Sitting of 4 December 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT AND PRODUCTIVITY

    Prices and Incomes (Standstill Orders)
    Mr. Crouchasked the Secretary of State for Employment and Productivity if she will publish a list of the standstill orders or directions under the Prices and Incomes Acts, 1966, 1967 and 1968 at present in force, stating in each case the expiration date of the order or direction and the numbers of persons affected by each standstill relating to incomes.
    The Under-Secretary of State for Employment and Productivity (Mr. Harold Walker): There are two standstills at present in force, both relating to incomes. I am arranging for the information about these cases to be published in the OFFICIAL REPORT.
    Mr. Crouch: What is the effect of the standstill orders on the level of aggregate demand in the economy?
    Mr. Walker: The standstill orders flow from the general policy which itself is having an effect on the level of demand.
    Mr. Higgins: But is not the overall purpose of the policy to reduce the level of aggregate demand in relation to inflation? I am sure that the Minister, before imposing the orders, takes their effect into account.
    Mr. Walker: The overall purpose of the policy, among other things, is to relate the growth in incomes to the growth in output. The orders are part of that general policy.
    Following is the information:
    Statutory Standstills under the Prices and Incomes Acts at present in force
    1. On a settlement reached on 7th February, 1969 relating to the pay of certain workers employed in the exhibition industry. The Awards and Settlements (Temporary Continuation of Standstill) (No. 2) Order 1969 (S.I. 1969 No. 953) extended the standstill until 17th February, 1970. This agreement covered about 4,800 workers. The Order does not apply to the settlement reached on 10th October and effective from September, 1969.
    2. On an agreement relating to the pay of certain workers employed by members of the Association of Film Laboratory Employers. It is at present in force by virtue of Section 1(2)(a) of the Prices and Incomes Act, 1967, which provides for the continuation of a standstill imposed by direction for thirty days after the publication of an adverse report by the National Board for Prices and Incomes if the Secretary of State gives notice within 10 days of the publication of the report of a proposal to make an order extending the standstill. The N.B.P.I, report was published on 6th November and notice was given in the Gazette on 14th November. This standstill affects about 3,150 workers. An Order has been made, and will be laid and published on 5th December and come into operation on 6th December, extending the standstill until 7th February, 1970.

    Wage Settlements
    Mr. Crouchasked the Secretary of State for Employment and Productivity how many wage settlements have been notified to her Department in the current year to the latest available date where the award has exceeded 5 per cent.
    Mr. Harold Walker: Twenty-four affecting 10,000 workers or more. The number affecting a fewer number of workers cannot be extracted without a disproportionate amount of work.
    Mr. Crouch: Does the hon. Gentleman consider that this has been an effective order from his Department? By how many has this exceeded the norm, which we understand to be 3½ per cent.
    Mr. Walker: I am not sure that I understand the hon. Gentleman's question. He should not attach too much significance to the 5 per cent., because these settlements invariably involve a substantial element of productivity or substantial restructuring of wages.
    Mr. Heffer: Is the recent building workers' settlement likely to be referred to the Department for further consideration?
    Mr. Walker: The settlement is currently under consideration by the Department.

    Employment, Midlothian
    Mr. Eadieasked the Secretary of State for Employment and Productivity what was the total employable labour force in Midlothian in April, 1966; how many were male and female; how many were teenage, male and female; and what are the comparable figures to the nearest available date in 1969.
    The Minister of State, Department of Employment and Productivity (Mr. Edmund Dell): The employment estimates available for local areas show the numbers of employees—employed and unemployed—at each mid-year. They are analysed by sex but not by age. At June, 1966, the estimated number of employees in Midlothian was 257,000 of whom 156,000 were male and 101,000 female. The corresponding figures for June, 1968, the latest date for which information is available, were 255,000, 153,000 and 102,000.
    Mr. Eadie: I thank my hon. Friend for his answer. Would he agree that these figures indicate that, despite the fact that there has been massive contraction of the agricultural and coal mining industries, the County of Midlothian seems to be, not only holding, but increasing its population? Is not this because of the Government's policy of giving the development areas preferential treatment, or, as the Prime Minister says, blatant favouritism?
    Mr. Dell: I entirely agree that this excellent result is due to the considerable assistance given to Scotland by the Government.

    Ex-miners (Industrial Retraining)
    Mr. Eadieasked the Secretary of State for Employment and Productivity how many ex-miners received industrial retraining in the year 1968 in the County of Midlothian and to the nearest available date in1969.
    Mr. Dell: This information is not available for the whole field of industrial retraining. Eight ex-miners from Midlothian completed courses at Government training centres during 1968 and 16 so far in 1969.
    Mr. Eadie: Would my hon. Friend agree that these figures are most unsatisfactory, bearing in mind that the Select Committee on Nationalised Industries, in its report, indicated that contraction of the mining industry would still take place? Would he also agree that if this contraction continues at a substantial rate, not only in Midlothian but all over the country, his Department or the Secretary of State should look into the question of retraining miners?
    Mr. Speaker: Order. Long questions mean fewer questions.
    Mr. Dell: The small numbers are not due to the lack of facilities in Government training centres. If further ex-miners are available and suitable for training in Government training centres, their ability will be assessed. But the main possibility of retraining miners lies in industry where it can be undertaken on the specific jobs on which they are employed and in development areas and intermediate areas, with the assistance of Government grants.

    Safety, Health and Welfare Legislation
    Mr. Ellisasked the Secretary of State for Employment and Productivity what consultations she is having about her proposed legislation on safety, health and welfare; and if she will make a statement.
    The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): I have had the benefit of advice from a sub-committee of my Industrial Health Advisory Committee so far as my proposals for the reform of the Appointed Factory Doctor Service and the establishment of the Employment Medical Advisory Service are concerned, and of a subcommittee of my Industrial Safety Advisory Council in relation to my proposals for joint consultation on safety. The C.B.I., T.U.C., nationalised industries and other interested organisations are represented on these sub-committees and, in addition, there has been individual consultation with organisations concerned with the proposed legislation. I hope to introduce the legislation at an early date.
    Mr. Ellis: Does my right hon. Friend accept that, while a lot of propaganda is

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    made about strikes, official or unofficial, the fact is that more man-hours are lost in this way than in any other? Will she therefore see that the legislation is speeded up? She has given an encouraging reply but we should get on with this vital job.
    Mrs. Castle: I agree that, if we are concerned with keeping up a high level of production, it is imperative to take measures like this to improve health and safety at work. I am anxious to introduce the legislation as soon as possible.
    Dr. Winstanley: Does the right hon. Lady agree that, by establishing an effective occupational health service, she might do more to promote productivity and avoid strikes than she would by any Industrial Relations Bill? Will she do what she can to fill this gap in our otherwise comprehensive health services?
    Mrs. Castle: The hon. Gentleman is merely echoing what my hon. Friend said and I have already replied to that point. I think we need to tackle this problem of maintaining production from a number of angles, and these two are very important. I am anxious to get the legislation on the Statute Book as early as possible.

    Industrial Relations Bill
    Mr. Dudley Smithasked the Secretary of State for Employment and Productivity what further consultations she plans to have with the Confederation of British Industry over the forthcoming Industrial Relations Bill; and if she will make a statement.
    Mr. William Hamiltonasked the Secretary of State for Employment and Productivity if she will make a statement on the progress of discussions with the Confederation of British Industry and the Trades Union Congress on the proposed legislation on trade unions.
    Mrs. Castle: Consultations on detailed proposals made by the Government are now taking place with both the C.B.I. and T.U.C.
    Mr. Smith: Can the right hon. Lady confirm that she will publish a White Paper before the Bill? Will she also confirm that, contrary to the Government's undertaking last summer that there would be no penal sanctions in the Bill, there will be such sanctions but
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    that they will be purely discriminatory and levelled against one side only—the employers'?
    Mrs. Castle: I will consider the need for publishing a White Paper. The hon. Gentleman knows that consultations are only just beginning in this very important matter and it would be wrong for me to anticipate the outcome with regard to the second part of the supplementary question.
    Mr. Hamilton: Can my right hon. Friend give any idea as to when the Bill is likely to be published? Does she recognise that there is a good deal of urgency in the matter in the sense that many firms, particularly in Scotland, flatly refuse to recognise trade unions and this is creating the potential for and, indeed, the certainty of very bad industrial relations?
    Mrs. Castle: I cannot at this stage give a date for publication of the Bill because, as I have said, the consultations are only just beginning, the proposals are far-reaching and detailed and will require considerable amount of discussion with the T.U.C. and the C.B.I. The recognition question is tremendously important. This is why we have not waited for publication of the Bill. As my hon. Friend is aware, the C.I.R. is dealing with a number of recognition references I have made to it.

    London Transport (Inter-union Dispute)
    Mr. Goodhewasked the Secretary of State for Employment and Productivity what progress she has made in achieving a settlement in the inter-union dispute concerning the appointment of mechanical craftsmen at London Transport's railway overhaul works at Acton, which was referred to her in mid-August.
    Mrs. Castle: I very much regret the public inconvenience caused by this dispute. My officers and the T.U.C. have both held a number of discussions with the parties in an effort to find a solution. Further proposals put forward by London Transport earlier this week were rejected by the A.E.F. last night.
    A meeting is at this moment taking place in my Department between my officials, London Transport and the T.U.C. and in the light of this I shall

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    be urgently considering what further steps should be taken.
    Mr. Goodhew: Is the right hon. Lady aware that this has been going on nearly four months, and on the Northern Line, as each week goes by, more and more carriages and rolling stock go out of repair, more and more escalators go out of use and passengers are now expected to travel in a manner which would not be considered acceptable for cattle, let alone human beings? If the T.U.C. is really unable to redeem its solemn pledge to the Government, why does she not do something about it now?
    Mrs. Castle: Of course, I am aware that the dispute has been going on since 26th September. This is why there have been these efforts by my Department and the T.U.C. to find a solution. I assure the hon. Gentleman that the T.U.C. has put in very hard efforts to find a solution and is doing so at the present moment.
    Mr. Orme: Does not my right hon. Friend agree that this official dispute in which the A.E.F. is involved is not basically an inter-union dispute between it and the N.U.R. but arises from the fact that London Transport has violated an agreement it has made with the A.E.F.?
    Mrs. Castle: I am aware that this is the argument put forward by the A.E.F. Whether the N.U.R. would agree is a different matter. There are inter-union difficulties here which it is important the T.U.C. should take action about, and this is it so doing.
    Mr. R. Carr: Is not the right hon. Lady aware that, when the Prime Minister commended the binding undertaking of the trade unions to this House, he laid great emphasis on the powers which the T.U.C. had taken to deal with this sort of dispute? After four months, should not these powers be used if the agreement is to be kept?
    Mrs. Castle: As I have said—and I am sure that the right hon. Gentleman will appreciate its importance—a meeting is going on at present between London Transport, the T.U.C. and my Department to consider what the next step should be, and I would not wish to add anything until we see what comes out of this talk.
    Mr. Goodhew: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible moment.

    Employers' Liability (Compulsory Insurance) Act, 1969
    Mr. David Watkinsasked the Secretary of State for Employment and Productivity what consultations she is having in connection with formulating regulations under the Employers' Liability(Compulsory Insurance) Act, 1969; and if she will make a statement.
    Mrs. Castle: These matters are under consideration and a further statement will be made as soon as possible.
    Mr. Watkins: Is my right hon. Friend aware that this important piece of legislation does not become operative until regulations are made? Will she treat it with some urgency?
    Mrs. Castle: I am aware that this is an important piece of legislation and I congratulate my hon. Friend on his success in getting it through the House. I assure him that no time will be lost in preparing the regulations but this is a very detailed and technical matter. I ask him to have a little patience, as it is not many weeks since the Act was put on the Statute Book.

    British Leyland Clerical Staff (Wage Claim)
    Mr. Danceasked the Secretary of State for Employment and Productivity what percentage increase was involved in the settlement of the British Leyland clerical staff wage claim; and on what grounds it was approved by her Department.
    Mr. Harold Walker: I understand that the settlement to which the Question relates is that between the Austin-Morris Division of the British Leyland Motor Corporation and the Clerical and Administrative Workers Union, which was effective from 9th June, 1969, and involved an average increase of 9·9 per cent. for clerical staff. It was not opposed by my Department because of the direct contribution by clerical staff towards increasing efficiency and the

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    further productivity measures included in the agreement.
    Mr. Dance: What productivity guarantees did the Government get out of this settlement?
    Mr. Walker: The productivity guarantees in the agreement, which satisfied the Department.
    Mr. Roy Hughes: Can my hon. Friend say whether the Department also took into consideration the fact that this section has always been an under-privileged section of the motor industry and that, in this sense, the increase was well justified?
    Mr. Walker: The increase was justified because of the measures included in the agreement leading to increased efficiency and further productivity.

    Motor Vehicle Retailing and Repair Workers (Wage Claim)
    Mr. Danceasked the Secretary of State for Employment and Productivity what percentage increase was involved in the settlement of the motor vehicle retailing and repair workers' wage claim; and on what grounds it was approved by her Department.
    Mr. Harold Walker: The increase is estimated to be within the 3½ per cent. ceiling. Approval was given primarily in recognition of the increasing amount of repair work being undertaken by a reduced labour force. The agreement should chiefly benefit the lower paid in the industry, who had not had a national increase since December, 1967.
    Mr. Dance: Whilst one is delighted that the lower-paid workers will get an increase, may I ask whether the hon. Gentleman would agree that the various settlements now going on have blown the roof off any prices and incomes policy?
    Mr. Walker: I fail to see how that wild allegation arises out of a Question the answer to which relates to a settlement within the ceiling.

    Employment, North-Western Region
    Mr. Fortescueasked the Secretary of State for Employment and Productivity whether she will list the total number in employment in the North-
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    western Region at the latest available date and the equivalent date in 1966.
    Mr. Dell: The estimated numbers of employees in employment in the Northwestern Region at March, 1969, and March, 1966, were 2,876,000 and 2,987,000, respectively. The figure for March, 1969, is provisional.
    Mr. Fortescue: Does the Minister recall that in 1966 the Prime Minister said that he saw no reason why unemployment should increase and that later in the summer he said that the regions would be protected from the effects of the squeeze? There are now 111,000 fewer jobs in the North-West than there were in 1966. Has the Prime Minister been to his own north-western constituency to explain this discrepancy, and, if he has not, when will he come to Liverpool to do so?
    Mr. Dell: As the hon. Member knows, being a Member from the North-West, a great amount of industrial restructuring has been going on in the North-West over the last few years as a result of which employment prospects are now very much more secure in many of the industries which in 1966, and since, were declining very fast. I can tell the hon. Member that on the basis of the I.D.C.s issued since April, 1966, when the projects are completed and manned we will have created 76,800 jobs as compared with only 45,000 in the four-year period 1961–64.
    Mr. Arthur Davidson: Can my hon. Friend confirm that as a result of the Government's help to areas such as North-East Lancashire this area in the North-West, which has traditionally suffered from unemployment, now has a potential danger of a shortage of skilled labour? Is he bearing this in mind?
    Mr. Dell: Certainly, I am bearing that in mind. There is to be a conference on employment in that area in the next few months and my hon. Friend will know that, as a result of creating an intermediate area in the area to which he refers, grants for industrial training are now available from the Government.
    Mr. R. Carr: How can the hon. Gentleman talk about employment in this area being more secure when, despite all the waffle about restructuring, the fact is that

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    there are 111,000 fewer jobs than there were three years ago?
    Mr. Dell: I am saying that employment prospects are more secure because industry in the area has been diversified and is more modern and more capable of competing both in this country and internationally, and that is the basis for the future prosperity of the North-West and in particular of Merseyside which has development area status.

    Women (Average Earnings)
    Mr. Rossiasked the Secretary of State for Employment and Productivity what estimate she has made of the in crease in average earnings of women in industry by 1975 resulting from the ending of discrimination on grounds of sex.
    Mrs. Castle: Allowing for the fact that some women already receive equal pay, the average earnings of all women workers will probably increase by between 15 and 20 per cent.
    Mr. Rossi: Can the right hon. Lady say what effect this will have on the economy as a whole?
    Mrs. Castle: We believe that the effect on the economy will be containable taking into account the rise in production and output that will take place in the period up to 1975 and the fact that the figures I have given correspond to an increase in the national wage and salary bill for all workers of between 3 and 4 per cent, during that period in respect of equal pay.

    Employment (Yorkshire and Humberside)
    Mr. Hileyasked the Secretary of State for Employment and Productivity whether she will list the total number in employment in the Yorkshire and Humberside Region at the latest available date and the equivalent date in 1966.
    Mr. Dell: The estimated numbers of employees in employment in the Yorkshire and Humberside region at March, 1969, and March, 1966, were 1,986,000 and 2,092,000, respectively. The figure for March, 1969, is provisional.
    Mr. Hiley: When the Minister examines this unfortunate trend, will he consider the possibility that the over-generous treatment of the development
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    areas has adversely affected those who are outside those areas and that we are not securing any new real jobs, but merely transferring unemployment from development to other areas?
    Mr. Dell: I do not believe that that is the case. In any event, the hon. Gentleman will know that the Yorkshire coalfields and North Humberside have now been made an intermediate area. There are many factors affecting the level of employment relative to March, 1966. These factors include such things as the point in the cycle which we had reached in March, 1966, an increase in the number of people self-employed, and an increase in the number of people staying at school. All these are factors in the situation.
    Mr. Tinn: On the contrary, will my hon. Friend bear in mind that in development areas the unemployment rates are running at two, three and even more times the rate for Yorkshire and Humberside and that there is no justification for the allegation of over-generosity to these areas?
    Mr. Dell: I entirely agree with my hon. Friend. That is why we are continuing to give substantial assistance to the development areas.
    Mr. R. Carr: Does the hon. Gentleman realise that this is the second area in three Questions of which he has had to admit that the number of jobs is more than 100,000 fewer than three years ago?
    Mr. Dell: Yes. I have also given the right hon. Gentleman an explanation of these facts. I am sure that the right hon. Gentleman will have studied, for example, the March, 1969, edition of the D.E.P. Gazette showing forecast levels of employment which go way ahead. He will find that even at high levels of demand it is expected that they will remain very stable for as far ahead as 1980 owing to various demographic factors of which the right hon. Gentleman must be aware.

    Government Training Centres
    Mr. Ellisasked the Secretary of State for Employment and Productivity how many Government training centres and training places there were in each year since 1964; and how many are planned in the next two years.
    Mr. Dell: With permission, I will circulate the figures in the OFFICIAL REPORT.
    Mr. Ellis: Does my hon. Friend accept that the Government deserve a great deal of credit for the great increase which these figures will show? Will he tell the House whether he has initiated any studies with existing places as to the usefulness of the work being done there and whether they are meeting the needs of people we are keen to serve in this business of retraining?
    Mr. Dell: I entirely agree with my hon. Friend that the increase in the number of training places since November, 1964, which has more than trebled them, has been a factor of fundamental importance and a considerable achievement. The usefulness of training places is shown by the fact that people trained at Government training centres normally achieve useful employment very shortly afterwards.
    Following is the information:

    Number of Government Training Centres

    Training Places

    November, 1964

    26

    4,078

    November, 1965

    30

    5,595

    November, 1966

    32

    6,421

    November, 1967

    38

    7,775

    November, 1968

    40

    8,863

    November, 1969

    43

    9,609

    November, 1971 (estimated on the basis of present plans)

    54

    nearly 13,000

    Wages Inspectorate
    Mr. Frank Allaunasked the Secretary of State for Employment and Productivity what plans she has for enlarging the Wages Councils' Inspectorate and for increasing the fines on employers who are found to be paying employees below the legal minimum.
    Mr. Gardnerasked the Secretary of State for Employment and Productivity whether she is satisfied with the present size and activities of the Wages Inspectorate; and if she will make a statement.
    Mr. Harold Walker: Each year about 10 per cent, of all establishments on Wages Councils lists are inspected by the Wages Inspectorate and the wages of approximately a quarter of a million workers are examined. Of this number
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    about 5 per cent, on average are found to have been underpaid. The number of wages inspectors employed full time on visits to employers' premises varies between 145 and 155. Given the low rate of infractions I see no justification for increasing the size of the Inspectorate.
    In the great majority of cases the Department is able to secure compliance with the requirements of the Wages Regulations Orders by enlisting employers' co-operation and it is rarely necessary to resort to legal proceedings. I have no plans for increasing the penalties laid down in the Wages Councils Act.
    Mr. Allaun: I thank my hon. Friend for that very full answer. Does he agree that there is no point in wages councils or minimum wages, however low, unless there is effective control to see that they are observed?
    Mr. Walker: The Donovan Commission gave some advice on the way ahead for wages councils and suggested that the best answer to the problem implicit in my hon. Friend's question was for the growth and development of collective bargaining to be facilitated in those industries.
    Mr. Fernyhough: Will my hon. Friend look at this again? His figures showed that employers are visited only once every 10 years and then it is found that 5 per cent. of them are not observing the law-This means that over a period of 10 years there may be several tens of thousands of decent workers who are not getting what they are entitled by Statute to get.
    Mr. Walker: My hon. Friend must not misunderstand the figures. It is not that 5 per cent. of employers are found to have been not complying with the regulations, but that 5 per cent, of the employees covered by the establishments visited were found to be receiving wages below the amount. This was usually not because of any attempt on the part of the employers to evade, but because of the complexity of the regulations and the need to explain them.

    Mergers (Economic and Social Consequences)
    Mr. Dalyellasked the Secretary of State for Employment and Productivity

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    what studies she is making of the economic and social consequences of mergers which have taken place.
    Mrs. Castle: The results of a pilot research study commissioned by the Government have recently become available and are being studied to see whether a broader programme of research would be worth while.
    Mr. Dalyell: What discoveries are emerging about the long-term effects of mergers?
    Mrs. Castle: As I explained in my answer, what we have carried out so far is a pilot study, the object of which was to attempt to assess the development flowing from a merger which took place five years ago. We are now considering whether a more extensive programme, involving a number of mergers and dealing also with more general studies would be worthwhile.
    Mr. Dudley Smith: Has the right hon. Lady had her attention called to the debate late last night when the whole question of the merger of the Prices and Incomes Board and the Monopolies Commission was condemned on all sides? In view of the outstanding speech by her right hon. Friend the Member for Batter-sea, North (Mr. Jay), a former President of the Board of Trade, who proved conclusively that this was a bad thing, would she look at it again?
    Mrs. Castle: I am sure that the hon. Gentleman is aware that this is an entirely different question. I would be very happy indeed to deal with the merits of the proposed merger at the appropriate time.

    Low-Paid Workers
    Mr. Dalyellasked the Secretary of State for Employment and Productivity what she is doing to identify those groups who are low-paid.
    Mrs. Castle: My Department's new earnings survey has yielded a wide range of information about the incidence of low pay in the economy.
    Mr. Dalyell: Will the results be taken into account in any White Paper?
    Mrs. Castle: Yes. The results of the survey have of course been published in the D.E.P. Gazette each month from
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    May to October of this year. There was a special article in the October issue dealing with some of the causes of low pay. I have had these findings very much in mind in evolving a policy for the low-paid in the next stages of the prices and incomes policy as my hon. Friend will see when a White Paper is published.
    Sir B. Rhys Williams: Is the right hon. Lady studying the possibility of helping the low-paid workers through the tax system?
    Mrs. Castle: The hon. Gentleman knows that that is not a matter for me.

    South Wales (Government Training Facilities)
    Mr. Fred Evansasked the Secretary of State for Employment and Productivity what plans she has to extend Government training and retraining facilities in South Wales.
    Mr. Dell: There are now three Government training centres in South Wales and a fourth is to be opened in West Monmouthshire by the end of 1970; and with effect from 1st September, 1969, new and expanding firms in the Cardiff area and part of Monmouthshire, which is shortly to be designated an intermediate area, have become eligible to receive the full range of my Department's training grants and other forms of training assistance available in the rest of South Wales.
    Mr. Evans: I thank my hon. Friend for that encouraging answer. Is he aware that, in an area like South Wales, where there has been an incidence of pit closures, with further closures threatened, and the consequent denial of traditional forms of employment for young people, the acceleration of training places and the maximising of the range of skills taught is now a matter of desperate urgency?
    Mr. Dell: I entirely agree with my hon. Friend. This is why the Government have placed so much emphasis on industrial training and retaining.

    Hotel and Catering Industry (Training Board)
    Mr. Fred Evansasked the Secretary of State for Employment and Productivity whether she will introduce legislation to amend the Industrial Training Act in order to enable the Industrial Training

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    Board for the Hotel and Catering Industry to extend its scope, in view of the limitations placed on it by a recent decision of the House of Lords.
    Mr. Dell: Yes. I shall take the first opportunity of introducing an amending Bill for this purpose.
    Mr. Evans: Is my hon. Friend aware of the keen sense of injustice felt by many employees, not least those in local authority employment, as a result of being denied the opportunity of proper training? Will he, whenever a weakness is revealed in the Act—as a result of an appeal court decision—which has enabled certain employers to deny their employees the opportunities of training, take immediate steps to close such loopholes?
    Mr. Dell: As I said to my hon. Friend, it is our hope to introduce legislation on this as soon as we can.
    Mr. R. Carr: Can the hon. Gentleman enlighten us further as to what he means by "as soon as we can"? Can he confirm that it will definitely be in this Session of Parliament, because I think that the House would think that anything later would be disgraceful?
    Mr. Dell: I cannot give the right hon. Gentleman a definite date, but I hope that it will be in this Session of Parliament. I cannot guarantee that.

    Wage Rates
    Mr. Scott-Hopkinsasked the Secretary of State for Employment and Productivity (1) what has been the average rise of wage rates during the last six months in the private sector of industry and services;
    (2) what has been the average rate of increase in wage rates in the last six months in the public sector of industry and public services.
    Mr. Harold Walker: Separate indices of wage rates are published for 18 major groups of industries based on the Standard Industrial Classification. This classification does not, however, distinguish between the private and public sectors as such.
    Mr. Scott-Hopkins: I thank the Minister for that most unhelpful reply. Would he not agree that we had the greatest number of wage rises in the past six months in the public sector? Does this
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    not go well over the norm set by his right hon. Friend and is it not now evident that her policy is completely in tatters?
    Mr. Walker: I would not accept that and the hon. Gentleman must not allow himself to be misled into drawing conclusions from one or two well publicised settlements in the public sector which do not necessarily reflect a movement in earnings.
    Mr. Molloy: Can my hon. Friend say whether he intends to have discussions with the Secretary of State for Social Services about the very low wage structure of the nursing profession?
    Mr. Walker: That is not a matter for me.
    Mr. Maudling: The Minister was asked a very serious question by my hon. Friend to which I do not think he has replied Can he say whether the movement of these two sectors in the last two months have been in advance of the Government's norm?
    Mr. Walker: The Question related to wage rates—the policy concerns itself primarily with earnings.

    Gross Annual Earnings
    Mrs. Renée Shortasked the Secretary of State for Employment and Productivity what were the average gross annual earnings for men and women, respectively, in Great Britain in 1968.
    Mr. Harold Walker: £1,249 and £622 respectively in the tax year 1967–68, the latest period for which annual figures are available. The figures relate to employees covered by P.A.Y.E., aged at least 18 but under the normal retirement age, who were at work for the whole year.
    Mrs. Short: Do not these staggering figures indicate the moral basis of the case for equal pay? Is my hon. Friend aware that in the West Midlands, which is a wealthy part of the country, the average earnings for women are lower than the national average? Will he take all steps to see that the date for the implementation of equal pay is advanced as much as possible?
    Mr. Walker: To the first part of my hon. Friend's supplementary question I would say "Yes." I have no statistical

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    evidence whatever to support her contention about women's pay in the West Midlands. She will know that my right hon. Friend is engaged in consultations with the C.B.I, and the T.U.C. about the phasing, implementation and other matters of equal pay.
    Mrs. Ewing: Can the hon. Gentleman give the figures for Scotland, or at least publish them in the OFFICIAL REPORT? Do not the figures that he has already given show that some cut in the phasing period must be made, as this is an injustice which cannot be tolerated for as long as is proposed?
    Mr. Walker: I have no figures to show that the position in Scotland justifies the hon. Lady's contention.

    Manpower and Productivity Service
    Mr. Howieasked the Secretary of State for Employment and Productivity what services are now being provided to industry and the trade unions by the Manpower and Productivity Service of her Department.
    Mrs. Castle: The assistance of Manpower and Productivity Service is freely available to both employers and unions. It provides information and advice on a wide range of subjects relating to productivity, especially in the better utilisation of manpower and on industrial relations. The service operates primarily through manpower advisers attached to my regional offices and the advice of specialists in a central consultancy service at headquarters is available to help them. It undertakes short advisory visits and more extensive surveys, particularly on pay and productivity problems.
    Mr. Howie: Is my right hon. Friend aware that she is to be congratulated on the breadth and depth of the services provided? Can she assure me that private industry is sufficiently gingered up to make use of them?
    Mrs. Castle: I agree with my hon. Friend that sometimes one can offer a service of which advantage is not taken. The evidence here goes to show that firms are very responsive indeed to these offers of help that are coming from my Manpower and Productivity Service, which in the first nine months of this year
    1692
    has advised nearly 3,000 firms. We find that they look upon this, quite rightly, as an invaluable free service to them by Government.
    Mr. Higgins: In view of the total failure of the right hon. Lady's prices and incomes policy, would she agree that the best service that can be provided is to ensure that pay for productivity agreements should not be made until productivity has actually gone up, and not when it is merely promised?
    Mrs. Castle: The hon. Gentleman is showing his total ignorance of the policy.

    Government Training Centres
    Mr. Howieasked the Secretary of State for Employment and Productivity what proposal she has to extend the range of skills and crafts taught in Government training centres.
    Mr. Dell: Industry's needs are kept under constant review and new trades are introduced and existing ones modernised. In addition, the courses are being modified as necessary to meet the individual needs of employers nominating their workers for sponsored training.
    Mr. Howie: Am I to suppose that the range of skills and crafts taught is now much wider than it was two or three years ago? Does my hon. Friend believe that the provision of training places in Government centres is yet sufficient to meet the demand?
    Mr. Dell: The range of courses available is now much wider than it was two or three years ago. We are continuing to extend it as necessary. There are two main forms of training available, of which the most important and the one covering the largest number of people is training in industry. The Government training centres are intended to provide skilled training for very much more limited numbers of people. We are getting to the point at which we are meeting the demand, but if demand increases we will take note of that fact and try further to meet it.
    Mr. Scott: Will the hon. Gentleman say whether the Government training centres are still meeting any resistance from unions to so-called dilutees being

    1693
    turned out from the Government training centres?
    Mr. Dell: There are in most areas agreements with the trade unions. There are still occasional difficulties, but over the country as a whole this is not a major problem.

    Resettlement Transfer Scheme
    Mr. Arthur Davidsonasked the Secretary of State for Employment and Productivity what changes have been made in her Department's Resettlement Transfer Scheme.
    Mrs. Castle: I would refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) on 24th July, 1969. The changes mentioned then came into effect on 1st September.—[Vol. 787. c. 430.]
    Mr. Davidson: Is the Minister aware that the improvements to which she refers are most welcome? Can she assure the House that the advantages of the scheme are being sufficiently publicised by her Department, particularly with a view to enabling workers to move into areas where there is a potential shortage of labour?
    Mrs. Castle: Through our local exchanges and other services we give extensive publicity to those schemes, but I can assure my hon. Friend that one of the purposes of the conferences such as that which will be held in his area of North-East Lancashire in January is to bring the Resettlement Transfer Scheme to the attention of workers in the area to meet the very shortage of labour to which my hon. Friend refers.

    Factory Inspectorate
    Mr. Arthur Davidsonasked the Secretary of State for Employment and Productivity what increases there have been in the size of the Factory Inspectorate over the past three years.
    Mr. Harold Walker: The number of factory inspectors in post increased from 497 on 1st November, 1966, to 611 on 1st November this year. The figures for the same date in the intervening years were 515 and 573 respectively.
    Mr. Davidson: The increase will be greatly welcomed, but can the hon. Gentleman say whether he is satisfied that the amount offered as a starting salary to factory inspectors is not too low, and perhaps acts as a disincentive to persons to take up this important work?
    Mr. Walker: The current rate of recruitment is encouraging and the figures I have given the House show an increase of about 10 per cent. per annum in the last two years. This is consistent with the current rate of recruitment. None the less, the recruitment is not going perhaps as well as we would like and we are prepared to look at factors which might provide an incentive to speeding it up.

    Coloured People (Employment)
    Mr. Bidwellasked the Secretary of State for Employment and Productivity what proposals she has to ensure that coloured workers obtain equality of opportunity in obtaining work in new areas of industry.
    Mrs. Castle: My Department is making continuous efforts to extend employment opportunities for coloured people through its employment services, training at G.T.C.s, the language courses which industrial training boards have been invited to sponsor and through the Regional Advisory Service on Race Relations.
    Mr. Bidwell: I thank my right hon. Friend for that answer. Will she not agree that, since investigations have shown that in areas in which coloured workers are to be found there is far less prejudice than elsewhere because people are beginning to be evaluated as human beings, these opportunities will go a long way towards getting the British working people as a whole to realise that people should be assessed as people, not by ethnic origin or colour of skin?
    Mrs. Castle: I entirely agree with my hon. Friend about the importance of widening employment opportunities for coloured workers. I know the interest he takes in this subject as a member of the Select Committee. That is why, despite the successful efforts which we have made, my Department has set up a working group to consider what further measures can be taken to widen employment opportunities still more.

    Race Relations Act
    Mr. Bid wellasked the Secretary of State for Employment and Productivity whether she will make a statement about the working of the Race Relations Act as it affects placements by employment exchanges and careers officers.
    Mrs. Castle: The number of employers seeking to notify vacancies of a discriminatory kind—which was always small—has been reduced to negligible proportions since the passage of the Act. Reports from careers officers show that, since the passage of the Act, more employers are prepared to consider coloured school leavers on their merits.
    Mr. Bidwell: I thank my right hon. Friend for that reply, which is most encouraging and offsets the propaganda suggesting that the introduction of this Act was unnecessary. Will she accept that immigrant workers as a whole are making a most valuable contribution to the British economy because they are composed of age group levels far out of proportion with the rest of the indigenous population?
    Mrs. Castle: I agree with my hon. Friend that the facts I have reported to the House show the value of the Act and that fears about the Act were totally unwarranted. I also agree that immigrant workers have a vital contribution to make to our national production and that we should help them in that task.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. John Fraserasked the Prime Minister when he intends to hold an official meeting with the Chancellor of Federal Germany.
    Mr. Winnickasked the Prime Minister what consultations he has with the Heads of the Common Market countries with regard to the British application to join the European Economic Community.
    Mr. Barnesasked the Prime Minister what plans he has to meet Heads of Government of the European Economic Community countries following the outcome of their Summit meeting at The Hague.
    Sir G. de Freitasasked the Prime Minister what communications he has received during the last week from the Heads of Government of the countries of the European Economic Community regarding the United Kingdom's application to join the European Economic Community; and what replies he has sent.
    The Prime Minister (Mr. Harold Wilson): We are in regular and close contact with the Governments of the Six through the normal channels. We welcome the agreement reached by the Six at their meeting at The Hague earlier this week to open negotiations between the Community and the applicants for membership and we are ready for negotiations to begin as soon as the Six are ready.
    On my meeting with Herr Brandt I would refer to what I said in the House on 25th November. There are no arrangements at present for a meeting with other Heads of Government of the Six.—[Vol. 792, c. 194.]
    Mr. Fraser: When the Prime Minister meets Herr Brandt again, will he congratulate him on bringing a breath of fresh air into European politics? Will he seek from Herr Brandt, and indeed from other leaders, subscription to the moral and philosophical objectives in the declaration by the Italian President on such matters as overseas aid and democratisation of European institutions?
    The Prime Minister: Yes, Sir. I think the House will be encouraged by Herr Brandt's line on a number of issues since his assumption of the Chancellorship and by what he is reported in the Press as having said in The Hague this week. With regard to the declaration mentioned by my hon. Friend, I am sure the whole House will endorse, as will Herr Brandt, the aspirations mentioned by my hon. Friend.
    Mr. Winnick: Is it the Government's intention that there should be some reasonable chance of success before the negotiations begin, say, next July? Is there a possibility that at the end of or during the negotiations the British Government will come to the conclusion that the cost could be too high and therefore decide not to go any further?
    The Prime Minister: The best chance of assessing the prospect of success is to "have a go". I do not think that it is possible to form a clear view of what terms will be available to us except by entering into negotiations. If those terms are possible, if they make it open to us to accede to the Community, that is one thing. If the terms involve too high a price, I am sure that we should all agree that it would be wrong to accept them.
    Mr. Barnes: Would the Prime Minister agree that, following the very encouraging outcome of The Hague summit, many people hope that the Government will make a wholehearted statement of our will to complete these negotiations successfully? Would it not be dangerous to this country to approach negotiations on a "take-us-or-leave-us" basis?
    The Prime Minister: I do not think there is any question of a "take-us-or-leave-us" basis. I have expressed the view that Europe needs Britain at least as much as Britain needs Europe. This is a fair approach. But as to the whole-heartedness of our application, this has been made clear on a number of occasions in 1967 and again this autumn. Obviously one cannot forecast what particular terms will be made available to us. I hope that these negotiations could be over in a much shorter time scale than that indicated by the right hon. Gentleman the Leader of the Opposition in his broadcast last Sunday.
    Sir G. de Freitas: Will my right hon. Friend agree that not only is it encouraging that there is agreement to open negotiations, but also that there is agreement to look at the agricultural front and study the ridiculous surpluses and the equally ridiculous budgetary burdens?
    The Prime Minister: My right hon. Friend speaks with all the authority of a former President of the Council of Europe and is expressing a view that is widely held in Europe as well as in this country. But the whole House will agree that in discussions, whatever our attitude in debates in this House, it is the common agricultural policy and what will be required of us which is the crunch of the issue as regards prices and the cost of living, budgetary contributions and the balance of payments. I see some en-
    1698
    couragement in some of the speeches reported in the summit talks this week both as regards budgetary contributions and, if I read them aright, as regards a matter of great importance to this country, namely the question of production grants as we would call them, hill farming grants and the rest, which might be treated in a different way in the future as compared with the way in which they have been treated in the past.
    Mrs. Renée Short: On a point of order. Did I mishear, Mr. Speaker, or did my right hon. Friend say that he was taking Question No. Q16 with this batch of Questions?
    Mr. Speaker: Order. The hon. Lady did mishear.
    The Prime Minister: As you say, Mr. Speaker, my hon. Friend misheard. As we all know, this is always a very difficult problem. I have run into trouble with the House sometimes for grouping too many Questions. What I tried to do on this occasion, and what I thought was fair, was to group those Questions put down on the same day three weeks ago, but not to group with them a large number which have been put down since then, because it means interfering with later Questions.
    Mr. Thorpe: Does the Prime Minister agree that one of the hopeful aspects of The Hague communiqué is that should negotiations start in July between Britain, the other applicants, and the Six, by then we shall know what will be the general level of agricultural prices, and the general monetary policy to pursue, and therefore our position can be assessed on the basis of a realistic, known future for this country, and not on the basis, as with so many opponents of the Common Market, of wild and usually totally inaccurate statistics?
    The Prime Minister: I hope that it will be possible at any rate to know the background of the C.A.P. in relation to which we negotiate. Obviously, we cannot know what derogations, what changes, will be available through the negotiations. The problem the right hon. Gentleman mentioned is the big problem that we have in preparing our White Paper on assumptions. We are choosing a wide range of assumptions, some of which might become unrealistic by the

    1699
    time the negotiations are well advanced. We shall still go ahead with the White Paper, even though that is so.
    Mr. St. John-Stevas: Does the Prime Minister agree that apart from his own sustained enthusiasm for entry the most important thing is to have an early negotiation on a limited number of major economic and political issues?
    The Prime Minister: I think that the hon. Gentleman is right in saying that. Certainly I hope that the negotiations might start before what was set at the Summit as the latest date. I hope that they will be reasonably speedy, and that there will be a desire in Europe as in this country and in this House that we do not have long tedious negotiations about a lot of small matters.
    Mr. Roy Roebuck: Kangaroo meat.
    The Prime Minister: I have heard that mentioned before. I hope that we should not have long negotiations about smaller matters, many of which are capable of solution after entry if we get the right terms for entry. In our negotiations we should concentrate on the main issues, and there are some very serious issues between us and the Common Market countries. Therefore, I hope, as the hon. Gentleman hopes, that the talks will be reasonably short but directed to the main strategic questions.
    Mr. Shinwell: While my right hon. Friend cannot be held responsible for statements made by the Leader of the Opposition, has he noted that the right hon. Gentleman has stated that we are unlikely to enter the Common Market before 1973 or 1974? Does not that damp down my right hon. Friend's enthusiasm a little?
    The Prime Minister: No, Sir. The right hon. Gentleman the Leader of the Opposition must take responsibility for his own statements. I hope that what he said will not be taken in Europe as any weakening of his will or the will of anyone else in the House in this matter. There is no need for it to take as long as he said. It may be that he thinks that they should wait for him, in which case they will have to wait a very long time.
    Mr. John Page: In view of the known time scale, does not the Prime Minister
    1700
    think that it would be much fairer to the British people if serious negotiations were not started until after the next General Election?
    The Prime Minister: Hon. Members can make their own assessment of the various unknowns in the equation the hon. Gentleman is trying to discuss, both as to the starting date, the length of negotiations, and the timing of the General Election. On none of those three am I in any position to help the House at present. But the hon. Gentleman will know that his own Government in 1959 went into a General Election with most categorical statements about why they could not enter into negotiations, and in that Parliament they started negotiations.
    Mrs. Renée Short: Will my right hon. Friend bear in mind that our relationships, both political and trading, with Eastern Europe are of tremendous importance to this country and should not be allowed to be interfered with by any attempts to enter the Common Market? Will he bear in mind Early Day Motion No. 52—"Relations with the German Democratic Republic"—when he meets Herr Brandt?
    The Prime Minister: I do not think that there are many hon. Members keener on trade with Eastern Europe than I am, or have been more involved with it over many years. There are six countries in the Common Market just as keen on maintaining and developing links with Eastern Europe in the matter of trade as we are.
    Mr. Maudling: As the Prime Minister has commented a little on my right hon. Friend's estimate of the timing, would he care to make his own estimate of possible timing for British entry into the Common Market, and say whether he would regard harmonisation on a value-added tax as part of the things to be negotiated?
    The Prime Minister: I was only very slightly critical of the right hon. Gentleman's broadcast—very slightly. I could do much better if he were here, but I do not think that I should in his absence. It is very unusual that he is absent, and I am sorry that he is not here. But he must take responsibility for that forecast. I do not think that it is for me to give another one, but I do not accept that the

    1701
    timetable need be anything like as long as he said.
    With regard to the second part of the right hon. Gentleman's question, obviously all regulations and decisions made under the Treaty of Rome are matters for the negotiations, including not only the value added tax but other aspects of prices and agricultural policy. Where the right hon. Gentleman and his party seem to indulge in so much masochism for themselves and putatively for the country is that they want to inflict these very big increases in costs and taxation on the country without even obtaining the gains of joining the Common Market.
    Mr. Milne: Is my right hon. Friend aware that while he talks about Britain needing Europe and Europe needing Britain, E.F.T.A. still represents our major foothold in Europe, that improvements in European unity began only when a Social Democrat Government were returned in Germany, and that possibly prospects for reconciliation between Eastern and Western Europe are our best indications at present?
    The Prime Minister: Nobody in this House would under-rate the importance of E.F.T.A. in this connection. When E.F.T.A. was put forward by the right hon. Member for Barnet (Mr. Maudling)—[Interruption.]—when the hon. Gentleman has had time to brief his leader, perhaps I could continue with my answer. When E.F.T.A. was put forward by the right hon. Member for Barnet it was widely applauded in this House, not merely as an alternative or a forcing move against the Common Market but as something right in itself, and so it has proved. But, on the question of E.F.T.A. in relation to the Common Market, my hon. Friend will have noticed the declaration agreed to in 1967, when our application was made, and that still stands.
    Mr. Shinwell: On a point of order. In view of the arrival of the right hon. Gentleman the Leader of the Opposition, Mr. Speaker, may I ask my question again?
    Mr. Speaker: Order. In no circumstances. Sir Harry Legge-Bourke—
    Mr. Faulds: On a point of order.
    Mr. Speaker: Order. I remind the hon. Gentleman that he is cutting into Question Time.
    Mr. Faulds: That is the point I wish to raise, Mr. Speaker. We have now had 13 minutes on one Question, which seems to me highly unreasonable.
    Mr. Speaker: Order. The hon. Gentleman is factually wrong in any case.
    Mr. Faulds: Fourteen minutes.
    Sir H. Legge-Bourke: In view of the Prime Minister's disagreement with my right hon. Friend the Leader of the Opposition over the length of time the negotiations are likely to take, does this mean that he will simply go on from where my right hon. Friend left off, having achieved considerable agreement before the negotiations broke down as a result of the French veto, or is he starting all over again?
    The Prime Minister: The position that we should take up in connection with the negotiations was made clear in the statement of my right hon. Friend the then Foreign Secretary to W.E.U. at The Hague in July, 1967. That set out the basis of our negotiations, and I have said already that it is my hope that they could be related to a relatively small number of strategic issues. A great deal of ground was covered in the early negotiations and, if that is still agreeable to our colleagues in the Six, nothing agreed then need be the subject of prolonged negotiation again.
    Mr. Edelman: Will my right hon. Friend discourage premature optimism about British entry into the Common Market and read the small print in the communiqué and Monsieur Pompidou's gloss on it which makes no mention of a time schedule for negotiating Britain's entry?
    The Prime Minister: I hope that I have said nothing to encourage excessive optimism in this matter. I regard the summit conclusions in the spirit of "so far, so good". They represent a step forward. But we must all be watchful against any dragging of feet, especially against any excessive hardening of the position on other issues in the period between now and the opening of negotiations which might make negotiations more difficult. This is no reason for anyone who is keen for Britain to get into the Common Market to become overexcited. Certainly it is no reason why those who are not keen to get in should

    1703
    take any view except that we are ready to go into negotiations, the door is now opening, we will see how they go, and then put a proposition to the House.
    Several Hon. Members—
    Mr. Speaker: Order. Mr. Heath. Business Question.

