Sitting of 5 April 1971

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

    Open Quarries (Safety)
    Mr. Madelasked the Secretary of State for Trade and Industry whether he is satisfied with the existing safety legislation that applies to open quarries; and if he will make a statement.
    The Minister for Industry (Sir John Eden): This legislation is now being reviewed by the Committee on Safety and Health at Work chaired by Lord Robens. Any major revision must await their recommendations.
    Mr. Madel: Is my hon. Friend aware that great concern is felt by parents
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    for their children's safety when they live near open quarries? As there is to be a major extension of a quarry in my constituency in the near future, will my hon. Friend consider setting up a joint Environment and Trade and Industry study group to consider further all the implications of open quarries?
    Sir J. Eden: I shall certainly look at the point raised by my hon. Friend. However, he will know that if a quarry which is accessible to the public is not properly fenced it is deemed to be a statutory nuisance for the purposes of the Public Health Act, 1936, and that proceedings can be taken under that Act.

    European Free Trade Association
    Mr. Moateasked the Secretary of State for Trade and industry when he next expects to attend a meeting of the European Free Trade Association.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): The next meeting of the E.F.T.A. Ministerial Council will be held in Reykjavik on 13th and 14th May. My right hon. Friends the Chancellor of the Duchy of Lancaster and the Minister for Trade will attend.
    Mr. Moate: I am grateful to my right hon. Friend for that reply. Does he recognise that, with the probable failure of the Common Market negotiations, E.F.T.A. will have a vital rôle to play in the creation of much wider genuine

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    industrial free trade in Europe? Will he therefore publish the result of the inquiries which he has doubtless made into the expansion of E.F.T.A., or must these studies remain confidential?
    Mr. Davies: While not entirely assenting to the early part of that comment, I can assure my hon. Friend that we keep the potential growth of E.F.T.A. under continual review. However, I do not think that at the moment it would be expedient to publish any further information.

    Australian Sugar
    Mr. Moateasked the Secretary of State for Trade and Industry what is the value of Australian sugar exports to the United Kingdom.
    The Minister for Trade (Mr. Michael Noble): £14 million in the year ended June, 1970.
    Mr. Moate: I thank my right hon. Friend for that answer. Does he agree that it is vitally important to the stability of world sugar prices that Australian sugar should be maintained within the renewal arrangements of the Commonwealth Sugar Agreements and that it would be going back on the many commitments which this Government have given if they were not to offer full Commonwealth safeguards for Commonwealth trade in the context of the Common Market negotiations?
    Mr. Noble: It is because of the importance of this trade to Queensland, Australia, that very special arrangements are being sought by my right hon. Friend in the negotiations.

    Charter Aircraft (Night Flights)
    Mr. Allasonasked the Secretary of State for Trade and Industry what steps he is taking to restrict night flying by charter aircraft.
    Mr. Noble: Restrictions are imposed on the total number of night jet movements during the summer months at Heathrow and Gatwick. None is used for charter flights at Heathrow. We have no power to impose similar restrictions at non-B.A.A. airports but two other airport owners do so.
    Mr. Allason: Is my right hon. Friend content to see a steady expansion of
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    night flying? Is he content that more and more people should be driven demented by sleeplessness? Will he please carry out an investigation with the travel industry to determine exactly the effect of a total ban on night flights by charter aircraft?
    Mr. Noble: I assure my hon. Friend that I am by no means content with the level of noise which surrounds the particular airport in which he is interested, as well as others. We are continually discussing with the industry ways and means of reducing this nuisance without doing serious damage to the tourist industry, which is also important to the country.
    Mr. Skeet: Will my right hon. Friend also bear in mind that there is night flying at Thurleigh which goes on until about 11 o'clock at night? Could that be reined back to a respectable hour?
    Mr. Noble: The nuisance at Thurleigh, though no doubt of some importance in the area, is considerably less than that surrounding most of the municipal airports.

    Luton Airport (Engine Run-up Testing Area)
    Mr. Allasonasked the Secretary of State for Trade and Industry what factors he considered before granting approval for an engine run-up testing area at Luton Airport.
    Mr. Noble: The Department's rôle was limited to sponsoring loan sanction for the project. This was based upon a technical appraisal of the proposals and consideration of the necessity of the ground run-up area for the running of the airport.
    Mr. Allason: Is my right hon. Friend aware that this area requires the provision of a taxiway which almost exactly coincides with the taxiway which is required to double the capacity of Luton Airport? What consultations has the Minister had on noise, as this site happens to be the worst from that point of view to the neighbourhood?
    Mr. Noble: On the first part of my hon. Friend's supplementary question, I am aware of this point because he has rightly brought it to my notice; but this has and will have no result on any final planning permission which might be given.

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    The information which I have is that it is likely to cause rather less noise to the most densely populated part of Luton which is affected.
    Mr. Simeons: As one of those who live at the end of the runway, may I assure my right hon. Friend that I agree with what he says? May I nevertheless ask him to bear in mind the fact that the noise of revving-up of aircraft at 11 o'clock at night is far worse than the noise of aircraft taking off? It is that which needs restricting as well as the sound of aircraft taking off.
    Mr. Noble: If my hon. Friend has not already done so, I hope that he will bring that point to the attention of the Luton authorities. I agree that what he says may well be so, and those authorities are the people who can stop it.
    Mr. Leslie Huckfield: Does not the right hon. Gentleman agree that, far from the level of noise being reduced, because of the increasing delays occasioned by the air traffic control system the noise will increase?
    Mr. Noble: I am not certain that I fully understand the point of the hon Member's question. Is he referring simply to Luton, or to airports as a whole?

    Prices
    Mr. Molloyasked the Secretary of State for Trade and Industry if he will make a further statement regarding rising prices with regard to both retail and wholesale sectors, which concern his Department.
    Mr. John Davies: I can only reiterate that the greatest single cause of price increases in recent times has been excessive wage settlements unmatched by increases in productivity. Only when wage increases are very considerably moderated can we expect to see more stable prices.
    Mr. Molloy: Is the right hon. Gentleman aware that the country completely rejects that answer? Is he further aware that for the ordinary family this constant rise in prices is a grievous issue, especially for the aged and infirm? Does he agree that if he were to introduce a firm policy of price control it might act as a catalyst and help to solve our economic problems?
    Mr. Davies: I am not of the opinion that the country rejects the point of view that I have expressed; on the contrary, considering the whole pattern of movement of rising prices and wages it is noticeable that the level of price increases has been consistently half that of wage increases. It would be folly to imagine that that does not have a repercussive effect. I realise the extremely troublesome and worrying effect of rising prices, especially on those who can ill-afford them and cannot defend themselves, but I commend that thought very much to those who exploit their power in order to obtain wage increases which feed their way into prices. I wholly reject the thought of price control as an effective means of trying to control this problem.
    Mr. Evelyn King: May I ask a question that is constructive and nonparty? Has it been put to my right hon. Friend that out-of-town shopping precincts can save as much as 2½ per cent. on prices, and that these precincts are being delayed because of the great difficulty of obtaining planning consent for them? Will my right hon. Friend turn his mind to that issue?
    Mr. Davies: I shall bring the point to the attention of my right hon. Friend the Secretary of State for the Environment. It is worth re-emphasising that shopping around is a great advantage, although I realise how difficult it is for certain aged people.
    Mr. Wellbeloved: Is the right hon. Gentleman aware that the housewife is becoming sick and tired of this Government's hiding behind so-called inflationary wage increases? Is not he aware that his Government's decision to impose a meat tax for the first time on the housewife's family joint is an inflationary measure which can be laid entirely at the doorstep of this miserable Government?
    Mr. Davies: I take note of the hon. Member's comment, without any approval of it.

    Liquidated Vehicle Insurance Companies (Premium Payments)
    Mr. Frank Allaunasked the Secretary of State for Trade and Industry if

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    he is aware that some car insurance companies which have ceased to trade have continued to receive payments under standing bankers' orders, where, through inadvertence, these have not been stopped; and what action he will take by legislation or otherwise to prevent this.
    Sir J. Eden: If a policyholder inadvertently pays premiums to an insurance company after it has gone into liquidation, he should apply for reimbursement to the liquidator.
    Mr. Allaun: Is the hon. Gentleman aware that the receiver for the Alpha company has gone on accepting such payments for six months? As the Minister has some responsibility in this case, is he not morally and legally bound to see that these repayments are made?
    Sir J. Eden: The proper course is to make application to the liquidator.
    Mr. Allaun: That is no answer.
    Sir J. Eden: Then I shall look into the matter to see whether I can help.

    National Coal Board (Chairmanship)
    Mr. Skinnerasked the Secretary of State for Trade and Industry whether he has found a Chairman of the National Coal Board to replace Lord Robens on 1st July, 1971, at a new salary of £20,000 per annum.
    Mr. John Davies: I shall make an announcement as soon as possible.
    Mr. Skinner: Is the Minister aware that the new Chairman of the National Coal Board—whoever he is—will receive a salary increase of £2,500 on 1st July, accompanied by a similar sum as a result of recent tax changes that have been announced? Beset by all these personal problems, will he also have to contend with the job of producing a policy of subsidising the private sector, like the Steel Corporation but unlike the oil companies, which seemingly can put up their prices whenever they choose?
    Mr. Davies: If the hon. Member wishes to put down a Question on the price of coal I shall be willing to answer it, but that is not the subject of the Question. I draw the hon. Member's attention to the fact that Lord Robens,
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    the present Chairman, agreed to forgo his increase in salary until 1st July.
    Sir G. Nabarro: While my right hon. Friend's thoughts are maturing on this critically important appointment, will he bear in mind that the person appointed should be a man of long industrial experience and knowledge, and of the highest calibre, and that my right hon. Friend would be well advised to refrain from appointing an old Etonian or an ex-merchant banker?
    Mr. Davies: I shall bear carefully in mind the advice given to me by my hon. Friend.
    Mr. Bidwell: Will it not lead to discontent on the part of the potential Chairman of the National Coal Board to realise that the improvement under the Budget will be only just over £2,000 a year, compared with Sir David Barran, of Shell, who will receive an 80 per cent. increase in his total take-home pay, adding up to about an extra £10,000 a year? Will not that lead to discontent among the chairmen of the nationalised boards?
    Mr. Davies: I am sure that the new Chairman of the National Coal Board, when his name is announced, will prove to be acceptable to the House. I feel equally certain that he will regard his duty in this rôle as being paramount in the national interest.

    Caledonian/British United Airways (Routes)
    Mr. Leslie Huckfieldasked the Secretary of State for Trade and Industry whether he will make a further statement on the transfer of routes from the British Overseas Airways Corporation and British European Airways to Caledonian/British United Airways.
    Mr. Sheldonasked the Secretary of State for Trade and Industry if he will now make a further statement on the routes to be taken from British European Airways and given to the second force airline Caledonian/British United Airways.
    Mr. Noble: I announced on 29th March that Caledonian/B.U.A. will take over B.O.A.C.'s services to Tripoli, probably this summer, and will start to serve Paris—le Bourget—towards the end of this year or early next year.
    Mr. Huckfield: I am grateful to the right hon. Gentleman for that answer, but will he tell the House what revenue he expects from these transfers, and what profits he expects from them? Will he not accept that since the financial situation of the two corporations is obviously deteriorating, to transfer routes at this point would obviously be putting both corporations' finances into considerable jeopardy?
    Mr. Noble: As I said in the debate on 29th March, the route revenue is within the limit set out in my original statement on 3rd August. Profits must obviously depend on how the second force operates. As the hon. Member has said, the profits of B.O.A.C. and B.E.A. have dropped considerably in the last year. It is therefore impossible to forecast future profits.
    Mr. Sheldon: Why does not the Minister answer the question rightly put to him by my hon. Friend? Why does not he state what estimate he has made—he must have made one—of the revenue to be obtained in this way, and his estimate of the capital value, so that the House can know the amount of money being filched from the public companies and handed to private operators?
    Mr. Noble: The answer that I gave indicates clearly the level of the amount involved. In my statement on 3rd August I said that the revenue transferred would be 2½-3 per cent. of B.O.A.C.'s total route revenue. It is within that figure.
    Mr. Benn: Did those calculations go to the Central Policy Review Unit?
    Mr. Noble: No, Sir.
    Mr. Benn: Why not?

    Air Traffic Central (Linesman/Mediator System)
    Mr. Leslie Huckfieldasked the Secretary of State for Trade and Industry whether he will make a further statement about the effect of Linesman/Mediator on the reduction of air traffic congestion.
    Mr. Noble: Operational experience to date has confirmed that the traffic handling capacity of the Mediator system as introduced on 1st February is superior to that of the previous systems which
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    it has replaced. There is no doubt that the new system will help to minimise traffic congestion and that later stages will bring further benefit.
    Mr. Huckfield: That exceeds the normal evasive answer which I am given by the Minister. Is he not aware that, far from reducing air traffic congestion delays, there has been an increasing of delays which have been occasioned by far more than operating with only one runway? Is he also aware that the system hitherto has been saved only by the fact that the French air traffic controllers have been imposing delays? Has he, as yet, had a report of the meeting on Thursday, 25th March, between the air traffic controllers and the Guild of Air Pilots and Air Navigators? Will he not now accept that, because this system is still not working perfectly, many Easter holidaymakers will have to face delays precisely because of this system, which will, of course, increase the noise which he was trying to throw away recently?
    Mr. Noble: I have not yet had the report from the Guild of Air Pilots, but although, as I have said in earlier replies, in the first days of this there were troubles, the indications today are that they are overcome and that improvement is apparent. I do not believe that it could cause any extra delay over the Easter holiday. I certainly hope that it will not.

    European Economic Community
    Mr. Gryllsasked the Secretary of State for Trade and Industry whether he will make a statement about the prospects for British industry in the event of Great Britain's entry to the European Economic Community on the acceptable terms now envisaged.
    Mr. John Davies: Provided we can get terms which will allow us to take full advantage of the opportunities offered, I am confident that British industry will benefit from the wider home market and the scope for specialisation and economies of scale.
    Mr. Grylls: I thank my right hon. Friend for that answer. Would he continue to point out to industry the very good opportunities to which he has drawn attention in his answer?
    Mr. Davies: Yes; my Department is continually in contact with industry and

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    we discuss these matters. My hon. Friend should not imagine that industry is lethargic in coming forward. On the contrary, it is studying its own possibilities with great attention.
    Mrs. Renée Short: Is the right hon. Gentleman aware that more and more people on both sides of industry are becoming more and more aware of the grave disadvantages to Britain of entry to the Common Market? Is he further aware that his right hon. Friend's announcement—or threat, I should call it—of a value-added tax to prepare us for entry will bear heavily on everybody?
    Mr. Davies: I cannot say that my inquiries at all confirm that industry more and more regards membership of the Community as a grave disadvantage. Quite the contrary: it is simply not the case. I keep carefully in contact with industry on the subject. Equally, it would be wrong to imagine that, at least among the industrial community, the effect of V.A.T. is regarded as a disadvantage.
    Mr. Biffen: Without being drawn into the merits or otherwise of British membership of the E.E.C., could my right hon. Friend arrange for either an edition of the Board of Trade Journal or a supplement to it to be published, listing all the Community regulations which would have to be adhered to by British industrialists were we now to join the Common Market, since this has considerable consequences for individual industries like footwear and brewing?
    Mr. Davies: I am, of course, very well aware that there are many regulations which would have to be introduced here, but it would be unwise to list these at the moment until the negotiation has been completed and we see exactly what the requirement upon us is. But I will consider doing so, as my hon. Friend suggests.
    Mr. Dell: Is the right hon. Gentleman aware that grants are being increasingly used in aid of investment in E.E.C. countries? What would be the effect of this on the competitiveness of British industry, taking into account the fact that the Secretary of State has withdrawn investment grants in this country?
    Mr. Davies: My own belief is that the system which we have devised will in due
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    course produce a very effective basis and will be an incentive for British industry to invest. I do not think that the introduction or reintroduction of grants in any substantial form would add materially to that incentive.
    Mr. Gryllsasked the Secretary of State for Trade and Industry when he proposes to discuss with the Trades Union Congress the effect of Great Britain's entry into the European Economic Community on the terms so far envisaged.
    Mr. John Davies: If the T.U.C. wishes to hold a meeting with me on the subject, I would be very willing to see it.
    Mr. Grylls: Would my right hon. Friend not agree that, on past experience, certainly the employment and wages prospects within the Common Market are very advantageous?
    Mr. Davies: There is no doubt that the evidence during the life of the Common Market is that both real wages and employment prospects have been greatly improved within the Community. I entirely assent to that.
    Mr. Molloy: But if the right hon. Gentleman is in favour of entering the Common Market, why is he attacking the steel industry and dealing it what could be a very serious blow, even before negotiations are completed? Could he explain his behaviour on this aspect?
    Mr. Davies: I do not think that that question really arises in this context, but in any case, I shall, with your permission Mr. Speaker, be answering a Private Notice Question on the steel industry later in the day.
    Mr. Hornbyasked the Secretary of State for Trade and Industry what recent consultations he has had with the Confederation of British Industry about the progress of negotiations for entry into the European Economic Community.
    Mr. John Davies: My Department has regular contact with the C.B.I., and all aspects of the approach to Europe are discussed.
    Mr. Hornby: Can my right hon. Friend confirm whether it is still the view of

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    the C.B.I., representing a great many interests of employees and shareholders in very many businesses, that the advantages of those concerned would be very much served if successful entry into the Economic Community can be achieved?
    Mr. Davies: Yes, I can confirm that to be the case. The C.B.I. has said that the substantial balance of advantage, as seen by many, would be for membership of the Community.
    Mr. Leadbitter: When will the Secretary of State indicate when his Department or the Government will consult the Trades Union Congress? When will the Government or his Department discuss this matter with the many organisations in this country representing serious points of view on the subject? When will the Government consult the people?
    Mr. Davies: There was an earlier Question on this subject which I answered specifically about the T.U.C. I should be pleased to consult the T.U.C. at any time that it wished. I would simply mention to the hon. Gentleman that the T.U.C. has made its views on membership of the Community well known. One is not in ignorance of them.
    Mr. Hornbyasked the Secretary of State for Trade and Industry what are his latest estimates of the effect on the growth of investment in industry in the United Kingdom which would be likely to result from Great Britain's entry into the European Economic Community.
    Mr. John Davies: The effect would depend upon industry's response to the opportunities that membership of the E.E.C. would offer. Industry generally welcomes the prospect of Britain joining the Community.
    Mr. Hornby: Is it not true that investment from overseas sources has eased off very considerably in this country since we failed on the last occasion to get into the Common Market? Is it not also true that if investment prospects from this and other quarters improved, the prospects for future increases in employment in this country would be greatly improved and eased?
    Mr. Davies: I cannot confirm that statistics bear out that inwards investment has materially abated. But, equally, I have no doubt that membership of the
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    Community would stimulate inward investment considerably and would create employment opportunities in this country.

    Licensing Laws
    Mr. William Priceasked the Secretary of State for Trade and Industry how many complaints his Department has received from tourists about British licensing laws during the past five years.
    Sir J. Eden: None, Sir.
    Mr. Price: Is the hon. Gentleman aware that he has just demolished one of the greatest myths surrounding the tourist industry? Is it not absolutely clear, in view of his answer and of the enormous growth in tourism to Britain over the last few years, that our licensing laws deter absolutely no one at all?
    Sir J. Eden: I do not think that that follows from the answer I gave. In fact, probably a larger number of complaints are directed to the licensees, the licensing authority or the tourist organisation. At any rate, as the hon. Gentleman knows, the laws are so archaic that setting up the review to inquire into them was fully justified.
    Mr. Tom Boardman: Does my hon. Friend not agree that this point will have to be considered by the Erroll Committee, and that, at the same time, the views of licensees and other organisations which would be opposed to unlimited licensing hours would have to be taken into account?
    Sir J. Eden: Yes, I am sure that that will be done.

    Petrol Prices
    Mrs. Renée Shortasked the Secretary of State for Trade and Industry if he will refer to the Cabinet Inter-Disciplinary Unit any further intentions by oil companies to increase petrol prices.
    Mr. John Davies: No, Sir.
    Mrs. Short: I thank the right hon. Gentleman for that reply. Is he aware that increases in petrol prices are often made an excuse for increases in the prices of all kinds of goods sold in the shops and, of course, for fare increases? He cannot blame those on wages increases.

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    If the Cabinet inter-disciplinary unit is to be more than the Prime Minister's gimmick, will the right hon. Gentleman change his mind about this and refer this matter to that body to see what action it can take?
    Mr. Davies: I would just point out that I believe that the hon. Lady is referring to the Central Policy Review Unit. Of course I realise that petrol costs find their way into a very wide variety of costs throughout the whole range of manufacture. It is, of course, interesting to note that, looking over the past period and discounting only that element of petrol price increases to which the last Government assented as being the consequence of Suez, the effective return to the companies is less now than it was in 1955.
    Mr. Lane: To remind hon. Members opposite and the country, would my right hon. Friend confirm that, even taking into account recent increases, the price of petrol and other oil products has risen much less during the last few years than the price of coal, gas and electricity?
    Mr. Davies: So far as I can make out, of all the elements of energy in the economy it has risen the least. Indeed, until very recently it was showing a net decrease in terms of return.
    Mr. Michael Foot: Does the right hon. Gentleman recognise that his last claim about the comparatively slow increases in oil prices would be laughed out of court by most of the people who have to buy the oil? Is it satisfactory that he should have the power to intervene to affect steel or coal prices but no power to interfere with oil prices, which certainly affect the whole range of competitive power to British industry?
    Mr. Davies: I shall, of course, be answering a Question, as I said, on the subject of steel later today. On the other hand, I am bound to reiterate that the experience with the movement of oil prices has not at all been comparable with that on other energy fuels. The only element which differs, of course, is the tax raised. If one deals with this in terms of the return to companies, it has been, until very recently a decrease, not an increase.

    Shoe Sizes
    Mrs. Renée Shortasked the Secretary of State for Trade and Industry if, in view of the difficulties experienced by almost half the men and women in Great Britain who take other than average shoe sizes, he will inquire into the effect on Great Britain's export trade in shoes of the restricted number of shoe sizes.
    Sir J. Eden: I do not think an inquiry is necessary. Exports of footwear have doubled since 1967 and I am not aware that the industry has difficulty in meeting its overseas customers' requirements.
    Mrs. Short: Is the hon. Gentleman aware that our exports of shoes to, for example, America, West Germany and the Soviet Union demand that our sizing system compares with theirs? What is being done to improve the sizing of shoes in this country? As very few manufacturers and retailers cater for men and women with either large or small feet —[Laughter.] This is not funny—many of these people suffer difficulty medically. Will the right hon. Gentleman take this matter up with the British shoe manufacturers and look at the whole question seriously, because it is a serious problem?
    Sir J. Eden: Exports of footwear in 1970 totalled 21 million pairs to a value of £35 million. As for meeting the requirements of the United Kingdom market, I am sure that the trade is not the least bit unsympathetic to the problems of those with difficult feet.
    Mrs. Short: Will the hon. Gentleman get them to do something about it?
    Sir J. Eden: The British Footwear Manufacturers Association will be happy to supply members of the public, on application, with a list of branded footwear made in special sizes and with the names of special retailers.
    Mr. Tom Boardman: Is my hon. Friend aware that the hon. Lady's Question is clearly based on a survey which is about 15 years out of date? Is it not a fact that the British footwear industry now supplies a variety of fittings and sizes and that they are at least comparable with those available in any other European country? Is it not also a

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    fact that the industry is prepared to make sizes and fittings to the request of any export market?
    Sir J. Eden: Yes. I am sure that my hon. Friend is right. In any case, the range of sizes and fittings stocked is a matter for the commercial judgment of the individual retailer.
    Sir G. de Freitas: Will the hon. Gentleman consult the industry's research association, which over the years has made an intensive study of feet sizes in general and has also made a study, in particular, at her request, of my hon. Friend's feet?

    Industrial Investment
    Mr. Sheldonasked the Secretary of State for Trade and Industry what further estimate he has now made of the level of industrial investment in 1971; and what action he intends to take to stimulate it.
    Mr. John Davies: As the hon. Member knows, the last investment intentions survey forecast a small fall in investment. since then we have given a powerful stimulus to investment through the Budget and the cut in Bank Rate as well as improving incentives in the assisted areas. We are confident that these measures will have a progressive effect on the prospects for industrial investment.
    Mr. Sheldon: As the results of the Financial Statement show that the Treasury's forecast is that investment will be no more than ½per cent. in the coming financial year after taking account of the Budget changes, how can the right hon. Gentleman talk about a "powerful stimulus"?
    Mr. Davies: The hon. Gentleman's supplementary question indicates a certain absence of knowledge about the trend of industrial investment. I mentioned in my reply that there would be a progressive effect. Those who have cause to know about these matters know that industrial investment has a profound timelag built into it. Thus, the normal effect of the Budget will be felt progressively over a longer period than the hon. Gentleman infers.
    Mr. Pentland: Despite the right hon. Gentleman's remarks about the effect of the Budget, is he aware that more and more firms in the North-East of England are reducing their labour forces every week by substantial numbers, and that this goes for a large industrial concern in my constituency? What does he intend to do to stimulate industrial activity in this area?
    Mr. Davies: One of the principal causes of the increase in unemployment in that and other areas has been the low state of the economy, which I confidently feel will be assisted by the Budget. This does not necessarily entail an investment effect, though increased activity in existing facilities could have, and I hope will have, a powerful result on unemployment.

    Manufacturing Industry
    Mr. Carterasked the Secretary of State for Trade and Industry if he is satisfied with the effect of Government policies on the present rate of growth of manufacturing industry; and if he will make a statement.
    Mr. John Davies: My right hon. Friend's Budget statement establishes a new fiscal and economic framework for profitable industrial expansion.
    Mr. Carter: I thank the right hon. Gentleman for that reply. Is he aware that growth in the manufacturing sector of industry is a prime mover to overall economic growth, and that the present very high levels of unemployment in manufacturing are an indication of inadequate investment? If the measures announced in the Budget do not produce a greater level of employment, what additional measures is it intended to take?
    Mr. Davies: I will certainly keep the whole question of unemployment under careful scrutiny, as I do now. On the question of expansion, the hon. Gentleman should remember that manufacturing expansion in the period of the Labour Government was something like half the rate in the previous five years of Conservative Government. It is worth mentioning, too, that the upturn in manufacturing production took place in the last half of last year.
    Mr. Body: Is my right hon. Friend aware that those who make weekend speeches about growth should recognise that our growth will be greater this year than it will be in Federal Germany, where it is estimated to be 2·5 per cent.?
    Mr. Davies: I will keep that under consideration, too.
    Mr. Dell: If, in the right hon. Gentleman's view, the effect of the Budget on investment will be progressive, may I ask him to give an estimate for the years beyond this coming year? If it is right to use investment grants to stimulate growth in manufacturing industry in Northern Ireland, where there is a very high rate of unemployment, why is it not right on Merseyside, in the North-East of England, in Scotland and in Wales?
    Mr. Davies: The answer to the first part of that supplementary question is that the statistics which the Department gathers will give some indication forward in June of this year. The right hon. Gentleman knows very well of the multiplicity of surveys which are carried out and the fact that to increase the number still further would not be popular with industry.
    The answer to the second part, about Northern Ireland, is that conditions are very exceptional there. This has been recognised for a long period. The Government have not introduced anything new in Northern Ireland. They have simply maintained a situation that has existed.
    Mr. Douglasasked the Secretary of State for Trade and Industry if he will publish recent estimates of investment in manufacturing, industry in the special development areas, development areas and intermediate areas.
    Mr. John Davies: Information is not available in this degree of detail. Expenditure in recent years on machinery and plant attracting investment grants at the development area rate has been equal to about one third of total expenditure on these items.
    Mr. Douglas: I thank the right hon. Gentleman for that reply, but is it not about time that we had this type of information available? It is extremely important to the areas affected. Will not the Secretary of State concede that even
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    with the Government's investment policy we shall not get any real increase in investment in the regions nor any lowering of the unemployment percentage there in the coming winter?
    Mr. Davies: I confidently expect that the measures taken by the Government of the kind mentioned earlier will have a very real impact on the level of industrial investment, and I believe that there will be a progressive improvement as a result of those measures in jobs available in the assisted areas.
    Captain W. Elliot: Does not my right hon. Friend agree that it is wrong for industry constantly to turn to the Government for encouragement? Would it not be better for managements and unions between them to get together to make industry profitable, when investment would take place?
    Mr. Davies: I entirely endorse those remarks. I have always felt that the effect that a Government can have is marginal in relation to the real effect to be obtained by management and unions.
    Mr. Heifer: Would the right hon. Gentleman indicate what the position concerning Merseyside is? Is he aware that there are now 40,000 workers unemployed in that area and that this level of unemployment is quite criminal? Is it not time that the Government indicated their intentions in areas of high levels of unemployment, such as Merseyside?
    Mr. Davies: I share the hon. Gentleman's concern about unemployment on Merseyside. However, I assure him that the Government's measures, which have been outlined by my right hon. Friend the Chancellor, have very much in mind the stimulation of the economy generally, with this purpose in view.

    Development Areas (Industrial Expansion)
    Mr. William Hamiltonasked the Secretary of State for Trade and Industry if he will make a statement on the results of his regional policies in the last eight months, expressing it in terms of firm inquiries about industrial expansion in the development areas, with particular reference to Scotland.
    Mr. John Davies: Inquiries about the development areas generally received

    21
    during the eight months ending 28th February numbered 2,573. I cannot say how many of these were firm, but during the same period 314 visits to possible locations in these areas were made, mainly by firms at present established elsewhere; 85 of these were to locations in Scotland.
    The hon. Member may also like to have figures for industrial development certificates approved and the estimated additional employment which these projects will provide when fully manned. In the period in question, 16,825,000 sq. ft. was approved with an estimated employment of 26,460. Scotland accounted for 7,369,000 sq. ft. and 9,610 jobs out of this total.
    Mr. Hamilton: Is the right hon. Gentleman aware that Scotland will note his indication that he does not know how many of these inquiries are firm inquiries? That being so, how does he arrive at the figure of 9,610 estimated jobs for Scotland? If that figure is not based on firm inquiries, is it not relatively meaningless? May we have an assurance that the Scottish unemployment figures will be reduced from the record rate at which they now stand, being the highest since 1963?
    Mr. Davies: Inquiries arise in extraordinarily diverse ways, including by telephone. Largely they are concerned at that early stage with the provision of literature. At that point it is impossible to say how the recipient of the literature will react. We then arrive at the stage when inquiries change to projects of the kind I have mentioned, and I gave the number nationally and for Scotland independently. It is at that stage that one can refer to the inquiries as firm, and these are the figures I used in arriving at the estimated employment effect of these inquiries.
    Mr. Hamilton: Is that how the right hon. Gentleman arrived at the figure of 9,610?
    Mr. Davies: Yes.
    Mr. Varley: In giving the comparable figures for the months prior to those concerned with the figures he has just given, will the right hon. Gentleman say whether he is aware of the criticism of the Government's regional policy not only from this side of the House but recently from the Secretary-General of the
    22
    C.B.I., and from Viscount Ridley, Tory Chairman of the Northumberland County Council? Would it not be better to institute a proper review now, with a White Paper issued at the end of it, so that at least some hope might be given to those living in the development areas?
    Mr. Davies: I do not think that there is occasion at present for a "proper review", as the hon. Gentleman calls it. I think that the thing to do is to continue to work steadily with our arrangements, which I am sure will have a profound effect. It is perhaps worth mentioning that I have one comparative figure which indicates that in the period prior to that for which I gave the figure of 7,369,000 sq. ft., the area was 5,310,000 sq. ft.

    Oswestry
    Sir A. Meyerasked the Secretary of State for Trade and Industry on what criteria the Oswestry district has been given intermediate area status.
    Sir J. Eden: Oswestry has experienced several major closures, unemployment rates have been consistently high, and without intermediate area status the prospects for attracting new employment were poor.

    North Wales
    Sir A. Meyerasked the Secretary of State for Trade and Industry whether he will now grant intermediate area status to those portions of north Wales which are outside the Welsh development area.
    Sir J. Eden: No, Sir. Their circumstances do not justify such a designation.
    Sir A. Meyer: Is my hon. Friend aware that all the arguments he has adduced for giving intermediate status to Oswestry apply with equal force to Flintshire which is entirely surrounded by areas having intermediate or development area status? Is he further aware that this absence of any kind of incentive for investment in the Flintshire area is having an adverse effect on the tourist industry, which is, after all, the area's staple fare?
    Sir J. Eden: I have considerable sympathy with areas which are subject to seasonal fluctuation due to their dependence on the tourist industry. As to designation of areas, we intend to keep a close watch on present coverage to ensure that

    23
    it continues to reflect the current balance of needs.
    Sir A. Meyer: 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 the matter on the Adjournment.

    Thamesside (Industry)
    Mr. Roger Whiteasked the Secretary of State for Trade and Industry what plans he has to assist the declining industries on Thamesside.
    Sir J. Eden: Circumstances do not appear to justify any special plans for Thamesside, but industry generally will benefit from the measures announced in the Budget.
    Mr. White: Is my hon. Friend aware that like other areas outside the development areas, where pockets of unemployment have occurred, Thamesside has been neglected for some years? Will he take that fact into account when looking at areas for special consideration?
    Sir J. Eden: As my hon. Friend knows, Thamesside is in the G.L.C. travel-to-work area, for which the unemployment rate is 1·5 per cent., and we must give priority to areas with a greater degree of persistent unemployment.

    Paper Industry
    Mr. Roger Whiteasked the Secretary of State for Trade and Industry what plans he has to assist the paper industry following the closure of mills and short-time working in the industry.
    Sir J. Eden: Officials of the Department met employers and union leaders from the paper and board makers industry on 24th March. I am urgently considering their report.
    Mr. White: My hon. Friend will be aware that at the meeting on 24th March both the employers and the trade unions drew his attention to the unfair pricing policies operated by the paper-producing Scandinavian countries. Do these policies contravene the E.F.T.A. Agreement? If so, what steps will he take to overcome them?
    Sir J. Eden: I am aware of the points raised by the deputation, and I am continuing to give them close study. The
    24
    point to which my hon. Friend refers in particular has already been the subject of representations to Scandinavia, and I shall be looking further into the matter.
    Mr. Gregor Mackenzie: Is the Minister aware that in Scotland more than 2,000 people have lost their jobs in the paper-making industry over the last two years, and that their number is growing now? Can he assure the House that instead of only making representations to Scandinavia he will, as has been suggested, also consider the attitude of some companies here which want to close their mills and import newsprint from Canada?
    Sir J. Eden: I am very much aware of the industry's problems. The changes in corporation tax will undoubtedly be of some assistance, and I hope, as I am sure the hon. Gentleman does, that generally my right hon. Friend's Budget proposals will go some way to easing the industry's problems.
    Sir J. Rodgers: Is my hon. Friend aware that only last week 1,000 jobs were lost by the closing down of five out of 13 mills at Aylesford? Will he talk to his right hon. Friend, and discuss the whole problem with our E.F.T.A. partners when they meet in about a month's time, and, as a short-term measure of help, will he consider granting I.D.Cs. more easily in future?
    Sir J. Eden: With regard to the first part of my hon. Friend's supplementary question, these are certainly matters for continuing discussion between myself and my right hon. and hon. Friends. As to the second part, I.D.C. proposals have to take account of the position of a particular industry in the general employment or unemployment context of the area concerned.
    Mr. Wellbeloved: If intermediate status is to be conferred on areas which have suffered major closures of industry, will the hon. Gentleman look at the London Borough of Bexley, where there have been a number of major closures and where unemployment is now at the highest level ever, and do something about dealing with the unemployment situation in the Prime Minister's own borough and in my constituency?
    Sir J. Eden: This, again, comes into the wider G.L.C. travel-to-work-area,

    25
    which is not so adversely affected as are some other parts of the country.

    Oil Refining Capacity (Investment)
    Mr. Douglasasked the Secretary of State for Trade and Industry what estimates he has made of the future trend of invesment in oil refining capacity in the United Kingdom.
    Sir J. Eden: Extensions now in hand will increase United Kingdom refinery capacity by 28·5 million tons. A number of companies have further extensions under consideration.
    Mr. Douglas: Will the Minister on occasion give us dates when he indicates increases in capacity? Down to what date does the figure of 28·5 million tons refer? Are these expansions firm, and can we be sure that they will not be undermined by the Government's policy of switching from investment grants to tax-based allowances?
    Sir J. Eden: I cannot specify the date by which the various projects will be concluded, but these are schemes which are now in hand and which will lead to this increased capacity. The second part of the hon. Gentleman's question will be answered by the companies themselves, which are considering their own schemes. All the evidence I have is that they are proceeding.
    Mr. Lane: When looking at the benefit to the balance of payments from the further expansion of refinement capacity, does not my hon. Friend agree that the balance of payments already benefits by over £200 million a year from the worldwide operation of British-based oil companies, compared with what the position would be if we had to depend wholly on foreign companies for our oil supplies?
    Sir J. Eden: Yes, Sir. There is very substantial benefit to our balance of payments from this investment.

    Coal Mines (Interim Dust Standards)
    Mr. Dormandasked the Secretary of State for Trade and Industry when an assessment will be made of the effect of the new interim dust standard introduced into National Coal Board mines on 1st April, 1970, together with the new method of dust sampling based on the weight of respirable dust in mine
    26
    atmospheres; and if he will publish a report.
    Sir J. Eden: The National Joint Pneumoconiosis Committee has agreed to carry out a review of the new interim dust standards after two years of full operation. It will, no doubt, consider whether a published report is desirable.
    Mr. Dormand: I am grateful for that information. Would the Minister accept that those of us who represent mining constituencies believe that there has been substantial and valuable progress on this matter in recent years? But is he aware that there are no grounds for complacency is seeking to eliminate the dreadful disease pneumoconiosis? Would he ensure that all the resources requested will be made available to the various agencies which are doing research on it?
    Sir J. Eden: I am grateful for the hon. Gentleman's question, and I can assure him that there is absolutely no question of anybody being complacent about this. These are the new standards and we want to see how they are working out in practice. The matter is being kept under careful review.

    Coal (Gas and Oil Derivatives)
    Mr. Harperasked the Secretary of State for Trade and Industry what research is being undertaken, under the supervision of his Department, to produce gas and oil from coal
    Sir J. Eden: Although this is primarily a matter for the industries concerned, the Department keeps under review developments in other countries.
    Mr. Harper: That answer is disappointing and short-sighted. Is the Minister aware that the United States of America is planning to meet future energy requirements by obtaining oil and gas products from coal? As the recently concluded agreement in Iran with our oil suppliers will cost our balance of payments £100 million, rising to £400 million by 1975, added to which is the recent oil agreement with Libya, concluded on Friday last according to the newspapers, which adds another £40 million, is it not imperative that we start to seek alternative forms of oil supplies? What better than to get it from coal?
    Sir J. Eden: What matters is that we get it at an economic price. The position has been unchanged since acceptance of the report of the Committee on Coal Derivatives in 1960, which then recommended that the prospects of making oil from coal economically in this country were so remote that no further technological work directed towards this objective should be undertaken. On the subject of gas, the hon. Gentleman knows that since those days North Sea gas has made a considerable difference.
    Sir G. Nabarro: Is my hon. Friend not aware that the major industrial users in this country, such as electricity and steel, are now bringing coal from the other side of the world, including imports from Australia? Would it not be advisable, before we start turning our minds to derivatives such as oil and gas from coal, to produce enough raw, bituminous coal here for all our industries, without going to the Antipodes for it?
    Sir J. Eden: I am aware of the fact to which my hon. Friend draws attention, as also, I am sure, is the National Coal Board.
    Mr. Eadie: Is the hon. Gentleman aware that when he speaks of the 1960 report on derivatives, he is well out of date and out of touch with the situation today? Would he not agree that we are facing over the next few months an ever-increasing cost of importing oil amounting to hundreds of millions of pounds? Would he not agree that if this were costed, the cost of an oil-from-coal installation would be equal to that the installation at Longannet of a coal-fired power station which at present is being completed in Fifeshire? Is he aware that the Michael colliery has millions of tons of coal which could be used for getting oil from coal?
    Sir J. Eden: There has been intensive research over a number of years into the possibility of converting coal to liquid or gaseous fuels. The information which is available is enough to make it clear that the economics do not justify further work on this.
    Mr. Costain: Does my hon. Friend appreciate that coal in the United States is won by private enterprise? That is one of the reasons why the Americans
    28
    can make oil products economically from it.
    Sir J. Eden: I am equally aware that the pithead prices of United States coals can be taken as approximately half of those operative in the United Kindgom.

    Advertising Company (Shares Transactions)
    Dr. Gilbertasked the Secretary of State for Trade and Industry if he will order an inquiry into transactions in the shares of an advertising company, whose name has been supplied to him, since 1st February, 1971.
    Sir J. Eden: On the information available I do not consider that there is good reason for making such an inquiry.
    Dr. Gilbert: Would the hon. Gentleman not agree that this case has caused considerable public concern? There have been two other cases involving City dealings on the Stock Exchange in recent weeks that equally caused public concern. Is it not high time that the toothless watchdog, the Takeover Panel, was replaced by an official body with adequate powers and staff?
    Sir J. Eden: No, Sir. If we had thought that there was good reason to do as requested in the question we could have used the powers under Section 109 of the Companies Act, 1967. The question of consistency with the City code on takeovers and mergers is for the City panel.

    Accepting Houses Association (Accounts)
    Dr. Gilbertasked the Secretary of State for Trade and Industry whether he will now require members of the Accepting Houses Association to publish full accounts.
    Sir J. Eden: No, Sir. But I am keeping under review the position of these banks as shown by the full accounts which are supplied to the Department through the Bank of England.
    Dr. Gilbert: Is it not a continuing scandal that these private merchant banks, in this day and age, can accept money from the public on deposit and not have to reveal their true accounts? At least we have got around to requiring the joint stock banks to do so. Why should

    29
    these entrenched citadels of privilege in the City not have to publish accounts?
    Sir J. Eden: There is a balance of advantages and disadvantages here. That is why we shall keep a close watch on the matter.
    Mr. Douglas: Would the right hon. Gentleman examine his answer in the light of his right hon. Friend's Budget Statement, as we are searching for a more qualitative means of controlling monetary supply?
    Sir J. Eden: Yes. This is one of the reasons why we shall keep the matter under review.

