude by saying that I do not believe that the main cause of inflation is what is called wage-cost inflation. If one looks at the economic figures for the last 15 or 16 years, I do not think that it is a tenable theory that prices have been pushed up by wages. I think that it is more likely that wages have followed rises in prices. I do not know whether the noble Lord, Lord Shackleton, who is to reply has read the article on incomes which wits published last February by the National Institute of Economic and Social Research. That article showed quite convincingly that since compulsion came in in 1966 wage increases had been just about what they would have been from natural factors, and that for the first time they were rather more than they had been in comparable periods when there was no compulsion.
I think that this is the first time in which our wage policy has been designed to depress the standard of the wage-earner's living. We all agree with the principle that there should be continued growth, and we want to try to see that the growth of wages should be a little less, instead of being always a little more, than the growth of production. But what we are now trying to do this year is to prevent anybody from getting more than 3½ per cent. increases in wages, although we are proclaiming that the cost of living will go up by 5 per cent. because of devaluation. So we are making a statutory provision that everybody shall get less real wages by the end of the year than he was getting before.

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I believe that the fundamental cause of inflation in this country—in some circumstances it may be caused by wages going too high—is that Government borrowing below-the-line has been met to too great an extent by the creation of new money: the printing of new notes and credit money through the banks. There are three ways in which the Government can meet expenditure. One is by taxation, which takes money out of the economy. Another is by borrowing in the open market, which also takes money out of the economy because the money is there already. The third is by creating new credit money which was not there before. Up to a point, if it is in keeping with a rise in the growth of economic output, the creation of new money may to a small extent be a good thing, but over the years the printing of new money has been greatly in excess of economic growth. That is the cause of inflation. If one looks at the various Budgets in recent times, Chancellors have tried to take money out of the economy. One Chancellor takes out £500 million; another £700 million and so on. They put up taxes by £500 million, which is taken out of the economy, but then they put more back by increasing our new money by more than £500 million; so that the whole aim of moderate deflation is defeated. That, and not excessively high wages, is the fundamental cause, which has been our trouble over the last twenty years.
We are not going to oppose this Bill, and any Amendments which we may propose in Committee will, I hope, be entirely constructive. We all have the same objective as the Government. We all want full employment, stable prices and economic growth and, when the Government bring in a measure which they say is the central part of their plan to achieve that common objective, it would not be right for your Lordships' House to oppose it. We must do our best to help the Government and hope that they will achieve their objective, but I do not think they will. I have no doubt that devaluation, like a shot in the arm, may promote some growth and I wish we could take advantage of it and make it permanent. My fear is that the Government's economic mismanagement will fail to extend our temporary increase in production this year
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into the permanent increase that we want. We shall do our best to help them constructively in their aims, but we must add that if those aims do not succeed, the responsibility is with the Government alone and not with us.
7.41 p.m.
LORD SHACKLETON: My Lords, once again we have had a debate in which the argument is very clearly on one side; namely in support of the Government. Luckily, the armies are not to be deployed against them, even though on the last occasion they were rather uncertain.
I should first like to say that I very much appreciate the co-operation of your Lordships, and indeed of the Opposition, in the procedure we have followed. There has been talk of "Shepherd's Pie" and "Beswick's Breakfast". I am rather disappointed. I hoped it might have been "Shackleton's Shish-Kebab". I think the procedure is really rather satisfactory. First of all, we are giving the Opposition far more time than my noble friend Lord Shepherd, in his perhaps more authoritarian days, ever allowed the House. We then took all the stages of the Bill in one day, having had a go a week before on the White Paper Bill; and the same thing happened previously. But on this occasion we are effectively giving a week between the Second Reading and the Committee, and there will be several days before Report and Third Reading.