BUSINESS OF THE HOUSE
Mr. Heath: Will the Leader of the House kindly state the business of the House for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next week will be as follows:
MONDAY, 8TH DECEMBER—Debate on Foreign Affairs, which will be continued on Tuesday, 9th December the 4th Allotted Supply Day.
At the end on Monday, Motions on the Milk Marketing Amendment 1933 Scheme and on the Winter Keep (Scotland) Scheme.
At the end on Tuesday, Motions on the British Overseas Airways Corporation (Borrowing Powers) Order and on the Defence Powers (Continuance) Order.
WEDNESDAY, 10TH DECEMBER—Supply [5th Allotted Day]: Until 7 o'clock, a debate on Private Health Insurance, and afterwards, on the Reduction of Employment Opportunities in Scotland both on Opposition Motions.
Prayer on the Town and Country Planning (Control of Advertisements) Regulations.
THURSDAY, 11TH DECEMBER—Second Reading of the Gas Bill.
FRIDAY, 12TH DECEMBER—Private Members' Bills.
MONDAY, 15TH DECEMBER—Debate on a Motion to take note of the White Paper Public Expenditure, 1968–69 to 1973–74, (Command No. 4234).
Motions on the Rate Support Grant (Increase) Order, the Cumberland County Council Order, and the West Riding County Council Order.
The House will wish to know that subject to progress of business it is intended to propose that we should rise for
1704
the Christmas Adjournment on Friday, 19th December, until Monday, 19th January, 1970.
Mr. Heath: I thank the Leader of the House. Is he aware that, on Tuesday, the second day of the foreign affairs debate, which is a Supply day under the Opposition's control, we would wish the debate to be centred on the situation in Nigeria? Can he say to which subject the debated on Monday will be devoted?
Mr. Peart: Subject to your view, Mr. Speaker, it will be open to hon. Members catching your eye to raise such matters as they wish. However, it might be for the general convenience of the House if, on Monday, there was some concentration on Vietnam, and on Tuesday on Nigeria. However, I think that I should metion that, in opening the debate, my right hon. Friend the Prime Minister will want to touch on other issues as well as those two subjects. This must really be very much a matter for right hon. and hon. Members themselves.
Mr. John Mendelson: White welcoming the statement by the Leader of the Opposition this week, in contrast to his attitude last week, has it not clearly emerged that it is the wish of many hon. Members to have one clear-cut debate on Nigeria—
Hon. Members: No.
Mr. Speaker: Order. The House must allow the hon. Gentleman to say what has clearly emerged.
Mr. Mendelson: Has it not clearly emerged from the Order Paper that it is the desire of many hon. Members—and that does not exclude the opinions of other hon. Members—to have a clear-cut debate one day on Nigeria, and to devote the other day to Vietnam? Would it not be subverting the purposes of debate not to have a clear distinction between the two subjects, with one day, Monday, on Nigeria, and the second day on Vietnam, and should not the Government make certain that that is so by putting down a Motion on Vietnam for the second day of the debate?
Mr. Peart: I would have thought that my hon. Friend would have accepted my reply to the Leader of the Opposition. I thought that my reply was reasonable.
Mr. Rossi: Will the Leader of the House give time for the Secretary of State for Employment and Productivity to make a statement on the dispute between the A.E.F. and the N.U.R. as to whose members should be promoted as the mechanical craftsmen of London Transport? The dispute has caused a strike which is now in its 11th week, leading to a reduction in services on the Northern Line—
Mr. Speaker: Order. The hon. Gentleman can ask for a debate, but he cannot debate it at the moment.
Mr. Rossi: It has caused a reduction in services of one-third, a break-down of escalators, and has resulted in appalling travelling conditions in London.
Mr. Fernyhough: On a point of order, Mr. Speaker. Is it not an abuse that, after my right hon. Friend the First Secretary, at Question Time, has asked hon. Members to bear in mind that at this moment negotiations are taking place on this very matter, the hon. Gentleman should take advantage of a business question to make a statement of that kind?
Mr. Speaker: Order. I thought that I had conveyed that to the hon. Member for Hornsey (Mr. Rossi). It is not in order, when asking a business question, for an hon. Member to make the points which he will make if he gets the debate that he is seeking.
The Leader of the House has been asked for a debate on the dispute.
Mr. Peart: Not next week.
Mr. James Johnson: Will the Leader of the House bear in mind the fatal—
Mr. Rossi: On a point of order, Mr. Speaker. I did not ask the Leader of the House for a debate. I asked for time to be given for a Ministerial statement.
Mr. Speaker: The hon. Gentleman is quite right. He asked for a statement, not a debate.
Mr. Peart: I will, of course, represent the hon. Gentleman's views to my right hon. Friend. However, I believe that hon. Members should be very cautious about what they say when there is an industrial dispute and negotiations are taking place.
Mr. James Johnson: May I now ask my right hon. Friend to bear in the mind the fatal consequences of yielding to the pressures of my hon. Friends below the Gangway to muzzle back-bench hon. Members by discussing only two subjects on Monday and Tuesday? We should be allowed to speak on whatever subjects we want, and not be confined to only two aspects of foreign affairs.
Mr. Peart: I thought that I had replied to the Leader of the Opposition on this point. I hope that my hon. Friend will accept what I said earlier to the hon. Member for Penistone (Mr. John Mendelson), that I thought that what I told the right hon. Gentleman was reasonable.
Mr. Bitten: If it is the intention of the Leader of the House that we should concentrate in the foreign affairs debate primarily on Vietnam and Nigeria, will he tell the House next week when we may have a debate on our relations with Europe?
Mr. Peart: It is up to hon. Members to catch Mr. Speaker's eye and, if they wish—[Interruption.] I cannot interfere with the procedure of debate in that way. It is up to the hon. Gentleman to make his case if he so wishes.
Mr. Dickens: Is my right hon. Friend aware of Motion No. 64 in my name, supported by 120 right hon. and hon. Members on both sides of the House?
[That this House, having noted with approval the Government's acceptance in principle of the Services Committee's recommendations that 'provision should be made at public expense for secretarial assistance or an allowance to meet the cost up to a maximum of one full-time secretary per Member' and that 'a substantial increase in the car allowance should be granted' urges the Government to assume immediate responsibility for the salaries, National Insurance, and selective employment tax of Members' secretaries, and to make an early announcement of the revised mileage allowance.]
As four months have elapsed since the Government's acceptance in principle of the Select Committee's recommendations, may I ask my right hon. Friend whether he will make a statement on the matter, preferably next week?
Mr. Peart: I will endeavour to make a statement next week.
Mr. David Steel: Does the right hon. Gentleman recall that the Government have asked for views on the report of the Scottish Royal Commission on Local Government by the end of the year? Will he seek to make arrangements for Members of Parliament to give their views in debate at least in the Scottish Grand Committee, if not on the Floor of the House, before Christmas?
Mr. Peart: I will look into this matter.
Mr. Atkinson: Is the Leader of the House aware that the conversion to decimal currency which is now taking place is having a serious effect on the cost of living and that the Government's advice in the matter is being constantly ignored? Therefore, will he rearrange the business towards the end of next week so that we may have an emergency debate on the effect of the conversion?
Mr. Peart: My answer to my hon. Friend is "No, Sir".
Mr. Amery: Reverting to the foreign affairs debate on Monday and Tuesday, while fully appreciating the desire of the House to discuss Nigeria and Biafra on one of those days, and not underrating the importance of the Vietnamese issue, will the Leader of the House confirm, after the exchanges which have taken place, that it will be in order to raise other matters, such as the Middle East and Europe, which are just as important in the eyes of many hon. Members as the other two issues?
Mr. Peart: I should think that it would be in order to do what the right hon. Gentleman suggests.
Mr. Lawson: Referring to Wednesday's business, in view of the obvious difficulty of right hon. and hon. Gentlemen opposite to understand the plain facts and figures of Scotland's extraordinary recovery, will my right hon. Friend endeavour to persuade the Leader of the Opposition to devote a full day to discussing this subject instead of half a day?
Mr. Peart: This is a Supply day and the Opposition, quite rightly, have chosen two subjects. It is for the Opposition to decide. I cannot go beyond that.
Mr. Scott: In view of the widespread feeling in the country and in the House on nurses' pay, cannot the Leader of the House offer us at least a statement, if not a debate, next week on this vital subject?
Mr. Peart: I will refer this to my right hon. Friend.
Mr. Prentice: In view of the importance of the debate on public expenditure on Monday week, will my right hon. Friend consider whether this should be a two-day debate? If this is difficult in terms of Government time, will he consult the Opposition with a view to seeing whether they will sacrifice a Supply day so as to have a two-day debate?
Mr. Peart: This is difficult, because I conceded a debate on another matter. I hope that my right hon. Friend will understand.
Mr. David Mitchell: Will time be found for a statement by the Secretary of State for Employment and Productivity on the disastrous situation at Tilbury and in the London docks?
Mr. Peart: As soon as my right hon. Friend is ready to make a statement she will. I recognise the importance of this matter.
Mr. Winnick: Obviously, right hon. and hon. Members will want to raise various items on Monday and Tuesday, but will my right hon. Friend accept that for many weeks hon. Members have been pressing him for a debate on Vietnam? Is he aware of Motion 39, signed by 90 of my right hon. and hon. Friends?
[That this House, deeply disturbed at the allegations of mass murder committed by United States troops in a Vietnam village, calls upon Her Majesty's Government to express to the United States Government the deep concern which exists in this country at these reports.]
Mr. Peart: My hon. Friend should not ask me to repeat myself. I gave a clear reply on this matter to the Leader of the Opposition.
Mr. Peter Walker: Will the Leader of the House carefully consider making time available for a statement on Tilbury in view of a report that yet another firm has decided to leave Tilbury?
Mr. Peart: I agree. I thought that I gave a sympathetic reply to the hon. Member for Basingstoke (Mr. David Mitchell).
Mr. Roebuck: Referring to the foreign affairs debate, is my right hon. Friend aware that I have been waiting, since his promise of last July, to hear from the Ministry of Defence and the Foreign Office about the situation with regard to the Greek Army's rôle in N.A.T.O.? Can he assure the House that his right hon. Friend will come to the House on Monday or Tuesday to give us his assessment of the position?
Mr. Peart: I will convey the opinions of my hon. Friend, but I cannot promise that my right hon. Friend will refer to his contribution.
Mr. Michael McNair-Wilson: Will the Leader of the House consider finding time for a debate on the White Paper on Civil Air Transport?
Mr. Peart: I cannot promise a debate before Christmas.
Mr. Frank AUaun: May I remind the Leader of the House that the last time we had a two-day debate on foreign affairs was August, 1968, when one day was clearly devoted to Czechoslovakia and the other to Nigeria? I think that my right hon. Friend must admit that it will lead to tremendous confusion if these and other subjects are dealt with on a "Cook's tour". Is my right hon Friend aware that 140 right hon. and hon. Members have put down their names to a Motion on Nigeria?
[That this House, in the name of humanity and realism, calls for a change in Government policy over the Nigerian civil war, which after two-and-a-half years cannot now be won by either side; and urges Her Majesty's Government to press through the Security Council of the United Nations for an immediate and total embargo on the supply of arms to either side.]
Both Nigeria and Vietnam deserve not only discussion but, if the Government fail to make advances, if necessary, a vote. Right hon. and hon. Members will be put in great difficulty if this is denied to them.
Mr. Peart: I think that my advice to the House is right. I have examined this matter—[An HON. MEMBER: "Not enough."] I must consider other hon. Members. If my hon. Friend catches Mr. Speaker's eye he will be able to make a contribution to the debate.
Mr. Heath: If it would help the Leader of the House, we on this side would be prepared to accept from the Prime Minister on Monday a statement on Europe on which the House could cross-examine him so that he could afterwards devote his speech to Vietnam and to the debate in his party on that subject.
Mr. Peart: I think that it would be right for my right hon. Friend, in opening the debate, to touch on the whole canvas of foreign affairs.
Mr. Philip Noel-Baker: It has been evident for a long time that the House should urgently debate both Nigeria and Vietnam and that we shall get no satisfaction on either of those matters unless the whole time is devoted to them. But is it not also equally urgently important that there should be a debate on the Middle East, where the situation is very dangerous? If the House gets its priorities right, should not the Leader of the House give us another day?
Mr. Peart: My right hon. Friend wishes me to suggest another day for debate apart from the two-day debate— [HON. MEMBERS: "Yes."] I think that my hon. Friends who have pressed me for a two-day debate should be satisfied at this stage.
Mr. Thorpe: Is the Leader of the House aware that whilst in no way wishing to limit the matters which may be raised in the two-day foreign affairs debate, there are many hon. Members in all quarters who, particularly on the issues of Nigeria and Vietnam, would like to be able to express their opinions in a vote? Surely this is not beyond the wit of the right hon. Gentleman to arrange?
Mr. Peart: I hope that the Leader of the Liberal Party will carefully examine what I said when I made my first statement on this matter in reply to a question. I think that he must be sensible.
Mr. Sheldon: I should like to press my right hon. Friend about having a

1711
two-day debate on public expenditure. This really is of extreme importance. We have created a new method of examining how we are spending the vast sums of money which the Government raise. Surely this is worthy of a two-day debate.
Mr. Peart: It is an important matter, but I am pressed for time.
Dame Irene Ward: To help both sides, will the Leader of the House ask the Secretary of State for Education and Science whether he can tell us what his instructions to his two representatives on the Burnham Committee are? I want to know whether it is the Chancellor who is conducting the negotiations or the Secretary of State for Education and Science. If he could tell us what his instructions are we should then know how the Chancellor of the Exchequer was playing the hand and whether the Secretary of State is in favour of the teachers.
Mr. Peart: Much as I like the hon. Lady, I must say, in view of the delicacy of the matters affecting the Burnham Committee, that I do not think that her suggestion is very helpful.
Mr. Molloy: In view of the serious crisis arising in the nursing profession, will my right hon. Friend arrange for a debate in the House on the pay of nurses before we rise for the Christmas Recess?
Mr. Peart: I cannot promise a debate, but I will represent to my right hon. Friend the feeling of many hon. Members on both sides.
Mr. Hugh Fraser: While thanking the right hon. Gentleman for his assurance, and in view of the statement by my right hon. Friend the Leader of the Opposition that on a Supply day we are debating Nigeria, may I ask him to make it clear that the Prime Minister will open the debate on Monday, and that on Tuesday the Foreign Secretary will deal in detail with the Nigerian situation?
Mr. Peart: I cannot at this stage be committed to the order of the debate, but I said that my right hon. Friend the Prime Minister would open the debate. I expect my right hon. Friend the Foreign Secretary to intervene on Tuesday.
Mr. Hugh Jenkins: Is it not a fact that the manner in which the two-day
1712
foreign affairs debate has been arranged means that the Government will not have an opportunity of knowing the opinion of the House on the question of Vietnam? Will my right hon. Friend reconsider the position? Might it not be to the advantage of the Government to know the opinion of the House?
Mr. Peart: I hope that my hon. Friend will not think that I am as naive as that. I know his views, and those of many other hon. Members.
Sir Alec Douglas-Home: The right hon. Gentleman knows that the Opposition have a Supply day next Tuesday, and that we have chosen to concentrate on Nigeria. Will he convey to his right hon. Friend the Foreign Secretary that we shall expect a detailed reply from him on this subject?
Mr. Peart: I shall, of course, do that. I thought that I had said so.
Mr. Albu: In view of the radical and welcome improvement in the method of presentation of public expenditure, which is published today, will my right hon. Friend reconsider his decision about the number of days allocated for debate and accept the Select Committee's recommendation for a two-day debate on public expenditure?
Mr. Peart: I have noted the point, but I cannot go beyond my earlier reply.
Mr. John Page: Will the right hon. Gentleman make a statement before we rise for the Christmas Recess on how a written record of the unveiling of the Churchill statue, including the words of Mr. Speaker on that occasion, can be made available to hon. Members?
Mr. Peart: I shall consider that. If it is possible, we should have a written record.
Mr. Raphael Tuck: I heard my right hon. Friend say, "I am pressed for time". Although the Government are pressed for time, there are many vital issues which will not be discussed—
Mr. Speaker: Order. Only one question at Business Question time.
Mr. Tuck: I am coming to it, Mr. Speaker. As Vietnam, Nigeria, Europe, the Middle East, public expenditure, and other matters are not to be debated, and

1713
as we are apparently having no fewer than 31 days' Recess, would it not be a good idea to extend the term for a couple of days before Christmas, and come back three or four days earlier than intended, so that we can have time to debate all these vital matters?
Mr. Peart: My hon. Friend can no doubt participate in the debate when I move the Motion for the Adjournment of the House for the Christmas Recess. I think that a good holiday is good for a lot of people.
Sir Edward Boyle: Is it not highly desirable that there should be a two-day debate on public expenditure? Is it not clear that many hon. Members will wish to raise not only priorities, but also machinery for controlling Government expenditure, and how we can get the best value for money?
Mr. Peart: I accept that. I suggested earlier that possibly one day, later, we could have a debate on the structure of Select Committees and matters like those mentioned in the report. I cannot go beyond what I said earlier.
Mr. Bidwell: Will my right hon. Friend think more deeply about having two separate days for the foreign affairs debate on the specific items of Vietnam and Nigeria? If we roam all over the world, are we not in danger of going on for ever because some Members are happy about some aspects of the Government's handling of foreign affairs, but not about others? If we all vote against the Adjournment of the House we shall end up in a shambles.
Mr. John Mendelson: So will the Government.
Mr. Peart: I hope that my hon. Friend will study what I said earlier. I cannot go beyond that.
Mr. R. Carr: Can the right hon. Gentleman say whether the Government expect to publish next week their new White Paper on prices and incomes policy, and whether the First Secretary of State will accompany the publication with a statement to the House?
Mr. Peart: I am not sure about a statement, but I shall represent the right hon. Gentleman's views to my right hon. Friend.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. Only one business question from any right hon. or hon. Member.
Mr. Scott-Hopkins: In view of the obvious importance of Professor Swann's report on antibiotics, can the right hon. Gentleman say whether there will be a debate on it before Christmas? If not, will he say how soon we can have one?
Mr. Peart: Not before Christmas.
Mr. McMaster: May I press the right hon. Gentleman for a statement before Christmas on the continued ban on the operation of container facilities at Tilbury, so that hon. Members on both sides can express concern about the great damage that this is doing to the country's export efforts?
Mr. Peart: I have already answered that question.
Mr. Onslow: Will the right hon. Gentleman bear in mind the need to have a half-day debate soon, in Government time, on the report on the recent outbreaks of rabies?
Mr. Peart: I know that this is of concern to the general public, but I cannot promise a debate.

QUESTIONS TO THE PRIME MINISTER
Mrs. Ewing: As we reached only Question No. Q1 to the Prime Minister, and No. Q3 was not answered, and, therefore, apparently Scotland's vital statistics remain veiled in mystery, I wonder, Mr. Speaker, whether you would use your influence with the Prime Minister to urge him to cut down the length of his Answers, and thus increase his own productivity?
Mr. Speaker: I make no comment on vital statistics. As a matter of fact—and this is why I corrected the hon. Member for Smethwick (Mr. Faulds)—we dealt with four Questions. The Prime Minister was dealing with four Questions on Europe, at a rather interesting stage in the whole matter of Europe, and I thought it right to let it run as I did.

PERSONAL STATEMENT
The Under-Secretary of State for Defence for the Army (Mr. Ivor Richard): With your permission, Mr. Speaker, I should like to make a personal statement.
At Question Time yesterday, I answered a supplementary question from the hon. Member for Moray and Nairn (Mr. Gordon Campbell) on the development of the rocket range in the Hebrides in these terms:
"The hon. Gentleman knows that within 48 hours of having made the statement in the House I wrote to him and to other Members most directly concerned in this matter, correcting that."—[OFFICIAL REPORT, 3rd December, 1969; Vol. 792, c. 1463.]
I now find that, whereas I did indeed write to the hon. Member on 16th October, my letter did not cover the precise point in question, namely, the income to the islands from the rocket range in the current year.
This information was, in fact, given to the hon. Member by my Written Answer to his Parliamentary Question on 22nd October, and in Answers to subsequent Parliamentary Questions on later dates.
I am grateful to you, Mr. Speaker, for the opportunity to correct this error, for which I apologise to the House and to the hon. Member concerned.

BILLS PRESENTED
  LABELLING OF FOOD AND TOILET PREPARATIONS
  Mrs. Joyce Butler, supported by Sir Stephen McAdden, Mr. John Farr, Mr. John Rankin, Mr. Jeremy Thorpe, and Mr. Tony Gardner, presented a Bill to confer powers in relation to the provision of information or instructions on the sale of food and toilet preparations; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 20th February and to be printed. [Bill 52.]
  ANTI-DISCRIMINATION
  Mrs. Joyce Butler, supported by Mr. Bishop, Mrs. Freda Corbet, Mrs. Winifred Ewing, Miss Margaret Herbison, Mrs. Lena Jeger, Mrs. Anne Kerr, Miss Quennell, Dr. Shirley Summerskill, and Dame Joan Vickers, presented a Bill to make illegal discrimination against women in respect of employment, education and training, social and public life; to provide for equal pay to women for work of equal value; to establish an antidiscrimination board; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 20th February and to be printed. [Bill 51.]

NATIONAL SUPERANNUATION (WHITE PAPER)
3.58 p.m.
The Minister of State, Department of Health and Social Security (Mr. David Ennals): I beg to move,
That this House takes note of the White Paper on Terms for Partial Contracting Out of the National Superannuation Scheme (Command Paper No. 4195).
I should like to start by saying how sorry I am, as I am sure the House will be, that my right hon. Friend the Secretary of State for Social Services is unable to open the debate because he is suffering from a bout of influenza.
In the debate on the first White Paper, Command 3883, in March, the noble Lord the Member for Hertford (Lord Balniel), who, I understand, is to lead for the Opposition today, made a fiery speech and demanded of my right hon. Friend that he should take back his White Paper, and the hon. Gentleman led his supporters into the Division Lobby at the end of the debate. This time the Opposition have decided not to force a Division. I welcome this. I guess that we are winning the argument, and I warmly welcome that.
When my right hon. Friend presented the third White Paper which we are debating today, Command 4195, on 5th November, the noble Lord described it as being totally incomprehensible. I hope that he was speaking for himself when he made that statement. The subject that we are debating today, and which is being debated in the country, is by no means an easy one, especially to a layman, and most of us in the House are laymen.
The problems of easy comprehensibility are not confined to the State scheme. I was reading a day or two ago the rules of one of the largest and best funds in the private sector. This is what they said on how one calculates one's pension:
"The total retirement pension, including the part of your National Insurance pension described in section 15, is called your 'Gross Retirement Pension'. This will be expressed as a percentage of your Final Pensionable Pay and is calculated by adding together three items: (1) On the first £1,650 a year of Final Pensionable Pay: 1½ per cent. for each year
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of Pensionable Service; (2) On Final Pensionable Pay in excess of £1,650 a year: 1¼ per cent. for each year of Pensionable Service; (3) On total Final Pensionable Pay, a … Service Credit of: 12½ per cent. proportionately reduced if total Pensionable Service is less than 30 years. (But see also section 14 and if you are entitled to benefits from other … Funds section 30.)"
So now we understand.
This is an extremely difficult subject, whether we are involved in a private sector or public sector fund. But there are many ways in which the Government's new scheme is very much simpler than our present hybrid system. First, there are three ways in which we can pay for our pension: the flat-rate contribution levied by stamps on the insurance card; the contribution for a graduated pension collected through the P.A.Y.E. system; and the contribution to earnings-related sickness, unemployment and widow benefit, also collected through P.A.Y.E. Now we have one simple system in which there is one form of payment. By this means we are able to abolish the stamped card. I think that most people will say, "Thank goodness for this simplification".
Secondly, there are now two different types of State pension—flat rate and graduated. In future, there will be one type, linked to earnings by a formula which is simpler than is the case with many occupational schemes. Thirdly, no one can have any idea what State pension entitlement he will have 5, 10, 15 or 20 years from now; it is entirely dependent on the whims of successive Governments. Under the new scheme pensions will have a clear relationship to earnings, as with most occupational pension schemes.
But, fourthly, pensioners at present are entirely left in the dark about the frequency with which they will have their pensions up-rated to cover increases in the cost of living, and so on. It may be less than two years, it may be as much as three-and-a-half years. At present, they are in the lap of successive Governments good, bad and, I was going to say, indifferent, but mainly good and bad. In future, they will know that they can count on a biennial review with a statutory obligation on the Government at least to cover rises in living costs and more likely to follow the trend of earnings.

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Yesterday, we published a popular booklet, "The New Pensions Scheme: Latest facts and figures with examples", which is almost essential reading on pensions for the layman. I am sorry to interpose a commercial, but I hope that this pamphlet will be read because it sets out in a simple way the problems before us.
Today, we are basically debating the terms for partial contracting out, but before I come to the White Paper I should put the problem of contracting out in the general context. No one can seriously doubt the need for a major reform of our present inadequate, archaic system of social security. The pity is that it had to wait this long before being introduced. An increasing proportion of pensioners are dependent, or partly dependent, on supplementary benefits. There is no doubt that unless the scheme were changed the proportion would steadily rise.
We know that as long as that fact exists there is a tremendous disincentive to save by those who know that the State pension is below the level of supplementary benefits and, therefore, they will automatically be able to turn to supplementary benefits. Most people recognise the importance of an earnings-related scheme, learning from the experience in many European countries, with two quite clear advantages, first, that it is a means of producing adequate pensions for the future, better than present pensions, and, secondly, that it is a fairer way of spreading the burden of contributions.
It is unfair—and I have said this before in the House and I think that most people agree with it—that a man on a very low level of earnings of £12 a week spends almost 8½ per cent. of his earnings on his insurance contribution, while a man earning £36 a week is called upon to pay about 4·7 per cent. of his earnings.
The Opposition saw the attractions of introducing a graduated system of payment when, in 1959, they introduced their graduated pension scheme. They obtained extra money to pay for the pensions, but they provided a derisory benefit in return for the contributions. A man who today retires at the age of 65 and who has been paying his graduated contributions ever since the scheme was introduced will have the priceless sum
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of 11s. 6d. to his credit from the Opposition scheme. That sum will gradually shrivel with rising costs, because there is no means of ensuring that that small pittance would do other than stay at precisely the same money figure without any revaluation to take account of the cost of living.
At present, quite a lot of people are saying that work people distrust Government pension schemes. A number of journalists have been saying this. We must look to the scheme which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) introduced as the explanation for the fact that there is a good deal of doubt about systems of this sort. Not only hon. Members but the public recognise that system as a swindle.
Since the White Paper was published in January no one has suggested a viable alternative to the scheme put forward by my right hon. Friend the Secretary of State. The Opposition have hinted, but have not made clear—and the great advantage of this debate is that we shall get clarification—that the best thing to do is to leave matters to the occupational pension schemes. The development of occupational pension schemes is an extremely valuable addition to the State scheme, quite apart from their savings advantages, which we all recognise. But it is a fallacy to think that occupational schemes can be a substitute for a fair and proper State pension scheme.
We should remind ourselves of the facts. There are 12,200,000 people in occupational schemes. I hope that that number will increase. But no one, including people in the pension world, doubted that even by the turn of the century there would still be about one-third of retirement pensioner households with no occupational pension and who would even then be dependent on a State pension. I do not believe that we could compel employers to provide an occupational pension scheme, as some have suggested.
Mr. Sydney Bidwell: The figure of 12 million people in occupational pension schemes may be a little misleading, because the bulk, or a considerable number of them, are, by our standards, in entirely unsatisfactory occupational schemes.
Mr. Ennals: I should not like to generalise, because some occupational

1721
pension schemes are very sound. But my hon. Friend is right in stating that some still provide a very modest benefit. According to the latest statistics, in 1967, about half of the people receiving occupational pension were receiving £3 a week or less. But we must not overplay this, because in some cases the funds had been in operation for only 10 or 15 years; they had not reached total maturity. I therefore do not want to imply that there are not many very sound occupational pension schemes.
But what we must recognise—as I am sure my hon. Friend does—is that it is possible for a man to be a member of a perfectly sound occupational scheme and then to move to another form of employment, perhaps very good pensionable employment, with the likelihood that such a man takes with him the money he has paid in but no pension entitlement. In fact, only one in 10 of people moving from job to job take with them a pension entitlement.
So, if one moved four or five times, as is not unreasonable, particularly in the private sector, one could be in four or five kinds of employment, each with a good occupational scheme, yet retire with a very modest pension because each time one moved one had received a payment of contributions but not a preserved pension right. It is not the issue to be debated at present, but it is an essential part of the Bill.
Another essential factor is that two-thirds of all occupational pensions give no widowhood cover, and even some of that third make very inadequate provision for the widow. This is very important, when one remembers that two-thirds of women survive the death of their husbands.
The only serious alternative which has been proposed to my knowledge since the White Paper came out in January is that of the National Association of Pension Funds. It said, "We are in favour of earnings-related contributions, but it should be for a flat-rate benefit." That was its conclusion, and it would certainly be a higher flat-rate benefit than at present.
Apart from the cost, which I do not want to go into at present, it must be accepted that it would be grossly unfair to middle and higher wage earners to be
1722
told that the more they earned the more they would contribute, for precisely the same pension right. Nothing could be closer to a form of direct taxation than that. It totally undermines, as the noble Lord the Member for Hertford said in an earlier speech in March, the insurance principle. Also, it denies the advantage of earnings-related pensions to all who are not fortunate enough to be members of private or public sector occupational schemes.
I cannot see—I have tried to consider this—that such a system would give any room for contracting out. I cannot see, either, that there would be any logic or any need to establish a ceiling on contributions in a system which produced only flat-rate benefits. We have analysed this proposal very carefully and have discarded it. Frankly, had the Government come forward with a proposal which would have seemed so unfair to the middle and higher earners, we should have been pilloried for doing so, and hon. Gentlemen opposite would certainly have been among the leaders.
I hope that the Opposition will make their position clear on this scheme. The hon. Member for Somerset, North (Mr. Dean) was reported as telling the C.I.B. Life Society on 15th October that he found the proposal attractive, but that it was the political judgment of some very experienced colleagues that the idea would be unacceptable. Maybe one very experienced colleague is the hon. Member for Hertford who is sitting next to him, because, on 6th March, the noble Lord said in the House:
"… I am saying that there should be a relationship between pension and the man's earnings in his working life."—[OFFICIAL REPORT, 6th March, 1969; Vol. 779, c. 715.]
That was an important statement, and perhaps it has totally cleared up the question of whether or not the Opposition support this proposal.
At least we know that they fully recognise that higher contributions are needed—and, we must say, higher contributions in any case. Were there to be an earnings-related system or not, were we simply to exist with our present hybrid amalgam scheme, we should still have, if we are to improve pensions and pay for the vastly increased number of old people now in retirement, to raise contributions. It is important that both

1723
hon. Members who speak from the Opposition Front Bench have recognised this, so there is no division between us about whether contributions would have to be increased.
If the new earnings-related scheme is essentially the issue, we are really analysing in this White Paper what should be the relationship between the State scheme and occupational schemes. My right hon. Friend could, if he had wanted, have steamrollered our State scheme through without any basis of partnership. So far as I know, no Government, in introducing an earnings-related scheme, have consciously set out to leave a special place for, and to work out a form of partnership with, existing occupational schemes.
Mr. Douglas Houghton: My hon. Friend says that the Government could have steamrollered through a scheme without any contracting-out arrangements. Surely he knows that that would have been politically impossible?
Mr. Ennals: I do. I was about to say that we would never have thought of doing such a thing. I am saying that it would have been possible for a Government to seek to do it, but that we would never think of doing this. First, it would have had a very serious effect upon savings, of which occupational schemes provide a significant part. Secondly, it would have led, inevitably, to drastic cut-back by occupational schemes which were left with the only alternative of living on top of an enhanced State scheme. We genuinely believe in partnership. This is so because each type of scheme—on the one hand, a funded occupational scheme and, on the other, a pay-as-you-go State scheme—has its advantages which enable them to fit together very well.
The first advantage of a State scheme is the automatic transferability. A man can change his job as frequently as he likes and his pension right is always preserved. Secondly, the State can provide, as an occupational scheme cannot, dynamism, by which I mean that the level at which a man's pension is established at the moment of his retirement is based on the earnings levels of the country at that time and, also, that the pension, after he has received it, can be uprated to cover either, as a minimum, rising costs
1724
of living, or, as a maximum, earnings levels or any other maximum which one cared to set. No privately funded scheme can give a total guarantee that a pension will not shrivel somewhat if there are rising costs—
Mr. Peter Tapsell: How can the Government, either, give such a total guarantee for the future?
Mr. Ennals: Because the Government can write into their legislation, as we will do, this statutory obligation. Nor should we imagine that this is a fearful obligation for a Government to take. During the years when the hon. Member's party was in power, even without a statutory obligation, it raised the level of pensions and this did more than cover rising costs. We have proceeded beyond that, but I am simply saying that both Governments have found this possible. There will now be a statutory obligation and it will come at a fixed time, when the pensioners will know it.
But the next advantage, of course, is that a State scheme can give an enhanced pension to a man with a wife and children. It can also give widowhood cover, which is more generous than, so far as I know, any occupational scheme can offer. As the House will recognise, a widow of 50 or over, when her husband dies or her children grow up, will be able to inherit his full rate of earnings-related pension. This is a very important step forward and especially so, because, as I said, two-thirds of wives survive their husbands.
The fifth advantage is that, in a pay-as-you-go scheme, we can introduce a relatively short maturity period of 20 years which could not possible be done by a funded scheme.
On the other hand, there are advantages in a private occupational scheme which the State cannot match. For example, an occupational fund can adapt its conditions to its employees. It can tailor its provisions to suit the needs of individual occupations, with maybe for white collar workers a pension based not on average earnings over a period, but on final salary. It can adjust to meet an early retirement age and it can provide a lump sum.
All these are advantages because of the flexibility of an occupational scheme. There is, therefore, everything

1725
to be said for having the advantages of both State and private schemes. State and occupational schemes can both complement and supplement each other.
The next question is: what is the right mix? This is what partial contracting out is all about. It allows occupational schemes to take over responsibility for part of the State pension in return for a reduction in the State contribution of employees and employers, so avoiding or reducing the need to cut back occupational schemes when the expanded State scheme is introduced.
It was announced in January, when the first White Paper was published, that there would be detailed consultations about the terms of partial contracting out. There have been very detailed consultations indeed. Having had the privilege of being involved, with my right hon. Friend the Secretary of State, in literally dozens of meetings, I pay tribute to the principal organisations with which we were in consultation, such as the National Association of Pension Funds, the Life Offices Association, the C.B.I. and the T.U.C. These were centrally chosen as being particularly representative bodies.
Mr. Arthur Palmer: Would my hon. Friend explain why there was no direct consultation with the public service trade unions, which have had vast experience in this sphere?
Mr. Ennals: It would have been impossible for us to have sought negotiations with all trade unions.
Mr. Palmer: Why not the public service unions?
Mr. Ennals: I am not certain why my hon. Friend thinks that only the public service unions should have come into this. Why not other trade unions which represent other sections of industry? Looking behind me, I see hon. Friends who represent at least 15 trade unions of which I can think immediately. We had negotiations through the T.U.C. and many of the principal unions are directly represented on the Social Services Committee of that body, including a number of unions representing the public service.
Secondly, wherever there was an organisation which wished to put forward its point of view directly to Ministers, we saw that organisation and I have had many meetings with different unions, in-
1726
cluding those in the public service, so that they could put forward their views and I or my right hon. Friend could respond. I therefore pay tribute to those organisations, and I certainly include among them the public service unions which were involved in, so to speak, the second level of consultation; and we learned a great deal from those meetings.
I pay tribute to my right hon. Friend the Secretary of State, who was involved in long days and weeks of consultation. We achieved, through that consultation, a wide measure of agreement. It is often the case, when one is engaged in long negotiations, that at the end of them one argues about a couple of points that are left but not about the main points on which agreement has been reached. So it was in this case, and the main pattern of partial contracting out was accepted.
Two main points were left. The first was how much of the State pension we could agree that occupational pension schemes could take over the responsibility for. There were limiting factors here. If the level of abatement was too high, then the pension paid by the State 30 or 40 years from now might be reduced to a very low figure. Bearing in mind the lack of facilities for transferability, it might be against the interests of all concerned if there were not at least a substantial State pension left when the abatement facilities had been used.
Secondly, if we had set too high a level of pension abatement, this would have been beyond the reach of many of the smaller schemes, which could not guarantee to provide that amount of pension taken over from the State.
We examined the possibility of having two levels of abatement, one for big schemes and one for small ones. Frankly, however, there were so many complicated administrative problems—had we accepted such a system all sorts of difficulties would have arisen—that we reached the conclusion that there had to be only one level.
We reached a wide measure of agreement on this, namely, that it should be 1 per cent. of a man's reckonable earnings for a year. This figure was higher than the Government originally proposed and, by the time it was settled, most of the organisations with which we were in consultation accepted it as being about the right figure. The Government also

1727
agreed that the State, rather than occupational schemes, would accept responsibility for the dynamism, the revaluation, of the part of the pension taken over by occupational schemes.
One can see that it would have imposed a considerable burden particularly on smaller occupational schemes if they had been obliged every two years to do a revaluation of that part of the State pension which they were providing. Thus, the State said, "We will do the revaluation, not only on the part of the State pension which is coming from the State but on that part which is being provided from the occupational fund." This is an important undertaking and, frankly, a costly one for the State.
This, therefore, took us to the last major decision: what should be a fair amount of contribution reduction to match up with the 1 per cent. of pension abatement? This was obviously not a matter on which we, as laymen, could take a snap judgment. We therefore took the advice of the Government Actuary who, as an independent figure, reached his own conclusion. Sir Herbert Tetley's report is set out in the appendix to the White Paper, and the assumptions on which he based his conclusion are summarised in paragraph 20 of the White Paper. His conclusion was that a fair amount of contribution reduction would be 1·25 per cent. This, he said, would be fair for the average scheme.
However, many pension interests said, "That is not enough", and the figure of 1·5 per cent., instead of 1·25 per cent., was proposed by a number of principal organisations. We weighed this up and the Government decided to move beyond what the Actuary had thought was fair, and we moved to 1·3 per cent. We did so because we recognised, as the Actuary had, that if we were to make a movement from 1·25 per cent. to 1·3 per cent. this would help a substantial number of small schemes, and particularly small schemes with only a few members where the administrative costs were inevitably high.
Indeed, in paragraph 9 of his report the Actuary said:
"Since the average ages for the various schemes tend to be closely concentrated about the 'breakeven' point, this improvement"—
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that is, up to 1·3 per cent.—
"in the terms should be sufficient to make them financially acceptable to a further number of schemes covering an appreciable number of employees."
One might ask, "Why did not the Government move further forward; to, say, 1·5 per cent?" If this were an over-generous or unnecessarily generous provision, it would be unfair to those who were contracted out. It is the responsibility of the Government, while those representing pension interests—
Mr. Douglas Jay: Before my hon. Friend continues, I suggest that he meant to use the phrase "contracted in" in his last remarks rather than "contracted out".
Mr. Ennals: It would be very unfair to those who remained contracted in. They would rightly ask, "Why are those people getting an over-generous reduction in contributions?" They would look at the fact that this would produce a more rapid drain on the National Superannuation Fund, and certainly affect the date at which there might be an increase in contributions.
The assessment was made on fair terms. Our task was to strike a balance and to get it right. Did we get the figure right? No doubt some hon. Members opposite will argue that it should have been very much more. It is interesting to see points which have been made since then. The National Association of Pension Funds, which argued for 1·5 per cent., said on 5th November:
"In our view the terms now proposed will probably be financially acceptable to most large employers but they will still appear very delicately balanced for the majority of smaller schemes."
Mr. Dryden Gilling-Smith, a very prominent writer on pension subjects who seems to be writing for almost every newspaper in the country, wrote in the Financial Times on 11th November:
"In fact, it is highly probable that the terms offered may enable you "—
He was directing this to employers—
"to contract out and still be on the right side of the financial break-even point."
Lord Balniel: The hon. Gentleman quoted the National Association of Pension Funds, but he did not quote the next sentence, which said:
"It seems unlikely, therefore, that the contracting-out arrangements proposed by the

1729
Government will serve to encourage the development of new occupational schemes … "Surely that is a very significant sentence?
Mr. Ennals: I was not for a moment suggesting that the Association had given unqualified support. I made quite clear that it argued for the higher figure. I will take up the point it made when I look later at the assessment of the effect on existing occupational schemes.
Noble Lowndes and Partners, very well-known pension consultants and brokers, also seemed not particularly alarmed by the terms, as can be seen by those who read "Like it or Not", which the firm published recently.
The T.U.C. put out a statement saying that it
"noted the Government intention to increase its original figure of contribution abatement for those in occupational schemes from 1 per cent. to 1·3 per cent. The General Council accepted this increase because it would assist those in occupational schemes. They would, however, oppose any further increase in the level of abatement as detrimental to the State scheme because

(a) the loss of income to the National Superannuation Fund would be excessive, and

(b) the difference in the unabated State scheme contributions of those without occupational pensions and the abated State scheme contributions of occupational pensioners, would be greater than the diiference in their pensions would justify."

Mr. Paul Dean: The hon. Gentleman skipped very quickly over the point made by Noble Lowndes. I am sure that he does not wish to mislead the House. Would he agree that the calculations in the Noble Lowndes document are not a direct comparison with what the Government were offering, because one is on the basis of a fixed price contract and the other on the basis of a fixed profits contract?
Mr. Ennals: Yes, but if hon. Members look at page 13 of the pamphlet they will see an age-earnings distribution and contribution-pension ratio which resulted in a figure of 2·2 per cent. as "low" and 2·4 per cent. as "normal". If one reads through the generality of the document one sees that the opportunities for contracting out and making use of and dovetailing with the Government scheme are there, like it or not.
Mr. John H. Osborn: May we come back to what is considered a large occupational scheme and what is considered a medium-size
1730
one? The hon. Gentleman bandied these phrases about. Can he help us?
Mr. Ennals: I agree that I was generalising. It is rather difficult to particularise because the vast numbers of people involved in occupational schemes are in large schemes in the public service, in local government and with large employments. There are several hundreds of thousands of them whereas there are substantial numbers of very small schemes. In talking about very small schemes I am referring both to numbers of individual members, and also the level of benefit and, therefore, of contributions for which they call.
One must ask: what is it likely to mean in terms of members contracting out? What do we expect will be the consequence of partial contracting out of the terms the Government have announced? Of course, we shall not know; the proof of the pudding will be in the eating. The numbers will be dependent on many thousands of decisions still to be taken by employers in consultation with employees between now and the starting date of the new scheme.
The estimate that the Government have made is that there will be at least as many as are now contracted out of the graduated element—that is 5,750,000— and probably marginally more. This is accepted by Mr. Gordon Bayley, Chairman of the Life Offices Association, who said this in a television interview. Even if there were some increase over present figures in partial contracting out, the fund would be building up a surplus for five years or more. It is important to recognise this.
What will those contracted out get in return for their contributions? This is a natural question that all sorts of people in funds of one sort or another have been asking. One cannot give a precise figure, and I should not wish to do so. Because the scheme is dynamic, the level of pensions will be dependent both on the level of earnings of the individual and on the national earning levels at the time when a pension is awarded. It would be the worst service we could possibly do to contributors to fix a monetary sum in advance and to say, "This is what you will get in pounds, shillings and pence 10 or 20 years from now".

1731
None of us can know what will be the changes in the value of money between now and the time when pensions are awarded. Pensions, of course, must reflect rising living standards. If one looks back to 1946 and the 26s. State pension which was awarded then, one sees that if it had only kept pace with prices the 26s. pension would now be very little over £3.
Mr. John Horner: This is a very complicated point. Would my hon. Friend agree that while it is not possible to promise what the contracted-out employee will draw in pounds shillings and pence, nevertheless it might not be impossible to assure the contracted-out employee of a return? After all, he will be paying nearly three-quarters of the nominal contribution rate throughout his entire working life.
There is an ominous phrase in the White Paper which suggests that if the 1 per cent. were much higher a young employee might find himself in a negative position at the end of his working life. Although a certain sum of money cannot be guaranteed, can there not be a floor below which the contracted-out employee will not fall in terms of a proportion of the State pension?
Mr. Ennals: It would be very difficult to do. What we can do is to make an estimate. Suppose that we have had the new scheme over the last 20 years instead of the existing scheme. Bearing in mind the earnings increases which have taken place over that period, we can produce a figure. It is a helpful figure and I will give it to the House since my hon. Friend has asked me to do so. A man earning £18 a week retiring under the present scheme gets £5 8s.—the new level of £5 at flat rate and 8s. as the graduated element. Under the new scheme, if not contracted out, he would have £8 14s. Had he been there for 20 years contracted out, he would have received from the State £6 13s. of that £8 14s. and £2 1s. as part of the pension that he got from his own occupational pension scheme.
Going back over 40 years, which is a much more likely period for a man for the maturity of the scheme, the actual amount of pension abatement would be
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not much less. The £6 13s. which the State would provide would go down to £6.
An average earner would at present get £5 11s. if he retired now—£5 flat rate and 11s. graduated. Under the new State scheme, not contracted out, he would get £10 4s. If contracted out, £7 9s. would come from the State and £2 15s. would come from his occupational scheme. If spread over 40 years instead of 20 years, it would have been £6 12s. and not £7 9s.
A top earner on the ceiling of one and half times national average earnings would now also retire with £5 11s. Under the new scheme he would have got £13 4s. If contracted out, he would get from the State £9 1s. and from his occupational fund £4 3s.
We can produce these figures based on experience over the last 20—or, if we wanted to make it so, 40—years. It would be difficult to make a prophecy what would be an increase in earnings in the future.
It may be that my hon. Friend is worried and thinks that we are not saying that it will be 6 per cent. I am not making any prophecy. Let us suppose it to be quite different and that the earnings increase would be only 3 per cent. or 3½ per cent., that is, much lower. If that were to be so, it would undoubtedly have an effect upon interest rates. If interest rates were substantially different, the terms of contracting out now put forward would also be different.
A person involved in a contracting-out operation can be confident that he will receive from the State a substantial part of his State pension. He will know that he will get the rest of it from his occupational fund. Our calculation is that, even under the most dismal earnings increase, a man would certainly get no less from the State than he gets at current earnings levels.
Mr. Bidwell: It is possible to predict proportions which make it clear to the average person, particularly as there is to be an in-built reassessment or revaluation mechanism. My hon. Friend called it "dynamism", which is an unfortunate word which very few people understand. One can talk in terms of proportions so that people as a whole get the hang of the thing, as it is most important they do.
Mr. Ennals: The difficulty about talking in proportions is that the proportion changes year by year. The best way to give an indication is to give this sort of backwards projection based upon the experience which people have understood over the last twenty years.
Mr. John M. Temple: The Minister talked about a "most dismal earnings increase", which he would not expect. Has that dismal earnings increase been achieved by the present Government over the last few years? If so, what is the figure of the dismal earnings increase?
Mr. Ennals: I do not think that the hon. Gentleman is interested in the subject, but it is an interesting question. The increase to which I referred was spread over 20 years, which included a number of years under this Labour Government, a number of years under the Tory Government, and another number of years under the first post-war Labour Government. Whatever political conclusions one wants to draw, those are the facts of what experience has been over 20 years. Until I was—I will not say "rudely"—interrupted I was asking: what does the contracted out man get for his contribution? I have dealt with that in terms of his own pension.
In addition, the widow will be able to inherit his full unabated pension. The widow of the contracted out man does not merely inherit the part of the State pension that the State pays. She will inherit the full State unabated pension. Further, the Government have agreed to revalue, to uprate, the contracted out element as well as the rest of the pension.
Taking all in all, I believe that this provides very good value for money, whether for the contracted in or for the contracted out. I recognise that the hon. Member for Somerset, North (Mr. Dean) does not agree with this, because he said on television on 13th November:
"I would say we have got a bad bargain here for the majority of people."
As the hon. Gentleman had in an earlier speech recognised that he, like myself, is not an expert, I hope that he will also look at what Mr. Gordon Bayley, the Chairman of the Life Offices Association, has said:
"The White Paper scheme as a whole promises us additional benefits at a future date which on any commercial reckoning would cost
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a great deal more in contributions than the Government is asking us to pay."
I set that against the views of the hon. Gentleman.
The question of contributions should be put into proportion. Under the new scheme, a man on the ceiling level would expect to pay 14s. 7d. more. An average earner would pay only 2s. more. There are approximately 8 million employees as well as their employers who will pay less under the new scheme for a better deal than they get under the existing scheme.
I want to take the value for money argument a stage further. The new scheme is a social security scheme. First, low earners will do proportionately better than higher earners. I shall be interested to hear whether any hon. Member wishes to challenge that. Secondly, married men will do better than single men. This is fair, too, because of their responsibilities. Thirdly, it could be argued that there is a more generous deal for widows than for spinsters. I shall not argue whether this is right or not. There are very great problems for widows. Fourthly, there is more advantage, because of the early maturity of the scheme, for the middle-aged than there is for the very young. These are four perfectly reasonable social objectives written into the new scheme.
What about the suggestion of a drastic cut-back in occupational schemes or even the suggestion that some or many will fold up. The C.B.I. in a statement on 5th November said:
"… for below average schemes there can be no alternative but to discontinue."
This is such an erroneous statement that I challenge it immediately. It is certainly not so.
A scheme which is good enough to contract out can contract out. If its contribution level is very small and therefore it cannot provide the degree of benefits required, it can expand and can then contract out. If it is so small that it cannot even expand, it can live on top of the State scheme. It is absurd to suggest that there are no alternatives.
I am not saying that there will not have to be considerable adjustments to the new scheme by occupational pension schemes. There will have to be all sorts of adjustments which are not necessarily

1735
in terms of cut-backs. There will be a good deal of adjustment which will mean that some will seek to integrate their benefit provisions with the new type of State benefit provision. I do not minimise the problems which will now have to be sorted out and the decisions which will have to be taken; nor would I minimise the importance of close consultation between employers and employees in taking these vital decisions.
Now, a word about the effect on public service pension schemes, a matter about which there has been a great deal of interest. Obviously, I cannot yet say how public service pension schemes will be adapted to the new situation. It would be wrong for me to do so because these also must be a matter of full consultation with staff interests. However, I can illustrate our approach to these matters by quoting one or two extracts from a document which we have just issued to the staff representatives concerned with the occupational scheme for which my Department holds responsibility, the National Health Service superannuation scheme. Here are some of the specific assurances which we have given in respect of that scheme.
First, whatever changes may be necessary after the introduction of the State scheme, benefits earned by previous service in the National Health Service superannuation scheme will not be subject to retrospective change. This means that any changes which might be made will apply only to service after the date of the change. Benefits for service up to that date will be calculated on the present basis. So, at the end of the day, benefits will be calculated in two parts—one in respect of service on the present basis, and one in respect of service on the new basis.
Second, any adjustment to the amount of National Health Service pension to take account of the State pension will apply only to remuneration covered by the State scheme, that is, up to 1½ times national average earnings.
Third, there is nothing in the new State scheme which need affect lump sum retiring allowances. This is a matter about which many people have been worried, and I am glad to give that assurance. The current review of the income tax position of occupational pension schemes
1736
covers lump sums, but it is unlikely to alter the position whereby the National Health Service superannuation scheme can continue to provide lump sum retiring allowances on the present basis.
Fourth, where people retire on pension before the age at which the State pension becomes payable, they will have their full pension from the National Health Service superannuation scheme. Any adjustment to take account of the State pension will, as now, be made only from the date on which that pension becomes payable. Thus, female nurses and so on who choose to retire at age 55 will have the full occupational scheme pension, and this will be adjusted to take account of the State retirement pension only when they reach age 60, which is their State scheme minimum pensionable age. Similarly, the pensions of men who retire at age 60 will not be adjusted until they reach age 65.
Fifth, the legislation on the new State scheme will provide also that, when members of an occupational scheme with certain minimum qualifications as to age and service leave their employment before pensionable age, they will be able, to the prescribed extent, to have their accrued pension rights preserved or frozen until they reach retiring age. Facilities for preservation at least as good as those in the legislation will be provided for members of the National Health Service superannuation scheme.
Those are important assurances. They do away with many of the assumptions which people have wildly accepted that, somehow or other, the rights which they have built up would be taken from them, that someone would grab the pensions for which they had already paid, that people would be obliged to retire later and they would lose their lump sums. Who put that sort of information about I do not know. It is important that the facts should be clearly known.
Now the last major aspect of the matter, the effect on savings through occupational pension schemes. Over the past 10 or 15 years, there has been an impressive growth in savings through occupational schemes, and we can be confident that growth will continue to be the long-term trend. Nevertheless, in the first year or two of the new State scheme, we must expect a temporary reduction in the flow of new savings from

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this source. Any such effect will be substantially reduced by the facilities for partial contracting out which will enable contributions which would otherwise have gone to the State scheme to be channelled through occupational schemes instead.
In order to take advantage of these facilities some occupational schemes may actually increase their own benefit scales when the new State scheme starts. Even so, we recognise that the immediate net effect is likely to be that the funds of occupational schemes grow rather more slowly for a year or two than they otherwise would have done. A small minority of schemes may be wound up, and others will reduce the benefits they provide for future service. As to winding up, it will be only the schemes with a very modest scale of benefits that are likely to consider this course; and they will, no doubt, also consider, in the alternative, either continuing to provide modest benefits to supplement the State scheme benefits—"living on top"—or else increasing their provision sufficiently to qualify for contracting-out terms.
If the immediate effect of introducing the new State scheme is to limit the growth of savings through occupational schemes, the crucial question to be faced is whether this will have an adverse effect on productive investment. Happily, there is no reason to suppose that this will be so; indeed, there are good reasons for supposing the contrary. In the early years of the new State scheme, the increase in contribution income will be greater than the increase in expenditure. The result will be a surplus in the National Superannuation Fund which will reduce the extent to which the Government needs to borrow on the market. This reduction in the Government's borrowing requirement will at least offset, and is likely to more than offset, any adverse effect on the supply of investment funds which might otherwise have resulted from a diminished flow of savings through occupational schemes. In consequence, there is no reason at all to fear that the introduction of the new State scheme will have an adverse effect on productive investment.
I bring my remarks to a close now by putting some questions to the noble Lord the Member for Hertford. As I said, this debate gives us an opportunity to
1738
elicit some clarity in the Opposition's views. First, I take existing pensioners, those for whom, apparently, the Conservative Party's line is that we are not doing enough. One of its principal criticisms of the new scheme is that it does not do enough for existing pensioners. I gather that the Opposition welcomed the pension increase in November. We took part in the Committee stage on the Bill together, and I recall their attitude then. They did not propose a larger increase than we introduced in November. They welcomed, I understand, the promise of biennial increases.
What do the Opposition propose for existing pensioners? Do they insist that the increases should be tied to earnings increases rather than to, as a minimum, price increases? I should doubt it, but it will be interesting to hear what the noble Lord has to say. I suspect that their intention would be to leave things just as they are and to allow the numbers on supplementary benefit steadily to increase.
Second, what about their future attitude to the new scheme? They favour earnings-related contributions. Do they also favour—I believe that they do—earnings-related benefits? If they do, do they argue that we are seeking to provide too good a deal for those who retire after 1972? If that is it, let them make clear to the country that our proposal, in their view, is too generous to future pensioners. We know what experience of their graduated pension scheme has been, and it leads us to suppose that they are all in favour of higher contributions but for derisory benefits. They really must come clean about it. We have had debates over almost a year now in which there has not been a clear statement of Opposition policy on this question.
In Leicester, on 15th November, the right hon. Gentleman the Leader of the Opposition said that the Government, as he put it, intended to impose a State pension scheme which will take away from millions the means to make a little extra provision for their old age and their families. I have not heard a more grossly distorted description of the pension which the Government have announced. Our intention is to do exactly the opposite. The new scheme will provide the means by which there can be a better deal for those in retirement—not just for a privileged section but for the whole of society.
5.1 p.m.
Lord Balniel: I join the Minister of State in regretting the absence, through ill-health, of the Secretary of State for Social Services, and I congratulate the Minister on fulfilling his right hon. Friend's responsibilities so efficiently, albeit with a slightly lengthy speech. In previous debates, I am afraid that Front Bench speeches have occupied a great deal of the time available. I will do my utmost to keep my remarks as brief as possible, so that as many hon. Gentlemen as possible who wish to take part will be able to do so.
It is quite right that we are holding this debate, although it was announced earlier only this week that the debate was to be held and the Motion was placed on the Order Paper only last night. It was quite wrong for the Government to have resisted our request for a debate so fiercely and for so long. This resistance is reminiscent of what happened in the past. In the Budget, the Chancellor announced the usual uprating of the pension to compensate for the cost of living increase. In spite of repeated demands, it was not until we put down a Motion of censure that the figures for the increased contributions were announced.
On this occasion, although one day after the publication of the White Paper, on 6th November, the Prime Minister declared that it would be right to have a debate, it became increasingly apparent that the Government intended to do their utmost to avoid a debate. In fact, this debate has been conceded only because once again we threatened to put down a Motion of censure. I genuinely thank the Leader of the House for his last-minute repentence and for meeting what I regard as the elementary right of the House to debate a White Paper which, after all, is causing a great deal of concern to many thousands of people, and to debate it before publication of the Bill—
Mr. Ennals: I cannot let the noble Lord get away with that. If there had been such enthusiasm for this debate from his side of the House, it might have been possible to take time for it instead of a debate on rural buses. I am not against rural buses, but they decided that that was the subject to take on their last Supply Day.
Lord Balniel: First of all, we have asked for a debate at every Business question time. Second, it is the Government's White Paper and it is their responsibility to provide time to debate it.
Turning to the issue—the care of the elderly, the disabled, the sick, the widowed and the unemployed stand out, perhaps above all other social duties, as the greatest social problem and challenge which this country must face today and in the decades to come. The general theme of how we can best fulfil this social duty and meet this challenge and problem can be more appropriately argued when we discuss the general reconstruction of the National Insurance Scheme. What we are concerned with today is just one of a whole series of crucially important aspects of this reconstruction.
We are concerned with the White Paper which was published on 5th November entitled "Terms for Partial Contracting Out of the National Superannuation Scheme". We on these benches are specifically concerned with the impact of the Government's scheme on savings and on the future growth of occupational pensions. I want to underline right away the great significance which we attach to the growth of occupational pension schemes. I do not deny that it is partially a philosophical attitude. We think it is quite simply right to encourage individual responsibility, so that the young and the middle-aged are encouraged to take on their own shoulders a larger share of responsibility for providing for their own future. Indeed, this emphasis on helping people to stand on their own feet lies at the very heart of Conservative philosophy.
We also believe that people can generally obtain much better value in occupational schemes tailored to meet the special needs of their jobs. As the Minister of State himself said, they are sometimes designed to provide for early retirement at 60, or sometimes earlier. They are often designed—
Mr. Bidwell: Purely on this philosophical front, is it not the case that, historically and right now, these decisions are made by employers and not by workpeople in the matter of occupational pension schemes?
Lord Balniel: It is true that occupational pension schemes are run by industry or trustees who have the advice which enables them to get the best terms for those in the jobs concerned. That is the third interruption which the hon. Gentleman has made in the debate and I thought that they were all designed to encourage the improvement and expansion of occupational pension schemes.
Another factor about occupational schemes is that they are often designed to provide lump sum cash payments on retirement as well as the pension. Another advantage is that they do not include an earnings rule, which has always seemed to me to be one of the features of a State scheme which I believe we should steadily move towards eliminating as fast as we can.
As the occupational schemes grow and expand, there is scope for improving them, suiting them more to individual needs and providing yet better value for money. I am not saying that all occupational schemes are perfect and without defect. It has never been a part of the case which I have argued in the past that they are all perfect. Certainly, inadequate arrangements exist in some of the schemes for the protection of pension rights when one changes one's job. This is something which we should strive to eliminate, because it is a serious limitation to occupational schemes.
What I am arguing, and always have done, is that it would be best to concentrate on putting these weaknesses right rather than on bringing in a blown-up State scheme which does nothing for existing pensioners, which gives the younger generation of people worse value for money and which results, I believe, in a cut-back in the growth of occupational schemes.
We also, in lending our support to occupational schemes, believe that the savings of those schemes, which, after all, form two-fifths of total personal savings and which bring in £800 million extra investment every single year, are vitally important to the economy. These are savings invested in industry and go to create the wealth out of which one pays for the social services, for hospitals, for schools, for the very pensions which we are discussing, for supplementary benefits, for welfare and for all the other services which the State has to provide.
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This question of the future growth of occupational schemes is only one aspect of the reconstruction of social security. But it is certainly true—I agree with the Minister of State—that the question mark which hangs over these schemes lies at the very heart of the Government's pension plans. The House will remember that, in our reasoned Amendment on 6th March, we referred to this as
"… the crucial question of the contracting out arrangements for occupational schemes …"
At that time, only a few months ago, this vital matter affecting the interests of nearly 12½ million people was left by the Government in total obscurity. But at least now the picture has been sketched in, and the professional experts can begin—I emphasise the word begin—to assess the impact of what the Government are doing to the 65,000 occupational pension schemes.
I would like briefly to look at the historical development of the scheme, which has culminated in the publication this month of the White Paper. This is necessary, because only in this way can the public gain some understanding of the design which is being pursued—the production of a pension scheme at the end of the life of a dying Government, with its promise of better State benefits in the far, dim, distant future, and higher contributions which must be paid for after the General Election.
We are told that the scheme is based on the Labour policy document, "Signposts for the 'Sixties", published in June, 1961. According to the Manifesto this was to be
… one of the first jobs of the next Labour Government.
At the 1963 Labour Party conference, just before the General Election, we were told that the scheme was based on
"… detailed and rigorous technical and financial and actuarial advice."
That was the statement of a previous Minister at Scarborough on 3rd October, 1963. But then there was a long silence, and it is only now, six years later, once again just before an election, that probably in the new year of 1970 we shall be debating the Second Reading of the Bill.
In the past few months, White Papers have showered down on the House like confetti. As the Minister of State said,