STEEL INDUSTRY
Mr. James Hamiltonasked the Secretary of State for Trade and Industry whether he will give a general direction to the British Steel Corporation to submit to him for his approval all future proposed steel price increases; and if he will make a statement.
Mr. Michael Foot(by Private Notice) asked the Secretary of State for Trade and Industry if he will make a statement on the consequences for the steel industry of the directions he gave to the British Steel Corporation on 2nd April.
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): With permission, I will now answer Question No. 43 and the Question of which I have had Private Notice.
As I said in my reply to my hon. Friend the Member for Cheadle (Mr. Normanton) on 2nd April, I am satisfied that an increase of the magnitude of 14 per cent. would be damaging to the competitive position of British industry. In taking this view I was influenced by the recommendation of the Iron and Steel Consumers' Council and by widespread representations to this effect from steel users generally. I also took account of the financial position of the Corporation.
My action will clearly compel the Corporation to operate within a greater financial constraint and will thus make it necessary for it to press ahead with its efforts to reduce costs and maximise efficiency. The Corporation's whole finan-
30
cial situation is for clarification and consideration in the review which the Corporation and the Government are jointly carrying out, and I hope that the position as regards the financial year 1971–72 will be clarified within a matter of weeks. This should enable the Government to decide on the main issues affecting 1971–72 including financial objectives for that year and the finance to be made available to the Corporation having regard to the level of capital investment required and the Corporation's cost-saving measures.
These events demonstrate that the present arrangements whereby the B.S.C. consults the Government on major price increase proposals are useful and I do not propose to give a general direction as suggested by the hon. Member for Bothwell.
Mr. Foot: When the Government made this intervention, what was their estimate of its effect on the Corporation's development plans and on the number of redundancies which will have to be announced in coming months?
Mr. Davies: On the first part of that question, I have thought that it was right to see through this review. The review is being undertaken against the background of great difficulty in forecasting the financial out-turn by the Corporation in the past year. Until the first phase of the review is completed—I hope to have the results of it within six weeks—it would be very unsafe to make anything like definitive appraisals of where the Corporation will be in the immediate future.
As to the longer-term development, it is clearly necessary for this review to carry on for its full period, and that will require several months.
The effects on short-term finance, closures and the like will not be very considerable. Closures are unlikely to render any short-term advantage. Any closures must be seen within the framework of a proper long-term programme, which is precisely what we are seeking now to define.
Mr. Foot: Will the right hon. Gentleman now answer the questions that I put to him? Is the answer, therefore, that this intervention will have no effect on the development plans? If it is, there is nobody in the steel industry who will

31
believe it. Will the right hon. Gentleman answer the second question as to how many redundancies will be involved by this cut? What is the figure? Does the right hon. Gentleman say that there will be no increase in the number of redundancies because of what he has said? Does he understand that this intervention by the Government is bound to plunge the whole industry into heavy losses and that that is bound to have an effect on its development programme? Does he understand that even though we have a Prime Minister who apparently does not care how many workers he throws out of work—
Sir R. Cary: On a point of order, Mr. Speaker. Is this not drifting into a debate? If it is, can it be stopped?
Mr. Speaker: I am sure that the hon. Member for Ebbw Vale (Mr. Michael Foot) is well aware that many other hon. Members wish to ask questions.
Mr. Foot: Does the right hon. Gentleman understand that, even though we have a Prime Minister who does not care how many workers he throws out of work, it is the right hon. Gentleman's duty to carry out his duties under the Iron and Steel Act, 1969? Will he tell us when he is going to start to assist the steel industry to prevent the redundancies and carry through its development programme?
Mr. Davies: The hon. Gentleman will recollect that at the time of nationalisation the steel industry formulated a programme which envisaged a great scale of closures. This also provided for a large number of redundancies—to the best of my recollection, about 40,000 men. The redundancies in question have as yet not at all been realised. The point I have sought to make—I believe that the hon. Gentleman has, as I have, the greatest interest of the steel industry at heart—has been, quite consistently, that in the short-term any panic measures in terms of short-term closures will have no effective financial result. So they are not a factor in this problem.
As to the long-term development programme, my impression is that I replied to the hon. Gentleman. The long-term development programme, which involves enormous funds to the extent of a maxi-
32
mum of £4,000 million, cannot be the subject of clear and definitive conclusions on the part of the Government without profound study, which we are now seeking to undertake.
Mr. James Hamilton: Now that the Government have made a decision, will the right hon. Gentleman tell us if his thoughts were in line with the 14 per cent. increase or whether he had to accept the decision of the Cabinet? Now that the Government have taken a decision about prices, are they prepared to say what is the position about investment in the industry, bearing in mind that if the investment programme is not carried out there will be 15,000 redundancies in Scotland? Will the right hon. Gentleman now tell us what the situation is, particularly as regards the industry in Scotland?
Mr. Davies: The situation has not changed. On the first part of the question, I myself gave a directive to the Corporation to contain itself within a 7 per cent. increase.
The matter of development is in two phases. The immediate hold on the existing development programme will be finalised, I hope, within six weeks when the first phase of the review is carried out. The longer-term programme will take considerably longer.
Sir G. Nabarro: Does my right hon. Friend realise that the great majority of people in industry warmly congratulate him on halving the increase to 7 per cent.? Will he now apply his mind to the simple fact that in the year before nationalisation the steel industries before tax made in the aggregate a profit of £80 million, whereas they are now losing money at the rate of £100 million? Is not this a calamitous state of affairs for the taxpayer and ought it not to lead to the replacement of the present chairman by a competent businessman?
Mr. Davies: I am as deeply concerned as is my hon. Friend about the future wellbeing of the industry, which is fundamental to the country as a whole. However, the present rate of deficit clearly cannot be allowed to continue and sustain a programme of the kind of which we are speaking. It must be a matter of proper study and exact and correct

33
forecasting, which at present is not practicable.
Mr. Thorpe: Now that the Government have completed their first act of nationalisation of a private firm, namely, Rolls-Royce, and have by implication accepted that they will have to pay a subsidy to a present nationalised concern, namely, steel, and accepting that for this Government this is breaking rather new ground, can the Secretary of State tell us how long it will be before we shall know the extent of the subsidy which they will have to pay to the Iron and Steel Corporation so that it will break even?
Mr. Davies: Perhaps the right hon. Gentleman will be prepared to wait, as I am constrained to do, for the result of the review which I am currently undertaking. The right hon. Gentleman's earlier remarks were not conducive to trying to consider the future prosperity of this great industry.
Dame Irene Ward: I congratulate my right hon. Friend on his decision. Without waiting for the review, could he let us have the detailed figures over the last 10 years to show how the steel industry previously made a profit and now makes a loss so that the country may judge the wisdom of his decision?
Mr. Davies: If my hon. Friend will put a Question down on that subject I shall give her all the details I can. I am bound to say that a comparison of the revenue results of the industry in its previous hands with the position now would not, perhaps, be entirely illuminating. I am, however, prepared to give what figures I have.
Sir G. de Freitas: As the Government have now arranged for an enormous subsidy of cheap steel to private industry, will the right hon. Gentleman at least tell us that private speculators will not have handed over to them sections of the publicly-owned steel industry such as those in Corby, Northants?
Mr. Davies: I must refute the suggestion that there is a vast subsidy. This is not so.
Sir G. de Freitas: Of course there is.
Mr. Davies: Of course there is not. There would be a vast subsidy if the
34
industry were to continue to operate at a deficit without any endeavour to restrain it, but that is neither the intention of the Chairman of the Corporation nor mine.
Mr. Patrick McNair-Wilson: Does my right hon. Friend recall that in May, 1969 the then Labour Government intervened in a price rise asked for by the British Steel Corporation, and does he not find it somewhat strange that the Opposition, who are always demanding price controls, should behave in this hysterical and hypocritical manner when the Government take action of this sort?
Mr. Davies: Yes, Sir, I find the contradictions which come across from the other side from time to time slightly opaque.
Mr. Eddie Griffiths: Could I remind the right hon. Gentleman of his words at the weekend, when he said that the Corporation should be responsible for its own deficit? As I understand it, this can be brought about in two ways. I accept the right hon. Gentleman's point that closures—because six months' notice has to be given for a plant closure and two years' notice for a works closure—will not solve the coming financial year's problems. Those problems, therefore, can be solved, as I say, in two ways: either by giving the Corporation the price increase which it wants, which the right hon. Gentleman has refused to do, or—and here I ask the right hon. Gentleman to stop messing about and tell us exactly which way his thinking is going—by having the B.S.C. put its house in order through selling off some of its assets. Will the right hon. Gentleman now tell the House, the steel workers and the taxpayers which part of the British Steel Corporation he and his friends want to sell off to private ownership?
Mr. Davies: No, Sir.
Mr. Lane: Is not much of the steel industry's present difficulty the result of the disruption and distraction caused by the nationalisation policy of the party opposite ever since the war?
Mr. Davies: There are great problems; my concern is to try to overcome them and to try to get an effective steel industry. I am sure that both sides of the House conspire in this concern.
Mr. Harold Wilson: As the right hon. Gentleman seems unwilling—to use his own phrase—to illuminate the minds of his hon. Friends, will he at least tell them that in the last year of private ownership, on the same depreciation basis as is now used by the industry, private ownership had a total loss of £56 million? Second, will he explain how it is that it is widely believed that the Board felt that he had himself agreed in principle to the price increase for which it asked, and tell us what intervened to cause him to change his mind? Third, as the right hon. Gentleman referred to the opacity which, he said, he noticed on this side of the House, will he tell us in which case he has intervened to stop a price increase in the private sector?
Mr. Davies: I have promised to give all the statistics I have in response to any Question put down about the figures previous to nationalisation and subsequently; I shall not try to anticipate those. [Hon. MEMBERS: "Oh."]I
have promised to give the figures which I have been requested to give. I am afraid that I cannot effectively deal with the right hon. Gentleman's queries about views expressed about my views without any consultation whatever with me.
Mr. Harold Wilson: Although the right hon. Gentleman will not comment on my second question—the House will judge from his refusal to answer—will he now answer the third: when has he intervened in the private sector to stop price increases? Will he specify all the cases in which he has intervened?
Mr. Davies: I have intervened by seeking to increase the level of competition in the private sector.
Mr. John Mendelson: Will not the right hon. Gentleman agree that what people in the steel industry and in the country at large are most interested in is that there should be agreement that this country needs an expanding steel industry? If that be so, will he agree, also, that there are only two ways of financing the expansion—either allowing the steel industry to charge the same prices as are charged in Europe for steel or, if the Government are not prepared to sanction that, by providing public funds for that expansion? Surely, the people who work in the steel industry,
36
away from the propaganda which we have had, are entitled to a serious answer from the Secretary of State.
Mr. Davies: As to the hon. Gentleman's first question, what I seek to see is an efficient steel industry. I hope that that means an expanding steel industry, but it must be first and foremost an efficient steel industry. As to the second part, the whole question of price levels is fundamentally involved in the review into the Corporation which I am currently undertaking.
Hon. Members: Where is the money to come from?
Mr. Michael Foot: I beg to give notice, Mr. Speaker, that at the appropriate time I shall seek leave to move the Adjournment of the House under Standing Order No. 9.

PAKISTAN
The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): With your permission, Mr. Speaker, and that of the House, I wish to make a further statement about the situation in Pakistan.
Since I last reported to the House, the conflict in East Pakistan has continued. Our information about what has taken place is still not complete, but there can be no doubt that many lives have been lost. The whole House and country will join me in urging an end to the strife, a start on reconciliation and on the task of bringing relief to the injured and the homeless.
Over the past weeks, we followed with anxiety the course of political negotiations in Pakistan, and my right hon. Friend the Prime Minister had expressed to President Yahya Khan his concern that political differences should be settled by agreement. We were aware of the endeavours of the President to achieve this end, and we hoped that he would be successful. We feared that violence would do permanent damage to the constitutional fabric of Pakistan. To our great regret, negotiations collapsed and military force was used.
We are deeply concerned at the loss of life and suffering of all sections of the Pakistan community and welcome the

37
President's statement that his aim remains the transfer of power to the elected representatives of the people. It is our earnest hope that this objective will be achieved.
Her Majesty's Government have no intention of interfering in Pakistan's internal affairs, and I wish again to emphasise that this is our position. It is the people of Pakistan themselves who must decide their own destinies, and intervention from outside will only complicate a very difficult and distressing situation.
The British Government and public gave dramatic evidence of their deep compassion for the East Pakistanis who suffered in the cyclone last year. We again stand ready to play our part in an international effort to help in mitigating suffering in East Pakistan, should we be asked to do so.
The House will wish to know that we have still received no report of injury or damage to British subjects or property in East Pakistan, apart from the attack on the British Council premises in Dacca which I reported in my earlier statement. It has, however, not been possible to contact some British subjects known to be in outlying areas. In these circumstances, the Deputy High Commissioner advised that women and children and those whose presence was not essential should leave the country if, in their judgment, they could make the journey to Dacca in safety. As a result, about 100 United Kingdom nationals have left Dacca by air, by Royal Air Force and civil aircraft, since my last statement; and about 40 have left Chittagong by sea.
I should like to express my gratitude to the Deputy High Commissioner Mr. Sargeant and his staff in Dacca, to the members of the British community in East Pakistan, and to the members of the Royal Air Force and the Merchant Marine, who have been cool, resourceful and effective in a very difficult and dangerous situation.
Mr. Healey: The House will welcome what the right hon. Gentleman said about the Government's intention to give material aid to those who are suffering in the present situation, and also what the right hon. Gentleman said about the evacuation already carried out of British subjects. We join in the tribute he has
38
paid to those responsible for carrying out that evacuation so competently in such difficult circumstances.
In view of the very convincing reports of indiscriminate bloodshed in East Pakistan and the patent risk of external intervention in these events, may I underline to the right hon. Gentleman the importance of Her Majesty's Government using any influence they can bring to bear on the two issues to which the right hon. Gentleman has himself referred? These are, first, that there should be an immediate end to the bloodshed and, secondly, that there should be a peaceful solution of the political problems of East Pakistan in accordance with the wishes of the people of that territory, expressed with such remarkable unanimity in the recent elections.
All of us in this House will, I am sure, be deeply concerned about the physical safety of Sheikh Rahman and the other leaders of the people in East Pakistan. Has the right hon. Gentleman any information to give the House about their present whereabouts and situation? Can he assure the House that he will express to the Pakistan Government the desire of all of us on both sides of the House that people so recently elected with such an overwhelming vote should be treated with the respect they deserve in a democracy?
Sir Alec Douglas-Home: We will certainly use any influence we have to make clear that we hope that bloodshed will be ended as soon as possible. There have been elections quite lately and there was the intention of calling together the Assembly to frame a constitution. We hope that these processes can be resumed. Certainly, too, we are interested in clemency and justice, but the right hon. Gentleman will not ask me to make a judgment about the internal affairs of Pakistan.
Mr. Braine: While it is right that there should be no intervention in the internal affairs of a friendly Commonwealth country, is my right hon. Friend aware that the basic problem facing Pakistan is the sharp economic disparity between the two wings of the country? Is he further aware that the Select Committee Sub-Committee which went to Pakistan at the end of 1969 came away

39
convinced that substantial outside help from the world community would be necessary if that disparity was to be corrected? Will Her Majesty's Government take any initiative in calling an early meeting with, or having discussions with, the World Bank and the Pakistan Consortium to see whether some definite and positive move could be made in this direction?
Sir Alec Douglas-Home: I have long been convinced, as everyone has, that a programme of economic development is necessary for East Pakistan. We are willing to play any part in an international organisation which would contribute to that end. The first thing, however, is to end the fighting and get back to some kind of political stability in the country.
Mr. Shore: We welcome what the right hon. Gentleman has said about ending the strife and the need for reconciliation. Will he add something more about the safety of Sheikh Rahman and impress upon the Pakistan Government how essential it is to release the leaders of this freely elected democratic party so that the political process can be resumed?
Sir Alec Douglas-Home: I do not think that I can go further than to say that in our view there will have to be a political settlement. For that purpose there must be political talks. I cannot as a member of the British Government possibly dictate to anyone in Pakistan what form those talks should take.
Mr. St. John-Stevas: While fully supporting my right hon. Friend's declaration of neutrality and non-interference, may I ask him to use his influence to impress upon neighbouring States, including India, the necessity to follow a similar policy?
Sir Alec Douglas-Home: As I understand it, the Prime Minister of India has said that India has no intention of intervening in the internal affairs of Pakistan and has cautioned people against creating new difficulties by talking of it.
Mr. Thorpe: All of us would agree that we should not interfere in the internal affairs of Pakistan, but while accepting that the Commonwealth Study Group—for reasons I will not go into—is not exactly a happy precedent, may I ask the right hon. Gentleman whether he would
40
not nevertheless approach the Commonwealth Secretary-General to see whether there could not be some Commonwealth initiative for a form of mediation which would bring the two sides together?
Sir Alec Douglas-Home: This must be a matter for the Government of Pakistan if they want any assistance.
Mr. Douglas-Mann: Is the right hon. Gentleman aware of the widespread feeling that Pakistan, after the events of the last few weeks, can never again be one country? Is he further aware that to take the view that this is an internal matter of a Commonwealth country—which in most circumstances would be perfectly proper and appropriate—is not in this context the right one, and that the British Government do have influence and should be using it to secure a cease-fire? Is the right hon. Gentleman further aware that there is a widespread opinion on both sides of this House—an all-party Motion to this effect secured over one hundred signatures today—that the right hon. Gentleman should use the significant influence he can exercise to ensure that the fighting in Pakistan ceases as soon as possible?
Sir Alec Douglas-Home: Certainly I respond to the hon. Gentleman's request. We will use all the influence we can. We are deeply concerned about the division of Pakistan. We believe that the division should be ended. I do not believe that it will be ended by external intervention, although it may be helped by private advice.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We must now get on to other business.

NEW MEMBER SWORN
Frank Marsden, esquire, for Liverpool, Scotland.

STEEL INDUSTRY
Mr. Michael Foot: On a point of order. Mr. Speaker. I beg to move the Adjournment of the House under Standing Order No. 9 to call attention to a specific matter of public importance which requires urgent consideration, namely
"to call attention to the direct and damaging intervention of the Government in the affairs

41
of the British Steel Corporation, as a result of which the Corporation is compelled to face a £50 million loss, to imperil its long-term development plan, and to threaten fresh, widespread redundancies in the industry."
I apologise to you, Mr. Speaker, for not having been able to inform you in advance that I was proposing to move this Motion, but I was waiting to hear the replies which would be given by the right hon. Gentleman. In view of the exchanges in the House a few minutes ago, I shall not detain the House more than a minute or two in order to press this Motion.
First of all, the replies which were given by the Minister were in direct contravention of information which has been given on this subject by the Steel Corporation itself, and since there are widespread reports that, until a few hours ago maybe—at any rate, a day or two ago—the right hon. Gentleman himself was in substantial agreement with the proposals which the Steel Corporation was making, it does appear that the intervention is one which has come from the Cabinet on the basis of information which gives no foundation at all for such action of this nature.
On this side of the House we are all in favour of proper price control, but we are not in favour of price control applied to only one industry in the country, and applied to it in the most discriminatory and arbitrary manner. [HON. MEMBERS: "Too long."] Hon. Gentlemen opposite do not care about the people in the steel industry, but we do. We are concerned about people working in the steel industry.
Mr. John Hall: On a point of order—
Mr. Foot: I am on a point of order, and—
Mr. Speaker: Order. I think I can anticipate the point of order which the hon. Member for Wycombe (Mr. John Hall) might be seeking to make. The hon. Member for Ebbw Vale (Mr. Michael Foot), in moving the Adjournment of the House under Standing Order No. 9, must not develop his argument in the way in which he is doing.
Mr. Foot: Perhaps, Mr. Speaker, I may be daring enough to enlighten you
42
by suggesting to the House that I was on a point of order already before the hon. Member opposite intervened. The hon. Member, therefore, had no right to intervene in what I was saying. [HON. MEMBERS: "Oh."] That is a rule of the House.
Mr. Speaker: Order. It was not the hon. Member for Wycombe (Mr. John Hall) who intervened. It was I who intervened.
Mr. Foot: It was to your Ruling, Mr. Speaker, that I was bowing, not the hon. Member.
What we on this side of the House are concerned about is the jobs of people in the steel industry and the maintenance of an expanding steel industry, and we believe that this intervention could have the most damaging effects on the industry, not merely in the two or three years hence; we believe that in the coming weeks and months it will lead to a general review of the whole development plan of the Corporation, and we believe it is not right for this House to wait for six weeks for the review which the right hon. Gentleman has promised before making a pronouncement about the Corporation's future, and because of the action which the Government took last Friday we, in the interests of the steel workers, and of the steel industry itself, ask you, Mr. Speaker, to accept this Motion.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific matter of public importance he thinks should have urgent consideration, namely,
"to call attention to the direct and damaging intervention of the Government in the affairs of the British Steel Corporation, as a result of which the Corporation is compelled to face a £50 million loss, to imperil its long-term development plan, and to threaten fresh, widespread redundancies in the industry."
As the House knows, under Standing Order No. 9 Mr. Speaker is directed to take into account the several factors which are set out in the Standing Order but to give no reason for his decision. I have considered what the hon. Member has said and also what has been said earlier today about this matter. I have decided that I cannot submit his application to the House.

ORDERS OF THE DAY
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [30th March].
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but—
    (1) this resolution shall not authorise the making of amendments of the enactments relating to purchase tax, other than amendments about the remission of tax on exported vehicles, and other than amendments making the same provision for chargeable goods of whatever description, or for all goods to which any of the several rates of tax at present applies; and
    (2) neither this resolution nor any resolution relating to selective employment tax shall authorise the making of amendments of the enactments relating to selective employment tax so as to give relief from tax—

    (a) by way of exemption from, or a reduction in the rate of, tax except in respect of all persons of the same descriptions relevant for determining the rate of the employer's flat-rate contribution with which the tax is combined, whether that contribution is under the National Insurance Acts or under the corresponding enactments in Northern Ireland; or

    (b) by way of providing for payments to employers of an amount equal to the whole or a specified part of the tax paid if the proposed provision—

    (i) is in respect of employers in, or at establishments in, part only of Great Britain; or

    (ii) extends to employers in, or at establishments in, Northern Ireland; or

    (iii) is in respect of all persons in any particular description of employment in all parts of Great Britain, and relief in respect of the whole of the tax paid could be given in respect of that description of employment by an order under section 9(1)(a) of the Selective Employment Payments Act 1966 adding that description of employment to the employments to which section 1 or 2 of that Act applies; or

    (c) by adding or removing any employer to or from the employers to whom section 3 of that Act applies; or

    (d) by amending the provisions of Schedule 1 or Schedule 2 to that Act.

    Question again proposed.

  BUDGET RESOLUTIONS AND ECONOMIC SITUATION
  Mr. Speaker: Before I call the hon. Member who is to speak first for the Government, I would tell the House that I have another 30 hon. and right hon. Members who want to speak and that if what has happened in this debate already continues, if some hon. and right hon. Members speak for half an hour or more each, it means squeezing out other Members. I hope, therefore, that there will be greater regard for brevity.
  4.5 p.m.
  The Chief Secretary to the Treasury (Mr. Maurice Macmillan): There has been a marked contrast between the wide diversity of the pre-Budget advice on whether the Chancellor should reflate the economy or move to a policy of greater stringency, and the relative unanimity, on one point at least, of those who have spoken in this debate, for no one has yet suggested, so far as I know, that my right hon. Friend has gone too far in his reflation. Many hon. and right hon. Gentlemen opposite have, indeed, hinted that he has not gone far enough and that he has acted too late.
  This, of course, is very different from the accusations which the House will remember from last October, that the package of public expenditure savings and tax reduction was not, as my right hon. Friend said at the time, neutral in its demand effect, but dangerously inflationary. In any case, the charge "too little and too late" comes oddly from right hon. Gentlemen opposite in relation to cutting taxation. Their system was for six years "nothing and never". The Budget speeches of the right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins) were persuasive and eloquent, they even expressed regret that he was unable to reduce the tax burden of the high earners, they went so far as to deplore the disincentive effects of high taxation; but when it came to giving any hope to the taxpayer his speeches sounded like Edgar Allen Poe's raven—a dispirited croak of "Never more".
  Anyway, whatever right hon. Gentlemen may have done in Government, at the moment they seem to agree with us on this side of the House on one matter

  45
  at least, that my right hon. Friend is right in reducing the burden of taxation in total, for no one has suggested that he should have reduced it by less.
  It is true that my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), if he catches your eye, Mr. Speaker, may yet prove us all out of step in this matter, but so far not even my hon. Friend the Member for Oswestry (Mr. Biffen) has made this suggestion. He made a number of other points in a speech which was as interesting and original as his speeches usually are, and expressed with his usual cogent wit. I hope he will forgive me if I say that in seeming to prefer purchase tax to value-added tax, admittedly as the lesser of two evils, he was allowing his dislike of the Common Market to overcome his abhorrence for any distortion of the market—far worse, of course, under purchase tax than under value-added tax.
  I should like to take this opportunity of congratulating two of my hon. Friends on their maiden speeches, both delivered with force and clarity. I am certain the House will look forward to hearing more from them.
  My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) praised his predecessor and sought to follow his example in speaking up so vigorously in the interests of his constituency, and particularly Cornish tin mining. We are not ignorant of the problems which he described, and we are studying them. Nor are we so callous towards the arguments which he put forward as he would have the House believe; but, as he himself said, there are difficulties.
  My hon. Friend the Member for Truro (Mr. Dixon) made some suggestions with not all of which, I think, his hon. and right hon. Friends on this side of the House would agree, but in so doing he brought out very clearly what is one of the main objectives of the Budget, to encourage rather than to penalise the creation of new wealth, and to encourage not only small savings but also individual investors. This is a theme that has long been an enthusiasm of mine, so I have considerable personal sympathy with some of the arguments put forward by my hon. Friend the Mem-
  46
  ber for Surrey, East (Mr. William Clark), who also referred to the exemption of small disposals from capital gains tax, as did my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat) in, incidentally, the first Budget contribution that the House has heard from that constituency by force of circumstances for many a long year.
  I should make clear to them that the Government wanted to make the £500 disposals exemption in 1970–71, bringing it in now for this year. It would have been wrong to withdraw the £50 gains exemption, in effect retrospectively, at the same time. The two will run together but only for 1970–71, since it would obviously be complicated and confusing to have two different types of exemption with their separate marginal concessions as a permanent feature of the tax code.
  Perhaps I should also make clear to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who suggested the exemption from capital gains tax of unit trusts and investment trust companies, that the tax treatment of these organisations and of their unit and share holders is being kept open, so that it can be considered as part of the review of corporation tax, and he will see a reference to this in paragraph 28 of the Green Paper. He mentioned, too, some aspects of estate duty, as did my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). My right hon. Friend the Chancellor of the Exchequer during the coming year will be considering these proposals, together with others which have been made for changes in estate duty.
  I turn now to my main task this afternoon, the question of the scrutiny of taxation and the recent report of the Select Committee on Procedure, which was raised by the Chairman of the Select Committee, my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), the hon. Member for Ashfield (Mr. Marquand), my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) and the hon. Member for Dewsbury (Mr. Ginsburg)—
  Mr. John Mendelson: Before the hon. Gentleman departs into

  47
  these highly technical matters—he said a little earlier on the general strategy of the Budget that the Chancellor was planning some reflation. Will he not admit that the Chancellor will maintain the present level of unemployment unchanged and have not the Government a case to answer on how they are failing the country in not trying to reduce the level of unemployment?
  Mr. Macmillan: I am sure the House is grateful for a preview of the hon. Gentleman's speech, which my right hon. Friend will deal with in due course and which I shall come to at a later stage, if he will be content to wait until then.
  The report makes five recommendations. What I have to say about them is not necessarily the final view of the Government, since the report was published only in February and we can at best put forward an interim view.
  The first recommendation was that it should be possible for a private Member to move Amendments altering the incidence of a tax so that some people paid less and others more, provided that the total amount was not increased. I have great sympathy with this intention, and would like to see what can be done to get more useful, constructive Finance Bill debates with fewer artificial restrictions on the sort of Amendment that can be put down. There are some problems, as the House will realise. The Committee had in mind the maintenance of neutrality within a given single tax. There will be the question of who is responsible for the definition of "neutrality", and there will also be the difficulty of preventing that definition limiting the less restricted "incidental charges resolution", which we introduced in 1964, in a way which would lessen its effectiveness. However, we will try to overcome these problems for, as I have said, we are by no means opposed to the idea, but we have not had long to consider the details, and I am afraid that I cannot go any further today.
  There is much the same sort of difficulty with the second proposal—to publish parts of the Finance Bill in advance. I fully accept that it would be a great help to the House to have the longest practicable time to study the whole detail of tax changes before the
  48
  start of the Committee stage, however this might be done, whether by prepublication of selected parts of the Finance Bill, or by stretching the timetable as widely as possible.
  The Budget this year has been fairly early, and we can stretch the programme a little. The Finance Bill will be published soon, indeed, after the Easter Recess, and we shall go as far as we can to meet the Committee's points about the spread of time between the various stages. The White Paper which will be published with the Bill will also help in this respect. This year it was not possible in the time available even to try to get some parts of the Finance Bill published in advance without a great risk of an appalling general delay. We will see what we can do for future years to speed up publication and to combine this with the publication of some Clauses before the Budget, but this depends on the nature of the Bill and on the availability of suitable Clauses.
  Since it is already known to the House that we intend to legislate on value-added tax this autumn, I have no hesitation in relaxing my ingrained habit of caution far enough to give a firm promise that there will be a second fiscal Bill next Session in response to the Committee's proposal for an ancillary Finance Bill. I am reluctant to step so far out of character as to make a firm promise for next year, but such a procedure is not wholly unlikely. There may be a similar need, although one cannot be certain in advance that such a need will arise in any given year, or that there will be enough ancillary matters to justify a second Bill, and I am sure that my right hon. Friend the Leader of the House will wish me to say that one cannot be certain that there will always be parliamentary time for such a second ancillary Bill. But, in general, we would not resist this proposal when it is suitable.
  The Committee's fourth and fifth recommendations taken together amount to a proposal that taxation matters should be examined in advance by a Select Committee on Taxation, by a Sub-Committee of the Select Committee on Expenditure or at least by an ad hoc committee set up for the purpose. This is much the most important and controversial of the Committee's proposals. I repeat the point

  49
  I made earlier, that what I say now is not necessarily a final view.
  In giving evidence to the Select Committee on Procedure I made it clear that, strong though the arguments put forward were, I felt the arguments against the procedure suggested were even stronger. This remains the Government's present view. A permanent Select Committee or Sub-Committee with a remit over the whole tax field would inevitably develop the sort of political controversy that should inform debates in this Chamber rather than proceedings in a Select Committee. Indeed, there was some evidence for this in the speech of the hon. Member for Ashfield (Mr. Marquand). He suggested, in examining the value-added tax, that a Select Committee
  "could help in elucidating the options and problems in that sphere."
  He was referring to the value-added tax and to
  "compensating measures to make sure that the regressive effects do not take place."—[OFFICIAL REPORT, 1st April, 1971; Vol. 814, c. 1794.]
  That was a suggestion that the Select Committee should be in a position to make clear to the Chancellor of the Exchequer proposals for measures, the object of which was to obtain a political end laid down for the Chancellor by the Committee.
  Mr. David Marquand: I do not think that is quite what I said, and it is not what I meant. "Elucidating" was the key word. "Elucidating the options" surely does not imply that the Committee would make recommendations.
  Mr. Macmillan: It is extraordinarily difficult to list with entire neutrality a series of options, particularly on a hypothesis which itself is disputed, as the hypothesis that a value-added tax is necessarily regressive is disputed. One of several reasons why the Government feel that such a taxation committee is not a suitable method of examining such problems is the inevitability of this type of argument developing, not only with Ministers present, but when officials are liable to be dragged in to a fundamentally political discussion.
  Perhaps I could digress to deal with some of the points of doubt raised about the value-added tax. I reassure hon. Members on both sides of the House that it does not necessarily put up the cost of
  50
  living relative to the effect of selective employment tax and purchase tax which it replaces. It depends on the rate and the coverage. Neither is yet decided, and the rate will not be decided until the tax is brought into operation.
  I should have thought that by now the position concerning food was clear. With the possible exception of a very few items which are now subject to purchase tax, food will be relieved of value-added tax.
  Mr. John Roper: Does the right hon. Gentleman mean that it will be an exempt item or at a zero rate?
  Mr. Macmillan: If the hon. Gentleman had waited a second or two, I would have dealt with that point. Food will be relieved of value-added tax. There are various methods of giving relief from value-added tax. They are described in general terms in paragraph 2.11 of the Green Paper on the tax. The other possibilities for dealing with food are described in some detail in paragraph 4.3 of the Green Paper. No decision has yet been taken or will be taken on the methods to be used for relieving food until the National Farmers' Union and other interested parties have been consulted.
  Turning to the question of the future of value-added tax should we be successful in entering the European Economic Community, members of the Community are free to decide value-added coverage individually. The aim is to harmonise indirect taxation, including value-added tax throughout the Community. No decisions have been reached on the details. I understand that that is still the case, even after the decision of 9th February to which my right hon. Friend the Member for Thirsk and Mal-ton referred and which reaffirmed the harmonisation commitment. We shall have to harmonise, too, in due course, but only after such transitional arrangements as may be negotiated and probably on a basis of decisions taken by the enlarged Community.
  I should like to make a final point on value-added tax which I hope will give some comfort to my hon. Friend the Member for Dartford (Mr. Trew). Although it is described as a tax-on-tax system, it does not mean, as my hon. Friend feared, an automatic increase on the total tax paid on hydrocarbon oils.

  51
  It depends on the intention of the Chancellor of the Exchequer at the time of the introduction of value-added tax. He can adjust the duty on hydrocarbon oils in the light of the rate which he decides for value-added tax so as to leave the total tax paid unchanged compared with the previous year or, if he wishes, to raise or lower it.
  Reverting to the report of the Select Committee, in giving evidence about the proposal for setting up a committee on taxation I made it clear that the Government were prepared to consider setting up ad hoc committees on specific problems about taxation, including Green Papers and possibly a value-added tax. I made it clear in answer to Question No. 19 that, in considering discussion on value-added tax, consideration
  "would in some ways, in certain circumstances, be a rather theoretical consideration. The Chancellor would have the choice of referring it "—
  that is, the Green Paper—
  "to a Select Committee; but doing that in one year means forcing its introduction to wait until another year because of the timetable."
  That is pretty well the situation today over the two Green Papers. The Government are not willing to delay the abolition of selective employment tax and purchase tax and the introduction of a value-added tax beyond April 1973. That means that it will be necessary to introduce a Bill soon after the start of next Session. So there will be no time for a Select Committee to consider and report before the Bill has been prepared.
  Mr. Joel Barnett: May I refer back to the right hon. Gentleman's unusually discourteous reply to my hon. Friend the Member for Farnworth (Mr. Roper)? Does the right hon. Gentleman accept that if the Chancellor of the Exchequer chooses to use the exempt method for food that will mean, in practice, a tax on food?
  Mr. Macmillan: I said that food will be relieved of value-added tax. The method has not been decided, and it will be decided in consultation with those concerned.
  Mr. Barnett Mr. Barnett rose—
  Mr. Macmillan: I shall not give way. There is no question to answer.
  Mr. Barnett: There is.
  Mr. Macmillan: The hon. Gentleman asked whether food was to be exempted from value-added tax. My hon. Friends the Financial Secretary and the Minister of State and myself, in answering Questions, have said, and I repeat, that food will be relieved of value-added tax and we shall use such methods as are necessary to do just that. The methods open to us are set out in the Green Paper and we shall use them after discussion.
  Mr. Barnett: This matter is dealt with in paragraphs 2.12 and 2.13 of the Green Paper. If the exempt method is used, and the Chancellor has left himself free to use that method, a farmer, for example, who pays value-added tax on a piece of machinery would recoup it through the price he charges his customer. Clearly that would be a tax on food.
  Mr. Macmillan: That is a very interesting hypothetical argument, but it is not relevant. The hon. Gentleman was quoting from paragrah 2.11. which deals with general reliefs from value-added tax. All that I said was that food will be relieved and that we shall, after discussion with the interests concerned, use such methods as will relieve food. I cannot be more specific than that. Food will be relieved. If the hon. Gentleman is not happy about that, there is nothing that I can do to make him happy about it.
  The timetable for corporation tax is not quite so difficult, although I must admit that there is not very much time to spare. In such a case, legislation inevitably takes a fair time to draft properly, and it has to be ready for next year's Finance Bill. But we are prepared to consider the possibility of a Select Committee to study the Green Paper on corporation tax; that is to say, we are prepared to see whether it is possible for a Select Committee, set up ad hoc for the purpose, to examine the proposals set out in the corporation tax Green Paper, without facing such a Committee with a ridiculously short time in which to consider the whole matter and prepare its report, bearing in mind the timetable, the recess and so on.
  I am aware that a great deal of what I have had to tell the House about what we can do with regard to Select Committees will disappoint those enthusiasts

  53
  on both sides who have done so much valuable work on these problems. But I assure them and the Chairman of the Select Committee on Procedure, my right hon. Friend the Member for Thirsk and Malton, that, given the Government's present views on any permanent tax committee, we have done our best, subject to the constraints of the timetable and other difficulties, to meet their proposals in other ways.
  We have embarked on a very large programme of tax reform. It puts a considerable strain on all the Departments concerned which have already had to work almost unbearably hard to take matters as far as they have in so short a time. It is impossible to carry out such a programme without keeping to a very strict timetable, because the different parts of it all depend on each other.
  My right hon. Friend has published full details as far ahead as possible of the necessary legislation for these reforms, which is a great deal more than our predecessors ever did. My right hon. Friend has told the House and the country exactly when we shall bring in the legislation. All this has been done within nine months of taking office. Nor is it all plans for the future. My right hon. Friend has started the process of reform; indeed, a start was made last October, four months after the election.
  It is all very well for the Opposition to criticise this Budget for having too little effect on wages and prices. It was little enough that they did when they were in Government. In 1969, they relied ineffectively on co-operation with the T.U.C. In 1970, they did absolutely nothing to slow down the rise in prices. They did rather the reverse, in fact. Their criticisms leave out of account two of the main objectives of our policies: responsibility and realism. First, we are seeking to act on wages and prices without compulsion by the Government as such, outside our public sector responsibilities. Secondly, we are trying to bring back a sense of financial and economic realism to both the private and the public sectors.
  My right hon. Friend's Budget is immensely important to these two objectives. If we are asking the trade unions to see that pushing up wages so much faster than the rise in either prices or
  54
  production is self-defeating, we should not force them to contend with higher taxes but, rather, provide incentives for greater productivity by reducing marginal tax rates. This Budget does that.
  If managements are to stop responding to rising costs by automatic increases in prices without further consideration, we should not squeeze profit margins unbearably, as right hon. and hon. Gentlemen opposite did. Rather, as my right hon. Friend has done, we should reduce and recast the whole system of the taxation of companies and alter investment incentives to encourage profitable investment.
  If people are to accept that a pension increase, as it does under any Government, means an increase in contributions, too, we must not add in an increase in taxation. Rather, we must return more than the increase through tax reductions and through not putting up the contributions of lower wage earners. For the unions, managements, and people at large, these are three ways in which the Budget helps to combat inflation directly.
  In addition, we have begun to cut public spending—and I assure my hon. Friend the Member for Oswestry that it is the beginning—without cutting essential programmes. Rather, we are giving extra help where the need is greatest. This means that more of the costs fall on those who can afford them. We have begun also to reduce the total burden of taxation—
  Mr. Eric S. Heffer: Very stirring stuff.
  Mr. Macmillan: All the measures brought in by my right hon. Friend in his Budget and in last October's are an essential part of creating the conditions in which responsibility and realism can help prevent the erosion of a higher standard of living by inflation and allow real incomes to increase for the earner, the saver and the pensioner alike. As my right hon. Friend himself said last Tuesday, there is a great deal more to do, and not all of it by the Government. We have made a start. In my right hon. Friend's Budget and in all our other measures, we are doing what we said that we would do, in opposition, in the election. and afterwards. We shall go on doing just that.
  4.38 p.m.
  Mr. Anthony Wedgwood Benn: The Chief Secretary struck one responsive chord in my mind when he was discussing the possibility of siphoning off further debate on taxation changes to a Select Committee.
  I must ask for the indulgence of the House, since in my 21 years here I have never spoken in a Budget debate. To the outsider debates on the Budget often seem to be confined to a magic circle, restricted to economists, tax lawyers and accountants. I am reminded of the French saying that "There is more in common between two deputies, one of whom is a revolutionary, than there is between two revolutionaries, one of whom is a deputy". In this House, I sometimes think that there is more in common between two taxation experts, one of whom is in opposition, than there is between two members of the Opposition, one of whom is a taxation expert.
  I must therefore ask the House to allow me to turn to what seems to be the political judgment behind this Budget. When the Chancellor sat down on Tuesday and his supporters erupted with cheers, and when the Stock Exchange responded generously the following day, they were not cheering the statistical neatness of the Treasury's forecasts or the administrative genius of the Inland Revenue for changing our tax structure. They were cheering the political judgment of the Chancellor.
  Now that we have had the opportunity of reading Mr. David Wood's article this morning, we know exactly what they were doing. Mr. David Wood said:
  "Backbenchers could scarcely believe their ears as they heard Mr. Barber going through his well-prepared check list, ticking off the party promises that were being kept."
  I hope, therefore, that both sides of the House will allow me to go through the same check list as the Chancellor and to consider the political judgments that lie behind the Budget.
  The first judgment is that the level of unemployment is about right and cannot really be reduced. The only possible interpretation of the measures announced by the Chancellor was that although he was not prepared to see unemployment rising to some of the worst extremes of the forecasts, neither was he prepared to bring unemployment down. The first
  56
  judgment, therefore, which the party opposite were cheering was that the level of unemployment which we now have was about right. [Interruption.] Let my right hon. and hon. Friends hear my argument and what the debate is about.
  The second thing hon. Gentlemen opposite were cheering—since it is a good legal principle, the Chancellor, as a lawyer, will know that a man is presumed to intend the consequences of what he does—was that investment should remain about stationary for the rest of this year and rise by ½ per cent. next year; that is, that there was not to be a stimulus of investment of a kind which, in Opposition, certainly the Secretary of State for Trade and Industry was continually demanding, although at that time the level of investment in the forecasts was much higher than it now is after the Budget that we have had this year.
  Thirdly, they were cheering the argument that the unions are mainly responsible for inflation, and must be controlled either by employers, to whom continual appeals were being made, or, alternatively, by the Industrial Relations Bill now before another place.
  Fourthly, they were cheering the basic argument, which emerged from the Chancellor's speech and from the speeches of many of his colleagues, that the market really is the best determinant of as many parts of the economy as can be left to it, that subsidies of all kinds are wrong, that competition is the best way of dealing with prices—I shall come to the extent to which competition is helpful in dealing with inflation as it affects prices—and that, broadly, public enterprise should be restricted or held back.
  Fifthly, for this is the only interpretation which one can put on the Chancellor's speech, that Britain must be in Europe as part of the strategy. The announcement today about the early legislation on V.A.T. confirms what the Secretary of State for Trade and Industry said in his Press Gallery lunch the other day—that he saw Britain's entry into Europe as "our single most vital step."
  Sixthly, that taxation has in the past been too egalitarian and that a greater degree of inequality is necessary for growth. That was being cheered last Tuesday.
  Finally, that public expenditure is too high and ought to be systematically held