I am sorry that the noble Lord, Lord Erroll of Hale, has suffered so. In fact, I am rather worried about his diary because he kept on talking about it. Apparently he had not written in his diary that we had said that the proper Bill would come in on Friday; he thought it was coming in on Monday. Nor, apparently, had he written in his diary, until it was announced in the House last Monday, the information which I had given him the previous Thursday, when I noted that he consulted his diary but did not write anything in it. I should not go into these intimate details, if the noble Lord, Lord Erroll of Hale, were not so prone to go into such things himself. Indeed, I felt that he must have been suffering very greatly. It may well have been through having to work things down to decimal points when he was trying to work out

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his dividends. I realise that he is an engineer, and I should have thought he would have been familiar with his slide-rule in his long term budgetary forecasting in his firm, where it is very usual, in my experience, to work your estimates, your allocation of costs and your forecasts down to two or three decimal points. But when it comes to dividends they are too sacred, and I realise that great distress has been caused to his firm. I am sorry that they have had such trouble in order to make a not very convincing political point here.
There have been a number of excellent speeches, and I do not think I need state the case for incomes and prices policy. It has been so admirably made, with great strength and moving sincerity, by many of my colleagues—Lord Blyton, Lord Douglass, Lord Champion and Lord Popplewell. The speech of the noble Lord, Lord Arwyn, was very short. I rushed in, but I am afraid that I heard only the last minute. However, I heard that it was a very good speech. I must ask the Opposition, who I know listened carefully to those speeches, to heed the views that were expressed—and expressed very moderately. When I look back on the history that some of our trade unionists have had, I am amazed, in the light of past bitter experiences, by the moderation with which they argue these issues. And I do not think it is good enough to reject or oppose this Bill on some of the grounds advocated by the only two noble Lords who have opposed this measure at all. Incidentally, I noticed that the noble Lord, Lord Auckland, in a very short and admirable speech, did not criticise the Bill. I am not sure whether or not he is opposed to it. He obviously suffered, as he described, as an ordinary worker in Lloyd's, which seems to be a particularly painful type of activity.
The noble Lord, Lord Molson, who always makes such very thoughtful speeches was generally in support. He apologised for his absence. Then there was the noble Lord, Lord Henley, with a very forthright speech. I rather hope that the Opposition, whose co-operation I again acknowledge over the timing of this Bill, will see that, whether or not they agree with our policies in general terms (I listened very carefully, and I can see there are arguments, also, in relation
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to taxation and expanding economies), the policies they followed did not solve our problems. The policies we are now trying to carry out have been carried out in difficult circumstances, but we are absolutely convinced that, given these circumstances, they are necessary.
I have been asked: Why the hurry? I appreciate that the noble Lord, Lord Erroll of Hale, did not press us very far on this. The answer is quite a simple one. I gave one of the reasons on Monday, and the noble Lord gave the same reason again to-day—perhaps at greater length and perhaps with even greater clarity. But the Government's policy was announced in the Budget speech on March 19, the White Paper was published on April 3, and the National Board has been operating on the new criteria for over two months. There really is an urgency to get this Bill into law. The Government are proceeding in a way—and the noble Lord, Lord Champion, pointed to this—which creates difficulties for themselves, by their willingness to come back year after year to Parliament to get new authority. I think it is not unreasonable in those circumstances, the Government not having taken absolute powers which could be renewed by Order or under the Expiring Laws Continuance Bill, that we should try to get our business through quickly. This is one measure, anyway, which no-one can suggest has not been very fully discussed in another place.
There are one or two points which I should like to deal with quickly. I thought that the noble Lord, Lord Erroll, made rather a lot of the problem of the Chairman of Hambro's Bank. Again, all our hearts on this side bleed for him and, in so far as it helps to raise further money for the Conservative Party, I am rather delighted, because I know how worried the noble Lord, Lord Carrington, is about this, and it may be that this is a helpful and co-operative gesture. The noble Lord, Lord Erroll, asked what powers there were in this matter. I do not propose to refer precisely to this particular instance, because, so far as I know, no reference has been made. But under Section 2(1) of the Prices and Incomes Act 1966 the Government have power to refer any question relating to wages, salaries or other forms of income. I admit that it is rather exceptional. The noble Lord and other noble Lords, I

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think, referred to the position of engine drivers. My Lords, their salaries are usually fixed collectively: they are not dealt with by some benevolent board. I really do not see what is so awful about this beyond the fact that there is obviously, again, political advantage in it.