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a new one was published yesterday to keep people up to date. With each White Paper the incomprehension in the country grows deeper, the scepticism becomes more firmly and deeply rooted, and the Government become more desperate to try to explain the scheme.
With the publication of the White Paper we are debating on the future of occupational schemes, we had a very lengthy statement from the Secretary of State. I admit that I put a very lengthy question after his statement. On the same day we had a four-page Press release from the Press Office of the Civil Service Department. On the same day, we had a seven-page explanation from the Department of Social Services and a sheet with pictures trying to explain the scheme to the public. Yesterday we had a further document, a 29-page guide, very appropriately headed, "Latest facts and figures", because they have changed a great deal from the earlier publication.
Next week we shall have yet another Government Actuary's report, and even the calculations in that will be based on impossibly vague guesses about the number of occupational schemes that will continue. Those guesses must be based on Government estimates and not on the Actuary's estimates. It will also be accompanied, presumably next week, by a Bill of absolutely stupefying complexity.
When I look at that sequence of events, I entirely agree with the Permanent Secretary at the Ministry of Technology who has offered £5 to anyone producing a sensible idea for the reduction of the flow of paper. I will put forward my own contribution.
Mr. Ennals: The hon. Gentleman is saying nothing. He spends a long time complaining to the House and to my right hon. Friend that he did not have the White Paper which we are now debating, that he did not have enough material to understand it, and did not have enough explanation. Now that we have met his wishes, he says that we are giving him far too much. Really!
Lord Balniel: I would like to have all the explanations. One aspect which gave me particular pleasure in the White Paper we are debating was paragraph 9, which explained that the scheme was
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perhaps a little complicated, but added that
"… to keep the scheme understandable is essential to its smooth introduction and effective working".
My point is that after all the great explanatory propaganda which is pouring down on us, the great mass of the public, the Press, the House, the employers and the unions remain completely bewildered by the scheme. The 12½ million members occupational pension schemes cannot possibly know in the next few years what will happen to their pensions. The millions of people who will have to pay much more for the State pensions, which will not reach maturity until 1992, cannot even know how much they will have to pay in 1972, when the scheme begins. What a long way we have come from those simple phrases about half-pay on retirement after seven years!
I strongly suspect that after all this propaganda most married women and widows with a job, for instance, have no idea that they will be forced to pay contributions for the first time whether they want to or not. Today, the overwhelming majority of married women and widows in employment choose not to pay contributions, and pay only the industrial injury contribution of 7d. a week. According to the first White Paper, a married woman earning only £8 per week, which is a pretty low income, will have to pay not 7d. a week but 10s. 10d. a week.
No doubt the Government think that the whole country is daft. But we are not really daft. What has happened is that the Government have departed from any coherent principle. They have turned their back on financial integrity in this scheme. The Minister is in the position of a confidence trickster trying to explain his accounts to an inspector. He can twist and turn, but nothing he does will make the accounts stand up to public inspection. It is all very well for the Minister to smile and for the Government to say that the scheme is no more complicated than ordinary occupational pension schemes. This is simply not true. There can be very few, if any, occupational pension schemes where the harder one works and the more one earns the less is the value of one's contributions. The Government are deliberately muddling the redistribution of income, a task

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which is must better fulfilled by taxation, with insurance which they say will earn benefits in the future. The Government are stirring these things together—the redistribution of income should be the responsibility of taxation and insurance contributions designed to give entitlement to benefit.
Mr. Houghton: Does the noble Lord recall that the fundamental principle of the Conservative Government's scheme of 10 years ago was redistribution accomplished by levying graduated contributions mainly for the purpose of financing the flat-rate scheme?
Lord Balniel: The right hon. Member for Sowerby (Mr. Houghton) knows a great deal about this subject, but on this occasion he is wrong. Each "brick"—the word that was always used—of contribution earned a firm and determined amount of benefit.
Mr. Kenneth Marks: Would the noble Lord explain why—
Lord Balniel: I shall not give way. I want to be very brief, because many hon. Members want to speak.
We believe quite simply that it is right to encourage occupational pension schemes. Yet all the organisations and bodies which are concerned with occupational schemes are convinced that their growth will be harmed. Even the Secretary of State himself on 5th November—column 1017 of the OFFICIAL REPORT—admitted that there will be a slowing down of savings.
The Life Offices Association, which, after all, represents the major life assurance companies and which runs many of the smaller occupational pension schemes, has said in nice simple English:
"It's not on, Mr. Crossman. You will never get your partnership at this rate. Far too many employers will find your price not worth the risk. This means, of course, that armies of people are going to have to depend on the State for their pensions instead of on their firms".
The National Association for Pension Funds points out that 80 per cent. of all pension schemes have fewer than 50 members. As the Minister of State has said, while they accept that the terms may be reasonably acceptable for the large
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employers, they specifically go on to say, as I pointed out:
"it seems unlikely that the contracting out arrangements proposed by the Government will encourage the development of new occupational schemes".
The C.B.I., which represents the employers, who will have to take on their own shoulders the decision whether to continue with their occupational pension schemes, was reported in The Times Business News of 27th November as saying:
"Confederation of British Industry experts have estimated that the number of employees contracting out of State pensions to rely on their company schemes for retirement will slump of 50 per cent. if the Government get their way on the new earnings-related national insurance scheme. Many occupational pension plans provided by private industry may have to be wound up".
Similar expressions of view have been received from a large range of unions and staff associations, from N.A.L.G.O. with its 400,000 members, the Post Office workers, the National Union of Journalists. Every hon. Member has received a flood of letters expressing the utmost concern about the Government's proposals, letters from firemen, nurses, police, doctors and others.
The implications for employees in the nationalised industries and in public service are very far from being clear. My hon. Friend the Member for Somerset, North (Mr. Dean) has put down a whole series of Questions about the implications for the Armed Forces, for the Civil Service, for the National Health Service, for the police, for the fire services, for the teachers, and he has been told that it is too soon to have initiated the necessary consultations. Too soon? I think that they should have been consulted a long time ago.
The Secretary of State has been giving assurances, which were reiterated by the Minister of State, that there will be no retrospective changes, but both he and the Minister of State are silent about the future growth of these schemes. I should like to ask one question which I hope will be answered tonight. May we have a categorical assurance that the negotiations on pension schemes for members of the nationalised industries and the public service, for which the Government are responsible, will be completed before the Bill leaves the House? There is the

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utmost of concern in those industries and in the country, and the elected representatives in the House of Commons should be in a position to try to defend the interests of their constituents.
We are debating only a White Paper, but the general picture which is emerging is of a scheme which certainly has some good points—certainly I concede that—but which is one which does nothing for7½ million pensioners in 1972 when the scheme comes into existence and it is one which almost inevitably will damage occupational schemes.
I should like to make it clear that during the course of the proceedings on the Bill we will do out utmost to defend the interests of public service pension schemes and occupational pension schemes in general. I want to make it quite clear that if the Government cut occupational schemes, as they have already curbed home ownership, the Conservative Government will alter the scheme when we return to office.
We want to see the Government concentrate the resources of the State on the elderly and the needy and the disabled of today. We want to see the next generation increasingly making its own provision over and above the State scheme through genuine savings, rather than being increasingly dependent on the State.
Mr. Ennals: The hon. Gentleman has not answered one of the questions which I put to him. Would he not care to take five minutes more to give some indication of his answers?
Lord Balniel: Certainly. I thought that my answers were implicit in everything I said. The hon. Gentleman asked whether we believed in earnings-related pension schemes. The answer to that question is that we do believe in earnings-related pension schemes, but we believe that the major responsibility for these should be shouldered by occupational schemes, which give much better value for money than anything which the Government are producing.
Mr. Julian Snow: On a point of order. May I draw your attention to the fact, Mr. Deputy Speaker, that there are 50 or 60 young people standing outside St. Stephen's En-
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trance? It is extremely cold and St. Stephen's Hall is empty. The police, with whose work I do not wish to interfere and who are doing a very good job, fear that they may establish a precedent if they allow them into the Lobby. May this matter be investigated? It is very cold outside.
Mr. Deputy Speaker (Mr. Sydney Irving): I am grateful to the hon. Gentleman. I will have the matter looked into.
5.26 p.m.
Mr. Douglas Jay: I was singularly unimpressed by the attack of the noble Lord the Member for Hertford (Lord Balniel) on the Government's pension scheme. He did not seem to make any serious criticism of the main lines of the scheme. He answered none of the questions put to him until further stimulated to do so. As for public bewilderment, I think that the public were just as bewildered by the scheme of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) ten years ago, because in the nature of the case any scheme of this kind is highly complex and difficult to understand at first sight.
Having listened to both speeches today, it seems to me that the main lines of the Government's scheme are sound and that a fair balance has been struck between the State and the occupational schemes. Experience since the original 1946 Act has established several firm principles which should guide us in pension policy. First, there is an overwhelming case for a contributory scheme on the insurance principle. Theoretically, I suppose, there could be an argument for complete finance of pensions by taxation, as enforced in certain countries. But there seems no doubt that people in this country like to feel that they have earned a pension by their contributions and that they are far more willing to pay a given amount in contribution to their pension at the end of their life than in taxation to other people's pensions now, although economically it could be said that it comes to the same thing.
Secondly—and I am glad that we carry the noble Lord with us here—the case for an earnings-related scheme seems conclusive. If we were to stick to a flat rate, either the contribution would be too

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oppressive to the lowest-paid workers, or the pension would be derisory for those in the middle and higher grades. Therefore, graduation, if we may call it that, is also inevitable, as, incidentally the United States discovered about 25 years before we did.
Thirdly, in our rather complex free society, plus a mixed economy, the private occupational schemes—and I agree so far with the noble Lord—have clearly come to stay and are of great importance, if only because millions have already contributed to them and acquired contractual rights in them. I take it for granted, as my hon. Friend said, that no existing contractual rights will be abrogated in any part of his scheme. It is also desirable that there should be some real choice whether one wishes to provide more or less for the future as compared with the present. I would have preferred that we should give the choice of contracting out to the individual rather than the employer, but I gather that the experts regard this as impractical. For these reasons we must have contracting out, and I only regret that it cannot be for the individual as well as the firm.
Fourthly and perhaps most important for the purposes of the present debate, I am convinced that the main provision for old age must be made through the State scheme and the main responsibility shouldered by it. There are two really conclusive reasons for this. First, despite the spread of the occupational schemes, there are and always must be many millions of people left out of them. We still have a number of industries, notably agriculture, building and distribution, where units are too small or too short-lived for sound occupational schemes to be possible. There are still many thousands of small firms outside those industries.
I sometimes find it ironical that hon. Members opposite who normally pose as the champion of the small firms, the small shopkeepers and so forth, seem to forget about the existence of these employers when they come to talk about pensions and superannuation. The hard fact is that half the employed population, something over 12 million people, are outside of occupational schemes. And that is after allowing for the fact that 4 million people within them are employed
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by the public services. The second reason for putting the primary responsibility on the State scheme is that the greater the provision made by the State scheme, the easier will it be for people to move from one job to another. Surely on all grounds, whether social, economic or human, it is desirable to remove artificial barriers against people moving from job to job if they wish to do so. A great deal of nonsense is sometimes talked about mobility of labour between areas, which is very small and always will be. But mobility of labour between jobs is something that I think we would all agree is highly desirable. This is a powerful argument for an effective and comprehensive State scheme. As my hon. Friend has said, it is only a minority of the occupational schemes which guarantee reasonable pension rates for those who move to another profession.
If we follow the logic of those arguments, I believe we will inevitably end with a scheme substantially on the lines of that now proposed. I am not saying that every detail is perfect; I am not enough of an actuary to say whether the ideal figure for the contribution abatement should be 1.25, 1.3 or 1.35. No doubt that will be argued when we come to the Bill. The practical tests seem to be these: that the plan ought first and foremost to protect the contributor; secondly, that it should ensure the solvency of the State scheme; and thirdly enable sound occupational schemes to continue.
From all that I can learn by studying this White Paper and from what I have heard from those who administer occupational schemes, I believe that sound occupational schemes will be able to survive within the arrangements that the Government are proposing. In addition, we must remember the exceedingly important fact that the Government scheme is undertaking—I try not to use the word "dynamise"—to gear up future levels of pension to allow for rises in prices and earnings after retirement. That applies not to the whole occupational pension, but to that part which replaces the abated State pension.
Mr. Palmer: Would it not be easier to say that the pensions will be paid in real terms?
Mr. Jay: That might be the simplest way between my hon. Friend and myself, but I am not absolutely certain whether the general public would find that to be sufficiently explicit.
In those circumstances, I do not see how it can be argued that this plan is unfair to the occupational schemes. Nor can it be seriously maintained, in spite of what the noble Lord has said, that it is likely to lead to a reduction in savings by the community as a whole. All the evidence shows that the restraint on consumption due to the higher contributions will exceed any reduction in savings as a result of occupational schemes becoming more limited. If the noble Lord doubts that, he should study an article in The Times Business News today which shows pretty conclusively that the scheme, at any rate in the early years, will lead to an increase in savings rather than a reduction. The noble Lord looks highly puzzled. If he studies the article he will probably be a wiser if a sadder man than he now is.
There is only one question I have about my right hon. Friend's White Paper and the Government's policy. This has to do with the apparent absence of any provision or policy to enable and encourage those who want to work beyond the age of 60 or 65 to do so. The real reason why Government expenditure is mounting so rapidly is that people are living longer, owing to better health, and are being educated to a later age. If people live and retain their health and energy for years longer and are educated for a longer period, and if they continue to retire at 65, then what we are doing is unnecessarily reducing the proportion of a person's life which they devote to work and earning.
This is bound to mean a huge increase, much of it unnecessary, in Government expenditure. To put the arithmetic extremely crudely, because, as I say, I am no actuary, if a person worked, as people once did, from the age of 14 to the age of 65 and then lived until the age of 75, he would be working for 51 years out of 75. Someone who works in future, as many will, from 23 until 65, and then lives to 85, will be working for 42 years out of 85, which is a very different proportion.
It follows that if we move far down this road there will be an enormous increase
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in Government expenditure on pensions, as well as a very heavy burden of taxation on the diminishing proportion of the community still at work. To some extent this is already happening. The figures are rather remarkable. In 1931 there were 4·3 million retired people in Britain; by 1961 there were 7·7 million; 8·5 million this year, and probably 9·2 million by 1975. There are two solutions to this problem of the increasing proportion of non-workers in the community which probably no hon. Member of this House would advocate. No one would want to reverse the rise in the age at which education ends. We all want to see that widening out to a larger section of the community. No one would wish to force a person to retire at an age later than 65. None of us would propose a compulsory raising of the age of 65.
What we can do, and surely should do, is to enable and encourage everyone to go on working who is willing and able to do so, as thousands of people are. That is why I have always believed that the so-called increments in the National Insurance Act, 1946, were one of the most valuable parts of it. For each year after 65 that one worked, one earned a higher pension on retirement. I hope that before the debate is over the Minister will make clear whether some provision of that kind is proposed in the revised scheme, because its absence would be a retrograde step. If there were a scheme under which the annual pension on retirement at 70 was no higher than the annual pension on retirement at 65, clearly there would be a very strong incentive for people to retire earlier than they need or might wish to do.
Apart from that and other criticisms which one might make, my right hon. Friend's scheme is based on sound lines. We cannot today pronounce the details to be perfect, but it has suffered very little from the criticism of the noble Lord the Member for Hertford, and I wish it well in its progress through the House in the coming months.
Mr. Deputy Speaker: Order. I have looked into the matter raised by the hon. Member for Lichfield and Tamworth (Mr. Snow), and I am happy to tell the House that the pressure of numbers in the Central Lobby has been reduced and

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that all those to whom he referred are now in the building.
5.43 p.m.
Mr. John Boyd-Carpenter: I am glad to hear from your announcement, Mr. Deputy Speaker, that one aspect of social security has been improved.
Like my noble Friend the Member for Hertford (Lord Balniel), I regret the absence of the Secretary of State and its cause. This scheme, with all its convolutions and complications, is very much his child, and it is no disrespect to the Minister of State when I say that we should have liked to have heard him make the opening speech.
The right hon. Member for Battersea, North (Mr. Jay) was a little unfair to my noble Friend the Member for Hertford when he criticised him for not discussing the main lines of the scheme. That is not what we are debating. We are debating a Motion to take note of the White Paper dealing with the abatement provisions. This is a serious enough matter in itself and quite sufficient for the House to deal with. I assume that there will be an opportunity to discuss the main lines of the scheme on the Second Reading of the Bill.
I therefore differ from the right hon. Gentleman in that respect. But I should like to restore the balance by saying how much I agree with him about the importance of increments in National Insurance. If the Bill does not make adequate provision for improving them, I will join him in an attempt to amend it. He will recall that, happily, thanks to a ruling given many years ago, a National. Insurance Bill is one of the few Measures on which it is in order to table Amendments which would have the effect of increasing expenditure. I therefore hope that the right hon. Gentleman will join me in ensuring that the increments are improved, for the very good reasons which he gave.
I apologise to the Minister of State for the fact that a delayed train bringing me back from a previously made television engagement deprived me of the pleasure of hearing, I am told, the first three minutes of his speech. He went all over the place and saw fit to bring up once again the famous "swindle" argument in reference to the 1959 Act.
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The hon. Gentleman is notably less adroit in these matters than his right hon. Friend who, since he adopted the principles of the 1959 Act, has switched off the swindle argument. I only wish that the Minister of State would follow his right hon. Friend's example in that respect, because it would save us all time. It compels me, as the hon. Gentleman pointedly referred to me across the Floor of the House, to say a few words in reply.
Every penny obtained in contributions under the 1959 Act was used in paying out benefits to existing pensioners. To that was added a substantial Exchequer contribution. It is true that in the early years of the scheme the great bulk was paid in respect of flat rate pensions. So it will be under this scheme, for the same perfectly good reason that all new schemes take a considerable time to build up entitlement. But it is silly this afternoon to drag in this ancient jibe when the very principle to which it was foolishly applied by the right hon. Gentleman is being enshrined in his own legislation.
Let me make one further point, and then I will leave this issue. If the Minister of State thought that the scheme embodied in the 1959 Act was seriously to be described as a swindle, why since 1964 has it been maintained in full operation, nay expanded substantially, and why is it intended to prolong its existence to 1972? If the hon. Gentleman were serious about this, and even if he could keep up with his right hon. Friend, which admittedly is rather difficult, he must face the fact that that means that the scheme will have been operated by a Labour Government for more years than by a Conservative Government. It is proposed that it should run to 1972. Therefore, it will have run for up to eight years under a Labour Government against three years under a Conservative Government. If the hon. Gentleman persists in the swindle argument, he had better be careful or I might find it necessary to turn Queen's evidence against him.
I come to the White Paper, which is the issue that we have to discuss. In my view, it is the clearest indication that it is not possible for good occupational schemes to thrive and grow alongside a National Insurance scheme of this type.

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I believe, for reasons which I will give very briefly, that they are not meant or able to co-exist. This is borne out by evidence from a rather interesting source. The House will be aware that the Secretary of State recently brought out a Fabian tract which has, understandably, attracted some interest in the Press. It contains a passage very much on this point:
"I know there are a number of Socialists who regret that we have to work in partnership with the private insurance interests. In 1957 when we first published National Superannuation we had hopes that our great new scheme, though it would allow good private schemes to contract out, would be able to look forward to a dwindling amount of private insurance and be able to take over most of this field of activity.
But in the decade before we took office and started working on national superannuation the situation had been transformed."
This, incidentally, is something of an unconscious tribute to the 1959 Act.
"Occupational pension schemes have grown to a point where some 65 per cent. of all male employees are members of some kind of occupational pension scheme, and something over half can look forward to a good pension from their employers. Moreover, by the time we took office the occupational schemes had become the largest medium of personal saving, whereas the Government pension scheme we inherited from the Tories was not a savings scheme at all but a pay as you go scheme."
There is the old tag that
"A man convinced against his will
Is of the same opinion still."
This obviously is the mental attitude of the Secretary of State. It shows that basically he agrees with me in what I ventured to say to the House a moment or two ago about the incompatibility of the two.
My reasons are these. First of all the scheme is too big. The Secretary of State is, as it were, appearing in a maxi when a mini would be more stimulating to growth. It goes too far and takes too large a proportion of the resources available for provision for old age.
Secondly, as my noble Friend pointed out, it is redistributive even within the structure of the contributions. Contributions up to half average earnings earn 60 per cent. of that figure on retirement. Contributions above that level earn less than half that, 25 per cent. It will be noted that if one has a scheme of this sort, whatever the social merits, one
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makes effective contracting out extremely difficult to arrange. One provides a very good incentive to people to contract out the subsidisers and leave in the subsidised. Yet if that is done the whole finances of the scheme are undone.
It follows that a Government which persists in a scheme of this sort are bound—and if the Department of Social Security is not bound, the Treasury will see that it is hound—to secure that there is not enough effective abatement to undermine the finances of the scheme. This seems to me to be a reason why these unhappy and unfortunate terms have been devised. It is because it is a scheme which, if a substantial number of people were given an opportunity to abate their pensions on fair terms, the whole finances of the scheme which, like its predecessor is a pay-as-you-go one, would be undermined. The Government therefore dare not do it. Therefore they pay lip service to the occupational schemes and provide a formula which I do not say will spell the death of all of them. The bigger ones no doubt will survive. But it will involve the death of many of the smaller ones and will slow up the expansion which has been the great feature of recent years.
The Minister of State took pride in saying that there are 5¾ million people now contracted out under the act of 1959. He might acknowledge that this was one of the purposes of the 1959 Act. But this process will reverse that. It will damp down the growth of the movement which, apart from its social value, makes up two-fifths of the personal savings so desperately needed in the country today. That is why it is a bad scheme, because it cannot be made to live with a viable system of occupational pensions.
In the sphere controlled by the Government, that of the public service pensions, it is admitted that they must be what is sometimes called "modified" and at other times "cut back". I should like to ask the Minister without Portfolio who is to reply for certain assurances about this matter. It is not good enough to ask the House, as I understand will shortly be the case, to give a Second Reading to a Bill unless we know what will be its effect on many of our constituents who are concerned about these schemes. We should not be asked to give it a Second Reading, which involves acceptance of

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the principle, until at least we know the facts on what will happen to the occupational schemes.
There are some public service schemes which are non-contributory, such as those in the Armed Forces, the Civil Service, and so on. I was given an assurance, which I should like repeated, that the scheme will not touch the non-contributory pensions. If that assurance is repeated it raises two problems. First, towards the bottom of the scale, it means that occupational pension plus National Insurance under national superannuation will be somewhat higher than retiring pay, with all the difficulties which that will entail. Secondly, it will arouse the greatest ill feeling among other public service pensioners, in that those who already have the advantage of a non-contributory pension will be unique in having also the advantage that their pensions alone will not be reduced because of national superannuation. I hope the Minister without Portfolio will be able to clear up that matter when he replies.
There is, then, the point about lump sums and retirement before age 65 to which the Minister of State has referred. He gave an assurance that the lump sum rights of workers in the National Health Service would not be affected, nor would there be any reductions in their pensions payable before 65. Does that assurance apply to other public service schemes? We must be told.
It is intolerable that one public service, however meritorious, should be picked out, reassured and given assurances while all the rest are left in complete uncertainty. If it is possible to work the matter out and give assurances in respect of the National Health Service, it must be possible in respect of all the other public services for which Ministers are responsible. I press the Minister without Portfolio to give similar assurances tonight about the others, if he does not wish to intervene now.
In the private sphere, this means a falling off in investment, the cutting back of schemes, much social damage and wholly unnecessary harm.
The effect of what is being done in the White Paper is plainly to divert a good deal of provision for old age from occupational schemes, public or private, to the National Insurance Scheme. It is
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a step towards the nationalisation of provision for old age.
Let the House reflect what will happen to the pensioners involved. We shall be depriving them of the security of established schemes, in the private sphere mainly funded, with real physical security for their pensions, and in return are giving them what was described in The Times the other day in a fine article as "promissory pensions". What is done in National Insurance is to take contributions from present workers, paying them to the present pensioners, in return for the assurance that when the present workers retire future workers will be paying them specified pensions. There are no physical resources either earmarked or hypothecated. It simply rests on that. Are we certain, as The Times pointed out, when we are talking about the next century, that our successors will be prepared to give priority, over other needs and demands which may seem as important to them in the different circumstances of another age, to these promises given by the Secretary of State today. In considering basic provision, it is reasonable to assume that a Christian and humane society will somehow or other carry it out. But when one goes above that, when it is carried so far up the scale with dynamised pensions and when one makes a bigger absolute payment to the higher earners than the lower, can one assume that the justice of this is so manifestly self-evident that a future generation facing its own problems necessarily will automatically accept it? The Government propose to put on the basis of promisory pensions many pensions which are now well-secured, with legal rights and the physical assets to back them. This is a very big responsibility for anyone to take and it is an excessive responsibility to be taken by a dying Government in a dying Parliament.
6.0 p.m.
Mr. Hugh D. Brown: It was absolutely outrageous of the right hon. Member for Kingston-upon-Thames (Mr. Boyd Carpenter) to suggest that it is unreasonable to issue a promisory note to guarantee someone now earning £18 a week a pension of £9 a week. To suggest that that is going beyond the bounds of Christian compassion is a shocking indictment of the right hon. Member's approach. I do not share his belief that he was the best

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Minister of Pensions and National Insurance which we had, because I had the misfortune to work in the Department when he was the Minister. While there may have been arguments for the introduction of the graduated pension scheme, it was rightly regarded as a swindle in the poor return that it gave—
Mr. Boyd-Carpenter indicated dissent.
Mr. Brown: The right hon. Member can shake his head as much as he likes, but that is how it was regarded.
I am not accepting responsibility for the Government's delay in deciding on its abolition, but it was not a popular scheme and was properly regarded as a swindle—not in the legal sense but in the sense that it did not give value for money.
It is fair to remind the House that 60 per cent. of occupational pensioners get a return of less than £4 a week. Is this the level at which we should aim? This is the point which is being put to us—that we are guaranteeing too much from the earnings of future generations to provide for the old. By the time this time scale takes effect, I shall probably be one of them. Let us establish clearly that, outwith the public sector of occupational pensions the provision is quite inadequate. That cannot be said too often. There are 65,000 different schemes. Even from the point of view of tidiness of mind, is that an efficient way to organise the community's resources in the modern age? How many accountants and legal advisers are being well paid—better than the staff in the Department of Social Services—for doing this job? Hon. Members opposite are prepared to argue for this. There is a lot of good "lolly" to be picked up by people acting as consultants and advisers to occupational pension funds. So if we are to make some assessment of what we get from any investment which we make, let us consider the cost of administration of some occupational schemes.
The last point to be answered by hon. Members opposite who take this line is that it is estimated that, even by the end of the century—we have heard many curious stories about how it will take 20 years for this scheme to reach maturity—a third of our people, even allowing for
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the continuation of the present growth of these schemes, will not be covered by occupational pension schemes. How can it be done for a shopkeeper or those in the shop with only two or three employees? How can it be done for the farmers with a handful of employees? These are practical problems and hon. Members opposite are almost deliberately confusing the issue, as usual, by defending vested interests and not exposing the real nature of the problem which the Government are trying to grapple with—
Mr. Boyd-Carpenter: The kind of people to whom the hon. Gentleman referred and whose interests, I agree, are very important are, in considerable degree, catered for as self-employed persons by the provisions of the Finance Act, 1956, for which the previous Government were responsible—but I would say that that could be brought up to date and expanded.
Mr. Brown: Obviously, I was not making myself clear. I did not mean the shopkeepers or the farmers, but their employees, who are not self-employed. It is true that the owners might be able to make their own provision.
Even with all the complications of a scheme which is undoubtedly difficult to understand—the more difficult to understand something is, the easier it is to misrepresent—it has brought into public discussion the relative merites of a State scheme versus private enterprise. There is nothing wrong with that. That is surely a healthy conflict here and in society. I must admit that I welcome the examination which will require to be made by the Treasury of the extent to which tax reliefs are given to contributors to occupational schemes and the extent to which employers' contributions attract tax relief.
In other words, when we are making this comparison of what we get for our contribution, it is like the examination which needs to be made in housing—to what extent is the person with a mortgage who gets tax relief subsidised by the community? This is a fair point. I am not against that, but the examination should be made so as to compare like with like.
It is like every other insurance company dealing with personal policies. On reason that they are profitable is the number of lapsed policies. There is nothing

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wrong with this, but it is a recognition that a provision needs to be made—in other words, transferability—which is not made at the moment. The number of pensions which die with the contributor are far away in the majority. Therefore, people who argue that occupational schemes, now or in future, can supply and satisfy the needs of the community in my opinion have not a leg to stand on.
There are two other points which should be welcomed in a democratic society. Everyone recognises that there will be problems, because virtually every person in an occupational scheme, whether in the public or in the private sector, will have to sit down and, with the help of his professional body or trade union, reconsider and possibly renegotiate a future scheme in the light of the State scheme. That is not an unhealthy operation in a democracy. It is not unhealthy to be reminded now and again, "Someone has entered into a bargain: let us have a review of it." That is normal business practice. There are all sorts of option clauses to review a contract after three, five or seven years.
Why should we make an apology for recognising that, out of this discussion will come the need to reconsider and renegotiate possibly every occupational pension scheme? I do not need to exercise the same diplomacy and tact which perhaps Government spokesmen do, but I do not think that this is unhealthy.
Finally, why should not we throw some light, in this process, on to the lack of democratic participation in private schemes? Is it not a good thing in a democracy to have public discussion of public funds in public places? If people are doing quite well out of the occupational schemes—either those who administer them or those who contribute—our examination will reveal the facts. If this scheme or something like it had been thought out 20 years ago, we should be in a better position now.
One of its important objects is to lift people above the need to go on supplementary benefit. I regret this because there is always the impression, when one has to admit that, that we are condemning the operation of the Supplementary Benefits Commission or minimising the excellent work that it does. But by lifting out of this orbit, albeit 20 years
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ahead, 2 million pensioners who now have to go for supplementary benefits, surely it is obvious to everybody that one desirable side effect of the new scheme will be that the commission, or whatever body might be in existence, will be able to deal with some of the real social problems that it cannot deal with now because it is so busy handing out money in cases of need. On social grounds, I think that this is an extremely commendable point which would he acceptable to all right hon. and hon. Members.
I am willing to go on to any platform in the country confident in the knowledge that we have produced a good scheme, and that it will be an election winner.
6.11 p.m.
Mr. Tim Fortescue: It seems incredible that the Government ever sought to avoid having this debate. I will remind the House of some of the history. The Government published their first White Paper in January. There was a short debate on it in March, but no back bencher from this side had the opportunity to catch your eye, Mr. Speaker.
The Government then produced their second White Paper on the day before the House went into recess for the summer. That White Paper has never been debated, even though it introduced an important change in the scheme and indicated that the national average wage had increased between April, 1968, and April, 1969, from £22 5s. to £24 a week, so that the median pension contribution would be increased under the new scheme from 29s. 8d. to 32s. 5d. a week.
If wages rise at that rate between now and 1972—and at present they are rising faster than that rate—the median pension contribution, when and if the scheme comes into force, will be 40s. 6d. a week for a man on the national average wage. This is the scale of the scheme about which we are talking.
The Government published their third White Paper last month—probably the least comprehensible of the three—and again hoped to get away without a debate. It was only because we said that if they did not have a debate we would put down a censure Motion that we are having this debate today. It is an incredible series of parliamentary non-events and

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the Government must expect every kind of fresh criticism of the scheme from those for whom this is the first opportunity to comment on the Floor of the House since last January.
As we are debating a Motion to take note of the new White Paper, I wish to take note of one sentence in paragraph 31:
"The new State scheme will replace the existing scheme of national insurance, which provides a basic flat-rate retirement pension with a small graduated addition, by a comprehensive scheme of fully earnings-related national superannuation which will for the first time offer to the general body of contributors, whether or not they enjoy the cover of an occupational scheme, retirement pensions at an adequate level."
This sentence picks up from the first White Paper the notion of earnings-related pensions in a compulsory State scheme, for which no proper argument has ever been advanced, and the notion of an adequate pension on which the Government's thinking has never been explained.
I will, first, examine the case for earnings-related pensions. In the January White Paper, the only substantive argument advanced in favour of earnings-related State pensions was in paragraph 28, where it states:
"If it "—
the State pension—
"were to be kept basically flat-rate, retired people would continue to be divided into two nations—those with good occupational superannuation, and those with little or nothing to add to their basic State pension except supplementary benefit based on a test of means and needs."
The allegedly divisive effect of the flat-rate State pension was repeated at Question Time on more than one occasion by the Prime Minister who referred to those without occupational pension schemes as "second-class citizens in old age". There was no mention by the right hon. Gentleman of the over-80s who have no State pension at all. How would he describe them—third-class citizens in old age?
This slim pretext of "social divisiveness" for introducing a compulsory earnings-related State pension scheme can, I shall hope to show, be dismissed as hypocrisy. The real reason—and this would be a perfectly fair reason if it was advanced more strongly by the Govern-
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ment—is that the Government need more money to pay a constantly rising pensions bill. They must, therefore, increase pensions contributions. This is accepted by the whole House. The most equitable way to do it—and we all accept this—is to introduce earnings-related contributions instead of the present flat-rate contributions.
So far, we are all agreed. But the Government have decided to sugar this pill, as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) pointed out in his excellent speech, by issuing promissory notes on the future—offering bigger pensions a long way ahead when someone else will have to pay the bill. This is what the Government are doing.
At various times the Secretary of State has defended his proposed earnings-related State pension scheme by pointing out how popular earnings-related private occupational pension schemes are. This is his line. Whenever anyone criticises it, the right hon. Gentleman says, "This must be a popular way of doing it, because the private schemes do it this way." This shows—and it is surprising—his fundamental lack of understanding of the different rôle which the State should play in pension matters from the rôle which the employer should play. These are two entirely different things.
The State's function is to see that a man is adequately provided for in his old age, because, if he is not, it will still be the function of the State to look after him. Therefore, an adequate pension must be provided for. The employers' function is to defer some of that man's remuneration, to invest it for him together with the employer's contribution so that his old age is buttressed by something above the adequate State pension. These two entirely different rôles seem to have been overlooked by the right hon. Gentleman in devising this scheme.
"Earnings-related" is an "in" phrase nowadays, which seems to be accepted uncritically whenever it is applied to any form of social security benefit. But it is important not to lose sight of the real purpose of making a benefit, such as unemployment benefit or sickness benefit, earnings-related. Unemployment and sickness are unexpected events which happen to a man suddenly and create

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an emergency in his social and economic life. Therefore, it is completely defensible that the benefits payable in those emergency situations should be related to what his income has been in the immediate past. We agree that this is right, eminently defensible and fair.
But to become 65 is not an emergency. Every man in this House, with the most honourable exceptions, Mr. Speaker, knows that one day he will either be 65 or dead and that it is his responsibility throughout his working life to plan for his income after he reaches that age. That is not solely the function of the State.
The Minister without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore): When the hon. Gentleman says that it is his responsibility, is he referring to the employee? Surely the hon. Gentleman is aware, if that is the meaning, that it is not open to employees to arrange for their private superannuation. They can only be privately superannuated if their employers operate an appropriate scheme.
Mr. Fortescue: This may be the view of the right hon. Gentleman, but it is not mine. There are many ways in which an employee can save for his old age. For instance, he can stop smoking, or he can spend less money on other things. The occupational pension scheme is not the only way in which an ordinary citizen can provide for his old age. He has many ways open to him.
In the words of the first White Paper, for which there can be no justification:
"The new scheme requires people to spread their incomes more evenly throughout their lives, so that they have somewhat less during working life and substantially more during retirement."
What business is it of the right hon. Gentleman, or of the Government, or of the State, to interfere in how a citizen arranges his expenditure during his lifetime?
Mr. Marks: Does not any occupational scheme require the teacher, the local government officer, or anybody else, to do the saving whether he likes it or not?
Mr. Fortescue: The citizen chooses his job. If he does not like the occupational pension scheme offered to him
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when he enters the employment, he can choose not to take up the appointment. That is the difference. The difference of which it seems so difficult to persuade hon. Gentlemen opposite is the difference between compulsion by the State and voluntary ability of the citizen to join what employment he likes, with a pension fund to suit him.
The right of the Government to require anybody to do anything beyond the basic needs of society must always be examined with the utmost care. It is not the Government's job to require people to do things. It is their job to encourage them to do things and to create the climate where they can do those things in their best interests and in the best interests of society.
We shall need to have far stronger arguments in favour of compulsory earnings-related State pensions than are advanced in the White Paper if we are to be convinced of their necessity. The "division into two nations" argument—those with occupational pension schemes, and those without—is insufficient, misleading, and in any case diminishing. Most of those without occupational pension schemes, and with no prospect of having them, are unskilled manual workers for whom an adequate flat-rate State pension would be at the same level as the earnings-related benefit which they will get under the new scheme. The number of higher paid employees without pension rights is a small and declining proportion of the working population.
But even if one accepts the Government's argument, the only argument put forward by the Government, that a compulsory earnings-related State pension scheme is necessary to prevent this divisive effect to which they apparently pay such attention, it is difficult to see how their new scheme will contribute towards preventing it. From its inception in 1972, until well after the end of the century, it will have a further divisive effect among pensioners. Pensioners will be divided into two nations—those on flat-rate pensions, and those on earnings-related pensions, and this will have a far greater divisive effect than anything which exists now.
Everybody who reaches 65 before April 1972, if that is when the scheme is

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introduced, will be on a different pension basis from those who reach 65 after that date, and those who become 65 before 1972 will survive until well after the end of this century. The Government are thus creating a new divisive effect on the pretext of removing one which does not exist in people's minds.
There is another respect in the scheme which is objectionable. I am sorry that he is not here, but the Minister of State said that the Government's scheme was no more complicated than a lot of private schemes. At present, every man who is going on pension knows what his State pension is almost exactly to the penny, and if he does not he can find out very quickly. Under the Government's scheme there will be no way of a man finding out what his pension will be, and no way of understanding it when he gets it. His pension will include at least five variables, which will be calculated by the Government, and which the ordinary citizen will have no means of checking.
These are, first, his own life average earnings. Second, the national average earnings, which are quite different and are calculated from complicated statistics. Third, the revaluation of life average earnings because of changes in the national average earnings. This is another factor which will be brought into the equation by the Government before deciding how big a man's pension is. Fourth, he will be credited at a different rate for those periods when he was on sickness or unemployment benefit. This is another variable which he will have no way of calculating. Finally, there will be the changes in price levels and in general living standards which will be taken into account by the Government before his pension is calculated.
All those variables will be fed into a computer, and the answer will come out at the other end. I believe that the average man has no faith in the accuracy of what people put into computers and what comes out at the other end.
Presumably every pensioner will be told on his 65th birthday what his pension is. He will then ask, "Why is my pension at that figure? The man next door is getting much more—or much less—than that. How can I find out what it should be?" He will write to his Mem-
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ber of Parliament, and hon. Members and the office of the Department of Social Security will be overwhelmed with queries. No one will be satisfied that justice is being done, and there will be interminable arguments, compared with the simplicity of the present position, when everyone knows what his pension is.
Throughout the story the word "adequate" has been used to define the pension which the Government wish to provide. In the first White Paper, issued in April, 1968, an adequate pension for the lowest-paid worker, that is the man who earns up to half national average earnings, is given as £6 12s. as opposed to the £4 11s. which he gets now, an extra £2. Is that intended to be adequate for rent as well? What rent variables are taken into account in providing this adequate pension? Is the single man today expected to find accommodation at a rate of £2 a week? Is that what the Government are saying?
If £6 12s. is thought to be adequate today, and will remove people from supplementary benefits, which is the Government's boast, why does the man at the top of the earnings scale get £12 2s. under the new scheme? If the first one is adequate, why is the second one not adequate? Are the Government saying that adequacy is different for different people? Is this the approach of this egalitarian Government? Are they saying that some people need more to eat than others? Is this the whole purpose of the earnings-related scheme, that the social difference between various income groups should be accentuated?
I have tried to show some of the basic objections which we have to this scheme. Very little of what I have said has been directly relevant to most of the White Paper of which we are taking note, but this is the first opportunity that we have had to express our views, and I thought it right that the Government should know that many of us have the gravest misgivings about the basic principles of the scheme.
6.29 p.m.
Mr. John Forrester: One of the themes which has come from hon. Gentlemen opposite is that they think the people have a distrust of State schemes and computers. I think that that shows a singular lack

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of confidence in their prospects at the next General Election, otherwise they would not tend to think that the public have no faith in their Governments. I prefer to trust the Government, even one of a different complexion from my own, rather than some of the occupational pension schemes that are in operation now.
The hon. Member for Liverpool, Garston (Mr. Fortescue) over-simplified the argument that a person can go to any employment or change it whenever he wishes in order to get the best private occupational pension scheme. I know that he will appreciate that the type of employment that a man may take up depends very much on his aptitudes and abilities and, therefore, that not all spheres of industrial or academic life are open to everyone. I appreciate that people have freedom, given the necessary qualifications, but it is not open to everyone.
The hon. Member for Hertford (Lord Balniel) made great play with the fact that people will not be able to calculate the amount of pension that they will get under the scheme. The White Paper admits that it is a complicated scheme, but it is also true that anyone at present in the teaching profession with 20 years to go cannot accurately say in £ s. d. how much pension he will get. He may know that he will get half of his pay, but he has no idea what that will be in 20 years. For the same reason, he cannot calculate what he will put into the teachers' scheme. All he can say is that it will be a 6 per cent. contribution. In the same way, in the State scheme a man knows that he will pay a 5·75 per cent. contribution, or whatever it is.
I was attracted by the hope voiced by my right hon. Friend the Member for Battersea, North (Mr. Jay) that the Government will be able to consider some extension of the retiring age beyond 65 with adequate pension provisions. But have the Government closed their mind completely to the possibility of pensions for disabled people at the age of 60 or even earlier? Many kinds of disabled people spring to mind. In mining areas, for example, those with pneumoconiosis would benefit from such a provision. It may be that it will be too complicated to work out with the scheme as it is at the moment.
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I understand that my right hon. Friend the Secretary of State said at the weekend that people were prepared to pay contributions willingly, but were not prepared to pay tax very willingly. My experience has been that anything taken out of the wage packet at source of the average working man or woman is regarded as income tax. I have heard people quoting their take-home pay when rents and rates had been deducted at source, and I am told that that was regarded as tax as well. If these contributions are to be deducted in the same way as P.A.Y.E., the general population will look upon them as just another piece of taxation. However, that does not detract from the merits of the scheme as a whole.
My right hon. Friend may have difficulty in selling it to the younger generation. It may not be such a good buy for them. Young people are not greatly concerned with making provision for their old age. It is only when we approach middle age that we become obsessed with the idea of an adequate pension for our later years.
I do not take seriously the criticism that the 20-year maturity period is too long. When one considers that most occupational pension schemes have at least a 20-year maturity period and sometimes even longer—a man has to do 30 years in the teachers' scheme to qualify for a pension—and that the only benefit under the maturity period is the return of one's contributions, I think that that is a fair compromise, especially when one considers what many people have not yet cottoned on to, that a proportion of the contributions will be paid even after the first year of the scheme's coming into force.
I am sure that the House welcomes the extra provisions for women. It may be difficult to sell them the idea that they have to pay full contributions, but the provisions giving widows their husbands' pension rights has been long overdue. The reduction of the qualifying age for a widow's pension to 40 is a step in the right direction. I suppose that all that will happen is that the age of discontent will come down from 49 to 39. It has always struck me that the alternative would be an extra contribution from married men purely for widows' benefits. I have no doubt that that would lead to just as much discontent in the future and might make the contributory system too

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complicated and administratively impossible. I know that my hon. Friend was not prepared to go into the realms of comparing benefits for married women with those for single women. I bow to his discretion there and join him.
The decision to "dynamise"—I cannot think of a better word, though it may not be the best one—the contracted-out part of the State pension is a big concession to private schemes. It relieves them of the obligation of trying to keep up with inflationary pressures. We all know that the vast majority do not attempt to do that, but this raises a problem in terms of pensions which are paid today. In future, the State is to pay a 100 per cent. increase on what is virtually an 80 per cent. Pension. Today, if a man has an 80 per cent. pension, he gets only 80 per cent. of any increase. If I understand it correctly, a person with an 80 per cent. pension would have received only 8s. of the last 10s. increase.
It was put to me rather forcefully that this was a cost of living increase, that the cost of living obviously had gone up the same for everyone, and that it seemed wrong that everyone did not get the full increase. If this is the method that we are to operate in the future, are we to take it that people who have not a full pension now can expect their part pensions to carry the full amount of future cost of living increases?
Amongst the most satisfactory aspects of the scheme are those allowing employees to take deferred pensions when they leave jobs, albeit after five years' employment. In my view, that is the most important part of the Bill. For reasons which I will give in a moment, I do not share the confidence of hon. Members opposite in almost any occupational scheme. It has been conceded that some of them are not very satisfactory.
Unfortunately, many occupational schemes carry all the hall-marks of fostering a depressed and almost slave society. Those may be strong words, but I will endeavour to show what I mean. Even some of the best schemes have very undesirable inhibiting side effects and, if there had been an extension of the private schemes as opposed to a comprehensive State scheme, it would have
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been necessary to provide greater safeguards against abuse in the private schemes than we have now.
I hope that the House will permit me to illustrate my point by quoting a family case which is typical of what can happen in a private occupational pension scheme. It is not unusual, and it demonstrates the pitfalls into which the unwary and the trusting may fall.
My sister worked for a small tile manufacturer in Stoke-on-Trent. Like many other "white collar" workers, she was not very well paid. That is not unusual. For imaginary benefits, many white collar workers fare worse than their fellows on the shop floor. This employer decided to join a group occupational scheme for the few people whom he called "staff members". The scheme would give a pension, after 30 years, perhaps of £5, a typical, unsatisfactory pension scheme, undynamised, but what its real value would be in 30 years' time was anybody's guess.
Whenever an employee in the scheme asked for a wage increase the employer made a point of ascertaining what he was paying towards the superannuation fund. He would then tell the employee that he had to take this factor into account when judging his wages. In other words, wages in this firm were depressed because of membership of the superannuation scheme. As a result of this bargaining system for wages, employees in the firm were, in effect, paying not only their own contributions but their employer's share as well.
After 20 years' service with this employer my sister thought, on leaving, that she would be entitled to the firm's share of the contributions, especially as she had been told that they were part of the wages that she had been receiving. Her employer told her, "Yes, you may have them", and the boss signed the necessary form, which was sent to the insurance company.
However, after my sister left, but before the formalities were completed, the boss withdrew the terms, with the result that she was entitled only to her own contributions; and I suppose that she had no legal right to the contributions paid by the firm, even though she may have felt that the lower wages which she had received had paid for the employer's share.