  57
  back. These were the judgments which lay behind the Budget presented by the Chancellor.
  We are grateful to Mr. David Wood again for explaining why we have been able to detect in the Budget a certain degree of irrelevance. It was a Budget prepared after Selsdon Park. This Budget could have been bought from the Conservative Central Office a year ago. Indeed, this is exactly what we suspected when we heard its presentation. But just as our criticism of the Industrial Relations Bill is that it was based on "Fair Deal at Work" which came out before Donovan, so our complaint about the Budget is that it was a product of Selsdon Park and was thought out before the election. Indeed, it is described as "a covenant between the Prime Minister and the late Iain Macleod prepared before the Government confronted the reality of the problems which fall to be debated today.
  I want to turn to some of the judgments to see whether they can stand examination.
  First, the level of unemployment. Listening to the Chief Secretary, and recalling his father's concern with unemployment, I wondered whether we should hear anything from the hon. Gentleman about unemployment. I refreshed my memory of what was said in "The Middle Way" by the former Prime Minister, and I came across these words, which I think it right to put to the House again today. Mr. Harold Macmillan said:
  "In a society in which opportunities of employment occur according to the efficiency of a vast and complicated economic mechanism employing co-operative methods of production, society should accept the responsibility of so governing that mechanism as to provide the individual with the opportunity to work."
  That was "The Middle Way" commenting upon a much more serious pre-war depression, but becoming rather more relevant as the levels of unemployment begin to rise high again.
  I recall the debates in the spring of last year when, with much lower figures of unemployment than now, the then Opposition chose to put down two censure Motions. Today, looking at the level of unemployment, it is no longer true to say, as we said—it was true in our case—that unemployment was principally
  58
  a regional problem. The fact is that even in the Midlands, and in some areas where unemployment has not been a source of anxiety, the spectre of unemployment is beginning to rise again.
  Not only does unemployment involve a massive waste of talent far exceeding any loss of working days in strikes, but it has other effects. I want to draw attention to some of the consequences of unemployment which I think that we should take into account.
  Mr. J. Bruce-Gardyne: The right hon. Gentleman said that at the time when the Labour Party was presiding over our fortunes, unemployment was only a regional problem. Does he recall that his right hon. Friend, in his Budget judgment last year, forecast a rate of increase in money supply for the year which has just ended which was predicted by all commentators at that time to involve inevitably an overall and substantial increase in unemployment?
  Mr. Benn: I am not sure whether that judgment would be regarded as noncontroversial. In fact, what was predicted last year was some pick up in the rate of growth, which did not occur. If our criticism of the Budget, that it represents too slow and too late a stimulus to growth, has validity, it is because the Treasury forecasts last year did not turn out to be correct. That is why we believe that the stimulus we now see has come too late.
  I should like to draw attention to the consequences of unemployment on the general state of the economy as a whole. Undoubtedly one effect of the present level of employment and the forecast of rising unemployment is that it will reduce the likelihood of productivity agreements being brought to fruition. It is no good expecting the same interest and support of working people in productivity agreements which necessarily have and are intended to have the effect of getting fewer people to do the same amount of work if it is done against a background of rising unemployment.
  Secondly, checking the rate of growth in the economy is one factor contributing to the continuation of inflation. Anyone who believes in unemployment as an instrument for checking inflation should look again at the circumstances of

  59
  modern industry. A reserve army of unemployed to hold down wages used to be the theory. I do not say that that is exactly what is being advocated by the Government today, but the theory that a higher level of unemployment had a depressing effect on wage claims and settlements is totally inaccurate in modern circumstances. We can see that, with inter-dependence in industry, the bargaining power in certain key industries is wholly unaffected by the general level of unemployment.
  It is all very well for the Prime Minister to have lunch with Henry Ford when he comes to Britain to reassure him about the British economy, but when Henry Ford has to make his offer at Dagenham or elsewhere he is facing a claim virtually unaffected by the general and rising level of unemployment elsewhere.
  I now turn to a second consequence of the delay in creating the necessary stimulus which stems from the Budget judgment—namely, the prospects for investment. The Secretary of State for Trade and Industry at Question Time today told the House that the estimates recently published, showing a virtually zero change in investment this year and a half per cent. increase next year, should be seen against the prospect of a steadily rising rate of investment afterwards. But this does not take account of what the Government have already done in abolishing investment grants. There is absolutely no doubt in the minds of anyone, particularly in the regions, that the decision to abolish investment grants, taken, as the Government frankly admitted, before their own review of regional policy had been completed—again, a Selsdon Park decision, taken in the very uncertain world of Opposition before the facts were made available by Government Departments—is one of the major reasons why investment forecasts over the next 12 months will be so low.
  I want to put one point to the House which has some general validity apart from the question of our disagreement. If we want any measures to be effective we have to leave them long enough for people in industry to become used to them and to be able to rely upon them. That was why we introduced the regional employment premium. After having published a Green Paper on it—I think that
  60
  it was the first Green Paper to be published—we deliberately laid down a long period so that people could be sure that the premium would be of benefit to them.
  We always recognised that the substantial sums of money which were paid in subsidies—for that is what regional policy is; a subsidy to regions where the level of activity is below what is tolerable and economically sensible—would never pay full dividends until it was possible to obtain a general increase in the rate of growth. It is not possible to persuade people to move into the regions unless there is a greater degree of buoyancy in the economy as a whole. Therefore, at the very moment when we had a balance of payments surplus which my right hon. Friends and my colleagues were able, after a great deal of effort, to help to bring about, and at that moment when the opportunity arose to make those regional discriminations effective, they were discontinued.
  The Chancellor must know very well that the degree of sophistication and planning that he or any Chancellor can introduce is effective only to the extent that it is matched by a sophistication and understanding on the part of the managements to whom it is directed. We can introduce very complicated measures in the Budget, but until they have sunk into the managements that might benefit by them, and for whom they are intended, they will not be effective.
  One reason why the regional discrimination that we introduced was more effective in respect of American firms than British firms was that American firms, making their calculations about expansion, could see earlier than some British managements the obvious value of discriminatory investment grants in the regions, and moved their new plant there at an earlier stage. By absolutely dismantling the structure of regional discrimination at this moment the Government have performed a great disservice and have contributed to the continuing unsatisfactory nature of investment.
  It is not only to the private investment side that we now have to turn our attention. We have had a statement today by the Secretary of State for Trade and Industry about a very important piece of investment, namely investment in the Steel industry. I listened to the Secretary of State on the radio programme

  61
  "The World at One" yesterday. I took down what he said when he was asked about the consultation that he was having with the steel industry. It is worth quoting to the House. He said:
  "The intensity of it is a matter, I fear, I couldn't exactly illustrate to you, or define. I don't know."
  He went on:
  "What people, I think, don't realise enough is that when you are dealing with a corporation of this size, you are dealing with one of the most enormous and one of the most important elements at all; and to take steps and make decisions without really going most deeply into the question and most carefully, would be the folly indeed."
  That is what he said on the radio yesterday when asked about the steel industry. Contrast that with what appeared in the Conservative Party manifesto, namely:
  "We will progressively reduce the involvement of the State in the nationalised industries, for example in the steel industry."
  The truth is that the Government have intervened on the prices side, but only in the public sector, and with the regional implications of any acceleration in redundancies as a result of the Government's intervention there is even greater grounds for anxiety.
  I turn now to the reasons which the Government have given for their Budget judgment and for the degree of stimulus they thought it necessary to give. The first is that inflation has made it impossible for them to do more. Here again, there is a straight conflict between what is said by Ministers about the causes of inflation—and it was said again by the Secretary of State for Trade and Industry today—and what was said about inflation by the present Government when in Opposition. Today we are told that inflation is entirely attributable to unjustified wage increases granted by irresponsible management, but last summer the Tory Party manifesto said:
  "The main causes of rising prices are Labour's damaging policies of high taxation and devaluation … So wages started chasing prices up in a desperate and understandable attempt to improve living standards."
  They were then trying to win the votes of trade union members. There was none of this blanket condemnation of the unions as being the sole cause of inflation. The plain truth is that we cannot tackle the problem of inflation—we all accept it as one of the central economic problems now confronting the
  62
  country—by disconnecting incomes from prices and trying to bear only on one side, nor can we deal with prices by concentrating solely on those in the public sector, which inevitably has the effect of providing a subsidy for the private sector. It is now quite clear that the S.E.T. reductions that have been announced are most unlikely to work their way through into any serious reduction in prices.
  Next, we cannot disconnect wage claims from the Budget tax remissions, in this case granted to those with very high incomes. It is no good the Chancellor's rebuking Jack Jones, Hugh Scanlon and others for their wage claims when the general secretary of the national union of surtax payers—the Chancellor of the Exchequer—is giving increases to his own constituents much greater than any that are claimed in the so-called "most unjustifiable" claims being made today. Chancellors of the Exchequer have in the past tried to close tax loopholes year after year. This Chancellor must be the first who, using his knowledge of tax law, has taken a pair of wire cutters to open a bigger hole for those whom he thinks would be able to benefit by what he can do, and has shown by the aid of a torch how best to benefit.
  The second basis of Budget judgment was that the balance of payments did not permit any greater stimulus to the economy. We have the strongest balance of payments in our history, but in giving his reasons for caution in the second day of the Budget debate the Secretary of State for Trade and Industry expressed three fears which he indicated made it necessary for the Government to limit what they were able to do. First, there was an unfavourable trend in exports and imports. Secondly, there was the higher cost of oil from the oil-producing countries and, thirdly, the limitation that had to be put on the stimulus that could be given, due to our impending entry into Europe.
  Of course, this reason, which was fully developed by the Secretary of State, raised in my mind and in the minds of a number of people who heard him the fear that the approach to Europe, with the payments across the exchanges which would fall due to us on entry, might be used as a reason for locking us into a lower level of growth at this stage than we would need if we were to

  63
  get the take-off necessary to benefit from the higher growth which it is thought we could acquire by entry.
  One of the anxieties, therefore, which we have is that this intending burden of the transitional payments arising out of the entry of Europe may be used as a way of keeping our rate of growth below the level which we shall need if we are to benefit even from the advantages of entry if acceptable terms can be found.
  On the European question, it is clear that, although the actual terms of entry will not fall to be debated by the House until later this year, already there are certain aspects of this which are becoming dominant in our debates. I have given one example, the reasons which the Secretary of State gave in explaining why it was not possible to give a greater stimulus to the economy. The second is the decision to go ahead with the value-added tax, with the legislation which we now understand is coming this autumn.
  Third, there is the anxiety which many of our people feel—this will also be felt by hon. Members opposite with constituencies in the regions—that entering Europe with regional discrimination disappearing, with the demobilisation of regional measures, could actually have a very much more damaging effect on growth in the regions even than has been brought about by the dismantling of the special discrimination which we have seen over the last few months, with the end of R.E.P. and investment grants, and the anxiety that, in a wider market, where obviously the pull of the centre will be greater, the regions could suffer even more than they have done in the last few months.
  But all this reflects the Government's general philosophy, which came out very clearly in the course of the Budget debate, that the market is the best determinant for the allocation of resources. In a number of speeches—I heard him recently making a speech on this subject to the Press Gallery—the Secretary of State underlined again his belief that the whole apparatus, as he would describe it, for developing a working partnership between Government and industry was totally unacceptable to him—in marked contrast to the experience of many other countries which have, without any
  64
  Socialist inspiration, certainly succeeded in maintaining a far closer supervision of industry.
  I cite only one quotation from many which I could give, from the Director of Planning of M.I.T.I. in Japan, who, in a recent paper on the work of the Ministry of International Trade and Industry, made it clear that, for the Japanese Government—no one should forget that they have the highest rate of growth of all—
  "It is, therefore, unrealistic to expect some self-regulating market mechanism …"
  to perform the functions in a modern industrial society. All the evidence which one can get from the work of our major competitor in Japan suggests that they have long ago rejected the idea that Government can step entirely aside from industry.
  Even in the European Economic Community, it would not be true to say that there was not some degree of protection. The French farmer, I imagine, enjoys a degree of protection which even the Secretary of State would find it difficult to approve. My French is not good enough to translate "lame duck" into French, but perhaps "le canard blessé", a wounded duck, might be appropriate. Probably "boiteux" is really the word, but "canard blessé" has rather more of a popular flavour about it, and I am not sure that, even in the Common Market, the doctrines of laissez-faire will apply to quite the extent that the Government believe—
  Mr. A. E. Cooper: It should be
  "canard a la Labour ou non-travaille".
  Mr. Benn: I yield to the hon. Member in my knowledge of French but he will know that an exchange in a foreign language across the Floor is contrary to the rules of order. The Chair will probably correct me, as it did Sir Winston Churchill for addressing the House in Welsh.
  I turn now to the taxation proposals in the Budget. All I want to deal with here is the view reflected by the Chancellor, which won him so many plaudits from his friends, that our system has been too egalitarian in years gone by. The Chancellor made two references to the problems of taxpayers and their advisers, as if the nation were full of taxpayers and

  65
  their advisers at every level of income, and as if the problem at Dagenham were the Ford workers and their advisers, who found it so difficult to manage under the present tax structure.
  In his broadcast, according to the Daily Telegraph, the Chancellor gave two other reasons:
  "One, men at the top of industry need incentives not to be tempted to give up and work abroad."
  That is the most astonishing doctrine, that Lord Stokes was retained here only by the sort of tax remissions made in the Budget. The truth is, the brain drain has never been a problem at the top. No one has ever left from the top; there is no mobility at the top. The problem has always been lower down.
  But anyone who read the Jones Report on the brain drain, which we commissioned, will know that its conclusion was that,
  "for qualified men, the effect of taxation (if properly understood) is unlikely to sway a decision to emigrate."
  And anyway, the brain drain is no longer a problem. There are thousands of British scientists and engineers clamouring to come back from the United States, where the science squeeze has hit them, and this began long before the change of Government.
  The second reason which the right hon. Gentleman gave was that the effect of taxation was to make overtime less acceptable. But if the right hon. Gentleman had read the P.I.B. report on overtime, he would know that taxation was a very minor factor, that only one in ten referred to it. In any case, the tax tables published in The Sunday Times show that the very man who is in exactly this middle bracket, who needs the bracing of which we are always told—even up to the £3,000-a-year man, the very highly paid worker, if one likes—is actually, taking tax, food, National Insurance contribution, rail fares and health charges increases into account, worse off to the extent of £7 a year.
  Anyone who really thinks that this Budget was an incentive Budget, designed to help that sort of person, upon whom so much of British industry depends, is absolutely wrong. The truth is the Chancellor has made a conscious decision to increase inequality as a stimulant to growth, and it is a massive miscalcula-
  66
  tion. As anyone can see who uses the evidence of his eyes, this country is still cursed by the fact that it is two nations in terms of capital, income, variations amongst retired people and between the richer and the poorer parts of our cities, and to increase that gap as a conscious act of policy is totally unacceptable.
  There is one other aspect on which I should like to comment, stimulated by what the Chief Secretary said—the argument that public expenditure is too high and should be controlled or, if possible, reduced. This is a part of the built-in mythology of the party opposite, which they have stimulated as best they could in public speeches over the last five or six years. But the pressure for increased public expenditure is not a product of the fevered brains of doctrinaire Socialists; it comes from any ordinary observation of the nature of our society, and the many unsolved problems which still confront us. I have referred to some of them in the two nations. They are evident to anyone who likes to look around.
  If the Chancellor cares to take the Social Trends published recently by the Statistical Office and project them forward ten years, he will find that from every one of them comes a demand for further public expenditure.
  For example, the population increase of two million up to 1981 will require further expenditure on housing, schools, health and roads. The number of young and old people—in other words, dependants as a whole—will continue to rise until in 1981 for every 1,000 people at work there will be 700 dependants, the highest the figure has ever been. Only after that it will tend to decline. Thus, the burden on those at work in funding their children, aged parents and providing for education and social service payments is bound to increase if we are to maintain civilised standards.
  If one examines the number of women at work and projects the trends forward, one sees that from 1951 to 1981 a trebling of the numbers will require special expenditure for amenities and such things as nursery care, pre-school play groups and so on. All this arises from predictable forward trends. The same can be said for the number of deaths. If trends continue, in the 45 to 75 age group, 60,000 more people will be dying each year by

  67
  1981 than in 1968. This will require greater public expenditure, on hospital and health services.
  Consider the most basic statistic of all. Crime having doubled between 1951 and 1969, if it carries on and doubles again, and if the trend in those crimes which are not solved continues at the present rate, it will mean that by 1981 we will have a very low percentage of crimes being solved. Wherever one looks at the social trends, the case for increased public expenditure is staring one in the face.
  For the Government to speak as if poverty and deprivation can be dealt with by a little charity on the margin is totally to misundertand the nature of the "Better Tomorrow" which we are told the Conservatives are offering us.
  Captain Walter Elliot: In discussing the question of Government expenditure the right hon. Gentleman starts from a completely wrong premise. Naturally the gross amount of expenditure will continue to rise, but the real point is the percentage of the gross national product taken by the Government.
  Mr. Benn: I appreciate that, but I am arguing something different. I am saying that the trends of population which are revealed and the number of retired and young people rising to the highest figure we have ever known are all bound to increase the burden of taxation on those at work. People now demand a higher standard of living, a quieter and cleaner life and the rest of it. The level of public expenditure is bound to increase more rapidly, and I am saying that it is no basis to approach a modern electorate by saying that public expenditure is, of itself, undesirable and should, if possible, be reduced. The implication of everything that has been said about public expenditure and taxation by hon. Gentlemen opposite is entirely in that direction.
  The Financial Secretary to the Treasury (Mr. Patrick Jenkin): The fact that the right hon. Gentleman must put his argument into our mouths in those extreme and erroneous terms shows how weak an argument it is.
  Mr. Benn: Having listened to many of the speeches of hon. Gentlemen opposite,
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  not only in this House but at the hustings, and having noted their attacks on, for example, civil servants and the size of the Civil Service and how it should be cut and so on, there is only one conclusion to be drawn, which is that hon. Gentlemen opposite thought there was political mileage to be gained from suggesting that when they came to power they would dismantle some of the apparatus of the State necessary to meeting human need. That is the conclusion I draw.
  Addressing a group of business men in Cardiff recently, the Prime Minister —if the Sunday Times report which I have is correct—said:
  "'To managements I say: You asked for help to ease your investment problems—we've given it. You asked for greater liquidity—we've given it. You asked for tax incentives for your workers—we've given them. Now the Government and the community can expect something of you'".
  Giving a similar address to workers, the right hon. Gentleman said:
  "'You asked for a stimulus for the economy —we've provided it. You asked for higher old age pensions—we've provided them. You've asked for increased child allowances and for help for the lower paid workers—we've provided them … We've done our part. Now on behalf of the community, we have a right to expect you to do yours. Stop the strikes—start the work'."
  There was a vaguely familiar ring about that, and then I remembered where that approach to the public first appeared. It was in the Book of Genesis:
  28. And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth …
  31. And God saw every thing that he had made, and, behold, it was very good …
  2. And on the seventh day God ended his work … and he rested".
  The Prime Minister, having seen his colleagues present their Budget and various other measures, was evidently pleased with what had been done and thought it all necessary to solve the problems of the community. It achieved only one thing. It got Mr. Desmond Donnelly to join the Conservative Party, and a very welcome recruit he is.
  I can sum up by saying that in our view unemployment is unacceptably high and must be reduced; that further help must be given to the regions, particularly

  69
  if the Government contemplate entering the E.E.C.; that it is wrong to damage investment in the public sector at a time when investment in the private sector is likely to be stationary; that in tax policy there must be not just justice but justice that is seen to be done; and that the only basis for tackling the problem of inflation, which is one of the central problems of our economy, is by a sense of national partnership, which the present Government, by their Budget and other measures, have shown themselves to be incapable of achieving. As the shape of the Budget does not meet these needs, we shall vote against it.
  5.17 p.m.
  Mr. J. Enoch Powell: I gather that it falls to me, if not to congratulate the right hon. Member for Bristol, South-East (Mr. Benn) on a maiden speech, at any rate to welcome him to what he calls the club of those who take part in Budget debates.
  I hope that, with more experience and on subsequent occasions, he will not fall into the blunder of confusing the economic effects of a remission in taxation with the economic effects of an increase in pay or prices. It is to be hoped also that he will, as my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot) pointed out, concentrate his attention on the relevant facet of public expenditure—namely, the ratio of public expenditure to national income. If he will do that, he will find that many of the consequences which he treated as inevitable in future trends are by no means inevitable and may well turn out to be the reverse.
  There were a few points in his analysis from which I do not dissent; however, I observe at the outset that it has been the habit in these debates over the years for each side of the House to complain of its inheritance from the other. Hon. Gentlemen opposite used to complain of their inheritance of a deficit on the balance of payments. We are occasionally heard to be complaining of our inheritance of an inflationary situation.
  These complaints mistake the nature of the things about which we are speaking. Both these things, and I am particularly concerned with inflation, are in the nature of processes: unless they
  70
  continue, they cease. The surplus on the balance of payments before June of last year was not the same surplus, but a different one, from that which accrued after June of last year. Similarly, the inflation which occurred before June of last year is not the same as the inflation which has continued since.
  The fact which we are confronted with is the continuation of inflation at a high rate, and its continuation to the present time. That is not something which my right hon. Friend the Chancellor of the Exchequer in any way sought to deny or palliate. Indeed, the most emphatic passages of his Budget speech, particularly at the beginning and end, referred to the consequences of continuing inflation. In view of that, it is difficult to understand those who conduct the present debate in terms of reflation, as though the inflation were not continuing, and as though its rate was not the most serious problem we face. I am sure that the Chancellor of the Exchequer would not object to his Budget being primarily seen and tested in the light of its effect upon inflation.
  One respect in which I find myself in agreement with what the right hon. Member for Bristol, South-East said was his repudiation, which I share, of the notion, though commonly held, that inflation is the product of wage claims—or rather, of wage claims which are conceded. Still less is it the product of some fault in our system of industrial relations. There is much for criticism in our system of industrial relations. I am one of those who believe that Parliament has not been wasting its time but doing work of major importance in reforming the legal structure of our industrial relations. But what I do not believe will stand the test of reason is the proposition that that framework, or any other, has anything causally to do with the phenomenon of inflation.
  If hon. Members will take the trouble to look at what has been happening in other countries, they will find that in the three Scandinavian countries of E.F.T.A. in 1970 the rate of inflation was as fast as, or faster than, it was in this country. Yet those are some of the very countries which have been held up to us as paragons of the way in which we ought to conduct our industrial relations.

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  In the E.E.C. countries as a whole, if hon. Members will look back over the experience of previous years—and this was set out in a Written Answer on 26th March in cols. 229–230 of HANSARD —they will find that, taking one year with another, there is very little difference between the experience of various parts of the European Economic Community and that of this country in the matter of the rise of prices and the rate of inflation.
  Above all, we are entitled to look at Germany; for perhaps more than any other country Western Germany has regarded its own performance and procedures with great satisfaction compared with ours, and I have heard in recent weeks sneering references made in Germany to industrial relations in this country. Well, Sir, last year there was a 15 per cent. increase in earnings in Germany and only a 6 per cent. increase in production.
  So I think that we are entitled to dismiss as purely superstitious the idea that the phenomenon with which this country and other countries are confronted is the product of the egregious demands of a disorderly or undisciplined trade union movement, or that it could be dealt with by any alteration of the law, however necessary and desirable that alteration may be on other grounds.
  There is a Collect which refers to One who is
  "ever more ready to hear than we to ask;"
  but that is not the state of affairs here below. The state of affairs on earth is that we are always more ready to ask than there is the means of giving. That is a constant: there are always more demands in total being preferred than can be satisfied. When we find that the rate, in terms of money, at which those demands are being satisfied has suddenly increased, as it did in 1970, compared with previous years, we must look not to that which is constant—the asking, the demand—but to the means of satisfying it, and see whether there has been a change there—whether there has been a change in the supply of money for satisfying the demand for higher earnings and higher prices.
  Sure enough, we find that one of the most marked phenomena of 1970—my right hon. Friend referred to it several
  72
  times in his Budget speech—was the sharp increase in the money supply; a sharp increase which surely in reason must be related—whether as cause or effect, I will inquire—to the inflation which was our experience last year and which is our experience still.
  It is of the utmost importance to know whether that increase in the supply of money is cause or effect; to know whether in this matter the Government are passive, helpless, confronted with a phenomenon over which they have no more control, perhaps less control, than over the weather, or whether it is a positive controllable cause which is at work. That is the vital question, and on that question my right hon. Friend the Chancellor has been heard in recent months. About two months ago, speaking to a financial audience, he said:
  "The monetary policy appropriate to our present circumstances is one that does not passively provide the amount of money that is needed to underwrite the going rate of inflation, but something less."
  If those carefully chosen words mean what they say, they mean that the Government, if they chose, could provide less money—could finance not "the going rate of inflation", but a lower rate of inflation. They are an assertion that the Government, whether they like to use it or not, have the power, by the amount of money they "provide"—my right hon. Friend's word, not my own—to underwrite the present rate of inflation or to underwrite a lower rate of inflation, and that presumably, if they did not underwrite it at all, it would not continue.
  The same is implicit in the words my right hon. Friend used in his Budget Statement. He was referring to the past year and said:
  "In the monetary field, the policy I have pursued has been to allow an increase in money and credit sufficient to support a rise in the level of economic activity but not so large as to compound the pressures of cost inflation."—[OFFICIAL REPORT, 30th March, 1971; Vol. 844, c. 1362.]
  That is clear enough, too. It means that if the Government do not "compound the pressures of cost inflation", we do not have so much cost inflation, and if perhaps they sufficiently refrain from "compounding" them, we do not have cost inflation at all. My only observation on that policy is—and I am sure that my right hon. Friend shares this regret with myself and with all of us—that that was

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  not what actually happened. The "rise in money and credit" was not merely sufficient to cover the requirement of a comparatively modest rise in the level of economic activity, but was sufficient to "compound", or, to use my right hon. Friend's other word, to "underwrite", a very substantial cost inflation indeed.
  I will not weary the House with more than one other quotation from my right hon. Friend in another part of his Budget speech, when he said:
  "… this does not mean"
  —and I will deal with what "this" is in a moment:
  "that I intend the growth of money supply simply to accommodate the going rate of inflation."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1374.]
  So we may take it that the Government's view is that they have it in their power by control of the money supply, of the rate at which money and credit increase, to determine how much inflation there is. That is—it seems to me impossible to contest—their view and I respectfully say. it is a view which seems to me to stand the tests of reason and of empirical experience.
  But then there are other passages in my right hon. Friend's speech. There is the one in particular to which my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) drew attention last Thursday, where my right hon. Friend went on, from the passage which I have just quoted, to say:
  "As the rise in costs and prices is moderated, so the aim will be to slow down the growth of the money supply. This will depend on the progress we make in de-escalation."
  Here we seem to have swung across to the opposite point of view, and to be speaking as if the increase in the money supply were not a cause but a consequence, as if it were not initiatory but consequential; and we find the clue to the change in my right hon. Friend's previous words:
  "… there would be dangers for liquidity and employment if we sought immediately to reduce the growth of money supply to much below 3 per cent. per quarter."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1374.]
  So 3 per cent. per quarter, we are told, is the rate of growth of money supply upon which we are embarked, as at present advised—a rate of 12 per cent. a year, sufficient to finance not a lesser rate
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  of inflation than last year but possibly even a higher one.
  So it is as if my right hon. Friend were to say to the country, "We the Government will carry on providing an additional 3 per cent. per quarter addition to the money supply. We will go on inflating the money supply at a rate equivalent to 12 per cent. per annum. But we should like you to understand"—he continues, addressing the public, addressing all sections of the community—" that it is your business to act as though we were not doing so. It is your business to act as though, instead of increasing the money supply by 12 per cent."—and thus underwriting 12 per cent. inflation, presumably —"we were only increasing it by 10, 8, 6 or 4 per cent. Then, when we find that you have listened to us; when we find that you have behaved as you would do if we were acting in the way that I have explained we shall not be acting; when we find that you have behaved as you would be behaving if we were only underwriting an inflation of 10, 8, 6 or 4 per cent.; then we shall come along afterwards and slow down the growth in the money supply."
  There is undeniably a grave contradiction here, and it is a contradiction not of a minor character but one which goes to the root question of the cause and, therefore, the remedy of inflation. It is in no carping spirit that I have sought to expose this contradiction, because it is one which I believe not only the Conservative Party or the House but the country as a whole has to face and to resolve.
  My right hon. Friend has not left us in doubt as to the reason why, having asserted that the Government have the power to control inflation, he then goes on to say that they are not going to use that power until they find that inflation, for some other reason, is beginning to slow down. It is because of a relationship which he believes to exist between slowing down inflation and liquidity and employment. In short, he believes that if the Government were to use their power not to underwrite the current rate of inflation, then the consequences would be an increase in unemployment.
  I have never—for reasons which are implicit in what I have said to the House already—been one of those who regard

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  the manipulation of unemployment as a means of dealing with inflation. Experience shows that consistently with inflation one can have both high unemployment and low unemployment. The notion that employment is a kind of lever which can be adjusted to correspond automatically with a given level of inflation is simply absurd. There is no basic underlying connection between the real phenomenon of employment or unemployment and the monetary phenomenon of inflation. If we doubt this, we can reassure ourselves by looking, for example, at the experience of Germany and other countries. In the last 10 or 15 years, West Germany has experienced high growth in periods when it had no inflation and high growth in periods when it had what we should have regarded until last year as very substantial inflation indeed. It is a superstition, and a crude and dangerous superstition, a superstition which most of economic history refutes, to suppose that there is a simple linkage between growth or economic activity on the one hand, and inflation on the other.
  There is, however, a certain connection between employment and the cessation or reduction of inflation. It is a transitional connection, which arises as follows. We all extrapolate. All life is carried on by extrapolating, by assuming that the immediate future will resemble the immediate past. Therefore, in a period of inflation, all concerned—employers, trade unions, every element in the community —are working, consciously or not, on the assumption that inflation will continue. If inflation does not continue at the same rate, if it slows down, or is slowed down, or is not "underwritten"—to use my right hon. Friend's word—then those who prove to have miscalculated, or some of them, catch a cold. It is like a game of musical chairs. When the music of inflation stops, there will always be somebody who for the time being is without a chair until a new pattern of activity, behaviour and expectations is attained which corresponds either with a reduced rate of inflation or with stable money values. So it is, therefore, that in the short term the slowing down or halting of inflation has a transitional effect upon activity and employment by defeating and falsifying expectations.
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  But my right hon. Friend, the Government and, I feel, the House cannot just ride off from that fact and say: "In that case, we shall do nothing about it. In that case, that being so unpleasant, we will not use the means to combat inflation, which we have to our hand and do not deny that we have to our hand. We shall leave it alone and hope for the best."
  We cannot do that. Here is a monetary phenomenon, the result of an undue increase in the money supply, the result of an increase which, if it is not the result of Government action, the Government have admittedly the power to control or to prevent. Here is an evil which my right hon. Friend the Chancellor of the Exchequer stigmatised rightly as the greatest evil from which we are suffering, the greatest danger to this country. And we have in our hands the means of dealing with it. I do not believe that a Government can say, "Well, there will be transitional effects and therefore we will not use the methods which lie to our hand".
  I suggest another approach. If the transitional consequences are due to defeated expectations, then it is the business of the Government to minimise those transitional consequences by ensuring that as few expectations as possible are defeated. In other words, they must make it clear in advance what exactly they are going to do. They must make clear by their acts as well as by their words that in the coming 12 months the Government will bring about a substantially slower rate of inflation—to put it no higher than that—than in the last 12 months. In so far as they get that conviction across, people will modify their behaviour, decisions and expectations without waiting for the harsh chastisement of unexpected events. So it is by the clarity, the determination and the publicity with which my right hon. Friends pursue a policy—not a deflationary policy, of course; we are not talking about deflation; we are a long way from that—but a policy of reducing the rate of inflation and show they have the means and intend to use those means, that the inevitable transitional consequences will be minimised.
  Briefly, in conclusion, I want to look at the Budget decisions in the light of what I have just said. There are probably two major factors operating on the

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  money supply, at any rate in contemporary times. One, which was certainly operating last year, is the effect of the huge surplus on our balance of payments.
  It is not only in this country that a surplus on the balance of payments has proved to be a curse in disguise. Hon. Members will recall that it is only a year or two ago that the Germans were putting a tax on exports and a bounty on imports in an effort to avoid the misfortunes which a surplus on the balance of payments will bring. The Swiss—the happy Swiss, though they had an inflation of between 5 per cent. and 6 per cent. themselves last year—have for years been putting barriers round their country to try to prevent the rest of the world from pushing money into it—to try to prevent themselves, in other words, from having a corking surplus on their balance of payments. Probably in the last 12 months, to the discomfiture both of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and of my right hon. Friend, the huge surplus on the balance of payments has been the prime factor affecting money supply in Britain.
  I hope that I was right in reading into my right hon. Friend's Budget speech an intention that in the coming year there should be a genuine balance—not a trading balance, but a balance overall in our payments in and out. If the Chancellor aims at that, and if he can achieve that, it is not I who will quarrel with him as to the method by which he does it, though he is aware that given the preference which I hope we share in principle for automatic methods, I would think that it would be more likely to be achieved by allowing the price mechanism, in terms of the exchange rate, to work than by any other methods. As I say, I hope that I may take it that the object in the coming year is, at any rate, to avoid this source of increase of the money supply—the huge surplus on the balance of payments, the huge "total currency flow", as the Treasury put it.
  Finally, there is the much more long-term, much more endemic source of uncontrolled increase in the money supply, namely, a Government unable to cover their current cash requirements with their current cash inflow. I am far from thinking that there is some crude mathematics by which one can read off inflationary
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  consequences from the size of a net borrowing requirement. The net borrowing requirement is a useful bit of arithmetic, a useful concept; but one cannot just say: "Here is the net borrowing requirement. That is so much extra on to inflation". The underlying truth is that the larger the net borrowing requirement, the greater is the chance that in the circumstances of a particular year the Government will lose control of the money supply, even when they want to keep and to exert it.
  We ought to be under no delusion, particularly those of us on this side of the House, as to how we have purchased the tax remissions in this year's Budget. The tax remissions—£540 million in the coming financial year—happen to be just about the size of the Government's net borrowing requirement; or, to put it another way, it is not by a reduction of Government expenditure that we have earned those remissions which all of us welcomed—and they were all of them justified—in last Tuesday's announcement. We have done it by increasing the Government's, and indeed the public sector's, borrowing requirement by that amount, and more than that amount, in the coming year.
  What we ought to understand is that thereby, by substituting for last year's Budget expectation of a net repayment of £250 million a net Government borrowing requirement of over £600 million, my right hon. Friend's power to control events during the next 12 months has, to that extent, been weakened.
  Therefore, it comes down in the end, in terms of years, to the ability and to the will to prevent inflation. The ability depends upon the Government being able to finance their expenditure without the risk of resorting to inflationary expedients. The will to do so, given the knowledge—I am saying nothing different from my right hon. Friend—that inflation is our greatest single enemy, the one on which we have to concentrate first and foremost, is the will to use the powers which are in our hands to combat that evil—[An HON. MEMBER: "Unemployment."]—the hon. Member who has just said "Unemployment" cannot have been present at the earlier stage of my remarks —the will to show the public that there is that determination, the will to show

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  why the use of those methods will bring, not loss to any section of any community, but benefit to all.
  5.45 p.m.
  Mr. J. Grimond: The right hon. Member for Wolverhampton, South-West (Mr. Powell) has, as usual, made an attack upon one of the central policies of the Conservative Government. I sometimes wonder why the right hon. Gentleman remains a supporter of the Government. He gained a certain amount of applause from this side of the House by seeming to say that it did not very much matter how high the wage claims might be; but that is not the right hon. Gentleman's real view.
  The right hon. Gentleman indicated that, after all, other countries, such as Germany, had had bad inflation and nevertheless were very prosperous economically. Germany is in a rather different position from us. She has had an immense inflow of foreign labour. She does not support a currency which is one of the world's reserve currencies. Wage increases of 15 per cent. against an expansionist economy of 5 per cent. or 6 per cent. are rather different from wage increases of 12 per cent. to 14 per cent. in this country against practically no expansion.
  Mr. Powell: I do not think that the right hon. Gentleman heard what I said. There was a wage increase in Germany of 15 per cent. against an increase in production of only 6 per cent.
  Mr. Grimond: That is exactly what I said. That is very different from the situation in Britain where the wage increase is 14 per cent. or 15 per cent. and the production increase is at the rate of under 2 per cent.
  The right hon. Gentleman's real argument is that in fact these wage increases would not take place did we but have a very strict monetary policy. This is a well-known argument. Indeed, it was the classical argument of the nineteenth century—that the supply of money should be controlled and thereby the price level will be controlled. That has been done. We returned to the gold standard and, as a result of that, the value of money actually increased. However, there were certain other consequences: there was
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  exceptionally high unemployment and there was a very great increase in poverty at the lower end of the scale.
  Therefore, what the right hon. Gentleman is really saying is that the Ford workers should have their demands turned down because the Ford Company cannot get its hands on the money to pay them. This is a pretty crude doctrine. It would require activities which have not been seen in this country for 30, 40 or 50 years. It would probably lead to a situation of extreme social injustice and of extreme in labour relations and would certainly defeat any chance of expansion in the economy for a very long time to come. It is theoretically possible, like so many of the right hon. Gentleman's suggestions, and practically totally impossible. In fact, it would be theoretically possible only at a great cost in human misery.
  Mr. Powell: Why does the right hon. Gentleman think that an increase in wages of only 15 per cent., and not an increase as great as 25 per cent., is paid?
  Mr. Crimond: I am coming on to deal with why I think that wage increases should be limited to below 15 per cent., but I do not accept the right hon. Gentleman's method of pursuing this matter.
  The right hon. Gentleman pointed out that in his Budget statement the Chancellor of the Exchequer has said that he intends to keep a close eye on the supply of money and that, at the moment, he will allow it to rise, as I understand it, by 3 per cent. a quarter, but that later in the year he may take a different view.
  The Chancellor of the Exchequer also said that the whole question of the control of money supply was to be reviewed. I think that I am right in saying that even those who attach great importance to money supply—it certainly has a part to play—believe that it is the rate of increase or decrease in the supply and not the absolute amount that matters.
  Later in the debate, we had an explanation from the Minister of State of the difference between a passive and a neutral policy over the money supply. Although the Minister of State said that the Government would pursue a neutral policy, the Chancellor seemed to me to

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  indicate that the policy would be rather nearer a passive one.
  Mr. Bruce-Gardyne indicated dissent.
  Mr. Grimond: I see the hon. Member for South Angus shaking his head. I should, I agree, qualify that, because the Minister of State did say that, although, in general, he rejected the argument for a passive attitude towards the money supply, a neutral attitude would have to be modified in certain ways, at least in the immediate future. But the Minister of State did, I think, say that the Government's basic view was that they should be more neutral towards money supply by which I understand him to mean that the money supply is to be regulated not by wage demands but by the productive capacity of the country and increases in that capacity.
  If that be so, the House is entitled to have rather more information about when we may expect the means for enforcing that policy to be known. Are we to have a further Green Paper about it? Indeed, may we be told whether it is, in fact, the Government's policy?
  I, too, consider that inflation is by far the most serious danger which we face, and, also, that that danger is aggravated by the high rate of unemployment. When the Labour Party was in office, it maintained that wage increases must be limited, I think, to under 4 per cent. They are now running at 8 per cent. to 10 per cent., and I cannot understand the comparative enthusiasm with which even the Government seem to welcome settlements of that order.
  I fear inflation not only because of its potential effect upon our balance of payments, not only for the damage which it does to the economy, not only for the fact that it is an effective bar to a high rate of investment, but because it is socially extremely unjust. For instance, the £10 a week rise which the Ford workers are to have is in fact the basic wage of many women in my constituency today, and women who do jobs just as skilled and useful as those done by Ford workers.
  I understand that the Government's policy for dealing with this is, first, to stimulate enterprise, and they aim to do that by their tax changes and by some overall reduction in Government expenditure. Will these tax changes be an incentive, and, if so, what sort of incentive?
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  I do not take the view that there is any great danger of our "top brass" leaving the country for higher wages and salaries overseas. Indeed, if they were, I should say, "Let them go", for I believe that people stay in this country not because they earn a marginally larger slice at the top of the surtax bracket but because it is an extremely good country in which to stay and work.
  I do, however, realise that there may be a case for saying that the general climate which the Government hope to promote may encourage enterprise. I can see that there is a case for encouraging movement from one job to another in the middle band of incomes. But I am not clear that any of the Government's actual measures will help that.
  I come now to their next step, which is to refuse as far as they can, to finance what they consider to be unjust wage claims in the public and nationalised sectors. The first thing they must do here is to equip themselves with some doctrine and, perhaps somebody—whether called a Prices and Incomes Board or something else—which will enable them to have some principles upon which they deal with claims of this kind.
  It is, unhappily, apparent that a large proportion of people in this country do not understand the dangers of inflation and have no idea of its causes. The right hon. Member for Wallasey (Mr. Marples) made this point, and I think that it is justly made. That is one reason why the Government should themselves carry on a campaign and, as I say, rather than abolish those which they have had to hand hitherto, establish some impartial body to explain the dangers facing us.
  It is not only a question of this matter being misunderstood by the weekly wage earner. I find it quite incredible that the top men of the steel industry and Rolls-Royce each took increases of £9,000 a year last year, and this at a time, no doubt, when they, among others, are preaching wage restraint. I shall be very interested to see whether the executives of the big oil companies and their directors take extra salary and emoluments at the very time when they are complaining about under-developed countries taking a rather higher slice out of the large profits earned on oil.
  If they are to be effective, the Government must also establish some principle