I should like to pursue this just a little more. The Government made it clear in their White Paper that the principles of the policy apply to all forms of personal income, including those of company directors and others whose remuneration is not fixed by the normal process of collective bargaining. Such groups are not covered by the voluntary arrangements for early warning. Nevertheless, the Government expect these groups and others who are not subject to these arrangements to ensure that improvements in their remuneration can be justified fully under the policy; and the Department of Employment and Productivity has been concerned on numerous occasions in the application of the policy to persons not covered by the early warning arrangements, including the giving of advice to individuals and directors of companies.
My Lords, I am grateful for the fact that the noble Lord did not regard this particular matter as being actuated by malice on the part of the Government, and I assure him that so far as the Government are concerned—and I stress "so far as the Government are concerned"—there is no such thought in this case but simply a wish to establish for those concerned the facts about an increase in remuneration. Furthermore, it would have been really difficult to ignore if the Government are in fact being asked to give advice in other cases. The letter inviting the observations of Mr. Jocelyn Hambro was sent on June 25, and Mr. Hambro replied on June 26 that a full reply would be sent as soon as possible. I really do not think I can comment further on this.
My Lords, perhaps I will shorten my speech and proceed to another point which the noble Lord, Lord Erroll, made. He suggested that the early warning system for prices applied to only a small minority of prices. I assure him that this is not correct. The early warning arrangements, together with those for the constant watch on food prices, cover some 70 per cent. of the expenditure
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represented by the retail price index. I do not want to make too much of the position of the Conservatives in this matter, but we were twitted. The noble Earl, Lord Dundee, complained that the trade unions did not co-operate with the National Incomes Commission. I really am astonished that noble Lords' memories are so short. The National Incomes Commission had no direct remit to deal with prices, and this was one of the main reasons, apart from the basic distrust for Conservative Governments on the part of the trade unions, for the lack of co-operation with the National Incomes Commission. On the other hand, the present Government have tried to deal with the whole field—and it is a very difficult field indeed.
My Lords, the noble Lord, Lord Erroll, asked me not to twit him because he did not explain what was the Tory line on an incomes policy. He said that he did not want to waste time; so I will be fair. I only wish that I knew what it was. We know that they are very split on this subject. It is all very well for the Labour Party to be charged with being divided on these matters, but we know that the stretch from Maudlingism to Powellism is very wide indeed. The Tory line on industrial relations has been set out in the booklet, Fair Deal at Work, although it is not described as being a final, definitive statement of Conservative policy. The interesting thing is that although the Conservatives reject statutory powers over prices and incomes they want a great deal more legislation governing trade unions and collective bargaining. Indeed, they want to bind on the trade unions a number of obligations, including provision for penalising them in some circumstances for unofficial actions by their members. I therefore find it—
THE EARL OF DUNDEE: These proposed subjections to the law are bringing the trade unions under the civil law in the same way as any two ordinary people who make a contract are brought under the civil law. They are not bringing them under the criminal law.
LORD SHACKLETON: We shall no doubt have an opportunity to discuss this point. What I really find so difficult is to find out what is the Conservative opposition to this policy other than an understandable tendency—and I know

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Oppositions are given to this—to take advantage of a particular situation and to press the Government where they think they are at their weakest. I must say that I was appalled at certain actions taken in regard to voting in another place on certain issues, and that I appreciated the forthright line which the noble Lord, Lord Henley, expressed on these matters.
Let me say just briefly something on the effectiveness of incomes policies. There is no simple arithmetical answer as to the effects, and as the noble Lord, Lord Molson, made clear, there are of course imperfections. This is the best we can do, and we believe it is a very important best. It is not possible to separate with any accuracy the incomes policy's effects from the effects of the lower pressure of demand. The National Institute, to which the noble Earl, Lord Dundee, referred, has had a shot at this, and it reached the conclusion, I fully acknowledge, that the incomes policy had not had any significant effect. But this was a pretty tentative type of analysis, and other work suggests that the results of the National Institute are inconclusive.