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In this case there was no contract of employment. My investigations have shown that many employers, especially where wages and conditions are not negotiated by trade unions, do not issue contracts of employment. However, that is not a matter for this debate. I hope that the First Secretary will consider this issue in connection with the Industrial Relations Bill and will not only close certain loopholes, but will prevent victimisation, which is an important point.
The example I have given is not unique. Many private occupational schemes result in employers taking this attitude. Too many of these schemes have been used to keep wages down and many people in such schemes stay in jobs which they would otherwise leave. A scheme which, on the face of it, seems generous can be a millstone round an employee's neck. He may become the unhappy victim of all sorts of miserable circumstances.
Even the best occupational schemes do not allow for transferability—my hon. Friend said that only one in 10 provided this right—and I fear that many people stay in occupations to which they are not suited long after the job has lost its original attractions because they feel that they must stay on to qualify for pension.
They therefore go through the mechanics of their daily tasks, longing for the day when they can retire and do what they really want to do. This creates frustration for employer and employee alike and the firms or institutions for which they work suffer because they are not giving of their best. If they are employed in public institutions the general public may get the backlash of their misery. On the other hand, too much mobility of labour has adverse results. But immobility of labour, especially when it is based on the fear of losing one's pension rights, is no good to anybody.
An employer who has not contracted out of the scheme may superimpose a private scheme on top. In such cases, will the safeguard for the deferment of pension be the same as the safeguards which, I assume, will be introduced for deferred pensions for those who are partially contracted out of the scheme?
I understand that the 1 per cent. abatement is based on the expectation that inflation will continue at an annual rate
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of about 6 per cent. If that were not the case, occupational schemes would, in the end, need to provide a greater share of the pension. I gathered my hon. Friend to say that the private schemes had been satisfied that this was possible. In these circumstances—the White Paper suggests this—when the four-yearly reviews take place will it be possible for an employer who is partially contracted out at that time to change his mind? If so, will the pension which has been earned to that date be deferred for the employee, who will then be fully in the State scheme, and, presumably, not be helped by a private scheme?
Can an employee who has done less than five years' service—after all, this will not be his fault—have his pension rights—the same question applies if the firm has been in the scheme for less than five years—deferred, or will he merely be entitled to his contributions back?
Mr. Ennals: In the circumstances of the employee to whom my hon. Friend is referring the procedure will be for the employer to buy him back in by a payment in lieu so that he is brought back fully into the State scheme again. By that means his pension will be fully established as a State responsibility.
Mr. Forrester: Presumably the private part of the scheme will fall, but that is another problem which I can take up with my hon. Friend on another occasion.
A major overhaul of the nation's pensions system was obviously due. There was little evidence that private enterprise would, of its own free will, step in and provide adequate benefits for the majority of employees. There was even less evidence that it would organise things so as to provide for transferability and a deferred pension. I am, therefore, in favour of the State scheme as proposed, for it will embrace all the population, with a private scheme superimpossed.
There has been much clamour for selectivity in benefits and this clamour will, no doubt, continue. There may be merit in the argument of selectivity. Be that as it may, there should be a basic pension which has contributory principles and which is given of right. If, as the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, we

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cannot know what attitude or priorities will exist in 20 years' time, and if by that time there is an even greater clamour for selectivity in State benefits, but if an employee were to have no right by the contributory principle to an acknowledged State pension, we would have the worst features of the means test once again.
For the vast majority of people, at any rate in my constituency, this is an excellent plan. It will bring within their grasp in old age, for the first time, the amenities and comforts which hitherto have been within the grasp of only the wealthy and those fortunate enough to belong to very good occupational schemes. I therefore have no hesitation in supporting the main outline of the Government's proposals.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I would remind the House that there is still a large number of hon. Members who wish to speak.
6.50 p.m.
Mr. Tom Boardman: I must, first, declare an interest, in that I am chairman of one of the larger pension trusts.
The hon. Member for Stoke-on-Trent, North (Mr. Forrester) referred to the case of a lady who did not know during her employment that her pension would be sacrificed if she left. This is no precedent on which to condemn occupational pension schemes. It is clearly bad industrial relations and a failure by the employer to provide the contract of service and a book giving all the information.
But similar conditions apply in the public service. The hon. Member should know that, there, the pension is taken into account when people are deciding whether to go in and considering the terms of pay—yet if they leave before their pension rights has matured those rights will be lost. So that is no justification for condemning all occupational schemes.
The hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), who is no longer here, made some unworthy remarks when he condemned those who administer the private pension schemes. He suggested that they were administered largely for the profit or gain of those who ran them. I am sure that he did not mean to condemn them as he did, but, for the record,
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it should be made clear that those remarks were totally unjustified and that such schemes are administered well and efficiently. It is a pity that public funds in Government quarters are not administered with the same economy and efficiency.
There has been reference to the effect of occupational schemes on the economy, my noble Friend the Member for Hertford (Lord Balniel) referred to the need for this source of savings. To get industrial expansion and economic growth, we need to create savings and reduce taxation, the best source of such funds is the occupational pension scheme. Two-fifths of our savings are generated from that source, so anything which penalises them would be tragic and detrimental to the economy. I do not accept the argument which the Minister of State mentioned, and which is quoted in The Times today, about the non-inflationary effect of the proposed State scheme. I will heed your warning, Mr. Speaker, about brevity and will not develop the attack upon that article otherwise I feel confident I could mount. Perhaps I could do that another time.
The occupational pension scheme is one of the vital incentives to which people in industry and commerce look. They first consider their take-home pay, but taxation makes that less and less valuable, so the wish of most men and women during their working lives is to be able to put aside something of their earnings to provide for their retirement in a funded scheme which will not be eroded by inflation or left to the whim of Government.
The Minister of State made great play about the statutory protection which is built into the State scheme. It was quite illogical, compared with what he said earlier, that he would have been able to steamroller through the Bill no matter what its merits. If he can steamroller through legislation without consultation, of course, he or his successor could steamroller through a Bill to revoke any statutory protection—
Mr. Ennals: I do not think that the hon. Gentleman would intentionally twist what I said. I was explaining why the Government have no intention of steamrollering such a procedure through the House. He will recognise that that was what I was saying.
Mr. Boardman: I accept that this is what the hon. Gentleman said, but he did say that it would be possible. We know that, when the Government have a majority, it is possible for statutory protection built in in 1969 to be removed in 1970, 1972, or 1975, if that is Parliament's will.
The Government proposals are still, despite the number of White Papers and explanatory documents, clouded with doubt. I would like the Minister to clear up some of my queries. First, will the State benefits be taken into account by the Inland Revenue when fixing the limit of retirement income? It is vital that industry should know this. There is, as he will know, a maximum limit allowed for retirement pension at the moment.
Another question which he will not be able to answer, but which must concern everyone who has to evaluate occupational schemes, is: what amount of contribution will be payable in 1972—and later—by the employer or the employee? The figures quoted in the White Paper are by way of illustration and the uncertainties surrounding them makes it impossible to give a valid or considered judgment on the course to be taken by occupational schemes. I accept that there will be a breathing space before such decision must be made, but it is unfortunate that figures could not have been quoted upon which better assessments could now have been made.
The effect on the occupational schemes will be to cause a heavy increase in the total cost of schemes with the cost of the State contribution. Those occupational schemes which are kept going will find it possible only by accepting a heavy increase in the cost of labour employed. Many will be wound up, and no new ones will be introduced.
What is particularly unfortunate is that those schemes which have been improving their benefits year by year will no longer be able to do so—
Mr. Ennals: Why not?
Mr. Boardman: Because the burden which will fall upon the occupational schemes, if superimposed upon the State scheme, will make the cost such that the improvements which would otherwise have been possible will no longer be
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possible. The Minister of State must know that.
It will make more difficult the objectives which all concerned in occupational schemes wish to achieve—preservation, and, ultimately, transferability, ideals which both sides of the House will welcome. He will know that, in the process of controlled funding, which is adopted by all the schemes which have been building up over the year, the additional burden which will fall on industry will mean the postponement or curtailment of the move towards preservation and transferability.
There will be a particular penalty for the smaller companies which are less able to digest this extra charge. For—my hon. Friend the Member for Liverpool, Gars-ton (Mr. Fortescue) made the point about the inability of employees to plan for their retirement—there will be uncertainty and lack of information or anything but a rough guess about their position when they reach 65. They will be unable to understand many of the calculations. The Minister of State looks puzzled—
Mr. Ennals: Yes, I look very puzzled, because it will be easier for them to make some assessment of what their State pension is likely to be in relation to their earnings than is possible now under the existing scheme.
Mr. Boardman: That is an argument I cannot accept. It will be a complex calculation, with variations of wages throughout the whole of a man's working life adjusted by the average increase in wage levels which have to be interpreted by a computer. It will be extremely difficult for anyone to make more than a very rough guess as to what his pension is likely to be.
Mr. Ennals: Certainly, it will not be more difficult than in an ordinary occupational scheme, because a man will not know what his final salary will be 20 years hence.
Mr. Boardman: A man in employment knows that his final salary is likely to be something not less than his salary at any given point, and he can estimate the rate of progress with reasonable accuracy. In my experience it is possible to give people a clear indication of their anticipated pension three, four or five years ahead.
Mr. Fortescue: In any good pension scheme the trustees of the fund automatically, at regular intervals, tell each member of the fund what his pension will be at retirement age.
Mr. Boardman: I am obliged to my hon. Friend. He is completely correct and this is up-dated from time to time.
Mr. Speaker: Order. Interventions make for long speeches.
Mr. Boardman: One matter which the Minister of State slipped over rather quickly, and on which he was not prepared to give way when I raised it, is the position of married women. He referred to single women and widows being better off, but a married woman will be worse off for she will be left paying 10s. a week more than she is paying at the moment and, in many cases, she will not draw anything.
The way in which that is put in a small footnote to the explanatory leaflet does not give the sort of clarity to this very important subject which the community would expect to find in a simple guide. I draw attention to the footnote at the bottom of page 10 and the rather fleeting reference to it on page 18. I hope that the position of married women and the way in which they may be worse off in their contributions may be given more publicity.
The hon. Gentleman made reference to there being no retrospective legislation which would prejudice accrued pension rights. I believe that it was limited to the Health Service. My right hon. Friend asked whether this would be extended to the public service generally. I ask: is this assurance also to apply to private pension schemes and rights to lump sum payments which are secured at the moment under Section 388 schemes? Are those to be penalised or jeopardised in any way either by this legislation or by the adoption of a different attitude by the Inland Revenue? An assurance on this is vital.
Generally, the State scheme will be too complicated and too expensive. It is full of promises without security. It will penalise rather than encourage the good employer who has a good occupational scheme and wishes to up-grade it. I would have hoped that after all the years of incubation since this idea germinated in the mind of the Secretary of State we
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could have had a clearer, better and different pension policy from this Government.
7.4 p.m.
Mr. Arthur Palmer: The hon. Member for Leicester, South-West (Mr. Tom Boardman) made a very thoughtful contribution to the debate. The whole debate has been extremely restrained and in marked contrast to some of the hysterical discussion which has gone on outside about the scheme. That is all to the good, because in discussing pension matters we always have to keep a proper balance between advantage and disadvantage.
Because I hope to be a little critical of some aspects of the scheme, I think it right to start by saying that in its general principle I welcome it thoroughly. I do not think anyone could seriously challenge in these days the need for public pension reform, or deny that the alternative to a State flat-rate system is a system of graduated benefits and graduated pensions. The noble Lord the Member for Hertford (Lord Balniel) in opening the debate, for the Opposition, did not challenge that assumption for one moment in all he said.
It must also be accepted in the interests of industry and the country generally that pensions should both be transferable and paid in terms of real purchasing power. All these important contemporary points are contained in the Government's scheme. Therefore, my right hon. Friend the Secretary of State could reasonably hope to be regarded as the Beveridge or the Bismarck of his time. I am not making any predictions, but he yet might be so regarded. I do not think that so far, in the last few months, he has attained that stature. It is something which posterity may grant him, but it has not come right away.
There are two reasons for this. The first is that the scheme is intensely complicated. It is no good my hon. Friend the Minister of State, who may at last understand the scheme, denying its complexity. I have been doing much explaining of the scheme at meetings and I have found it very difficult to explain. There is much good in it, but the good is difficult to bring out. People already understand what they will have to pay in contributions, but what they will eventually

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get in benefit is hard for them to discover. That is sometimes also the trouble with occupational pension schemes; complexity is in the very nature of pension arrangements.
The second reason why the Secretary of State, who, we all regret, cannot be here this afternoon, has not achieved the popular approbation which he will eventually receive is that there is considerable apprehension and fear as to what will be its effect on the position of those already in good occupational schemes. As one connected with technical staff employees in the nationalised electricity supply industry I have had to deal with many doubts and fears which have been expressed in the last few months. They are very genuine doubts and fears, because to people in occupational schemes pensions represent their life savings. They are there to grant them a measure of security in their old age. Therefore, such people are bound to be concerned when a State scheme comes forward which might, for good or ill, affect pension benefits and the amount to be paid for them in contributions.
I wish that the Minister of State would give up talking about those in occupational schemes as being "privileged". Those who negotiate salaries in the public service know very well that contributions to pension funds are simply deferred pay. Members of occupational schemes are not especially privileged. They have had to pay for their pensions and they go on paying for them from the start to the finish of their careers.
Further, on the question of the fears of those in occupational schemes. I must again challenge my hon. Friend. The truth is that the consultation was not very satisfactory. He consulted the Life Offices Association, which are not particular friends of State schemes. He consulted managements of pension funds in the private sector. He certainly consulted the T.U.C. but the T.U.C. covers such a wide range of interests that it is bound to speak with a divided voice. Consultation with the T.U.C. alone from the trade union point of view was never good enough. There are many, I fancy, on the General Council of the T.U.C. who would accept that.
In particular, my hon. Friend should have gone to the public service unions.
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He asked why he should go especially to the unions operating in the public service. The reason is that all the schemes operating in the public service, including the nationalised industries, are statutory schemes for which the Government and this House are responsible.
Of course, since N.A.L.G.O., a powerful local government union, kicked up a tremendous fuss there has been a flurry of consultation. I sometimes think that my hon. Friend has joined that union, since he speaks so often nowadays from its platform. I think that, in effect, the N.A.L.G.O. campaign has been exaggerated and sensational on the contracting-out terms. I am sure the exaggeration of fear was not deliberate, but it was often the effect of the campaign on people.
But the campaign produced answers and assurances that nobody could obtain before, such as the assurance that existing pension rights in occupational schemes would be protected, that pension rights in the existing State scheme would be protected and that the Government have no intention of interfering with occupational schemes. I always took that for granted, but when we had the official assurances it was very much easier to convince rank and file members of occupational schemes. Those assurances could have been given much earlier and it was a pity that they were not.
But what now worries many of those representing employees in industries and services with occupational schemes is that modifications may be made in schemes by the employers so that occupational expectations may be worsened without any truly corresponding compensation from the State scheme. There is the fear that the management of pension funds may be obliged to modify their scheme. I pay full tribute to the improved contracting-out terms which have been proposed, and which represent a marked step forward. But when my hon. Friend says, "Let the unions negotiate with the employers", I must point out one or two facts.
I am sure that my hon. Friend will remember that the right to contract in or out is to be with the employer and not with the employee or the trade unions. Second, pension schemes, unlike wages and salaries, are not negotiable because they are not paid out of the employers

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trading revenues, but out of what is, in effect, a trust fund. Whilst unions can, and I am sure do, influence these matters, to talk of them negotiating on them is not apt. Many employers such as Co-operative societies will not in any case be able to separate out their pension funds.
Often pension scheme membership is a condition of employment. An employee must be in it or he will lose his job, so we must not talk as if the trade unions were on all fours with employers in these matters because they are certainly not. I hope that when we eventually see the Bill we shall find a Clause in it giving the unions a statutory right to object to the pulling down of occupational benefits by employers with no corresponding benefits to take their place on the same terms.
I shall not try to make calculations on the abatement terms in a general debate of this kind. It would be tedious, and I am sure that I would not get them right, anyway. But I still think that after allowing for the new abatement terms the proposed scale of contributions and benefits is unfair to the middle range income man. The man on £33 a week is no plutocrat these days, yet he is expected to bear the brunt of the partial income redistribution which, in effect, the scheme brings about. As a Socialist, I have no objection to redistributing a great deal of the capital and industrial wealth of the country, but when one tries to bring about equalisation between a limited range of salary and wage earners in this way one runs the danger of being unfair to many of them.
I am puzzled—and I have not yet heard any really convincing explanation—as to why there is the cut-off point at one and a half times average national earnings. I believe that it could have been pushed very much higher, because the man or woman with the larger income, whether earned or unearned, is now to move into a new kind of affluent flat-rate pension scheme and it is curious that a Labour Government should accept this.
Finally, I hope that Ministers will be a little clearer soon about their intentions towards the statutory schemes, many of which will need amending legis-
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lation. I believe that there will need to be enabling Acts of various kinds. This will possibly be true of the teachers and it will certainly be true of local government employees. One starts a chain reaction in this business which will go on for some time. What will happen about the amendments that may be necessary—I do not know—in the nationalised industry schemes? They are statutory schemes and the managements of nationalised industries cannot make any changes in them without the Minister's approval as things are at present.
It would be helpful to the course of this debate, and in preparation for the debate on Second Reading of the forthcoming Bill, if my right hon. Friend the Minister without Portfolio, who is to reply this evening, could give an indication of the timetable for the amending legislation that will be necessary for the public service schemes when the main Bill has passed.
I have made these observations in a spirit of realism and as someone speaking in fairly close touch with the public service scene, although I do not profess to be a deep pensions expert. Because I have made these criticisms, on an aspect of the scheme may I assure my right hon. and hon. Friends that, in general, I welcome the proposed legislation which I regard as a great step forward socially. If it is properly handled and explained, my right hon. Friend the Secretary of State may well yet go down in history as the Beveridge of his time.
7.19 p.m.
Mr. John Pardoe: I was surprised not to see an Opposition Amendment on the Order Paper. I thought of tabling an Amendment, but then realised that the chances of a back bench Amendment being called were slim and that I would make my opposition to the Government's scheme patent by the content of my speech.
I had also hoped, like the Minister of State, that today we should at long last hear exactly what the noble Lord the Member for Hertford (Lord Balniel) has in store for us when and if he is returned to power. At the end of his speech, he said that he believes in earnings-related pensions but that the major responsibility for this should lie with occupational schemes.

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I differ from the noble Lord there, because it is not only the major responsibility that should lie with occupational schemes. It is the sole responsibility for earnings-related pensions that should lie with occupational schemes and the State should confine itself, as I have made clear in the House on several occasions, to providing an adequate flat-rate pension.
Unfortunately, we still have no Conservative policy. Every time the noble Lord makes a speech I get nearer to the edge of my seat. As he nears the end of his speech I start biting my nails in eager expectation. Then the noble Lord sits down. I know why. It is because an invisible hand stretches out from the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), tugs at his coat tails, and drags him back; and a silent voice whispers in the noble Lord's ear, "Do not dare say anything nasty about my scheme. Do not deny the perfection of the graduated pension scheme", which is sometimes known by the term "Tory swindle".
Until the noble Lord can say that the graduated pension scheme which emerged from the muddy waters of the Thames at Kingston can go back there, indeed he has difficulty in putting forward an alternative policy. He will eventually tell us that he has abandoned the graduated pension scheme. I do not know whether he will do it when he is in power or before, but it is inevitable that he will have to do it. Then he may eventually come to a sane policy for pensions.
I maintain that the Government's scheme is entirely unacceptable. I have maintained this on several occasions in the House and made clear why. Although I am very grateful to the Secretary of State and his staff for producing this excellent simplified scheme which enables laymen to understand a little more of what it is all about, having read my way through it I have not changed my view that the scheme is in its entirety unacceptable, for these reasons.
First, it offers absolutely nothing to the existing 7 million pensioners. I know that it is the Government's intention to continue to help them. I do not deny that considerable help has already been given. Pensioners are better off than they were when the Government came to power, not only in terms of purchasing
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power, but in relation to the average industrial earnings.
In November, 1959, the basic pension for a married couple was 29·5 per cent. of average industrial earnings. In November 1964, it was 30·1 per cent. In November 1969, although the hon. Gentleman was unable to give me this information in answer to a Question last week because November had not then finished, by my calculations it was about 33·6 per cent. So there has been an upward trend in the relationship between the basic State pension and average industrial earnings. This is no more than I would expect, because, as I have said before, I expect higher standards in these matters from a Labour Government than from a Conservative Government.
However, I do not think that it is good enough. I think that it is entirely wrong that a couple should be expected to live on one-third of average industrial earnings. This is not a standard which an affluent society, even with all the qualifications to affluence that our balance of payments position makes necessary, should tolerate.
Two million out of 7 million pensioners are on supplementary benefits. In recent speeches from defenders of the Government's record it has come to be something of a cause for self-congratulation that 2 million out of 7 million pensioners are on supplementary benefit. I can remember a time when it was not part and parcel of Labour's policy to put people on to supplementary benefit.
Indeed, a book issued before the 1964 General Election and entitled, "The Twelve Wasted Years" says this on page 220:
"Now in 1963, after 12 years of Toryism, nearly 1 in 4 retirement pensioners—1½ million old people—are forced to rely on National Assistance because the pension by itself is inadequate to live on."
I make 2 million in 7 million not much better, and I think slightly worse, than I in 4. So the Government have not improved the situation.
The Government's scheme is unacceptable, secondly, because it retains the earnings rule. It is extraordinary that the Government will legislate the earnings rule into the scheme for 1992. I am not in favour of working throughout a long life. I take a Disraelian view of the importance of leisure. A society

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that discourages people from working can hardly be said to be wholly sane. The Government should look at this question again.
The scheme is unacceptable, thirdly, because it will, through the medium of the State, perpetuate the inequalities of life, not all of which by any manner of means are deserved. People on low earnings, and people who have been sick for long periods of their working life, will still be badly off in retirement under the new scheme, because it is based on average earnings throughout the whole of the working life.
I do not regard the scheme as securing a sufficient redistribution of income from the well-off to the less well-off; nor do I think that it sufficiently redistributes income from the young to the old. I make that position quite clear, because it may be contrary to certain views from other parts of this side of the House that my commitment is that the redistribution has not gone far enough.
The scheme is unacceptable, fourthly, because the averaging of the benefit and the payments over the working life is exceedingly complicated. On page 10 of this very helpful pamphlet the answer to the question—
"How will the pensionable 'life average earnings' be calculated when a worker reaches pension age?"—
is summed up in the last sentence:
"The recording and calculations will be done by a computer."
One hon. Gentleman has already told us the sort of difficulties that this will give rise to. I have no doubt that in 1992 in surgeries throughout my constituency—because I shall still be the Member, and I shall be well under retirement age—people will be bringing me computer slips and saying, "What does this mean?" What kind of appeal procedure is there to be? It is unreasonable to expect that an individual can keep his record of earnings throughout his life. Most of us find it difficult to keep it from one year to the next to fill in our income tax returns. Nobody will do this. If there is an appeal machinery, the only evidence that a man can produce will be the evidence the computer has produced for him. He will not be
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able to challenge this from independent evidence of his earnings.
The scheme is unacceptable, fifthly—this is perhaps a strange reason for the Government—because it will perpetuate the different retirement ages of men and women. We are moving into an era of equal pay. Presumably there will be equal pay in 1992. It is almost as if the Secretary of State thinks that all elderly working men should have someone around the house to bring their slippers. I cannot see quite why this difference is being perpetuated and what is the purpose of this five years.
This may again seem a strange criticism, but I find it rather odd that the Government should not only have increased contributions for women but should also have increased the benefit for widows, in the sense of reducing the age at which they will receive those benefits. This is legislation for a past era. I should have thought that by 1992 most of those who become widowed at 40 will have thought in terms of making a career for themselves after their families have gone out into the world. Fifteen or 20 years of bringing up a family will be the maximum; then women will expect to go out and earn their way in the world.
Mr. Eric Lubbock: Will my hon. Friend make it clear that he is speaking in this context of widows without children? He would not alter the provisions that already exist, and which we hope will be improved, for assisting widows with children under working age?
Mr. Pardoe: I am grateful to my hon. Friend for emphasising the point I have made. I am not talking of widows whose children have gone out to work and who no longer have any children to think of
It is odd that the Government should have distinguished between widows and single women. One can well understand that there must be a distinction today, because one is faced with a situation in which many women become widowed at 40 and do not have a trade or skill and may never have worked for a lengthy period. But in 1992 the situation will have entirely changed.
My final major reason for regarding the Government's scheme as unacceptable is

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that it will undoubtedly discourage occupational schemes, which for philosophical reasons I happen to support. In his pamphlet for the Fabian Society, the Secretary of State paid tribute to the natural partnership between private and public enterprise and said that without both of them consumer satisfaction could not be given. I regard that as a Liberal thought, but I find it strange that he has not accepted just where the line in that partnership should be drawn.
The scheme will have a substantial effect on net private savings and will shift the balance substantially towards the public sector. I should like the Government to say whether the abatement of 1·3 per cent. will be the subject of any tax concessions. I can find nothing about this in the White Papers, nor in the simplified version.
The Minister of State said that the new scheme was simpler than the present, but the scheme which I propose is far simpler still. He said that he was not aware of any alternatives except that which came from the National Association of Pension Funds. I am sorry to hear that he has not listened to my numerous speeches in the House on the subject of pensions. I have put forward precisely this alternative and on occasion he has even tried to answer some of my points.
The scheme is that we should abolish the present system of contributions, abolish the graduated pension scheme, and introduce a flat-rate pension which should be at least half the average annual earnings of a man in industry, and that half-pension should be paid to a married couple. I am not saying that this could be done immediately, and we would introduce it over a period of ten years. This pension and all the other welfare benefits should be paid for by a social security tax based on a pay roll tax, two-thirds being paid by the employer and one-third by the employee.
The Minister of State has enumerated objections to this and the right hon. Member for Sowerby (Mr. Houghton) once dealt with it in a speech on an earlier occasion. The Government's major objection to a flat-rate benefit paid for by earnings-related contributions is political, that many people would feel that they were paying too much for too
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little. But this entirely depends on the relationship between what one pays and what one gets under each of the schemes.
The Government have sought to overcome the political objection of those who will be paying more by them paying them more in benefit, but they can do this only by paying less in benefit to the less well-off members of the community. How much less are they to pay the less well off members of the community and will what they pay provide an adequate standard of living in an affluent society?
Page 13 of the pamphlet gives the rates and shows that the lowest level of benefit under the Government's new scheme will be £270, which I make 22 per cent. of average earnings, and together with the wife's flat rate of £160 that will give a combined pension of £430, which is 37 per cent. of average industrial earnings. It is only when one reaches the figure of £1,000 on 1969 values that the combined pension becomes 50 per cent. of average earnings.
What the Government have done is to buy off the political objection of the better off by ensuring that all those whose incomes in 1992 are the equivalent of £1,000 in 1969 will have pensions less than half the average national earnings. I would have thought that there were grave political objections to that and I have no doubt that there will be in 1992. In fact, I issue this as a warning, because I know what will happen in 1992 and long before that—the lower pensions will be regarded as politically unacceptable, and so increases will have to be made. Those increases will be financed out of general taxation, which will make a nonsense of the whole contributory nature of the scheme, or by higher contributions, and the only people who will be able to pay higher contributions will be the better-off. Why not ask them to face this political objection now instead of deferring it? The Government are burying the political objections today, but they will rise from their graves tomorrow and their ghosts will haunt generations of Governments to come.
I am convinced that the policy operated in Canada, Holland and New Zealand, of flat-rate benefits paid for by wage-related contributions is a much better alternative to the present system than the Government's proposal is. The

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pension must be payable to everyone on reaching pensionable age, and it must also be paid to those who are now over pensionable age and receiving no pension from the State. This would not be a very expensive item today and it will obviously get less.
I do not understand why the Minister says that it would be impossible to enforce compulsory occupational schemes over the whole population. I do not see any objection to doing that. He said that about one-third of households would be uncovered by occupational schemes by the end of the century. Occupational schemes could be enforced and certain minimum standards for those schemes could be enforced. The Minister said that two-thirds of the scheme had no widowhood provisions; why not pass legislation to ensure that they have?
There is the difficulty that the schemes are not transferable. This is a difficulty which is always raised. The right hon. Gentleman once told me in the House that we had 65,000 schemes and that a very large report by some Government Department had proved conclusively that they could not be made transferable. The hon. Lady the Member for Petersfield (Miss Quennell) will be introducing a Private Member's Bill which I hope to sponsor and, although it may be a rather long and protracted affair, I hope that by the end of the day we shall have convinced the Government that it is possible to make the schemes transferable. It may not be possible to do so now or in the next five or ten years, but of course it will be possible in 20.
One or two hon. Members have mentioned those who cannot be covered by private schemes. There is provision for a retirement annuity for employees not covered by adequate private schemes and this would be financed out of a levy paid into a central account, and so there is no problem about that.
The Government scheme is unacceptable; the present situation is entirely unacceptable. But there is a viable alternative, and it happens to be Liberal policy.
7.40 p.m.
Mr. Kenneth Marks: I always find the speeches of the hon. Member for Cornwall, North (Mr. Pardoe) interesting, and tempting
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when he deals with this subject. I had hoped that he would enlarge on the amount of contributions that would be required from the workers in his scheme. We look forward to hearing what he has to say, as we have looked forward for so long to hearing what the hon. Member for Hertford (Lord Balniel) proposes.
I would like to take up the point made by the hon. Member for Leicester, South-West (Mr. Tom Boardman). One of the ways in which occupational schemes survive and do well is through people dropping out and the employers' part of the contribution going into the fund to help it along. The poor worker regarded that as part of his wage.
Dealing with this question of the incidence of taxation, I was glad to hear in reply to a Question I asked the other day that there is to be a review of taxation in connection with National Insurance and occupational pensions. This is a long overdue review. A very considerable proportion of the money which goes into the occupational funds comes from the Exchequer. The high-paid worker who contributes to an occupational fund collects a fair amount of tax rebate on his contributions. The low-paid worker collects nothing like the same amount, and in many cases it is nothing at all. It is high time that the whole question of taxation relief on National Insurance contributions and occupational pension contributions was examined.
The hon. Member for Liverpool, Garston (Mr. Fortescue) mentioned married women on £8 a week, who do not normally contribute to a National Insurance fund.
Mr. Fortescue: That is not so.
Mr. Marks: In that case I beg the hon. Member's pardon. I was convinced that he said something about it.
That woman will have to pay contributions in future. A great many of them pay now so that they can be assured not only of pension rights, but sickness unemployment and other rights, in their own right. The contribution under the present arrangement is far too high. For the woman on £8 a week it is 9 per cent. of her pay and she cannot afford it.
Under the new scheme there will be considerable reductions in the contribution payable by women and other low-paid workers. In examining this scheme

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we have to ask: is change necessary? With 2 million pensioners on supplementary benefit, and great resentment among those pensioners not on supplementary benefit, but on a low occupational pension, receiving only a little over supplementary pension which takes in both their National Insurance pension and their occupational pension, it is time for a change.
The transferability argument has been raised. In this scheme a great step will be taken, if not towards transferability, then towards ensuring that there is continuity in the National Insurance pension when someone has been contracted out. I have mentioned the vast proportion to be paid by women under the present scheme. The other day I was arguing with some older teachers who said that if they went in both schemes they would have to pay 12¾ per cent. of their salaries and they could not afford it. In the main, they were on more than £2,000 a year. But their young teachers on £16 10s. a week have been paying 13 per cent. of their salary and still do. This is one of the reasons why they can talk about a £13 a week take-home pay.
Some easing of this flat-rate contribution has always been necessary and this was recognised by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). Part of the graduated contribution went towards the flat-rate pension, as my right hon. Friend the Member for Sowerby (Mr. Houghton) said earlier. After what the right hon. Gentleman said—and I would add that contracting-out employees actually have to pay 2s. 7d. above the basic rate to compensate for that—the noble Lord should withdraw his remarks that my right hon. Friend did not know what he was talking about. The Conservative scheme was unsatisfactory. Parliamentary convention forbids me from using the language about it which the workers in factories in my constituency use.
One of the urgent requirements, and I agree that it should have been done sooner, is for the scheme to be altered. Despite the complication of this scheme, the Government have adopted the right method. It is desirable to insist that a national scheme should ensure an adequate pension and that occupational
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pension schemes should have an opportunity to adjust themselves to the national one.
As a layman, I look to the experts. I was intending to read an extract from a report produced by a study group of the Royal Institute of Public Administration. This group spent some years studying this subject. The summary of its findings, on page 253, would have made an excellent preamble to the Bill. I asked the expert in my union, the N.U.T. the superannuation officer, Dr. Barnes, to say something about the new superannuation scheme after I had received messages from worried teachers following speeches and Press reports.
Dr. Barnes published a reply, in which he said:
"In recent weeks, fears have been expressed by some members of the Union that they will lose their superannuation scheme when the government's new proposals for national superannuation comes into operation. These fears are unfounded. At the present time teachers at retirement receive the teachers' pension and the government pension. When the new Government scheme comes into operation— and it probably will not do so before 1972—teachers will still receive both."
Dr. Barnes goes on later to say:
"The lump sum available in the teachers' scheme can still be expected in full. Any existing benefit secured in respect of teachers' service and contributions will be fully safeguarded."
If there has been confusion on this matter it has been added to by the speeches of the noble Lord and some of his supporters. There are faults in the occupational pension schemes. In many, the pension is based on the last five years' salary. If someone becomes a head in those last five years he is on to a good thing, because he collects a pension far greater in proportion to the contributions he has made.
A man or woman who has not gained that promotion in their later years does not receive the same benefit from the scheme. This last five years business is not as fair as all that, even in the professions. For the manual workers it would not work out at all. In some of the public sector schemes, as in the private schemes, there is the danger that the man who is hard up—and this has happened among employees of my local council—will give up his job to collect his superannuation and then start afresh a few days later.

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Can occupational schemes do the job which can be done with the new Government scheme? I suggest that they cannot. The people not now in occupational schemes will be the most difficult to fit in. All the major industries are covered, together with the public services, and the rest will have to be covered by small schemes operated on behalf of employers by insurance companies. I cannot help feeling that the real reasons behind this debate are the figures 1 per cent., 1·25 per cent., 1·3 per cent. and 1·35 per cent.
The real objection to the Government's proposal is that the abatement of contributions will only be 1·3 per cent. although the Government Actuary argued that 1·25 per cent. was enough. The real reason for the opposition, and I expect the hon. Member for Cornwall, North and the Liberal Party from this, is that there is a great deal of money to be made by insurance companies if the 1·5 per cent. abatement is allowed. The noble Lord gave us no evidence that there would be any harm to existing schemes or contributors. Time and again he said that there would be no new schemes, and, therefore, no growth. Any growth would come from the insurance scheme. The argument in this debate is about whether the abatement should be 1·3 or 1·5 and whether the profits should be more or less.
7.50 p.m.
Sir Brandon Rhys Williams: With the publication of this most recent White Paper, 4195, the Secretary of State has completed his contraption and brought it before the House. They say that a camel is a horse designed by a committee. This is a pensions scheme designed by an extremely fitful and wayward genius. The more that people look at it, the more determined they will be not to buy it. I cannot help reflecting that this horse came from the same stable as the Parliament No. 2, Bill, and it seems to me very likely that it will end up in the same graveyard. At every stage at which the Secretary of State in drafting this contraption has had to take a decision, he has taken the wrong one. It is worth reflecting how he has arrived at the present scheme.
First, let us look at the right hon. Gentleman's general priorities for the
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Welfare State. We know what the public's priorities are: they are concerned about child poverty and the disabled, and they are very concerned about the existing pensioners, particularly the over-80s and public service pensioners. People who study the workings of the Welfare State are extremely concerned about the earning rule and the operation of the wage stop. All these things require urgent attention. But the Secretary of State proposes to raise £400 million in additional taxation in the first year of the operation of the scheme, yet not to use it for any of these objectives, but simply to put it away in order one day to honour an election pledge which was never believed by anybody and which will not indeed even be honoured by his extraordinary scheme.
The question of the relationship to earnings is extremely important. We all accept that the National Insurance contribution can no longer be a flat rate contribution but must be earnings related. But in giving a welcome to this advance, which was inevitable, we must consider much more closely the idea of earnings-related benefits. We are dealing with very large sums of public money and many millions of people, and we should be meticulous about the reasons why we should launch out on earnings-related benefits. I do not say that they are necessarily wrong, but we must be absolutely certain of what we are doing before committing ourselves to this sort of expenditure.
It used to be an old Socialist maxim— and many people think that it is not a bad idea—that money should be taken from each according to his capacity, and given to each according to his need. It seems a very long time since the Secretary of State reminded himself of this maxim. I am sorry that he has never given any explanation why he has abandoned it.
I have said before, but it is worth briefly going over it again, that there are two maxims which have come down to us from Victorian times when we are thinking about providing for old age. One arises from the impetus towards charity which gives rise to an impulse in everyone who has money to share it with those in need; and there is the precisely opposite injunction towards thrift, which encourages us to provide for ourselves and keep our money to ourselves.

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It is not possible to devise a scheme which combines the system of National Insurance, which arose from the Victorian concept of charity on the grand scale, with the system of National Savings, which is the twentieth century follow-up of the movement towards thrift. In trying to do so, the Secretary of State has produced a contraption which will give the most money to the people with the least need, but which will not even give them a fair deal.
The question of redistribution must be tackled. We all accept that there must be redistribution of income to meet people's basic needs. But the latest edition of the child's guide to the scheme contains on page 13 a table showing the way in which the scheme is supposed to operate. A pensioner whose annual average earnings achieved during his working life was £630 will get a fully mature new-scheme pension at April, 1969, earnings levels of £378. When we look to the bottom of the table we find that someone earning £1,900—broadly three times as much—whom we might expect, since this is an earnings-related scheme, to get three times as much, gets only £695 10s. instead of about £1,140. I calculate that that represents a loss in the system of about 39 per cent.
The Secretary of State has introduced the absolutely unacceptable and obnoxious concept of the redistribution of savings. We shall never be able to give people confidence in a State savings scheme which has secreted in it this principle of the redistribution of savings. But if we want to introduce a system which causes people to lose confidence in the currency, this is it.
Let us consider the question of entitlement, because it is vital that we should be clear what we think about it. Is entitlement to be based on need, as it is in the case of our vast special supplements system? Clearly, it is not in the Secretary of State's system, because even after it has been going for 20 years it is admitted that there will still be a need for special supplementation as the scheme will not have caught up with and eliminated need. Entitlement could be based on citizenship, in the same way as family allowances. But that is not the basis of this scheme. It is not even, as we have seen, to be related to contributions, because the relationship with
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contributions is to be so tenuous. There is an unexplained 18 per cent. subscribed to the scheme by the taxpayer for no known reason. Therefore, the taxpayer at the upper end of the scale must contribute twice, although he is the very person who gets the least return from the scheme for his money. All these problems arise because the Secretary of State has tried to mix the impulse towards charity with the impulse towards thrift, which cannot be done.
We must consider the changes likely to take place in the value of money. I think that everybody would agree that the basic scheme, which is to eliminate need, obviously must relate extremely closely to changes in the value of money. We might even wonder whether a two-yearly review will be frequent enough. But if we are to deal with people's savings, is it the right principle to introduce variations related to changes in the value of money when what we are dealing with is the growth of capital?
This matter needs a great deal of emphasis, because it is a major departure in policy that savings in future do not earn interest but are linked to price levels or, at the Minister's discretion, to the national income. This means that, in future, savings will not fructify in the pockets of the people but will be taken into the pockets of the Government from which people will be occasionally awarded a discretionary bonus out of taxation on a scale not identified in advance.
This is a principle which Governments have resolutely refused to apply to their own debts in the past. Certainly our own Government, I am glad to say, have never thought of applying it to the Government debt. It is something which is suggested only in bankrupt economies, and yet the Secretary of State has quietly slipped it into this scheme, and it is a feature of his scheme which has attracted far too little attention. It is a threat to the structure of the capital market, and particularly the gilt-edged market. If the Secretary of State says that the British people no longer have confidence in the value of sterling, how can we possibly expect people overseas to leave their deposits in London earning interest, when we ourselves have become far too sophisticated for that, and have voted ourselves a scheme under which we will be

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given discretionary bonuses by future taxpayers? This is an attack on the whole basis of a capitalist economy. I do not refuse to take a distant view at that idea. In due course we could all arrive in some state of Philadeplhia where we shall all escape from the cash nexus. But that time is not yet. It seems to me to be an ill-thought-out vote-catching and highly dangerous innovation.
There is, then, the question of contracting out. The further we get down the path, at every point taking the wrong turning, the more deeply entangled we all become. One cannot contract out of a system based on redistribution of income because, if we could, all the people would contract out who would be the most likely to suffer. And one cannot contract out of a system which has relationship to price levels, because one cannot predict what one is contracting out of. Thus it is inevitable that there should be universal coverage by a basic scheme which is redistributory and which is related to price levels. Why it is possible to contract out of the existing State graduated scheme, which is an honest scheme, is that it obeys the laws of arithmetic. If there are two schemes, one dealing with accretion of capital and savings and one dealing purely with the redistribution of income, one can contract into the one dealing with the redistribution of income and out of the other dealing entirely with the accretion of savings. But there must be two separate schemes.
The Secretary of State has again taken the wrong decision and has decided on one great galumphing scheme. It is impossible to contract out of this entirely: so one moves on to the stage where one has to find some method of partial contracting out. This means that every one of 65,000 established schemes must be compulsorily changed. Heaven knows how many years it will take for all the 65,000 schemes to reconsider all their plans and settle down as orderly vehicles for the collection of savings.
I have studied with great fascination the ingenuity which has gone into the development of the concept of abatement. It is so beautiful and so ingenious. One feels that it ought to be used for something, but not in a State scheme. It
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is rather like the designs for the Foreign Office which were rejected, but the draughtsmen admired so much they converted them into a railway station. They can now be seen at St. Pancras. I am sure that abatement will find its place in society somewhere, and I would love to be the person who suggested how this marvellous device could be used. But the more we study it the more problems it is seen to give rise to.
What priorities has the Secretary of State in dealing with the matter of partial contracting out, or abatement? His problem is that he either has to extinguish the private sector or will provide the big schemes with subsidies. He hopes that he has found a middle path in which he will extinguish only some of the private sector and hopes that the subsidy for the big schemes will not be so excessive as to cause an outcry. In fact, what he has done is choose a level of abatement which will damage the entire private savings movement. It is not possible to find a procrustean bed which will suit every type of scheme, because the large scheme will have lower administrative expenses than the small scheme and the scheme with a large number of young people will be better placed in terms of the compound interest provisions than schemes in declining industries which particularly need help and in which there is predominantly older membership. Whatever one does about the rate of abatement, one cannot be right.
There have been many different stabs at the problem. First of all there was a suggestion of 0·8 and 1 per cent. in the first consultative document. Then the Government Actuary decided that there could be 1 per cent. and 1·25 per cent. This is not hair-splitting since very large sums of money are involved. Then finally we hear that it is to be 1 per cent. and 1·3 a side. That is the level that the Secretary of State feels right in the circumstances of November/December, 1969. But by the time we reach January/February, 1970 those assessments will already look rather tired.
I see that the Government Actuary has allowed his signature to be printed at the end of the interesting appendix to the White Paper; but if one had seen his writing it would have been rather like Guy

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Fawkes' signature after he had been tortured and a confession was extracted from him. No one as estimable as the Government Actuary would willingly have put his signature to such wild generalisations as he has in the appendix. One cannot help feeling that he has done so under pressure. A lot of people would say that an actuary should not be expected to make estimates of long-term interest rates. He should be given them by whoever is running the scheme and then should be able to say what are the consequences of such assumptions. But the Government Actuary has had to say:
"…I have thought it reasonable to assume that an average yield of 7½ per cent. would be obtainable on new investments in the period in question. Investments made during these four years will themselves produce income which will need to be re-invested until the employees concerned reach pensionable age. I have assumed that the average yield obtainable on such re-investments will be 5½ per cent."
Goodness knows whether a crystal ball, a computer, or mere head-scratching has been the method used to reach those conclusions, but in as short a time as a few months these estimates of interest rates will seem archaic and wrong.
Let us look at some of the other things in the appendix which have been used by the Secretary of State:
"I have assumed that 7 per cent. of the amounts derived from contribution abatements will be absorbed in meeting expenses."
I was aghast at that. Some would think that infinitely too much and others too little, depending on what sorts of schemes are being considered. I will not elaborate further on the embarrassments of the Government Actuary. This will become a sort of locus classicus of actuarial examinations: "How many mistakes can you find in the Government Actuary's appendix to White Paper No. 4195?" If the scheme gives good value for money, it is cheating the taxpayer and subsidising the life offices. Nobody, I am sure, wants to do that. Or it is subsidising employers, which again will cause indignation when it comes out. But if it gives bad value it will force the winding up of thousands of savings schemes with disastrous effects on the capital market.
There is also the other anxiety that estimates are to be subject to a two-yearly return. This is simply building into the system from the start a perpetual element of doubt and instability.
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What are the conclusions to be drawn from all this? There are so many disastrous anomalies that we can be certain that the scheme will never come into effect. What is needed in its place is a new scheme which will keep the arithmetic of redistribution of income completely separate from the arithmetic of savings.
The Government must get their priorities right. They must deal with child poverty and the disabled. They must not leave these matters to Private Members Bills. They should deal with loneliness and the poverty among existing old people. They should clean up the anomalies in the existing welfare state which are crying out for attention; and should deal with the problems facing families of the chronic sick and the long term unemployed. These are the things to which the Secretary of State and his colleagues should be giving attention, and not fantastic contraptions and long term predictions which have troubled the House for many months past.
The Government must put their mind to solving two vital problems in our society. One is the need for a rapid growth of savings. The other is the provision of basic pensions which are enough. I hope that in due course we shall work together towards a property-owning democracy in which there are no poor. But this scheme will not achieve it.
8.9 p.m.
Mr. Douglas Houghton: I must apologise for having had to leave the Chamber earlier for a little over an hour. However, I heard most of the speech of the noble lord the Member for Hertford (Lord Balniel).
This is the debate for which the Opposition have been clamouring, threatening the Government with a vote of censure if they did not get it. Now look.
Mr. John Horner: The happy few.
Mr. Houghton: Most of the debate to which I have listened has not been about this White Paper, but about the previous White Paper, on which we had a separate debate. The Bill is to be published shortly, and then we shall consider it on Second Reading.
I thought that this debate was asked for to probe the detail and fairness of the proposed abatement scheme. I think

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that too little attention has been given to it in the course of the debate.
The noble Lord puzzles me more and more. His speech was full of mischievous and irresponsible criticism both of the scheme and of the Government, with, by the time that I left the Chamber, not a single constructive idea. The noble Lord and the Opposition generally will have to make up their minds very soon what is to be their attitude to the scheme. We have not had a glimpse of it yet.
The Liberal Party has laid its heart bare and told us about its alternative scheme and how unacceptable these proposals are. The Conservative Opposition have nagged and nattered. From the time that these proposals first came before the House, they have moved to strike, but been afraid to wound. We do not know what the Opposition intend to do, and I think that it is imperative that they should soon tell the country what their attitude is to the Labour Government's scheme for the reform of social security.
I have another grievance against the noble Lord. He said that I was mistaken in saying that the 1959 graduated scheme was redistributive. Of course it was. It would not have made sense had it not been. By "redistributive", I mean that contributions are levied upon higher-paid workers in order to transfer the bulk of them to supporting the benefits of lower-paid workers. The 1959 scheme had that as its primary purpose.
Before 1959, the problem that the Government of the day had to face was that the flat-rate scheme was running seriously into deficit. There was what was called an "emerging" deficit in the National Insurance Fund because it was difficult to raise flat-rate contributions to the level necessary to pay for the increased flat-rate benefits. That was the financial problem which confronted the Government in 1959.
Lord Balniel: I am sorry if I misunderstood the right hon. Gentleman's interruption in my speech. What I was criticising in the present proposals was that, the more one earns, the less is the value of one's contribution and, in that sense, was a redistribution which I thought was mistaken in an insurance contribution. Under the old scheme, each person's contribution was of equal value.
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I accept that, if one contracted out of the scheme altogether, one paid a bigger flat rate stamp towards the flat-rate pension.
Mr. Houghton: I am obliged to the noble Lord. Evidently, we were at cross-purposes.
The 1959 scheme was redistributive in the sense that it took away from all the graduated contributors an equal proportion of what they were paying to transfer to financial support of the flat-rate scheme. In the present proposals, the redistribution is of a graduated nature which leads at one stage to the lower-paid worker getting, £ for £ of contributions, almost twice as much in benefits as the highest-paid worker gets £ for £. In that sense, the form of redistribution is different, but there is no doubt that the 1959 scheme was redistributive.
I have furnished myself with the accounts of the National Insurance Fund to prove that, whereas graduated contributions last year produced over £400 million, I doubt whether graduated benefits amounted to £10 million, but still the fund was in balance only to the extent of £116 million at the end of 1968 and ran into the red in 1969.
Mr. Temple: The whole point of the graduated scheme was that the benefits would come later. The cash came now, but the benefits came later. Although the right hon. Gentleman is extremely adroit in these matters and is putting the figures relatively fairly, he is conveying a slightly erroneous point of view.
Mr. Houghton: I am obliged to the hon. Gentleman, but, if the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) were here, I would challenge him to say whether his mind was fixed on the ultimate future of graduated benefits or whether he was looking in the till to see how many million pounds he had to put in to finance the flat-rate scheme.
Mr. Temple: Both.
Mr. Houghton: Yes, but his eyes were on the till. He could not afford to look into the future. However, I think that we have cleared up that difficulty.
For the sake of the prestige of and confidence in national insurance I hope that we will stop talking about "the Tory swindle". It is not good for national

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insurance and does not happen to be true. Probably I shall quarrel with some of my hon. Friends about this, but the truth is that the 1959 scheme was re-distributive, but the Tories of the day dared not say so. They pretended that the graduated contributions were value for money when they were not. But the scheme as a whole was value for money. I am always surprised that the Tories let that label stick. The scheme as a whole is value for money today. There is no deferred annuity of the level of the national insurance pension which can be bought in the market for the price paid by the insured person in the scheme. That will be true of the future as well.
My hon. Friend the Member for Bristol, Central (Mr. Palmer) was on a point, and another hon. Member mentioned the possibility of a revolt later on against the redistributive element of the scheme. That is a possibility. It may be that higher-paid workers will feel that they should not continue to subsidise lower-paid workers to the extent that the scheme requires.
That element of redistribution within a superannuation scheme is a matter of politics as much as of finance, but this is not the only way of securing redistribution. There could be redistribution by asking the employer to pay a much higher contribution. There could be redistribution by asking the Exchequer to make a much bigger contribution. But the method adopted in this scheme is that chosen by the Conservatives in their scheme and, to that extent, the principles of the scheme are hallowed by Conservative precedents.
It does not mean that this form of redistribution will be wholly acceptable all the time. It depends largely on how the movement of workers into the higher income ranges reacts upon their sense of justice within the national insurance scheme as they then see it. They may feel that the subsidy of the lower-paid workers should come out of a wider redistribution and not from within the insurance scheme itself. That is a point which will have to be borne in mind when looking at this in the future.
The hon. Member for Cornwall, North (Mr. Pardoe) had one or two comments to make. He said that the scheme was unacceptable because it did nothing for
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the flat-rate pensioner. We must be realistic. It is clear that no earnings-related scheme can apply to existing pensioners. The hon. Gentleman was no doubt expecting that this scheme would be more generous to the flat-rate pensioner than in the past. If that is his point, then I say that the flat-rate pensioner stands a better chance of generous treatment from the finances of this scheme than from the finances of the present scheme. There will be more room for improvement to be given to the flat-rate pensioner, because initially the financial arrangements will be more favourable.
I have heard this scheme described as the generation contract. One generation undertakes to pay for the pensions of the previous generation in return for a promise from the next generation that its pensions will in due season be paid. But if any generation is asked to pay a much higher proportion of its income to fulfil the promises of the previous generation, tensions are bound to develop between the workers, on the one hand, and the large number of people in retirement, on the other. This has happened in Germany. This is why, when we were debating the matter earlier, I was anxious that the Government should fix the rate of contribution to begin with at such a level that it would be unnecessary to increase the percentage contribution for many years to come.
What does contracting out do to that? It has an adverse effect on the surpluses in the National Insurance Fund in the early years. In Table 7 in the original White Paper we see that the Government Actuary's estimates of the growth of the fund and the period over which it should grow and the percentage by which it should grow were all based on no contracting out. He ignored contracting out in producing his figures. The reason why the Secretary of State has had to drive a relatively hard bargain on partial contracting out is because a reduction in the contribution revenue by too much contracting out would adversely affect the financial basis of the scheme and he would have to begin by increasing contributions in certain circumstances. So we have to look at the partial contracting out proposals in the context of the effect upon the finances of the scheme as well as upon the interests of employees.

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The hon. Member for Cornwall, North again condemned the earnings rule, and I thought that I heard the noble Lord say that the earnings rule should gradually be worked out of the scheme. In no social security system in the world, as far as I know, is there a scheme without a limit of benefits according to earnings. There is an earnings rule in every one that I have seen. The reason is that it is difficult to define the basis of qualification for pension unless there is a retirement rule. With a retirement rule there must be some limitation on earnings thereafter. I know that the heads are shaking, but this will be found to be so when it is examined.
Will the workers of tomorrow be prepared to pay their shillings and shillings a week in contributions to keep people on full pay and full pension after pension age? They will say that it is too heavy a burden to place upon them to maintain people with double incomes in retirement—full wages and full pension. When the pension is lifted to a level where it is virtually a replacement of earnings, it is obviously improper to add that pension to full earnings.
That is why there must be an earnings rule, and we must face it, because people are constantly condemning it as if it was some evil device to prevent them getting additional resources to supplement their pension. But when people are to get more than half pay on retirement—and in retirement normally the level of expenditure falls—it is obviously improper to duplicate their income by providing them with an adequate and full pension to enable them to live in retirement and add that to the capacity for full-time earnings.
I sincerely hope that the scheme will provide—it is not clear now that it does—for additional benefit to be given where a person defers retirement. I presume that on deferment of retirement contributions will continue to be paid and that they will reckon towards the additional calculation of pension.
I give special attention to what was said by the spokesman for the Liberal Party, because that is where all the fresh, bright ideas come from these days— [HON. MEMBERS: "Oh."] It stimulates one's critical faculty. It gives one an opportunity of seeing whether there is
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anything fresh that one has overlooked. We cannot be sure of getting all the bright ideas on these benches.
The hon. Gentleman dealt with the position of women. I agree that women should be brought into line with men both as regards retirement conditions and age of retirement and that they should be put on terms of equality. When women get equal pay I shall press as hard as anyone for equality of men and women in national insurance as in every other sphere of economic and social life.
Mr. Pardoe: Is the right hon. Gentleman suggesting that women will not have equay pay by 1992?
Mr. Houghton: I hope that they will have equal pay long before then. But the scheme has to be drafted on conditions as they are. To expect equal pay and to write it into the scheme by lifting the retirement age of women in anticipation of equal pay, would be politically presumptuous.
I turn now to the effect on occupational pension schemes. There is room for a great deal of misrepresentation and misunderstanding on this. I do not minimise the degree of concern that some people felt initially when these proposals first came out. But there can be nothing simple about any superannuation scheme. My right hon. Friend proved that in the extract that he read from the conditions of a private occupational pension scheme. I nearly interrupted him to say that I could make it sound much more intelligible if I read it with verve and with the right emphasis and understanding of what I was reading, whereas he was really reading a Sunday morning sermon and had got into a private occupational pension scheme rule book by mistake.
All these things are complicated, and it is our job to make them understood. Those who say that everything should be made simple must realise that simplicity is the enemy of equity. This is one of the fundamental principles of administration. We can have a simple income tax, or a simple anything. We have a simple S.E.T., yet it is riddled with anomalies. We can have a simple wages tax, and it is soon riddled with anomalies because people say, "I am a family man with children. Do I have to pay the same as everybody else?" and we begin to make

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allowances for marriage and for children, and then we have to deal with illegitimate children, adopted children, stepchildren, and all sorts of children before we can make the rules.
Coming back to the occupational scheme, I regard this as an opportunity for those in occupational schemes, or the big ones, to negotiate a new, more enlightened, and modernised structure of superannuation than they have already. There is no need for them to worry unduly about that part of the occupational scheme which will be taken over from the State scheme. What they should be getting in their negotiations are better benefits for widows, better breakdown pensions, and better lump sums. There are all sorts of opportunities to renegotiate the superannuation schemes, and this, I believe, is what the big organisations will do.
Most of the occupational pension schemes are inadequate. A lot of them are overdue for reform. Few of them, for example, have any provision for widow's benefit at all. Many of them have no provision for orphans, or for a widower. There is nothing except the straight calculation of pension by reference to length of service.
I notice that some big organisations have wisely been going about their business without making a fuss. We have heard no complaints from the staff side of the Civil Service Whitley Council, and it represents as big a number in an occupational scheme as anybody else. The reason is that it is quietly talking to the Civil Service Department on how it will reshape superannuation to adapt it to the new State scheme. This is what other organisations should be doing. I do not want to be harsh on people who feel anxious about this, but to flood Members with postcards, as one organisation did, is not really the most intelligent way of conveying their difficulties and their grievances. We would like to hear from them what they are.
I do not regard the prospects of the occupational schemes with dismay. I believe that they have an opportunity, that the organisations representing them will be strong enough to get a quid pro quo in negotiating a new scheme. There are all sorts of things to take into account. I am sure that the tax position has been mentioned in the debate. Quite
1810
clearly, there are adjustments to be made with regard to the tax relief on occupational schemes and not on the State scheme.
I am glad that the debate has taken place, disappointing though it has been for the purpose for which it was held. Nevertheless, it may anticipate to some extent the problems with which we shall have to deal when the Bill comes before the House.
8.32 p.m.
Miss J. M. Quennell: I enjoyed enormously listening to the speech of the right hon. Member for Sowerby (Mr. Houghton), but I was getting a little alarmed at all the children who had to be taken into account in our fiscal laws. I believe that the right hon. Gentleman left out godchildren, but no doubt a rule will be brought in shortly to take them into account.
I should like to confine myself to two aspects of the scheme, but first I wonder whether it would be possible for the Minister without Portfolio to clarify one point. In opening the debate, which he did at a high speed for nearly an hour— and it is very difficult to take accurate notes when he is in full voice—the Minister of State said that only one in ten of those in occupational pension schemes have protection of their pension rights when they leave their jobs. I think that this comes from page 25 of the new pension scheme pamphlet which appeared yesterday. I find it difficult to relate that to tables 14 and 15 on pages 31 and 32 of the Third Survey of the Government Actuary which appear to show that in various aspects of the private sector at least 80 per cent. of people are covered.
I think the Minister of State said that we now had two schemes and it would be much simpler when there was only one, the Government's new scheme. I think that that will tend to lead to a little public confusion, because for a period while the new scheme is being phased in, and the old schemes are being phased out, three schemes will be running, not two as at present, and not one as the Minister hoped. This is one of the features which has led to a certain amount of confusion, and it has been mentioned by hon. Members on both sides of the House during the debate.