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  for increases in the public sector generally, and, further, they must make clear what their principles are for dealing with the jungle warfare of wage and salary settlements throughout the economy. At the moment, they say that they do not have a salaries and wages policy. In fact, of course, they have one. Their policy is to wait until there is a particularly large wage claim, and then institute an ad hoc committee, such as Wilberforce, to look into it. This makes it entirely a matter of chance which wage claims are considered, and, moreover, the solution is come to by men who have no particular expertise in this matter and who have no settled principle by which to operate.
  I am not suggesting that the Government operate a rigid prices and wages policy, but I am suggesting that these are matters which they should have some means of explaining to the country. Further, a prices and wages policy is very much needed at this time, for in all industrial societies there is a tendency for there to be a proportion of people who have expectations, like we all have, for a higher standard of life but who fall below the accepted standards of living.
  Sometimes, these people are immigrants; very often, they are women. I do not think that it is sufficiently realised that, although we all sympathise—I certainly do—with the plight of the pensioner, pensioners have, in fact, kept up comparatively well in the 1960s with the rise in the cost of living—indeed, retirement pensions rose faster than living costs—and those who have not kept up are people at the very bottom end of the employment scale, immigrants, people with large families, and so on.
  The Government can no more stand aside from the social implications of wage and salary settlements than they can from the social implications of housing and education.
  I reject, therefore, the simple solution offered by the right hon. Member for Wolverhampton, South-West. I do not believe that one can simply say, "Clamp down on the money supply and let the forces of the market take their effect". The social consequences are serious. They affect us all. Moreover, as has often been said, the market does not operate today, and many unions are in a virtual
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  monopoly position. It cannot operate in the public sector. It cannot operate in the way it used to do, with the individual employer standing out against a particular wage claim, when claims are made right across the board and, very often are dealt with by international companies. Strong unions will not abate their claims simply because the Government announce a money squeeze.
  What I do give the Government credit for is the courage to tackle reforms in the tax structure and the Budget generally, which those of us who have urged them for a long time were always told were impossible. Whether we like the reforms or not, I give the Chancellor of the Exchequer the highest possible marks for that, and I ask him to keep his courage high and look at some other matters, too.
  Here is one area in which the right hon. Gentleman might look. There have been suggestions, for instance, from Professor Fogarty and Professor Wiles, that it should not be beyond the wit of the Treasury to impose extra taxation on those who make wage and salary claims and succeed far beyond what is justifiable in the present state of the economy. It may be difficult—indeed, I think there needs to be an examination of what the psychology of these wages may be—but ideas of this kind ought to be looked into.
  Second, if there are today, as it is agreed there are, unused resources both in unemployment and in other ways, is not this a time not so much to cut down on all types of Government expenditure but actually to expand that type of Government expenditure which will increase production and help productivity. Is this not a time actually to expand the housing programme and the road programme to build up the infrastructure in some of the regions? We have heard a lot in the Budget debate about the failure to do anything for the regions.
  I realise that this will go against cerideologists of the Conservative Party, who wish to reduce Government responsibility. But "Government expenditure" is a blanket term which means all sorts of things and really productive expenditure is productive and useful whether it is taken by private enterprise or by the Government. I also realise that the building industry is not the great user of labour that it used to be, but it seems

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  that there is a classic situation of unused resources in which we want further investment and the improvement of certain facilities if we are to go into the Common Market, particularly transport in the north and west. We should examine ways of increasing direct investment by the Government.
  Lastly, I want to deal with the question of the value-added tax. I congratulate the Government on these Green Papers. I have long thought it anomalous that the Chancellor of the Excqhequer should come to the House one spring day and announce all sorts of decisions which have in fact been taken years before hand but in the formulation of which Parliament has had no part. To do them justice, the process of issuing Green Papers was started by the last Government but it is an important step forward that we are now to have some debate on the form of tax changes and thereby, I hope, avoid some of the mistakes made in 1965. I am not convinced that we should reject the idea of having a Committee of Parliament on this subject. At least let us have discussions.
  It is apparent that the value-added tax will not be a levy on agriculture or fish-in or food until we go into the Common Market. During the interim period, these are all to be exempt. Secondly, I am not sure how wholesalers and others stand under these proposals. This is a matter of some concern in areas where there are a lot of scattered businesses. I notice that the value-added tax, under the heading of "Services" in the Green Paper would normally be levied on transport and there is no mention of the exemption of transport.
  In my constituency and in most of the development areas this will be extremely serious. We are pressing the Government as hard as we can to reduce the steep increase in transport rates. If they are to intervene at all to cut down price increases by the nationalised industries, perhaps they would like to intervene and cut down some of the transport increases. We have just had another 10 per cent. increase on air fares by B.E.A. Do not let us have a tax actually levied on transport. I hope that when this matter is more fully considered we shall be reassured on that point.
  I do not believe that one can stop this process of inflation by a stroke of
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  the pen. The Government are right to reject that sort of approach. This is now an extremely serious in-built social and psychological matter. People say, "We have a claim because our prices have gone up "or" That chap is getting more" The problem needs tackling all round. The Government should now eat their words about a prices and incomes policy and should now be setting out some principles, at least in the public sector, for the purpose of public enlightenment. They have to operate on the money supply and to bring it back to near the path of neutral as soon as they can, no doubt with certain amendments thrown in to please the hon. Member for South Angus (Mr. Bruce-Gardyne), but essentially it should be nearer to the neutral position.
  Thirdly, the Government must look at whether undue wage increases can be made less profitable than now and at whether those who abide by good practices can be rewarded. The object of taxation is not to raise money for the Government to spend—they can, if they want to raise money, print it themselves. It is to remove from private expenditure a sufficient amount of purchasing power to enable the Government to carry out their part of the nation's expenditure without unduly causing inflation and rising prices. It is extremely difficult to hold the balance.
  I have never thought that these nice calculations in the Budget of £500 million this way or that make much difference. Most Budget estimates are out by that much anyway, so most calculations are usually lost in the wash. The Budget policy to be effective on the economy has not only to be a counter to inflation but must be seen to be reasonably fair, and I am not clear at the moment, taking into account the policy of the Government as a whole, including the Budget, that it will be seen to be fair. Unless it is seen to be fair and to be operating on behalf of the whole community and on some principle, the Government will not be able to stop the major sickness of our time, which is inflation.
  6.6 p.m.
  Sir Henry d'Avigdor-Goldsmid: I hope that the right hon. Member for Orkney and Shetland (Mr. Grimond) will forgive me if I do not follow him down the enticing paths of

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  monetary theory in which he wandered so beguiling, making so many attractive suggestions, because I am bearing in mind Mr. Speaker's request to us to be brief, and I want to be very brief indeed. I want to talk only of two things—the Chancellor who never was and the Budget.
  The Chancellor who never was is our late friend lain Macleod. I have read all the speeches delivered in the debate so far and I have not come across any serious reference to him. The right hon. Member for Bristol, South-East (Mr. Benn) made a passing reference to him but it was only a quotation from David Wood. I think that it does merit two minutes of the time of the House to think of that remarkable man who, if he had been spared, would undoubtedly have delivered a speech similar to the one we heard last Tuesday and would now be receiving the plaudits which his hard work over many years, particularly his years in Opposition, would have earned him. I think that particularly my hon. Friends the Financial Secretary and the Minister of State would both admit to having learned a great deal from lain Macleod in the years they sat beside him on the Opposition benches.
  I congratulate my right hon. Friend the Chancellor of the Exchequer on the style of his Budget. It was an entirely new style of Budget to me. I remember, as so many hon. Members do, the right hon. Member for Cardiff, South-East (Mr. Callaghan) producing what was undoubtedly an earth-shaking Budget, bringing in both corporation tax and capital gains tax. He did it without any previous Green Paper. It is true that we had a White Paper and mutterings but there was no element of consultation before hand. I remember very well how aghast we were at the enormous document which the right hon. Gentleman produced. It was in such shape that it had to have more than 600 Government Amendments in that first year and about 300 or 400 in the following year—the vast majority of which could clearly have been avoided if the Government then had gone about it in the same way as my right hon. Friend has gone about his Budget—by starting with a Green Paper and getting the opinions of the learned societies and those practising in these various skills.
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  In this context, I echo the words of another old friend, Lord Rhyl, better known to us as Nigel Birch. He used to say that Members of this House rarely showed to advantage when pretending to act like tax lawyers. I have no belief in the efficacy of hon. Members acting as tax lawyers, and I do not think that we can get the right result by doing so, as is shown by that extraordinary case in which both sides agreed that something meant something but the courts decided against them. My right hon. Friend will have to remedy that. These are the deficiencies of this institution. I do not think, therefore, that we shall be any better at drafting new taxes than we are at correcting old ones. I think that these should be left to the professionals.
  However, when I talk about the style of the Budget I would like to congratulate my right hon. Friend in covering so much ground in the time, under two hours, in which he spoke. We remember that Gladstonian style of Budget presentation which lasted five hours, and the style in which three hours were spent on the state of the economy and the experience of the previous year. This time the previous year's experience got the shortest shrift I remember, and was dealt with in one paragraph of my right hon. Friend's speech, and that paragraph lasted not more than about three minutes. So much for the previous year.
  These are changes of emphasis. I should also like to welcome another change. Chancellors, in making long-awaited statements, delayed saying anything interesting for an hour or an hour and a half until such time as supposedly the markets had closed. My right hon. Friend did not have any feelings on that subject, as far as I can remember, last Tuesday, and certainly I think there were people awake in the Stock Exchange who took cheer from his remarks. So there was a practice which I hope has gone by the wind, so that the Chancellor may give the House the things in which it is interested, in the way my right hon. Friend did.
  In this connection, I think I would like to say that I thought my right hon. Friend was doing rather too much credit to the Governor of the Bank of England in not announcing the change in Bank Rate, which was left until Thursday. There is no doubt now at all, there is

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  no element of doubt, that changes in Bank Rate are made on the decision and under the order of the Chancellor; these are not for discussion; this has been settled once and for all, and very properly. Therefore, I should have thought that my right hon. Friend might very well have copied the example of the right hon. Member for Birmingham. Stechford (Mr. Roy Jenkins) and announced his Bank Rate change in his Budget statement. I do not think it would have made the slightest difference to anybody, and certainly the Governor would not have been hurt.
  On the whole this has been a Budget which bears the marks of Iain Macleod, particularly on two matters on which he gave personal pledges. One was the disaggregation of minors' income, and the other was the separate taxation of wives' income. These are both very valuable points. I remember very well the battles we had in Committee upstairs in the Finance Bill of 1968, where we an on thalidomide babies. I am very glad to think that this sort of taxation annoyance has now come to an end, and I am grateful and glad about it.
  These debates follow an almost universal pattern. On the first day there are congratulations, and then on the following days people say they want to get more of this or that; we start with congratulations and then we get minor complaints. I am bound to tell right hon. and hon. Gentlemen opposite that my constituents like the Budget very much indeed. As the right hon. Member for Stechford said, they must all have incomes of £50,000 a year! But perhaps some of them do not; some, I think, may get as little as £5,000 a year. But they like the Budget. Why do they like it? I will tell right hon. and hon. Gentlemen why they like it—because they like the idea of a reduction in direct taxation. They like the idea. They like a reduction in indirect taxation, too. They know what S.E.T. costs. They like the idea of a reduction. They like the increases in allowances, and they certainly like increases in retirement pensions. Perhaps if we find one of them, who has £3,000 a year and travels 30 miles each way by train to his work, he may be one who, as the right hon. Member for Bristol, South-East (Mr.
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  Benn) said, will be worse off. But, perhaps, I am lucky; he is not there.
  The fact is that the people of this country are delighted with the Government because it comes from a party which has kept its word.
  I think that David Wood's piece in The Times today is remarkably interesting, where he says that he found a document dated March, 1970, a year ago, which gave him the Budget point for point. It is, I think, a great tribute to the consistency of this party. Not only that, I think that the people of this country will be much encouraged to think that here are a Government who keep their word and who are making plans to keep their word in the future and to implement various plans which were laid before Parliament and are being laid before Parliament again. The public are getting used to the idea.
  As to the state of the economy, I am not going to follow the right hon. Gentleman there, but my feeling is rather based on watching the Grand National on the television. Some horses seem to get round by going slowly; horses which win do so by going fast; but they all always run the risk of coming a cropper on the way. I read about it, and I listened to the interview with the rider of the winner, Specify, and he said, "Well, I just saw a gap and I went for it. The horse went for it, and we pulled it off" This, I think, is exactly what the Government have done. Where they see there is a gap in front of them, the country can go for it, and if they go for it they will pull it off.
  The Government cannot do more now than they have. As for this talk about not doing anything to stimulate growth, is not a borrowing requirement of £1,200 million a form of stimulant—the largest which has come to us in any time we can remember? I would have thought it bound to find its way into the economy. Anyway, I should like to tell my right hon. Friend that I am sure Iain Macleod would not have been dissatisfied with his speech.
  6.17 p.m.
  Mr. John Roper: I am tempted to follow the less controversial points in the speech of the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid). Like him, I am not in disagreement that this is a new style Budget,

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  although the things which I found new about the style may not be the same as those he felt were new. With regard to his references to the late Iain Macleod, I agree that there is much in the Budget which bears the stamp of the late lain Macleod, but I hope that he would have honoured his word on the increase of family allowances.
  I do agree with the hon. Gentleman in what he said about the Bank Rate reduction. It is time we recognised the reality of our monetary institutions, and I hope to have a few words to say about that later in my speech, and the inclusion in the Chancellor's speech of the announcement of such important measures as a 1 per cent. reduction in Bank Rate.
  Inevitably, there was, in the Chancellor's speech and in the speeches of other Government spokesmen, much with which I disagree, but it would be only right for me to say that I was much impressed by the Chancellor's achievement in developing such a comprehensive package of taxation reforms. I hesitate a little to use the word "reforms", as that has overtones of approval, and some of the measures which the Chancellor proposed will inevitably take our tax system in a regressive and retrograde direction. There will, no doubt, be more opportunity later for criticism of this, not only in the Finance Bill this year but, we gather, in Finance Bills in a number of subsequent years as well.
  I should like to say also how pleased I was to hear the Secretary of State for Trade and Industry on Wednesday in relation to the Finance Bill say that enabling powers are to be introduced on generalised trade preferences for developing countries following the U.N.C.T.A.D. agreement last year. I feel that this might well have been the subject of a Bill on that matter, because it is something we should like to debate.
  An article in Trade and Industry gives us some information about this but I hope the Government will give us some more information about it, particularly about the safeguard mechanisms which are to be introduced for the generalised trade preferences, whether these will be ceilings or escape clauses. Many hon. Members on both sides will feel that there needs to be a fair balance between
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  the interests of producers in this country and those in the developing countries. Those generalised trade preferences can be one of the most important steps forward in the relations between the developed and developing countries. I hope that the Chancellor of the Exchequer will tell us when the generalised trade preference scheme will come into operation. Can we at least match the effort of the European Economic Community and of Japan, who intend to introduce a scheme of generalised trade preferences in 1st July of this year?
  I should like to comment on one or two passages in the Chancellor's speech which have not so far received much comment in the House. The Chancellor on Tuesday and the Financial Secretary on Thursday referred to the problems of occupational pension schemes. I should perhaps declare an interest, in that I am a former member of the F.S.S.U. although I no longer receive any benefits from that superannuation scheme. The Chancellor told us that the Finance Bill will contain certain concessions and, of course, I welcome these, but there is one passage in his speech, which was also referred to by the Financial Secretary, which I ask them to think again about. The Chancellor said:
  "I cannot accept their claim to be allowed to remain as they are indefinitely, even as closed schemes."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1377.]
  He was referring to the F.S.S.U. and similar schemes. Does not the Minister of State agree that, if F.S.S.U. were to become a closed scheme, it would not continue indefinitely? This is quite impossible, because, if it were a closed scheme, all the members of it must at some time take their superannuation, unless one of the university teachers, spurred on by the new security of a continuing F.S.S.U. pension scheme, discovered the secret of eternal life. I hope the Chancellor and the Financial Secretary will reconsider whether the benefits which have accrued to F.S.S.U. should not continue at least for the existing members under a closed scheme, particularly as I understand there would be no loss to the Revenue if this policy were adopted.
  Mr. Patrick Jenkin: I am sorry that I did not hear the beginning of the hon.

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  Gentleman's speech, but in saying that there would be no loss to the Revenue, he must be aware that the inadequacies of F.S.S.U. are made tolerable to its members only by a substantial supplementation from the Exchequer. This is perhaps not the best argument for continuing it, even for the 30 or 40 years.
  Mr. Roper: I accept the Financial Secretary's point about supplementation, but I do not think it was on those grounds alone that rules were introduced last year by the Budget. I hope he and his colleagues will think again about the possibility of making it a closed scheme and permitting existing members to benefit from the contracts which they initially entered into.
  The Chancellor made great play of the success of the present Government in repaying overseas debt. He announced further repayments made last week, and said that more than £on had been repaid since June, 1970. Part of this was the result of the balance of payments surplus obtained by the efforts of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), but part was a result of the Government's foolish policy of maintaining until last week far too high interest rates and attracting volatile "hot" money into London. Repaying debts on the basis of balance of payments surplus on current account is to be commended, but repaying debts by means of high interest rates and "hot" money is expensive, harmful to the British economy and dangerous to the long-term position of sterling. "Hot" money is twice as expensive, costing perhaps 7 per cent. against an average cost of 3½ per cent. on I.M.F. borrowing, and inevitably it is far less stable than borrowing from the I.M.F.
  I was interested to read what the Minister of State—perhaps he will remain while I just finish this passage—had to say, speaking from these benches last year, about repaying debt by means of "hot" money. On 15th April, 1970, in column 1504 of HANSARD, he warned of the dangers of using "hot" money for the repayment of debt. I hope that he will continue to watch this problem and, in due course, point out the dangers to his right hon. Friend. It is not clear why the French in the Brussels negotiations have raised the question of sterling, but
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  the reason cannot be far removed from the irresponsible policy of the Government in relying on "hot" money in this way.
  The Chancellor and the Minister of State spoke very elusively about techniques of monetary control. They hinted at new techniques of operating on the bank resources rather than by directly guiding their lending. I hope the Minister of State will agree that this was one of the most frustrating parts of his speech and of the speech of the Chancellor. Like strip-tease artists, they hinted, but did not reveal. They were not fair to the House on that occasion. I am not quite sure what the Chancellor of the Exchequer believes about monetary policy—whether he thinks it matters or does not matter. As with the right hon. Member for Wolverhampton, South-West (Mr. Powell), it is not always clear where the Chancellor stands, but if monetary policy is important, the House is entitled to a far clearer statement of the Government's intentions in this direction.
  Why is there no Green Paper on possible developments of techniques in monetary control? Money is far too important a matter to be left to the bankers. Are we to move to a system of variable reserve ratios, as in the United States? What techniques do the Government wish to develop to deal with non-bank financial institutions? These are far too important matters to leave to the financial institutions and I hope that, at an early stage, the House will learn more about these techniques of control of which the Government speak.
  I refer finally to the Chancellor's Budget judgment and its macro-economic effect on the British economy. The Chancellor has gone for consumption-led growth—a dangerous prescription for the long term but probably all he could do in view of his prejudice against direct incentives to investment or help for the regions. The growth is all on the side of consumption, as has been pointed out before and as is shown by the forecast of 5·3 per cent. growth in consumption in the Financial Statement. This can only occur if there is a significant fall in the savings ratio, or no deceleration in the rate of wage increases, or a much faster fall in the rate of wage increases and prices than any commentator has dreamed of as being possible. The Treasury, by showing its forecast in 1963 prices and

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  telling us nothing of the divisions of G.D.P. and the effect on shares, has hidden from us which assumption it is making. Whichever it is, the Treasury had better tell the Secretary of State for Trade and Industry that this forecast seems unlikely to create a larger share for profits.
  The other weakness in the forecast is the extent to which the whole of the Budget judgment depends on an analysis of the effects of the reduction of S.E.T. This is something, as was pointed out in The Times this morning and elsewhere, we know nothing about. We know the effects of reductions or increases in other taxes, but we have no experience of the effects of a reduction in S.E.T. We do not know whether it will work on prices, on profits, or on employment. It is a fascinating economic experiment that the Chancellor has carried out by putting all the stress on a reduction of S.E. T. Perhaps he should commission Professor Reddaway to do a further study to see what the effects will be. It is a gamble to place the whole reliance of the stimulus which he is giving to the development of the British economy to a large extent on the reduction of one tax, the effect of which is completely unknown. He could perfectly well have acted directly on orthodox indirect taxes or hire-purchase controls to get the same effect but, instead, he has experimented in this dangerous way.
  This, I suggest, is one of the many weaknesses of the Budget. My right hon. and hon. Friends have pointed out its other weaknesses—its failure to tackle unemployment, the complacency which is prepared to accept a Budget judgment which leaves unemployment at the same level afterwards as it was before. If maintaining unemployment at the highest level since the war is the recipe of a good Tory Budget, it should be proclaimed throughout the length and breadth of the kinddom. I suspect that even the constituents of the hon. Member for Walsall, South would not be so complacent afterwards.
  The same can be said of prices. The Budget will have no direct effect on the rate of inflation. The Chancellor of the Exchequer could have acted in many ways to do something about inflation, but he chose not to do so. On a longer term basis, the class-basis of the Budget,
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  with tax concessions to one section of the community, has further divided the nation and set back further the hope of establishing a sensible incomes policy which must prove the foundation for a policy of steady growth.
  This is an interesting Budget, even perhaps a historic Budget, but it has failed to deal with the interest of the British economy or the British people.
  6.30 p.m.
  Mr. Edward du Cann: I shall not comment on the political conclusions of the hon. Member for Farnworth (Mr. Roper), because I profoundly disagree with them, nor on his remarks about the subject of striptease, for I know too little, about it. On the other hand, I am happy to make common cause with him about preferences for the manufactured goods of the developing countries. There is no more significant subject for us to attempt to grapple with than the growing disparity in living standards between developed and developing countries and what are called the problems of the third world and, not least, the opportunity for political disaffection which flows from them. Like the hon. Gentleman, I look forward to debating this subject on some other occasion.
  I too, congratulate my right hon. Friend the Chancellor of the Exchequer most warmly on his Budget speech. He showed both courage and competence. If I may claim this small distinction, he and I were Ministers together at the Treasury some time ago. We believed then in expansion and supported a policy aimed to that end and which I still believe would have succeeded had it not been for the incidence of the 1964 General Election and, in particular, the many political things said by the then Opposition before it.
  I rejoice especially in my right hon. Friend's personal success. For our country's sake, I hope that it endures, for we have suffered before when it appeared that the Chancellor of the Exchequer was insecure or uncertain, particularly in the context of the two devaluations which the country suffered at the hands of right hon. and hon. Members opposite.
  I wish to make two main points and some constructive suggestions. First, I urge my right hon. Friend the Chancellor and his colleagues to continue along the path of fiscal reform which they have so

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  well begun. I believe that the Government will be judged by how thoroughly that work is completed. I rejoice in the proposed detailed fiscal changes—the reductions in corporation tax, income tax and selective employment tax. My hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) referred—and it was as well that somebody did—to the late Iain Macleod, who I well remember saying, "How I long to cut the throat of that filthy tax". It is good to see its throat half cut and to see some reform of capital gains tax.
  I applaud what my right hon. Friend the Chancellor said, namely, that this is
  "the most comprehensive and far-reaching reform of the tax system this century".— [OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1397.]
  My caution is this. For all that has been done, and well done, so much more remains to be attempted and must be achieved if the Chancellor's strategy is to succeed and if his words are to be a reality. It is fine to paint with the broad brush, as my right hon. Friend has done, but the picture must be complete and there is a great deal of detail to be filled in.
  I give two instances—one small, the other rather larger. The small instance is this. It was good to see the stamp duty on mortgages abolished yet there must be other right hon. and hon. Members who have the same recollection of Finance Bill Committees and debates as I have. For 15 years I have put my name to Amendments urging the abolition or reduction of this stamp duty or that. After a while, one is reduced, perhaps another halved and maybe a third abolished. As my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) would say, they are either right or wrong; they cannot be half right. I hope that the abolition proposed in the Budget will be followed by others and that eventually we shall scrap the lot. They are tedious, most of them are unnecessary and most of them unimportant in terms of revenue. This is an area for further reform.
  The larger instance is this. We hear much about the shortage of liquidity in corporate terms. However, we hear nothing of the shortage of liquidity in agriculture. The Government are committed to the expansion of this industry and the recent Price Review introduced by my
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  right hon. Friend the Minister of Agriculture—the best Price Review for many years—is an earnest of that intention. The Economic Development Committee for Agriculture published a report a little while ago entitled "Agriculture's import saving rô3le". It suggested that by 1972–73 agriculture could expand its net output by 22 per cent. with a consequent saving of imports of £220 million per annum. The E.D.C. assessed the cost of capital items to fulfil this target—buildings, equipment, machinery and so on—at £230 million in a five-year term. I think that that is a gross under-estimate and that the sum is likely to be double.
  Whatever you, Mr. Speaker, or anyone else may think of my mathematics, and however suspect you or they may find them, it will be in the recollection of Members interested in agriculture that more lately a report called "Modern Farming of the Soil" has been published in which it was estimated that seven million acres of agricultural land urgently needed drainage. At present rates of progress this work could take 40 years to complete. At double the current rate of drainage, it would involve additional capital investment of £11 million per annum at current costs, or £220 million over 20 years. Add those two figures together and the sum is doubled.
  That money will not appear by magic. It cannot be found by issues on the stock market. Incidentally, how good it is to think that the new issue market may be in better shape this year than last. The money must be found from private pockets, and inflation exacerbates the problem. Yet, as far as one can see, little or nothing is done to help provide it. Minor reforms of tax in the aggregate could make a great deal of difference. I instance the reform of estate duty, of capital gains tax, of the depreciation allowances and of the way in which rents are treated by our fiscal system. There has been disappointment that the interest provisions introduced in 1969 were not repealed in whole or in part in this Budget, especially in cases in which there are statutory obligations to repair.
  There is a catalogue of needed fiscal reforms, both small and large, affecting agriculture which would not be expensive and which should be tackled. Similar catalogues can be given for other industries and other responsibilities.

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  I agree very much with the Prime Minister, whose speech was quoted by the right hon. Member for Bristol, South-East (Mr. Benn), that the Government can do so much and the rest is up to the British people. It is true that the Government must provide leadership. The Government are providing it, and it is to be warmly welcomed. The response will surely come, but it will be stronger as the Government continue and are seen to continue their purpose, especially of fiscal reform.
  Again, I warmly welcome what has been called the Green Paper strategy. I hope that consultation will become a habit. The Budget's new style encouragement of individual effort is perhaps its happiest characteristic. In this regard, consultation is especially significant. Whether we talk of a new system of monetary regulation, corporation tax, personal tax, or many other detailed matters, I hope that that consultation will also be a reality in less obvious ways.
  Take the savings scene. We are to have an inquiry into national savings. That again is welcome and long overdue. But it is a disappointment that some of the detailed suggestions for improvement made by many of us over the years, whether we talk about unit trusts, with which I have a special connection, investment clubs or any one of many other matters, it is disappointing that those recommendations seem to be ignored by the Treasury. We know that we are beginning a process of reform. I hope, therefore, that Amendments tabled by my right hon. and hon. Friends with the aim of assistaing in the process of simplification of tax will receive a sympathetic hearing in the Finance Bill Committee stage this year.
  I was interested in what my right hon. Friend the Chief Secretary said on the subject of committees of inquiry into taxation matters. This is a subject which requires further discussion. It was good to hear my right hon. Friend accept the principle in certain respects. I cannot help feeling that these smaller aspects of taxation are precisely areas where a Select Committee would be of the greatest use. I can remember you, Mr. Speaker, advocating such a Committee in years gone by. I have heard nothing
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  subsequently to make me feel less keen on the subject. The more that I think about it, the more I think that an ad hoc or Select Committee would be of great use in implementing the process of consultation.
  Each year, we pass a number of Budget Resolutions. I hope that we can encourage my right hon. Friend to say publicly that he will adopt two new ones. The first is that now and in the course of the coming year he will clear up as much detail as possible and that next year we shall have the fattest Finance Bill ever as a result. I am sure that I speak for many members of the club, as the right hon. Member for Bristol, South-East described it, when I say that my right hon. Friend will get nothing but goodwill, good wishes, and the utmost expedition in dealing with reforming and simplifying Clauses in the future.
  There is another change in the Budget strategy much less talked about in this debate than perhaps it might have been. It is the change in the Chancellor's economic strategy. Perhaps it is not yet fully understood. Certainly it is not yet fully evaluated. In 1968, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) undertook to provide an exportled boom. Today, my right hon. Friend is providing a very substantial addition to consumer expenditure as an encouragement to investment. That is right. First comes confidence. Then follows growth. Then follows investment. That is the usual and logical chain. But it is a bold course to adopt. It involves great risk.
  We have a chance to succeed. The balance of payments is satisfactory and, although it is fashionable to talk of it as declining, presumably we shall have a surplus of not less than £300 million this year. There is an assumption in the Financial Statement that imports in the year ahead will rise at an annual rate some £340 million higher than the assumed rise in exports. The risk is justified. It had to be taken.
  But the need is for time in which the strategy can succeed. Nothing has been more heartrending in post-war years than the assumed necessity to restrict growth to protect sterling. On this occasion we must succeed. We cannot go back to stop, with unemployment at perhaps more than a million. I agree with the T.U.C.

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  in one respect. We have already wasted too much time since devaluation. I was a critic of the right hon. Member for Stechford in that regard. I repeat that the need is for time.
  I come, then, to a suggestion. I was disappointed in the speech that my right hon. Friend made to the International Monetary Fund last year in Copenhagen. I appreciate that it was done for special and mainly domestic reasons. But I hope that it does not mean that he has closed his mind for all time to flexible exchange rates. I am sure that they are inevitable and correct. These matters take a long time to complete, of course. But, if we were to introduce them, they would be a helpful addition to the time that my right hon. Friend needs for his economic strategy to work.
  In slowing down the rate of growth in unemployment and in the revival of investment, my right hon. Friend's aim is admirable. But I reflect that an annual increase in the money supply of 12 per cent., £546 million of tax reliefs and 14 per cent. in wage increases added together make continuing inflation a certainty in this fiscal year perhaps up to 9 per cent., that is intolerable, not only to those at the lower end of the scale, many of whom are numbered among my constituents, but to us all.
  A significant passage in the speech of my right hon. Friend the Chancellor which seemed to go by largely unnoticed was when he said that an additional increment of reflation was not ruled out. I have another practical suggestion to make. However much we on this side of the House dislike S.E.T., we know that in terms of the effect on prices, purchase tax to S.E.T. is probably as to 10 to 1. We know also that there are many taxes, some introduced for artificial reasons of protection of the coal industry like the fuel oil tax, which similarly put up prices. We know that the Chancellor has the regulator in hand. Thus he has an opportunity still, if he wishes to take it later in the year, substantially to affect prices downwards by using tax leverage.
  The Industrial Relations Bill is now in another place. It will become law in the next month or two. Now that the main shouting and tumult is dying, I hope that there may be a renewal of the dialogue between trade union leaders and the Government. Both are honourable men. We all know that the Bill is essential.
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  The artificial light over it is the greatest folly. All men, barring only a few militants, whether in this House or as trade union leaders, are honourable. I hope that they will be better able to work together shortly.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. I am grateful to the right hon. and hon. Members for shortening their speeches. If hon. Members will keep to their assurances to me about the length of time that they intend to speak, I should be able to call another dozen hon. Members in the course of the debate. I propose to begin by calling an hon. Member from each side, both of whom have said that they will be only five minutes. Mrs. Short.
  6.49 p.m.
  Mrs. Renée Short: I have promised that I shall not take more than five minutes. That will be a painful operation for me, Mr. Speaker, but I shall do my best for your sake.
  I shall not deal with any of the points raised by the hon. Member for Taunton (Mr. du Cann). I did not agree with any of them, any more than I approve of very much in the Budget.
  Had I been charged with the job of introducing the Budget, I should have selected five urgent priorities. The first is the introduction of a basic minimum wage. In my view, that is absolutely essential if lower-paid workers are to be helped. I shall probably be told that the family income supplement does precisely that. However, most of us realise that the family income supplement is really a subsidy for bad employers who are not prepared to pay their workers a decent wage.
  Secondly, there should be an additional share for pensioners. Most of our pensioners now understand that the £1 a week increase is likely to be almost completely eroded by the time that they have waited another six months to get it.
  Certainly, improved family allowances should have been introduced, again to help the lower-paid families with children. The change in the tax allowances for families with children will remove

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  only about 200,000 families from payment of tax, whereas my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) in his last Budget removed something like 2 million lower-paid families from paying income tax. This is a measure of the attitude to the priorities that the two Governments have had. The Chancellor has to appreciate that any change in income tax does not help the lower-paid families at all, because many of those families do not pay income tax and yet this year they are having to bear the whole burden of the mini-budget without any real additional help.
  I would very much like to have seen an expansion in the urban aid programme. This is a matter of great concern to my constituency. We are in urgent need, just as all the other priority areas are, of more money to start nursery classes and to support playgroups. It is a shame and a scandal that nothing has been done in the Budget to help areas like Wolverhampton which have this desperate need.
  The fifth priority which, I think, has been completely ignored is that there is no help in the Budget for the housing programme and for the building industry. I do not have time to develop either of those. I want to concern myself with the alarming increase in unemployment all over the country, which has considerably affected the West Midlands and my constituency, areas which have not had a serious unemployment problem since before the last war.
  The Budget does not affect the unemployment position at all, as many right hon. and hon. Members have pointed out. The Government have a great deal to answer for in the 10 months they have been in office. The right hon. Member for Taunton said that nobody had mentioned what the late lain Macleod had said. I shall quote it. Last June, during the election campaign, he pointed to the fact that there were then half a million unemployed. I agree absolutely that that was too many. It was a reflection on the policies of the last Government that unemployment had risen to half a million. If those figures were a national tragedy then, I wonder what lain Macleod would have said today, when we have seen an
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  increase of 300,000 in the unemployment figures since June.
  The appalling incompetence of the Government in the handling of the Rolls-Royce situation has increased the numbers of unemployed and of redundancies all over the country. In Wolverhampton, on the very next day after the statement was made in the House, a well-known firm laid off 25 per cent. of its work force as a result of the statement in the House. Every week there are statements in the Press about new redundancies and more people becoming unemployed, all in firms which are household words throughmout the country, leading firms in engineering and leading firms of suppliers to the building industry.
  We now have 4½ per cent. unemployment among the male population in Wolverhampton. [interruption.] Hon. Members opposite need not bother to get ready to speak, because I shall not finish until I am ready and I have not had five minutes yet.
  Mr. Speaker: Order. I am trying something of an experiment, in which we want to get as many speeches as possible from hon. Members. In these circumstances, it is necessary for hon. Members not to be provocative.
  Mrs. Short: I recently asked the Secretary of State for Employment for the unemployment figures in Wolverhampton and the West Midlands. In February, 1970, the figure for male unemployment in Wolverhampton was 2,047. In February, 1971, that had risen to 2,717. By the time that the right hon. Gentleman published his latest figures on 8th March, however, the figure for male unemployment in Wolverhampton had risen to 3,198. In February, 1970, the unemployment total for men and women in the whole of the West Midlands was 50,000. That had risen to 64,000 in February, 1971; it has, of course, very much increased since the change in Government.
  Wolverhampton, with its 3,198 male unemployed by March, tops the list of towns in which unemployment is rising in the West Midlands, but Cannock, Halesowen, Oldbury, Smethwick, Stafford, Stourbridge, Tipton, Walsall, Wednesbury and West Bromwich have all shown increases in the number of men and

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  women unemployed, certainly from February to March and, indeed, from June until March, during the whole of the lifetime of the present Government.
  If the West Midlands is affected in this way by unemployment, it is obviously a serious position for industry all over the country, because the West Midlands is the seedbed of British industry and a great deal of skill and capital is going to waste. Those who have said that the unemployment figure would rise to 1 million by next winter will find, I think, that their figures are overtaken. The figure is now almost 800,000 and it looks as though the increase in the figures month by month will make the figure of 1 million look rather an under-estimate by next December and January.
  I conclude. I have taken five minutes. I think that is a record, Mr. Speaker, and you ought to give me a medal. I merely say to the Chancellor that the Budget has clearly taken too much account of the evidence placed before him by the C.B.I. It has not done a thing to help ordinary working people. Indeed, on my calculation, it is only those families which have above something like £4,000 a year coming in who will derive any benefit from the Budget. It is scandalous and a shameful Budget and the right hon. Gentleman should be ashamed of the whole exercise.
  6.58 p.m.
  Mr. Hugh Dykes: One hesitates to waste any of one's precious five minutes in paying tribute to the experiment. If it enables more Members to speak and make one or two points that they consider to be extremely important, that will be a good thing for the House and for the Budget. I hope that I shall be as successful as the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renee Short) in keeping to the time limit.
  I hope also that my right hon. Friend the Member for Taunton (Mr. du Cann) will forgive my not following some of the extremely valid and cogent points he made on some of the things which were, perhaps, omitted from the Budget and which might be considered for later use and implementation. I want to reserve myself to one or two points, some of which have inevitably been mentioned
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  already but which, none the less, merit a degree of re-emphasis.
  I, too, would echo the encomium, which has come not only from this side of the House, but from outside the House for the Budget, for its balance, for its central strategy, for its intentions and for its excellent division.
  As far as one can judge at this stage in time between the short-term measures to which my right hon. Friend the Chancellor of the Exchquer referred under the heading "Conclusion" at col. 1396 of his Budget speech, which are intended to get the economy going now, and the longer-term reforms, the distinction, perhaps, in character and nature between those two divisions of the Budget is that while the longer-term reforms are, extremely bold and adventurous and have captured the imagination of the country —that is, apart from some hon. Member's opposite—the other, shorter-term budgetary stimulation measures, as they might be described, are much more cautious and reflect the anxiety of the Treasury concerning inflation. They are measures which, therefore, will affect different industries in different ways, as inevitably they always will. But nevertheless they will affect industries and economic activity in the aggregate by a cautious, slow progress and, indeed—this is no lack of praise for the Treasury Bench on the Budget—in a way in which there will be only a slow start to that essential stimulation to the economy which we all desire.
  That is why I should like to add my voice to those who are making a plea for what the Chancellor described or hinted at in his Budget speech under "The Budget judgment":
  "If, after the measures I am about to announce have been allowed a reasonable time to have their effect, a further stimulus is needed, the usual instruments are always available. Here I should mention that I propose to extend for a further year the power to vary revenue duties and purchase tax by means of the regulator."—[OFFICAL REPORT, 30th March, 1971; Vol. 814, c. 1370.]
  I very much hope that the allusion to the usual instruments does not mean that he will limit himself only to the regulator and to nothing else. There are a number of other instruments which will be available to my right hon. Friend later this year to stimulate the economy.

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  No one would gainsay the central and pressing fact that the rate of growth of production at 3 per cent. per annum this year puts us at a severe disadvantage compared both with our European neighbours, and other countries as well.
  I could mention a number of other points on the Budget but time does not permit. Like my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) and, indeed, many others of my hon. Friends who have already spoken, I was pleased with the general tenor of the Budget. I also enjoyed, as I am sure the whole House did, my hon. Friend's humorous allusion not only to wage earners of £50,000 a year in his constituency, but to those struggling along on a supplementary benefit of £5,000 a year. I think that they, too, will enjoy and will be grateful for the Budget.
  This Budget means that there will be a chance to get away from what has bedevilled British economic policy: the distribution of resources, equality of economic growth for all those sharing in it, the balance of resources of the community and what is in effect a marginal change on the higher rates of tax announced by my right hon. Friend for high income tax and surtax payers—shortly to be merged in one tax. This in itself is anything other than the kind of deluding temptation which the Opposition would always care to use; to suggest that the Government are anything but a Government which will operate economic policy on behalf of the whole community.
  My final point is that this Budget will be welcomed not merely because it exclusively—it did not do this; far from it—gave tax remissions to the high income tax and surtax payers, but because it was the beginning of a tax revolution which surely spells out the opportunity to those not yet in high income brackets who want to stay in this country and to earn those salaries which would be derived directly from a faster rate of economic growth.
  7.3 p.m.
  Dr. John Gilbert: The only contribution to the debate on which I should like to comment was that by the right hon. Member for Taunton (Mr.
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  du Cann). I congratulate the right hon. Gentleman on his remarks about exchange rates and leave it at that, just to let him know that he has the support of at least one Member on this side of the House.
  I should like to give a warm welcome to some parts of the Budget speech. Having said that, I should add that most of the items I welcome were in the speech, but not in the Budget proposals.
  I particularly welcome the Chancellor's remarks about the Crowther Committee's Report and his intention of reviewing the whole of the credit industry and changing the whole nature of controls over the activities of the banking sector and operating in future on the total of banking resources rather than seeking to act directly on the level of bank lending. This, at least, is some sign of more movement than we have had from the Secretary of State for Trade and Industry.
  As I promise to be brief. I shall not deal with the macro-economics of the Budget. They have been gone over long enough by others far more expert than I. In view of the shibboleths and slogans which have flowed from Budget speeches year in, year out from both sides of the House and from both Front Benches, I should like to take up some issues, particularly on the question of growth.
  The right hon. Member for Wolverhampton, South-West (Mr. Powell), although I disagree with much of his analysis, put his finger on some important matters. We cannot get sustained growth by tinkering about with Budget aggregates from one year to another. We all want sustained growth. I doubt whether any hon. Member on either side really has any idea of how to get it. If there were a magic key to getting this growth, it would surely have been propounded before now. It is a more complex thing than toying about with the money supply or the fiscal policy from one year to another. It involves a whole menu of choices. It involves the educational system, the number of engineers we produce, the attitude of young people to whether they will go into commercial or industrial activities for a career, the attitude to risk taking, discrimination in the work force, whether it be against women, immigrants, or whatever deprived minority it may be.
  It is not good enough for hon. Members on either side to say that we should

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  push our growth rate up from 2 to 3 per cent., as though it was the easiest thing in the world. An increase from 2 to 3 per cent. is an increase of 50 per cent. We shall not get an increase of 50 per cent. in our long term growth rate by playing about with the Budget or the money supply from one year to another.
  Having got that off my chest, there are certain other things in the Budget for which we should be grateful. If it is to be a programme of reform for the whole of this Parliament, it is thin gruel indeed. This could be taken as some criticism of my own Front Bench, because, with the exception of the Budget of 1965, we missed many opportunities for reform.
  I particularly welcome the assimilation of the income tax and the surtax structure. That is not to say that I welcome the contemplated changes in the level of surtax. That is a totally different matter. I am not suggesting that there are no circumstances in which surtax could be cut, but to cut surtax by the proportions proposed this year at the same time as, by Government action, we are putting up the price of welfare milk and school meals is an absolutely intolerable socially divisive act, whatever hon. Gentlemen opposite may say.
  As has been pointed out more than once, there have been several encomiums to the late Iain Macleod which I certainly endorse. But for hon. Members opposite to refer to Iain Macleod without pointing out that he had made a pledge about family allowances is hypocrisy which they should ponder very deeply.
  The net effect of this Budget, plus the proposals of last autumn, means that the children of the poor will suffer. Their teeth will be worse cared for down the years and their poorer health will go to pay for more champagne at Ascot, and things like that. Whether hon. Gentlemen opposite like it or not, this is a fact.
  Various other opportunities for reform have been neglected. It is high time that something was done for widows and divorced women. There is no mention of them in this year's Budget or in the programme of reform for the years ahead.
  I welcome very much the Green Paper on Corporation Tax. Although this may sound like heresy to some of my hon.
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  Friends, I endorse the comments made by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) about some of the effects of corporation tax, particularly in the form in which it discriminated in favour of retained earnings and against distributed earnings. I have always thought—I endorse the comments made by the Prime Minister at the time of the introduction of the tax in that form—that it ensured the survival of the fattest, not of the fittest. I have an even stronger objection to it.
  That tax, in the form in which it has survived up to now, was one of the greatest contributors to inequities in the incomes policy which the last Government put forward. It did not escape the attention of trade unionists that while they were being asked to forgo wage increases for good and all—they never got them back—shareholders who were asked to forgo dividends were having them saved for them by their companies at preferential rates of tax and were able to get them out at any time by selling a proportion of their shareholding, reaping the reward at a capital gains tax rate.
  Apart from that, I have some general reservations about corporation tax as a whole. It acts as a veil in the economic system. It appears to be largely indirect in its incidence. It is high time that we had a study of its effects on prices. A corporation is a legal fiction. In the last resort it cannot pay tax, any more than it can accumulate income. Its income belongs to its shareholders, and the tax that it pays will be borne by the shareholders, or the workers, or the suppliers or, far more likely, by the customers of the company. In other words, although it appears to be a direct tax, its form of operation makes it an indirect tax. I hope that we shall have a chance to study matters of that sort in greater detail.
  The distinction between direct and indirect axes that is frequently made by hon. Members on both sides of the House is largely a myth. Not only has corporation tax an effect on prices more often than on the incomes of shareholders; income tax is often indirect in its effect, because when it is levied on sole traders or partnerships it can be passed on to the customers of those sole traders or partnerships. The distinction between direct and indirect taxation, about which we tend to become so heated, ought to

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  be studied in the much more relaxed atmosphere of a Select Committee rather than in the polemic of debate on set occasions such as this.
  It therefore seems that the case for a Select Committee is now virtually irresistible. I put that point to the Leader of the House at business question time last Thursday and he did not accept it. I am glad that the Chancellor, or whoever winds up the debate tonight, intends to refer to it. The Treasury argument against a Select Committee is that it is impossible to discuss taxation proposals in advance. That argument has been riddled from one end to the other by the Government's publication of their two Green Papers. I hope that we have heard the last of that shabby little argument and will have a Select Committee before long.
  I welcome the change of basis of capital gains tax—the change to a disposal basis—which does not mean that I welcome the change in the treatment of short-term gains. I also welcome the raising of the lower limit of estate duty. The way in which estates are treated in cur taxation system, however, is still nothing short of a scandal. In this country estate duty remains an optional tax. Nobody with any brains in his head or generosity in his body pays estate duty if he can possibly avoid it.
  My preference is for some sort of cumulative capital receipts tax which would operate throughout an individual's lifetime. I appreciate that there are alternatives, such as a wealth tax or a gift tax, but something must be done. If we say that we cannot do it I should like to know how the United States Senate—that well-known body of revolutionary Socialists—was able to introduce a gift tax as long ago as 1936.
  We do not expect from this Government much of an attack on inherited wealth. One of the most distasteful parts of this Budget—and I hope that I have shown that I am prepared to give praise where it is due—was the Chancellor's attempt to equate wealth with merit. My hon. Friends and I totally reject such an equation.
  I should like to hear the comments of the Government Front Bench on the way in which, after we have entered the European Economic Community they will be
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  able to make any pretence at preventing evasion, in terms of the taxation of estates, when we will have this enormous loophole for the flight of funk capital to tax havens as soon as the integration of this country's monetary system into that of the Community takes place. As I have said, the equation of wealth with merit is obnoxious to us.
  I now come to the most disgraceful part of the Budget—the disaggregation of children's investment income. There is not a shred of a reason for that step, in terms of incentive, savings, investment, or anything else. It is purely an open invitation to tax avoidance. I hope that the Opposition Front Bench will give a pledge that that measure, if no other, will be repealed in the first Budget after we return to office. It perpetuates divisions in society. It is intended to perpetuate accumulations of inherited wealth. It is intended to preserve a socially-divisive educational system. It must go. There is no merit in it. It is the clearest indication that this is a rich man's Budget.
  7.16 p.m.
  Mr. Peter Rees: I had not proposed to follow the hon. Member for Dudley (Dr. Gilbert), but I have been stung by one or two of his observations, and I hope that I may be allowed to follow his remarks briefly. First, he repeated the old shibboleth that estate duty is an optional tax. No one, except by suicide, can calculate the moment of his death. I practice in that field of law, and I have not found estate duty to be an optional tax. It is possible by good management to mitigate some of its grosser effects, but total avoidance is a matter of pure luck. I hope that when my right hon. Friend the Chancellor has finished reforming corporation tax and income tax he will take a closer look at estate duty, because at a rate of 80 per cent. it is not taxation; it is confiscation.
  The Budget has been rightly commended as a reforming Budget. We remember Chancellors from Addington to the right hon. Member for Cardiff, South-East (Mr. Callaghan) imposing taxes on us, but we do not recall many Chancellors standing back from the jungle and weighing in with a hatchet to try to clear a path through it. For that reason I welcome the Budget, and hope that my right hon. Friend will find his niche in fiscal history.