I always think that the National Institute is rather like the Met. Office at times. I know certainly that on the long-range forecasts both the National Institute and the Met. Office employ the same sort of methods. They look at the past, they look for analogies, they all sit round a table and they take a balance of opinion. On the long-range weather forecasts I believe they claim something like rather more than 50 per cent. reasonable accuracy. This is not in any way to denigrate the work of the National Institute; indeed, I would not wish to do so, since one of its main conclusions was that the Government ought to strengthen the National Board for Prices and Incomes as a weapon for restraint; that it could lengthen the period of statutory delay. Indeed, the Institute is urging that the incomes policy should be made even more effective.
My Lords, there are figures, with which I will not detain the House, which suggest that in some respects the policy has been effective and that, indeed, without it the results might have been very much worse. But I stress that this is really very urgent nationally. Many noble Lords have emphasised this. We know
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that the "low" Tories, as the noble Lord, Lord Henley, called them, are against it. Lord Molson (I do not know whether he is a "high" Tory or what) was for it. Lord Auckland, I suspect, is a "middle" Tory. As for Lord Sieff, who gave us an admirable speech, a good chairman's speech, again I was not quite sure on which side he came down. Obviously we are bound to listen with respect to anybody who has made such a great success in business—even though I was in competition with him personally.
I think, as the noble Lord, Lord Douglass, said, that the Conservative Party missed a chance in not setting up a committee with the T.U.C. and C.B.I. I hope myself that we shall now face this very fairly and that we shall give the Bill a good run. All noble Lords now have to explain why they do not vote or do vote; either there is a mandate or there is not; either there is too big a majority or there is not; they want to support the Bill and it is painful for them either way.
Now we have given them enough time, I hope that as this is a matter of such profound importance we shall be able to pass this Bill through fairly quickly. We shall undoubtedly have some interesting and worthwhile discussions at the Committee stage. I promise noble Lords that we shall listen very seriously to serious Amendments. I know, although some of my noble friends may not appreciate it, that there is a serious streak in the noble Lord, Lord Erroll, and that he may on the next occasion, if he has got his diary right, be able to make some serious contributions. We have had the important points made by the noble Lord, Lord Molson, on rent. I will not take up the time of the House in answering them; but I expect that we shall have the opportunity on "That the clause stand part …" to discuss the points he made on rate increases resulting from rent interventions. These are points that we have considered very closely. I can assure him that there is an answer that I could give.
My Lords, there are two points which I should like to emphasise. The first is that a prices and incomes policy has always been, and must continue to be, based mainly on a large measure of public support and co-operation front management and workers. However the

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Government consider that they might wish to move in a particular direction, and that we must depend on voluntary co-operation. The reason for the need, in the interests of fairness, for some power of compulsion as a reserve has been made very clear. That is based both on equity and the vital need that we should take such steps now and should be seen to be taking such steps. The statutory power will be used only to the extent necessary where voluntary arrangements are not being properly observed. It is therefore a buttress to the voluntary system.
The second point is that an incomes policy is not a substitute for fiscal action as an instrument of demand management, although the Budget allowed for it. I sympathise with the noble Earl, Lord Dundee, when he moved into monetary policy. I should have liked to debate this. I am hoping that the Bill will arrive—
SEVERAL NOBLE LORDS: It has arrived. You are all right.
LORD SHACKLETON: In that case, my Lords, I can shorten my remarks and say that a prices and income policy, including the reserve powers sought, is an essential factor of the Government's
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economic strategy for recovery and sustained growth. On that basis I warmly commend the No. 2 Bill to your Lordships, and shortly, I hope, we shall see No. 1.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PRICES AND INCOMES BILL
Brought from the Commons, read 1a, and to be printed.
BRITISH RAILWAYS BILL
The CHAIRMAN OF COMMITTEES The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Order made an May 28 last discharged, the Bill committed to the Committee on Unopposed Bills.

BRITISH RAILWAYS (MERSEY RAILWAY EXTENSIONS) BILL
Reported, with Amendments.
House adjourned at five minutes past eight o'clock.