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I should like to try to clarify the transitional period of the scheme. I have had many letters from puzzled constituents about how they will be affected, and how the new scheme will work out, and it is not helpful for the Minister of State to pretend that this confusion does not exist, or that it has been artificially stimulated. People are genuinely bewildered, and with good reason.
They have taken in the fact that they are to have 60 per cent. retirement pension related to their earnings if their earnings are half the national average when the new scheme is fully in force; that they will get 42 per cent. of their earnings if those earnings are on the national average; that they will get 37 per cent. if their earnings are one and a half times the national average. What they find bewildering is trying to assess what their position will be unless they can also assess what the relationship between the standard of living and the cost of living, between wages and living conditions, will be when the new scheme comes in. This is where the scheme begins to disappear into the realm of the hypothetical for the man in the street, and it is most unfortunate.
They have taken in the fact that the existing scheme is flat rate and that the new scheme will be earnings related. They have taken in the fact that the two will run concurrently for a time and that there must be a period of overlap. What has not yet been taken in is that people retiring before the new scheme comes in in 1972 will not derive any special benefits from the new scheme. The only benefits they will get will be from the two-year review, or "inflation proofing" as the phrase is in the guide which appeared yesterday. I am not quite sure what that phrase means, because it is new. But I am a little critical of it, because I do not think it is one that I would have used if trying to make something simple for the generality of the public to understand.
People retiring between 1972 and 1992 will get some penny benefits on rates intermediate between the present level and the new level. It is when they try to work out what those benefits will be that they get into difficulty. They can take away the appropriate number of twentieths, but when they try to add a
1812
figure they are sunk. The Minister of State has said that we would be wrong to do this and that we can only give them a probable idea of what they will get and our assurance that it will be better than what they are getting now.
It is all very well for Ministers to talk like that. The fact remains that people know that, if they are in their mid-50s, approaching the age of retirement, they will have to meet costs in cash terms. They will want to plan for such things as holidays on retirement or a new car. These things have to be accounted for in cash terms, and when they come to hypothetical sums perhaps they find themselves in understandable difficulties.
The position of women has been mentioned and it would only be honest of me, as I seem to have been the only woman M.P. in the Chamber most of the day, to say that I think they will be adversely affected. Let us look at this "new deal for women", as the two pamphlets refer to it. That sort of "new deal" has another name from time to time.
There are 7 million women in employment at present and some 4 million of them are married. A married woman can at present exercise her right to opt out of the scheme and pay 7d. or 8d. weekly contribution to cover industrial injuries, relying on her husband's contributions to cover her for other requirements. Hitherto, the State has done very well out of this arrangement because their employers have been unable to contract out. They have had to pay their full whack to the State and these women's pensions and all their other benefits have been covered by their husbands' contributions. Thus, the employees' contributions have been buck-shee to the State and have gone into the National Insurance Fund to be redistributed.
When we consider women who are salaried we get a different picture. Their national insurance expenditure has been escalating and, in recent times, escalating very rapidly indeed. If a woman in this category had an employer in an occupational pension scheme she could pay the 7d. or 8d. a week industrial injuries contribution plus 2s. 1d. for the State graduated contribution, a total of 2s. 8d. a week, because her firm's pension scheme was contracted out of the State scheme.

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If she had not been contracted out she would still have to pay about 7d. for industrial injuries, plus 9s. 9d. for the State graduated pension, making a total of 10s. 4d.
Autumn has a habit of giving way to winter. What went in October does not go in November. The temperature has been dropping. At the begining of November her State graduated contribution rose from 2s. Id., if she was contracted out, to 8s. 8d.; and from 9s. 9d., if she was not contracted out, to 16s. 4d. So much for the present scheme.
The new scheme will come as a rude shock to most women employees, let the Government make no mistake about that. Even if her firm decides to contract out on the currently understood basis, her weekly bill for National Insurance contributions will shoot up nearly £2, and it could be very much more if hypothetical national average earnings rise between now and 1972. And if one reflects on recent wage settlements, one can be certain that they will.
It is fascinating to take the two simple guides which have been given to us; the new scheme and its predecessor, which, for some extraordinary reason, was published in apple green print. One document is based on the figures for April, 1968, and the other on the figures for April, 1969, and a comparison of the two sets of figures is fascinating. Examples are given of wages on page 13 of the apple green document and on page 17 of the other. They show an astonishing difference—a variation of anything from £1 to £2 a week in the pension to be received simply because the national average wage has, in the intervening period, risen considerably.
Thus, for the salaried woman the prospect of a rise in national insurance contributions in about two-and-a-half years amounts to a great percentage. I make it nearly 1,300 per cent. I do not know what the P.I.B. would think of that. That is probably what the Secretary of State calls "A new deal for women", but it is not a very fair one and, to do the right hon. Gentleman justice, he has not called it fair.
Married women employees, whether full or part-time, will get a new deal too because while at present they can opt to
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pay 8d. and rely on their husband's contributions, under the new scheme they and all women, be they single, married or widowed, must, if they go to work and come under the P.A.Y.E. scheme, pay the full contributions.
If the Government had achieved any real progress along the road to equal pay I do not think that there would be any criticism of this new penalty, but—let us face facts—they have not. We have had some pious words, but nothing has been achieved in reality. We are faced with a scheme which increases the contributions of women workers of every category to equality with those of their menfolk while the women are on wages which are substantially less and they will still pay the same percentage in each case. So will their employers.
The differential between men's and women's contributions which has always existed has existed in recognition of the fact that a man's family benefits would cost the fund more. The wife's allowance and the children's allowance, if he is sick or unemployed, and a wife's pension or widow's pension or widowed mother's pension allowance, all have to be met out of his contributions.
There has always been recognition that a woman's dependants did not cover such a wide spectrum of likely benefits and therefore this recognition in the contribution. This disappears for the first time under the new deal. The social fact that women still have a much narrower spectrum of dependants than the average man still exists, and the cost of the old differential could still be applied in the new scheme.
Mr. Houghton: I am very interested in this, but, as the hon. Lady knows, under the existing scheme no woman can insure her own widowhood, for example. Is there any reason why women should not regard widowhood as a hazard of their lives and insure in their own right for it, and not be dependent on whether a husband pays contributions or disappears and leaves her probably with no widow's benefit when he dies? Does the hon. Lady disagree with the principle that women should have rights in this scheme themselves for their own contributions?
Miss Quennell: This is one thing we could accept if we had genuine equality of employment and in prospects,

1815
opportunities and equal pay, but at present we have not got it. For a time, therefore, there is an argument for what the right hon. Gentleman says. We have to wait perhaps until 1992, or thereabouts, before it comes into existence. At present it seems that equality of contributions which under the new deal is introduced for women simply represents a new method of finding money for the fund. For goodness' sake let us say so. I do not think that women should be exempted from carrying the burdens of citizenship, but let us be honest about it.
8.45 p.m.
Mr. John Horner: This has been an extraordinary debate. No doubt when my right hon. Friend winds up he will say that it has been a far-ranging debate. As my right hon. Friend the Member for Sowerby (Mr. Houghton) said, the debate has dealt with the structure of the basic scheme which is not before us in detail. We are not having a Second Reading debate on the Bill. One hon. Member opposite went so far as to attack this scheme as an attack on the whole basis of capitalist economy. I want to come back to the essence of the subject under debate, the terms and conditions of contracting out. Only in the last speech or two have there been specific references to problems facing those in occupational pensions schemes.
I am delighted that my hon. Friend made such a clear statement about the existing rights of public service pensioners. Those of us who have been associated with public service pensions for many years must have been disturbed at the presentation given to public servants in some quarters recently about the nature of the scheme and the impositions it was said would be made upon public servants when the problem of contracting out was considered.
Like other hon. Members, no doubt, I have had many letters from public servants asking, "Are they going to take my pension away?" It is greatly to be regretted that the misunderstanding, and in some cases almost gross misrepresentation, which occurred in the summer created this widespread fear in the minds of public servants that they would be hard hit when the scheme became operative.
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An extraordinary situation developed a week or so ago when the Secretary of State attended a mass meeting at Central Hall. However difficult it may be to present the details of the scheme in this Chamber, the Secretary of State is to be congratulated for the lion-hearted valour with which he sought to present the scheme to about 4,500 public servants in Central Hall.
I am delighted that my hon. Friend the Minister of State listed the guarantees being given to one section of civil servants. I join the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in asking him to expand those assurances. We are entitled to hear from the Front Bench that what was said in respect of a single group of civil servants shall be applied to public servants as a whole.
For many years there have been adequate arrangements for retirement and other pensions for the police and the fire service. The question of dovetailing into a State scheme the very special requirements of a police and fire service pension scheme has presented problems in the past, but they have been overcome. I am confident that the problems presented by the new scheme will be solved.
It may not be known that it was not until 1948 that the police and the fire service were in the State scheme at all. We were "excepted" employees. We did not pay unemployment insurance, because it was not expected that policemen or firemen would become unemployed. We did not pay National Health Insurance, because under the benevolent employment of the Home Office we were entitled to full pay while sick; thus, we were "excepted".
I do not think that any possible outcry which may occur in the police and the fire service in the next few months will reach the proportions of that which took place in 1948 when, rightly, the Government said, "Every employee now comes into the State insurance scheme. Firemen and policemen will come into the State insurance scheme". But firemen and policemen then said, "We have a pension scheme. We are assured of certain benefits. We want special arrangements". The problem was solved.
Firemen, policemen and public servants in general will learn with pleasure from

1817
this debate that existing benefits are secured and that any calculation of future abatement will be in respect of future service only. There is an early retirement age for policemen and firemen because they must be fit and alert. Consequently, there is agreement that there shall be an early retirement age. That very special entitlement earned in this particular occupational pension scheme will be secured, and any abatement which will take place will occur only when the retired fireman or policeman reaches normal retirement age.
Guarantees of that kind will dispel almost completely the misgivings about the effect of the scheme on public service occupational schemes. I hope that we shall hear from my right hon. Friend the Minister without Portfolio that the Bill and the regulations to be made under it, so far as they affect public servants, will enshrine and extend the assurances which were given by my hon. Friend the Minister of State.
I am glad of the opportunity now presented to try to amplify the point which I lamely put in an interjection in my hon. Friend's opening speech. This is a highly complicated matter. One hon. Member talked about a computer. When I first began to study the White Paper, I was reminded that in my constituency we have a large industrial establishment which makes plastic powders for industrial plastics, in about 6,000 different shades and colours. The problem is to mix the shades and keep them the same. This has been done visually by experts. Then recently the firm introduced a computer to do the job. I was puzzled to know how a computer could mix colours, so I asked to be shown the computer and instructed in its operation. I was taken into an enormous room where the computer stood, and the experts took me through each stage. After each stage, they said, "You understand, do you not?", and, when I said that I did, they took me to the next. When we reached the end of the computer process, however, I had to confess that I had lost the thread, and I said, "Would you please take me back and start again?" I remembered that when I read the first White Paper, and I felt that I was going through that computer exercise again.
But one thing is plain. It seems to me that, if a fireman or a policeman says to me, "If I do not contract out,
1818
if the Home Office, the police authority or the fire authority agrees to keep us in, and I pay my full State contribution, I shall be entitled to my full State pension. I shall be paying my occupational pension contribution, and I shall be entitled to my occupational pension", my response must be, subject to other decisions, that that is right and he will be entitled to both. But I should think it highly unlikely that the local authorities as employers will do anything except contract out. So the policeman and fireman, like other public servants, will be expected to pay just under three-quarters of the State contribution—it is a 1·3 per cent. reduction, which means nearly three-quarters.
No one can say what that will produce in terms of a State pension, and the White Paper is quite blunt and honest about it. In paragraph 11—this is what I should have quoted in my intervention earlier—we read:
"With a pension abatement much above 1 per cent. of earnings, there could be no guarantee that, even allowing for rising earnings, abatement would not eventually lead in some cases to the total elimination of the State pension. There would also be a serious risk that contracted out employees, particularly those in the younger age groups at the start of the new scheme, would qualify for lower State pensions than they would have received under the present scheme."
That was one of the reasons why the Government resisted the argument for increasing the abatement by more than 1 per cent. The abatement of 1 per cent. remains.
It would go a long way to help to resolve the doubts and misgivings of those in occupational public service pension schemes if there could be a further examination by the Government. I shall not give a figure tonight, but there should be a safety net, a floor below which the provision of the State pension should not be permitted to fall. In other words, there should be a datum line below which the occupational pensioner knows that the proportion of his combined retirement benefit coming from the State will not fall. I do not see why the Government cannot produce such a figure in the further examination that can be undertaken.
I am with my right hon. Friend the Member for Sowerby. I believe that when the associations in the Civil Service, the

1819
public service, the nationalised industries and the trade unions get down with their employers to work out the effects of the scheme on the occupational schemes the problems will be solved. The history of the past 20 years, certainly in the service with which I have been proud to have been associated, gives me no fear that this will not be so.
9.2 p.m.
Mr. David Mitchell: When we talk about a scheme involving many millions of pounds and the security in old age of millions of people, it is very important that we have our basic arithmetic right, and that we are certain that the scheme is soundly based.
I want, in the few minutes available to me, to ask three practical and realistic questions and to explore whether the answers are likely to be satisfactory. First, what effect will the proposals have on the country's basic prosperity? Second, what effect will they have on the cost of living? Third, can we be sure that pensions will go up in line with prices, in the way which has been advertised to us? Will the scheme affect our ability to pay our way in the world? What effect will it have on our prosperity?
I am very glad that the Minister without Portfolio is to wind up the debate, because in his recent past incarnation he had a lot to do with the country's economic affairs. I think that he will agree with me that the crying need of the country is for more modernisation, more mechanisation, more investment in British industry. One of the main reasons why the Americans, West Germans and Japanese are in many ways much more successful than we are with their productivity is that they have so much more capital behind each of their workers.
Therefore, anything which will seriously affect the amount of money available for modernisation and investment in industry is a matter of considerable concern to the House. Where does industry now obtain its investment funds? There are many different sources, but one of the largest is the private occupational superannuation funds. About £810 million net a year goes in this way towards investment in British industry. That is about 40 per cent. of all the new investment money which comes forward.
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So, in talking about this, we are dealing with a vital key in the future prosperity of this country.
What would be the effect on the cash flow for investment in this way if the "Crossman" proposals in the White Paper go through? The scheme is a pay-as-you-go scheme, rather like a turntable or the old dumb waiter that used to be in hotels. One puts money in one side, turns it round and it pays out the other side. There is no saving element in it.
A private scheme involves putting money by—saving it—for investment in industry and subsequently it is available for paying out. These proposals do the reverse. They pay out tomorrow what they take in today. I shall not go into the technicalities of abatement, but there will be enormous pressure on people to join the new scheme rather than private superannuation schemes.
The Minister of State said that there was bound to be a degree of cutting back in the private side. The C.B.I. has been doing sums on how great this will be and comes up with the answer of a 50 per cent. slump in the number of private schemes. This is a serious matter, because it means that about 20 per cent. of the money needed for investment in industry, and which is now coming forward for that purpose, is at risk and in doubt for the future. That is something the House cannot dismiss lightly or ignore.
My second question concerns the effect on the cost of living. If one takes something like half the amount of money now going into genuine savings through the superannuation schemes—about £405 million—and puts it into a pay-in payout scheme, one is bound to have an enormous surge of purchasing power in the economy. That means rapidly rising prices under the law of supply and demand, or swingeing increases in taxation such as we have become all too used to in recent years. There is growing fear, to say the least, that it will have a highly inflationary effect.
Thirdly, will the pensions really go up in line with prices? On what basis of assurance can the House accept this? The pension level will be decided by politicians. My constituents, and the

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majority of people in the country, would rather that pensions were in an actuarial basis through insurance companies and kept away from politicians. Politicians should have nothing to do with it.
Mr. Ennals indicated dissent.
Mr. Mitchell: The hon. Gentleman may shake his head, but I know my electorate and I am sure that they and many others would prefer to have their pensions kept away from politicians.
Mr. Ennals: I shook my head because no funded scheme can give a guarantee that pensions, after award, can be protected against an unknown degree of inflation in the future. It cannot be done.
Mr. Mitchell: I did not suggest that they could, but I did suggest that the decision should be taken on actuarial and not on political grounds. That is the big difference.
People do not like politicians meddling with their security in old age. The Minister is proposing to take the situation that, in 20 years' time, our sons and daughters, who will then be working, will be prepared to pay out the higher pensions to keep pace with rising prices at that time. How can we guarantee now that they will be prepared to make these sort of sacrifices?
On page 16 of the shortened version of the scheme—for which we are grateful—it is stated that
"the Government will be bound by law to review every two years the main rates of pensions and other benefits."
The Government were also bound by law to implement the findings of the Boundary Commissions, but did not let that stand in their way. So much for the integrity of the Government when the Home Secretary brought in his squalid manoeuvre. We are thus to have a situation in which pensions will be political pensions and will not have the security for old people to which they are entitled.
Time does not permit me to talk about the way in which I should like to see it done. All I would say is that the scheme now proposed is dangerous, in that it would wreck the basis of the modernisation of industry; it is wildly inflationary and I believe that it is dishonest, because no Government now can guarantee what will happen in 20 years' time.
9.10 p.m.
Mr. Paul Dean: With one exception, and that was the Minister of State, every hon. Member who has spoken has agreed that the scheme is complicated. The Minister of State did not agree, probably because he is the one person in the House who understands it. [HON. MEMBERS: "NO."] I believe in giving credit before coming to my criticism.
But I notice that the Secretary of State, who, we regret, is not able to be with us tonight, put a rather different view in that very agreeable way which he has on the television screen. On the programme "News at Ten" on 5th November, he was asked what he thought about the difficulties and complications of the scheme and he is reported to have said:
"It is because if you have actuarial schemes they have their own lingo. Pensioneering is like chess, you cannot play unless you know the gambits."
That is one of our difficulties, and I mean this extremely seriously, because I do not believe that people will trust a pension scheme, or any other scheme, put forward by any Government unless there is a reasonable chance that they will understand at least the elementary principles of the scheme. The people do not understand this scheme and I believe that it will be extraordinarily difficult, with all the eloquence that the Treasury Bench may command, to get them to understand it.
When there is misunderstanding, or lack of understanding, there is suspicion about what the scheme is about, and when to that is added—and it is significant that it has been mentioned in speeches from both sides of the House—the coming of the computer to make all these highly complicated computations, there will be incomprehension and pensions by computer. We are in a situation in which it will be difficult for the scheme to have the credibility that National Insurance schemes run by the State should have.
We hoped that in this debate we would have a much clearer indication of the Government's intentions than we have had. In this respect this has been a disappointing debate. There are many open questions, particularly about the future of occupational pension schemes and the public service schemes, which we hoped the Minister of State would answer. I am sorry to say that he has taken us very

1823
little further from the three White Papers and the Explanatory Memorandum. There are still many urgent questions which are unanswered, and in that respect the debate has not taken us much further.
Let me summarise the underlying difference of view between the two sides of the House as it has come out in the debate. The Government feel—and I am not complaining, for they are perfectly entitled to feel this—that it is the job of the State to decide what pension arrangements every family shall have and to impose those arrangements from the centre through the State scheme. If by some chance people have made their own arrangements through occupational pension schemes, or in some other way, and those arrangements can be fitted in with the State scheme, all well and good; but if they cannot, they will have to be moderated, changed, cut back, or whatever it may be, to fit in with the State scheme.
Mr. Ennals indicated dissent.
Mr. Dean: But the Minister himself said that earlier, and I made a careful note of it. He said that occupational schemes and public service schemes on certain conditions can take over responsibility for part of the State scheme. That is my exact point. We believe that if pensions are approached in that way all sorts of things follow which we regard as bad.
The first bad thing is that we do not think that it is right or appropriate for the State to decide what pensions people should have over and above a fairly basic level upon which they can build. The minute one gets up to 1½ times average earnings in the case of employees and the roof for employers we get a scheme which is far too rigid and which does not take sufficient account of the needs and desires of the individual, and the State is dictating to people to a far greater extent than is required.
The second major criticism, which follows directly from that, is that a colossal pension bill for the next generation is being built up. In this scheme we are writing for ourselves—the present working generation—a much fatter cheque than we are prepared to meet for the existing generation of pensioners, including the over 80s, the disabled, the widows, and the rest.
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The third main criticism, which follows directly on, is the harm which in our view will be done to occupational schemes and public service schemes as a consequence of the size of this. We have already had a clear admission from the Secretary of State and the Minister of State that there will be some cutback in the rate of increase of savings through occupational schemes which would otherwise result.
In our present economic circumstances, I can think of nothing more damaging than a cutback in the increase of savings. One of the things which dogs Britain more than anything else is that we are not putting enough aside as the seed corn for future prosperity. One of the best ways to do that is through occupational pension schemes and funded public service pension schemes. This is a very damaging admission by the Ministers.
What it adds up to is that this is not only bad economic policy, but it is bad social policy, too. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who knows a great deal about these subjects, said that this scheme and occupational schemes were not meant to co-exist. The State scheme is of such a nature that almost inevitably, because there is no firm base for contracting out, it is putting us firmly on the road towards a State monopoly in pensions.
Our approach is very different. We approach the problem by asking ourselves first: what are the existing commitments; how much do we need to pay existing pensions, recognising that this is on a rising graph because of the growing number of pensioners and the increase in pensions which every Government since the war have rightly given to ensure that pensioners have some share in the nation's rising prosperity? How much do we need to meet this immediate commitment? How can we best raise this money without damaging the future growth of occupational pension schemes and of public service pension schemes.
I am prepared to admit that the ultimate solution may not be as different as the philosophical difference may suggest, but it will still be of tremendous importance in the future development of the State scheme and of occupational schemes.

1825
As my noble Friend the Member for Hertford (Lord Balniel) made clear, we on these benches accept completely that in these days pensions should be related to earnings. After all, this concept was introduced into the State arrangements from these benches. We accept that without any argument, so I hope that we need not waste further time on it.
The right hon. Member for Sowerby (Mr. Houghton) managed, as he often does, to administer a rebuke to both this Front Bench and his own Front Bench. It is interesting to note that the rebukes to his own Front Bench are becoming more severe as the weeks and months go by. But it was interesting—and this is one of the most valuable arguments one would expect to be put more from this side of the House—that he said that inevitably in any State scheme there must be a redistribution between generations. On a pay-as-you-go basis, this is one of the main things which we do. But he went on to say that if we try to make any redistribution too severe between the present generation of working population and the present generation of retired people, we risk a kick-back.
I hope that we have for all time got rid of this dreary argument about the Tory swindle. The right hon. Gentleman speaks with great authority on these matters. How nice it was to hear him saying what utter rot it was to talk about a Tory swindle. I hope that this is the last that we have heard of that boring argument.
My hon. Friend the Member for Petersfield (Miss Quennell) referred to the position of women. This is particularly true of widows in respect of whom there are substantial advances in what is being proposed, but when we come to the contribution which married women must make we find from the figures which my hon. Friend quoted that this is nothing like as good a deal for them as opposed to widows as it may sometimes appear.
I turn to occupational pension schemes and some of the arguments used on both sides of the House in the debate. As is well known, occupational pension schemes now provide for well over 12 million members—about two-thirds of all male employees, or probably not far short of 90 per cent. of the population
1826
if we take into account married women who are covered by their husbands' insurance, those, possibly under 21, who are not old enough to join, and those who are not yet able to join schemes because they have not fulfilled the qualifying condition, which may be two or three years' service. If we take all that into account, we find that there has been a substantial increase in the cover available through occupational schemes in recent years. We are quite rapidly approaching the stage at which the overwhelming majority will be able to be covered in one way or another.
These schemes pay out well over £900 million a year in pensions and benefits, and, as my noble Friend the Member for Hertford said, they generate new savings of over £800 million a year—two-fifths of all personal savings. The Minister admits that there will be a slow-down in the growth of this rate of savings under the proposals we are considering.
I know that it is difficult to argue whether the terms of abatement which the Government propose are exactly right or whether they should be a little higher or lower. But we must consider this in the wider context which I mentioned earlier. In that context, it is very significant that there is virtually a unanimous view among the experts in this field that the terms for abatement are not adequate. The Minister of State quoted the Chairman of the Life Offices Association. What he said quite clearly was, "It is not on, Mr. Crossman. You will not get your abatement in these terms. You will get a cut-back in occupational pension schemes."
The National Association of Pension Funds, the C.B.I. and even the T.U.C. have doubts about this matter. The T.U.C. at their conference in August expressed considerable doubts as to the terms. Admittedly the details were not available, but those doubts were voiced and have been repeated again this afternoon.
The Minister of State himself admitted today that some of these schemes would be wound up as a consequence of the Government's proposals and that some would have to reduce their benefits. This tends to bear out how well-founded were the fears of the experts. Such fears are manifested not only from those who run

1827
pension schemes, but also from the members of occupational pension schemes and public service pension schemes. I feel justified in saying that there is an overwhelming majority of people connected with the schemes who have grave doubts as to whether the terms for abatement are adequate.
What are the criticisms brought against the schemes as they stand? One criticism, which was mentioned today by the Minister of State, is that something like a third of the population cannot be covered by occupational schemes. I do not know how the Minister of State calculates that. I do not accept that the figure is anything like as high. It is possible in industries with large turnover of labour, such as the building industry, to have federated or industry-wide schemes. There are many ways in which schemes can still be developed to cover those sections of the community not covered at present. Because there is this gap, which will remain for some time, it is accepted on this side of the House that through the State arrangements there must be the possibility for people to get a graduated pension for themselves.
Another criticism made about the schemes is that the benefits offered are not good enough. But what is often compared is the benefits of a scheme with a maturity in 20 years' time with occupational schemes at the present moment. One hears quoted figures of £2 or £3 in regard to many of these schemes, but when they mature in 20 years' time they will be offering as good as, or in some cases probably better than, the proposed scheme will be able to offer in 1992. We should compare like with like. The Secretary of State has been a big offender in the comparisons he sometimes makes.
We also have had criticism about transferability. We surely want to work as speedily as we can towards the concept of portable pensions, in whatever is the most acceptable and appropriate form. I do not wish to get into arguments as to whether it should be in the form of preservation of transferability, because the matter becomes highly technical, but increasingly we are reaching a position in which pensions are regarded as deferred pay to which a person is as entitled as he is to his monthly pay cheque or weekly earnings.
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This is where Ministers can set an example. There is very little preservation within the public service. In fact there is none whatever outside the public service to any employee under the age of 50. Let us have a little less criticism of occupational schemes and a little more example from the Government of the day and from Ministers.
Another point on this is the Inland Revenue rules. The right hon. Member for Sowerby referred, as he often does, to the position of widows. I do not think that anyone is satisfied with the provision for widows in many occupational schemes at present. One of the reasons why widows are inadequately provided for is that, under Inland Revenue rules, they cannot get more than 50 per cent. of their husbands' occupational pensions at the moment.
Then there was the question whether occupational pensions can provide for the increasing value of pensions which is desirable as earnings and prices rise. Here again advance funding cannot be provided for future pension increases at more than 2½ per cent. a year under Inland Revenue rules. Equally, preservation or transferability is made far more complicated than it would be otherwise by Inland Revenue rules.
There is a strong case for bringing the rules up to date so that they serve the needs of the occupational pension and the public service pension as they have developed. I hope that the Minister without Portfolio will be able to tell us when the result of the examination which is now going on into Inland Revenue rules is likely to be announced to the House.
In view of recent Press reports, I hope, too, that the Minister can give us a clear assurance that the Government have no intention of interfering with the tax relief at present available on employees' contributions to occupational and public service pension schemes.
I turn briefly to public service pension schemes themselves. They are an aspect which has caused more disquiet in the country and amongst members of schemes than anything else. It has become very clear to me what an immense value people who are in public service schemes attach to them. Whether they be members of the Armed Forces, doctors, nurses, firemen, policemen, civil servants or teachers,

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they have a very high regard for the schemes. Many have said to me that the reason why they put up with low pay or dangerous work, or whatever disadvantages there may be in their branch of public service, is that they have a very good pension scheme which provides security and enables them to plan ahead for their future retirement.
Unless these people can be reassured, the Government will be breaking a moral contract. The Minister of State said that these are statutory schemes for which Ministers have a real responsibility. The lack of such a reassurance will also have a very damaging effect on scarce man and woman power. Who wants to see an increase in the brain-drain of doctors and nurses, or teachers going out of teaching? This could be a real problem unless reassurance is given.
In the pamphlet produced by N.A.L.G.O. in August, I was struck by these words:
"Never in recent years has a subject caused so much alarm and resentment among Association members."
One or two to whom I have spoken have added that the worries which they have about the Maud Report on local government are as nothing compared with those which they have about the future of their pension arrangements. I hope that the Minister without Portfolio will be able to give some specific assurances.
I do not want to go into what their fears are because they have all been rehearsed this afternoon. Among them are the age at which they can retire on pension; the lump sum arrangements; what cut-back, if any, there will be before the State retirement age is reached; the fact that pensions are based on average earnings rather than on final salaries in the State scheme; and whether there will be a very big burden on those earning between £20 and £30. Those are some of the fears.
However, I hope very much that the Minister will be able to assure us on two points.
The Minister of State mentioned, concerning the National Health Service scheme, that the lump sums and the retirement provisions which are available before the normal age for retirement will continue in this scheme.
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Two points arise from that. I am not clear whether the hon. Gentleman was talking purely of previous service or of future service, too. Perhaps we can have that point clarified. If he was talking of previous service only, it is of little value. We want to know what the arrangements will be for service in future and, equally, whether the points that he has made concerning the National Health Service superannuation scheme will apply to all the other public service schemes, contributory or non-contributory. Those are the assurances that we want from the Minister without Portfolio, and I hope that he will be able to give them.
Equally, I hope that he will deal with the point made by my noble Friend the Member for Hertford at the beginning of the debate, namely, whether we shall know the answers to these questions before the Bill, which is expected shortly, leaves this House. Unless we know the answers to these questions before the Bill leaves this House, it will be extremely difficult for many of us, particularly those hon Members on both sides who are disturbed about the future of public service schemes, to know what our attitude to the Bill should be.
Many of the fears that have been expressed on both sides of the House today have not, unfortunately, been clarified. I hope that the Minister will be able, at any rate, to give some reassurance to the public service pension schemes, if he cannot do more.
9.37 p.m.
The Minister without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore): We are asking the House tonight to
"take note of the White Paper on terms for partial contracting-out of the National Superannuation Scheme."
No one will doubt the importance of this subject. I, for one, welcome the fact that time has been found for a debate this week. The time has, generally speaking, been used very well to deploy many of the problems and, indeed, some of the anxieties which, whether legitimately or some illegitimately, have been aroused and undoubtedly exist in some people's minds about the impact of our new national superannuation scheme on their private pension rights.

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I also accept and agree with those who say not just that this is an important subject, but that it is a complex one. It is indeed. I would hope that during the course of the debate some, at any rate, of the complexities will have been ironed out; but we must face the fact that the process of consultation and negotiation of occupational schemes has yet to be embarked upon—the White Paper, after all, is a recent one—and it is only when this is completed that all the questions in people's minds can be answered.
Because it is a complex subject, I think that it would be helpful to the House if I began by presenting a broad relief map of the territory we are covering rather than attempt to supply a one mile per inch ordnance survey of every bit of the ground. To attempt the latter would not only at this stage be impossible, but would absorb far more time than I can hope to have this evening. Further, to do so now would inevitably mean that the broad perspectives were lost.
Lord Balniel: I apologise for interrupting the right hon. Gentleman, but is the answer to the question which we posed as to whether—
Mr. Shore: Perhaps the noble Lord will be patient. There are many questions to which I am anxious to come and to do my best to answer before my time lapses.
I want, first, to put the White Paper against the background of the main scheme and its aims. As I see them, they are twofold. First, it is our intention through the national superannuation scheme substantially and progressively to improve the standard of living of retired people as a whole. Not only will standards improve absolutely, but they will improve relative to those of the working population. Second, the aim is to make far better pension provision for women in retirement.
In spite of what was said by the hon. Lady the Member for Petersfield (Miss Quennell), I think that we could justify to the hilt the claims that have been made Women will be able to earn more generous pensions in their own right, but, particularly in the condition of widowhood, they will benefit both before and after they reach retirement age.
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For those who have today only their national insurance pension and the small pension of which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) is the author, the advantages of the new national superannuation scheme are self-evident. I do not intend to go over the ground trying to illustrate how great we believe that benefit will be, but it is very substantial. It is a substantial increase over the present provision of the flat-rate national insurance scheme combined with the small graduated scheme of which I have just spoken. We need not argue about the benefits to this large category of people, perhaps up to 12 million, who are today outside occupational pension schemes.
What we are concerned with tonight, and the subjects on which most of the contributions have been made, are two things. First, whether the undoubted advantages of which I have spoken are, as it is sometimes alleged, to be at the expense of the national economy, whether there will be repercussions and implications of the kind mentioned by the hon. Member for Basingstoke (Mr. David Mitchell) and to which the hon. Member for Somerset, North (Mr. Dean) drew attention.
Second, whether introducing the national superannuation scheme will have disadvantages for people in occupational schemes. Those are the two matters on which I propose to spend as much time as I can.
On the first question, the effects of the scheme on the national economy, the increase in the cost of living which will be attributable to the introduction of this scheme, as the basic White Paper makes clear, will be about ½ per cent. as far as we can judge. That, as I think the hon. Member for Somerset, North will agree, is hardly a crippling or disabling increase. The increase in labour costs is thought to be about ½ per cent. We are all very conscious in terms of our output, and in terms of our exports and imports, that any increase in costs has to some extent to be looked at and scrutinised very closely. But a ½ per cent. increase in labour costs has such small implications for the balance of payments that I think I can leave those two points and turn to the other question affecting the national economy.

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and that is the question of the effect on savings.
I think that my hon. Friend the Minister of State was misunderstood, or not properly heard, by the hon. Member for Somerset, North. My hon. Friend did not say that this would have a net adverse effect on savings. He said perfectly properly, openly, and very frankly, that in our judgment the effect of this scheme would be to slow down the rate of growth of savings of private occupational schemes, which, as we know, make an important contribution to the total of personal savings.
Let us keep it in proportion. The offset to that is the increase in total savings which will come from the fact that, in the first few years of the scheme, it will be running at a substantial surplus which will more than outweigh any anticipated loss of savings as a result of a decline, if there is one, in the rate of growth of occupational pension schemes.
Mr. Dean: I hope that I did not misrepresent the Minister of State. I was careful to say, I hope, that what had been said was a decrease in the rate of growth of savings. But what, in effect, is happening is a transfer from savings schemes to a pay-as-you-go scheme. That is the main point. Equally, it depends upon the so-called surplus proving to be the case and not a myth.
Mr. Shore: That argument is irrelevant to the question of the totality of savings. The right hon. Gentleman the Member for Kingston-upon-Thames, with his greater experience and sophistication, knows that the total savings will not be diminished but increased by our proposals. We should get into perspective the fact that, while occupational pension schemes may contribute 40 per cent. of personal savings, they constitute about 10 per cent. of total savings, and that the great bulk of savings, certainly for investment—which I agree is of great importance—come from ploughed back retained profits. I have no reason to believe that the effects of the scheme will in any way be adverse to the national economy.
The second aspect discussed in the debate has been the effect on occupational schemes. Our basic purpose has been to marry the improved State scheme and existing occupational schemes. We believe this partnership essential because we
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are not starting from scratch but from a position in which about 12 million people are members of existing occupational schemes.
Our task has been to find a formula for abatement which would make it possible for occupational pensioners to enjoy benefits of the State scheme—in particular, benefits such as the inflation proofing which few occupational schemes can undertake—and at the same time to retain substantial benefits from their existing occupational schemes. The negotiations which have taken place have led, with the general approval of the Government Actuary, to the production of a formula which we believe is fair and one which most occupational pension schemes will be able to live with.
I accept that there is a difference in attitudes towards occupational schemes and the State scheme on the two sides of the House. The difference is quite important. The hon. Member for Hertford revealed a clear bias in favour of occupational schemes. He thought that there was a kind of moral value in them because he felt that the people in them were responsible for providing for their own future, for taking it upon their own shoulders, as he said.
The hon. Gentleman laughed when I challenged the hon. Member for Liverpool, Garston (Mr. Fortescue) on this point. I wanted to get it clear. The hon. Member for Garston obviously felt the same as the hon. Member for Hertford, but the conclusions they drew were, however, different. The hon. Member for Hertford ended up in favour of earnings related State benefits—at least he assented, when challenged, that they were necessary—whereas the hon. Member for Garston denied it. I have a feeling that the hon. Member for Garston was expressing in rather cruder terms the basic philosophy animating the hon. Member for Hertford.
The right hon. Member for Kingston-upon-Thames is a kind of inverted Marxist, as I have discovered from a number of debates. He said that he does not believe in the co-existence effect, he does not believe that a good State scheme and a good private scheme are compatible. The right hon. Gentleman was really describing his own state of mind when he introduced his own scheme. It

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is precisely because he believes that a good State scheme and a good private scheme are incompatible that he produced what my right hon. Friend the Member for Sowerby (Mr. Houghton) called "this somewhat dishonestly described scheme".
Mr. Houghton indicated dissent.
Mr. Shore: No. Well, it was something else, then. He acquitted the right hon. Gentleman of one charge only to level another. We must study his words.
Mr. Boyd-Carpenter Mr. Boyd-Carpenter rose—
Mr. Houghton Mr. Houghton rose—
Mr. Speaker: Order. The Minister must decide to whom he is giving way.
Mr. Boyd-Carpenter: The right hon. Gentleman has exactly reversed my argument when he says that I was stating that a good State scheme and private schemes do not go together. I was suggesting that it was a sign of a bad State scheme if it would destroy the private one, if they could not co-exist.
Mr. Shore: That is a very different proposition, and I do not accept that the new State scheme will have that effect. I do not think that anyone accepts that the new State scheme would have this effect. The view has been expressed that it might have an effect, in some cases a worrying effect. No one has seriously said that occupational pension schemes as a whole are in any way under threat as a result of what we are doing.
I have been asked for many assurances, principally over what we are to do in the public sector. My hon. Friend gave very ample assurances. He made it clear that we do not intend to dismantle public service schemes. He also made it clear that we do not intend the benefits earned by previous service to be subject to retrospective change. He said too, that we had no intentions of making any change in the retirement age of those who, because of the special nature of their duties, cannot continue in their present employment until the age at which the State pension comes into payment.
My hon. Friend said that those who retire on pension before the State pension age will still receive an immediate
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pension as good as they get now. Necessary adjustments to take account of the State pension will apply only at the State pension age. Finally, he said that there was nothing in the new State scheme which need affect lump sum entitlements.
The right hon. Gentleman also asked for an undertaking that the assurance given to the National Health Service employees applied with equal force to members of other public service pension schemes. I can certainly confirm that this is so for all the schemes under the direct control of the Government and I shall be surprised if other public service employees see any difficulty about giving a similar assurance.
Mr. Dean Mr. Dean rose—
Mr. Shore: I cannot give way.
Mr. Speaker: Order. I think that the right hon. Gentleman is not giving way.
Mr. Shore: I must proceed because I have been asked for such a large number of assurances. I have also been asked for assurances that the changes that may be made to public service occupational schemes will be finally settled before the Bill leaves the House. This amounts to setting a close term to the period within which discussions with the staff must be completed. We have no intention of limiting discussions in this way. Consultations and discussions are crucial in carrying through an agreed and accepted public sector scheme, married in with the new national superannuation scheme. The issues are complex and it would be unreasonable to insist that staff must master them and say all that they want to say within a limited period. So I cannot help in that respect.
I was also asked by my hon. Friend the Member for Stoke-on-Trent, North (Mr. Forrester) whether the safeguards for deferred pensions under the preservation requirement will be the same as those for employees who have contracted out. Detailed rules will be laid down in the Bill and regulations made under it, but there is an important distinction between the two types of case to which my hon. Friend referred. The contracted-out employee is getting some pension from his occupational scheme which he would otherwise have received under the State scheme and he must have the same absolute guarantee of getting this pension as under the State scheme.

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The deferred occupational pension for a man not contracted out—assuming that he accepts the offer of a deferred pension—must be as well secured as the occupational pension he would have received had he stayed in the employment up to pension age. There must be no discrimination against him because he left early. That is the proper basis of comparison in this case. On those principles we shall proceed.
I have also been asked, not least by the hon. Member for Somerset, North, for assurances about the tax position. Those suggestions that we read in the Press today that tax relief for employees' contributions is to be taken away are completely without foundation. I hope that that will get well and truly on the record. Beyond that the new level of State pension is, of course, bound to raise the question whether the continuance of existing maximum on benefits under approved occupational schemes would be reasonable. [HON. MEMBERS: "Oh!"] This is a perfectly reasonable point. My right hon. Friend the Chancellor of the Exchequer has it under consideration and we believe that he will be able to announce his decision before long.
I wish to end by summarising as I see it the very obvious advantages that people in occupational schemes will get from the new arrangement and from their membership, even in an abated form, of the State superannuation scheme. First, taking their occupational scheme in conjunction with their State scheme, members of occupational schemes and their families can look forward to cover which is not only as good as now but will in a great many cases be better than now.
Secondly, the basis on which widowhood cover is provided under the new State scheme, particularly for the older widow who inherits the full rate of her husband's pension, far outstrips what is at present done under the great majority of occupational schemes. Thirdly, to the extent that the new State pension replaces any part of an occupational pension those concerned will have an assurance that they are receiving something which will be completely protected on any change of job. What occupational scheme offers a corresponding guarantee?
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Finally, occupational scheme members who are in lower-paid occupations, like others not in occupational schemes will have the advantage of lower contribution rates with a substantially improved benefit return. That together with the guarantee against the erosion of the benefit through at least a two years post-award price adjustment gives a tremendous basis and guarantee for the future of all people in occupational schemes that they will not be adversely affected, but will substantially benefit by the new scheme we are introducing.
Question put and agreed to.
Resolved,
That this House takes note of the White Paper on Terms for Partial Contracting Out of the National Superannuation Scheme (Command Paper No.4195).

ETHEL GEE
Motion made, and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]
10.0 p.m.
Mr. Evelyn King: I can fairly say that neither by background, by temperament nor by heredity, am I the sort of person who would ever be likely to have a temperamental sympathy for a spy, and even less so would the party to which I have the honour to belong.
Hon. Members may therefore ask why, for a period of some months, I have persistently sought to deal with the case of Ethel Gee. I have never set eyes on this woman, and I am glad that I have not done so, because it makes my comments all the more impersonal. It is a tradition of this House that an hon. Member owes a duty to all his constituents; and if one of them be an aged woman, a captive, in misery or in peril, receiving harsh treatment, in frail health or has sinned, so much the stronger is that duty, certainly to put her case, for if that case is not put by him it will not be put by anybody else in the world.
The year 1961 was an unusual one. Two unmarried women civil servants were convicted in criminal courts of disloyalty. Both were in their 40s or 50s. Both fell in love. One was a top civil servant drawing £3,800 a year, and she was sentenced to two years' imprisonment for

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revealing to a diplomat of an Eastern Power confidential diplomatic documents over a long period. The other, a junior clerk, was 46 years of age and was also dominated by her lover. She passed defence documents, which she clearly should not have done, in a way which was criminal, and she was sentenced to 15 years' imprisonment.
Throughout history women in love have, through their emotions, been guilty of this sort of crime, and, naturally, punishments have fallen on them. I believe that most courts have taken—I will not stress this point—a slightly more lenient view towards what they have done than towards what their lovers, or men, have done.
I need hardly outline the crimes, because they are so well known. Naval secrets were sold from Portland to a foreign Power, Russia. However, I must outline the penalties, which were inflicted by the Lord Chief Justice. He described Lonsdale as the master-mind and sentenced him to 25 years' imprisonment. He sentenced both the Krogers to 20 years, while Houghton, on whom I will not dwell, and Ethel Gee, on whom I shall dwell, were given 15 years.
The Lord Chief Justice heard the case, saw these people, heard the cross-examination, and that was his assessment of their relative guilt. I accept his verdict, and had that verdict remained I would not have raised this matter in debate. The political interference with those sentences that subsequently took place is that of which I complain, and it is the inequity that that has caused which I must condemn.
First, however, a comment about the treatment of Ethel Gee in prison. Hon. Members will agree that a prisoner is a defenceless person. For that very reason, I would like to think that any promise or undertaking given to a prisoner would be scrupulously fulfilled. On arrival in prison Ethel Gee was told that if she was a co-operative prisoner she would, in due course, receive her reward. She was, in fact, a model prisoner, and I believe that the Home Office will confirm that. After four years, she did see her reward. In 1965, she was sent to Styal open prison. She was given a study bedroom, with a radio. In one of the letters which she was allowed to write to
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a friend outside, she said that she was overwhelmed with delight. Presumably, the prison authorities thought that by her conduct she had earned that degree of relaxation.
It was unfortunate that at that point Blake, who never had any kind of connection with Ethel Gee and was totally unknown to her, happened to escape from a different prison. As a result, all Ethel Gee's privileges were withdrawn. She was removed at immediate notice from Styal and sent to Holloway. She was there put in a cell, her radio was removed, and a naked light was kept burning in her cell day and night for many many weeks.
On that, I comment thus—and I hope that the Under-Secretary of State will mention it in his reply. First, it was a breach of faith to Ethel Gee. Even in the existing circumstances, I argue not so much that the Home Office was inhumane as that it was singularly silly. Either by sending her to Styal, an open prison out of which she could have walked whenever she chose, the Home Office showed gross negligence, or by sending her to Holloway it showed needless severity. It can take its choice as to which of those descriptioins it thinks it deserves. I say only that the Home Office should not play cat and mouse with a prisoner in that way.
It was at that point that Ethel Gee wrote to me, and I wrote to the Home Office. By now, I think, the Home Office was a little shamefaced. In January 1967, Lord Stonham wrote to me to say that her radio would be restored. That was it—her radio "would be restored", without qualification. With Home Office consent, I told Ethel Gee that this would happen, and hence I became involved in bad faith, too, which I resent. Four months later, her radio had not been restored. Again I wrote.
In May 1967—how many months was it after it was first removed?—I was told that she would have her radio "in about five weeks". She did not receive it in five weeks, although, again, I had written and told her, on the authority of the Home Office, that she would. In October of that year—I think that she actually had the radio a little earlier, perhaps in August—I was finally officially told that it had been returned to her.
To us, a radio seems a small matter. To a prisoner it is not. But I am not

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concerned to argue in this debate whether Ethel Gee should be in Styal or in Holloway, should have a radio or should not, should have a naked light in her cell day or night or should not. But I do argue that, if assurances are given to her—I have quoted the three separate points—it is wrong for the Home Office not to fulfil the promises which it gives.
The argument is that she is an escape risk. There can be no other argument. May we spare a moment to examine that? This is a woman of 54. Her nearest relative is a aunt of 82. Was the escape to be organised by her relatives, or is it suggested that it would be organised by some eastern Power? Let us consider that. The Government themselves had already sent the major criminal, Lonsdale, back to Moscow, and they have sent Kroger back to Poland. Is it tenable that the pawn in the initial conspiracy could conceivably have any information which would be of value to a foreign enemy? Where, therefore, does the risk of escape lie?
Having sketched in a little of the background, I come now to the major point. At the end of July 1969, the Foreign Secretary annnounced that the two Krogers would be freed in exchange for Gerald Brooke. Lonsdale had already been freed in exchange for Greville Wynne. So what happened to the Lord Chief Justice's original sentences? Lonsdale free after serving less than one-eighth of the period to which he was sentenced; the Krogers free having served less than half that to which they were sentenced: the wretched Ethel Gee, the female clerk, left to bear punishment for a crime which clearly she had not planned or initiated. That could not be held to be equitable.
I said once, though this is not the subject of the debate, that I think the whole scheme the Government initiated of exchanging prisoners was a foolish one. It simply invites Russia, on a score of trivial offences, to arrest more Englishmen. I am not in favour of exchanges, but once they made up their minds to follow this course, one would think that at least they would have seen the consequences through. I have a vivid memory of asking the Foreign Secretary immediately after he made the initial announcement, "What about Ethel Gee?" From the look on his face and
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what he said it was fairly clear that he had not thought of that. It must be presumed that if a Government embark on such a course they would have thought through the other consequences which must flow from it.
I understand the Home Secretary's difficulties and the pressures on him. He has said himself that he is sympathetic to this case, and I hope to arouse that sympathy further. He conceded that he would refer the case of Ethel Gee to the Parole Board set up under the Criminal Justice Act, 1967. He then told the House that the Board had recommended against her parole. I do not think that the Board was set up with the idea of taking what has become a political decision. Second, the right hon. Gentleman said categorically that he could not release her without the consent of the Parole Board. How comes it then that the Government were able to release Lonsdale and both the Krogers, as I understand it, without reference to the Parole Board, or did he refer their case to the Board? If he did not, why not, and how can it be that the case of the less guilty woman must be referred to the Parole Board whereas the case of the major criminals does not have to be so referred?
I read last night the Government White Paper of 1965, "Adult Offenders". I am sure the Minister will be familiar with it, but I would quote one sentence:
"Persons who do not of necessity have to be detained for the protection of the public" should be freed after serving an appropriate portion of their sentence. I find it impossible not to include Ethel Gee within the meaning of those words.
"Persons who do not of necessity have to be detained for the protection of the public …"
If the Minister tells me that those words no longer represent Government policy, I understand that. But if they do, I cannot see how Ethel Gee's can be excluded from the meaning they bear.
Why do we send people to prison—punishment, retribution, security? Let us examine those words one by one. She can no longer be a security risk. Retribution or punishment? Ethel Gee is 54 years of age. She is in frail health. Her only relative is an aunt of 82. She is no longer a security risk. She has served nine long years; she has been punished and punished and punished again. Now I think that it is reasonable to ask the

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Home Secretary to use his authority to let her go.
10.15p.m.
Mr. Tam Dalyell: I think that the hon. Member for Dorset, South (Mr. Evelyn King) was less than fair to my right hon. Friend the Foreign Secretary. I remember the occasion when the hon. Gentleman asked that question. My right hon. Friend's reply was:
"I take the hon. Gentleman's point, but this is a question that he must put to my right hon. Friend the Home Secretary.—[OFFICIAL REPORT, 24th July, 1969; Vol. 787, c. 2151.]
Surely it is clear that, given the Departmental responsibilities in Whitehall, my right hon. Friend was saying the correct thing. It was my opinion, on that occasion at least, that he was not surprised by the question.
The other issue is that, since, rightly or wrongly, the United States Government set a precedent in these matters by swopping Colonel Abel—who was a very much more considerable centre of a spy network than has appeared in this country—this must have coloured the actions which Her Majesty's Government should take.
10.16p.m.
The Joint Under-Secretary of State for the Home Department (Mr. Elystan Morgan): I should, first, remind the House briefly of the circumstances which led to the question that we are discussing. The story of what has been called the "Portland Spy Ring" has been told many times, but it is as well that we should recall the threat to national security which the breaking of that ring brought to light. The offence was conspiracy to commit the gravest offence under the Official Secrets Act— that is to say, conspiring together, for a purpose prejudicial to the safety or interest of the State, to communicate to other persons information which might be directly or indirectly useful to an enemy.
The conspirators convicted were Gordon Lonsdale, Peter and Helen Kroger, Harry Houghton and Ethel Gee. Lonsdale—that, of course, was not his real name—was a professional spy employed to seek out military secrets wherever they could be found. The
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Krogers were employed in the transmission of this vital information. It was Houghton and Miss Gee who were the sources of the information, without which the conspiracy could not even have begun. I merely make that point, without labouring it, in an attempt to show to the hon. Member for Dorset, South (Mr. Evelyn King) that they were not the passive pawns that he suggested they were.
Mr. Evelyn King: I did not suggest that they were passive. I said that I accepted the relative sentences imposed by the Lord Chief Justice—25, 20 and 15 years. I hope that the hon. Gentleman does the same.
Mr. Morgan: The hon. Gentleman said that Houghton and Miss Gee did not initiate the crime. What I am saying is that it could not even have begun but for their initiative in that respect.
Both Houghton and Miss Gee were employed at the Admiralty Under-Water Weapons Establishment at Portland. Both had access to information which they knew to be highly classified. At the trial, evidence showed that Houghton and Miss Gee were observed in London on a number of occasions meeting Lonsdale and handing parcels of papers to him. They were in process of handing over a set of Admiralty test pamphlets when the three of them were arrested.
These pamphlets were, in fact, available only to Miss Gee in the course of her official duties. In her own evidence, she admitted that she herself had suggested the test pamphlets as a further source of information, and these had been produced for Houghton to photograph with a view to transmission in due course to Lonsdale.
The gravity of the offences disclosed in the evidence was reflected in the sentences imposed by the court. Lonsdale was sentenced to 25 years' imprisonment, the Krogers to 20 years' each, and Houghton and Miss Gee to 15 years' each. The difference in the sentences may be taken to mark the order of importance of the various conspirators within the spy ring—namely, that Lonsdale and the Krogers were experienced professionals while Houghton and Miss Gee were tools, albeit willing tools.