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  It is curious that the Budget has been described as divisive and a "two-nations" Budget. I have never understood why a Budget that imposed taxes selectively at a high rate on certain sections of the community should be referred to as a unifying Budget while a Budget of this sort, which spreads its reforms and reliefs fairly widely should be described as divisive. I can only conclude that Socialist Budgets have been unifying through misery.
  I warmly welcome the abolition of that mean little measure introduced by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) involving the aggregation of children's unearned incomes with the incomes of their parents. Since the hon. Member for Dudley devoted some time to the matter I hope that, notwithstanding the pressure of the debate, I shall be permitted to reply in some detail. Some children are fortunate enough to enjoy settlements set up by rich grandparents or uncles. In my experience they are in a minority. They have been hit by the aggregation measure. But, as with so many ill-thought-out Socialist measures, many other children and parents have been hit by this measure.
  I want to give two examples. First, let us take the case of a woman who has been widowed early in life and in whose husband's will money has been left direct to the children. The income from that money counts as unearned income and is aggregated with the income of the mother. I have known of mothers who could ill afford that additional impost.
  Another case is that of divorced women. It has been a regular practice under divorce orders for maintenance to be paid direct to the children, and it was not aggregated on that basis, up to 1968. I rarely found that a man's income could stretch wide enough to support two families. Divorced women need all the assistance they can get and not the hindrance which is imposed upon them by this measure. I warmly welcome its repeal. My only criticism is that it is being repealed from 1972–73, and not from 1971–72. I cannot think that there are great administrative reasons why it should not be repealed as from this year.
  May I move from this controversial point to the method of the reforms which my right hon. Friend has introduced? I
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  commend this Budget as much for the method as for the matter. This is the first time in my limited experience that we have been presented with a programme of fiscal reform spread over a period of years—certainly the first time that we have had the measures proposed put out for our criticism and comment. I like to think that my right hon. Friend has read and marked and digested the evidence given to the Select Committee on procedure.
  Speaking as one who has had to deal professionally with fiscal matters, I contrast this Budget with that of the last Administration in introducing the 1965 Finance Bill, when there was very little chance for informed comment to make itself heard or for representations by the professions who would have to explain the measures to their clients to be heard by the Chancellor.
  It is absolutely right that we should know in advance the framework of the kind of taxation which we shall have to operate, even though such matters as rates must be kept, as a matter of secrecy, for the Budget measures themselves. So I welcome this approach and I hope also that fresh consideration will be given to the idea of publishing the technical measures, the Bills, well in advance of the actual debate, so that outside bodies can make representations to the Chancellor and his Ministers.
  On reform of corporate taxation, it has been a feature of Socialist thinking for many years that distributed profits should be penalised. We have had this at least twice. There was the two-tier profits tax and the imposition of income tax under Schedule F. We were challenged earlier to produce evidence that money raised on the market could be used more efficiently and earn a better return than retained profits. In the nature of things, it is unlikely that this kind of evidence will be available, because companies do not keep their money in separate pockets and one cannot always tell what they have invested, what they have retained and what they have distributed. If hon. Members are interested in this point, we might ask the hon. and learned Member for Lincoln (Mr. Taverne) to commission his Institute of Fiscal Studies to delve more deeply into this. But I suspect that we shall not get any more conclusive evi-

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  dence because any conclusions would have to be based on too many asumptions.
  But, in my limited experience, I have constantly encountered, in considering company balance sheets, companies which have far too much money, which they are not putting to use, which they have invested in quoted securities, Government stocks and local government stocks and which would have been far better distributed to their shareholders. This experience must have been shared by many people considering company balance sheets in commerce or the professions.
  I therefore welcome the proposal of a new basis for the taxation of distributed profits. My right hon. Friend said that he wanted to impose a neutral tax. This is not the moment to comment in detail on the relative merits of the two-rate system or the imputation system, but I would venture to suggest that neither is in fact precisely neutral in its operation as between distributed and undistributed profits.
  I should like a system under which dividends ranked as a deduction from corporate profits, because they would then be caught up in the net of personal taxation. I should like companies to be induced to invest, to re-equip by the generous system of capital allowances which we had before 1964. In other words, the profits which a company retained but did not use for re-equipment would be taxed at the high rate, the profits used for re-equipment would be relieved by a system of capital allowances and distributed profits would be caught by personal taxation.
  With this method, we might be able to disencumber the fiscal system of the extremely complex web of close company legislation and even of the anti-dividend-stripping measures and so on. We have got over-loaded with far too many anti-avoidance measures, which are inevitable when there is tax at high rates, and particularly when there is a high rate of tax on distributed profits.
  We are having a stimulating, profound and exciting Budget. I welcome it on the basis—that it will be a real step forward to ridding this country of its necessary but obsessive preoccupation with tax, so that at last it can get on with the more fundamentally important business of creating wealth.
  7.26 p.m.
  Mr. Eric S. Heifer: I do not intend to follow the hon. and learned Member for Dover (Mr. Peter Rees) in his learned arguments. I want to concentrate on two fundamentally important points which have not been adequately dealt with. The right hon. Member for Wolverhampton, South-West (Mr. Powell) put forward an argument which, in essence, once one had stripped away the interesting verbiage, and despite the reasoned way in which he put it forward, meant that we should restrict money supply and, of course, that there would as a result be a rapid rise in unemployment.
  That is what the right hon. Gentleman was arguing, although he hardly mentioned the word "unemployment". But unemployment is the most serious issue which faces us. I do not accept the argument of the right hon. Gentleman and the right hon. Member for Orkney and Shetland (Mr. Grimond) that inflation is the greatest evil. It is an evil and it has to be dealt with, but the greatest evil is unemployment, which affects the lives of millions of ordinary working people. Even if it is not millions unemployed, with 800,000 unemployed, their families are affected and fear and insecurity is created. If we are to do anything, we must deal with unemployment. That is the first essential for this Government or any other Government.
  I have criticisms of my own Front Bench when we were in power. To that extent, I agree with the hon. and learned Member for Dover that we all inherit something. We certainly inherited something. We solved the balance of payments problem. We got a surplus on the basis of a growth in unemployment—and I will not mince words on that. This Government, instead of doing something positive about it, in their first nine months have allowed the level of unemployment to grow to its present figure.
  Dealing with unemployment leads to the valid question of growth. I have been in the House six years and have heard all sorts of arguments about how we should get growth, but up to now I have heard no basic answer because we have all gone around the issue instead of getting to the heart of it.
  The question of an incomes policy must be considered as part of the issue. I

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  believed we should have a voluntary incomes policy and I argued, both inside and outside the House, that one should be initiated. Unfortunately we quickly went from a voluntary to a statutory incomes policy. The voluntary one failed because the norm was based on the percentage concept. The trouble was that an overall percentage increase was unfair to a man earning £12 a week compared with a man earning £25 or more a week.
  Today the trade union movement will not accept an incomes policy, not because it is against the concept of balanced planned growth in earnings, but because the previous policy was used to keep down wages, particularly the wages of the lower-paid. For this reason the trade union movement will not even listen when it is suggested that a wages policy should be established.
  Nevertheless, in the last analysis there must be planned growth in wages, though it must be linked to a planned economy generally. In other words, we must have planning in such a way that the policy is fair all round. I appreciate that this may not be the view of some of my hon. Friends, let alone hon. Gentlemen opposite. However, if we are serious about our future economic development this must be done. I hope that when the next Labour Government are elected we shall have as part our monetary policy planned growth in wages with greater control over the economy than has been the case in the last few years.
  There has been not an explosion in wages but a greater demand for higher pay in the last 18 months compared with the previous four years simply because between 1965 and 1969 wages were held down to an increase of 7 per cent. Once that percentage barrier was removed the trade union movement naturally came forward with higher demands. We should not forget, however, that during those years prices were rising partly, though not largely, because of taxation and other measures.
  Today workers must demand increases of, say, 10 per cent. just to stand still, and they do not want to stand still. They want to do more than just keep pace with the rise in the cost of living. They want an extra 3 per cent. or 4 per cent. to purchase the goods that make life better.
  "If only the workers would not ask for so much—all would be well," we are
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  often told, but are they not entitled to higher wages and some of the fruits of their labour? Hon. Gentlemen opposite would not be able to talk about giving £2,000 to £4,000 tax rebates to the wealthy in this Budget if it were not for the wealth created by the workers. This, basically, is why the workers are demanding more, apart from the need to keep pace with the rising cost of living.
  I promised to be brief and I shall conclude, although there are many other topics I would like to discuss. I regard the Budget as an example of the rich being given something on a plate, with only minimal benefits for a small section of workers.
  I accept and welcome certain aspects of the Budget, such as the endeavour to deal with the labour only sub-contracting question in the building industry. I hope that those concerned will be caught on the National Insurance stamps, point and not merely because of their failure to pay tax.
  7.36 p.m.
  Mr. Ralph Howell: I congratulate my right hon. Friend the Chancellor of the Exchequer on an excellent Budget. It represents a turning point in our history. We are turning our backs on the Socialism and semi-Socialism which we have been operating for the last 25 years and have set sail on a free-enterprise course. I welcome this, as do my constituents.
  While I am pleased that my right hon. Friend has decided to reform the P.A.Y.E. system, I regret that this will take several years to complete. It should be done quickly because P.A.Y.E. discourages people from working. A great mistake was made in 1949 during the Attlee Government when social security benefits, unemployment pay, sickness benefits and other State payments, with the exception of family allowances, were exempted from income tax. This caused appalling anomalies.
  The Chancellor said he was baffled because we had inflation and rising unemployment at the same time. I see no reason to be baffled. If people are paid more when they are unemployed than when they are working, inflation will obviously result.
  My constituency is a very low wage area, so this problem is more obvious

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  to me than to some hon. Members. I have done a considerable amount of research into this matter and I have consulted the Treasury on it. For example, I pointed out some time ago that a man earning £20 a week with a wife and four children was better off by £1·05 when unemployed for as long as 13 weeks in the year. This did not seem to make sense to me, but I was told by the Treasury that while it could happen, I had to admit that a man with four children was "an exceptional case". I could admit no such thing.
  I investigated further and discovered that while in every case the single man was worse off when unemployed, a man earning £15 a week with a wife and no children was £1·25 better off when unemployed and that that was the position for the 13 weeks while his tax rebates were coming to him. The man with a wife and one child would be about the same amount better off for a period of 14 weeks, and a man earning £20 a week, with a wife and two children, would be £2 a week better off for a period of 12 weeks.
  That is all utterly wrong, and it is one of the very deep-seated causes of our trouble. I sympathise with people who are unemployed through no fault of their own, but a great number of people have found out how to work this State-approved tax fiddle—and I say that deliberately. They have discovered that if they extend the period between jobs they can recover practically all the tax they pay. This is also one of the reasons for there being a greater degree of strike activity in the last quarter of the year. I pointed out to the Treasury that this matter could be dealt with very simply, and it is wrong that we should have to wait for several years before tackling a very thorny problem which is causing so much harm to our economy.
  7.41 p.m.
  Mr. Gwynoro Jones: My constituency, too, is basically a low-income area-40 per cent. earn less than £900 per annum—but I doubt whether my constituents will be so eager to accept this Budget as those of the hon. Member for Norfolk, North (Mr. Ralph Howell) seem to be. The Budget does nothing to assist the bulk of those in the low and middle wage earning sector. It
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  is the payback for the hundreds of thousands of pounds doled into Tory Party funds to help that party at the election.
  It is a clever Budget. We had euphoria following the Chancellor of the Exchequer's speech, but we also had it with the change of Government on 18th June. Many people in the City thought that the problems of inflation, investment and growth would be solved overnight with the return of a Conservative Government. I daresay that last Tuesday's euphoria is rapidly disappearing and that, as with last October's mini-budget, people will begin to assess what there is in this Budget for them, and will soon realise that they have been badly had by the "jolly, jolly sixpence" announcement in the national Press.
  It is basically a give-away Budget for those who least needed the money. It helps the rich. It is amazing to hear hon. Members opposite talking in academic terms about the value of this Green Paper or that and of the long-term fiscal or tax structure strategy while deliberately avoiding the issues now confronting us. The real issue is unemployment, but the Budget does nothing to help reduce the numbers. The right hon. Gentleman the Member for Taunton (Mr. du Cann) claimed that it will reduce the rate of growth of unemployment, but we are completely at loggerheads on this issue. We on this side do not expect unemployment to be dealt with in terms of reducing its rate of growth, but in terms of reducing the number of unemployed.
  The Budget does nothing about inflation and prices. Hon. Members opposite keep pointing out that S.E.T. has been halved. We on this side remember that when S.E.T. was introduced a little slip appeared in the shop window announcing price increases because of the S.E.T. surcharge. Now that S.E.T. has been halved, we must expect in the near future to see a similar slip in the shopkeeper's window announcing an equivalent reduction in prices.
  The Government came to power, not on the issue of industrial relations or anything else but on the issue of a reduction in the cost of living. That was the commitment: that was the promise. Hon. Members opposite like to claim that they keep their promises, but how is this promise being kept? Where in this Budget is there a direct attempt to reduce

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  prices, as was promised by the Prime Minister? We have here a bonanza for the rich. Taking last year's mini-budget in conjunction with Tuesday's Budget, we find things heavily loaded against the low and middle band of wage earners. With the abolition of free school milk, the increase in the cost of school dinners, prescription charges, dental charges all coming into effect now, the vast majority of people will find the £40 increased child allowance and the 6d. of income tax soon whittled away, if it has not gone already. This certainly applies to those below £3,000 p.a.
  There is merit in certain aspects of the Budget. The increase in the old age pension must be welcomed. But why was that increase not announced last October for implementation now, in the same way that the 6d. cut in income tax was announced last October? The one could have been dealt with in the same way as the other. But, again, the £1 increase for a single person will soon be eroded by the present rate of inflation of 10 per cent. per annum. The last pensions increase was in November, 1969, since when the purchasing power of the pension has decreased by 9·7 per cent. or 50 new pence. By the time this increased pension is paid in September the pensioner will find himself in practically the same position as now, if not worse off.
  Turning to industrial investment, we in Wales are now going through a period in which industrial inquiries are at the lowest level since 1966 while redundancies are at the highest level for many years. The average redundancy in Wales runs at about 9,000 or 10,000 a year, but in the first ten weeks of this year the present Government have managed to get rid of 5,000 jobs in Wales in 10 weeks of 1971 which is already 60 per cent. of the figure of any year since the period of the Labour Government. Unemployment is at its second highest level since the war with 45,000 out of work. Needless to say, the highest level was at a time of Conservative Government—in 1963–so we did not really expect much better in the first nine months of this Government's term of office. Nevertheless, in September, 1969, the present Prime Minister was eager to convince those in the development areas that he and his party would do all in their power to help those regions. The Prime Minister said:
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  "We shall act to bring new life to those areas suffering from high unemployment or depopulation. We shall act to encourage a sensible spread of industry"
  Noble words. But since June of last year, factory after factory in South Wales has announced redundancies or closures. Hardly a week or a day goes by without some announcement of jobs lost here or there. During the term of the present Government, we have not heard much about industrial development or industrial inquiries.
  The Budget does nothing to tackle this situation. The abolition of investment grants was a major miscalculation, at a time when the rate should have been increased and the rate of payment should have been increased. What has happened? The investment grants have been done away with. On an analysis of investment grants from 1967 to 1970, 200 manufacturing firms announced their intention of coming to Wales. Under the investment allowances of 1960 to 1964, only 69 manufacturing firms announced that they were coming to Wales, which proves that in terms of the development area of Wales, the investment grants were that much better.
  Regardless of the trivial academics of whether consultation was sufficient or better than the Budget of 1965 of the value of tax reform, or whether there should be a Select Committee on this or that proposal, the basic tenor is that the Budget will hit hardest those who should be having the benefit and be encouraged. The child allowance, which has been bandied about as a great giveaway to the ordinary man in the street, has rapidly been dealt with by price increases and the increased charges which came in last week.
  The Budget does nothing for unemployment or prices, but only serves to keep happy those people who drew in the money month after month to the Tory Party coffers up to the election of last June.
  7.52 p.m.
  Mr. David Lane: I hope to touch on one or two of the issues raised by the hon. Member for Carmarthen (Mr. Gwynoro Jones). Visiting my constituency during the weekend has strengthened the approval of the Budget which I felt last week. There is

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  a widespread welcome for my right hon. Friend's proposals, not by any means confined to Conservatives. It is surely a bold, relevant, and confidence-inspiring Budget. I join in the warm tributes paid to the Chancellor and his colleagues, and, with my hon. Friend the Member for Walsall, South (Sir H. d'AvigdorGoldsmid), I also pay tribute to the late Iain Macleod for all the work he did in laying the foundations.
  My right hon. Friend's Budget judgment was sound, in giving the right degree of stimulus and encouragement in the short term and, even more important, paving the way for sustained long-term growth. The country will appreciate two things especially. First, out of the most complex dilemma facing a Chancellor for several years, my right hon. Friend has produced the most ambitious Budget for several years. Second, the Government have already justified the claim which the Prime Minister made at the General Election to be a great reforming Administration. We have already had the Industrial Relations Bill. We have before us proposals for local government reform. Now we have this far-reaching programme for taxation reform.
  I shall touch briefly on a few aspects. First, on the changes in the tax system, the hon. Member for Farnworth (Mr. Roper) earlier this afternoon spoke about the position of the federated superannuation system for universities, the F.S.S.U. I thank my hon. Friend the Financial Secretary for the personal interest which he has taken in this. I think the Government have gone as far as is reasonable to meet the wishes of people in universities, and I hope that these people will accept that in the deferment of the appointed day until 1980 there is a generous concession to their particular needs.
  I welcome the unification of income tax and surtax, the reform of corporation tax, and the introduction of a value-added tax. I join with those who have praised the openness of this programme, in contrast to what happened in 1965.
  Speaking of the value-added tax on Friday, the Leader of the Opposition, typically, was distorting and misrepresenting the facts. Experience in other countries, to my knowledge, has shown that
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  this is an eminently workable tax. I am very glad that the Chancellor has already made clear that there will be exemption for small traders. I am thinking especially of small shops. The pendulum has swung too far towards the big multiple stores and away from the small shops. I hope that this exemption will be widely appreciated because the small shop has a great value in the community.
  My right hon. Friend applauded the willingness of the Inland Revenue nationally to accept this programme of reform. I pay tribute to all that the Inland Revenue does in my constituency in looking carefully and sympathetically at the individual taxpayer's problems.
  On the immediate measures, critics opposite have said that we have done too little for many of the population. This was well refuted by, among others, my hon. Friend the Financial Secretary on Thursday. The increased pensions after September will have the highest purchasing power ever, and will be brought into effect at a date two months before what would have been the due date under previous patterns. I draw attention to the increase of £2 in the application of the earnings rule, to the more generous provisions for family income supplement, to the increased help for the disabled through the constant attendance allowance, and to the additional help promised for the chronically sick and for very elderly people. This is never enough, but taken in total it adds up to a considerable package of extra help for those who need it most.
  Another criticism which we have heard is that the Budget does nothing about prices. That criticism comes ill from the Party that added record burdens of taxation to the pressure on prices in the shops. The cutting of selective employment tax will have a major influence here. The hon. Member for Carmarthen evidently is unaware of what Sainsbury's announced last week. We hope that there will be a similar announcement soon from the Co-ops. I hope that lion. Gentlemen who spoke on behalf of the Co-ops in our debates about selective employment tax will bring their influence to bear.
  I echo what was said on Thursday by my hon. Friend the Member for Dartford (Mr. Trew), regretting that it had not been possible for the Government this time to reduce the tax on fuel oil, petrol

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  and other oil products. These should be leading candidates for the next reductions which my right hon. Friend can contemplate.
  The Budget is already giving encouragement visibly to industrialists, according to the reports reaching me. There is great psychological benefit, too, from the announcement about Bank Rate. It is good that the Budget is giving particular help and encouragement to small companies.
  On the immediate economic prospects, we are all concerned, on both sides of the House, about cost inflation and about unemployment. Regarding inflation, in contrast to what I think was implied by the speech of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), the Government are absolutely right to continue giving first priority to reducing the level of salary and wage settlements. The gap between the settlements and the increase in production has to be narrowed. I should like to see not only the level of settlements coming down but productivity going up more. In this, the Budget will help.
  I wish the Government had been able to take further action about unemployment, but, as my hon. Friend the Member for Tonbridge (Mr. Hornby) said last Thursday, the Government could not prudently have done more at this stage. I believe that the Budget, plus the other measures already taken to help the regions, will before long halt and then reverse the trend in unemployment; and, as the Government make progress in the next few months in getting on top of cost inflation through salary and wage settlements, I hope that they will not hesitate to give further stimulus, through the regulator or through the relaxation of instructions to the banks or in accelerating public spending in some of the regions.
  I want to refer, in passing, to one of the main question-marks in the employment situation-the problem of Rolls-Royce and the RB211. My constituency, together with many others, is indirectly affected. I hope fervently that, even at the expense of further millions of pounds of public expenditure, it will be possible, to reach an agreement to continue the manufacture of this engine, for the sake of employment at home and for our reputation and prospects overseas.
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  My final reason for welcoming the Budget is its relevance to our application to join the Common Market: because I believe that it is proof of the Government's continuing seriousness of purpose in seeking British entry. I think the Budget will help by making sure that the British economy gets into better shape over the next few months, and by laying down the firm commitment to tax reform it will make eventual transition to the Common Market system easier.
  I know that there is much public scepticism about the Common Market, but there is also strong support for joining, especially among young people and among people in industry. As a friend of mine in industry in one of the most distant regions put it very vividly last week, "Ware out on a limb and we are falling further and further behind". Any alternative to joining the Common Market will be very much a second best, both economically and politically. I therefore hope that the Government's negotiations will succeed.
  I end by reminding the House of words with which The Times, not always one of the Chancellor's most ardent admirers in recent months, greeted the Budget in its leading article on Wednesday morning:
  "… this does look like a Budget which opens a new political prospect. It offers a coherent political strategy, and takes advantage of a period of opportunity. It could be the starting point for a revival of confidence in British industry and, if the European negotiations succeed, in British life."
  8.3 p.m.
  Mr. John Mendelson: The Chief Secretary earlier gave me a firm promise that he would return later in his speech to reply to an intervention of mine concerning the level of unemployment. Alas, he never did. I do not regard that as a broken promise. I think that we shall probably get an attempted answer from the Chancellor.
  However, I begin with that reminder because I regard this as the crux of the debate. It is a subject to which the right hon. Member for Wolverhampton, South-West (Mr. Powell) did not address himself in sufficient detail. The very interesting attack which the right hon. Gentleman made upon the Chancellor's monetary policy was incomplete; and for that reason I do not believe that the Chancellor will find it too difficult to reply to him.

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  The points about the transitional difficulties which would arise, as the right hon. Gentleman described them, after a strict application of a tight money policy are far too serious to be glossed over in a few sentences. They may well mean, if the right hon. Gentleman's policies were to be followed, a level of unemployment of 1½ million. I do not think that the country is prepared to accept that.
  We have the benefit of the experience in recent years of all the major capitalist countries. Obviously, I am treating the right hon. Gentleman's argument with the seriousness that it deserves, because he himself went outside this country—rightly—and did not discuss only the details of our own economy. In a number of capitalist countries in recent years there has been a phenomenon which, strange to relate, the fathers of the Socialist movement predicted more than 70 years ago. They have been proved absolutely right. It is right that in a debate on the Budget their point of view should be briefly introduced.
  The problem with which the right hon. Member for Wolverhampton, South-West, the Chancellor and my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), when he was Chancellor last year, are wrestling is that of directing economic policy in a society where 44,000 boardrooms must be influenced and where the Government have very few means of directly telling the 44,000 boardrooms what economic policy they are to pursue. It is a society in which the two major economic strategic decisions which must be made on two questions—first, what is to be produced; and, second, how much of it-are not in the Government's hands.
  That is why the right hon. Member for Wolverhampton, South-West, like some eminent American academicians and politicians, comes up with this very blunt instrument of the tightest possible monetary policy, no matter what the consequences in the shorter and the intermediate run. It is a counsel of despair. Some of the advisers of Mr. Montague Norman, when he was Governor of the Bank of England, brought forward the same counsel of despair on many occasions. I should have thought that the lessons of that advice would have been learned by now.
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  The real problem that the Chancellor faces is that which my right hon. Friend faced. There should be realism across party lines in a Budget debate. In the Budget debate last year, I criticised my right hon. Friend as being too cautious. I believe that my criticism has been proved correct.
  The responsibility for the present level of unemployment must be shared between the two Front Benches. Some of it is a continuation of the too-cautious economic policy pursued last year by my right hon. Friend; and some of it is a direct result of the reluctance of the present Government to do anything about it when they came into office.
  Both of them are tied to the economic system that we have. Both of them face the difficulty of not being able to command the instruments of economic policy which would make sense in a modern economy to any Government's economic intentions.
  The United States economy is largely dependent at present upon a space programme. In recent years in America, when economic policy has been discussed, people have said, "What will you do with all our economic resources? How will you use them?"; because, in spite of the naïve contributions that we sometimes hear from hon. Members opposite, the problem of a modern capitalistic economy is not the absence of resources. It is the presence of too many resources.
  I mention America because we are so much influenced by what happens in the United States economy. If, in America, there were not a space programme and if there were not a policy of having three cars for each family, it might be found that the level of unemployment there today would be seven million to eight million.
  The problem which faced the Chancellor of the Exchequer last year and this year can be summed up in this way. How is the economic policy of the private economic system to be controlled if the Government have real control over only the public sector? That is the unresolved problem. It was shown again this afternoon when we were talking about the public sector. I represent a steel constituency. I asked the Secretary of State for Trade and Industry, "Is it not common ground that we want an expanding

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  steel industry and that an expanding steel industry can be financed only in two possible ways? One is by allowing the required increases for the product of the industry so that it will be on an equal footing with the prices charged in the United States or just below that, but at any rate near to the level of the Western European countries. The other is by raising public capital which the Steel Corporation will be allowed to use".
  The right hon. Gentleman the Secretary of State did not give a straight answer. He said, "I want an efficient British steel industry" So the question remains, for there cannot be an efficient steel industry in this country unless it is an expanding steel industry, as the Chairman of the British Steel Corporation has made clear publicly and privately on many important occasions.
  The dilemma is that, if the steel industry were to adopt the proper expansionist policy, it might be in conflict with a restrictionist economic policy in the private sector. I only hope that men's jobs will not be sacrificed on the altar of doctrine and short-term advantage, and that the Government's responsibility for coming to a decision about the future of the steel industry will be exercised in the knowledge that what they have to decide is not whether we have a small or a large industry but whether we are to have a steel industry at all in the future.
  That brings me back to the question of the economic strategy. The Government are deliberately aiming—this is clear from the Chancellor's own statements—not to reduce unemployment. They do not feel that they have enough control over the economy to be able to sustain a great expansion within the next 12 months, and this leads them to the old-fashioned view that the working class can be taught their lesson of being what they call reasonable in wage claims only by having a large pool of unemployment.
  The argument going on at present between the Chancellor and some of his Right-wing critics, as the hon. Member for Oswestry (Mr. Biffen) rightly hinted last week, is precisely the argument about whether they are being tough enough. Whether in the context of money supply policy or the context of industrial policy, are they being tough enough in forcing working people to realise what the score
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  really is? The Government have no convincing answer to that question because they are tied to the policy inherent in our economic system.
  We must not be surprised, therefore, that the Government are refusing to reduce unemployment, are not planning for a reduction in unemployment, and are not planning for the proper expansion of our economy. The Budget stands condemned not only as regressive and because of its inequalities—that we would expect—but because it refuses to face the reality of our economic situation, does nothing to reduce unemployment, and does nothing to end the wastage of our economic resources which has been going on for some time.
  8.13 p.m.
  Mr. David Knox: In view of the shortage of time, 1 hope that the hon. Member for Penistone (Mr. John Mendelson) will forgive me if I do not closely follow his remarks, although I hope shortly to touch on the question of unemployment.
  I enter this debate as one who, ever since I became interested in these matters, has considered that the Treasury is always wrong—sometimes more wrong than others, but always wrong none the less. The highest tribute that I can pay, therefore, to my right hon. Friend the Chancellor for his Budget Statement last Tuesday is that I feel that I should reconsider that view for the future and accept that sometimes the Treasury may be right, or at least half right.
  This is the best Budget that I can remember, and I congratulate my right hon. and hon. Friends at the Treasury for the work which they have done. It is right also to pay tribute, as other hon. Members have done, to kin Macleod for his contribution to it. I could extol the virtues of the Budget at length, but, because several hon. Members still wish to speak, I shall keep my contribution as brief as possible and concentrate on one aspect of it which appeals to me in particular.
  In my view, the most important aspect of the Budget is its strong orientation to the Common Market. My hon. Friend the Member for Cambridge (Mr. Lane) made this point a few minutes ago. The tax changes and, in particular, the proposal to introduce the value-added tax

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  will help prepare us for entry into the European Economic Community in a year or two. The Times said last Wednesday:
  "The more open approach to taxation treats Britain as though Britain could be brought to take a more confident view of herself. As the European negotiations are more likely to fail because of British lack of self-confidence than for any other reason, Mr. Barber's Budget is a real help to Mr. Rippon in the European negotiations."
  In my judgment, this is the most powerful reason why it is a good Budget. I am convinced, and I have been for many years, that we shall never put our economy right in this country until we join the Common Market. The Budget will take us a certain way along the road towards strengthening the economy, and it will help to smooth the passage of entry into the Common Market, but in itself the Budget will not enable us to improve our economic performance in the way that membership of the European Economic Community will.
  I think it probably true that the British domestic market at the time of the Industrial Revolution was larger than we needed for the Industrial Revolution to take place, but, as industrialisation has advanced, and as modern science and technology have opened up new prospects and new productive techniques and methods, so Britain, notably in recent years, has been increasingly unable to exploit the opportunities open to her. This inability to exploit opportunities has been due to the lack of a large domestic market. As a result of all that, the lead which we built up because we were the first country to undergo the Industrial Revolution has in recent years been lost. Although our economy has grown, it has not grown as fast as the economies of other countries, and increasingly we have been left behind.
  It is interesting to note that the significant difference between other advanced industrial countries and ourselves has been the much larger domestic market which they have enjoyed. This is true of the United States. It is true of the European Economic Community. It is true also of Japan, and it is right to remember that, as Japan is frequently cited as an example of a country which has got by without a large domestic mar-
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  ket. In fact, the Japanese domestic market is twice the size of Britain's domestic market.
  The logic of my argument, therefore, is that we need a much large domestic market, and this can be provided only through membership of the European Economic Community.
  Some interesting statistics were given in an article by Mr. Andrew Shonfield in The Times last week, in which he showed that the growth in productivity in the United Kingdom in the last 20 years had been a mere 2·6 per cent. All the countries of the Common Market, on the other hand, had done better, ranging from 3·84 per cent. in Belgium to 6·88 per cent. in Italy. No matter which sector of economic or social statistics one takes, the performance of the countries of the Community has been better than ours in the United Kingdom.
  Because I believe so strongly, therefore, that we need this large market before we, too, can enjoy the sort of advantages and have the sort of growth which we want, I am convinced that we must join the Common Market, and join it soon. For that reason, I welcome the orientation of the Budget towards our early entry into the European Economic Community.
  Not only do I warmly welcome the actual measures in the Budget which will make our entry easier, but I welcome, and welcome wholeheartedly, the strong European tone of the Chancellor's speech last Tuesday.
  Thus far, I have given strong support to my right hon. Friend and his Budget. I now turn to one aspect of his speech which somewhat concerns me. He said that his broad aim over the next 12 months was to ensure that demand expanded by 3 per cent. over the year, which was the estimated rate of growth of production potential. I was sorry to hear this, because it means, as a number of hon. Members have noted, that unemployment will remain at the present level for the next 12 months which is much too high. It also means that none of the undoubted slack in the economy will be taken up over the next 12 months—and there is a great deal of slack.
  One large firm, the directors of which I was talking to recently, told me that

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  they could increase production by 10 per cent. and that the only additional costs they would have would be the material costs. The existing labour force and the existing capital equipment would enable them to do it. This means simply that both labour and capital are grossly underemployed at present. If I thought the current rate of unemployment and the under-utilisation of labour to be some brake on the increase in labour costs, I might support it, but there is, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said, no evidence of this, and indeed the experience of the last two years has tended rather to the contrary conclusion.
  Apart from the fact that this unemployment and under-utilisation of labour make no contribution to keeping labour costs under control, there are a number of other very substantial disadvantages, both social and economic, in running the economy at the current level of activity, a level where demand is substantially below supply potential. In the first place, there are the social effects of unemployment, because unemployment of this sort affects good workers and bad alike; it is quite undiscriminatory and it is an affront to human dignity.
  One has to be careful with this argument, because it is obvious that, in a modern industrialised economy, one cannot altogether eliminate unemployment. But if one can reduce unemployment by 10 per cent. one is reducing the social ill-effects by 10 per cent.; if one can reduce unemployment by 20 per cent., one is reducing the social ill-effects by 20 per cent. At this time in our history, it is intolerable for purely social reasons that almost 800,000 people should be out of work, particularly because of the grave affront to their dignity as human beings. Of course we pay better allowances now to people out of work, and that is welcome. But it is not the whole story. It is an affront to a man—to all sorts of people at all levels in our society—to have to go home and tell his wife and children that he has lost his job. This is a slight on him, even though we here know that there is no real slight at all. That is the first reason why the current level of unemployment is unacceptable.
  Then again, there is the wastage of human and capital resources s through unemployment and the under-employ-
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  ment of labour and capital. One does not need to be a sophisticated economist to understand what this means, because at its simplest it is absurd to say that one is strengthening the economy by stopping people from working and preventing machines from producing goods and thus making a contribution to a larger national cake.
  Another reason why it is wrong to have this level of unemployment is the effect on getting rid of restrictive practices. These came into being, we would do well to remember, not because people were bad but because men were afraid of losing their jobs and felt insecure. By the mid-1960s, most people had accepted that restrictive practices should go. We are not helping much to get rid of them by re-creating the very conditions in which they came into being.
  Then again there is the effect of the current under-utilisation of resources on the level of investment. Investment is dropping. Labour-saving investment naturally is not taking place because there is plenty of labour available. Risk investment does not take place to the same extent when one has an economy that is under-utilised to the extent that ours is. Particularly bad is the effect on growth industries of this sort of policy, because one is cutting off marginal spending power by the people. One is cutting off the sort of spending power they use for luxuries—and yet those luxuries are the very things that the growth industries are producing and which need a good domestic market to enable us to sell them abroad.
  There are a number of other disadvantages, which I will not go into now because of time, but finally there is the effect on business morale and business confidence and the effect on national morale. Industry in this country has been subjected to stop-go—and plenty of "stop". Confidence is at a low ebb. Business men have spent a lot in investment, often at the behest of the Government, which has not been taken up. Business men do not like stop-go but they like stop" even less, particularly at a level of economic activity substantially below the full utilisation of capacity. The result is that we have a complete lack of confidence amongst our business community —not only the financial community but the business community as

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  well which, in my view, with the greatest respect to my friends in finance, is more important than the financial community.
  There is also the lack of national morale which this sort of policy brings about. This is the sort of thing which concerns me. I think that my right hon. Friend has done certain things which will help improve the position in some of these respects. I also ask him to think about using the regulators in a few months' time because I believe that this country can never again begin to expand economically until such time as we start injecting substantially more spending power into the economy and enable us to use the resources we have to a much greater extent than in the last five years or so.
  8.26 p.m.
  Mr. Edmund Dell: I found a great deal to agree with in what was said by the hon. Member for Leek (Mr. Knox) about the curse of unemployment. I think that he may find certain of the other things I have to say will follow along the lines of some elements in his speech. I want to make a brief intervention in part to celebrate' my return to Budget debates, from which I have been diverted by other vital occupations in recent years.
  Many things have been said about the Budget—that it is a Tory Budget, a gambler's Budget, a two-nations Budget. I see nothing in it but faith, hope and charity. The charity, as one would expect, begins at home; the faith is in personal incentives and market forces; the hope is that this will do some good to the country's economy.
  At any rate, the faith in market forces appears to be mitigated by some doubts. The Government are prepared to make some gesture, for example, in the direction of the development areas and to distort market forces in the interests of development areas—as long, apparently, as what they do shall be ineffective. They reconcile themselves to the inconsistency of their action with their own principles by the ineffectiveness of what they are doing. When they want to be effective they use investment grants. In Northern Ireland, where there is a very serious unemployment problem. They want to be effective. I asked the Secretary of State
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  for Trade and Industry today, why only in Northern Ireland? Why in Northern Ireland can one do something which we are apparently not allowed to do in other development areas of this country? He says that Northern Ireland is a special case. The real situation is that in Northern Ireland the Government are prepared to take steps which will be effective. They are prepared to take steps which will be effective because of the situation there, but the situation is becoming equally serious in the North-East of England, in Scotland, in my own constituency on Merseyside. It is no use the Government rejecting the use of investment grants on the principle that in some way they create investment of bad quality when apparently they are prepared to use them in Northern Ireland despite the danger, on their own argument, of creating investment of inadequate quality.
  I suggested to the Chancellor of the Exchequer, in my own Budget representations which I made by means of a Question which I put down to the Secretary of State, that in addition to free depreciation in development areas he should reintroduce investment grants at a lower level than the Government are using in Northern Ireland, at the rate, say, of 5 per cent. to 10 per cent., on plant and machinery bought for use in development areas. The cost of so doing would be relatively small; at 5 per cent. the gross cost would be £32 million, at 10 per cent. the gross cost would be £64 million. This would have been very much along the lines of what the right hon. Member for Barnet (Mr. Maudling) did during the period when he was Chancellor of the Exchequer. This would have given assistance to development areas, and it would have been consistent with what the Government are doing in Northern Ireland. Unfortunately, nothing along this line was done, but this would have helped to deal with the increasingly serious problem of unemployment in development areas.
  The hope is that that these policies of the Government will increase this country's rate of growth. I hope the Government are right. I do not want to see the next three or four years of this country's economic history wasted, but I am afraid that the Government have got the real problem wrong. The real problem is not the problem of lack of