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Nevertheless, both Houghton and Miss Gee were in a special position of trust. They abused that trust. Both were British subjects. That was not the case with Lonsdale and the Krogers. Houghton and Miss Gee betrayed their country. The court, having had the benefit of seeing and hearing all the defendants, found Miss Gee to be a willing participant for gain and saw no reason to distinguish between the two for the purposes of sentence.
All the defendants subsequently applied for leave to appeal against their sentences, but these appeals were unsuccessful. The Court of Criminal Appeal found no reason to disagree with the sentences imposed by the court of trial.
These, then, were the sentences decided upon by the court, and under our system of law it was entirely a matter for the courts to decide. The Executive, even in a State prosecution of this kind, obviously has no part in this process, either at the trial, or subsequently. Of course, there remain the exceptional powers under the Royal Prerogative of Mercy which may be invoked on the advice of my right hon. Friend the Home Secretary, but, as the House will recognise, it has long been recognised that these powers ought not to be used in such a way as to usurp the responsibility of the courts for deciding sentence upon the evidence which has been placed before them. It is only in exceptional circumstances and when considerations have arisen which were not, and in some cases could not have been, present in the minds of the court that the Executive powers of interference can properly be invoked.
What I have said about the Executive in relation to the courts also bears relevance in relation to the Parole Board itself. The Government as such can have no policy in relation to the Parole Board, contrary to what the hon. Gentleman has suggested. The Home Secretary has duties, of course, under the Act of 1967, but he exercises those duties in a quasi-judicial manner, and that is a different thing.
As it happens, such exceptional considerations have arisen in the case of three of the five conspirators in this Portland spy case. These were considerations which had nothing to do with the merits of
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the sentences which were originally imposed. As the House will recall, Lonsdale was released and returned to Russia in 1964 in order to secure the release of Mr. Greville Wynne. In rather similar circumstances, Peter and Helen Kroger were released in October, this year, to ensure the immediate safe return of Mr. Gerald Brooke.
It is, of course, not for me tonight to go into all the reasons for the arrangements made with the Soviet Government in these cases. It is sufficient to say that exceptional action was taken because of compelling humanitarian considerations relating not to the prisoners detained here, but to the health and welfare of British subjects detained elsewhere.
I fully realise how this will be seen by Houghton and Miss Gee. It is natural that they should feel bitter that they are still detained when those given the longer sentences have been released. It does not follow, however, that because circumstances have compelled the release of one offender, another sentenced with him must also be excused. It is necessary in each case to find special reasons justifying the release of the individual.
Clearly, the exceptional reasons leading to the release of Lonsdale and the Krogers do not arise in the case of Miss Gee, and my right hon. Friend has found no other grounds which could be taken to justify interference by means of the Prerogative with the sentence which the courts thought it right to impose. Furthermore, if these cases were to be given special consideration because of the association with the three people released, many thousands of prisoners not so privileged would feel that they were the victims of an equivalent denial of justice. If there is to be earlier release, it falls to be considered within the framework of the general statutory provisions, which brings me to the question of parole.
I would remind the House that parole is governed by Section 60 of the Criminal Justice Act, 1967, subsection (1) of which provides for early release on licence of persons serving determinate sentences of imprisonment, but that provision makes it clear that an essential prerequisite is a favourable recommendation by the Parole Board. The Home Secretary,

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therefore, cannot act solely on his own initiative.
Under the provisions of the Act, every prisoner serving a determinate sentence is eligible to be considered for parole after serving not less than one third of his sentence, subject to serving at least a term of 12 months. Prisoners are considered automatically unless they choose to opt out. At the first stage each case is reviewed by a local review committee at the prison, comprising the governor of the prison or his representative, with at least three other members appointed by the Home Secretary, including a member of the board of visitors or visiting committee of the prison, a probation officer other than the prison welfare officer and an independent member.
The prisoner is interviewed by a member of the committee other than the governor and, in addition, is free to make written representations to the local review committee. The committee sends to the Home Office its finding as to whether the prisoner is suitable or unsuitable for release on licence. All cases favourably recommended by local review committees are sent to the Parole Board for its consideration.
If the board is not in favour of parole the Home Secretary has no power to grant early release on licence. If the board recommends parole the Home Secretary has power to refuse to approve its recommendation. This is a power exercised very sparingly by him, for example, where in his opinion early release would have entailed an unacceptable degree of risk to the public.
The legal position with regard to parole is exactly the same for spies as it is for all other prisoners serving determinate sentences. The procedure followed is exactly the same except only that the Home Secretary has to take into account any special security considerations. I can say at once that no such considerations arise with regard to Ethel Gee. The local review committee sent forward a favourable recommendation in her case and consequently, in accordance with the normal procedure, her case was referred to the Parole Board. The board informed my right hon. Friend that it did not recommend
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her release on parole and in those circumstances, as I have explained, my right hon. Friend has no power whatever to issue a parole licence.
Mr. Evelyn King: Would I be right in assuming that her case could again go before the Parole Board in the spring?
Mr. Morgan: I was coming to that.
My right hon. Friend has, however, arranged for the case to be considered again in the New Year and we must await the further recommendation of the Parole Board at that time. It is not for me or my right hon. Friend to speculate about the possible findings of the board when it comes to consider the case a second time, but I can undertake that what has been said in the House tonight will be placed before the board at the proper time along with all the other information about the case which it will have.
Mr. Dalyell: Is it within the terms of reference of the Parole Board to consider the wider implications involved in this case, such as the swapping between countries of other persons connected with the same affair? Can this be taken into account by the board, or is it irrelevant to its deliberations?
Mr. Morgan: As I have explained, the case we are dealing with involves an exceptional factor. I know of no rule that specifically debars the Parole Board from taking cognisance of that situation but normally it would direct its mind to more classical criminological considerations.
I turn now to the treatment of Ethel Gee. She was in custody in Holloway Prison and shortly afterwards at Birmingham Prison for a few months. Then she returned to Holloway and transferred to Styal Prison, Manchester, as a long-term star class prisoner in April, 1964. Therefore, the hon. Gentleman must take up the question of the wisdom or otherwise of that decision with Lord Brooke of Cumnor, who was Home Secretary at the time. Secondly, Styal Prison is not an open prison, as he has suggested, and she could not have walked out of it at any time.
After the escape of Blake—and we appreciate that that event brought about very substantial changes—Ethel Gee was returned to Holloway in 1966 and detained

1849
in the special security wing. It is true that she lost her personal radio set because she was then classified as an A prisoner. At a later date she was given piped radio in her cell. Last February, she returned to the ordinary category C condition at Styal, where she still is.
The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at half-past Ten o'clock.

EMPLOYMENT AND PRODUCTIVITY
  Equal Pay
  Equal Pay
  Industrial Sickness and Disease
  Industrial Sickness and Disease
  Male Employees, Cornwall
  Male Employees, Cornwall
  Unemployment Pay Claims, Cornwall (Refusals)
  Unemployment Pay Claims, Cornwall (Refusals)
  Employment Exchanges (Functions)
  Employment Exchanges (Functions)
  Offices, Shops and Railway Premises Act (Notification of Accidents)
  Offices, Shops and Railway Premises Act (Notification of Accidents)
  Motor and Cycle Manufacturing Industries (Stoppages)
  Motor and Cycle Manufacturing Industries (Stoppages)
  Productivity, Prices and Incomes (White Paper)
  Productivity, Prices and Incomes (White Paper)
  Unemployment (Duration)
  Unemployment (Duration)
  Male Employees, Scotland
  Male Employees, Scotland
  Disabled Persons (Unemployment)
  Disabled Persons (Unemployment)
  Production Workers, Motor Car Industry (Earnings)
  Production Workers, Motor Car Industry (Earnings)
  Toilet Provision, Canteen Facilities and Pension Schemes (Staff and Production Employees)
  Toilet Provision, Canteen Facilities and Pension Schemes (Staff and Production Employees)
  Unemployed Persons
  Unemployed Persons
  Equal Pay
  Equal Pay
  Exhibition Stand Fitters (Pay Settlement)
  Exhibition Stand Fitters (Pay Settlement)
  Employed Persons, Northern Region
  Employed Persons, Northern Region
  Employees, Scottish Region
  Employees, Scottish Region
  Employees, Wales
  Employees, Wales
  Industrial Relations
  Industrial Relations
  Unemployment (Investigation)
  Unemployment (Investigation)
  Canadian, Australian and New Zealand Medical Personnel
  Canadian, Australian and New Zealand Medical Personnel
  Industrial Training Board Chairmen (Trade Unionists)
  Industrial Training Board Chairmen (Trade Unionists)
  Unemployed Persons, Brixton
  Unemployed Persons, Brixton
  Building Trade Workers, Sunderland (Unemployment)
  Building Trade Workers, Sunderland (Unemployment)
  Disabled Persons, Sunderland (Unemployment)
  Disabled Persons, Sunderland (Unemployment)
  Messrs. Procter and Gamble and Unilever Limited (Soap Powders)
  Messrs. Procter and Gamble and Unilever Limited (Soap Powders)
  Safety, Health and Welfare (Legislation)
  Safety, Health and Welfare (Legislation)
  Tilbury Docks (Dispute)
  Tilbury Docks (Dispute)
  Unemployed Persons, Thorne
  Unemployed Persons, Thorne
  Pay Increases
  Pay Increases
  Construction Industry Training Board (Levy)
  Construction Industry Training Board (Levy)
  Immigrant Teachers and Graduates
  Immigrant Teachers and Graduates
  Unemployment, Mexborough Area
  Unemployment, Mexborough Area
  Women, Coventry (Night Shift Work)
  Women, Coventry (Night Shift Work)
  Development Areas
  Development Areas
  Statistical Surveys
  Statistical Surveys
  Official Strikes
  Official Strikes
  Industrial Development, North Devon
  Industrial Development, North Devon
  Redundancy Payments
  Redundancy Payments
  Training Centre, North Devon
  Training Centre, North Devon
  Young Persons, North Devon (Employment)
  Young Persons, North Devon (Employment)
  Employees, South-West Region
  Employees, South-West Region
  Unemployed Miners, Bishop Auckland
  Unemployed Miners, Bishop Auckland
  Unemployed Persons, Bishop Auckland (Re-employment)
  Unemployed Persons, Bishop Auckland (Re-employment)
  Professional and Executive Register
  Professional and Executive Register
  Unemployed Miners, Midlothian
  Unemployed Miners, Midlothian
  Agriculture and Mining, Midlothian (Jobs)
  Agriculture and Mining, Midlothian (Jobs)
  Women Workers, West Midlands (Wages)
  Women Workers, West Midlands (Wages)
  Employed Persons, Scotland (Statistics)
  Employed Persons, Scotland (Statistics)
  Lower-paid Workers
  Lower-paid Workers
  Higher-paid Executives (Salaries)
  Higher-paid Executives (Salaries)
  Wages, Prices, Dividends and Rents
  Wages, Prices, Dividends and Rents
  Company Directors (Salaries)
  Company Directors (Salaries)
EDUCATION AND SCIENCE
  C.E.R.N. (Nuclear Accelerator)
  C.E.R.N. (Nuclear Accelerator)
  Nursery Schools (Standards)
  Nursery Schools (Standards)
  Primary Schools (Six-Year-Olds)
  Primary Schools (Six-Year-Olds)
  Divorced Female Students (Grants)
  Divorced Female Students (Grants)
  School Meals
  School Meals
  Education, Nottingham (Expenditure)
  Education, Nottingham (Expenditure)
  Higher Education (Abolition of Means Tests)
  Higher Education (Abolition of Means Tests)
  Teachers' Salaries (Global Sum)
  Teachers' Salaries (Global Sum)
HOME DEPARTMENT
  Capital Punishment
  Capital Punishment
  Vietnam War (United States Deserters)
  Vietnam War (United States Deserters)
  Traffic Offences (Diplomatic Immunity)
  Traffic Offences (Diplomatic Immunity)
  Road Accidents (Metropolitan Area)
  Road Accidents (Metropolitan Area)
  Burials (Medical or Death Certificates)
  Burials (Medical or Death Certificates)
  Mr. Ivan Mikheyer
  Mr. Ivan Mikheyer
  Absolute Discharge
  Absolute Discharge
  Mrs. Ronald Biggs
  Mrs. Ronald Biggs
  Death Certification Committee
  Death Certification Committee
OVERSEAS DEVELOPMENT
  Tanzania (Teachers)
  Tanzania (Teachers)
  Pacific Coral Reefs (Acanthaster Planci)
  Pacific Coral Reefs (Acanthaster Planci)
  Nigeria (United Kingdom Doctors and Nurses)
  Nigeria (United Kingdom Doctors and Nurses)
  Nigeria (Post-War Reconstruction)
  Nigeria (Post-War Reconstruction)
FOREIGN AND COMMONWEALTH AFFAIRS
  Ex-British Colonies (Africa)
  Ex-British Colonies (Africa)
  Nigeria
  Nigeria
  Libya (British Subjects)
  Libya (British Subjects)
  Brussels Conference
  Brussels Conference
TECHNOLOGY
  Miners (Wage Award)
  Miners (Wage Award)
  Jobs (Rutherglen)
  Jobs (Rutherglen)
  Concorde (Production Expenditure)
  Concorde (Production Expenditure)
  Nuclear Power Station (Site)
  Nuclear Power Station (Site)
  Anthracite
  Anthracite
  Coking Coal
  Coking Coal
  Smokeless Fuel
  Smokeless Fuel
  Steel Supplies (Construction Industry)
  Steel Supplies (Construction Industry)
  Consultant and Advisory Services (Cost)
  Consultant and Advisory Services (Cost)
  Industrial Investment Schemes
  Industrial Investment Schemes
  Factory (Rutherglen)
  Factory (Rutherglen)
HOUSING AND LOCAL GOVERNMENT
  Sewage Disposal (Brighton)
  Sewage Disposal (Brighton)
  House Purchase Allocations (Bournemouth)
  House Purchase Allocations (Bournemouth)
  Yorkshire and Humberside Sports Council (Grants)
  Yorkshire and Humberside Sports Council (Grants)
  Dustmen (Wages)
  Dustmen (Wages)
  Rate Rebates
  Rate Rebates
SCOTLAND
  Hillwood House, Edinburgh (Incidents)
  Hillwood House, Edinburgh (Incidents)
  Local Authorities (Electoral Costs)
  Local Authorities (Electoral Costs)
  Central Scotland (Bus Strikes)
  Central Scotland (Bus Strikes)
  Sugar Beet
  Sugar Beet
DEFENCE
  Armed Forces (Pay and Allowances)
  Armed Forces (Pay and Allowances)
AGRICULTURE, FISHERIES AND FOOD
  Rabies
  Rabies
  Foodstuffs (Prices)
  Foodstuffs (Prices)
SOCIAL SERVICES
  European Countries (Pensions)
  European Countries (Pensions)
  Nigerian Student Doctors and Nurses
  Nigerian Student Doctors and Nurses
  Chronic Sick and Disabled (Entitlements)
  Chronic Sick and Disabled (Entitlements)
  Disabled Persons (Motor Vehicles)
  Disabled Persons (Motor Vehicles)
  PRIME MINISTER OF JAMAICA (MEETING)
  PRIME MINISTER OF JAMAICA (MEETING)
  SCOTLAND
  SCOTLAND
  CABORA BASSA DAM (MOZAMBIQUE)
  CABORA BASSA DAM (MOZAMBIQUE)
  FIRST SECRETARY OF STATE (SPEECH)
  FIRST SECRETARY OF STATE (SPEECH)
  PEARSON COMMISSION (REPORT)
  PEARSON COMMISSION (REPORT)
  LOCAL GOVERNMENT (OMBUDSMEN)
  LOCAL GOVERNMENT (OMBUDSMEN)
  OVERSEAS AID (LETTERS)
  OVERSEAS AID (LETTERS)
  PERSIAN GULF AND SOUTH-EAST ASIA (MILITARY PRESENCE)
  PERSIAN GULF AND SOUTH-EAST ASIA (MILITARY PRESENCE)
  RHODESIAN REGIME (RECOGNITION)
  RHODESIAN REGIME (RECOGNITION)
  WEST GERMAN CHANCELLOR (MEETING)
  WEST GERMAN CHANCELLOR (MEETING)
  EUROPEAN ECONOMIC COMMUNITY
  EUROPEAN ECONOMIC COMMUNITY
  COUNCIL OF EUROPE AND WESTERN EUROPEAN UNION (DELEGATES' EXPENDITURE)
  COUNCIL OF EUROPE AND WESTERN EUROPEAN UNION (DELEGATES' EXPENDITURE)
  QUEEN'S AWARD SCHEME
  QUEEN'S AWARD SCHEME
  AGRICULTURAL PRICE REVIEW
  AGRICULTURAL PRICE REVIEW
  H.M. AMBASSADOR TO UNITED STATES (AIR TRAVEL)
  H.M. AMBASSADOR TO UNITED STATES (AIR TRAVEL)
  MEMBERS (CAR MILEAGE ALLOWANCE)
  MEMBERS (CAR MILEAGE ALLOWANCE)
  COUNCIL OF EUROPE (DELEGATION)
  COUNCIL OF EUROPE (DELEGATION)
NATIONAL FINANCE
  Stainless Steel Products (Fixed Price Contracts)
  Stainless Steel Products (Fixed Price Contracts)
  Private Pensions (Tax)
  Private Pensions (Tax)
  Duchy of Cornwall Land (Wiltshire)
  Duchy of Cornwall Land (Wiltshire)
BOARD OF TRADE
  Trade Figures
  Trade Figures
  Re-refined Lubricating Oil (Imports)
  Re-refined Lubricating Oil (Imports)
  Film Distributors
  Film Distributors
  U.S.S.R.
  U.S.S.R.
  Newspaper Prices
  Newspaper Prices
  National Film Finance Corporation (Advances)
  National Film Finance Corporation (Advances)
  Fordham Performance Bonds (Advertisement)
  Fordham Performance Bonds (Advertisement)
WALES
  Slate Industry
  Slate Industry
  Housing
  Housing
TRANSPORT
  Public Transport
  Public Transport
  A30 (Launceston-Exeter)
  A30 (Launceston-Exeter)
  Transport Act, 1968 (Section 48 (4))
  Transport Act, 1968 (Section 48 (4))

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Leicester.
The Viscount Monsell — Sat first in Parliament after the death of his father.

ADMINISTRATIVE LAW
LORD WADE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what action has been taken following the submission by the Law Commission to the Lord Chancellor on administrative law and in particular whether it is their intention to set up an inquiry as recommended by the Law Commission in Cmnd. 4059.]
THE LORD CHANCELLOR (LORD GARDINER): My Lords, the Government do not consider that this is the right time to undertake the wider inquiry into administrative law which was suggested in the Law Commission's Report. But the Commission has been asked to review the existing remedies for the judicial control of administrative acts and omissions with a view to evolving a simpler and more effective procedure, and I hope this will go a long way towards bringing about the improvements which the Law Commission has in mind.
LORD WADE: My Lords, I am obliged to the noble and learned Lord on the Woolsack for that reply. But would he not agree that the Law Commission, in its Report, urged a broad-based inquiry into this matter, and in particular said:
"We regard the Parliamentary Commissioner as a valuable supplement to, rather than a substitute for, the comprehensive and coherent system of administrative law."
THE LORD CHANCELLOR: Yes, my Lords, it did. The Law Commission wanted a more wide-ranging inquiry and the appointment of a Royal Commission, or a Committee of comparable status;
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but in the view of the Government it is getting rather late in this Parliament to start appointing a Royal Commission. Many believe, and I share their view, that if this first head suggested by the Law Commission is considered by the Commission, great headway may be made.

THE MIDDLE EAST: FOUR-POWER TALKS
3.8 p.m.
EARL JELLICOE: 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, in view of the deepening crisis in the Middle East, and the apparent failure of the bilateral talks between United States and Soviet representatives, they will take an early initiative, either alone or in concert with the French Government, designed to break the impasse.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, although I do not accept the second premise in the Question of the noble Earl, Lord Jellicoe, I agree that the situation in the Middle East is serious and that there is an urgent need for international action. I am therefore pleased to say that talks between representatives of the four Permanent Members of the Security Council resumed in New York on December 2. We hope that the four will be able to agree on fresh guidance for the Secretary-General's Special Representative, Dr. Jarring, and that this guidance will enable him, in collaboration with the parties, to make progress in his mission.
EARL JELLICOE: My Lords, I am grateful to the noble Lord for his reply, and I am of course glad to learn, as we all must be, about the resumption of Four-Power talks in New York. However, in view of the vast importance of this problem for Western Europe, and indeed for the peace of the world; in view of the greater possibility which now exists for concerting policies between the British and French Governments, and in view of the apparent failure, up to now, of the ability of the Soviet Union and the United States to agree on a joint

191
approach to this problem, would not the noble Lord agree that there is at least scope here for a more concerted approach by the British and French Governments to these very important problems of the Middle East?
LORD SHEPHERD: My Lords, as I have already said, I do not accept the use of the word "failure", or even the words "apparent failure". This is a very difficult problem, as the noble Earl will know. The Soviet Union and the United States have been in consultation but have not yet been able to find the right solution. The fact that Britain and France are now again taking part in these meetings might indicate that there has been some move, and that we may be able to see more progress. I would not want to go any further than that at this stage.
LORD BROCKWAY: My Lords, may I ask my noble friend, while welcoming the action of the four Powers, whether his attention has been drawn to the constructive proposal by President Boumedienne, of Algeria, that there should be an association between Israel and a Palestine State? And in view of the close connection between France and Algeria, might it not be that this matter should be raised with them, as well as with the United Nations' representative and the Four-Power meeting?
LORD SHEPHERD: My Lords, I have seen those proposals, as I have seen many others, for the settlement of this affair. I personally would prefer now to leave it with the four parties to continue their discussions in New York.
LORD BOURNE: My Lords, may I ask the noble Lord the Minister this question? Observing that the present climate in the Middle East could hardly be more unfavourable, and that any solution arrived at must be backed up by guarantees, including if necessary the use of force to support that solution, do Her Majesty's Government prefer that guarantee to be given by the United Nations, with a United Nations peace-keeping force on the ground, or by the four Powers concerned in the very welcome talks now going on in New York, with a four-Power force on the ground and, if necessary, in the air?
LORD SHEPHERD: My Lords, I think I have already indicated to the House that at this present stage I do not want to say anything further than I have done. Therefore, I hope the noble Lord will forgive me if I do not reply to him.
THE LORD BISHOP OF LEICESTER: My Lords, is the Minister aware that the International Department of the British Council of Churches has been giving prolonged and informed attention to this matter, and that the Churches, and I think other religious communities, would be very gratified if Her Majesty's Government could discover any initiative which they themselves, with possibly some other European countries, could take in the present impasse?
LORD SHEPHERD: My Lords, again I do not want to go any further than what I have already said, but I hope the House will accept that we shall be governed only by our own desire to bring this war to an end as rapidly as possible.
EARL JELLICOE: My Lords, while not wishing unnecessarily to break in upon the noble Lord's coyness in this matter—and I recognise the need for discretion here—can he at least assure us that there is close and continuing contact in this area between the British and French Governments?
LORD SHEPHERD: My Lords, there is a great deal of informal contact, as the noble Earl, Lord Jellicoe, will know, at the United Nations.
EARL JELLICOE: Between the representatives of the two Governments?
LORD SHEPHERD: Yes.
LORD GORE-BOOTH: My Lords, may I ask the noble Lord a question arising out of his original Answer? Given that it is possible that it may be difficult for the four Permanent Members of the Security Council to make early progress, would it not in any case be reassuring if there could be some resumption of conciliation work in the area by the United Nations itself, even if the possibilities are limited?
LORD SHEPHERD: My Lords, clearly, in the end, this will be a matter for the United Nations; but we know that Dr. Jarring is most anxious to make progress here and is now awaiting fresh instructions.

CORAL EROSION IN SOUTH PACIFIC
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what assistance they plan to give to the international effort to combat the erosion of coral in the South Pacific.]
LORD SHEPHERD: My Lords, the only official report of fairly widespread damage in British territories in the South Pacific is from Fiji, where the Governor tells us that the extent of infestation by what is called the "Crown of Thorns" starfish is being studied. We are seeking information about the investigations at present being undertaken in the Pacific, and as soon as we know the extent of the problem we will consider what assistance might be given.
LORD BEAUMONT OF WHITLEY: My Lords, I should like to thank the noble Lord for that Answer, which is moderately satisfactory. But would he not agree that on the basis of what we know already about this plague there is little time, and that urgency is very important?
LORD SHEPHERD: My Lords, so far as the British territories are concerned, at present it is only Fiji that has expressed concern. However, we are in contact with the other territories, and they are carrying out their own investigations.

STANDARD-TRIUMPH LABOUR DISPUTE
LORD SANDFORD: 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 they delayed for nine weeks before ordering an inquiry into the dispute at Standard-Triumph in Liverpool.]
THE MINISTER OF STATE, MINISTRY OF TECHNOLOGY (LORD DELACOURT-SMITH): My Lords, my right
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honourable friend the First Secretary of State kept in close touch with developments throughout the dispute and was satisfied that an inquiry at an earlier stage would not have helped to resolve the issue.
LORD SANDFORD: My Lords, I should like to thank the noble Lord for that reply, which four or five years ago would almost certainly have been the right reply. But is it not now the case that the Government's prices and incomes policy has provoked resentment and disaffection in industry to a quite unprecedented extent? Is it not the case that the loss and damage due to unofficial strikes is now more than twice as great as it was when the Government came into power? Is the noble Lord therefore quite sure that this policy of delay and delicacy is still the right course?
LORD DELACOURT-SMITH: My Lords, I do not accept the implications of the noble Lord's supplementary question. He was, of course, touching upon broad issues which we debated at greater length two or three weeks ago; but I must emphasise that under the law as it stands the appointment of a court of inquiry to examine an industrial dispute, and the timing of such an appointment, is entirely within the discretion of the First Secretary of State. It is clearly a matter for judgment as to when in the development of a dispute a court of inquiry procedure can be fruitfully invoked. As I said, the First Secretary of State was in close touch with the situation throughout this dispute, and the respective attitudes of the two sides made it unlikely that any earlier appointment of a court of inquiry would have led to an earlier settlement of the dispute and a resumption of work.
LORD SANDFORD: My Lords, is it not the fact that, quite apart from the effect of the inquiry on the dispute, when a loss of £11 million (which was the extent of the loss in this particular case) is involved the public has a right to know what is going on? Is it not the fact that the First Secretary has powers under this Act to order an inquiry not only after a dispute has begun but even if one is apprehended?
LORD DELACOURT-SMITH: My Lords, the noble Lord's Question really dealt with the situation which had

195
developed in this particular industry. The statutory provision upon this point, if I am correct, permits the Secretary of State to inquire into causes and circumstances of a dispute and to refer any matters appearing to the Secretary of State to be connected with or relevant to it to a court of inquiry. I can only reaffirm that the prime purpose of an inquiry of this kind is to conduce to a settlement of the particular dispute that is taking place, and it must be a matter for the judgment of the First Secretary of State whether or not a court of inquiry is likely to conduce to that result and at what particular stage in the dispute it is likely to be most useful.

THE CHRISTMAS RECESS
LORD BESWICK: My Lords, I hope that it will be to the convenience of the House if I say that, subject of course to the progress of business, it is hoped that the House may adjourn for the Christmas Recess on Thursday, December 18, and return on Tuesday, January 20.

SEA FISH INDUSTRY BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to the sea fishing industry and to repeal certain obsolete enactments relating to herring. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a. —(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

BUSINESS OF THE HOUSE
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, until the House rises for the Christmas Recess, Standing Orders No. 35 (Arrangement of the Order Paper) and 41 (No two stages of a Bill to be taken on one day) be suspended, and that Government business do have,
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except with the consent of the Government, precedence over other business during the same period.—(Lord Shackleton.)
On Question, Motion agreed to.

HOUSE OF LORDS OFFICES
THE DEPUTY CHAIRMAN OF COMMITTEES (LORD STRANG): My Lords, on behalf of my noble friend the Lord Chairman, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the Baroness Phillips be added to the Select Committee.—(Lord Strang.)
On Question, Motion agreed to.

EXPIRING LAWS BILL
House in Committee: Clauses agreed to.
House resumed: Bill reported without amendment: Report received.

ADMINISTRATION OF JUSTICE BILL [H.L.]
3.23 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. In the last Session we had a Bill which, apart from increasing the jurisdiction of the county courts, dealt with a considerable number of different points of greater or less importance concerning the administration of justice. The Bill now before your Lordships carries further the process of modernising and improving the administration of the law. There is inevitably a good deal of technical detail in this Bill; but I shall do my best to concentrate on the essentials.
Part I reconstitutes the Divisions of the High Court. It also makes one urgently needed reform, which the Royal Commission on Assizes and Quarter Sessions thought was required now and without waiting for the major legislation which will be needed in due course to give effect to the Report of the Royal Commission. This will allow the holding of assizes to be dispensed with at places

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where there is not enough judicial business. When the High Court first came into existence in 1875, it comprised five Divisions. They were the Chancery Division, the Queen's Bench, Common Pleas and Exchequer Divisions and the Probate, Divorce and Admiralty Division. This fragmentation of the High Court was found to be unsatisfactory and the three common law Divisions were accordingly merged into one Division in 1881. since then we have, of course, had only three Divisions: the Chancery Division, the Queen's Bench Division and the Probate, Divorce and Admiralty Division.
Nowadays, it may strike people as very odd to find such a strange assortment as probate, divorce and admiralty proceedings taken by the Judges of a single Division. But this grouping would not have appeared so surprising in 1875. It was then a question of grouping with the High Court of Admiralty the court of probate and the court for divorce and matrimonial causes, which had both been ecclesiastical courts as recently as 1857. The jurisdiction of the newly constituted Probate, Divorce and Admiralty Division was by nature and origin unfamiliar to the ordinary common law and chancery courts. The lawyers who had practised in the old ecclesiastical courts were specialists, doctors and proctors and even had their own Inn, known as Doctors' Commons, as your Lordships may remember from the pages of David Copper-field.
In 1875, and indeed for long after that, there was so little matrimonial business that no one would have dreamt of constituting a Division of the High Court especially to deal with it. Indeed, the designers of the Law Courts no doubt thought that they were providing for all future time in providing for four divorce courts when the Division consisted solely of the President and one Judge—now there are the President and 17 Judges. It is only in comparatively recent times that the anomaly of the present distribution of work among the Divisions of the High Court has really begun to strike people. It is only during the last few decades that anyone would have thought of ridiculing the present position as A. P. Herbert did when he spoke of the Probate, Divorce and Admiralty Division as
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that part of the High Court that deals with wills, wives and wrecks.
Nor has it been seriously suggested until comparatively recent years that a Family Division should be created to deal not only with the matrimonial jurisdiction of the Divorce Divison, but also with all the jurisdiction of a family kind which is now fortuitously scattered among the other Divisions of the High Court. In proposing that there should be a reconstitution of the High Court and the creation of the Family Division, we are not simply striving for something that would be tidier and look better on an organisational chart. This is a matter that concerns human feelings and it is most important that all family matters, whether they involve the parties to a matrimonial dispute or the care, adoption, or guardianship of children, should be dealt with in the most sympathetic atmosphere and by Judges and officials who really understand family problems and how to grapple with them. More and more emphasis is now laid on the importance of welfare: the welfare of every member of the family who may be concerned in any domestic case that comes before the courts. So long as the jurisdiction in family matters is scattered in the way that it now is and often dealt with by Judges and others in between other totally dissimilar kinds of business, it must surely be so much harder for those who are concerned to be familiar with welfare matters and keep an eye constantly on them.
My Lords, I should now like to refer briefly to the main provisions of the first three clauses. Clause 1 concentrates in the new Family Division almost every type of jurisdiction of a family kind. I ought to mention in particular the jurisdiction, until now exercised by the Chancery Division, in wardship, guardianship and adoption cases. The whole jurisdiction of the Family Division is conveniently listed in Schedule 1. The clause also assigns the admiralty jurisdiction to the Queen's Bench Division and the contentious probate business to the Chancery Division, but it leaves the non-contentious probate business, which is more of an administrative than a judicial nature, to be dealt with by the Family Division. It will, therefore, continue to be dealt with by the same registrars and

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staff who have for so long skilfully managed the large amount of business involved. Some would say that the non-contentious probate business should be kept with the contentious probate business and assigned to the Chancery Division; but there is really no need to make such a change, which would, in practice, serve no useful purpose.
It would be possible to reconstitute the High Court by Order in Council made under Section 5 of the Supreme Court of Judicature (Consolidation) Act 1925; but, since the present Divisions of the High Court have been altered only once in the last 94 years—that is to say, 88 years ago in 1881, when the five Divisions originally created were reduced to the present three —I have thought it right to bring the matter before Parliament. It is possible that the power given by Section 5 to alter the number of Divisions of the High Court may be needed in future; but it can be exercised only on a recommendation of the Council of Judges of the Supreme Court. That is a cumbersome procedure in these days when there are so many more Judges. I am therefore taking the opportunity afforded by this Bill to amend Section 5 so that if hereafter any further change were thought desirable in the constitution of the High Court without troubling Parliament direct, it could be made by Order in Council on a recommendation of the Heads of Divisions.
Rather than create a fourth Division of the High Court to deal with admiralty and commercial matters, which would be too small to be viable and which are to be transferred out of the existing Probate Divorce and Admiralty Division, Clause 2 establishes the Admiralty Court and Clause 3 the Commercial Court as separate courts, each forming part of the Queen's Bench Division. As some of your Lordships may remember, we celebrated in 1960 the 600th anniversary of the Court of Admiralty. It is a court with an international reputation, and I share the view that has been expressed that it should be retained as a separate entity.
I now turn to the Commercial Court. Although special arrangements for the trial of commercial cases have existed since 1895, the commercial court as such has never had any statutory status. Clause 3 now remedies this omission. I
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need hardly say that it will in future be as important as it has been in the past to have Judges who are experienced in Admiralty matters in the Admiralty Court, and Judges who are experienced in commercial cases in the Commercial Court. Clause 3 also enables rules of court to be made which will enlarge the Commercial Court's power to dispense with the strict rules of evidence and to sit in private. This follows the recommendations of the Commercial Court Users' Conference of 1962.
I am sure that it is important, especially in this rather specialised field, to pay attention to the needs and wishes of the section of the community whom this part of the legal system is serving. After all, the courts exist for the people and not the people for the courts. There is no doubt at all that businessmen tend to avoid litigation in the courts because they dislike the formality and publicity of legal proceedings. So they often take their disputes to arbitration, instead of going to the courts. It is most desirable for many reasons, both legal and economic, national and international, that we should do whatever we can—just as Lord Mansfield did in the 18th century—to attract commercial litigation into our courts: and I consider that in genuine commercial cases the desire of the business community for informality and privacy is a legitimate one which should be met so far as we properly can do so. Since most court proceedings are, and must remain, both formal and public, I think that it is right that the special power in relation to the Commercial Court should be regarded as a limited experiment. That is why the Bill itself makes no substantive provision on these points, but merely confers power on the Supreme Court Rule Committee to make such rules of court as it thinks fit. Rules of court must, of course, be laid before Parliament, and are much more flexible and easy to amend in the light of experience than an Act of Parliament.
Clause 4 extends the present power for dispensing with holding assizes which is inflexible and far from adequate. The Royal Commission were critical of the present poor locations of assize courts and drew attention to the serious waste of judicial resources which these cause. They found it difficult to quantify the

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resulting loss which the nature of the existing system led to, but they said this:
"… we are satisfied that, in certain circumstances, the loss may be as high as 25 per cent. of the total available court time."
They added:
"Unfortunately much of this lost time is used in travelling to small towns to honour obligations incurred many centuries ago when the disposition of population and communications was entirely different. The result is that travelling is forced not only on the judges but also on the seekers after justice, and, as the courts are not always at the best centres of communication, journeys by public transport may be unnecessarily difficult."
Under the present Bill it will be possible to dispense with the holding of assizes for every county and this will enable the Lord Chief Justice to deploy the High Court Judges much more effectively throughout the circuits. Thus, a start can be made—in advance of the main legislation implementing the Beeching Report—on tackling the very serious delays to which the Commission have called attention. I should emphasise that there will be no question of assizes being closed at any place, either for all purposes or for a particular form of business, without my first discussing the matter with the local authority concerned. Thereafter the Order will be laid before your Lordships.
I now come to Part II of the Bill. It is concerned with the enforcement of debt. The Report of Mr. Justice Payne's Committee on the Enforcement of Judgment Debt—a major work comprising no less than 455 pages, for which we are greatly indebted to the learned Judge and members—was presented to Parliament in February of this year. I will mention the Committee's main recommendations, so as to show how they are related to one another and the extent to which it is practicable to give effect to them in this Bill.
First, the Committee proposed the abolition of imprisonment as a means of enforcing the payment of civil debts, though they were divided on the question of retaining imprisonment as a means of enforcing maintenance payments. Secondly, they recommended the substitution of attachment of earnings as a means of enforcing the payment of civil debts. Thirdly, they proposed that the jurisdiction of the magistrates' courts in claims for civil debt such as arrears of income tax, rates, gas and electricity
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charges and so forth, should be transferred to the county courts. Fourthly, they proposed that enforcement offices, charged with the duty of enforcing orders for money payments made by the courts, should be set up all over the country, and they advocated that these should be responsible, on the application of creditors, for taking appropriate steps for securing that debtors pay what they owe in accordance with their means and assets.
My Lords, it would plainly be impracticable to give effect to all four of these recommendations straight away. Indeed, the Committee recognised that to do so would result in administrative chaos. They advocated that their recommendations should be carried out by stages, and this is exactly what the Government are proposing to do. Part II of the Bill gives effect to two most important recommendations. With certain exceptions, to which I shall refer, it abolishes imprisonment as a means of enforcing the payment of civil debts and it substitutes for that antiquated method of enforcement a system of attaching earnings. The Committee were, as they said in paragraph 982 of their Report,
"inevitably led to the conclusion that the vast majority of debtors who are actually received in prison under orders of the county courts are inadequate, unfortunate, feckless or irresponsible people; they are, for the most part, not dishonest and do not therefore require punishment;".
No doubt because imprisonment has become widely recognised as an ineffective and inappropriate method of enforcement and one that is unjust in certain circumstances, the number of debtors imprisoned under orders of the county court has very substantially declined in recent years. It is only right that I should observe that that process had begun long before attention was drawn to this matter by my appointment of the Committee in March, 1965. Some figures are given by the Committee in paragraph 991 of their Report. These show that in 1962 the number of debtors sent to prison by the county court was 7,913; by 1967 the number had dropped to 3,329. In 1968 the number was further reduced to 2,789. An order committing a debtor to prison can be made only where it is proved to the satisfaction of the court that the debtor has been able to pay, but has failed to pay.

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The judges have, of course, done their best, in difficult circumstances, to exercise this jurisdiction humanely. However, as the Committee showed, conditions in the courts really do not give them a chance to distinguish between the persistent, dishonest debtors and those who are merely inadequate. The persistent, dishonest debtors may often be clever enough to avoid actually going to prison, while those who are inadequate suffer from their inability to manage their affairs. The sanction of imprisonment serves little purpose and it contributes to the overcrowding of our already overcrowded prisons. This is, I believe, the only country in Western Europe where imprisonment for ordinary civil debt has been retained. And as I think I pointed out in the debate on the gracious Speech, in Scotland they have never had imprisonment for debt; they have always had attachment of earnings. There is, in my opinion, an overwhelming case for abolishing it for ordinary civil debt, but, for the time being at any rate, we must retain it as a way of enforcing the payment of maintenance and the Crown debts, to which I shall refer in due course.
Clauses 5 and 6 therefore abolish the court's power to imprison defaulting debtors in the general run of civil debt cases, retaining it only as a means of enforcing payment of maintenance and Crown debts. The case for distinguishing between maintenance payments and other civil debts can be put very simply. Unfortunately, there are men who, for one reason or another—it may be bitterness—will do anything they can to avoid paying maintenance. Mr. Justice Payne and two members of his Committee, who supported him in recommending that the sanction of imprisonment should be retained for the enforcement of maintenance and comparable orders, said in their Report at paragraph 1039:
"The selfishness and irresponsibility by which he"—
a man responsible for paying maintenance—
"is motivated are, in our view, no less morally reprehensible and socially damaging in their effects than many offences against the criminal law in respect of which the courts' power to pass a sentence of imprisonment is not questioned".
I fear that it follows that to be able to send to prison someone who is deter-
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mined to avoid his obligations may be the only practicable way of enforcing the court's order. There is another practical difficulty, because a man living, say, in a council house with a wife and children is not going to give up his home and move in order to avoid paying a debt of £20, whereas a man whose home has already been broken up for whatever cause and who may as well live here as live there, may all too easily change his employment and move without notice for the sole purpose of avoiding the continuing payments of maintenance.
The retention of the sanction of imprisonment, for the time being at any rate, for failing to pay taxes and social insurance contributions is, alas! also necessary, because, here again, it may be the only way of enforcing payment. The Crown is, in such matters, in a totally different position from tradesmen and others who may be able to avoid bad debts by not doing business with those who are not considered to be creditworthy. If a person evades his obligations and cheats the taxpayer by not paying his taxes or social security contributions, imprisonment may be the only remedy for the Crown. It is, however, of some comfort that, out of the huge number of people who are liable to pay taxes and National Insurance contributions, only about 30 to 40 are sent to prison each year.
I now come to the remaining provisions of Part II of the Bill, which deal with the attachment of earnings. I fear that they are inevitably somewhat technical and complicated. To simplify the position so far as possible, we decided that, rather than retaining the existing code under Part II of the Maintenance Orders Act 1958 for the attachment of earnings of defaulters under maintenance orders and also making fresh arrangements for the attachment of earnings for civil debts, it would be easier for users of this legislation if we replaced most of the provisions of Part II of the 1958 Act and had the composite code which your Lordships will find in this Bill.
Clause 7 empowers the High Court, the county court and the magistrates' courts to make attachment of earnings orders in their various spheres to secure the payment of civil debts. As the Payne Committee recognised, we could not abolish imprisonment without substituting

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another means of enforcement and the attachment of earnings is undoubtedly the best means that could be devised. For this course the Committee had strong support from professional bodies of different kinds and also from individuals. There were few objectors. Your Lordships may remember, as I do, that in 1958 the trade unions objected very strongly to attachment of earnings and it is interesting to observe that, now the T.U.C. has reported, having consulted all the trade unions, there was only one union which objected. As it is now working in the magistrates' courts, the system of attaching earnings is not all that could be desired. This is largely because an attachment order is discharged when the debtor leaves his employment. The Bill corrects this defect among others to which the Committee drew attention.
Clause 7 gives the High Court power only to make orders for the attachment of earnings to secure payments under the court's own maintenance orders. It gives the magistrates' courts power to secure payments under their maintenance orders and in criminal matters. But otherwise it is left to the county courts to deal with all applications for orders to attach earnings, so that they, and only they, will make such orders for the enforcement of judgments for the recovery of civil debts, taxes and other Crown debts. Clause 8 is concerned with machinery. It shows who may apply for an attachment of earnings order. Among those who may apply are, as the Payne Committee recommended, the debtor himself, if it is a case of securing maintenance payments.
Under Clause 9 an attachment of earnings order has to be directed to the person who appears to be the debtor's employer. It will, in effect, be an instruction to him to make periodical deductions from the debtor's earnings and pay them to the collecting officer of the court. In making the deductions he must follow the scheme set out in Part I of Schedule 4. At first sight, this scheme looks rather complicated but employers will be supplied, as they now are where attachment orders are directed to them under the Maintenance Orders Act 1958, with instructions which explain the system as simply as possible. We have, indeed, made every effort to devise a scheme which will give employers no more trouble than is absolutely necessary.
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The scheme for the deduction of maintenance payments remains, so far as the employer is concerned, broadly the same as that under the 1958 Act. But the scheme which is set out in paragraph 5 of Schedule 4, and which operates in the case of attachment orders to secure the payment of judgment debts or payments under administration orders, is a simplified version of the present scheme under the 1958 Act. The difference between the two is due to the fact that, whereas maintenance payments, until they are varied or terminated, continue, civil debts are for finite amounts. In the case of attachment orders to secure the payment of finite amounts there is no need to take the maximum possible amount from the debtor on each application, as is necessary in the case of maintenance payments, so as to meet current liabilities and accrued arrears.
Under Clause 9 the attachment of earnings order will give the employer the name of the debtor and sufficient particulars to identify him or her, the normal deduction rate, the protected earnings rate and, in the case of orders made to secure payments other than maintenance payments, the whole amount to be collected. This information will give him all the information that he needs to comply with the order.
On the first pay day after the order comes into force, the employer will be concerned with three amounts: first, the attachable earnings, which are the debtor's gross earnings less any tax or insurance contributions or superannuation deductions. These the employer would have to calculate even if there were no attachment of earnings order, so that we are not so far adding to his troubles; secondly, the normal deduction, which is the amount which would represent a payment at the normal deduction rate in respect of the period since the last pay day. In effect, this means that, where the normal deduction rate is £X a week and the debtor is paid regularly each week, the normal deduction will be £X; and thirdly, the protected earnings, that is to say, the rate below which, having regard to the debtor's resources and needs, the court thinks it reasonable that the earnings actually paid to him should not be reduced.

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The employer will, therefore, be able to ensure that the debtor is left with an amount that does not drop below his protected earnings. Provided that the attachable earnings exceed the protected earnings, he will pay to the court whatever remains, not exceeding the normal deductions. Before doing so, the employer may first take Is. towards his clerical and administrative costs. Under the 1958 Act an employer may only deduct 6d. on each occasion for his trouble; but we recognise that that is now insufficient.
Clause 10 requires the employer to comply with the order if the debtor is still with him. If, however, the debtor is not in his employment or subsequently leaves his employment, the employer is required in not less than ten days to notify the court. This will help in achieving the Committee's object in tracing the debtor to his new employment and in preventing him from escaping from his obligations.
The priority as between orders that an employer with more than one order must observe is given in Part II of Schedule 4. Here there are two basic principles. First, an attachment of earnings order made to secure an ordinary debt or payments under an administration order will take second place to an attachment of earnings order made to secure maintenance payments and criminal debts. Subject to that, an employer who is required to comply with more than one order has to deal with them according to the dates on which they were made. Clause 11 prevents a creditor from pursuing any other remedy against the debtor when he is granted an attachment of earnings order which is still in force.
Clause 12 is important. It is designed to avoid another defect of the present system to which the Committee called attention. Under it an attachment order does not come to an end when the debtor changes his employment, but merely lapses and may be redirected to the new employer. This, coupled with the provisions about notifying the court of changes of employment, will, I believe, be of real value to creditors. Clause 14 gives the court an essential power to order both the debtor and the employer to supply information as to the debtor's employment, earnings and commitments.
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The Committee also recommended, in paragraphs 1218 to 1223 of their Report, setting up a social service office to help debtors. It is however right that I should say that the county court registrars and members of their staffs are extremely considerate to debtors and give them valuable advice and help when they are in trouble.
There are also welfare officers employed by the local authorities, the Citizen's Advice Bureaux and so forth; and in a number of courts, especially in the London area, there are some voluntary welfare workers who are doing most useful work, which is very much appreciated by the judges and registrars of the courts. This does not, of course, amount to the kind of service that the Payne Committee contemplated; but for the time being there is a very great shortage of people trained in welfare work and it would not be practicable to introduce an additional service.
Clause 15 imposes on the debtor the duty to notify the court in writing of every occasion on which he changes his employment and he must tell the court of his earnings and anticipated earnings. The new employer who becomes aware of the existence of an attachment of earnings order is likewise obliged to inform the court in writing and state the debtor's earnings and anticipated earnings.
Clause 18 makes it, subject to certain defences for the employer, an offence to fail to comply with any requirement of the Bill concerning attachment orders. This clause gives the county courts power to secure the debtor's attendance when an application for an attachment order is being considered, and it gives the High Court and the county court power to punish for offences in respect of their own proceedings. I do not think I need say anything about the remaining clauses in Part II of the Bill.
Part III of the Bill gives effect to the recommendations of Lord Justice Winn's Committee on Personal Injuries Litigation about what is commonly known as "third party discovery". For the benefit of those of your Lordships who are not lawyers, I ought to explain that discovery is a means by which a party to litigation can call upon his opponent to disclose any documents which he has in his possession relating to the matters in issue and to produce them for inspection. At

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present an order for discovery can be made only when proceedings are pending and it can be made only against another party to the action. The Winn Committee thought that in personal injuries cases it ought to be possible to obtain an order before any proceedings are begun. They also thought it could sometimes happen that a person other than a party might have in his possession a document with an important bearing on the case. It might, for example, be a medical record kept by the hospital where the plaintiff had been treated, or a report made by an expert on some machine which the plaintiff was operating at the time of the accident. They accordingly recommended that the court should have power to make an order for discovery on an application made before any proceedings had been commenced and that it should be possible to obtain an order against a person who was not likely to be a party.
Clause 23 and subsection (1) of Clause 24 give effect to these recommendations. The first enables the court, before the commencement of proceedings for personal injuries, to order a person who is likely to be a party to the proceedings to disclose any documents which are relevant to any issue likely to arise out of the claim. This does not go quite as far as the Winn Committee suggested, because it does not enable an order to be made against a person who is not likely to be a party to the proceedings. It seemed to me that it might be oppressive if a stranger could be put to the trouble of searching for and producing documents simply to assist in the prosecution or defence of a claim which had not yet been formulated in legal proceedings. Subsection (1) of Clause 24 does, however, enable an order to be made after the commencement of proceedings against a person who is not likely to be a party to the proceedings.
Subsection (2) gives effect to another recommendation of the Winn Committee by enabling a similar order to be made for the inspection, photographing and preservation of property and such like. I am sure that these provisions will be helpful. We have all known of cases, for example, of factory accidents and of a machine being said to be unguarded; and before proceedings can be started and formulated, as soon as the plaintiff's solicitors go along to the factory the
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machine has been removed—it has been under repair, and nobody has taken a photograph of it. It is cases such as these that these provisions should be able to meet.
My Lords, I now pass to Part IV of the Bill, which deals with actions brought by mortgagees for possession of the mortgaged property. It used to be thought that where the borrower had failed to make some payment under a mortgage the court had power to postpone the operation of any order for possession that it might make, so as to give the borrower an opportunity of making good his default. In 1961 this view was held to be mistaken, but it seemed to me that the matter ought to be further examined, and I asked the Payne Committee to consider whether the court should have power to postpone the operation of an order for possession of mortgaged property. The Committee unanimously concluded that, where the property was a dwelling-house with a rateable value within the limits of the Rent Act (that is, £400 in London and £200 elsewhere), the court should have power to adjourn the application for possession or to stay or suspend the execution of any order that might be made. They also recommended that the mortgagee should be required to bring the proceedings in the borrower's local county court.
I do not think it is really appropriate to define the cases by reference to the Rent Act. The court's powers ought to be exercisable in any case where the premises consist of or include a dwelling-house, whatever its rateable value. On the other hand, I do not think it would be desirable to take away the High Court's jurisdiction in London and force mortgagees to bring proceedings in the county courts which are scattered over the area. That would be of little advantage to the borrower and might be a great inconvenience to building societies and other mortgagees with offices in the centre of London. Clause 28 of the Bill accordingly gives the court power to adjourn the proceedings or to stay or suspend any order of possession in an action by a mortgagee for the possession of a dwelling-house. The power is to be exercisable only for the purpose of giving the borrower an opportunity to pay any sums due under the mortgage or to remedy any other default he has made, and the

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court may impose conditions with regard to payment of those sums or remedying the default. I anticipate that where the borrower has fallen into arrear with his payments under an instalment mortgage, the court will make an order for possession within, say, 28 days, and suspend it on payment of the current instalments and so much a week or month off the arrears.
Clause 29 gives the county court exclusive jurisdiction where the dwelling-house is outside Greater London and its rateable value does not exceed £400. Clause 30 ensures that the jurisdiction of the county court is not ousted by the joinder of a claim for money exceeding £500—the present limit in an action of contract or tort. If time permitted I could satisfy your Lordships beyond doubt that this is a position which is causing considerable hardship, and that in many ways a man who virtually owns his house is less secure than a council tenant. A man may be buying his house through a building society and may want to raise £150; and he does this on second mortgage. He has paid most of it back, but because he falls ill or out of work he cannot pay £30 "on the nail", so his home is sold off. The court has no jurisdiction to inquire whether, if he were given a couple of months, he would be able to pay. Some mortgagees in that position are, in effect, money lenders and are not always inclined to take a reasonable course.
I need not detain your Lordships long with the remaining provisions of the Bill. Clause 32 deals with the recovery of costs awarded by assizes, quarter sessions and appellate criminal courts. It provides for them to be recoverable as sums adjudged by magistrates' courts to be paid as a civil debt. Clause 34, together with Schedule 8, provides in effect for legal aid contributions in criminal cases to be subject to the same enforcement provisions as maintenance payments. Clause 35 gives effect to a recommendation in paragraph 1168 of the Payne Committee's Report that the rate of interest on judgment debts should be increased so as to produce a commercially acceptable return. At present it is fixed at 4 per cent. by Section 17 of the Judgments Act 1838. The clause will enable a higher rate to be sub-
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stituted by Order made by the Lord Chancellor, with the concurrence of the Treasury.
Clause 36 removes the limit imposed on the number of judges and registrars who may be appointed to a county court district. The maximum is now two, except in London where three judges may be appointed to a district. In recent years there has been a considerable increase in the number of judges and registrars owing to the enlargement of their jurisdiction. The busier courts now have their full complement of judges and registrars and it is inconvenient not to be able to increase their number in certain districts. Clause 37 makes it clear that a deputy registrar of a county court does not commit an offence by being engaged as a solicitor in proceedings in that court, so long as he does not act as deputy registrar in relation to those proceedings. This is already the rule in the case of deputy district registrars of the High Court.
My Lords, there is one other matter to which I should like to refer, and it concerns Clause 4. It is true that Clause 4 makes the first legislative change recommended by the Royal Commission on Assizes and Quarter Sessions. If, instead of being unanimous on every recommendation except one, the Commission had been divided, and had not yet reported because they were still arguing what recommendations they should make, I should still have asked the House to include Clause 4 in this Bill, because, my Lords, we are approaching a breakdown in the administration of justice. The reasons for this are the very ones which led the Government to appoint the Royal Commission. They are the reasons set out in the Report of the Judicature Commissioners of 1869. Things have simply and steadily been getting worse and worse, particularly so since the great increase in both criminal and civil work—and especially criminal work.
The principal defect (which in a sense it did not need the Royal Commission to point out to us, because we all knew it) is the extreme inflexibility of the present system, and particularly the fetter—which Clause 4 would remove—of the obligation to hold assizes in every county twice a year, whatever the state of business. This means that, months and months in advance, all the dates have to

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be fixed for all the assizes, including all those we have had since the reign of King John—places, in some cases, which are really large villages with only 1,500 inhabitants. The dates have to be fixed at a time when nobody has any idea whether there will be more cases to try in place A or place B. Between all these small places there has to be a travelling day, and a travelling day at the end of an assize which may only last one day. These are some of the considerations which led the Royal Commission to estimate that in some circumstances our total loss of judge time caused by the inefficiency of the present administration might be as much as 25 per cent. of the judges' time.
What happens in practice is that the noble and learned Lord, the Lord Chief Justice (whom, if I may say so, I am glad to see here this afternoon) tells me, "There are so many cases to try at place X that the number of judges I am sending there cannot possibly get through the criminal cases, let alone starting the civil cases: so I must have a commissioner." A commissioner means either a retired judge, a county court judge or a senior silk, who is vested with all the jurisdiction of a High Court Judge for the purpose of taking cases at that assize. Of course, it is all a question of degree: if this happened twice a year no-one would complain. But it is getting worse and worse, and I have had to tell the noble and learned Lord that I am now finding it most difficult to find the commissioners.
If I ask a busy silk, "Will you sit for a month at Kingston, starting three weeks from now? ", it means that he has to return all the briefs of his clients' cases that he was going to deal with, and that they have to find counsel at short notice. If I find a county court judge and ask him to sit as a commissioner, what is going to happen to the cases he ought to be trying? This would be robbing Peter to pay Paul; for then I should have to find a deputy county court judge. Last year I had to find a thousand days' worth of deputy county court judges. Since September I have been called on to find commissioners for four weeks at Liverpool, four weeks at Manchester, three weeks at Reading, six weeks at Chelmsford, three weeks at Norwich, five weeks at Aylesbury, another two weeks at Manchester, six weeks at Reading, five
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weeks at Kingston, five weeks at Liverpool, four weeks at Bristol, four weeks at Newcastle and four weeks at Manchester. People are entitled to have their cases tried by judges, and not by barristers; High Court at assizes is the highest jurisdiction of the court of trial, and something has to be done.
My Lords, I thought I should like to make the position quite clear, because I have heard the criticism that in including Clause 4 in this Bill we are beginning to implement the Beeching Royal Commission's Report when we have not yet discussed it. The fact is that, while this was one of the recommendations of the Royal Commission, we have now arrived at a state of affairs in which we face a real breakdown in the administration of justice unless this Clause 4 is passed. Therefore, even if the Royal Commission had not reported, I should be still asking the House to agree to this clause. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
4.7 p.m.
LORD ILFORD: My Lords, I am sure that noble Lords in every quarter of the House will wish me to express to the noble and learned Lord the Lord Chancellor our appreciation of the very clear and, if I may say so, fascinating and interesting story which he has told us in support of this Bill this afternoon. It is a very complicated measure. Having listened with the best assiduity that I can command to the noble and learned Lord I am still not quite clear whether this is to be the end of the assize system, or whether it will still continue in some modified form. I hope that the assize system will come to an end. The assize system has clogged and handicapped the working of our judicial institutions for generations, as those of us who have practised in the courts know very well. It has been bolstered up in the Reports of more than one Committee or Commission; it has been shielded with all its inefficiencies and it has lasted too long.
From the tone of the noble and learned Lord the Lord Chancellor this afternoon I hope that it is his intention that the assize system—or at least its worst aspects—shall be removed from our judicial institutions. Knowing the taste for change and progress which has always

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animated the noble and learned Lord I felt convinced that he would produce proposals which would seek to sweep away the inefficiency and dilatoriness of our judical system. I am sure that that will be the view of all who practise in the courts and of those who have been penalised by the inconsistencies and the dilatory character of our judical institutions.
I had always anticipated that the noble and learned Lord on the Woolsack would bring forward a new judicature measure comparable with the great Act which has governed our destinies now for nearly 100 years and that the noble and learned Lord himself would be acclaimed as a new Lord Cairns come to judgment. Whether the present Bill will bring about these changes in our judical system, which has awaited reform too long, I cannot say until I have had the opportunity of examining it in rather closer detail than has been possible up to now. This is a highly complicated Bill. It includes many different matters collected from the Reports of different Commissions at different times. It is a Bill which I think will best be discussed on its Committee stage. We shall, no doubt, all of us, whatever approval we may give the Bill as a whole, have points, of sometimes minor substance, which we shall desire to debate on the Committee stage. Your Lordships will probably find that the Committee stage will last some time. I do not propose to occupy your Lordships' time this afternoon by endeavouring to deal with the details of different matters which this Bill includes. It would be much better, as I said a moment ago, that they should wait for the Committee stage. All that I propose to do is to pick out one or two aspects of the Bill upon which I think some further comment may be desirable.
May I first of all say a word about the reorganisation of the Supreme Court. Certainly, the most striking feature of the proposed reorganisation will be the creation of the Family Division. I hope that the Family Division will live up to the reputation which has been prepared for it. It will, I am sure, advance the administration of justice in all those cases which have a bearing on family life if they are brought together into a single Division of the High Court. Certainly
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they look much tidier under one name. Whether in fact the pattern will be as tidy as it is hoped it will be when it comes into being, or as its name would suggest, it is difficult to say. But there it is. It is a bold experiment, and I am quite sure that all your Lordships will wish it well.
The next matter to which I desire to refer is the continuation of the Admiralty Court. I am glad that it has been decided to continue the Admiralty Court with its separate name. The Admiralty Court is a very delicate plant indeed. Foreign shipowners and foreign underwriters are very ready to come to London for their disputes to be decided by the Admiralty Court, provided that they get two things. First, they want the Judges in the Admiralty Court in whom they have complete confidence. By that I mean Judges who possess the necessary specialist knowledge which is needed for practice in that highly technical court. The other thing that foreign litigants require in the Admiralty Court is that they should be able to fix firmly the day on which their cases can be tried. They have stronger reasons for that than have ordinary litigants, who of course have the same desire. In the Admiralty Court the need for a fixed day is of special importance because the matter entails keeping a ship back. If witnesses have to be detained on shore until a trial is possible, it may keep the ship back some days. Therefore, subject to those two conditions, I am sure that the Admiralty Court is a valuable feature of our judicial institutions, and I am delighted that the Government have not surrendered to the forces—and they are quite numerous—who have advocated that the Admiralty Court is out of date and should now be brought to an end, and its jurisdiction exercised by the Queen's Bench Division.
May I now turn for a moment to Part II, which deals with the enforcement of debt? As the noble and learned Lord the Lord Chancellor pointed out, the proposals in Part II concerning enforcement of debt mean the end of imprisonment for debt in all classes of maintenance cases and in the case of other orders; but it does not mean the end of imprisonment for debt in the case of failure to pay income tax or to pay a Crown contribution. If imprisonment for debt can be abandoned in the case of an ordinary

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civil debt, why cannot it be abandoned in the case of non-payment of income tax? The noble Lord the Lord Chancellor endeavoured to differentiate the merits of the two things. He said, "Well, an ordinary tradesman can avoid bad debts if he conducts his business carefully"—and so of course he can. But I should have thought that, if imprisonment for the enforcement of debt is abandoned in the case of civil debt, its abolition might at least be tried as an experiment in the case of Crown contributions. It seems anomalous that a man who does not pay his income tax goes to prison, while a man who does not pay his grocer does not. I hope that at a later stage we may consider this matter again.
The next question I come to is one which in some ways is perhaps a minor matter better dealt with at the Committee stage, but I should like to say a word about it this afternoon. I refer to Clause 28, which gives effect to the recommendation of the Payne Committee that where a mortgagee is being threatened with eviction he can apply to the court, and the court will have power to adjourn the proceedings or to make an order to suspend the execution of judgment or to postpone the date of delivery of possession. The Payne Committee coupled that recommendation with a recommendation that, in the case of local authority houses, this new power to adjourn the proceedings or to postpone execution of proceedings should not apply. It is quite true that in their recommendation the power to suspend proceedings was restricted to dwelling-houses to which the Rent Act applied. The local authorities have no houses to which the Rent Act has any application. Their houses are all free of the Rent Act. The Payne Committee recommended that, for that reason, the power to suspend an order in the case of a local authority house should not be given.
It is true that the Payne Committee put their recommendations on the basis that the house was rent-controlled. Does it make much difference? After all, local authorities are public bodies; they are bodies with very close contact with the public. There are some differences between the type of person who obtains a local authority mortgage and the type of person who does not. As a rule, a person who goes to the local authority
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for a mortgage is the last man on the list and perhaps the tenant who is most likely to default in his mortgage repayments. I should have thought that these cases might well have been left to the discretion of local authorities. I hope they will be, and that at a later stage we may ensure that the local authorities are not handicapped, as I think they would be handicapped if these orders could be made in the case of their dwellinghouses.
That is all I desire to say this afternoon. I am sure that your Lordships in all parts of the House will give this Bill your blessing. We shall do our best to improve it at the Committee stage, and we shall look forward to getting, in our later deliberations, the assistance which we normally get from the noble and learned Lord on the Woolsack.
4.22 p.m.
LORD LLOYD OF HAMPSTEAD: My Lords, like the noble Lord, Lord Ilford, I would begin by expressing my appreciation of the characteristically illuminating way in which my noble and learned friend the Lord Chancellor has presented this Bill to us this afternoon. It is of course very much a miscellaneous provisions Bill, and for my part I propose to concentrate entirely on Part II, dealing with the enforcement of debts. I do this not because I fail in any way to value the importance of the other parts of the Bill, but because I do not wish to take up too much of your Lordships' time and it seems to me that it is this Part which calls for particular comment.
By way of introduction I should like to begin by paying my tribute to the work of the Payne Committee, which laboured for nearly four years on this extraordinarily difficult topic and produced this massive Report, containing a vast amount of detailed information, the result of their prolonged investigations and an array of extremely practical and constructive recommendations. In the last Session I put down a Motion aimed at a consideration of the recommendations of this Report, the idea being that it was perhaps desirable for your Lordships' House to explore the whole field before the Government became committed to particular legislation. Unfortunately there was not time for that Motion to be debated, and therefore now, for the first time, we find ourselves considering the provisions of this Report.

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I propose to say very little about the question of imprisonment for debt because I think there will be few who will quarrel with this recommendation, so far as it goes. I say "so far as it goes" because perhaps this is something on which one can use the phrase of Mr. E. M. Forster, "two cheers" for the Government for almost abolishing imprisonment for debt!
In some ways it is ironic that this is the centenary year of the Debtors Act 1869—the Act which purported to abolish the old debtors' prison. Well, of course, it did abolish the successor to the Marshalsea. I think the Marshalsea was actually abolished in 1842, but it had its successors. However, the Act did abolish the debtors' prison, in the sense immortalised in the pages of Dickens's Little Dorrit, where I am sure it is familiar to all of us. But it did not get rid of the whole notion of imprisonment for debt; and, as I say, it seems ironic that to-day, 100 years later, we are carrying out this measure but even now are not totally abolishing imprisonment for debt. There still seems to be a certain reluctance, as the majority of the members of this Committee pointed out, to recognise, even at the present day, that imprisonment is something which ought to be directed to criminals and not to debtors. So we are still going to retain it, at any rate for the time being, as the noble and learned Lord on the Woolsack has told us, in regard to maintenance defaulters and debts due to public authorities.
The matter on which I wish to dwell a little longer this afternoon is the main recommendation of the Payne Committee, the setting up of enforcement offices to deal with the whole problem of the inveterate debtor. The Committee stress in their Report that it is vital, if we are to implement the proposal regarding attachment of earnings, at any rate to take steps to initiate a new system of enforcement offices. The Committee emphasise that this is a complex administrative matter which cannot be done at one blow, but they also emphasise—and this is a unanimous recommendation—that it is vital to take the first steps and to get this machinery going.
The importance of this basic recommendation is the need to get rid of the present system, or lack of system—it
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could perhaps be more appropriately described as a kind of legal jungle, where there is a multiplicity of courts and procedures for enforcing judgment debts. What we want to be able to do is to stop creditors engaging, as they now do, in a "disorderly free-for-all, and catch-ascatch-can", as the Report describes it, and, by setting up an adequate procedure, to permit account to be taken of the social and financial position of the debtor and his family. Under the sort of system recommended by the Payne Committee there would be an enforcement officer who would be on the spot to inquire thoroughly into the debtor's means and his other commitments, and it would be possible to see that the debtor was required to pay instalments according to his means and that the money obtained was allocated fairly among the creditors.
The core of the problem, as the Report repeatedly stresses, is the so-called multiple debtor: the feckless person who is quite incapable of properly managing his own affairs. He owes money in all directions—for rent, rates, heat, lighting, hire-purchase, and all sorts of other things. Under the present so-called system it is the creditor who gets in first who may get something, or it may be a committal order for the imprisonment of the debtor. But the creditor who gets in first may be the least deserving creditor; and in this connection it is particularly alarming to note that the county court, which was originally devised as a poor man's court, has now very largely turned into a court that is used by firms to bring proceedings to recover debts against individuals.
In a considerable proportion of cases—and there is ample material to support this proposition—credit has been given to people who have a long record of default, without any inquiries being made as to their creditworthiness. Indeed, a recent survey which was carried out by a body called "British Debt Services", which is a large credit-reporting and debt-collecting agency, has shown that, of defaulting debtors, nearly 58 per cent. have a previous record of default, and that—and I quote the words of this survey:
"Too many firms did not take the simplest steps to check a customer's credit record and were overwilling to gamble on whether or not he would pay up."

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Of course it is often that sort of creditor who gets in first and obtains an order against a multiple debtor.
My Lords, if we are to have an attachment of earnings system without the correlative enforcement office procedure which the Payne Committee recommend, considerable dangers will arise. For one thing, the wrong type of creditor, having been given this very powerful weapon of attachment without providing the means of ensuring that the weapon is justly deployed, both as regards the debtor himself and the other creditors, may well find himself in a very powerful position indeed. Surely this would be a great pity, because it might serve to discredit the whole attachment system, though the attachment system itself, if linked to something like the enforcement office, might prove to be a very valuable social reform.
Again, one of the dangers is that the effect might simply be to increase the financial troubles of the feckless kind of debtor with whom we are concerned. Under existing procedures, which will still go on merely with attachment of earnings added, the court is rarely in a position to ascertain the true state of affairs of the debtor, and the result is that orders tend to be made without any real regard to the true financial position. Attachment orders may, therefore, be made almost automatically, and this will impose deductions on the pay packets of the particular debtor which will simply serve to augment his financial disorders and ultimately result in total disaster for him. So that, far from resolving the underlying social problem, it may simply add to it.
I should like in this connection to refer to something in the Explanatory Memorandum which I confess I find a little puzzling. At the end of that Memorandum, at page iv, we are told that the number of attachment orders is estimated as being possibly 100,000 a year. Though I do not know how this figure is arrived at, and the Explanatory Memorandum does not tell us, it would seem that it is based on the assumption that we are going to have the same number of attachment orders as we now have committal orders, because it appears that at the present time about 100,000 committal orders a year are made.
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If this is so, I confess that I view with a certain amount of alarm and despondency what may be the underlying thought behind this suggestion. Under the present system, with the best will in the world—one knows that county court judges all over the country strive to do their best under this very inadequate debt-collecting system—the tendency of many courts is virtually to make a committal order as of course, on the basis that that is the best thing to put pressure on the debtor to make him pay up. In other words, the present procedure is used as a sanction, and the implication of this observation in the Explanatory Memorandum—I may be wrong about this—seems to be that it is contemplated that the new attachment order will be used in much the same way. If that is so, I would venture to suggest that it is providing quite the wrong sort of guideline to our judicial authorities as to the way the attachment order ought to be used.
The whole underlying philosophy of the Payne Report, as I understand it, is that attachment of earnings should not be a sanction but should simply be part of the process of debt collecting. There will be a full investigation as to the true position of the debtor. The court should then try to make the order which is best adapted to the debtor's potentialities of payment, making appropriate instalment orders and so forth, and attachment should only come as the last resort and not as a sort of initial sanction. The publication of this figure of 100,000 in the Explanatory Memorandum, without any explanation of how it is arrived at or what it may be related to, may well constitute an encouragement to regard the attachment order as a kind of sanction, and indeed as a first step rather than a last step in relation to the debtor.
May I venture to draw attention to another point in this Explanatory Memorandum which also causes me some slight puzzlement? It is stated in the last part of the last sentence that if that number of attachment orders were made it is estimated that the net increase in cost to the Exchequer would be around £70,000. No explanation is given to us as to how this calculation is arrived at. I am a little puzzled by this, because it seems to me that the mere abolition of imprisonment for debt must afford an

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enormous saving in a variety of ways. It appears from the calculations of the Payne Committee that they estimate that keeping a man in prison for debt costs the State about £28 a week. There will, in the new system, also be immense savings in the judicial and administrative expenses which are required in operating the present system. So one is a little puzzled why it is that we are told that even this limited measure of advance is going to cost something of that order.
I would draw attention to another of the Payne recommendations, and that is in relation to harassment. Your Lordships may recollect that when the Rent Act 1965 was passed, a very useful and important new principle was introduced into that Act—namely, the offence of harassment as between landlord and tenant—to try to restrain some of the Rachmanite types of activity and to give tenants protection. Although that provision may not have worked perfectly, it has undoubtedly done a great deal of good. Following that analogy, the Payne Committee have discussed the question of harassment in regard to debtors and they point out that there is ample evidence, and they give a good deal of it, that under the existing system unscrupulous creditors are often disposed to, and do in fact resort to, strong arm and terrorist tactics to get their money, as they see it, from their debtors. The Report gives many instances of this.
But the Report goes on to point out that if imprisonment for debt is abolished, there is a considerable danger that that kind of thing may develop on a still larger scale and may become a considerable social problem. The Committee therefore make the very reasonable and comparatively simple recommendation that a new offence of harassment, comparable to that as between landlord and tenant, should be introduced as between creditor and debtor, and they discuss this in paragraph 1230 of the Report. I would simply ask whether the Government have considered this course, because, even if they are introducing a limited measure without a whole procedure of enforcement offices, there seems to be a case for introducing this provision with regard to harassment.
Here one might perhaps raise a more general issue. One wonders how far the
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members of the Payne Committee have actually been consulted in regard to the implementation of the provisions of this Report. Although the Committee, having reported, no doubt no longer exists as a Committee, it seems that the Government are failing to take advantage of the benefit of having a group of highly expert people who have given their detailed attention to a matter over a period of years if, when they come to the question of introducing legislation, they do not continue consultation with that body in order to see how far they are succeeding in interpreting the philosophy, apart from the detailed provisions of the Report. In this kind of case one wonders how far the members of the Committee are really still made use of (as I am sure they would be only too willing to be, if consulted) in advising the Government not only as to the initial recommendations but as to their implementation.
I am afraid that I have taken up more of your Lordships' time than had been my intention, but it seems to me that this is a question of great social importance. For my part, in so far as one can say it is an abolition, bearing in mind the remaining pockets of resistance, I welcome the long-delayed abolition of imprisonment for debt. I welcome, too. though with some reservation, the alternative system of attachment of earnings. But it seems to me that one is obliged to express considerable concern about the failure of this measure even to begin to initiate a comprehensive system of enforcement offices without which the whole basis and purpose of the Payne Report is eroded.
Whatever other views one may have about this Parliament—and one knows there are differing views—I think most impartial people would accept that this has been a Parliament representing a great era of law reform. This is largely attributable to the remarkable energy and efforts of our present Lord Chancellor. It is, however, fair to say that this great era of reform has been one which has so far concentrated mainly on substantive rather than procedural law, and many people, both inside and outside the legal profession, share the view that the real hard core of the problems are procedural rather than substantive.
It is, therefore, some consolation at any rate to feel that we are now beginning

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to tackle that hard core. We have had the Royal Commission under Lord Beeching; we have had certain other procedural reforms, and now we have at any rate a beginning being made on this great area of mediawal, archaic produre which besets our whole enforcement process. Though I regret to say that the Government have not had the courage to grasp the nettle and at least begin the process of setting up the enforcement offices, one can only express the hope that the acceptance, at any rate in part, of the recommendations of the Payne Committee will constitute a spur which will induce them to apply themselves to these broader aspects of the problem with that characteristic energy which one associates with the Lord Chancellor and his present Department.
4.45 p.m.
THE LORD BISHOP OF LEICESTER: My Lords, I hope your Lordships will show forbearance if, before I address myself to this matter, I spend just one moment of paying a tribute of respectful remembrance to the late Lord Carron. It is not often that a noble Lord who speaks in the House on one day has passed away by the time we meet the next day. Lord Carron was a devout member of a Church other than my own, but I know that he took a great interest in any efforts that were made in the Church of England to bring sweetness and light into the difficult industrial situation. That is why I felt it my duty to say just one word of respectful remembrance concerning him.
My Lords, with regard to the matters which we are now discussing and which have been so lucidly laid before us by the noble and learned Lord on the Woolsack, I should like to say a few words about two matters to which those in the Church who are concerned about social affairs have given their thoughts and have formed opinions. The first matter is that raised in Part I of the Bill, the new naming of a Family Division of the High Court. I am sure that most of us will warmly welcome this provision. The importance of the step should not, of course, be overrated. It falls far short of what has often been suggested namely, the setting up of a whole structure of family courts from the lowest to the highest level, specially equipped for
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the settlement of family differences and disputes.
It is perhaps curious that it has been thought right to begin this process, if indeed that is what is happening, at the top; that is, by a rearrangement of the business in the High Court. One would have thought it more natural to begin at the bottom, and to bring in family courts at local level, able to absorb much of the work now done in juvenile courts and in the domestic procedures which take place in magistrates' courts. It is unfortunate that appeals from decisions in magistrates' courts on findings of fact in bastardy cases will continue to go, as at present, to quarter sessions where they lose that degree of privacy which is afforded to such cases in magistrates' courts, and where they enter a more or less criminal atmosphere. Similarly, appeals arising out of orders in magistrates' juvenile courts, orders concerning care for the most part, continue to go to quarter sessions where, once more, they will enter a semi-criminal atmosphere.
Three-quarters of all divorce cases outside London are hoard in the county courts. These will continue as before and appeals from them will lie to the Court of Appeal. Thus, the new Family Division of the High Court will not deal with many matters other than those which previously would have been dealt with by one section or another of the High Court. It is nevertheless a considerable gain that the new name for this court should be the "Family Division". This, for the first time in English law, establishes a court specially named and suited to deal with family matters as such; and it is to be hoped that this new court will in time beget courts at lower levels similarly suited to deal with these intimate and largely non-criminal matters. It is particularly desirable that there should be courts to deal with bastardy cases and custody cases which at present still fall to be dealt with on appeal in the quarter sessions.
I now turn to Part II of the Bill, which deals with the question of imprisonment for debt. Here I should like to diverge slightly from the noble Lord who spoke before me and express the view that the Government have been wise not necessarily to bring into force immediately the

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proposal of the Payne Committee about the setting up of enforcement of debt offices throughout the country. I seem to recall a line of a hymn which speaks about "nations crowding to be born". There are always officials "crowding to be born", and we could easily have immediately fallen for this proposal and set up a whole new branch of bureaucracy. It may in the end prove that something of this kind is necessary, but I think we might well try this new system of the attachment of earnings for a few years before concluding that we have to set up a whole new series of offices of this particularly kind.
I think we must in general protect any Goverment from feeling that it has no option but to accept almost in toto every proposal of any Committee that reports. One of the difficulties of government in our time is that such publicity is given to every new Report that large numbers of the public think that as soon as a Report is published the Government is bound immediately to put the whole of its proposals into force. Any Government is entitled to use its discretion, both as to the number of proposals that it brings into force and the speed at which it does it.
We welcome the abolition of imprisonment for commercial debt. Any step which reduces the overcrowding of prisons, which saves the country from unproductive expenditure, which protects feeble and unfortunate characters from the contamination which is still inseparable from a prison sentence, is to be welcomed, provided that it is not subversive of social and public order. It would have been good if prison sentences could have been removed in cases of failure to pay maintenance charges and social security contributions. Fines and costs in criminal cases are in a different category; they are, in some senses, so far as the fines are concerned, often alternatives to imprisonment, and if the fine is not paid the convicted criminal can hardly complain if he is imprisoned instead.
I find myself in a slight difficulty, and perhaps the noble and learned Lord may find a moment in which to enlighten me. The difficulty is that Clauses 5 and 6, as explained in the Explanatory Memorandum, retain imprisonment for
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failure to pay maintenance, taxes, social security, fines and costs, and so on, but Clause 7 empowers the courts to make attachment of earnings orders for the payment of civil debts, including social security contributions, fines, and costs. In other words, it seems to me that we now have two alternative proposals over a wide range of debts; what one might call official debts to the State, or to the community. I do not know whether the Bill gives any guidance as to what criteria are to be used by courts in deciding whether or not to use the remaining imprisonment right, or whether to go for the attachment of earnings. If I read the Bill rightly, it is important to see that attachment of earnings is a possible way in which courts can deal with practically all of those debts, including the official debts, for which imprisonment remains as an option. There is to be the alternative to prison of the attachment of earnings, and I personally hope that this will be widely used. We are well aware of objections to it, but some sanctions are clearly necessary in our complex and highly organised society, and it is hard to see a better one than that proposed.
I was rather surprised to hear the noble Lord who spoke before me speaking as though it were wrong to think of attachment of earnings as a sanction. However much it may be used as a sanction, it cannot be so severe a sanction as the threat of imprisonment. If anyone is able to pay, he has the quick answer to the proposed sanction of attachment of earnings—and that is to pay. If he cannot pay, it seems to me that he ought to be thankful to be allowed to pay by instalments, which is really all that is happening in what is proposed. It is not, of course, new to have the right to attach earnings in affiliation and maintenance cases. The former have been legal since 1914 and the latter since 1958. But with the bringing in of commercial debts the whole idea may become far more familiar, both to employers and employees, and to the public generally.
The steps being taken are small, but they are to be welcomed as further steps on the road to that happy state when shutting a man up, disrupting his family life, preventing him from earning his own living, compelling him to mix with anti-social or inadequate companions, will be a course of action resorted to only in

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the case of dangerous criminals, or those against whom society insists there must be some obvious mark of its disapproval and of its desire to deter others from embarking on similar anti-social conduct.
4.58 p.m.
LORD DONALDSON OF KINGS-BRIDGE: My Lords, I am entirely in favour of all that appears in this Bill, except certain things in Part II; and because I disapprove very strongly of these I hope that my noble and learned friend will not think it churlish if I do not spend a lot of time giving praise—which in any case, owing to the fact that my legal education stopped in 1929, would not be very valuable—to the other Parts of the Bill. I was immensely encouraged to have the support of such a learned lawyer as my noble friend Lord Lloyd of Hampstead, who has put forth arguments which I had myself very largely proposed to advance, and I shall try not to repeat them. I was unhappy to find myself disagreeing with the right reverend Prelate almost as much as I agree with the noble Lord.
At first sight, Part II of the Bill seems to be a proper fulfilment of the Payne recommendations. But if one looks closely at it one sees that it is nothing of the sort; it omits the kernel, which is the enforcement offices to be set up in county courts. This is where I find it impossible to agree with the right reverend Prelate that the Government are to be commended for not rushing in. I think they are to be blamed for picking out plums, and leaving the difficult part behind. Part II also fails to impose any restraints on those firms who, when they sell goods on credit, make too little effort to check on the customers' ability to pay and, consequently, sell to people quite unable to pay.
I should like to quote a few lines from the Payne Report to show that I am not exaggerating the case. In paragraph 1003 they say:
"We cannot reconcile ourselves to the view that it is justifiable to send inadequate or feckless persons to prison, or to threaten them with imprisonment, in order to extract money from thousands of others who have the means to pay."
In the next paragraph they say:
"The Committee do not accept that any benefit to the business or trading community or to the public at large can flow from the
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creation of bad debts, and if would-be suppliers of goods can be persuaded to make proper inquiries before entering into transactions so as to ascertain whether their customers are, in fact, credit-worthy before goods are supplied, this would be of the greatest benefit to all concerned."
These two sentences are the kernel of the Payne Report recommendations, and the point here is that they apply as much to the attachment of earnings as they do to prison. The attachment of earnings is a sanction curiously like prison, in that though it may act as a threat to the dishonest man, and a final sanction, if you like, yet it will catch and destroy the inadequate families without acting as a deterrent to them at all. The "wide boys" are never caught; they borrow from a friend in funds and pay in the taxi on the way to court rather than submit to the final sanction; and other debtors turn to money-lenders. But the type of family which will be caught is the one incapable of managing its affairs, which is simply overwhelmed by the problems of modern life. To send the wage-earner to prison can do nothing but harm; but to advise his employer to dock his wages may well get him the sack, as evidence from the United States shows. These men are, as a rule, unstable employees, and any chance of settling down can be entirely ruined by this kind of thing. In any case, this type of man will agree to any level of deduction you like to suggest, and be entirely incapable of carrying it out.
If, as my noble friend Lord Lloyd suggested, my noble and learned friend the Lord Chancellor had adopted the full panoply of the Payne Report, there would be a properly staffed enforcement office, receiving assistance from social workers, and proper arrangements could be made. But, my Lords, it is very naïve to suppose that a judge or a registrar, however skilled and benevolent, can sit in his court and add up the debts of a family, the total of which they probably do not know themselves, and make an arrangement for repayment which they have any chance at all of keeping. The Bill provides in Clause 14, in a way which I can only describe as hopelessly optimistic, for the debtor to fill up a form stating his means and other debts. If he gets it wrong wittingly or recklessly, the sanction is imprisonment. That seems to me the kind of thing which will frighten inefficient and

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only partly literate people into making mistakes which they will be unable to defend; and I think it may lead to real injustice.
It is interesting that the employers have not complained about the threat to them in Clause 18, because if they do not carry out properly the deduction from wages they are also subject to the sanction of imprisonment. They seem easier to keep quiet than my right honourable friend Mrs. Castle's employees. The noble Viscount shakes his head. Is that not true?
VISCOUNT COLVILLE OF CULROSS: My Lords, I have had the strongest possible representations from the employers on this very subject.
LORD DONALDSON OF KINGS-BRIDGE: I thank the noble Viscount. I did not know that. I will say a word here, my Lords—and this is really the key to the first point that I want to make —about how problem families are normally tackled by an organisation like, for example, the Family Service Units. First, you have to go in and make friends and gain confidence. Then, some time later, you try to collect all evidence of indebtedness—finding bills in odd drawers and demand notes behind the T.V. set, some known to the wife alone and some known only to the husband. Then you add them up, to the astonishment and distress of the housewife. Next you discuss the money coming into the family and the minimum demands for the weekly bills, and decide what amount, if any, can be put aside to clear off arrears. That generally means getting in touch with one or more of the principal creditors and persuading them to hold off for a bit and accept some small instalments on condition that other creditors get similar treatment. After this, you can start the real business of finding out what the non-financial problems of the family are.
The Payne plan, if it were to be carried out in full. envisages that the enforcement offices, with their social workers, would do exactly this; and it is a thing which requires doing. But my noble and learned friend wants to skip all the important part, the enforcement offices, and go straight to the easy part. I tell him now, with all the conviction I can summon, that without the support of a
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social worker to go into the home and sort out the problems there, the court will be unable to find out what the family's total liabilities are and unable to estimate fairly what it can afford to pay. The court will therefore fix a figure which is not based on the facts, the family will fail to meet its promises, the employer will become fed up with a worker who is always in trouble and at a suitable opportunity will get rid of him, and the family's income will be reduced to unemployment pay. The creditor will not get paid. but the family will be driven still further into the ground.
My Lords, this really is not just a sentimental idea of mine: it is the bitter truth. The Payne Committee tell us that over 50 per cent. of the civil prisoners were in prison for debts of £20 or less. Some years ago I chaired a steering group of Political and Economic Planning for the preparation of a book on prisoners and their families. It was written by Dr. Pauline Morris—not the easiest lady to steer, incidentally—but in spite of the Committee it is the best and most complete study of the subject in this country and, perhaps, anywhere. I recommend to your Lordships Chapter 9, which deals with civil prisoners. The picture it gives there is really pathetic. I will not bother your Lordships with it, but it bears out every word that we are saying: that the people who are going to be affected first by imprisonment and now by the attachment of earnings are the bottom fringe of society. Those are the ones who will be caught, and the attachment of earnings will hit them much more widely than imprisonment.
I think we all welcome (this has been said by every speaker) the recommendation to abolish imprisonment for debt; but I maintain that this recommendation should, and can, stand by itself. It must not be linked with the need to find an alternative sanction. Imprisonment for debt is bad. It is ineffective; it protects nobody but the strong, who should be able to protect themselves, and it inflicts hardship on people who already have more than their share of it. Let us get rid of it, and rejoice. This is where I find myself, unhappily, differing from my noble and learned friend the Lord Chancellor. He said, in effect, that he cannot remove the sanction of prison without substituting another. I do not accept this. The real rogue, who lies

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about his means, can usually be got for deception or fraud, under the new Theft Act. Firms do not bother to prosecute because it does not get them their money back. But if it is a sanction they want—and this is the main argument—here it is, under their hands. The man who is less than a rogue but a bad payer—and I freely admit that there are a good many such about—can be threatened with destraint, and eventually destrained on.
The Payne Committee say in paragraph 981 that against inadequate families prison has no value as a sanction. Nor, I say, would attachment have any value. The Payne Committee say in paragraph 993 that where a debtor has goods a creditor will first attempt to obtain payment by execution against goods, and only if that fails will he resort to judgment summons. My Lords, I agree. If there is any thing to be had, let the creditor exert his rights. He comes to the court only when he finds there is nothing to be had. In my opinion, the court cannot help him by restitution, only by punishment; and I am quite certain that that is not what my noble and learned friend is attempting to effect. The doctrine of caveat emptor! holds an important and respected position in English law. It is high time we adopted and respected a parallel doctrine, "caveat creditor!"—let the lender beware!
The attachment of earnings is not in itself a very satisfactory process, as evidence from the United States and Scotland suggests. There is strong pressure to abolish it in America—"garnishment", as they call it. The United States Secretary for Labour in 1966 estimated that between 100,000 and 300,000 people a year were "fired" because their wages were garnished. In Scotland, "arrestment", as it is called, was described by a 1958 Committee as working well, but social workers have recently expressed to the Consumer Council a good deal of uneasiness about it. However, if my noble and learned friend would give us the safeguards which the Payne Committee so rightly insisted upon, I should not feel obliged to oppose it. But if we are to have attachment, then at least let us have the enforcement offices, as the Payne Committee recommended.
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There is another disturbing feature of the Bill as it stands. The attachment of earnings will certainly be more widely used than imprisonment. Happily, judges have in the past been reluctant to employ such a crude weapon as imprisonment if they could possibly avoid it, but a mere financial sanction does not carry the same overtones. I see that the Payne Committee made a rough guess (my noble friend Lord Lloyd of Hampstead referred to it, and questioned its validity) that there might be 100,000 orders in a year—that is, as against 3,000 to 4,000 imprisonments. This is the order of what they think might be the difference in the application of this sanction. One must realise that it would bite, and it would bite on the ordinary commercial debtor in a way in which it does not with maintenance orders. My noble and learned friend has explained that people under maintenance orders have just left their wives and families. They can easily flit from job to job and from place to place. The ordinary debtor, as my noble friend said, has a council house and is easy to find. This attachment will bite on him in a way that it has not bitten on the maintenance debtor.
My Lords, may we pause and consider for a moment whose lives would be affected by this legislation? On the one hand, it would affect the underprivileged, inadequate families of whom I have been speaking and who incur small debts which they ought not to incur. But the system of wage attachment, particularly as proposed in this Bill, will cause hardship to the capable as well as the incapable. I have already mentioned the tendency of American employers to dismiss men whose wages are garnished. Employers here to whom the Consumer Council has spoken are opposed to the system. They do not think it is their job to collect debts for private creditors, and they do not want to know about this part of an employee's affairs. A Scottish employer said that although his firm does not sack a man at the first arrestment, it does finally get around to sacking after repeated arrestments. An English employer said that he might be chary of employing or promoting a man whom he knew to be in debt. This is how a man's livelihood may be affected by attachment. The scheme as proposed in this

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Bill will exacerbate employers by allowing them to be subjected to successive attachment orders from different creditors, instead of, as the Payne Committee proposed, merely one attachment order for all creditors administered by the enforcement office. The scheme provides no system—as the enforcement office would do—for varying the attachment order for a debtor who falls on hard times.
In aid of whom, and for what, is this legislation intended? Who is going to benefit? What sort of creditor? Two trade surveys recently concluded that bad debts amounted to about 0·5 per cent. of total credit issue. A retail co-operative society in the Midlands claims bad debts of from 0·1 to 0·5 per cent. Some less-reliable figures suggest that about 5 per cent. of the £1,200 million hire-purchase debts outstanding in 1967 was the subject of court action. And some of these debts would have been recovered. It seems that trade as a whole is not plagued with unreasonable losses but that a high proportion of bad debts is a normal expectation in some particular businesses. This is a point which my noble friend has already made.
In giving evidence to the Payne Committee, one county court judge, who has given the Consumer Council permission to quote his words, wrote as follows:
"An overwhelming majority of the creditors who use the judgment summons procedure are large commercial concerns trading on instalment credit. For them, judgment summons procedure is part of their normal business procedure and the county court and its staff a debt collecitng agency."
He went on:
"These firms habitually give credit without making any inquiries about the credit-worthiness of the debtor, so that sometimes the same creditor is issuing judgment summonses against a debtor while it is persuading that debtor to accept further credit."
One cannot go much further than that! An American survey in Ohio showed that two stores accounted for 20 per cent. of all garnishments in the city. Another American survey of nearly 7,000 garnishments showed that three firms were responsible for one-third of them.
My Lords, no-one advocates restriction of the right of people to trade on credit, or of the public to buy on credit, but that these transactions should stand on their own feet. Is it right that the county
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courts, which cost the nation nearly £3 million a year, should be used as an integral part of their trading by a few firms, as often as not to collect debts which should never have been incurred?
I wonder whom my noble and learned friend consulted before embarking on this very important legislation. I do not doubt that he consulted some of the business interests, but did he consult the other side at all? Did he consult the Probation Service, the Association of Child Care Officers, the various welfare interests for which local authorities are responsible, or any of the other people whose business it is to look after families in distress? I see that something like 18 such bodies gave evidence to the Payne Committee, and the Payne Committee recommendations were brought in after the most careful consideration of the evidence that had been given by these bodies. Has my noble and learned friend consulted them as to what they think? I have behind me the opinion not only of the Consumer Council but also of a hundred social workers working in 17 different branches of the Family Service Units. They differ on many points but are unanimous on two: first, that the onus should be put on to the lender to take proper precautions to find out whether the family can pay or not; and, second, that someone must move in and help the family to put its affairs in order before there should be any question of attachment of earnings.
My Lords, can I, in conclusion, persuade my noble and learned friend to do the following things in the following order? First, will he abolish imprisonment for debt in the terms of the Bill as it now stands. Second, will he introduce a clause into this Bill—or, if this is too naive a solution, make us a promise of future legislation—to deprive firms of the right to the court's protection if they cannot show that they have taken proper precautions to see that the person to whom they are selling goods on credit is in a position to pay. There are already credit reporting agencies to which lenders can refer. These should be improved and the public protected by legislation, as we were suggesting yesterday in this House, from inaccurate inaccuracies. But there is no reason to hesitate before bringing in this kind of negative legislation.

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Lastly, I would ask my noble and learned friend not to introduce attachment of earnings except with the full safeguards laid down in the Payne Report. I know that there will be difficulty in recruiting the necessary people and in paying for them. If my noble and learned friend would give me a timetable and say that we will begin now and have it in three years from now; if there were any promise of this ever being done, then ! should feel less strongly hostile. But what happens is that the easy thing is introduced, and no Government is ever going to do the other, because it is all very difficult. I beg my noble and learned friend not to introduce this very radical measure until the proper safeguards are put in. I certainly think that this Bill should have a Second Reading, but I hope that it will emerge from this House a good deal modified.
5.17 p.m.
LORD MORRIS OF BORTH-Y-GEST: My Lords, although I did not have the advantage of hearing the speech of the noble and learned Lord the Lord Chancellor, I hope that your Lordships will allow me with the utmost brevity to express a general welcome to this Bill. Here is another step, and a notable step, in a process which in these days we are witnessing and which I for one so greatly welcome, the process of giving attention to the machinery and content of the law and the endeavour to make improvements both in the machinery and in the content. There are only one or two points in regard to which I wish to say a word. I think that the new arrangements in regard to the Probate and Admiralty courts are satisfactory. In agreement with what has been said, I feel that the Admiralty Court and also the very much younger court, the Commercial Court, both have high prestige; and I think it is so important that that should be so. In a maritime country the prestige of those two courts should be recognised in other countries and in our own.
I particularly welcome the proposals that are contained in Clause 3 of the Bill in regard to the Commercial Court. It is very interesting to see that the Commercial Court, which began in 1895 and has really just been a court of the King's Bench Division or Queen's Bench Division, is now given statutory recognition. I think that the proposals contained in
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Clause 3 would much have appealed to those who were responsible for starting this court in 1895. The first judge was Mr. Justice Mathew and a special series of law reports began at the time that the court began to function. The first editor was a son of this judge, Mr. Theobald Mathew, one of the most beloved and distinguished members of the legal profession in recent years. In a very interesting introduction to the first volume of the Commercial Reports he said that the endeavour of judges of the Queen's Bench Division to provide a suitable tribunal and procedure for the ready settlement of commercial disputes was an incident of such importance that it seemed to afford a sufficient excuse for making an addition to the large number of existing law reports.
Mr. Mathew then described in the introduction how it is possible in litigation for the interlocutory procedure to be so protracted and so detailed that there is risk that justice may be delayed or even denied. He said it was manifest that an obstruent litigant indifferent, either from his wealth or his poverty, to the cost of legal proceedings, may in many cases deprive his opponent of effective redress or remedy. He went on to say that the procedure which he had described was particularly objectionable to men of business and under its pressure mercantile causes became few and far between. A dispute with respect to a commercial transaction, like any other matter of business, needs a prompt decision and in some countries special tribunals have been created to ensure dispatch.
In the first volume of the reports we see eminent names. On a very early page we see the name of Mr. Bingham, afterwards a Member of your Lordships' House as Viscount Mersey. We see very soon the name of Mr. T. E. Scrutton who, I venture to think, became one of the great judges of this century. The Commercial Court has always attracted both solicitors and barristers with special skills, and very many eminent men on both sides of the profession have given of their work to the Commercial Court and helped to establish its prestige. 1 am sure that in recent years it has been felt in some City circles, in some commercial circles, that the procedure might be still more adapted to suit the wishes of the commercial community.

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In this country we are very wedded, and I think rightly, to the general idea that justice should be administered in public. The phrase, "justice behind closed doors" always has a sinister sound, and in general we disapprove of it. But, my Lords, not every dispute is one which need attract the interest or the attention of everyone else; and if commercial men, businessmen, have a dispute which may involve matters which are rather confidential I think that the court ought to be as helpful as possible to ensure not only speed in decision but that the circumstances in arriving at the decision should be as attractive as possible. Therefore, I see no peril at all in giving to the commercial judge, or in conferring on the commercial judge, power to admit any evidence which would not otherwise be admissible under the law relating to evidence. It is the general feeling in these days that we can trust our judges to distinguish between what is worthless and what has value, and I am quite sure that in commercial cases particularly we may be satisfied to entrust that power to the judges.
Then, my Lords, there is the
"power to sit in private during any part of the proceedings in a cause or matter entered in that list."
There may be times when, though there are not what might be called trade secrets in consideration, there are many matters which are confidential, in the sense that those concerned would not wish every rival to be made aware of their affairs. Here again, I welcome the power given in the terms that I have set out. Indeed, I would welcome any further powers that are designed to bring back to the Commercial Court work that may at times have been going to arbitration. I think it is the general feeling that in the long run it is better for the parties if they begin their proceedings in court, with the opportunities for full appeal if they wish it, rather than that they should begin by arbitration.
My Lords, I confine myself to one other observation at the moment, and that is with regard to Clause 4 of the Bill, entitled:
"Extension of power to dispense with holding of assizes."
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I raise no objection to that provision. Indeed, I think that in present conditions it is probably almost essential to have that power. But I would ask just one question in regard to it. If the proposals of the Beeching Commission are, in general, accepted—and in a general way I find myself favourably disposed towards them—it may be that in future years there will be some counties, or some areas, within which trials will not normally take place. But there might well be on occasion some cases where there are a great many witnesses in one locality; where the parties are all in one locality, but that is not a locality where assizes normally take place. It might be much better in those cases to bring the court to the locality rather than make the people from the locality go somewhere else. That would happen, I am sure, only on occasion, but reading the words of Clause 4 I would hope that there is not undue finality or rigidity about it, for the words are:
"…assizes shall no longer be held for such county or at such place…".
I would merely hope that there would be opportunity, when occasion made it necessary, to have a special case heard in some special place.
I have in mind in this connection paragraph 278 of the Beeching Commission Report which reads:
"In making our recommendations we recognise that there may be occasion when, by special arrangement, a High Court or Circuit judge should visit some additional town to meet the convenience of witnesses and others, in long cases, where the majority of those concerned live in areas which are exceptionally remote. Such visits must, however, be kept to the absolute minimum if the defects of the present Assize system are not to re-appear, and will have to be limited to places where suitable accommodation is available. It will also be necessary to ensure that the progress of court business at the normal centres is not unacceptably impeded. It is consistent with this recommendation that we regard the need to specify court centres by legislation, as for example by an Assize Order, as unnecessarily restrictive and running counter to our view that this is an administrative matter to be decided by the Lord Chancellor and varied by him as events dictate."
My Lords, it may well be that whatever is done under Clause 4 will not run counter to that thought. I raise the point because the words seem to have a certain air of finality about them. I would hope, and indeed I imagine, that this will be in contemplation and that whatever is done

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in the near future will not make it impossible, in the circumstances contemplated which might happen only rarely, on occasion to depart from what may be the new scheme of things if the Beeching Reports are in general adopted.
5.30 p.m.
LORD PARKER OF WADDINGTON: My Lords, I rise to join with other noble Lords in giving a general welcome to this Bill. As has been pointed out, it covers many subjects. The only subject with which I wish to deal is the powers contained in Clause 4. If I speak with feeling on this matter, may I disclose my own personal interest. Being largely concerned with the day-to-day administration of the work of the courts throughout the country, the position for me at the moment is not merely a headache but a complete nightmare. So long ago as 1964 it was clear that the machine for the administration of justice, both criminal and civil, was going to grind to a halt and I am sorry to say that the position has almost been reached to-day.
At the expense of wearying your Lordships, I should like to explain a little of the present position. At any rate, I think that those who may desire to criticise these powers should fully realise what that position is before they voice any criticism. May I give an illustration by taking first the Birmingham Assizes? There was a time when three judges at Birmingham could clear the criminal work and the civil work in an assize. The position to-day is that with four judges they do not expect to finish the criminal work alone, with the result that they leave from 450 to 500 civil cases, remnants from the previous assize and some of them double remnants. It is a deplorable position.
Take Winchester, again a case where three judges in a three-weeks assize would clear the lists both criminal and civil. This term they started with a two weeks' assize with four judges, followed by eight weeks of a single judge, followed again by an assize of four judges. On Monday that is to be followed by one of five judges, and they will not complete the lists. The position is the same in nearly all the major towns. At Cardiff-Swansea, if 1 may bracket together the two assize towns in Glamorgan, the lists are never completed. Manchester always has a back-log of civil cases. Nottingham is
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the same, and so it goes on throughout the country. It is not confined to the big towns, because when we get to the smaller towns, though it may be that the crime list is finished, the civil may go untouched, certainly not completed. In that category, I would put towns like Derby, Bedford, Bristol and many others.
Something has to be done about it. At the moment what is being done is mere patchwork. It is like a gardener with an old hose. We send judges down to stop up one leak, only to find it bursts out at once in three other places. All this patchwork is done at the expense of sending judge after judge out of London, so that the arrears of civil work grow in London, and at the expense of having to make request after request for commissioners. My noble and learned friend the Lord Chancellor has already explained the number of commissioners which he has been asked to find this very term, the difficulties involved in finding them and the rather unsatisfactory position of cases being tried by commissioners rather than by High Court Judges. Above all, this is all at the expense of the litigants in civil cases and of the prisoners who have their trials hanging over them, with the result that they either spend too long in custody or, if on bail, unfortunately commit other offences.
The powers in Clause 4 will enable something to be done, and on one view may bring a saving of as much as 25 per cent. of judge power. May I say why? There are many towns in the country where a short period of assize is justified. The period has to be decided in advance, before it is known what the work is. When a judge gets there, perhaps there is one plea of guilty or a five-day trial which he cannot begin because he has to get on to the next assize or perhaps very kindly, in order to please the inhabitants by giving the judge something to do, the quarter sessions have reserved a case for him.
There are 65 assize towns, visited three times a year, and on each occasion there is a loss of a commissioned day, when no work can be done. There is the loss in these small towns when a judge has to go there and is unemployed. There is the other difficulty that the last day of an assize is really only half a day's work, because the judge has to ensure that the

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last case finishes before he goes on to the next assize town. One has only to mention that to realise that even a slight concentration of work is going to save a tremendous amount of judge time.
The matter does not end there, because the powers being given by Clause 4 enable provision to be made for dealing better with civil work. If one takes a town like Derby (I mention it because I have it on my table at the moment) for three assizes no civil work has been dealt with, and unless some patchwork takes place before next winter's assize it will not be dealt with there. The reason is that the assize is only two weeks, which is ten working days, less a commissioned day, and it is impossible to deal with civil and criminal lists at an assize of such a short duration. There is clearly a case for saying that in such a town the assize should be criminal only and that civil work should be transferred to another town, where a longer period can be spent, where there is proper court accommodation and accommodation for more judges and where the civil list can be dealt with in a smooth fashion, independently of crime, with the obvious advantage of being able to have on occasion fixed days for hearing. That is another power which is being given by Clause 4. It seems to me that something along these lines—and for my part I can think of nothing better at the moment—is a matter of necessity at this moment.
Of course, it is only patchwork, because I am convinced that even a saving of up to 25 per cent. of judge power is not going to get over our difficulties. I very much hope that the time will come when the recommendations of the Royal Commission on Assizes and Quarter Sessions might be implemented. It seems to me that in the long run only the implementing of those recommendations will produce order out of chaos. And when that time comes, I earnestly hope that there will not be—indeed I should be in despair if there were—any controversy about the general principles and general scheme set out in the Report of that Royal Commission. But whatever views people take about that Report, whether or not it is implemented to-day, there is an urgent necessity for doing something about the lines which will be pos-
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sible as a result of Clause 4. I earnestly hope that not only will this Bill be given a Second Reading, but that Clause 4 will have the complete support of your Lordships.
5.40 p.m.
LORD LEATHERLAND: My Lords, I shall be brief. I had not intended to speak, but in view of the criticisms that have been made of the provision for attaching wages, I feel that it should be made clear that there is one small voice on this side of the House which believes that this is an important and desirable reform. I have the greatest respect for the Consumer Council, which has given this matter considerable attention. I have, equally, respect for my noble friend Lord Donaldson of Kingsbridge who is the very able and public spirited chairman of that Council. Nevertheless, I feel that this move in the direction of attaching earnings is something to which we have to look forward and accept.
It is right that we should abolish imprisonment for civil debt. It is a relic of Dickensian days, and is something which is almost a disgrace to our modern civilised society. But we must have some substitute if we are to remove the threat of prison from over the head of a man who will not pay his lawful debts: otherwise he will merely laugh at you. Presiding over a magistrates' court, I have known many cases where we have had non-payers before us—non-payment of fines, and things like that—and though it may not be particularly germane to this clause in the Bill, one finds that there are people who really will spend their money foolishly and extravagantly on motor cycles and motor cars, but they do not feel they are honour bound to pay any penalty that has been awarded against them. It has been suggested that distraint might be a remedy in these cases. It would not in many cases, because in lots of cases of distraint you are merely visiting the punishment upon the wives, mothers and children in the home, and not upon the rather irresponsible person himself. I feel that with this threat of attachment of wages hanging over the man's head he will not want his employer to know and, therefore, will make an effort to pay what he is properly required to pay.