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  incentives. The real problem is the fact that slow growth feeds on itself. In a slow-growing economy all the risks are greater and all management decisions more difficult.
  Take, for example, investment decisions. If one makes an overoptimistic investment decision in a market growing at 10 per cent. a year, then the results of over optimism are a great deal more rapidly absorbed than in an economy which is growing only slowly, in an economy which is growing only at 5 per cent.—even more so in an economy growing at 2½ per cent. The risks of investment decisions, particularly if overoptimistic or over-ambitious, are inevitably greater in a slow-growing economy. Consequently businessmen make cautious investment decisions leading to a slow growth rate.
  Take, for example, productivity—and here I follow the hon. Gentleman the Member for Leek. Productivity is continually a subject of discourse by Governments to industrialists. Industrialists quite understand the importance of raising productivity. The difficulty, of course, is that there is continued resistance because of the fear of redundancy. Redundancy is the English disease. If one could only get rid of the fear of redundancy. In countries with a higher growth rate there can be genuine guarantees that higher productivity will not lead to redundancy, and therefore one can more easily secure co-operation in obtaining a higher rate of growth of productivity.
  Take export-marketing. Industrialists may establish investment capacity directed to the export market and they may develop a market, often at great cost, yet they find, owing to the prestige which the Government attach, for example, to the value of the pound sterling in policies, such as the Chancellor of the Exchequer announced last year, that the competitiveness of their investment projects is undermined and the profit of their projects is undermined by the decision of the Chancellor to follow that course rather than maintain the competitiveness of British industry. Here I agree with what the right hon. Gentleman the Member for Taunton (Mr. du Cann) said about flexible exchange rates. In a slowly growing economy, I emphasise, this problem is much more difficult than it is in a fast-
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  growing economy, and the Government are, to that extent, in a more difficult situation.
  In that situation the Government can rely a great deal less on the operation of market forces, on the operation of international market forces. International market forces, I believe, are more likely to work for the benefit of the strong and to the detriment of the weak, and they work to the benefit of fast-growing industrial economies and to the detriment of slow-growing economies. I would no more disarm this country in face of international market forces than I would disarm its military defences. That is why I thought that, on balance, despite the disadvantages—I admit there are disadvantages—the investment grant system, in the condition of our economy, is very much better than the tax allowances system, and I still believe that. The investment grant system encouraged a very necessary degree of risk-taking.
  That is why I believe that any British Government must be prepared to take action to support the competitiveness of British industry, if necessary by taking a different view from time to time of the value of the pound sterling. The Government must create and sustain a market for British goods at home and abroad. Unless they are prepared to do this, further damage will be done to the British economy.
  8.35 p.m.
  Mr. Derek Coombs: I welcome the opportunity of speaking in this debate, particularly as the Finance Bill is probably the most significant fiscal event in our country since the war, not so much for its effects this year but because of the dramatic changes it foreshadows for the future. My only regret is that it is not possible, for obvious administrative reasons, to implement these long-overdue reforms before April, 1973.
  This Budget is the last chance for our country to keep pace with other advanced industrialised nations. Whilst congratulating the Chancellor on his initiative and without wishing to take credit away from him, it seems to me, logically and dispassionately, that he had little or no alternative. I may not be doing him justice in this, for even at the point where it is most obvious that any other course of action would be wrong, it still required the courage and determination

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  which have been so painfully lacking in previous Chancellors for many years.
  This does not stop me wishing—and these are minor criticisms—that some of the short-term incentive concessions had been more generous. The increase in earned income relief could have been higher than 15 per cent. Similarly, some immediate help on investment income, pending the long-term review, would have given an incalculable but extra boost to business confidence, apart from encouraging personal savings. To tax investment income at the present rate—usually the fruits of somebody's labour which in many instances has already been subject to income tax and surtax—is to my mind a diabolical imposition. In no other comparable country is there such wide and blatant class discrimination.—[Laughter.] —Hon. Gentlemen may laugh, but this happens to be true. They should check their comparisons.
  We pledged ourselves to a property-owning democracy, to provide help to the poor in our society and to improve the standard of living of all our citizens. To achieve this, we expect those who are able to take care of themselves to contribute the effort and skill which alone can induce a faster rate of economic growth, for, in spite of what hon. Gentlemen may think, we shall never achieve social justice in any other way.
  The prime ingredient is, therefore, confidence. It is a fact of life in any free society—and I am not talking about some Latin-American dictatorship—that the broad mass of the middle-class must get richer if the standard of living of everyone else is to be improved. People's expectations will always rise, and so, probably, will their standard of living, but the extent to which the State derives benefit depends on where these efforts are channelled. Honest endeavour, or devious tax avoidance; that is the choice. The hon. Member for Heywood and Royton (Mr. Barnett) lectured us about social injustice and implied that if any hon. Member wanted to learn a trick or two about tax avoidance he would be available for a quiet word afterwards. All this, after the biggest single handout in welfare benefits to the aged that this country has seen in recent years.
  Party political postulating in this way brings Parliament into disrepute. I should
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  be grateful if the Press would sometimes not only report what Opposition Members say but also the expression on their faces when they sit down. The public knows and will not be deceived, that it was Labour's policies during their last years in office which led to the dramatic increase in unemployment. The public knows, and will not be deceived, that it was Labour's high taxation and statutory controls which started this cycle of wage drift and increasing prices. But enough of the Labour Party; they are as irrelevant as yesterday's breakfast. They left behind the problems which this Government will put slowly but surely right.
  Now let me say that the element of risk in these budgetary measures on our balance of payments must surely be negligible, for the threat to our trading surplus lies not in the Budget, as the Chancellor of the Exchequer rightly implied, but in the cost-inflation which is eroding our price competitiveness in world markets. The Budget, inasmuch as it has any effect in abating excessive wage inflation, can only help, but even this should not be over-stated or overestimated.
  I listened with great interest to what my right hon. Friend the Member for Wallasey (Mr. Marples) said in the first part of his speech last Thursday. He pointed out how much easier it is for the public sector to stand firm against excessive wage demands than the private sector of industry. Both the Ford settlement and British Leyland's revised pay structure at Cowley bring home to all of us very forcibly the need to act swiftly. In addition, there is the awesome problem of the British Steel Corporation and the substantial price increases, be it 14, 12½ of 7 per cent., which stem directly from the enormous losses following nationalisation and the ill-thought-out changes for which the previous Government and the present management must bear some responsibility.
  From the point of view of wages and prices, there can surely be no doubt that time is not on our side. I utterly reject the proposition so often paraded of reverting to statutory control, but I recommend to the Chancellor of the Exchequer—and I ask him to think seriously about this—that consideration be given to encouraging companies to reduce wage demands and so restrict price increases per the medium of corporation tax. This

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  recommendation deserves and justifies attention.
  The proposition is very simple, namely, that for any company with 500 employees or more there would be a corporation tax rebate if total wages averaged per employee are less than 5 per cent. above that of the previous financial year. Equally, there would be a surcharge if the 5 per cent. were exceeded. A similar procedure would apply with prices except at a lower level in that for a company with over 500 employees there would be a corporation tax reduction if prices were less than 2½ per cent. above the previous year and again, there would be a special surcharge levy if they were more. Obviously, if companies were able to grant more than 5 per cent. on their wage bill and still keep their prices within 2½ per cent. because of greater efficiency, they would be exempt.
  That system would be very easy to apply both in the present method of corporation tax and also when a two-tier system for distributed and retained profits is introduced. For obvious administrative purposes, one would be concerned only with the larger companies where prices and wage factors really do have a bearing on the competitiveness of our exports. The method of credit or charge at the end of the tax year could be based on a simple declaration from the company concerned, with very substantial fines imposed for any false returns. In this way companies would have a direct fiscal incentive to be more efficient. Equally, trade unions would have a greater vested interest in not making exorbitant wage demands and our exporting industries would be able to maintain the competitive edge temporarily offered by our devalued currency.
  I hope that my right hon. Friend the Chancellor will give that matter some thought, because when we talk about international relative standards of living by 1980—and this was a very important point in my hon. Friend's speech—it follows that balance of payments considerations must never again be allowed to stultify soundly-based growth in this country, at least to anywhere near the same degree that has been allowed in the past.
  8.45 p.m.
  Mr. Michael Meacher: I can only follow the rather extremist siren voices that we have had from the City across the Chamber by seeking to put almost exactly the opposite case.
  It has been the constant theme of comment in the debate that the Chancellor had something to give to almost everyone. Indeed, in his weekend speech on a Consevative Central Council pla form at Cardiff, the Prime Minister was at pains to spell out how the benefits would cover the whole community. I am, therefore, merely accepting the package of measures in the spirit in which they were offered when I propose to examine how far they promulgate national unity and how far they advance the philosophy of one nation.
  It is well recognised by now that the income redistributive effects are geared massively to the advantage of the tycoon. From the 2½ per cent. cut in income tax, the increased child tax allowances, the 4 per cent. rise in earned income relief and the abolition of the upper income limit for this relief, the £20,000-a-year industrialist with three children will gain £2,078 net a year.
  Mr. Coombs: The hon. Gentleman talks about a £20,000-a-year industrialist. The number of people who have very high earned incomes can be literally counted on a few hands. One should not exaggerate the point, and the hon. Gentleman should check his figures before making these blatant, broad statements which have no relevance to the present situation.
  Mr. Meacher: The figures were carefully checked, and they are exactly precise. The number of persons to whom they apply is not known. I have tried to discover the number from the Chancellor of the Exchequer. I have been given no reply. Therefore, if the hon. Gentleman wants further information on the point, I suggest that he asks his right hon. Friend.
  I repeat that the £20,000-a-year man will derive £2,078 from these concessions, and there are a great many people in that position. If he has a high-earning wife, who opts for the advantage of separate assessment for taxation, his gain

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  from this Budget and the previous mini-Budget will rise to a staggering £4,235 net a year, or £81 net a week.
  From exactly the same concessions, the £20-a-week man with the same family responsibilities who is ineligible for family income supplements even at the higher revised levels will gain £3420 a year, or 65p a week. That staggering differential is sharpened still further when one takes into account the main debit element of the fiscal changes made last week, namely, the higher national insurance contributions. Whereas the £20,000-a-year man who is married with no children finds his bonanza cut to a mere £2,032, the wage-earner or clerical worker with a tenth of his salary, also married with no children, finds his sixpenny cut in income tax more than wiped out by higher National Insurance contributions, and he makes a net loss.
  It may be argued that, while the rich get the gravy, which they certainly do, the poor get the F.I.S. In terms of any just balance of advantage, this argument is a patent absurdity. Despite the higher family income supplement awards announced in the last 10 days, virtually no potential recipient family will as a result be brought up even to this minimum State-accepted poverty line.
  The £12-gross-a-week man with four children—and one cannot get a more bitter or grinding poverty than that—having to make do on a wage little more than two-fifths of the national average, despite a full week's work and often disproportionate overtime, will now, as a result of this package of measures, have a disposable income—a wage net of income tax, pension and insurance contributions, plus family income supplement and family allowances—of some £17·40, which still falls short of the supplementary benefit entitlement by about £1·50.
  I simply cannot see how the Government propose to construct one nation when they are showering £2,000 net a year on the £20.000-a-year man while the £40-a-week higher wage earner or clerical officer, net of the higher insurance contributions, the higher social service charges and the proposed near-cost rent structures which the Government have promised, will actually suffer a wage cut of £45, while the poorest of the poor are
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  forced to struggle on below the poverty line despite a full week's and often disproportionate overtime. What sort of social contract is that except a recipe for better industrial strife?
  However much the Secretary of State for Employment may believe that he has bottled up trade union anger at these inequalities through the legalisms of his Industrial Relations Bill, my view is that the Chancellor has made a terrible mistake, as time will show, in believing that the working class will not resist these confiscations in the interests of his free-booting allies in the City.
  I will be more specific. Although the official estimates of the annual cost of the revised family income supplement have not yet been made, it is unlikely that the cost will be above £10 million a year. This, which is the prize of the Government's shop window, glamorising their generosity to the low-paid worker, is seen in perspective as exactly the same amount as the Government are spending on building a mere 900 yards of one of the four Inner London motorways to which they are committed.
  It is also, to give another perhaps more direct comparison with the sum total of the Government's extra expenditure on the half-million poorest children in the country, no more than half the amount that the Government are gratuitously heaping on the few thousand of the richest children through the reintroduction of the non-aggregation rule for children's investment income. This grotesque class bias is surely the exact antithesis of any pretended one-nation philosophy.
  A similar pointer to the Government's interpretation of national unity is provided by the surtax concession and the separate assessment for taxation purposes of a wife's earnings. Quite apart from the fact that this utility arises only above family earnings of £5,265 a year and offers excessively lucrative gains at the very high income brackets, it is also, which is more to my point, in direct contrast to a principle which is operated on the poverty line.
  Indeed, if that rule were applied at the bottom of the income scale, it would mean that a low-wage earner and his wife could elect to be separately assessed for fiscal and benefit purposes and she, as an

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  independent person, could then claim supplementary benefits while also partly enjoying the benefit of his wage. Of course, any suggestion that she is receiving any male financial support would immediately lead to the curtailment of supplementary benefits and the loss of any State assistance under the cohabitation rule. On that principle, any man or woman in the high income bracket who appeared to share any joint property would immediately sacrifice any entitlement to separate assessment for taxation.
  If hon. Members opposite regard an argument of that kind as purely a reductio ad absurdum, all I can say is that it shows how divorced they are from the spirit of one nation and how little they recognise even the existence in promulgating this rule of one law for the rich and a very different one operating at the poverty line for the poor.
  There seem to be at least two other points in the Budget Statement where the Chancellor's concern for the poor and the low-paid was conspicuous by his silence.
  I refer, first, to his allusion to the assistance which he was giving to the family man. Certainly the increase in the child tax allowances for the average and above-average earner with three children represents about 90p a week, but for the family man on the poverty line at or below the tax threshold it represents no assistance at all. By deliberately rejecting increased family allowances, despite the Prime Minister's explicit written electoral pledge last June, and by ignoring the claw-back method as a non-stigmatising method of assisting the low-paid in family aid, the Chancellor has, in effect, given a family allowance exclusively concentrated on the well-off and the rich—the people who need it least, if at all.
  The other ostentatious oversight of the problems of the low-paid concerns marginal tax rates. The Chancellor reduced the top marginal rate for surtax by 13½ per cent., leaving a ceiling of 75 per cent.; but he did not deign to notice that the real crisis over incentives is now occurring at the bottom of the income scale. The low tax threshold, the higher national insurance contributions, higher rates, the accumulated loss of means-tested benefits forgone as income rises have conspired
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  to impose on the low-paid worker a tax disincentive of over 90 per cent. and, in some cases, over 100 per cent., so that, for every extra £1 earned by the low-paid worker, he stands to lose more than £1. What has the Chancellor done for him? Nothing. The grand design for the rich is uninterested in the problems of life below the £5,000-a-year level.
  In view of these differential carrots and sticks, it must have been an exercise in irony for the Prime Minister to say to the trade unions at the weekend:
  "We have done our part. Now you stop chasing wild and unjustified wage claims."
  At a time when the Government are deliberately, by their official policy, de-escalating the claims of many low-paid workers below the State poverty line, the Chancellor has given a knowing wink to the rich, by abolishing the charge to capital gains tax on death and also the associated 15-yearly charge on discretionary trusts, which may herald the biggest boom the tax avoidance industry in this country has ever seen.
  At a time when he is deliberately stabilising unemployment at near the million mark, the Chancellor has also seen fit to hand over a total of nearly £400 million exclusively reserved to the already well-heeled over £5,000 a year. When, in consequence of this largesse, investment is expected to rise by a mere ½per cent. a year whilst consumption expenditure is expected to rise by nearly 5½ per cent. a year, even the prop of explanation based on the dynamic investment factor is torn away, and the Budget is revealed for what at least in one vital dimension it really is—a long gravy train for the selfish aggrandisement of the rich.
  8.58 p.m.
  Mr. J. Bruce-Gardyne: I hope that the hon. Member for Oldham, West (Mr. Meacher) will not think it discourteous of me to say that there was not one of his remarks with which I agreed.
  Like so many hon. Members, I suppose, I had prepared a splendid speech in which I was going to congratulate my right hon. Friend most heartily on the brave innovation of a long-term strategy of fiscal reform and to denigrate the Opposition for their carping, niggling reaction to it, particularly the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) who, although a devoted

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  and professed enthusiast for Europe, did not hesitate to attack tax changes, such as V.A.T., which he knows are inevitable concomitants of entry into Europe, and to call upon my right hon. Friend to squander the balance of payments surplus, developed from devaluation, although he knows—none better—that that surplus will be needed in the case of a successful outcome to the Brussels negotiations.
  As a Scottish Member, I had hoped, too, to say a word of welcome for the changes in tax which will be of particular advantage to Scotland. There is the cut in S.E.T.—a tax that could hardly be better calculated to damage those areas of Scotland where service industries above all provide the backbone of employment—and the beginnings of reform of the penal taxation imposed by the last Government on family companies —a form of taxation which has driven one Scottish company after another into the arms of a larger group based in the South, which has then all too often closed its activities in Scotland. These were all points that I should have been delighted to develop.
  In view of the hour, however, I intend to concentrate on one point concerning the short-term economic strategy of my right hon. Friend. My right hon. Friend the Chief Secretary said earlier that nobody had criticised my right hon. Friend the Chancellor for doing too much. I hesitate to break the consensus, but I confess that my inclination is somewhat in that direction. The right hon. Member for Stechford said one thing with which I agree, namely—as Iain Macleod used to tell us—that a good Budget in April is often a bad Budget in July, and vice versa. Our assessments of the budgetary judgment often turn out to be wrong. I devoutly hope that mine this evening will turn out to be wrong.
  It seems to me that my right hon. Friends have, in the first place, gone for a measure of fiscal expansion which corresponds fairly closely to the most expansionist arguments of bodies like the National Institute. At the same time, there has been no mention or suggestion of any cuts in public sector spending to compensate for this. As a result, we have a net borrowing requirement of £600
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  million. The Treasury predicts a 5·3 per cent, rise in consumer spending. The Treasury often tends to over-estimate the buoyancy of consumer spending, but I have some sympathy with the attitude of the hon. Member for Ashfield (Mr. Marquand) who, on Thursday night, suggested that it was difficult to reconcile this forecast of consumer spending with my right hon. Friend's expectations of de-escalation in the rate of wage settlements.
  Here I come to the nub of my argument, which concerns the point raised by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) in his notable contribution to our debate this afternoon—the question of monetary policy. I thought that my right hon. Friend may not have studied what the Minister of State said on Thursday night. There was some further elucidation in that speech. The key phrase in my hon. Friend's speech to which I want to draw attention was that by setting quarterly guidelines
  "we have given ourselves greater flexibility for adjusting the course of money supply and credit later in the year in the light of developments." —[OFFICIAL REPORT, 1st April, 1971; Vol. 814, c. 1804.]
  I suggest that that flexibility could apply in two directions. It is clearly the hope of my right hon. Friends—and I pray that their hope is fulfilled—that during the months ahead we shall see a de-escalation in the level of wage settlements and the beginning of a decline in the level of unemployment. But let us suppose—and after the events of last week it does not seem a totally inconceivable possibility—that the opposite occurs. Let us suppose that we see both an escalation in the rate of wage settlements and a continuing rise in unemployment. Is it not quite compatible with what my right hon. Friend said on Tuesday night that we should see the flexibility in monetary supply used in an upward direction, so that instead of having a possible 12 per cent. increase over the years we have even higher levels?
  I conclude by asking my right hon. Friend whether he would clear up one point. We have been told that the 3 per cent. a quarter guideline for monetary policy is not a target of 12 per cent. for the year. Is it at least a ceiling? If it is not, I find the implications for inflationary potential somewhat preoccupying.
  9.6 p.m.
  Mr. Dick Taverne: I should like to start on a non-controversial note and congratulate the Chancellor on the amalgamation of income tax and surtax and the creation of a new personal tax. I used to make speeches about the need for this kind of reform when I was Financial Secretary, and, as the Chancellor knows a study of this was well under way in the Inland Revenue when his Government came to power. I am not saying this to claim the credit for us or to suggest that it would have taken the same form. I mention it to show that the reports in some papers that the Inland Revenue was resistant to this are quite misleading. We always knew that it would take some time. Obviously, we must wait to see the form which the new amalgamation takes and the rates which it provides, but in principle I warmly welcome it and congratulate the Government on having decided to introduce it.
  I fear that I cannot give the same welcome to the decision to introduce a value-added tax, irrespective of whether we enter Europe and irrespective of whether we have to, although I do welcome the decision to publish a Green Paper. Any traders who read the Green Paper will realise the huge task of accounting with which they will be faced. Anyone who has studied the effect on prices of the introduction of this tax on the Continent, or who has read the predictions in the "Neddy" Journal knows only too well that the value-added tax will add considerably to inflation.
  The recent study by Professor Brown to which my hon. Friend the Member for Ashfield (Mr. Marquand) referred on Thursday night shows in addition that it is likely to be heavily regressive in its impact on the ordinary family budget. So hon. Members opposite should not be under any illusion that the introduction of the tax in 1973 will bring great joy and delight.
  In case they do labour under such a delusion, I would refer to a quotation in a document which went carefully into the problems of this tax. It said:
  "S.E.T. currently amounts to 5 to 6 per cent. of the value of services. A V.A.T. with similar coverage would be not less than 10 per cent., and might be as high as 20 per cent., if exemptions were numerous. As a straight swap it could well be preferable to the service industries to put up with an S.E.T. of 5 to 6
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  per cent. rather than to have a V.A.T. of even 10 per cent."
  That is not a quote from a Labour Party propaganda sheet. It comes from a study by the very powerful Taxation Committee of the London Chamber of Commerce, which strongly advised the Chancellor against the introduction of a value-added tax.
  This committee referred to the official estimates that V.A.T. would require 8,000 extra staff in the Customs and Excise and that, if one assumed the end of purchase tax and S.E.T., the additional staff might be only 6,000 or so, and went on:
  "Most of these would be engaged in audit and verification of companies' V.A.T. returns and could well require the employment of two or three times that number in commerce and industry."
  That is a foretaste of some of the comments which are to come. Hon. Members opposite would do well to heed the warnings which the hon. Member for Oswestry (Mr. Biffen) sounded on Wednesday.
  But there is another change in taxation, which has attracted little attention. I refer to the new social security tax. Let there be no doubt about this National Insurance contributions are in the nature of insurance when they secure corresponding benefits. They are flat-rate contributions to obtain flat-rate benefits or earnings-related contributions to obtain earnings-related benefits. Then it is a form of insurance. Here, however, we have something quite different.
  Earnings-related contributions which increase with income and secure no extra benefit are a form of taxation. This, therefore, is a new form of social security tax. After a short introductory progression, these contributions are non-progressive. When one reaches a maximum of £42 per week, the payments remain the same, irrespective of income. That is why the Government support it. The richer one is the smaller the proportion of one's income goes in this form of social security tax.
  The Government say they are worried about the disincentive effects of progressive taxes. If they are really interested in the problem of high marginal tax rates, then, as my hon. Friend the Member for Oldham, West (Mr. Meacher) pointed out, what about

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  relief for those who pay "poverty surtax", because the Government know that this problem exists.
  Because of the gradual withdrawal of means-tested benefits such as family income supplements, rate and rent rebates, and exemptions for various charges and allowances, there is a whole range of income on which a person who earns an extra £1 loses 90 per cent. of it, and in some cases more. In many cases in the range of incomes £20 to £25 a week such a person will be worse off. What, then, comes of all the talk of disincentives?
  I have an interesting quotation for the House from a previous debate. The Financial Secretary to the Treasury said in November last when we were debating what was then the Income and Corporation Taxes Bill:
  "But if one is to give the selective help one wants to give one has to accept a high implicit tax rate and the loss of incentive which comes from it. What the evidence seems to show, however, is that, for the great majority even of those people, the loss of incentive does not have the effect of deadening the desire to work. I have thought over and over again how astonishing and commendable it is in the character of so many of our countrymen that, although the effect of a high implicit tax rate and the loss of selective benefits is to reduce incentive, nevertheless they will continue and want to continue to be, so far as they can, self-supporting and to work."—[OFFICIAL REPORT, 13th November, 1970; Vol. 806, c. 796.]
  It is a remarkable fact that the low paid are apparently not put off by these disincentives. Indeed, they appear to matter only to the rich. Thus, the Budget helps the rich, yet there is nothing whatever in it by way of incentives for the lower paid, who pay a far higher rate of marginal taxation than do surtax-payers. Perhaps the Chancellor can tell us why.
  This is an aspect of the Budget which has not received quite the same amount of comment from financial commentators, who have concentrated on the reforming zeal which the Chancellor had shown. This may not be unconnected with the fact that they are themselves in the surtax-paying class. [HON. MEMBERS: "Cheap") This reforming zeal has not extended, however, to the area where the marginal rates are the highest of all.
  If, without affecting incentives, the Chancellor had been willing to help those
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  who pay no tax, in the areas of real poverty, he could have done something to redeem the extraordinarily firm pledge which hon. Gentlemen opposite gave to spend £30 million on increasing family allowances. This point was made by my hon. Friend the Member for Dudley (Dr. Gilbert). Instead, all we have had is the family income supplement, with a total benefit for the poorest, if all the benefits are taken up, which is highly doubtful, of perhaps £8 million a year.
  One can compare this £8 million or so with the £65 million which goes for relieving surtax in one form or another, leaving aside altogether the income tax benefits. And of this, £15 million alone, about twice the amount which would be spent on family incomes supplement, will go to the disaggregation of children's investment income from parents' income. It is hardly the answer which I think the Child Poverty Action Group expected when the pledge was made. So much for the claim that this is a balanced Budget: balanced, yes—heavily in favour of the wealthiest.
  Let me turn now to the economic effects and, first, to the question of unemployment. There is one factor about the Budget which hon. Members opposite, I thought, and with one exception the speakers this evening, have rather conveniently glossed over. Why, one might ask oneself, is the Chancellor of the Exchequer in a position to give back so much in tax? The suggestion readily claimed on the other side is that this is a Conservative Government, and in so far as taxes are cut because public spending is cut this may well be so. But that is not the explanation for the Budget.
  Let me remind the House of what the Chancellor said in his Budget Statement. He said that it was because of the trend in unemployment. He told the House, as we read in col. 1369 of the OFFICIAL REPORT, that it was because if there were no change of policy there would be considerable rise in unemployment. So let us first make clear what has created the main reason for tax cuts of this size. It is the record high level of unemployment.
  But, even so, for them this Budget provides little comfort. The Chancellor has said, as a number of my hon. Friends have pointed out, that his measures should increase the rate of growth to 3 per cent. in line with the rate of growth

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  of productive potential. It is quite clear what this would mean. It would mean that once production grew as fast as new capacity was being created unemployment would level out. It would no longer rise, but it would not fall. That is what the Chancellor is saying, and both my hon. Friend the Member for Penistone (Mr. John Mendelson) and the hon. Gentleman the Member for Leek (Mr. Knox) made this point.
  So, on the Chancellor's own prediction, there is nothing in the Budget which will reduce unemployment. But the measures will not have immediate effect. There is a considerable time lag between taking measures and their results, and in recent years there has been a delay of many months between the pick-up in production and the resulting fall in unemployment figures. Mr. Malcolm Crawford suggested in the Sunday Times that the Budget measures would not take effect until spring of next year. So for many months before the Chancellor's measures take effect and employment levels out as he hopes there will first be a further rise in unemployment.
  But let there be no doubt that at present unemployment is rising fast. The levelling-off, if it finally takes place as the Chancellor hopes, will be at a figure considerably higher than that of today. That, again, is explicit in the Budget. But even this is probably too optimistic. There is a considerable body of evidence that productivity is now rising faster than 3 per cent.
  Professor Lomax's work, referred to in The Guardian on 2nd January, suggests that it is rising considerably faster, and several other leading economists would put the rate of increase at 3½ per cent. This implies that even when the tax cuts finally take effect unemployment will still continue to rise, although somewhat more slowly. The Minister of State reaffirmed on Thursday the Government's view that the fight against inflation must take priority over unemployment. The prospect for unemployment after the Budget remains a dismal one, especially for the regions.
  The late lain Macleod, who gave a very high priority to tackling unemployment, used to press us time after time to state to the House what the prospects
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  for unemployment were in the year ahead. Let the Chancellor tell the House what level of unemployment he now foresees for the third quarter of the financial year. At what figure does he hope that unemployment will level out this winter?
  It is not an argument which any of us on this side of the House accept, but let us suppose, as the Government argue, that one should not bring down unemployment until one has first won the battle against inflation. If one follows that argument, what is there in the Budget that will help us on this front? Last week the Prime Minister boasted that de-escalation was working, and the Chancellor has claimed the same. The Government only have to give voice to this claim for new settlements to be announced which totally refute it and which show up, incidentally, the monstrous disparity between settlements in the public sector and in the private sector.
  The Secretary of State for Employment is normally someone who chooses his words with care. But last Saturday he is reported as having made quite the most extraordinary statement of the week. He said that he welcomed the Ford settlement but that he was very concerned about the wage increase which it contained.
  What about the electrical construction workers? How does their rise, and the Ford rise, fit in with the bloody fight to keep the postmen down to 8 per cent.? If wage settlements are now de-escalating, as the Prime Minister says, and if inflation is now being brought under control, as the Government claim, why is a meeting to be held on Tuesday at which the Secretary of State will scold private employers? It is really no use the Government washing their hands of it all and saying, "We have done our bit; now let private industry follow."
  I commend to the Government a very interesting and thinking speech made on Thursday afternoon by one of their former colleagues, the right hon. Member for Wallasey (Mr. Marples). He warned the Government that discrimination between the public sector and the private sector will not work. He said:
  "When I was a Member of the Cabinet we had a squeeze on nurses' pay, which I did not like. Then it was assumed that the rest of private industry would follow suit. It did not. It cannot do so, for two reasons."

  155
  He said the first reason was that the public sector could borrow. The second reason was that
  "… many private firms cannot do that. Chrysler could not do it. It could not afford a strike so it had to give way quite meekly to the demands of its workers. It is simply no use saying that because the public sector does it the private sector will do it. It cannot. Ford is another example."—[OFFICIAL REPORT, 1st April, 1971; Vol. 814, c. 1724.]
  The Government, despite all their denials, will be driven back to a policy for prices and incomes which is an overall policy and not one related only to the public sector, unless they espouse the remedy so impressively expounded by the right hon. Member for Wolverhampton, South-West (Mr. Powell) and are prepared to face the very drastic transitional problems which that would involve. At least one can say that that is not so far the policy which they wish to pursue. But if they are driven back to a voluntary prices and incomes policy, they will come to realise that this Budget, with its heavy bias towards the highest paid, with its distribution of income not in favour of the weaker but of the wealthiest, will do nothing towards dealing with inflation.
  When one combines it with the mini budget, the increased charges on school meals, withdrawal of free milk, higher rail charges for commuters, higher rents as subsidies are withdrawn, higher food prices as levies are imposed, and when one adds to this the further increase in prescription charges and the enormous rise in rates, which the Government themselves estimate will be at 13 to 14 per cent. and is bound to increase as the rate support grant is rapidly cut back, how can they say that against this background they have done anything in the Budget to create a better climate for wage claims?
  Apart from unemployment and inflation, what are the other economic problems we now face, particularly for the longer terms? Hon. Members will find this on page 12 of the Financial Statement: the last line, which shows the progress from the first half of 1971 to the first half of 1972 cannot make any very easy reading for hon. Members opposite. The highest increase will be for imports, at 6·3 per cent. compared with an increase of exports of 2·3 per cent.;
  156
  there is an increase for consumption of 5·3 per cent. compared with an increase for private fixed investment, on which so much depends, of 0·5 per cent.
  The picture is worse than that, because if allowance is made, as the Chancellor said that allowance must be made, for a higher rate of housebuilding and shipbuilding, it is clear that industrial investment in the next year will drop.
  What are the prospects for the economy? The way in which help is given in the Budget will not reverse the trend of unemployment. It is likely simply to slow down the rise—and that only after a considerable period. It does nothing that will help with inflation. Although the Government gave priority to the fight against inflation, the prospect for the rise of prices is no better than it was before the Budget. Now we have the V.A.T. time-bomb ticking under us. The projection for imports and exports shows that the balance of payments will be deteriorating. Lastly, the outlook, in terms of the Government's own forecasts, is for an actual fall in the level of industrial investment.
  So when all the smokescreen has been blown away these are the stark facts which emerge—higher unemployment, higher prices, worsening balance of payments, falling manufacturing investment. If I am wrong, no doubt the Chancellor can explain later why we should ignore the explanations that have been given in his own forecasts.
  If the Chancellor had been concerned to act directly on prices, he could have gone for a big cut in purchase tax which would have benefited the ordinary person directly far more than the cut in S.E.T. Second, the Chancellor should have acted to help manufacturing in the regions, where we still have to have the implications of the ending of the regional employment premium. What will happen to those key firms that all of us know of in development areas and which are kept going by the existence of the regional employment premium when the scheme ends or, even earlier, when they must make their plans for the time when the scheme ends? In this Budget the Chancellor should have reversed the decision on the regional employment premium and increased it and have gone back to the investment grant system. But that would

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  have meant an increase in public spending and would have run counter to the whole philosophy of the Conservative Party.
  It is clear from the Budget what the Government's philosophy is in the whole social and economic field. Their only recipe for boosting production is one of tax cuts. Last week, at the same time that the House was debating the Budget, a conference was being held, attended by a large number of leading scientists, on the future of man. Paper after paper read at that conference emphasised the need for an increase in community spending to deal with the problems which will increasingly face us. Every advanced country in Europe is becoming more and more convinced of the need for a higher level of social and community spending and a bigger rôle for the community to preserve equality of their society.
  At the same time the Government are arguing that their main aim should be to reduce the rôle of Government, and they can only stress for their citizens, or at any rate for their wealthier citizens, one social goal—that of private personal enrichment.
  The Government will not achieve their goal of faster growth. They will not create their one nation. There will be a large part of this nation which will find itself out of work standing on its own two feet outside the employment exchange. This Budget contributes little to make Britain a better place. It is a bad Budget for the nation.
  9.30 p.m.
  The Chancellor of the Exchequer (Mr. Anthony Barber): Casting my mind back over all the Budget debates which I have either taken part in or listened to, I feel that this four-day debate has been one of the best, if not the best, that I can remember. I believe that this has been so for two reasons. First, we face a series of economic problems which I described last Tuesday as being in many respects paradoxical and uniquely difficult. Economists being what they are, therefore, there is room for genuine differences of opinion about the Budget judgment, about the magnitude of the necessary addition to demand, and about the type of measures most appropriate in the present circumstances. This, indeed, was clear from the speech of the hon. and learned Member
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  for Lincoln (Mr. Taverne) to which we have just listened.
  The second reason why I believe that this has been an unusually good Budget debate, a reason which, I am sure, will be accepted on both sides of the House, is that the debate has high-lighted the fact that there is, sincerely held, a fundamental difference of approach between the Labour Party and the Government side of the House.
  We have had two maiden speeches, those from my hon. Friends the Members for Falmouth and Camborne (Mr. Mudd) and Truro (Mr. Dixon). My hon. Friend the Member for Falmouth and Camborne showed an intimate knowledge of the economic problems of his constituency. He referred, in particular, to the problems facing tin mining and the question of taxation changes in order to help, arguing —I thought this particularly interesting —that by giving taxation relief we should increase the revenue. That was an interesting way to put it, and I think that all I had better say at this stage is that I have taken note of what my hon. Friend said. My hon. Friend the Member for Truro put forward some proposals for the reform of taxation concerning gifts and the estate duty. I assure him that, in our general review of taxation, which we are continuing, we shall take into account what he said.
  We heard also what I might, perhaps, describe as almost the third maiden speech of the hon. Member for Ashfield (Mr. Marquand). He spoke, I think he said, for the first time from the Front Bench, and I am sure we all join in congratulating him. As for the Leader of the Opposition, who had the task of following me last Tuesday, he gave it as his opinion that,
  "… this Budget fails to rise to the occasion". —[0FFICIAL REPORT, 30th March, 1970; Vol. 814, c. 1399.]
  It was probably the view of both sides of the House, after listening to the right hon. Gentleman, that it was not the Budget which failed to rise to the occasion.
  I must thank the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) for his generous remarks last Wednesday about the way in which I presented the Budget speech. I shall come to his speech in a moment. At this stage, I merely observe that, although.

  159
  obviously, he will not expect me to agree with all or with most of what he said, he at least argued his case—I am sure we all agree—with considerable moderation, as one would expect from him, and, may I add, somewhat more moderation than did some of his right hon. and hon. Friends. This was, in part, I have no doubt, due to the fact that there was little he could attack with genuine conviction.
  At the end of the debate, I think the House will agree that I am entitled also to thank my fellow Ministers at the Treasury—the Chief Secretary, the Financial Secretary, and the Minister of State. As one who, first as Economic Secretary and then as Financial Secretary, served three Chancellors of the Exchequer, I can say without fear of contradiction that no Chancellor has had a better team.
  Throughout this debate and in the Press, a great deal has been said on the general question of the reform of taxation, and in response I make two points. It is fortunately not the practice in this country for a new Government to inquire into the Departmental activities of a previous Government, but we are entitled to consider the public record. The hon. and learned Member for Lincoln referred to certain work which had been undertaken, he said, when he was in Government, concerned with the unification of income tax and surtax. One of the essential features of the unification of the two which I announced is to show the effective earned income rate—that is to say, the actual percentage of the taxation paid on earned income.
  I think that the right hon. Member for Stechford will agree that two years ago he said in his Budget Statement that he wanted to do just that—but he also went on to say that he did not find it possible. If there is one right hon. Gentleman opposite who is entitled to jump on the bandwagon and applaud amalgamation of income tax and surtax it is the right hon. Member for Sowerby (Mr. Houghton) who, in a telling intervention the other day, informed the House that he put forward the proposal 18 years ago—and, of course, the hon. Member for Heywood and Royton (Mr. Barnett) told us that he had been doing it since 1964.
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  But what counts is not talking about reform but actually doing it. We, of course, had the enormous advantage of all the work which we did in Opposition under the leadership of my right hon. Friend the Prime Minister and Iain Macleod. The right hon. Member for Bristol, South-East (Mr. Benn) referred today to the article in The Times by Mr. David Wood, in which Mr Wood referred to the work we had done in Opposition. Referring to my hon. Friends, the right hon. Gentleman said that, during my Budget Statement, they were ticking off a check list of the promises we made. That is right. That is exactly what they were doing. We were keeping our promises.
  I have been flattered by a number of speeches on this side of the House in which hon. Friends have suggested that, in some way, in pursuit of reform I have overruled officials of the Treasury, the Inland Revenue and the Customs and Excise. I am afraid I can make no such claim. The truth is that, in response to any proposal for reforms which is mooted by any Chancellor of the Exchequer, the advice of officials will be the same—the difficulties as well as the advantages will be clearly set out. But thereafter, it is for Ministers to decide, and once they have taken the decision to proceed with the reforms, as I did, then the officials at the Treasury and the Revenue Departments will proceed to implement them.
  I said at the end of my Budget Statement that the Revenue Departments themselves had told me that this Budget inaugurates the most far-reaching reforms of the tax system this century. I believe that there has been a general feeling for a long time on both sides of the House that the tax system does need fundamental reform. Indeed, I have not heard throughout the debate anyone contest that general proposition.
  I must admit that before last Tuesday I wondered sometimes whether there would be criticism because these reforms are not to be completed till two years from now, but no one in the debate has suggested that, and this is, I think, because hon. and right hon. Gentlemen on both sides recognise just how far-reaching the reforms are and that if we are to get them right it is essential, whenever we can possibly do so, to take enough time

  161
  to get the details right as a result of full consultation.
  There is another feature of the Budget to which several hon. Members on both sides of the House have referred, particularly today by the right hon. Member for Orkney and Shetland (Mr. Grimond) and my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor Goldsmid), and that is our decision to publish the Green Papers both on value-added tax and the reform of corporation tax, and this will give ample opportunity for public discussion before final decisions are taken on the methods which we shall adopt. I would say, without wishing to carp on what happened in 1965, that this is a much better method of proceeding than was the case in that year.
  What is of great importance is that we have found a method of making this reform while at the same time preserving the freedom which the Chancellor must always have to vary rates of tax according to the requirements of the economic situation. What we do know is that by April, 1973, we shall have a vastly improved system. We shall have a system of personal taxation which will be simple enough for everyone to understand, and it will be very much simpler to administer than the hotchpotch we have at present and which has accumulated over the years.
  We shall also have a system of indirect taxation which will be broader based and fairer and which will avoid the distortions which both S.E.T. and purchase tax at present impose. We shall also have a refurbished system of company taxation preserving the best of the changes made under the previous Government but adjusted to bring into play, by lower taxation on distributed profits, market forces which must be allowed to work more freely if we are to get more efficiency in industry and in the economy generally.
  Of course, there have been the anticipated criticisms by some hon. and right hon. Gentlemen opposite, but, on the whole, I must say that it seems to me that the criticisms which we have heard have been strangely out of tune with the reaction of the country generally to this Budget.
  The right hon. Member for Stechford asked me a particular question with re-
  162
  gard to bank lending, whether the 2½ per cent. a quarter to which I referred in my Budget speech was to be above the point reached in March of this year or above the ceiling in March which he himself laid down a year ago. The fact is that, as he knows, the March, 1971, figure was distorted because of the Post Office strike. It is clear that a certain amount of lending which would have occurred but for the strike was postponed. The guideline has been expressed as applying to the base level of 5 per cent. in line with his mid-March, 1970, level. The clearing banks and Scottish banks have been asked to ensure that their restricted lending should be in general this June not more than 7½ per cent. above the level of mid-March, 1970. This was made clear in the Bank of England's notice. I am sure that this is the fairest way of doing it. Updating the base level to mid-March, 1971, this year would have been to reward those banks which increased lending last year and to penalise those which exercised more restraint.
  My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), a few minutes before the hon. and learned Member for Lincoln spoke, raised one or two questions. I hope he will forgive me if I may, perhaps, in answer write to him afterwards. He asked me a question about the growth of money supply. The rise in costs and prices will be moderated, and this is why the aim will be to slow down the growth of the money supply over the year.
  Mr. R. B. Cant: Does this imply that the estimate of money supply or money stock—M3—to be operated from April this year to March next year, will be equal to 12 per cent., more than 12 per cent., or less than 12 per cent. of what it was in the last fiscal year?
  Mr. Barber: All this is set down in great detail in column 1374 of HANSARD, and I ask the hon. Gentleman to look at what I said there.
  My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) concentrated almost entirely this afternoon on money supply. He spoke with a lucidity and logic which was matched only by the speech on the same subject made to the Finance Houses Association by myself. As he knows, I respect his views, but he will not be surprised to

  163
  hear that I differ in two major respects from the points which he made in his speech this evening. First, I cannot accept that the excessive wage claims which we have been experiencing are not the main cause of the present inflation. Secondly, while I entirely agree with him that it would be possible to impose a far greater restriction on the growth of money supply, I have not proposed it; first, because it would result in far higher levels of unemployment which I could not accept, secondly, because it would result in a far greater number of bankruptcies, which I could not accept, and, thirdly, because it would be inconsistent with my aim of raising the growth of output to the growth of productive potential.
  My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) asked whether we could devise a scheme so that when a husband dies leaving property to his wife the estate duty is postponed until her death. As he said, this is not a new idea. Schemes for relief on property going to widows have been considered on various occasions in the past, but they raise considerable practical problems. I am sure that we should all like to do this if it could be done, but my right hon. Friend's variant of postponing the payment of duty attributable to the widow's benefit raises the difficulty of ensuring that the duty postponed is not dissipated in her lifetime. Nevertheless, hon. and right hon. Members on both sides of the House would like to do this and I will, therefore, ensure that it is looked into in the coming review.
  My hon. Friend the Member for Surrey, East (Mr. William Clark) raised a question which will affect many people about the exemption from capital gains tax of small disposals. As I said in my Budget statement, the intention is that the exemption for gains of £50 or less should continue for 1970–71 alongside the £500 disposal exemption. The only reason why the £50 exemption is kept in being for 1970–71 is that it would have been wrong to withdraw it, as people have arranged their affairs on that basis. At the same time, I particularly wish the benefit of the £500 disposals exemption to be available for that year. I hope, on reflection, that my hon. Friend will agree that it would
  164
  be the reverse of simplification and most confusing to small investors if we kept the two different types of exemption with their marginal relief provisions as permanent features of the tax code.
  I now want to deal with the series of questions raised about the Budget judgment. Several right hon. and hon. Gentlemen opposite have complained that the Budget is not sufficiently reflationary. Apparently, they want even more tax cuts. I am pleased that I have begun to whet their appetites—an unusual experience for them. In particular, references have been made by the hon. and learned Member for Lincoln and the right hon. Member for Bristol, South-East to the prospects for investment.
  To get investment up we must have two things. First, there must be adequate demand so that industry can see the prospect of a growing market for its products. I have no doubt that in present circumstances the most effective way to stimulate expenditure by industry on plant and machinery is to stimulate demand in the economy generally. The second requirement is that industry should be able to finance a rising level of investment and to see an adequate return on it net of tax, and, as I think the whole House will agree, the Budget has done a series of things to help industry in this way. The cut in corporation tax helps both liquidity and the net return. The reduction in the forced loan associated with selective employment tax and the cut in selective employment tax itself both help to improve liquidity, and the reform and reduction of personal taxation will contribute to savings and improve incentive throughout the economy.
  The right hon. Member for Bristol, South-East and the hon. and learned Member for Lincoln referred to the figure of 0·5 per cent. as the forecast growth in private investment in the Budget report. That figure represents a cautious view, but I would certainly hope—[Interruption.] Quite a number of forecasts in the past have proved to be false and it seemed to me right to be reasonable. I would certainly hope that in the outcome we shall have a better figure for investment than that. I think that there is a good chance that the impact which the Budget as a whole has made will produce a better figure.

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  Right hon. and hon. Members may have seen the front page of the Financial Times this morning which is headed
  "F.T. post-Budget Business Survey: Marked upturn in confidence."
  I read only the opening words:
  "The Budget has produced a marked upturn in business confidence. A post-Budget survey undertaken for the Financial Times … shows that 90 per cent. of businessmen in a sample of directors of 30 companies in the F.T. Actuaries Index feel more optimistic about their companies' prospects as a result of the Budget. All the companies surveyed report that the Budget will help their liquidity, and half think that their profitability will be improved. About a third say that the Budget should give direct help to new capital investment."
  Outside the House I have been taken to task by some commentators for stimulating demand too much and at a time when inflation is running as high as it is. This was a concern expressed by my hon. Friend the Member for South Angus. I believe that it would be irresponsible to plan for a faster growth of consumer spending than I have done—that is to say, faster than 5·3 per cent. The fact remains that the rate of cost-inflation is bound to impose limitations on the amount of extra demand which it is safe to inject in the economy at this stage. But I made it clear in my Budget speech that if, after the measures in the Budget have been allowed a reasonable time to have their effect, a further stimulus is needed, then the usual instruments are always available and I would not hesitate to use them.
  But others have concentrated on the balance of payments. This was referred to by every Opposition Front Bench spokesman and not least by the right hon. Member for Bristol, South-East. He spoke of the balance of payments as if it were impregnably strong. The fact is, as I said in the Budget speech, that in 1970 the volume of imports rose nearly twice as fast as the volume of exports. the improvement in the trade balance last year—no one can deny this and it is right that we should all face it—was due to prices.
  The underlying trend is not now running in our favour. It is true that, with the assistance of the terms of trade, we have a substantial current account surplus. But we have large commitments to meet from it, including a still large amount of debt. I was astonished to hear
  166
  the hon. Member for Heywood and Royton quoting with apparent approval on Thursday some remarks in an article in The Times which said:
  "We are virtually free of overseas debt."
  As my hon. Friend the Member for Horsham (Mr. Hordern) pointed out, this is dangerous nonsense. We still have outstanding debt of nearly £700 million and, as I said last Tuesday, this is bound to be a continuing constraint on our freedom of action.
  If right hon. and hon. Gentlemen opposite doubt the truth of what I say, let me remind them of the actual figures. If one takes exports seasonally adjusted, including adjustments for under-recording of exports, and imports seasonally adjusted, including United States military aircraft payments, last year at 1963 prices the volume of exports was up by 3·6 per cent., but the volume of imports was up by 6·3 per cent. These are the facts that we have to take into account in exercising caution for the future.
  Throughout the debate, I have been struck by the number of hon. Members on both sides who have referred to the economic record of our country over the years. If we are realistic—[HON. MEMBERS: "Unemployment."] If hon. Members will allow me, I shall deal with unemployment. If we are realistic, any consideration of our present situation must start with an acceptance of the fact that for two decades or more our national performance compared with our principal competitors has been, to put it mildly, inadequate.
  A number of hon. Members opposite have referred to unemployment. They have made the point that the Budget does not hold out the prospect of a fall in unemployment. We are all agreed that unemployment is too high. But there are two points that I must make—[Interruption.] Hon. Gentlemen opposite have asked me to speak about this, so I hope that they will hear me out.
  The first is that, although right hon. and hon. Members opposite may disagree, we take the view that one of the main causes of unemployment at present is cost inflation. Rising labour costs are causing firms to lay off men. I cannot make any promise that unemployment will fall until we get a substantial reduction in the level of pay Settlements.

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  The second point is this. I could have brought about a reduction in the level of unemployment by giving a still larger boost to consumer demand than I have. But everything that I have said supports the view that it would have been irresponsible in the circumstances to do so.
  The Leader of the Opposition accused us of acting contrary to our theme of one nation. But I do not believe that it is possible to create one nation by almost always increasing tax and hardly ever reducing it. It is not possible to create
  one nation by taking the existing tax system and saying that it can never be changed lest the changes seem unfair. It is impossible to create one nation by taking the pattern of subsidised welfare benefits which existed in the 1940s and saying that they must remain for ever. One nation is created by uniting it in a new confidence in the future of our country and trust in a Government who keep their word.
  Question put:—
  The House divided: Ayes 301, Noes 261.

  Division No. 338.]

  AYES

  [10.0 p.m.

  Adley, Robert

  Critchley, Julian

  Harrison, Col. Sir Harwood (Eye)

  Alison, Michael (Barkston Ash)

  Crouch, David

  Haselhurst, Alan

  Allason, James (Hemel Hempstead)

  Crowder, F. P.

  Havers, Michael

  Amery, Rt. Hn. Julian

  Curran, Charles

  Hawkins, Paul

  Archer, Jeffrey (Louth)

  d'Avigdor-Goldsmid, Sir Henry

  Hay, John

  Astor, John

  d'Avigdor-Goldsmid, Maj. -Gen. James

  Hayhoe, Barney

  Atkins, Humphrey

  Dean, Paul

  Heseltine, Michael

  Awdry, Daniel

  Deedes, Rt. Hn. W. F.

  Hicks, Robert

  Baker, Kenneth (St. Marylebone)

  Digby, Simon Wingfield

  Higgins, Terence L.

  Baker, W. H. K. (Banff)

  Dixon, Piers

  Hiley, Joseph

  Balniel, Lord

  Dodds-Parker, Douglas

  Hill, John E. B. (Norfolk, S.)

  Barber, Rt. Hn. Anthony

  Douglas-Home, Rt. Hn. Sir Alec

  Hill, James (Southampton, Test)

  Beamish, Col. Sir Tufton

  Drayson, G. B.

  Holland, Philip

  Bell, Ronald

  du Cann, Rt. Hn. Edward

  Holt, Miss Mary

  Bennett, Sir Frederic (Torquay)

  Dykes, Hugh

  Hordern, Peter

  Bennett, Dr. Reginald (Gosport)

  Eden, Sir John

  Hornby, Richard

  Benyon, W.

  Edwards, Nicholas (Pembroke)

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Berry, Hn. Anthony

  Elliot, Capt. Walter (Carshalton)

  Howe, Hn. Sir Geoffrey (Reigate)

  Biffen, John

  Elliott, R. W. (N'c't1e-upon-Tyne, N.)

  Howell, David (Guildford)

  Biggs-Davison, John

  Emery, Peter

  Howell, Ralph (Norfolk, N.)

  Blaker, Peter

  Farr, John

  Hutchison, Michael Clark

  Boardman, Tom (Leicester, S. W.)

  Fell, Anthony

  Iremonger, T. L.

  Body, Richard

  Fenner, Mrs. Peggy

  Irvine, Bryant Godman (Rye)

  Boscawen, Robert

  Fidler, Michael

  James, David

  Bossom, Sir Clive

  Jenkin, Patrick (Woodford)

  Bowden, Andrew

  Finsberg, Geoffrey (Hampstead)

  Jessel, Toby

  Boyd-Carpenter, Rt. Hn. John

  Fisher, Nigel (Surbiton)

  Johnson Smith, G. (E. Grinstead)

  Braine, Bernard

  Fletcher-Cooke, Charles

  Jones, Arthur (Northants, S.)

  Bray, Ronald

  Fookes, Miss Janet

  Jopling, Michael

  Brewis, John

  Fortescue, Tim

  Joseph, Rt. Hn. Sir Keith

  Brinton, Sir Tatton

  Foster, Sir John

  Kaberry, Sir Donald

  Brocklebank-Fowler, Christopher

  Fowler, Norman

  Kellett, Mrs. Elaine

  Brown, Sir Edward (Bath)

  Fox, Marcus

  Kershaw, Anthony

  Bruce-Gardyne, J.

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

  Kilfedder, James

  Bryan, Paul

  Fry, Peter

  Kimball, Marcus

  Buchanan-Smith, Alick (Angus, N&M)

  Galbraith, Hn. T. G.

  King, Evelyn (Dorset, S.)

  Buck, Antony

  Gardner, Edward

  King, Tom (Bridgwater)

  Bullus, Sir Eric

  Gibson-Watt, David

  Kinsey, J. R.

  Burden, F. A.

  Gilmour, Ian (Norfolk, C.)

  Kirk, Peter

  Butler, Adam (Bosworth)

  Gilmour, Sir John (Fife, E.)

  Knight, Mrs. Jill

  Campbell, Rt. Hn. G. (Moray&Nairn)

  Glyn, Dr. Alan

  Knox, David

  Carlisle, Mark

  Godber, Rt. Hn. J. B.

  Lamond, James

  Carr, Rt. Hn. Robert

  Goodhart, Philip

  Lane, David

  Cary, Sir Robert

  Goodhew, Victor

  Langford-Holt, Sir John

  Channon, Paul

  Gorst, John

  Le Marchant, Spencer

  Chapman, Sydney

  Gower, Raymond

  Lewis, Kenneth (Rutland)

  Chataway, Rt. Hn. Christopher

  Grant, Anthony (Harrow, C.)

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

  Chichester-Clark, R.

  Gray, Hamish

  Longden, Gilbert

  Churchill, W. S.

  Green, Alan

  Loveridge, John

  Clark, William (Surrey, E.)

  Griffiths, Eldon (Bury St. Edmunds)

  McAdden, Sir Stephen

  Clarke, Kenneth (Rushcliffe)

  Grylls, Michael

  MacArthur, Ian

  Clegg, Walter

  Gummmer, Selwyn

  McCrindle, R. A.

  Cockeram, Eric

  Gurden, Harold

  Maclean, Sir Fitzroy

  Cooke, Robert

  Hall, Miss Joan (Keighley)

  McMaster, Stanley

  Coombs, Derek

  Hall, John (Wycombe)

  Macmillan, Maurice (Farnham)

  Cooper, A. E.

  Hall-Davis, A. G. F.

  McNair-Wilson, Michael

  Corfield, Rt. Hn. Frederick

  Hamilton, Michael (Salisbury)

  McNair-Wilson, Patrick (New Forest)

  Cormack, Patrick

  Hannam, John (Exeter)

  Maddan, Martin

  Costain, A. P.

  Harrison, Brian (Maldon)

  Madel, David

  Maginnis, John E.

  Prior, Rt. Hn. J. M. L.

  Tapsell, Peter

  Mather, Carol

  Proudfoot, Wilfred

  Taylor, Sir Charles (Eastbourne)

  Maude, Angus

  Pym, Rt. Hn. Francis

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

  Maudling, Rt. Hn. Reginald

  Quennell, Miss J. M.

  Taylor, Frank (Moss Side)

  Mawby, Ray

  Raison, Timothy

  Taylor, Robert (Croydon, N. W.)

  Maxwell-Hyslop, R. J.

  Ramsden, Rt. Hn. James

  Temple, John M.

  Meyer, Sir Anthony

  Rawlinson, Rt. Hn. Sir Peter

  Thatcher, Rt. Hn. Mrs. Margaret

  Mills, Peter (Torrington)

  Reed, Laurance (Bolton, E.)

  Thomas, John Stradling (Monmouth)

  Mills, Stratton (Belfast, N.)

  Rees, Peter (Dover)

  Thomas, Rt. Hn. Peter (Hendon, S.)

  Miscampbell, Norman

  Rees-Davies, W. R.

  Thompson, Sir Richard (Croydon, S.)

  Mitchell, David (Basingstoke)

  Renton, Rt. Hn. Sir David

  Tilney, John

  Moate, Roger

  Rhys William, Sir Brandon

  Trafford, Dr. Anthony

  Molyneaux, James

  Ridley, Hn. Nicholas

  Trew, Peter

  Money, Ernie

  Ridsdale, Julian

  Tugendhat, Christopher

  Monks, Mrs. Connie

  Rippon, Rt. Hn. Geoffrey

  Turton, Rt. Hn. R. H.

  Monro, Hector

  Roberts, Michael (Cardiff, N.)

  van Straubenzee, W. R.

  Montgomery, Fergus

  Roberts, Wyn (Conway)

  Vaughan, Dr. Gerard

  Morgan, Geraint (Denbigh)

  Rodgers, Sir John (Sevenoaks)

  Vickers, Dame Joan

  Morgan-Giles, Rear-Adm.

  Rossi, Hugh (Hornsey)

  Waddington, David

  Morrison, Charles (Devizes)

  Rost, Peter

  Walder, David (Clitheroe)

  Mudd, David

  Royle, Anthony

  Walker, Rt. Hn. Peter (Worcester)

  Murton, Oscar

  Russell, Sir Ronald

  Walker-Smith, Rt. Hn. Sir Derek

  Nabarro, Sir Gerald

  St. John-Stevas, Norman

  Wall, Patrick

  Neave, Airey

  Scott, Nicholas

  Walters, Dennis

  Nicholas, Sir Harmar

  Scott-Hopkins, James

  Ward, Dame Irene

  Normanton, Tom

  Sharpies, Richard

  Warren, Kenneth

  Nott, John

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

  Weatherill, Bernard

  Onslow, Cranley

  Shelton, William (Clapham)

  Wells, John (Maidstone)

  Oppenheim, Mrs. Sally

  Simeons, Charles

  White, Roger (Gravesend)

  Orr, Capt. L. P. S.

  Sinclair, Sir George

  Whitelaw, Rt. Hn. William

  Osborn, John

  Skeet, T. H. H.

  Wiggin, Jerry

  Owen, Idris (Stockport, N.)

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

  Wilkinson, John

  Page, Graham (Crosby)

  Soref, Harold

  Wolrige-Gordon, Patrick

  Page, John (Harrow, W.)

  Spence, John

  Wood, Rt. Hn. Richard

  Parkinson, Cecil (Enfield, W.)

  Sproat, Iain

  Woodhouse, Hn. Christopher

  Peel, John

  Stainton, Keith

  Woodnutt, Mark

  Percival, Ian

  Stanbrook, Ivor

  Worsley, Marcus

  Peyton, Rt. Hn. John

  Stewart-Smith, D. G. (Belper)

  Wylie, Rt. Hn. N. R.

  Pike, Miss Mervyn

  Stodart, Anthony (Edinburgh, w.)

  Younger, Hn. George

  Pink, R. Bonner

  Stoddart-Scott, Col. Sir M.

  Pounder, Rafton

  Stokes, John

  TELLERS FOR THE AYES:

  Powell, Rt. Hn. J. Enoch

  Stuttaford, Dr. Tom

  Mr. Reginald Eyre and

  Price, David (Eastleigh)

  Sutcliffe, John

  Mr. Jasper More.

  NOES

  Abse, Leo

  Conlan, Bernard

  Fisher, Mrs. Doris (B' ham, Lady wood)

  Albu, Austen

  Corbet, Mrs. Freda

  Fitch, Alan (Wigan)

  Allaun, Frank (Salford, E.)

  Cox, Thomas (Wandsworth, c.)

  Fletcher, Raymond (Ilkeston)

  Allen, Scholefield

  Crawshaw, Richard

  Fletcher, Ted (Darlington)

  Archer, Peter (Rowley Regis)

  Cronin, John

  Foley, Maurice

  Armstrong, Ernest

  Crosland, Rt. Hn. Anthony

  Foot, Michael

  Ashley, Jack

  Crossman, Rt. Hn. Richard

  Ford, Ben

  Ashton, Joe

  Dalyell, Tam

  Forrester, John

  Atkinson, Norman

  Darling, Rt. Hn. George

  Fraser, John (Norwood)

  Bagier, Gordon A. T.

  Davidson, Arthur

  Freeson, Reginald

  Barnes, Michael

  Davies, Denzil (Llanelly)

  Galpern, Sir Myer

  Barnett, Joel

  Davies, G. Elfed (Rhondda, E.)

  Garrett, W. E.

  Benn, Rt. Hn. Anthony Wedgwood

  Davies, Ifor (Gower)

  Gilbert, Dr. John

  Bidwell, Sydney

  Davies, S. O. (Merthyr Tydvil)

  Ginsburg, David

  Bishop, E. S.

  Davis, Clinton (Hackney, C.)

  Gourlay, Harry

  Blenkinsop, Arthur

  Deakins, Eric

  Grant, George (Morpeth)

  Boardman, H. (Leigh)

  do Freitas, Rt. Hn. Sir Geoffrey

  Grant, John D. (Islington, E.>

  Booth, Albert

  Delargy, H. J.

  Griffiths, Eddie (Brightside)

  Bottomley, Rt. Hn. Arthur

  Dell, Rt. Hn. Edmund

  Grimond, Rt. Hn. J.

  Boyden, James (Bishop Auckland)

  Dempsey, James

  Gunter, Rt. Hn. R. J.

  Bradley, Tom

  Doig, Peter

  Hamilton, William (Fife, W.)

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

  Dormand, J. D.

  Hamling, William

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

  Douglas, Dick (Stirlingshire, E.)

  Hannan, William (G'gow, Maryhill)

  Buchan, Norman

  Douglas-Mann, Bruce

  Hardy, Peter

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

  Driberg, Tom

  Harrison, Walter (Wakefield)

  Butler, Mrs. Joyce (Wood Green)

  Duffy, A. E. P.

  Hart, Rt. Hn. Judith

  Callaghan, Rt. Hn. James

  Dunn, James A.

  Hoaley, Rt. Hn. Denis

  Campbell, I. (Dunbartonshire, W.)

  Dunnett, Jack

  Heffer, Eric S.

  Cant, R. B.

  Eadie, Alex

  Horam, John

  Carmichael, Neil

  Edelman, Maurice

  Houghton, Rt. Hn. Douglas

  Carter, Ray (Birmingh'm, Northfield)

  Edwards, Robert (Bilston)

  Howell, Denis (Small Heath)

  Carter-Jones, Lewis (Eccles)

  Edwards, William (Merioneth)

  Huckfield, Leslie

  Castle, Rt. Hn. Barbara

  Ellis, Tom

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Clark, David (Colne Valley)

  English, Michael

  Hughes, Mark (Durham)

  Cohen, Stanley

  Evans, Fred

  Hughes, Robert (Aberdeen, N.)

  Coleman, Donald

  Faulds, Andrew

  Hughes, Roy (Newport)

  Concannon, J, D.

  Fernyhough, Rt. Hn. E.

  Hunter, Adam

  170

  171

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Marsh, Rt. Hn. Richard

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

  Janner, Greville

  Mason, Rt. Hn. Roy

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

  Jay, Rt. Hn. Douglas

  Mayhew, Christopher

  Silkin, Rt. Hn. John (Deptford)

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

  Meacher, Michael

  Silkin, Hn. S. C. (Dulwich)

  Jenkins, Hugh (Putney)

  Mellish, Rt. Hn. Robert

  Sillars, James

  Jenkins, Rt. Hn. Roy (Stechford)

  Mendelson, John

  Silverman, Julius

  John, Brynmor

  Millan, Bruce

  Skinner, Dennis

  Johnson, Carol (Lewisham, S.)

  Miller, Dr. M. S.

  Small, William

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

  Milne, Edward (Blyth)

  Smith, John (Lanarkshire, N.)

  Johnson, Walter (Derby, S.)

  Molloy, William

  Spearing, Nigel

  Jones, Barry (Flint, E.)

  Morris, Alfred (Wythenshawe)

  Spriggs, Leslie

  Jones, Dan (Burnley)

  Morris, Charles R. (Openshaw)

  Stallard, A. W.

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

  Morris, Rt. Hn. John (Aberavon)

  Steel, David

  Jones, Gwynoro (Carmarthen)

  Moyle, Roland

  Stewart, Rt. Hn. Michael (Fulham)

  Jones, T. Alec (Rhondda, W.)

  Mulley, Rt. Hn. Frederick

  Stoddart, David (Swindon)

  Judd, Frank

  Murray, Ronald King

  Stonehouse, Rt. Hn. John

  Kaufman, Gerald

  Ogden, Eric

  Strang, Gavin

  Kelley, Richard

  O'Halloran, Michael

  Strauss, Rt. Hn. G. R.

  Kerr, Russell

  O'Malley, Brian

  Summerskill, Hn. Dr. Shirley

  Kinnock, Neil

  Oram, Bert

  Swain, Thomas

  Lambie, David

  Orbach, Maurice

  Taverne, Dick

  Lamond, James

  Orme, Stanley

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

  Latham, Arthur

  Oswald, Thomas

  Thomas, Jeffrey (Abertillery)

  Lawson, George

  Owen, Dr. David (Plymouth, Sutton)

  Thorpe, Rt. Hn. Jeremy

  Leadbitter, Ted

  Pannell, Rt. Hn. Charles

  Tinn, James

  Lee, Rt. Hn. Frederick

  Pardoe, John

  Tomney, Frank

  Leonard, Dick

  Parker, John (Dagenham)

  Torney, Tom

  Lester, Miss Joan

  Parry, Robert (Liverpool, Exchange)

  Tuck, Raphael

  Lever, Rt. Hn. Harold

  Pavitt, Laurie

  Urwin, T. W.

  Lewis, Arthur (W. Ham, N.)

  Pendry, Tom

  Varley, Eric G.

  Lewis, Ron (Carlisle)

  Pentland, Norman

  Wainwright, Edwin

  Lipton, Marcus

  Perry, Ernest G.

  Walden, Brian (B'm'ham, All Saints)

  Lomas, Kenneth

  Prentice, Rt. Hn. Reg.

  Walker, Harold (Doncaster)

  Loughlin, Charles

  Prescott, John

  Wallace, George

  Lyon, Alexander W. (York)

  Price, J. T. (Westhoughton)

  Watkins, David

  Lyons, Edward (Bradford, E.)

  Price, William (Rugby)

  Weitzman, David

  Mabon, Dr. J. Dickson

  Probert, Arthur

  Wellbeloved, James

  Marsden, F.

  Reed, D. (Sedgefield)

  White, James (Glasgow, Pollok)

  McBride, Neil

  Rees, Merlyn (Leeds, S.)

  Whitehead, Phillip

  McCartney, Hugh

  Rhodes, Geoffrey

  Whitlock, William

  McElhone, Frank

  Richard, Ivor

  Willey, Rt. Hn. Frederick

  McGuire, Michael

  Roberts, Albert (Normanton)

  Williams, Alan (Swansea, W.)

  Mackenzie, Gregor

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Williams, Mr. Shirley (Hitchin)

  Mackintosh, John P.

  Robertson, John (Paisley)

  Wilson, Alexander (Hamilton)

  Maclennan, Robert

  Roderick, Caerwyn E. (Br'c'n&R'dnor)

  Wilson, Rt. Hn. Harold (Huyton)

  McMillan, Tom (Glasgow, C.)

  Rodgers, William (Stockton-on-Tees)

  Wilson, William (Coventry, S.)

  McNamara, J. Kevin

  Roper, John

  Woof, Robert

  MacPherson, Malcolm

  Rose, Paul B.

  Mahon, Simon (Bootle)

  Ross, Rt. Hn. William (Kilmarnock)

  TELLERS FOR THE NOES:

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

  Sheldon, Robert (Ashton-under-Lyne)

  Mr. Joseph Harper and

  Marks, Kenneth

  Shore, Rt. Hn. Peter (Stepney)

  Mr. James Hamilton.

  Marquand, David

  Resolved,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but—

  (1) this resolution shall not authorise the making of amendments of the enactments relating to purchase tax, other than amendments about the remission of tax on exported vehicles, and other than amendments making the same provision for chargeable goods of whatever description, or for all goods to which any of the several rates of tax at present applies; and

  (2) neither this resolution nor any resolution relating to selective employment tax shall authorise the making of amendments of the enactments relating to selective employment tax so as to give relief from tax—

  (a) by way of exemption from, or a reduction in the rate of, tax except in respect of all persons of the same descriptions relevant for determining the rate of the employer's flat-rate contribution with
  172
  which the tax is combined, whether that contribution is under the National Insurance Acts or under the corresponding enactments in Northern Ireland; or

  (b) by way of providing for payments to employers of an amount equal to the whole or a specified part of the tax paid if the proposed provision—

  (i) is in respect of employers in, or at establishments in, part only of Great Britain; or

  (ii) extends to employers in, or at establishments in, Northern Ireland; or

  (iii) is in respect of all persons in any particular description of employment in all parts of Great Britain, and relief in respect of the whole of the tax paid could be given in respect of that description of employment by an order under section 9(1)(a) of the Selective Employment Payment Act 1966 adding that description of employment to the employments to which section 1 or 2 of that Act applies; or

  173

  (c) by adding or removing any employer to or from the employers to whom section 3 of that Act applies, or

  (d) by amending the provisions of Schedule 1 or Schedule 2 to that Act.

  Mr. Speakers: I am now required under Standing Order No. 94(2) to put successively without further debate the Question on each of the remaining 15 Ways and Means Motions, on the two procedure Motions, and on the Motion relating to Finance [Money], on all of which the Finance Bill is to be brought in.
  Instead of reading out each Motion in extenso, I propose to follow the procedure used during the last four years, that is to say, first to state the title of the Motion and then simply to put the Question, That the Motion be agreed to.

  BUDGET RESOLUTIONS AND ECONOMIC SITUATION

    2. GAS FUEL FOR VEHICLES (EXCISE)
    Motion made, and Question,
    That it is expedient to impose a duty of excise on gas for use as fuel in vehicles.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    3. BINGO DUTY (EXCISE)
    Motion made, and Question,
    That as from 13th April, 1971 the definition of "bingo" in section 3(10) of the Finance Act 1969 shall be amended by omitting there-from the words "except a version whose rules permit a player to withdraw any part of his initial stake after the game has begun".
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    4. SURCHARGES AND REBATES IN RESPECT OF REVENUE DUTIES
    Motion made, and Question,
    That the period after which orders under section 9 of the Finance Act 1961 may not be made or continue in force shall be extended until the end of August, 1972.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    5. AGRICULTURAL MACHINES (VEHICLES EXCISE DUTY AND CUSTOMS AND EXCISE DUTY)
    Motion made, and Question,
    That for the purposes of determining—

    (a) the duty of excise chargeable in respect of a vehicle under the Vehicles (Excise) Act 1971, and

    (b) the cases in which rebate is allowed on heavy oil used as fuel for road vehicles,

    provision may be made for restricting the descriptions of vehicles which fall within the definition of "agricultural machine".—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    6 INCOME TAX (SURTAX RATES FOR 1970–71)
    Motion made, and Question,
    That—

    (a) income tax for the year 1970–71 shall be charged, in the case of an individual whose total income exceeded £2,500, at the same higher rates in respect of the excess of that income over £2,000 as were charged for the year 1969–70;

    (b) an individual whose total income did not exceed £2,681 shall be entitled to have the surtax chargeable by virtue of paragraph (a) above reduced to an amount equal to 40 per cent. of the difference between his total income and £2,500.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94 s (2) (Ways and Means motions), and agreed to.

    7. INCOME TAX (ALTERATION OF PERSONAL RELIEFS)
    Motion made, and Question,
    That the following alterations shall be made in Chapter II of Part I of the Income and Corporation Taxes Act 1970—

    (a) in section 9(1) (earned income relief) for paragraph (b) there shall be substituted—

    "(b) 15 per cent. of the amount of any excess of his earned income over £4,005";

    (b) in section 10(3) (appropriate amount for child)—

    (i) for £165 (child over 16) there shall be substituted £205;

    (ii) for £140 (child over 11 but not over 16) there shall be substituted £180; and

    (iii) for £115 (child not over 11) there shall be substituted £155;

    175

    (c) in section 9 (age relief)—

    (i) in subsection (2) for the words from "either he" to "his wife living with him" there shall be substituted the word "he", and

    (ii) after subsection (3) there shall be inserted the following subsection—

    "(3A) If the claimant proves that, at any time within the year of assessment,—
    (a) he had his wife living with him, and
    (b) either he or his wife living with him was of the age of 65 years or upwards;
    subsections (2) and (3) above shall have effect as if for the references to £1,000 (income limit for relief) there were substituted references to £1,200."
    (d) in section 7 (relief for persons over sixty-five with small incomes)—

    (i) for the references to £475 and £740 (income limits for exemption) there shall be substituted references to £504 and £786;

    (ii) for the reference to £255 (the excess over those limits beyond which relief by reduction of tax is excluded) there shall be substituted a reference to £330.

    (e) in section 16 (relief for dependent relative) for the reference in subsection (1) to £260 (lower income limit of dependent relative) there shall be substituted a reference to £289, for the references in subsections (1) and (2) to £335 (normal higher income limit) there shall be substituted references to £364 and for the reference in subsection (2) to £370 (higher income limit where claimant is a woman other than a married woman living with her husband) there shall be substituted a reference to £399;
    (f) in section 12 (widower's or widow's housekeeper) the following shall be added at the end of the proviso:—
    "and
    (iv) no relief shall be allowed under this section to a person entitled to relief under section 14 below;
    but this Resolution shall not require any change to be made in the amounts deductible or repayable under section 204 of that act (pay-as-you-earn) before 6th July 1971.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the Provisional Collection of Taxes Act 1968.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    8. INCOME TAX (REDUCTION IN RELIEFS ON ACCOUNT OF FAMILY ALLOWANCES)
    Motion made, and Question,
    That—
    (a) section 24(1) of the Income and Corportation Taxes Act 1970 (reduction on account of family allowances in personal reliefs for the year 1970–71 and subsequent
    176
    years of assessment) shall be amended in accordance with paragraph (b) of this Resolution. and shall be deemed always to have had effect as so amended, and section 14(4) of the Finance Act 1968 (which the said section 24(1) replaced) shall be treated as having been in force for the year 1968–69 as so amended, and for the year 1969–70 as amended both by section 11(6) of the Finance Act 1969 and in accordance with the said paragraph (b);
    (b) the said amendments are as follows:—

    (i) the omission from each provision of the words "or allowances" and the words "for each allowance if more than one", and

    (ii) the addition of the following paragraph at the end of each provision—

    "Where for any year of assessment an individual is assessable to income tax in respect of payments on account of two or more allowances within the preceding provision, the appropriate reduction shall be made thereunder in respect of each such allowance";
    (c) nothing in this Resolution shall effect the determination of any commissioners, or the judgment of any court, made or given before 17th March, 1971.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    9. CAPITAL ALLOWANCES (INCOME TAX AND CORPORATION TAX)
    Motion made, and Question,
    That new provision be made as to the tax allowances and charges to be made in respect of capital expenditure on the provision of machinery or plant, being, subject to certain exceptions, expenditure incurred, or to be treated as incurred, on or after 27th October 1970, and that amendments be made in the enactments relating to allowances and charges in respect of other capital expenditure so incurred.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    10. OCCUPATIONAL PENSION SCHEMES (INCOME TAX AND CORPORATION TAX)
    Motion made, and Question,
    That charges to income tax and corporation tax may be imposed in connection with provisions about occupational pension schemes. —[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    11. CORPORATION TAX (CHARGE AND RATE FOR FINANCIAL YEAR 1970)
    Motion made, and Question,
    That corporation tax shall be charged for the financial year 1970 at the rate of 40 per cent.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    12. CAPITAL GAINS REPLACEMENT OF RELIEF FOR SMALL AMOUNTS AND DISALLOWANCE OF LOSSES IN YEAR QUALIFYING FOR NEW RELIEF
    Motion made, and Question,
    That provision may be made for replacing section 31 of the Finance Act 1968 by new provisions for giving relief from capital gains tax and for restricting the allowable losses that may be carried forward from a year in which the new relief is given or could be given but for an insufficiency of chargeable gains.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    13. TAX ON CAPITAL GAINS (CONSEQUENTIAL CHARGES)
    Motion made, and Question:
    That charges to capital gains tax and corporation tax on capital gains (including charges for a past year of assessment or accounting period) may be imposed—

    (a) in connection with the abolition of betterment levy; and

    (b) in connection with the abolition of income tax on short term capital gains.—[Mr. Barber.]

    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    14. ESTATE DUTY AND TAX ON CAPITAL GAINS (CONSEQUENTIAL CHARGES)
    Motion made, and Question:
    That it is expedient to authorise charges to capital gains tax and estate duty arising from the abolition of the disposal deemed to occur on the death of a person and of the chargeable gain or allowable loss accruing on a death or on a disposal by way of donatio mortis causa or from any amendment of the provisions relating to settled property.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    15. SELECTIVE EMPLOYMENT TAX
    Motion made, and Question:
    That, in respect of each contribution week within the meaning of Part VI of the Finance Act 1966 beginning on or after 5th July 1971 the amount payable by way of selective employment tax in respect of any person shall be reduced—

    (a) if that person is a man over the age of eighteen, to £1·20;

    (b) if that person is a woman over the age of eighteen, to £0·60;

    (c) if that person is a boy under the age of eighteen, to £0·60; and

    (d) if that person is a girl under the age of eighteen, to £0·40.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    16. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)
    Motion made, and Question:
    That it is expedient to authorise any in cidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from provisions designed in general to afford relief from tax.— [Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    PROCEDURE (FUTURE TAXATION)
    Motion made, and Question:
    That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

    (a) provisions for a new method of charging income tax, fixing a rate for the tax to be charged by the new method, abolishing certain reliefs from surtax and allowing the payment of part of any surtax to be deferred;

    (b) provisions for charging a wife's earnings as if she were not married;

    (c) provisions for or in connection with the repeal of Chapter V of Part I of the Income and Corporation Taxes Act 1970 (aggregation of child's investment etc. income with income of parent);

    (d) provisions for or in connection with the exclusion of all unmarried children from

    179
    Chapter II of Part XVI of that Act (settlements by parents) on their attaining the age of eighteen;

    (e) provisions about occupational pension schemes;

    (f) provisions for requiring sums on account of income tax to be deducted from payments under certain contracts relating to construction operations; and

    (g) provisions amending section 15 of the Finance Act 1970 (which increased initial allowances for industrial buildings and structures).—[Mr. Barber.]

    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means motions), and agreed to.

    PROCEDURE (NORTHERN IRELAND SOCIAL SERVICES)
    Motion made, and Question,
    That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, provision may be made in any Finance Bill of the present Session for confirming and giving effect to any agreement between the Treasury and the Ministry of Finance for Northern Ireland which supersedes the agreement set out in the Schedule to the Social Services (Northern Ireland Agreement) Act 1949 as amended by the agreement set out in Schedule 19 to the Finance Act 1968 and for otherwise contributing to the cost of social services in Northern Ireland.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means Motions), and agreed to.

    FINANCE [MONEY]
    Queen's Recommendation having been signified—
    Motion made, and Question,
    That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorise the payment out of the Consolidated Fund into the Exchequer of Northern Ireland of—

    (a) sums required to be so paid under any agreement superseding the agreement set out
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    in the Schedule to the Social Services (Northern Ireland Agreement) Act 1949 as amended by the agreement set out in Schedule 19 to the Finance Act 1968, and

    (b) sums towards the expenditure incurred in making payments under the enactments of the Parliament of Northern Ireland corresponding to the following Acts as from time to time amended, that is to say, the Family Allowances Act 1965, the Ministry of Social Security Act 1966, the National Insurance (Old persons' and widows' pensions and attendance allowance) Act 1970 and the Family Income Supplements Act 1970.

    and to authorise any increase in payments out of the Consolidated Fund or out of moneys provided by Parliament which is attributable to any provision of the said Act of the present Session amending section 16 of the National Loans Act 1968, and the payment into the Consolidated Fund of any fees paid, in connection with the approval of retirement benefit schemes under Chapter II of Part II of the Finance Act 1970. on applications for alteration of schemes.—[Mr. Barber.]
    put forthwith pursuant to Standing Order No. 94(2) (Ways and Means Motions), and agreed to.
    Bill ordered to be brought in upon the Resolutions relating to Ways and Means and Finance [Money] and the Orders relating to Procedure made this day; to be brought in by The Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Maurice Macmillan, Mr. Patrick Jenkin, Mr. Terence Higgins, the Solicitor-General, and Mr. John Davies.

    FINANCE
    Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance, presented accordingly by Mr. Patrick Jenkin and read the First time; to be read a Second time tomorrow and to be printed. [Bill 148.]