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I know that there are difficulties in operating the machinery of attachment. We have heard of the difficulties of Scotland and of the United States; but there are many aspects of the judicial system of the United States which perhaps it would not be desirable to introduce here. I know there is always the possibility that the man may give up his job and that therefore the employer will not be able to enforce the attachment order that has been made against him. I know that there are many nomadic workers. I do not want to get myself into conflict with the Race Relations Act, but I will mention the Irish workers who come over here on construction and pipelaying work. It is the easiest thing in the world for them, if they have an attachment order made against them, merely to give up their job, go back to Ireland to their families for a few weeks, and then come back again. One has heard of many such cases. Nevertheless, I think that we must have this weapon of attachment in our hands if we are to abolish the out-dated weapon of imprisonment.
I entirely agree with my noble friend Lord Donaldson about the irresponsible way that hire-purchase firms sue a man one day for a debt which he has incurred on a purchase and then go round the next day to try to persuade him to buy something else. But I am not with my noble friend when he suggests that we should deprive that kind of firm of the protection of the courts. The courts of this country ought to be open to everybody; we cannot have a kind of legal apartheid operating, whereby some people can go to court to get redress and others cannot. I feel that we must teach people that they have to pay their debts; we must make it possible for society to enforce the payment of debts. It is right to end prison sentences, as I have already said, but we must have a substitute. The courts in their discretion will decide the cases in which to enforce the claim by attachment of wages and those in which it is not the best remedy. That is all I have to say, except that I very much welcome this modernising and imaginative measure.
5.45 p.m.
VISCOUNT COLVILLE or CULROSS: My Lords, there is nothing like one of the noble and learned Lord's Administration of Justice Bills to provide Parliamen-
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tarians with some light bedside reading. I do not know what the combined weight of the Reports which need to be studied for this Bill must be, but I think it is considerable. There are the Report of the Commercial Court Users' Conference, the Payne Report, the Beeching Report and the Winn Report. There may be another Report, for all I know, but those are the only ones that I think are relevant. They are formidable in their scope. What I think they bring to our attention is the colossal value which one can derive from the work of these Committees. It would not be possible to have any intelligible conversation or discussion of the contents of this Bill—indeed, the Bill would never have arrived—had it not been for the prodigious work of these Committees, with their full and well-written Reports which have led to the recommendations, some of which are now being implemented. I would join in the compliments paid to the Payne Committee whose Report is the basis of Part II of this Bill.
I would apologise to your Lordships, and to the noble and learned Lord the Lord Chancellor and my noble friend Lord Ilford for having missed their speeches; but I have a note of what they have said, and I shall, of course, be able to read their speeches tomorrow. I would join in the welcome that has been given to the reorganisation of the High Court so that the Family Division may now be formed. That is a matter which has been under discussion for some time. I think I am right in saying that my right honourable friend the Member for Epsom, Sir Peter Rawlinson, pressed for it a long time ago; and he was not the only one. Although I take the right reverend Prelate's point that it is only the High Court that is affected, I think he agreed that it is a good start, even if it has to be a start at the top. I have no doubt that the difficulty about taking his idea further is that the jurisdiction, for instance, of quarter sessions is bound to be affected by whatever happens to the Beeching Report, and this would hardly be the moment to go into the reorganisation at that level of the court's jurisdiction when we may find that quarter sessions will cease to exist at all.
While welcoming this Bill, I should like to ask a few questions about Clauses 3 and 4. It may well be, and I think

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it is so, that the Report of the Commercial Court Users' Conference suggested what the experiment (for such I believe Clause 3 to be) in relation to the commercial court should be. There are paragraphs in this Report which explain the sort of evidence in the taking of which the strict rules may be dispensed with, and paragraphs which explain the provisions of sitting in private. But not everybody reads these Reports, and I believe it would be helpful if the noble and learned Lord the Lord Chancellor, if not to-day then at some other stage, could explain a little more what he has in mind: what sort of evidence would be admitted; whether the hearsay rule would be widely breached and, if so, in what way, and the type of case—perhaps those mentioned by the noble and learned Lord, Lord Morris of Borth-y-Gest—for the hearing of which the court will be sitting in private. With this information, I think the House will be able to judge much more easily than now whether this idea is a good one or not.
The House cannot fail to have been impressed by the speeches of both the Lord Chancellor and the Lord Chief Justice on Clause 4. My hesitation about accepting it in full is again, to some extent, the result of not knowing what is involved. I have no idea which are the towns where assizes are no longer likely to be held if the Orders in Council are made. I do not know what the consequential provisions may be about sending cases which have been committed from the magistrates' court, for instance to assize, or sent up in some other way, and how those arrangements will be dealt with. Therefore it would be a great assistance to the House if at some stage a little more could be spelt out, although I understand the reason for this.
I hope the noble and learned Lord the Lord Chancellor will be able to give us an assurance that this is not, as it were, a pre-judgment on Beeching. It may be that some patchwork has to be done, but the Beeching Report was made available to the public, and to Parliament, only in September, and we have not yet debated it. The noble and learned Lord the Lord Chief Justice may well be right in saying that it is the correct decision, but there are a number of questions
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to be asked on it; and not least is the matter of the cost, and where the cost is going to fall. And there will be substantial problems about buildings, and matters of that sort.
These may all seem very trumpery, but, on the other hand, if millions of pounds are involved one wants to know where the money is to come from and who is going to provide it. That is only subsidiary to the major matter of principle of a complete reorganisation of the circuit system, which has been going on now, in one form or another, for something like 700 or 800 years. This will need discussion in Parliament, something that we have not yet had. I hope that the noble and learned Lord will be able to give us an assurance that this in no way commits the Government to piecemeal implementation of Beeching without a proper discussion of the whole Report and a collection of the views from both Houses of Parliament upon it.
I wonder whether he could also reassure me on one other matter on this topic. I see in Clause 36 of this Bill that there is to be a relaxation on the districts to which the number of county court judges may be assigned. It occurs to me that this may be a device whereby the county court judges may be used more regularly as commissioners in order to help out with assize work. If this is so, it could be an implementation of part of Beeching rather in advance of the general matter. I should like to know a little more about Clause 36.
Part II of the Bill deals with the urgent matters that the Payne Committee Report mentions in paragraph 35. The noble and learned Lord the Lord Chancellor will, I am sure, be replying upon the major issue of the enforcement office, since this has been raised by two or three noble Lords, and there is plainly disagreement in the House about its omission from the Bill. I myself should like to know more about this subject, because while I accept as an extremely valuable reform the abolition of imprisonment for debt, and the imposition of attachment of earnings as a substitute for it, I am exceedingly worried as to how this new scheme is really going to work.
It was, I think, the noble Lord, Lord Lloyd of Hampstead, and the noble Lord, Lord Donaldson of Kingsbridge, who said

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that the kernel of this whole system was to be the enforcement office. It was the enforcement offices that were to discover the position in which the debtor finds himself; what his protected earning rate is to be and what are his other indebtednesses. They would co-ordinate the various debts and see that they were all run together. There is a tremendous amount of administrative work, and a great deal of judgment needs to be applied in this matter. Instead of the enforcement offices, it is all to be done by the clerks to the justices and, as I understand it, the county court registrars.
My Lords, I should be the first to suggest that they are very experienced and extremely skilful people. But they are also incredibly busy. Magistrates' clerks are often part-time appointments, with solicitors' practices of their own to carry on. The registrars are already dealing with a prodigous amount of business in the course of their duties. Nor does Parliament hesitate, Session by Session to give the county courts more work to do. Indeed, we are giving them more work to do in this Bill, quite apart from Part II. So, they are to take the brunt of this new burden. I should like to know from the noble and learned Lord whether the various associations of magistrates' clerks, county court registrars, and the other bodies concerned, have told him that they are content to take on this work without the addition of the enforcement office, which was the basis of the Payne Committee's approach to this matter.
Apart from the obvious difficulties which have turned up in the case of the Maintenance Orders Act 1958, which are to some extent put right in this Bill—such difficulties as finding the new employer, and matters of that sort—we shall now get what I imagine to be a comparatively novel situation. There cannot be many people in this country—at least, I hope there are not—who have more than one affiliation order imposed on them. I doubt whether there are more than a very few people indeed who are paying maintenance to more than one ex-wife. There may be some, but it cannot be a very common situation. Possibly there are some who are doing both, but the number of multiple debtors in relation to whom there is an attachment of earnings order now must be
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extremely small. That is not going to be the case, as I understand it, under this new system. The whole object is to try to deal with the people who simply have not been able to organise their affairs as well as with the hard core of wilful defaulters; and these are the people who are likely to have multiple debts.
This has all to be dealt with by two sets of people—the officers of the court and the employers. What I have said about the officers of the court also applies to the employers. The Payne Committee Report, in paragraph 593(b)(ii) said:
"Whilst, therefore, we appreciate the burden which this process"—
the attachment of earnings—
"will in fact impose on employers, we think the majority of them accept the arguments in favour of attachment."
Perhaps they do. But they have never been asked in the form that the Bill now sets it out. The Confederation of British Industry did not even give evidence to the Payne Committee at all; nor, I think, did the chambers of commerce. Yet they are suddenly confronted with the provisions of this Bill. These provisions are formidable, and I should like to draw your Lordships' attention to them.
In the first place, non-compliance with these attachment orders will be a criminal matter. In Clause 18 there are criminal sanctions for failing to comply. It is true that there are defences. You start off with the fairly severe penalties, which can be imposed, presumably, on more than one occasion if they get it wrong on more than one occasion. Not all employers have full-time wages clerks and computers who can work out the complicated provisions of these orders. Although they are much the same as, or perhaps even simpler than, those under the 1958 Act, they are nevertheless complicated. Not every employer has somebody whole-time on this job, and in a small firm the burden may be very considerable. Certainly it is not going to be very easy.
The Payne Committee report that the form of guidance which is given with the maintenance orders attachment procedure at the moment is a very complicated one, and people do not understand it. I wonder how many of your Lordships could say offhand—even those who are

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legally qualified—what would be an attachment of earnings order which is made to secure the payment of judgment debts or payments under administration orders, or one that is not. According to that distinction, in Part II of Schedule 4 (this is where there is more than one attachment of earnings order) priorities will have to be made out.
Supposing that there are a number of orders, they may be for all sorts of things. They may be for taxes, debts, maintenance orders, affiliation orders, and, I have no doubt, for other things as well. Then they come in at different times, and in different categories. The employer is supposed to sort out, in connection with the protected earnings rate, and the amount that has been set aside for deduction each week, who is to pay, and in what order of priority? If he gets it wrong he is subject to a criminal prosecution. I should have thought that a Is. a go, which is what is allowed to him under Clause 10, is pretty small compensation for this. I do not think there was any suggestion by Payne that this should be the case and that this should be a burden on employers, because what they say in paragraph 609 is this:
"It would be intolerable for any employer to have to comply with more than one attachment order for a single employee and we have therefore considered how this could be overcome."
They then say that the enforcement office should consolidate them and send the employer a consolidated order.
What is to be done about this? Are the county court registrars going to spend all their time consolidating judgment debts and attachment of earnings orders? Are the clerks to the magistrates going to do it? And if not, are we really going to insist upon criminal sanctions upon the employers if they get it wrong? This is the sort of practical side of it where the absence of the enforcement office, I believe, is critical. I should very much like the noble and learned Lord the Lord Chancellor to explain a little more, first, what people who are affected by the Bill think about it, and, secondly, how he believes it is really going to work.
There is, of course, another point about this whole process. It may very well be that people in my position who are self-employed are not very common. But I
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do not think we arc becoming any less common as a result of such things as selective employment tax. The attachment of earnings procedure simply does not work with self-employed people, because nobody pays them any wages—at least I do not think so—under the definition of "earnings" in the Bill. So we are going to have a collection of people in this country no longer subject to imprisonment for debt and not capable of being dealt with, as I understand it at any rate, by attachment of earnings. What is to be done about them? The Payne Committee Report also went into garnishee proceedings and made recommendations about them, but none of that appears in the Bill. Therefore, the system does not seem to me to be altogether complete.
There is one small point about which I should like to know. It may well be that in some cases creditors ought not to have given the debtor credit. But I do not believe that this is altogether universally the case, and I am surprised to find that the poundage—I think it will be a poundage or some sort of fee—payable for the collection through the courts by means of an attachment of earnings order is not, as I understand it, to be payable by the debtor. That is something that the creditor will have to bear. So he is the one who, although he is due the money, will only get it back, I believe, subject to a deduction because this process is being carried out through the county courts and the magistrates' courts.
Those may be criticisms. I do not mean them to imply that I wish to attack the principle of Part II. I would not go so far as the noble Lord, Lord Donaldson, in saying that this is something which can be left out and imprisonment for debt simply abolished, and the whole thing left at that. I should have thought that it was worth trying this, but 1 must say that I would need a lot of assurances, and I should like to discuss this matter at a subsequent stage in some detail to see how in fact it is going to work.
There is a footnote, as it were, to this, because in Clause 38 of the Bill—although it is none of this House's business—there is a provision for the payment out of public monies for the extra expenses of this Bill. Where are the extra expenses of this Bill going to be? I would suggest that they are going to be

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in Part II; and if they are in Part II, what are they for? Perhaps this is the key to the practical side of the whole issue. Perhaps the noble and learned Lord (I do not think he explained this in his opening speech) has more men, more trained staff, whom he can appoint in order to deal with this practical side—and perhaps Clause 38 is to pay for them. If so, I should be very grateful if he could explain it to us.
Part III derives from some of the Winn Report and it is not a part of the Bill on which I wish to say anything at all, except that I welcome it; it seems to be sensible. I think it follows on, to some extent, the provisions of last year's Administration of Justice Bill, and it fills out powers in personal injury cases which seem to me to be admirable.
Under Part IV, where we go back to Payne on the actions by mortgagees for possession, there are three questions to which I should be grateful to have an answer. First of all, Clause 28(1) does not apply this new procedure to actions for foreclosure in which a claim for possession of the mortgaged property is also made. This is contrary to the recommendation in paragraph 1360 of the Payne Report, and I should be grateful for an explanation as to why their recommendation has been departed from. Secondly, there is no mention in this Part of this Bill of any limitation of these powers to houses which come within Rent Act control, which was again part of the Payne recommendations; and I should like to have that explained. Thirdly, I should like to know whether in fact these matters are, as I believe to be the case, to go to the registrar in the county court, as recommended by Payne in paragraph 1405.
I believe that, on the whole, Part IV contains acceptable provisions, since it goes back really to the position which I believe was operating between about 1936 and 1965, when the new Supreme Court Rules made it clear that the powers, particularly of the Chancery Masters, which they had enjoyed, so they thought, legally for some time, were not in fact really theirs. It is therefore to put the discretion back upon them, and indeed chiefly on the registrars of county courts, that this Part of the Bill is being enacted. I believe that it will go towards providing justice and a reasonable approach in taking the possession of houses from
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people who have defaulted under mortgages.
I therefore have a qualified welcome for the Bill. I believe that we shall need to have considerable discussions about it at some subsequent stage, and it may well be that when we come back after the Recess there will have been opportunity for discussions and consultations, so that we can think more fully about it. But for the moment I would certainly not wish in any way to hold up the Second Reading, and I look forward to a series of fascinating debates upon it later on in this Session.
6.8 p.m.
THE LORD CHANCELLOR: My Lords, I am very grateful to all noble Lords who have taken such an interest in this Bill. To the noble Lord, Lord Ilford, may I say first that the Royal Commission's Report is not intended to suggest an end of the assize system? The Report points out, in paragraph 69 and succeeding paragraphs, that it is a very good thing to have the Judges of the High Court going round the country. The main defect, as the Commission point out, is that they have to go to far too many places; but they would retain the system as a system. If I may say so to the noble Lord, I have been struck by the number of judges who have told me, "I started reading the Report one evening, out of a sense of duty; then I simply couldn't put it down, and I didn't get to bed until three o'clock". Once one has gone through the description, which most lawyers know anyhow, of the present set-up, I think the Report makes compulsive reading; and a great deal, as I happen to know, was written by the Chairman himself.
As to the Admiralty Court, I entirely agree with what the noble Lord said. It is of course essential that the Admiralty Judge or Judges should be available in London, so that early dates and fixed dates can be obtained; and the whole of the Admiralty Registry will be moving to the Queen's Bench Division with the Admiralty Court. I heard what the noble Lord said about Crown debts. That perhaps is something which we can deal with at another stage of the Bill. The noble Lord also asked a question about local authorities and mortgage possession actions. This again, no doubt, is something which is a matter of opinion. But,

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of course, a local authority is under a duty to provide housing; it is not under any duty to provide loans.
I was glad to hear the things said by the noble Lord, Lord Lloyd of Hampstead, about the Payne Committee, because that Committee has produced a massive Report and obviously has done an enormous amount of work upon it. But he, like my noble friend Lord Donaldson of Kingsbridge, was a little unhappy about starting without an enforcement office. May I reply to both noble Lords at the same time? There are 330 recommendations in the Report. This Bill contains 40 clauses, and it is as much as I shall get in this field in this Session. If one had concentrated entirely on implementing Payne, there would have been nothing else in the Bill at all. One has to see what are the really important things. With the greatest respect, it would be quite impossible to do as my noble friend Lord Donaldson suggests—to abolish imprisonment for debt but not have attachment of earnings orders. On this point I must agree with my noble friend Lord Leatherland. Nobody before the Committee that I know of—except perhaps one body—ever suggested that at all.
The Committee did not say that all the people against whom attachment orders were made were poor, unfortunate, muddled, feckless people; it said that those were the people who went to prison, and one has to face the fact that, particularly in some parts of the country, there are sure to be a number of judgment summonses in different courts. There are parts of the country where, broadly speaking, nobody ever seems to pay a hire purchase instalment unless and until a committal order is made. They have a judgment summons, but they do not attend to that. Very often there are several judgment summonses in relation to one debt, and then finally the committal order is made, which is suspended so long as so much is paid, and only when the bailiff comes to take them to prison do they produce the money. But in fact they had it all the time. It was not that they could not pay, but just that they did not believe in paying. So far as the terms of contract are concerned, their view is that by entering into a hire purchase contract you do not
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expect to pay the money on the dates stated; the only date on which you pay is the date on which the bailiff is coming to take you to prison. It would therefore be quite unthinkable, and nobody has suggested it, to abolish imprisonment for debt without having attachment of earnings orders.
I should very much like to have enforcement offices, but one has to be practical. Unfortunately the Payne Committee were a good deal divided on various points, and there was no general recommendation about the order in which things should be carried out. They had varied views about the enforcement office. Some thought it ought to be entirely distinct from the county court; some thought it was virtually the same thing. At page 401 some of them said:
"To bring all these changes into operation at once would, we believe, result in administrative chaos. They should, in our view, be introduced by stages over a period of years and as each change is made its effect should be studied closely to see how it operates. If serious practical difficulties arise at any stage these should be corrected before the next stage, is undertaken. Holding this view we think it is important to spell out, in more detail than our colleagues have done, the stages by which the Committee's recommendations, if approved, could best be implemented."

They do this, starting on the next page:
"Stage 1. (A) abolish imprisonment for civil debt. (B) authorise the county court to make attachment of earnings orders for civil debt. (C) authorise judgment creditors in other courts to enforce through the county court and (D) extend and enlarge the administration order procedure. Some of our other less important recommendations, such as the use of a questionnaire in larger cases, could be implemented at the same time by conferring the appropriate power on the county court. The improvements to the system of registration of judgments which the Committee recommends should also be implemented as soon as possible.
"Stage 2. Transfer the bulk of enforcement from the High Court to the county court.
"Stage 3. Gradually, over a period of months or years, transfer the magistrates' civil jurisdiction, including rates, to the county court. During stages 2 and 3 the Committee's other less important recommendations could be introduced at convenient times.
"Stage 4. Once the county court was operating as the main, or sole, enforcement agency for the bulk of civil debt, the enforcement side of each county court could be separated off as an enforcement office and the 'fair shares' principle could be introduced together with such of the Committee's other less important recommendations which have not already been introduced."

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Then they come to Stage 5. So they are envisaging the enforcement office as arriving at only quite a late stage in the proceedings, and they do not really agree among themselves as to what its exact nature should be. In a sense it exists already, because the registrar, the chief clerk and their staff are experienced in going into financial affairs with debtors to see what sort of instalment order ought to be made. Whether the enforcement office is to be a new office, in which case it means that everywhere throughout the the country new premises will have to be found, or whether in effect it will end up as part of the county court, we shall have to see.
My noble friend Lord Lloyd of Hampstead questioned the estimate of 100,000 cases compared with the number of judgment summonses. The answer is that there will be only one attachment of earnings order for one debt, whereas there can be several judgment summonses in respect of the same debt. Also, there has to be default in payment before an attachment of earnings order can be made. I have a lot of sympathy with the view that one of the recommendations it would be nice to implement would be that about harassment, but we have found both definition and enforcement extremely difficult. How-ever, if my noble friend likes to put down an Amendment on Committee stage I shall be happy to consider it.
The right reverend Prelate, the Bishop of Leicester, welcomed the family courts but though we ought to have started at the bottom layer instead of the top. In my view, there is a lot to be said for that; but to think out entirely anew what would be the best form of local family court, exactly what they should cover, to whom appeals should go, and so on, is a much more complex operation than altering the Divisions of the High Court. But I hope that the fact that we are now getting a Family Division of the High Court will stimulate thought into giving us a really local family court so that family matters no longer have to be taken in what used to be called the "police court".
I gather that the right reverend Prelate welcomed the abolition of imprisonment for debt. In regard to Clauses 5, 6 and 7 I think that perhaps he had not ob-
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served that no order for committal in those cases—that is, maintenance cases—can be made without the court considering whether an order of attachment would not be the appropriate course to take. It may be that some day we shall be able to abolish imprisonment for debt in maintenance cases. We shall be in a much better position to judge whether or not we can do that when this legislation has been in force for some time.
Again, it would have been nice to have had a welfare officer in every court, but that is really impracticable at the present time. There is a great shortage of welfare officers, and considerable finance would be involved. Also, as I said when moving the Second Reading, the judges and registrars and staff are well used to dealing with people and are very good at distinguishing those who are crooks from those who are muddlers, and at helping the latter. My noble friend Lord Donaldson asked whether we could not manage simply with execution against goods; but that, I am afraid, is impossible, because experience shows that 40 per cent. of all execution for distress provides absolutely nothing at all.
Then the noble Lord, Lord Morris of Borth-y-Gest, with his great knowledge and experience, said what he did, and I entirely agree with everything he said about the Commercial Court. I can assure him that there is nothing either in the Report or in the Bill which prevents the trial of cases anywhere. I am very grateful to the noble and learned Lord, the Lord Chief Justice, for explaining, so much more clearly and with so much more authority than I could, our present difficulties, and how essential it is that we should have Clause 4 of this Bill quite apart from the Beeching Report.
The noble Viscount, Lord Colville of Culross, first of all asked about the Commercial Court and the type of case in which provision would be made for sitting in private and with regard to evidence It would be for the Rule Committee to decide if and how far any limitation should be placed. They might think it right to say that it should apply only if both parties agreed and the Court also concurred. I should like to leave it to the commercial judges, in a sense, as an experiment. The noble Viscount asked whether they would allow hearsay

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evidence and how far they would disregard the strict rules of evidence. I would leave that to them. In my old age, I have with some reluctance come to the conclusion that we would be better without any law of evidence at all. I do not believe it is necessary. Most systems of law do not have it, and the complications are now so great. I am not too happy at having introduced, and succeeded in getting your Lordships to pass, the Civil Evidence Bill. It is very logical; you must allow for computerised evidence because in some cases it is the only form of evidence nowadays; but it was so complicated that whether it will work I do not know.
I am a great believer in trying things out in a small way and seeing what happens. I should like to see the commercial judge, if he thought fit, sitting round the table with the litigants, without a wig and gown, and paying no attention to the law of evidence if he liked. Most of our law of evidence came about because everything was tried by a jury. When I was first called to the Bar, in any accident case there was always the county court jury. It is only the other day, almost, that any English judge was ever allowed to decide a question of fact at all. Our complicated law of evidence was designed to prevent juries from being misled by subtle advocates. The educated person knows that hearsay evidence is not very reliable, but (it was said) those chaps in the jury box do not understand that. I believe that is all nonsense, and I should like to get rid of the whole thing.
The noble Viscount spoke of Clause 4 as a pre-judgment of Beeching. I am not quite sure what he meant by that. All I can say is that the Beeching Report, unlike most of its predecessors in this field, is a unanimous Report on every recommendation, with one small exception only. The Government have announced that they have accepted the Beeching Report and will implement it as soon as possible. I am in a position myself to say that it has been approved by the Council of Judges, in principle, without, I think, any dissentient voice. It has been welcomed by a joint Press conference of the Bar Council and the Law Society, who have also accepted it in principle. What the noble Viscount
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means by saying that he hopes this is not a pre-judgment I do not know.
I am not in the least against discussion. I should like discussion of the Beeching Report in both Houses. The Opposition in the other place have I think more supply days than the Government for general discussion, and I rather think that in this House, too, there are more Wednesdays at the disposal of the Opposition than the Government. Certainly I should welcome debates.
The noble Viscount also asked how the new scheme is going to work, and whether there may be more registrars and clerks. What is said about finance in the Explanatory Memorandum is this:
"Only the provisions of Part II of the Bill are expected to have any significant manpower or financial implications. The new system of enforcement would involve increases in expenditure on some services, but would also allow considerable savings on others. It is not possible to say how many additional attachment of earnings orders might be made in a year, but if it were around 100,000 it is estimated that only a small increase in manpower would be required, and that the net increase in cost to the Exchequer would be around £70,000 a year."
Until it gets started, I do not suppose we shall know how many orders there are likely to be. I think some noble Lords have rather underestimated the effect of the provision for administration orders and the encouragement of administration orders. This necessarily means that a man's whole position will be looked at, what his earnings are and what his outgoings are, and it will of course deal with all his creditors at the same time. That, I think, is very likely to be advantageous in itself.
There are one or two other points of detail which I have not covered, notably mortgage possession, on which, if I may, I will write to the noble Viscount. I must say that I really cannot accept what he says about employers. Everybody knows that if you are going to abolish imprisonment for debt and have attachment of earnings orders instead, of course that is going to put some administrative burden on employers. You cannot have it without that. But this Committee first of all, four years ago, sent out circulars giving their membership and their terms of reference and referring in particular to attachment of earnings. These circulars were sent to

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the National Chamber of Trade, the Federation (now the Confederation) of British Industry, the Institute of Directors, the Institute of Chartered Accountants and the National Union of Small Shopkeepers, as well as a lot of other people.
The National Chamber of Trade said that there was general acceptance of the right of a creditor to the attachment of his debtor's wages, especially if the employer were allowed to make a nominal deduction for his trouble. The Institute of Chartered Accountants suggested the introduction of attachment of earnings despite the fact that it might be inconvenient to employers. The National Union of Small Shopkeepers drew attention to the Scottish system and thought that a similar system might be introduced in England. Neither the Institute of Directors, nor the Confederation of British Industry made any reply at all, and these are the people who are now saying that they never had an opportunity of expressing their view.
VISCOUNT COLVILLE OF CULROSS: My Lords, with respect, that is not what I said. I did not suggest that anybody was complaining that their views had not been taken into consideration by the Payne Committee. What I was suggesting was that the Bill is now different from the recommendation of the Payne Committee in that, although the noble and learned Lord the Lord Chancellor read out a minority report of two on page 401, there was in the much earlier stage a great pushing forward in priority of the enforcement office. It is in that respect, I think, that the burden has shifted. It is not the same as the Payne Committee Report. The burden has been put on to the employers and in terms which the Payne Committee themselves recommended should not be done, about dual orders and things of that sort.
THE LORD CHANCELLOR: My Lords, I do not think this will make the slightest difference to employers. The burden on employers is seeing to the order and seeing that they deduct the right amount. This does not depend on the enforcement office at all; it is of the nature of attachment of earnings orders that that is what has to happen.
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The greatest care has been taken by the Committee and by me to see that the burden on employers is as small as it possibly can be. The Trades Union Congress, of course, formerly objected very much to the whole idea; but since 1958 employers have been used to operating it in the case of maintenance orders. It was said at that time that it was opposed by the T.U.C. on the ground that this would make relations between employers and employees worse. The T.U.C. have evidently found that that is not so. It would be surprising to hear that the employers have found that it is so. Surely it is better for employers to keep men at work rather than have them in prison. It is not all loss to them. In any case, of course, if the estimate of 100,000 attachment of earnings orders is anything like right, I would point out how many tens of millions of employees there are; and there are of course, enormous numbers of employers. So the number of orders with which any one firm is concerned is likely to be extremely limited. But we really have done everything we can to make the task of the employer who has to comply with one of these orders as simple as possible. Of course it is not right to suggest that if an employer makes a mistake he is going to be convicted of a criminal offence: there are plenty of defences, and nobody is going to be sent to prison merely because he makes a mistake.
Then the noble Viscount mentioned the difficulty which an employer might find if he were asked to operate two attachment orders with differing priority. A copy of any attachment of earnings order made by a magistrates' court would be sent to the debtor's local county court, and it is unlikely that the latter court would make another attachment order in respect of an ordinary debt, as it could operate only on any free earnings left after the magistrates' order had been satisfied.
My Lords, if there are any other points on which I have not replied to noble Lords, may I write to them; and may I again thank them for the interest which they have shown in this Bill?
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MATRIMONIAL PROCEEDINGS AND PROPERTY BILL [H.L.]
6.32 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(The Lord Chancellor.)
On Question, Motion agreed to.
Clause 1 [Maintenance pending suit in cases of divorce, etc.]:
THE LORD CHANCELLORmoved Amendment No. 1:
Page 2, line 14, leave out from second ("the") to ("and") in line 15 and insert ("presentation of the petition").
The noble and learned Lord said: My Lords, I beg to move the first Amendment standing in my name. Before doing so, may I say that nearly all these Amendments are purely drafting Amendments which have arisen on points made primarily at the Committee stage of the Bill by noble Lords, and particularly by the noble Viscount, Lord Colville of Culross, and also by the Law Society, the President of the Probate, Divorce and Admiralty Division and others.
This first Amendment makes it possible to back-date an order for maintenance pending suit to the presentation of the petition, instead of to the making of the application for the order. It is normal practice to make such an order run from presentation of the petition, and in most cases this is also the date of the application, because the rules require the application to be made in the petition. If, however, the court gives leave to do so, the application may be made at a later date. In such a case, it might well be desirable to make the order run from the date of presentation of the petition. For example, a wife petitioner might well rely on her husband's informal assurance that he would maintain her until decree nisi, and she might therefore not include a claim for maintenance pending suit in her petition. If the husband then paid nothing and she got leave at a later date to apply for maintenance pending suit, it would be reasonable for the court to make the order run from presentation of the petition. My Lords, I beg to move.
VISCOUNT COLVILLE OF CULROSS: My Lords, I think this is a good Amendment, and I hope it will be supported.
On Question, Amendment agreed to.
Clause 2 [Financial provision for party to a marriage in cases of divorce, etc.]:
THE LORD CHANCELLORmoved Amendment No. 2:
Page 2, line 40, leave out ("discharge any liabilities") and insert ("meet any liabilities or expenses").
The noble and learned Lord said: My Lords, if no noble Lord objects I suggest that I speak to Amendments Nos. 2, 3 and 4 together, because they all relate to the same point, and also, if I may, to Amendment No. 12. Amendment No. 2 is a drafting Amendment designed to meet a point raised by the Law Society. As drafted, Clause 2(2)(a) empowers the court to order the payment of a lump sum so as to enable the payee to "discharge any liability" incurred before making an application under Clause 2. But the payee may in practice have been able to raise the money to pay, for instance, a child's school fees (for example, by selling her jewellery) and thus already have herself discharged the liability. What she then needs is a lump sum to reimburse herself. The Amendment makes it clear that this can be ordered. The Amendments to Clause 3 and Clause 6 are analogous. I beg to move.
On Question, Amendment agreed to.
Clause 3 [Financial provision for child of the family in cases of divorce, etc.]:
THE LORD CHANCELLOR: My Lords, I beg to move Amendments Nos. 3 and 4.
Amendments moved—
Page 3, line 34, after ("liabilities") insert ("or expenses").
Page 3,line 36, leave out ("discharge") and insert ("met").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 4 [Orders for transfer and settlement of property and for variation of settlement in cases of divorce, etc.]:
THE LORD CHANCELLORmoved Amendment No. 5:
Page 4, line 26, after ("including") insert ("such").

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The noble and learned Lord said: My Lords, this drafting Amendment meets a further point raised by the Law Society. The words in parentheses in Clause 4(c) might, it is said, raise an inference that any settlement made by will or codicil is to be variable, whereas the intention is merely to ensure that a settlement which has the characteristics of an ante- or a post-nuptial settlement is not to be incapable of variation merely because it was made by will or codicil. In all probability, the courts would interpret paragraph (c), as drafted, in the way intended; but the Amendment removes any possibility of misconstruction. I beg to move.
On Question, Amendment agreed to
Clause 5 [Matters to which court is to have regard in deciding what orders to make under Sections 2, 3 and 4]:
THE LORD CHANCELLOR: My Lords, if no noble Lord objects I will take Amendments Nos. 6, 7, 8 and 9 together. These Amendments make it clear that in considering financial provision either for a spouse or for a child the court is to have regard not only to the current resources, needs, obligations, and so on, of the parties to the divorce proceedings, but also to those they are likely to have in the foreseeable future. On Second Reading, the noble Viscount, Lord Colville of Culross, at col. 485, raised this point in connection with provision for children and the need to take into account the likelihood of either parent marrying again and starting a second family. I promised to consider the point, and in Committee I indicated my intention of putting down an Amendment.
The Amendments that are before the House to-day go rather further than Lord Colville had suggested: he was concerned only with provision for a child, and then only with the consideration that either parent might remarry and have a second family. But the possibility of second family is not the only relevant future event. For example, the husband in the divorce proceedings may himself have ageing parents who are going to need increasing help; on the other hand, he may have prospects of inheriting, in the near future, a large estate. It would be reasonable to take such probabilities into account in deciding whether he would make a settlement on a child of the
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family, or transfer a capital asset to him. It is equally reasonable that such considerations should be taken into account when deciding whether the husband should be ordered to settle property on his wife, and for this reason the Amendments operate on Clause 5(1)(a) and (b), which apply to a spouse's application for financial provision and are brought in by Clause 5(2) when provision for a child is being considered. The Law Commission had always meant Clause 5(1)(a) and (b) to include foreseeable future resources, obligations, and so on, and an earlier draft of Clause 5 annexed to their Report in fact included words corresponding to those proposed to be inserted by the Amendments. It was, however, thought that these words were not necessary to achieve the desired result, and they were therefore dropped. Thus, the Amendments do not represent any change of policy. If no noble Lord objects I will put those four Amendments together.
Amendments moved—
Page 4, line 39, leave out first ("of") and insert ("which").
Page 4, line 39, at end insert ("has or is likely to have in the foreseeable future").
Page 4, line 40, leave out ("of") and insert ("which").
Page 4, line 41, at end insert ("has or is likely to have in the foreseeable future").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: My Lords, I am grateful to the noble and learned Lord for dealing with this matter, and for taking it rather further and explaining the reasons. I wish I had thought that it was so simple to draft as it has turned out to be. I must say that I shrank from the task myself, and I am glad to see that the form of the words chosen is comparatively easy. I think that it is correct to make these Amendments to the Bill, because although there is no doubt that the courts could have interpreted the words now in the Bill in the sense intended by the Law Commission, there is equally every possibility that litigation would have been needed, with a fairly high-level decision given by the Court of Appeal before the matter could be established. I am always in favour of trying to make it clear in the Bill itself, without the necessity for some unfortunate person to be a guinea pig in the courts to get the question settled that way. This was

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certainly the intention expressed by the Law Commission, and it was that thought that put me on to this track in the first place. Therefore I welcome these Amendments. I think they are thoroughly acceptable and just what ought to go into the Bill.
On Question, Amendments agreed to.
6.42 p.m.
THE LORD CHANCELLORmoved Amendment No. 10:
Page 5, line 11, leave out from ("powers") to end of line 16 and insert ("as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other").
The noble and learned Lord said: My Lords, the effect of this Amendment is to require the court, in ordering financial provision for a spouse, prima facie to try as far as is practicable to put each spouse in the financial position he or she would have been if the marriage had not broken down and each had discharged his responsibilities towards the other. Clause 5(1) sets out the criteria to be observed by the court, in accordance with paragraphs 81 to 83 of the Commission's Report. As appears from the note on draft Clause 5 in the Appendix to the Report, the intention is to give statutory form to criteria laid down by the courts in the past. But it has been pointed out that, as drafted, Clause 5(1), if rigidly applied, might constrain the courts to make orders which, in particular circumstances, could have undesirable results.
In its present form, Clause 5(1) requires the court, first, to consider the relevant factors set out in paragraphs (a) to (f) and then
"so far as it is practicable and, having regard to the conduct of the parties, just to do so",
to put the party in whose favour the order is to be made in the position he or she would or should have been had the marriage not broken down. This formula could lead to the conclusion that, where no question of penalising misconduct arises, and where there is enough money to do so, the court must put the payee in his "pre-breakdown" position, regardless of the effect on the payer. This could
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produce a most unfortunate result. If one takes a case where there is a decree granted to a wife petitioner on the grounds of five years' separation and no question arises of misconduct by either husband or wife, the wife may be receiving an appreciable income of her own—for example from practice as a doctor or from the profits of a business—which is much greater than that of her husband. From the way the parties behaved before the breakdown, it may be clear that, but for the breakdown, the wife would have continued to be the financial mainstay of the family. It would hardly be right for the husband to claim that, on divorce, he was entitled to be put back in his financial status quo, even if this meant the wife's paying him more than half her income.
It is notoriously true that two separate homes are much more expensive to run than one. It will. therefore, in almost every case be impracticable so to reallocate the resources of the parties as to put one spouse in his or her pre-breakdown financial position without drastically reducing the standard of living of the other. In some cases, for example where that other's conduct is the more blameworthy, this may be a fair result. But where there is no question of one being more to blame than the other, it will not be fair. The principle underlying the Amendment is that the court should aim at getting as near as possible to putting both parties in their pre-breakdown financial position, so that, where some reduction in the standard of living is inevitable (as it usually will be), that reduction is shared and not borne entirely by one party—save where his own bad conduct makes it just that he should be the one to suffer the greater financial loss. My Lords, I beg to move.
VISCOUNT COLVILLE OF CULROSS: My Lords, this is a point of peculiar subtlety, but it seems to me that the argument that the noble and learned Lord has deployed is a very sound one, and one wishes to avoid the type of decision that could have resulted from the rigid interpretation of the words in the Bill. I certainly support this Amendment. Incidentally, I think the next one is on very much the same point.
BARONESS BIRK: My Lords, there is a point that rather worries me about this matter. I support the Amendment, but

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I wonder whether it is intended to give a guide-line so far as the period of maintenance itself is concerned, which I think is one of the points some of us were worried about in this particular Bill. Although there is no suggestion in Clause 7 that the maximum term for maintenance should always be used, we all know that it is inclined to be the practice that judges and registrars do use the maximum amount of time for maintenance. Under this Bill that would be until remarriage, or for the life of the joint parties.
I agree with the noble Viscount, Lord Colville, that this is a very subtle Amendment, which I can see takes the emphasis from just the one party and puts it on the future and prospects of both parties. I wonder whether the noble and learned Lord could say if in some way this could also be interpreted as a guide-line, certainly to registrars and judges, so far as the maximum period is concerned. Because where a woman has young children or is elderly, then it is obviously important that the maintenance should be for a sufficiently long period to cover her need. There are many young women who are quite capable of training and working for themselves, and who, even when the children are grown up, would then like to undertake work. That seems to me to be the only answer in the long run to the tremendously difficult problem, which is quite insoluble, of how a man keeps two wives, so to speak. There should be encouragement for the woman who can be independent to be independent financially.
I think that if Clause 7 is going to be interpreted in the way the present laws are inclined to be interpreted, then that will offset what I feel is an improvement the Amendment will effect in this particular clause. I should be grateful if the noble and learned Lord could indicate whether this is in the nature of a guideline. At one point I intended to put down an Amendment to the clause, but it seemed impossible to work one out which would be acceptable and which it could not be argued was already implicit in the Bill itself.
THE LORD CHANCELLOR: My Lords, I do not think the Amendment will have any effect on the interpretation of the clause as a whole, so far as time is concerned. Its only real effect will be
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to ensure that both parties are treated equally. I think is its real effect.
On question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment which brings the wording of Clause 5(2) into line with the wording of Clause 5(1). It makes no difference to the substantive effect of Clause 5(2). My Lords, I beg to move.
Amendment moved—
Page 5, line 34, leave out from ("the") to end of line 38 and insert ("financial position in which the child would have been if the marriage had not broken down and each of those parties had properly discharged his or her financial obligations and responsibilities towards him").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 6 [Neglect by party to marriage to maintain other party or child of the family]:
6.50 p.m.
THE LORD CHANCELLOR: My Lords, I spoke to this Amendment, Amendment No. 12, in moving Amendment No. 2. It raises the same point as Amendments Nos. 2, 3 and 4. I beg to move.
Amendment moved—
Page 7, line 41, leave out from ("enabling") to end of line 45 and insert ("any liabilities or expenses reasonably incurred in maintaining the applicant or any child of the family to whom the application relates before the making of the application to be met").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 11 [Power of court to order sums paid under certain orders to be repaid in certain cases]:
THE LORD CHANCELLORmoved Amendments Nos. 13 and 14:
Page 12, line 7, after ("to") insert ("or liable to make")
Page 12, line 8, leave out ("that person under the order") and insert ("the person entitled to payments under the order in respect of a period after those circumstances changed")
The noble and learned Lord said: My Lords, if I may, I will take Amendments Nos. 13 and 14 together. These linked Amendments enable the court to exercise its powers under Clause 11(1) if there

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has been a change in the circumstances of either payee or payer. As drafted, Clause 11(1) makes a change in the circumstances of the payee relevant, but not a change in those of the payer. This distinction was intentional, and was made on the grounds that, whereas the applicant/payer might well be unaware of a change in the payee's circumstances, he must have been aware of a change in his own and, on becoming so aware, ought to have applied at once for a variation of the order.
Although this argument is sound, there are in practice cases where to ignore a change in the payer's circumstances would cause injustice. It is not uncommon, for example, for a wife to acquiesce in her husband's paying, over a period, less than the amount ordered because she is aware that he has been ill, or his income has dropped, or he has incurred unavoidable expenses. Often, no attempt is made to vary the order in such a case, unless and until the wife has resiled from her earlier position and enforced the arrears. If, then, the husband seeks to vary the order, it may be reasonable for the court to order repayment of the excess. Another possibility is that, by reason of illness or other misfortune, the husband may be unable to make a prompt application for a variation and may go on paying at the full rate during a period when, because of his misfortune, he had good grounds for getting the order reduced. My Lords, that applies to both Amendments. I beg to move Amendments Nos. 13 and 14.
VISCOUNT COLVILLE OF CULROSS: My Lords, I should just like to say that I am glad that this change has been made, because the general principle of the Bill is to give maximum flexibility to the courts, and this was an example of rigidity. The courts are perfectly capable of exercising proper discretion in this case, and it does not seem to me that there is any sense in laying down a prohibition which prevents them from taking such circumstances as these into account. If they could not do that before, then these Amendments, I am sure, are justified and necessary.
On Question, Amendments agreed to.
Clause 26 [Interpretation]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved Amendments Nos. 15 and 16:
Page 22, line 19, after ("child") insert ("not being a child who has been boarded-out with those parties by a local authority or voluntary organisation").
Page 22, line 20, leave out from ("family") to end of line 23.
The noble and learned Lord said: My Lords, if, for similar reasons, I may take Amendments Nos. 15 and 16 together, these linked Amendments improve the drafting of paragraph (b) of the definition of "child of the family" in Clause 26(1). The intention is that a child boarded-out by a local authority or voluntary organisation should never be treated as a child of the family (because it is the authority's or organisation's statutory duty to make arrangements for such a child), but that a privately-fostered child should be capable of being a "child of the family" if he satisfies the test of being treated by both spouses as a member of their family. But not all privately-fostered children will fall within the definition, and it is not intended that they should. Each case will depend on its own facts.
It has been suggested that, as drafted, paragraph (b) could be construed as implying that a child boarded-out privately must necessarily be a child of the family. The Amendments are designed to exclude the possibility of such an implication arising. As proposed to be amended, paragraph (b) will read:
"any other child, not being a child who has been boarded-out with those parties by a local authority or a voluntary organisation, who has been treated by both those parties as a child of their family".
My Lords, I beg to move Amendments Nos. 15 and 16.
On Question, Amendments agreed to.
Clause 35 [Citation, construction, commencement and extent]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved Amendments Nos. 17 and 18:
Page 25, line 35, at beginning insert—
("The following provisions of this Act, that is to say, this section, sections 28 to 31, 33 and 34(2), so far as it repeals section 20(3) and (4) of the Matrimonial Causes Act 1965, shall

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come into force on 1st August, 1970 and the other provisions of")
Page 25, line 35, at end insert—
("( ) Any reference in any provision of this Act, or in any enactment amended by a provision of this Act, to the comencement of this Act shall be construed as a reference to the date on which that provision comes into force.")
The noble and learned Lord said: My Lords, if I may take Amendments Nos. 17 and 18 together the effect of these Amendments is to bring Part II (except Clause 32) and the repeals consequential on Clause 31 into force on August 1, 1970, instead of January 1, 1971 (which remains the commencement date for the rest of the Bill), and to make the necessary consequential provision for the construction of references to the commencement of the Bill.
Your Lordships will remember that on Second Reading the noble and learned Lord, Lord Denning, argued that the Bill should go through quickly; and he put down in Committee an Amendment, moved by my noble friend Lord Silkin, which would have brought it into force on Royal Assent. For the reasons which I gave in my reply, this would be impracticable. The essence of the matter, as I observed, is that Part I involves a fundamental recasting of the Matrimonial Causes Rules. So, to a lesser extent, does the Divorce Reform Act, which comes into force on January 1, 1971. While it would be theoretically possible to rewrite the Rules twice between Royal Assent and January 1, 1971, this would be neither practicable for the Rule Committee nor convenient to anyone.
It is likely that the Bill will receive Royal Assent between Easter and Whit-sun 1970. Although a provisional draft of the Rules could be prepared in advance of Royal Assent, it would not be finalised until thereafter and would then have to be considered by the Rules Committee. The earliest possible date for the new Rules to come into force would in practice be October 1, 1970, and, since the amendments consequential on the Divorce Reform Act will in any event have to come into force on January 1, 1971, there is nothing to be gained, and everything to be lost, by having two bites at the cherry in so short a time. All that applies to Part I.
Most of Part II, however, involves no rule-making or administrative arrangements. Clause 32 clearly depends on Part I and must come into force with it, but the remaining provisions in Part II could, with advantage, come into force sooner. The choice for these provisions is, therefore, between (a) a fixed date; (b) a date fixed by reference to Royal Assent (for example, one month thereafter); or (c) an "appointed day" commencement. The advantage of (a)—that is, a fixed date—is that it enables everyone to know at once what is the commencement date and makes it possible to fix an easily remembered date. The advantage of (b)—that is, by reference to Royal Assent—is that the date may be slightly earlier than under (a), though it will be less easy to ascertain or remember. The advantage of (c)—that is, an appointed day—is that it enables the first available convenient date to be chosen if the Bill makes unexpectedly rapid progress. But, against this, (c) involves a commencement order the effect of which may well not come to the notice of those concerned—an eventuality which, in another context, recently led to a commencement date not being brought to the attention of the High Court and a consequent reversal of the judgment of the High Court by the Court of Appeal.
The Amendments opt for (a). If, as is likely, the Bill receives Royal Assent about Whitsun, August 1 as a commencement date gives all concerned time to appreciate its effect. It is also easily remembered. My Lords, I beg to move Amendments Nos. 17 and 18.
VISCOUNT COLVILLE OF CULROSS: My Lords, the noble and learned Lord, Lord Denning, and the noble Lord, Lord Silkin, were very concerned on this point, and I believe that there was some other discussion in which the noble Baroness, Lady Summerskill, was interested. It would seem to me that the two Amendments represent a happy compromise between what is practicable in terms of making rules and what is desirable in terms of getting the law amended as quickly as possible. Perhaps I may be allowed to speak on behalf of those who are interested but who are not now in their places in thanking the noble and learned Lord for the Amendments.
On Question, Amendments agreed to.
Schedule 1 [Transitional provisions and savings]:
7.1 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved Amendment No. 19:
Page 29, line 37, leave out from beginning to end of line 42.
The noble and learned Lord said: My Lords, this Amendment is to omit paragraph 10 of Schedule 1. Paragraph 10 is a transitional provision, which provides for pending "Wilful neglect" applications to be dealt with under the old law. This is, however, not altogether consistent with the general principle of the Bill that the new, and extended, powers of the court should be exercisable from the moment the Bill comes into force. The effect of the opposite principle, that all pending proceedings should be governed by the old law, would be unsatisfactory. An order for financial provision is not something tied to a particular act occurring at a particular point in time; it is a remedy to meet a current need, and this is as true of "Wilful neglect" as it is true of divorce.
The omission of paragraph 10 means that pending "Wilful neglect" applications will fall within paragraph 1 of Schedule 1 and will therefore be dealt with under Clause 6. If paragraph 10 were left in the Bill, the only consequence would be that additional applications to vary orders might be necessary. Clause 9 is applied by paragraph 3 to orders made under Section 22 of the 1965 Act, since, under paragraph 10, the court's order would have to be one it could have made under Section 22, an applicant who though she could do better under Clause 6 would have only to apply subsequently for a variation of the Section 22 order and on that application she could, because of paragraph 3, exercise its Clause 9 powers and do what it could have done if Clause 6 had applied in the first instance. This would cause unnecessary complications and expense. The simple answer is to make Clause 6 apply to proceedings pending under Section 22. This is what the Amendment does. That would seem to me to be right. I beg to move.
VISCOUNT COLVILLE OF CULROSS: My Lords, I agree with that, too, but I wonder whether I may bowl the noble and learned Lord a rather fast ball, which
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I do not expect him to bat back to me to-day. It relates to a point on these transitional provisions which I have been unable to resolve, because they are very complicated. Somebody asked me about this point, which seems to me to be one of some importance—though the answer may be a simple one. Suppose that a divorce had been granted some time ago, and that there was a maintenance order, and that the person who was in receipt of this remarried. Then suppose that this Bill comes into force and that the person who remarried again gets a divorce. Under the old law, assuming that it is a wife, she could have gone back to the original husband on a variation and got the maintenance order restored. Under this Bill, she cannot do that because the maintenance order, if made under this Bill, would have died when she remarried.
What is going to happen in such a case? Is the old order going to continue in force, so that, notwithstanding what is in this Bill, she can on the second divorce go back and seek a variation, an increase, of the order against her original husband? Or is the practice or law going to be that, because she has remarried, she will not get anything on the second application? I can envisage either that the Bill says somewhere in these transitional provisions (although I do not think it does) that she is not going to be allowed to go back, or, possibly, that the practice of the courts will be to say that the general law has now changed and does not allow for maintenance to be claimable on this second occasion and therefore the court will not accede to this order. I think the point is of some importance, and if there is an answer I shall be grateful to have it.
THE LORD CHANCELLOR: My Lords, fortunately these transitional provisions will be only temporary; but I find them complicated. I am going to take advantage of the noble Viscount's offer and I will return the ball between this stage of the Bill and the next.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved Amendment No. 20:
Page 29, line 46, leave out from ("divorce") to ("the") in line 47 and insert ("or nullity of marriage in which a decree nisi has been granted but not made absolute before").
The noble and learned Lord said: My Lords, the effect of this Amendment is to

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apply Clause 17, and not Section 33 of the Act of 1965, to pending divorce and nullity proceedings in which decree nisi has not been pronounced when the Bill comes into force. Apart from the procedural advantages of applying Clause 17—namely, the need for an order of the court giving a right of appeal against it—the only differences of substance are that, first, if Clause 17 applies, there is no room for doubt about the effect of failure to comply, and, secondly, the class of children affected is slightly wider.
So far as the first difference is concerned, the merits of making the position clear are explained in the notes on Clause 17: the fewer cases where there may be some doubt about the validity of the decree, the better. So far as the second difference is concerned, if the right policy is that arrangements made for any "child of the family" should be considered before a decree is made absolute, there is no good reason why the policy should not, merely because the petition was presented before the Bill comes into force, be applied to, for example, a foster-child falling within that description. Where, however, decree nisi has already been pronounced, and the court has already considered the arrangements made for the children relevant at the time of decree nisi, it would cause confusion if decree absolute had to be held up because the existence of some other child, the arrangements for whom were at the time irrelevant and whom the trial judge had never had to consider, had not been brought to the attention of the court. The Amendment omits any reference to judicial separation: the reason being that in judicial separation there is no decree nisi. Either the effective decree has been granted when the Bill comes into force, in which case Section 33 has already been applied, or it has not, in which case paragraph 1 of Schedule 1 applies Clause 17. I beg to move.
On Question, Amendment agreed to.
Schedule 2 [Minor and consequential amendments]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved Amendment No. 21:
Page 31, line 21, at end insert—
(" . In section 8(3) of the Divorce Reform Act 1969 (grant of decree of judicial separation) for the words "section 33 of the Matrimonial Causes Act 1965" there shall be substituted the words "section 17 of the Matrimonial Proceedings and Property Act 1969".")
The noble and learned Lord said: My Lords, this Amendment makes a consequential amendment to the Divorce Reform Act. Its effect is to ensure that in judicial separation proceedings to which Clause 17 applies the Divorce Reform Act cannot be construed as requiring a decree to be granted without Clause 17 having been complied with. Since, as a result of the Bill, the Divorce Reform Act will never apply to any such proceedings which are still governed by Section 33 of the 1965 Act, it is correct to substitute in Section 8(3), for the reference to Section 33, a reference to Clause 17. I beg to move.
On Question, Amendment agreed to.

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