  ROAD TRAFFIC (SPEED LIMITS)
  10.17 p.m.
  The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): I beg to move,
  That the Motor Vehicles (Speed Limits on Motorways) Regulations 1971, a copy of which was laid before this House on 4th February, be approved.
  Perhaps we can discuss at the same time the next Motion on the Order Paper,
  That the Motor Vehicles (Variation of Speed Limits) Regulations 1971, a copy of which was laid before this House on 4th February, be approved.
  Maximum speed limits for specified classes of vehicles were set out in the Fifth Schedule to the Road Traffic Regulation Act, 1967. Under Section 78, the Secretary of State may, by regulation subject to the approval of each House of Parliament, vary these limits.
  The Fifth Schedule set out the limits currently applying to the specified classes of vehicles on roads generally. Under the identical power of Section 24 of the Road Traffic Act, 1960, which Section 78 of the 1967 Act replaced, the Minister made the Motor Vehicles (Speed Limit on Motorways) Regulations, 1966, which continued to substitute, for vehicles driven on motorways, a different schedule of speed limits from that applicable to vehicles on roads generally.
  The first Regulations substitute two new sub-paragraphs for sub-paragraph (1) of paragraph 2 in the 1967 Schedule, so making the following change in limits on all-purpose roads. First, the speed limit of 40 miles an hour, which at present is applicable to goods vehicles, is raised to 50 miles an hour where the unladen weight of the vehicle does not exceed 30 cwt. and a trailer is not drawn. This means that most small delivery vans will be able to drive at 50 miles an hour instead of 40. The reason is that these light vans have many of, though not all, the characteristics of private cars. From their size and performance generally, they are much more akin to motor cars than to lorries. There is, therefore, a strong case for raising their permitted speed limit.
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  However, it might be argued: If there is a case for raising the limit at all, why not get rid of it completely? But they may be more heavily laden than cars, so requiring longer stopping distances, and the van bodywork restricts the driver's vision more than in a car. Their accident record is somewhat poorer than that of private cars—an accident rate averaging 331 compared with 274 per hundred million miles travelled during the period 1967–69.
  The present 40 m.p.h. limit is clearly unrealistic for light vans of this type and is not well observed, and unrealistic speed limits which are not observed cannot be enforced. Removing the limit altogether is not justified on the safety grounds I have mentioned, but we consider that an increase to 50 m.p.h. is a reasonable compromise for this type of vehicle. This should be less frustrating for the drivers of these vehicles and also for car drivers, who will not so often be held up or obliged to overtake in conditions of traffic congestion. The new limit should also be better observed.
  The effect of the second set of Regulations is to introduce a speed limit of 60 m.p.h. applicable to goods vehicles exceeding three tons unladen weight when driven on motorways. This means that these heavier goods vehicles, which at present go at high speeds on motorways, will henceforth be required to limit their speed to 60 m.p.h. We shall, nevertheless, be retaining the existing limit of 50 m.p.h. applicable to public service vehicles when drawing trailers. An example of this might be London Airport buses which go on motorways. We think it reasonable that they should be kept within the existing 50 m.p.h. limit.
  We shall be retaining the 40 m.p.h. limit applicable to all other motor vehicles, including the goods vehicles I have mentioned, when drawing a trailer which has "less than four wheels", which is the language of the Act—though I cannot recall seeing such a trailer with less than two wheels, such a vehicle would, however, be included—and this will cover horse boxes and what are known as close-coupled four-wheeled trailers.
  The 60 m.p.h. motorway speed limit will apply to those classes of vehicles constructed or adapted for use for the conveyance of goods or burden which exceed three tons unladen weight; that

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  is, heavy lorries, motor tractors and locomotives. The distinction between a motor tractor and a locomotive for the purposes of the law is that such a tractor is under 7¼ tons and such a locomotive is over 7¼ tons. These classes of vehicles are prohibited from using the third lane on motorways and are currently subject only to the overall motorway speed limit of 70 m.p.h.
  The main reasons for subjecting heavy goods vehicles to a 60 m.p.h. limit on motorways, in place of the general 70 m.p.h. limit, are obvious to those who have observed them in action. First, they require considerably longer braking distances than light vehicles; secondly, their greater weight is likely to cause more damage and injury in the event of a collision—hon. Members will be aware of what can happen on motorways, particularly in multiple collisions—and, thirdly, the tyres of some of them are not suitable for sustained high speeds of 70 m.p.h. or more.
  My right hon. Friend the Secretary of State intends to keep the need for this limit of 60 m.p.h. under review in the light of improvements in breaking performances, maintenance and design.
  10.25 p.m.
  Mr. John Nott (St. Ives): A most regrettable situation will be created in the Isles of Scilly if the Regulations go through as they stand. I wish to refer in particular to raising the speed limit for vehicles having an unladen weight not exceeding 30 cwt. when not drawing a trailer. To explain my concern about the Regulations, I have to speak of the background to the case which I wish to put.
  There are in the Isles of Scilly five inhabited islands. Four of them have roads which were built entirely by the islanders themselves. The fifth island, St. Mary's, has roads which are used, I suppose, by up to 1,000 people. All but a tiny proportion of the roads in the five islands are owned by the Duchy of Cornwall, and have not been dedicated. They are, therefore, not public roads but private roads. That being so, I assume—and I would like my hon. Friend to correct me if I am wrong—that the islanders may, if they wish, drive in vans at 100 m.p.h. on the private roads—although they are not roads suitable for
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  driving at that speed—and there is nothing short of a bye-law, that the police or the magistrates can do or say to prevent it—
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I am sorry to interrupt the hon. Gentleman, but if these roads on the Isles of Scilly are not public roads they do not come within the Regulations.
  Mr. Nott: I was explaining the background, Mr. Deputy Speaker, and I will now refer to the public roads.
  It is for this reason that 90 per cent. of the roads there are free for drivers to do, within reason, what they like in relation to the Regulations. Nor is any driver driving on them liable to pay vehicle licence duty. However, the remaining 10 per cent. of the roads—and these in total amount to only one mile, in Hugh Town itself, the main town, which has narrow, winding streets—are public roads and therefore come within the Regulations. As far as I am aware, there is no speed limit on the islands, and 50 m.p.h. would be an absolutely intolerable speed at which to drive a vehicle through the narrow streets of Hugh Town. Just as intolerable to the islanders is the fact that they have to pay vehicle tax because of the bureaucracy existing in the Ministry of Transport.
  In the Isles of Scilly there is for some of the time only one policeman. There are normally two, but at present the policemen there are very concerned with the imposition of vehicle licence duty—
  Mr. Deputy Speaker: Order. I think that at this stage I should ask the Minister whether in his judgment these Regulations apply to the Isles of Scilly at all.
  Mr. Eldon Griffiths: Far be it from me to advise the Chair. I always feel that my hon. Friend is in order. He may perhaps have strayed a little, but I must leave it to your judgment, Mr Deputy Speaker.
  Mr. Deputy Speaker: Mr.Nott.
  Mr. Nott: With respect, Mr. Deputy Speaker, there are public roads in the Isles of Scilly to which the Regulations apply. There can be no doubt about that. If I have it wrong, I would very much welcome your advice, Mr. Deputy

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  Speaker, because if they are not public roads, vehicle licence duty does not apply in the Isles of Scilly either.
  On the public roads in the Isles of Scilly, which amount to about one mile, about 10 per cent. of the total roads of the Isles of Scilly, the islanders are being asked, as from last week, to pay vehicle licence duty for the first time because of the Act passed during the period of Labour government. Vehicle licence duty does not have to be paid if an individual does not drive for more than six miles on a public road in any one week. The police, who are meant to be enforcing these Regulations in the future, may be engaged in trying to measure whether the islanders are, or are not, driving six or more miles per week on the public roads in the Isles of Scilly. For that reason they are quite unable—
  Mr. Deputy Speaker: Order All this is quite out of order. None of this can possibly apply under these Regulations.
  Mr Nott: The opening paragraph clearly says that these Regulations have been applied
  "… after consultation with representative organisations in accordance with section 107(2) of that Act …".
  Did the Under-Secretary consult the Council of the Isles of Scilly before introducing these Regulations? After all, the Council is, I believe, a licensing authority, and therefore, presumably, will have some authority to apply the Regulations in the Islands. Did the Under-Secretary consult the Automobile Association and the Royal Automobile Club about the manner in which the Regulations might apply on the public roads of Hugh Town?
  It is not reasonable that vehicles should be driven at 50 miles per hour instead of 40 miles per hour, which is what the Regulations are about, through the narrow, winding streets of Hugh Town in the Isles of Scilly.
  It may seem strange that vehicle licensing, and the Regulations, should apply to the Isles of Scilly. Indeed it is. In the case of the vehicle tax, which started last week, an official has been nominated from Cornwall through the good offices of the Under-Secretary's
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  Department. He sits in the town hall of St. Mary. There is a board outside, which states—
  Mr. Deputy Speaker: Order. I am afraid that I must remind the hon. Gentleman again that vehicle tax is not in the Regulations either.
  Mr. Nott: I apologise, Mr. Deputy Speaker, for straying momentarily out of order on that point. I return to the question which I posed to the Under-Secretary a moment ago. Has his Department consulted representative organisations about the application of these Regulations to public roads in the Isles of Scilly? During the time of the previous Government there was no consultation with the representatives of the Isles of Scilly about the imposition of vehicle licensing tax. Has the Under-Secretary consulted the representative organisations, as the Regulations require?
  The basis of my argument is that the Ministry has arranged for an official to go to the Isles of Scilly. That official has been sitting there now for 10 days and has been waiting for islanders to come along and pay vehicle duty.
  Mr.Deputy Speaker: Order.That will not do at all. The hon. Gentleman is quite out of order in mentioning that sort of thing.
  Mr. Nott: Will that official, who has been sitting there for 10 days with nothing to do because no one has been to see him, be involved in the enforcement of the Regulations? The police cannot enforce the Regulations, because their time is wholly taken up with checking whether the islanders have driven farther than six miles a week on the one mile of road that the Isles of Scilly have.
  Finally, has my hon. Friend consulted the representative organisations in the Isles of Scilly about this? Are the Regulations being imposed upon the Isles of Scilly as just a piece of blanket bureaucratic coverage? As there is only one mile of road in the Isles of Scilly, and as it goes through narrow winding streets, is it reasonable that there should be a 50 miles an hour speed limit instead of a 40 miles an hour limit?
  I think that I can bring my relevant remarks to a close by saying that at the moment the Isles of Scilly—this is a

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  serious situation which nobody in the House should minimise—are in rebellion against the Whitehall Government on the subject of vehicle licence duty. They will be in rebellion, too, against the Regulations.
  Mr. Deputy Speaker:Order. They cannot be in rebellion tonight, because it is not in the Regulations.
  Mr. Nott: How does my hon. Friend the Under-Secretary think he will be able to enforce the Regulations in the Isles of Scilly, because they are very perturbed about the actions of the Department of the Environment in bringing them within the provisions of the other Transport Acts —the Regulations refer back to a Transport Act—on 1st April?
  I repeat that these islands are in rebellion. It is a situation comparable to Anguilla. How will the Under-Secretary restore law and order to the islands? if he imposes the Regulations, which will permit vehicles to travel at 50 miles an hour through the narrow one mile of streets— I repeat that there is only one mile of public roads in the Isles of Scilly—how will he restore law and order in these islands? I am not asking that troops should be sent in to wade ashore and restore law and order. I am asking merely whether the Regulations and the vehicle licensing duty apply to the Isles of Scilly; and, if so, why.
  10.37 p.m.
  Mr. Eric Ogden: I had what I thought were two simple questions for the Under-Secretary. However, I, in common with other hon. Members, have become so involved in what is happening or what is not happening inside or outside the Isles of Scilly that I shall be lucky if I reach my two simple questions. However, I will try to make them less complicated than the questions asked by the hon. Member for St. Ives (Mr. Nott). If we can have an assurance that these Regulations have not been introduced especially to bedevil life on the Isles of Scilly, that at least will be gratifying.
  I have two questions arising on the Motor Vehicles (Speed Limits on Motorways) Regulations. First, what consideration has been given to the circumstances that could well apply for heavy goods
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  vehicles coming from the Midlands, the North or the South along the M6 motorway and then along the A580 into the Port of Liverpool. With the coming into force of the Regulations, heavy goods vehicles will presumably be limited to 60 miles an hour.
  The A580 is a dual carriageway, with two lanes on each side of the carriageway. In the main, a 70 miles an hour speed limit operates, although in certain parts 30 m.p.h. and 50 m.p.h. restrictions apply. "No waiting" restrictions operate. I presume that on the A580, because it is not classified as a motorway with a maximum speed limit of 70 m.p.h., heavy goods vehicles, which on the M6 —the finest stretch of road in the United Kingdom—will be restricted to 60 m.p.h., will be able to travel at up to 70 m.p.h. This higher speed for heavy goods vehicles will operate on a much less effective road which is much more congested and which has traffic islands and roundabouts. Perhaps the Under-Secretary will tell me whether this will be the case. It will be extraordinary if it is the case. Or it may mean that in future on the M6 and on the A580 heavy goods vehicles will be able to travel at 60 m.p.h.
  My second question also I relate to the M6, the motorway which I know best. Will the hon. Gentleman clarify whether the normal restrictions on the class of vehicle able to use the outer lane of a three-lane motorway will apply? I take it that we do not want to see a heavy goods vehicle coming on to the outer lane, with its maximum speed limit of 60 m.p.h. One can imagine the congestion, bottle-necks or collisions which that would create.
  I leave my questions there. First, what is the effect of the Regulations as regards a heavy goods vehicle coming off the motorway and on to the A580? Second, what is the effect, if any—sI assume there is none—on the rules governing the use of lanes by heavy goods vehicles on motorways?
  10.41 p.m.
  Mr. Idris Owen: My only claim to be able to offer any comment in this debate is that I hope this year to have completed 750,000 miles on British roads since I first started to drive a motor car.
  I am disappointed at the Minister's rather timorous approach to Schedule 5

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  of the 1967 Act. He has introduced the 40 m.p.h. and 50 m.p.h. speed limits for two classes of vehicle on derestricted roads. Will he give consideration to introducing a third class; that is, vehicles not capable of carrying more than 5 cwt., and raise the limit in their case to 60 m.p.h.?
  Mr. Deputy Speaker: Order. I am sorry to interrupt, but the hon. Gentleman may not suggest that the Minister do something that is not actually in the Regulations.
  Mr. Owen: I understand, Mr. Deputy Speaker. I am disappointed that the Minister has not raised the unladen weight speed limit above 50 m.p.h. for vehicles with a carrying capacity below 5 cwt. There are many such vehicles on British roads which have been purchased by ordinary working chaps, and they are often used as private motor cars. One has only to travel about to see them beating a trail to the seaside in the summer, for example. Such vehicles are quite capable of being driven at speeds in excess of 50 m.p.h. with safety. If we are thinking in terms of danger, a Mini car, fully laden with passengers and luggage, is every bit as dangerous as a 5 cwt. pick-up with two passengers in the front and no goods in the back. I respectfully suggest that the limit should be lifted to 60 m.p.h for this class of vehicle.
  Insufficient attention has been given to the problem of bunching. One of the great problems which I have experienced in a little competition motoring and many years of ordinary driving has been the growing problem of bunching. It has developed greatly of recent years, due to the intense flow of traffic. The more we can segregate traffic, the better in the interests of safety. For this purpose, it is of advantage to have different classes of vehicle with varying speed limits.
  I return again to the question of the small vehicle to which I have referred. It is now designed, virtually, on precisely the same chassis as its equivalent motor car. I plead again that this small vehicle constructed on a specification almost identical to that of its motor car counterpart, should have a higher speed limit allotted to it.
  There is an enormous amount of bunching on our roads nowadays. The more we can segregate traffic, the better
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  we can create a more rhythmical flow, with less danger as a result. There should be a modification for the small vehicle, which cannot rank as a danger.
  10.44 p.m.
  Mr. Marcus Fox:I assure my hon. Friend the Minister that, despite the speeches made tonight, the majority of us welcome these two sets of Regulations. The proposed increase in respect of light vehicles from 40 to 50 m.p.h. is long overdue. It has been ignored for far too long.
  I think that for reasons of safety, the majority of people in the industry will welcome the Regulations which reduce the speed limit on motorways. Nothing has been more frightening than the limit of 70 m.p.h. applying to all vehicles on motorways. I should, however, like to know how my hon. Friend proposes to publicise the reduction of the speed limit. We are dealing with a reduction from 70 m.p.h. to 60 m.p.h., and I do not consider it sufficient to intimate this by means of a Press release.
  I take it that the Regulations will be effective fairly quickly, and I seek reassurance about this. How does my hon. Friend intend to get this across to drivers who have for so long been driving to the higher limit and will suddenly be faced with a lower limit? I am sure that many of them will not appreciate what has happened in this House. I would welcome my hon. Friend's assurance that other measures than a Press release will be used.
  10.46 p.m.
  Mr. Frederick Mulley: It is right that the House should consider changes in speed limits, and our short debate tonight indicates the many difficulties that face anyone who has to take such decisions. It is right to try to avoid over-complexity. I had great sympathy with what was said by the hon. Member for Stockport, North (Mr. Idris Owen), but the more categories there are, the greater the difficulty becomes.
  The other real difficulty is that of having to legislate for a category of vehicle. The test with which we would all be concerned is the capability of the vehicle in question. One cannot determine by specifying a category of 30 cwt., 3 tons or whatever it may be whether a vehicle, which may be 10 or 15 years old, meets the requisite standards of braking and the rest and is adequate for the same

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  speed limit as would be right for a modern, well-maintained vehicle of the same class. I think the Under-Secretary has struck the right balance in the Regulations but I am glad to hear from him that the matter will be kept under review.
  While many of the very large lorries are probably capable of the present 70 m.p.h. limit, there are many others that one is reluctant to pass on motorways because one wonders whether they are liable to swerve, and at that kind of speed they look anything but safe.
  I find it difficult to understand why, for example, the coach from Cromwell Road to London Airport should be kept down to a lower speed when any old lorry of over 3 tons may travel at 60 m.p.h. I understand that if public service vehicles have a small luggage trailer at the rear, they are kept down to 50 m.p.h. It seems to me that they are as capable of the higher speed as certain other vehicles, and we know that standards for public service vehicles tend to be higher than can be applied to the generality of road transport. I wonder what special reason there is for keeping that class of vehicle down to a limit of 50 m.p.h. when, after examination, 60 m.p.h. has been determined as the right speed for vehicles of over 3 tons.
  While one sees the possibility of increasing the speed limit to 50 m.p.h. for 30 cwt. vehicles on ordinary roads, it may be that there is a case for increasing their limit to 60 m.p.h. or making them, like motor cars, subject to the overall 70 m.p.h. limit. It is probably right, however, to err on the side of caution.
  There is a great problem here, because wherever a speed limit is imposed, the statistics are such that they always indicate a danger of more accidents. On the other hand, there is no means of measuring the extent of accidents which might be caused indirectly by frustration on the road when a driver has had to travel many miles behind a slow vehicle and then takes a chance because he is late for an appointment or is coming for a Division in the House. When he tries to overtake the vehicle in front of him, another car might be coming in the opposite direction and a serious accident occurs. That cannot be attributed to the fact that a man was held up for half an hour down the road by a vehicle
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  which was quite capable of doing a higher speed.
  The real problem in all this is enforcement, which, we know, is not the responsibility of the Department of the Environment. Certainly, if one can tighten enforcement standards, it is right. It is easier to enforce realistic speed limits, but I hope the hon. Gentleman will not rest too much on that argument, because there are many people who feel that the better thing to do is to drive at 5 or 10 miles faster than whatever the speed limit is.
  I think it is right that we should give these proposed speeds a trial. No doubt we shall have opportunity of having reports from the Department if it feels that the statistics indicate further changes are wanted.
  I am sorry that I cannot be involved in the affairs of the Isles of Scilly, but I can understand the anxieties of the hon. Member for St. Ives (Mr. Nott) in the matter, particularly as, if there is a rebellion, the rebels may well seek to make the first victim of the rebellion the hon. Member for the constituency who supports the Government. I can understand his personal difficulty. If he is worried about 50 miles an hour I would think from his description of one mile of public road than there 40 miles an hour would be dangerous. Maybe that difficulty could be resolved by a limit of 20 m.p.h. and the people should be independent in the matter, but I would not seek to proffer advice, for this is a matter in which they should exercise a proper independence.
  Although I think the hon. Member did not intend to do so, he underlined the whole problem with which we are faced in considering speed limits. We cannot lay down speed limits which will be suitable for all the various kinds of roads which we have in this country. There are many thousands of miles where it would be absolute lunacy to drive any car at 50 miles an hour and, clearly, round an S-bend we cannot have a speed limit over a few hundred yards or even a mile.
  Mr. Nott: Would the right hon. Gentleman not agree that it was lunatic—and I think it was done when he was at the Ministry of Transport—to impose a tax which cost more to collect than it yielded in revenue?
  Mr. Mulley:I imposed no such tax. On the other hand, if people enjoy the benefits of belonging to a country they should pay their share of the costs of running that country.
  A great number of the accidents which occur arise because, unfortunately, where there is a maximum speed limit people tend sometimes to drive much faster than they should, and I am afraid that there is nothing that we in the House can do to stop that, but hope that we shall have from the Under-Secretary of State an indication that there is to be the maximum possible expenditure on the roads for the sake of road safety generally.
  With that, I agree that the House should pass the Regulations.
  10.54 p.m.
  Mr. Bob Brown: I do not propose to detain the House more than a moment or so. I welcome these Regulations, or anything which tends to road safety, but I join the hon. Member for Stockport, North (Mr. Idris Owen) in his criticism of the timidity of the Department on the question of the 3 cwt. van.
  These vans are run by working class families. They use them as means of family transport. It is of no use the Government—or the Exchequer—burying their heads in the sand to avoid this issue. There are many hundreds of these little vehicles which are used by men to travel to and from their work and to take their families out at weekends, and, indeed, to take them on their holidays. It is ludicrous that a speed restriction should still be enforced. To all intents and purposes a light van is a private car. This Government are, and my own Government were, like ostriches on this.
  In answering the question which he suspected was coming, about why these vehicles were not derestricted completely, the Under-Secretary of State mentioned safety and vehicle design. Here he let the cat out of the bag. The only danger with a small van is the blind nearside, and all small vans should be designed with a widow behind the driver. This is not done, and road safety is sacrificed in the interests of the Exchequer. Purchase tax becomes payable if a window is put behind the driver. The manufacturers would be willing to
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  produce these vans with a window to give the driver visibility on approaching angular junctions on the left-hand side. The greater hazard of the van compared with the private car is caused simply by this failure of design.
  I am grateful to you, Mr. Deputy Speaker, for allowing me to develop this point. While I know the Under-Secretary cannot answer it tonight, I hope he will undertake to have further discussions with his Treasury opposite number—as I did when I was in his seat—and that he will succeed where I failed in getting a bit of common sense into the Treasury.
  10.57 p.m.
  Mr. Eldon Griffiths: did not imagine that we would range quite so widely on these rather limited and technical Regulations. As the law stands we must take them altogether as they stand or not at all. We are not able to amend them in particular.
  The right hon. Member for Sheffield, Park (Mr. Mulley), who speaks with great experience and authority on this subject, made two points. He wondered why we could not remove altogether the restriction on the 30 cwt. van. The answer lies in the statistical evidence about accidents. I have quoted some figures and it would only weary the House if I quoted more, but the objective fact that cannot be burked is that the light van at present has a significantly higher accident level than the motor car, and, therefore, it is right that it should be placed under greater restriction than the private car.
  The hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) sought to tempt me into Exchequer matters, but I will not be drawn. As things stand, the light van is more dangerous and must, therefore, be subjected to greater restrictions.
  Mr.Bob Brown:I would not dream of encouraging any hon. Member to go out of order, but will the hon. Gentleman at least concede that the obdurate nature of the Treasury is causing this further road safety hazard by increasing the accident rate of this type of vehicle?
  Mr. Griffiths: I cannot agree with that. Whereas, in the hon. Member's day, the Treasury may have been obdurate, the Treasury today is the soul of resilience,

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  flexibility and good sense. The hon. Gentleman must face it—more accidents occur to this type of vehicle. Although he is right to say that, in practice, large numbers of people use them virtually as private cars, they can be and are loaded to a much greater weight. Therefore, their braking capacity is less than that of private cars, and certain dangers are built into them. A Government Department or the police cannot so easily distinguish between loading to take children to the seaside and loading a substantial amount of goods for trading purposes. Because they are designed and used primarily as trading vehicles, they must be regulated on that basis. We have reached a reasonable compromise after our consultations with the trade.
  The right hon. Gentleman's other question was why we were applying the same rules as for heavy vehicles on the motorway to public service vehicles pulling a small trailer. As he said, such a coach would be restricted to 50 miles an hour, as at present. It should be, simply because it is pulling a trailer.
  Mr. Mulley:My point was not that there had been any change in respect of the public service vehicle, but that I imagined that these new proposals had emerged from a review of speed limits on motorways. I wondered why the small trailer was thought such a hazard in comparison with large vehicles which can travel at 60 miles an hour.
  Mr. Griffiths:It relates directly to the trailer. The heavier vehicles, which are allowed to go at 60 m.p.h. on motorways, are not pulling trailers. Any vehicle pulling a trailer is under a stiffer restriction, because certain other factors come into play, such as manoeuvrability, speed of stopping, winds and so on, affecting the safe speeds which can be reached. After consultation we have concluded that no change is justified in those vehicles, but we shall keep the matter under careful review.
  My hon. Friend the Member for Shipley (Mr. Fox) welcomed both sets of Regulations and was concerned about publicity about the speed which these very large and sometimes dangerous lorries do on the motorways. Our heavy goods drivers generally maintain a safe speed level and handle the vehicles with
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  great care, but he is right to say that this change should be made widely known, and we shall use our best offices for that purpose. Because he is a very practical man, I would point out to him also that there is nothing so effective as one or two prosecutions to make it known within the fraternity—
  Mr. Ogden: Oh!
  Mr. Griffiths: If vehicles were to break the law, surely the hon. Gentleman would accept that prosecutions should take place—
  Mr. Ogden: I was taking objection to the hon. Gentleman's proposition that there is nothing more effective than prosecuting someone who by default breaks the law. As someone who was previously adviser to the Police Federation, it was unfortunate that he should say that tonight.
  Mr. Griffiths: I do not want to pursue that point. I simply say that if the law is broken, then those who break it must expect to be prosecuted.
  Mr. Ogden:But it is not the most effective way of informing the public.
  Mr. Griffiths:I did not say that. I said that it was an effective way.
  The hon. Gentleman referred to vehicles using the A580 into Liverpool after leaving the M6. The dual carriageway A580 is not a motorway and, therefore, the heavy goods vehicle is subject to the 40 mile and not the 70 mile limit. In addition, on the motorway the heavy goods vehicle is not allowed to use the third lane, and this will continue to be the case. It would be wrong to allow such vehicles to do so. If the speed had been reduced to 60, it would be, if anything, a greater danger to allow them to use the third lane at this speed. I give the House that assurance.
  My hon. Friend the Member for Stockport, North (Mr. Idris Owen) was concerned about the possibility of bringing in a third category of vehicle here; namely, those not capable of carrying more than 500 cwt. The answer to that came from the right hon. Gentleman, when he said that there is a limit to the number of classes that one can bring in, and it is important not to overcomplicate matters by bringing in yet more divisions.

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  I understand the point my hon. Friend made about bunching. It is of great importance and he speaks there with a great deal of wisdom. But when he says that the ordinary working chap is, in any event, going off on his holiday in this kind of van, that may or may not be the case, although I suspect that he is right. But I think the answer to his suggestion is that the weight which can be carried by these vehicles is of crucial importance. It is not that they are occasionally used on holidays but that frequently they carry heavier weights than cars do, and, therefore, they must be restricted to slower limits than cars. But I emphasise again that this is a compromise we have come to after discussion with the trade interests. We will keep it under review and if after a time it appears that no significantly greater danger is arising from going up to a limit of 50, we shall be glad to look at the suggestion for still further flexibility.
  I come now to the suggestions of my hon. Friend the Member for St. Ives (Mr. Nott), who spoke so eloquently and vibrantly on behalf of the Scilly Isles. I think that his remarks were skilful in the extreme, although perhaps not directly related to the Order. I am sure that I would be out of order if I sought to answer the whole of his remarks, so I confine myself to saying that the regulations have nothing to do with the signed speed limits which appear on the roads. These are the limits at which vehicles which go on the roads are lawfully permitted to drive. The question of signing speed limits in one of the Scilly Isles also does not arise on the Order. Similarly, we are not dealing with the vehicle excise tax.
  My hon. Friend pressed me to tell him what my official is doing in the island. I hope that he is having an agreeable time there but I do not think that it falls within the terms of the Regulations. But, as always, I note what my hon. Friend says. I shall read it in HANSARD and, whether
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  it is within the terms of the Regulations or not, if there is anything I can usefully tell him, I will gladly write to him.
  We are seeking to do two useful things. First, small vans at the moment are restricted to an unrealistic level. Forty miles an hour in this day and age for the well-looked-after small vans is too low. I think it could reasonably be increased, first, for the benefit of those who drive and use these vehicles, and, secondly, for the benefit of other road users who frequently, in conditions of congestion, are stuck behind them or are occasionally tempted to overtake them at too great speeds.
  I think that the first Regulations, concerning light vans, take us a little further forward. I am sure that for that reason they will commend themselves to the House.
  The second Regulations reduce the danger of very large lorries thundering down the motorways at speeds which are too high. Whereas we are all in favour of realistic speed limits—to my mind, that means that lorry speeds should be realistic, too, as and when and if their tyres, mechanical condition, or the driving skills of the drivers permit that to be so—I think that it is common ground that for road safety reasons there should be some restriction on the speeds at which these very large vehicles are now being driven.
  I hope that the House will give its approval to these two modest sets of Regulations, one increasing the speed of the small van and the other decreasing the speed of the very heavy lorry.
  Question put and agreed to.
  Resolved,
  That the Motor Vehicles (Speed Limits on Motorways) Regulations 1971, a copy of which was laid before this House on 4th February, be approved.
  Resolved,
  That the Motor Vehicles (Variation of Speed Limits) Regulations 1971, a copy of which was laid before this House on 4th February, be approved.—[Mr. Eldon Griffiths.]

  HOVERCRAFT (CIVIL LIABILITY)
  11.12 p.m.
  The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I beg to move,
  That the Hovercraft (Civil Liability) Order 1971, a draft of which was laid before this House on 19th January, be approved.
  The purpose of the Order, which is the first made under Section 1 of the Hovercraft Act, 1968, to be presented to this House, is to lay down the principles applying to liability in respect of passengers, baggage and cargo carried by hovercraft and to third party liability in respect of hovercraft.
  In drafting the Order, the lines laid down in Section 1(1)(i) of the Hovercraft Act have been followed. Thus, as regards liability for passengers and their baggage, the aviation system has been applied. This system, so far as international journeys undertaken in civil aircraft is concerned, is based on the Warsaw Convention of 1929 as amended by the Hague Protocol of 1955. The United Kingdom, under the Carriage by Air Act, 1961, applied this system to non-international carriage also and with a higher limit.
  In practice, the limit of liability under the aviation system may differ according to the journey involved. At the lower end, in respect of a one-way journey from the United Kingdom to a country not party to the Hague Protocol, the limit is £3,500. At the other extreme, for a journey touching upon the United States and for non-international carriage, such as a domestic journey, the limit is £24,000.
  A feature of the aviation system is that the carrier is liable without proof of negligence unless he proves that he and his servants and agents took all necessary measures to avoid the damage, but by way of a quid pro quo the liability of the carrier is limited unless wilful misconduct is established. And, unlike the marine system, the carrier by aircraft is not permitted to contract out of liability or for lower limits.
  In deciding on the limits of liability for passengers and baggage carried by hovercraft, regard has been paid to the interests of the public, on the one hand,
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  and the interests of the hovercraft operators, who compete mainly with ships, on the other. After consultation with the industry, a limit of £12,000 has been inserted in the draft Order in respect of the liability for each passenger. The limits proposed for baggage are the same as for aviation, namely, £7 per kilo in the case of registered baggage and £138 per passenger in respect of baggage looked after by the passenger.
  On the question of liability in respect of cargo, Section 1 of the Hovercraft Act provides that the marine system should be applied. The Order adapts the Carriage of Goods by Sea Act, 1924, which applies the Hague Rules to outward bills of lading. The limit proposed in the Order is the same as for ships, namely, £100 gold. Under a protocol signed in Brussels in February, 1968, the limit is raised to about £270, but it is likely to be some time before this new limit comes into effect for ships. When it does, we intend to apply it to hovercraft.
  The foundation of the marine system is the issue of a bill of lading. If this document is not issued the limits do not apply. If a bill of lading is issued there are various circumstances in which the shipowner can escape liability. Loss due to fire on board is one such circumstance.
  Finally, the Order provides for an overall limitation of liability which is of benefit to hovercraft in the event of collision. This limitation does not include death or injury to passengers on board the hovercraft itself, or loss or damage to their baggage, and it applies only to navigable waters or otherwise in a maritime environment. The limit proposed in the Order is £3·50 per kilo of the maximum weight of the hovercraft; this includes a separate limit of £1 per kilo of the maximum weight in respect of damage to cargo on board the hovercraft plus damage to property outside the hovercraft.
  The draft Order also applies to hovercraft, under Section 1(1)(h) of the Hovercraft Act, 1968, the relevant provisions of the Maritime Conventions Act, 1911, regarding the apportionment of liability in the event of collision and provides for limitation of liability in respect of Her Majesty's Hovercraft by extending to

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  hovercraft parts of the Crown Proceedings Act, 1947.
  I commend the Order to the House.
  11.17 p.m.
  Mr. Bruce Millan: I am grateful to the hon. Member for the clear explanation that he has given of the Order, which eliminates a number of questions that I had intended to ask him. Before I say anything about the one or two points that I still wish to raise, I should refer to the undertaking given by the then Government—the Labour Government—when the Hovercraft Act went through in 1968, that when these Orders were prepared and were ready for presentation to the House there would be an opportunity for the Opposition to consider them in consultation with the Minister. That was an undertaking given at the time because the then Opposition were very worried about the nature of the Hovercraft Act, 1968, which is simply a part of the enabling legislation. The substantive legislation is included in Orders in Council—some, like the one with which we are now dealing, subject to the affirmative procedure and others to the negative procedure, where it is even more important that we should have this kind of discussion.
  The hon. Member has kindly written to my right hon. Friend the Member for Barnsley (Mr. Mason) about this matter, and just to put it on the record I would tell the Minister that when other Orders come along, concerning registration, hovercraft safety, noise, certification, accidents, and duties of captains and operators, we should very much welcome an opportunity of asking what is proposed, so that we can make comments about the Orders before they come before the House. I hope that the hon. Member can confirm that undertaking this evening.
  As I have said, the hon. Gentleman has given a clear explanation of the Order. I accept what he said about the laying down of liability at £12,000 in respect of passengers. Obviously we have to strike some balance here, and I should not quarrel with the figure that the Government have chosen.
  Perhaps the Minister will deal with one point about baggage that I find rather puzzling. In paragraph 5(a) of the Order it is pointed out that
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  "a vehicle and its contents shall not be treated as baggage."
  Since we are applying aviation law, it would have been surprising if a vehicle and its contents had been treated as baggage for air transport purposes. They seem to be excluded here, but, if that is so, may I ask the hon. Gentleman whether a vehicle and its contents are covered in some other way? If they are not treated as baggage, are they covered as cargo, for example, so that, if damage or loss occurs, at least the passenger concerned is covered for the vehicle?
  The other point arises from the question of the overall limitation of liability, which is dealt with in pages 18 to 21 of the Order. I am a little puzzled by the Explanatory Note on page 21, which says that the overall limitation of £3·50 per kilogram refers to property. As I read paragraph 503 on page 18, it seems that the £3·50 per kilogram refers not just to property but also to third party liability to persons as well. The limitation in respect of property is much lower than that, namely, £1 per kilogram. If I followed what the Minister said, he seemed to confirm my reading of the Order. But that is not what the Explantory Note says in paragraph 4. I should be grateful if the hon. Gentleman could clear up that point.
  Rather more important is what this overall limitation of liability means in practice. This must depend on the weight of the hovercraft. The overall limitation of liability is related to the weight of the hovercraft and, in the case of some smaller hovercraft, a minimum liability is laid down. I have no idea of the weight of a hovercraft or of between what limits hovercraft vary in weight. It might help if the hon. Gentleman gave some indication of what these limitations mean in practice.
  It is not very useful to adopt provisions of the Acts relating to the carriage of goods by sea and then subsequently to put overall limitations on liability which may make these other provisions nugatory. I am not sure whether that is not possible under the provisions relating to overall liability. I should be grateful if the hon. Gentleman could deal with this point, because, in my ignorance of what hovercraft are likely to weigh in practice, it is not clear to me.

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  I welcome this as the first Order under the Hovercraft Act, 1968. I hope very much that the subsequent Orders will not be too long in coming, because some deal with very important matters, and it is a defect in our existing legislation that many aspects of hovercraft operations are not satisfactorily dealt with legislatively. It is now three years since the Hovercraft Act, 1968. Two of them, admittedly, were under the previous Government, so we on this side bear our share of responsibility for any delay. But I hope, nevertheless, that the subsequent Orders will come along fairly soon in the future.
  11.24 p.m.
  Mr. Anthony Grant: With the leave of the House, I will endeavour to deal with the points raised by the hon. Member for Glasgow, Craigton (Mr. Millan).
  His first point concerned the reference in article 5(a) to the words
  "… a vehicle and its contents shall not be treated as baggage …".
  Under civil aviation law, vehicles have been treated as baggage. We want to make it clear that, in respect of hovercraft, this should not be treated as baggage for the purpose of the Statute.
  Mr. Millan: Is it cargo?
  Mr. Grant: I understand that that may be the case.
  The hon. Gentleman went on to refer to the limitation on liability of £3·50 per kilo. This is intended to refer to property and personal injury outside the hovercraft. In other words, if a person sustains injury while in a hovercraft his personal injury liability is limited to £12,000, though he may, of course, be able to claim against, for example, the owners of another hovercraft with which, perhaps, the hovercraft in which he was travelling collided. He might then have a claim for negligence. In that event it is possible that he could have a further claim, but this could be limited to £3·50 per kilo. I assure the hon. Gentleman that we will look carefully at the explanatory note to ensure that it is clear on this point.
  The hon. Gentleman then drew attention to an undertaking given under the Labour Government by the then Minister, his hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu),
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  on Second Reading of the Act. We do not necessarily feel bound by undertakings given by a previous Administration. However, I will be prepared, as I have made clear, to enter into inter-party discussions on the matter, if they should be required, before the next Instrument is brought before the House.
  Question put and agred to.
  Resolved,
  That the Hovercraft (Civil Liability) Order 1971, a draft of which was laid before this House on 19th January, be approved.

  MR. M. F. McEVOY (CONVICTION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Eyre.]
  11.27 p.m.
  Mr. Peter Archer: I am grateful for this opportunity to tell the House an unusual story. It is the story of what I believe to have been a miscarriage of justice. I do not suggest that it was deliberate, and I do not cite it as a general indictment of our legal system.
  This is the story of two ordinary youngsters who became caught up mistakenly in what, at that time and place, was the rapid, impersonal course of the criminal law, and the question which arises is how they are to obtain redress.
  The story begins on 1st August, 1962, which was one of a series of evenings when there took place in Dudley some ugly, nasty race riots. The following day the magistrates dealt rapidly and decisively with the offenders, and I do not complain about that. It was an unpleasant episode, but happily it was never repeated and it is best forgotten.
  Among those arrested were two young men, Michael Francis McEvoy and Hugh Reeve. They were charged under Section 5 of the Public Order Act, 1936, with using threatening behaviour with intent to provoke a breach of the peace. They pleaded not guilty. They were adjudged guilty, and although young men of previous good character from well respected families, they were sentenced unceremoniously to three months in a detention centre, and that sentence they duly served.

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  They maintained then and they have maintained ever since that they were not guilty of that offence. Michael McEvoy is my constituent. His good name was a matter of such concern to him and his family that they never ceased to look for a way to clear it. I agree at once that they might have appealed, and no purpose would be served now in discussing whether the plentiful advice which they seem to have received from various quarters was, in the circumstances of that time, good or bad. Suffice it to say that ultimately Hugh Reeve was persuaded not to pursue his appeal, and in those circumstances Michael McEvoy decided that it was pointless to pursue his appeal alone.
  The matter was brought to the attention of my predecessor, the Right Hon. Arthur Henderson, later Lord Rowley, and the then hon. Member for Dudley, now the noble Lord, Lord Wigg, because Hugh Reeve was his constituent. They raised the matter with the Home Secretary, who commissioned an inquiry by a senior police officer, Superintendent Tilley of the Gloucestershire Constabulary. The wisdom of entrusting that inquiry to a police officer in the circumstances may be open to doubt: what is not open to doubt is that Superintendent Tilley was a distinguished and conscientious officer who produced a careful report, not omitting what was in favour of the defendants. The Home Secretary sent that report to the magistrates who had convicted, inviting them to reconsider the matter. Not surprisingly, perhaps, they concluded that they had been right first time.
  On 20th January, 1964, this matter was raised on the Adjournment by my predecessor and the then hon. Member for Dudley. The matter was fully ventilated. My predecessor asked for a report by a legally qualified investigator. The hon. Member for Dudley took the opportunity to say that he was convinced of the innocence of these young men. The Home Secretary, in the course of his remarks, formulated the criterion for the use of the Prerogative by a Home Secretary in these words:
  "…the Home Secretary should use the prerogative only when evidence comes to light which definitely proves that there has been a miscarriage of justice."—[OFFICIAL REPORT, 20th January, 1964; Vol. 687. c. 883.]
  Applying that criterion he did not feel able to intervene.
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  There the matter might have rested, but in 1969 Associated Television showed a film sequence of the Dudley race riots, and there on the screen was the whole incident, re-enacted for posterity. There is an element of dramatic irony in the situation, because back in 1963, since various people claimed that they had seen a television reproduction of the incident, a very careful search had been made for the particular film sequence, but it had been edited out and from the film sequence then available it had not proved possible to find it.
  To explain the significance of the film it is necessary to refer to evidence which was given in the magistrates' court by the police officers. I take this from notes of evidence which have been very kindly supplied to me by the Home Office. I emphasise that this does not purport to be a verbatim transcript of the evidence, but it does purport to be a note taken by a magistrates' clerk of great experience, who is personally known to me and who is very widely respected. And this is the evidence on which the two young men were convicted.
  Two police officers gave evidence. They said that they arrested these young men at 12.40 and that they were banging on the side of the police van shouting, "Come on, let's get them." One of the officers specifically stated that they were arrested as they banged on the van. In cross-examination he rejected a suggestion that they were arrested when seated in their car. The other police officer, under cross-examination, as I understand it, admitted that he had not actually seen them banging on the side of the van.
  Michael McEvoy maintained that he never left his car. He said that they were driving through Dudley and stopped to watch what was happening. That may have been unwise, but it certainly was not criminal. As the police van arrived he said that two total strangers jumped into the back. That story was confirmed by Hugh Reeve, and the strangers have been identified. Their names are Mr. Bott and Mr. Poston, and they subsequently made a statement to the Press confirming what McEvoy and Reeve said about it. That was very fairly confirmed by the Home Secretary in the Adjournment debate in 1964.

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  This film sequence is significant in three respects. First, McEvoy and Reeve are shown arrested, but not by the officers who gave evidence of having arrested them. In fact, one of the officers who gave evidence is shown as fully occupied struggling with Poston, not with McEvoy and Reeve. The other officer is not shown at all. The police constable who is shown arresting McEvoy has not subsequently been identified. I understand that it is possible that there might subsequently have been a formal arrest by these two officers, but there is no reference in their evidence to their receiving assistance from any other officer and, reading their evidence, it seems clearly calculated to convey that they personally arrested these young men immediately following the banging—and with that the film is quite inconsistent.
  Secondly, it is clear from the film that the young men were not banging on the van when they were arrested. They were arrested from the car. The film does not exclude the possibility that they were banging on the van before the sequence began and that, in fairness, may be consistent with the second of the police officers who gave evidence. It is certainly not consistent with the evidence of the first officer, because he specifically rejected the suggestion that they were in the car when they were arrested. He said that they were arrested as they were banging on the van. The film is manifestly inconsistent with that evidence. Thirdly, both officers gave the time of the incident as 12.40 a.m. and I understand that the photographer who took these pictures states that he took no pictures after 11.30 p.m.
  The film has subsequently been studied by senior officers of the forces involved. That has been arranged by the Department of the Under-Secretary of State, and I am most grateful for the very careful consideration which he has undoubtedly given to this case and for the very full and careful letter which he sent to me.
  But at the end of the day the question is whether they have satisfied the test formulated by the Secretary of State's predecessor. The difficulty is that it is no easier now for these defendants to prove their innocence than it was at the time of the original crime. I can only submit that on this evidence, and in the light
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  of what we now know, virtually no court would consider that it was safe to convict. The letter from the hon. Member does not say whether the officers who gave evidence have been confronted with these discrepancies and invited to offer explanations. I do not suggest that they were necessarily lying. There was a great deal of confusion at this time. There is the possibility that they may have seen someone else banging on the side of the van and that they subsequently confused the identity of that individual with McEvoy and Reeve.
  But my submission is that this evidence is clearly unsatisfactory. It is evidence on which, beginning afresh, no court would consider it safe to convict. Again, at this last moment, I ask the hon. Member to clear the names of these young men and to vindicate the years of struggle by these families. If he feels unable to do so, I ask him to consider again what was suggested by my predecessor in 1964—inaugurating a full inquiry by someone with legal qualifications and who could not be suggested to have any personal interest in the matter.
  Often today those who suffer a real or imagined injustice choose methods of redress which we can only deplore. The McEvoy family have consistently used the channels prescribed by the constitution, channels which we always boast are available for the redress of wrongs. I suspect that if the hon. Member had replied to the debate which was so rudely interrupted on Friday—if he had not been prevented from doing so by hon. Members on his own benches—he might have urged upon us that these channels are available to redress the wrongs of the citizen. This family has pursued them, believing what they have been told of the adequacy of the channels of redress. Whether or not these facts satisfy the Home Secretary's criterion, the hon. Gentleman must be driven to conclude that there has been here a real danger of a miscarriage of justice. Is there no redress?
  11.40 p.m.
  The Under-Secretary of State for the Home Department (Mr. Mark Carlisle): Replying to the last point made by the hon. Member for Rowley Regis and Tipton (Mr. Peter Archer), had I been able to answer the debate last Friday I

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  would have said that one of the channels availabe for the redress of injustice in this country was indeed Adjournment debates and debate in the House. I certainly welcome the fact that the hon. Gentleman has chosen to raise this matter again in the House tonight and vindicate the right of this House as a House in which alleged injustice may always be raised by any back bencher.
  As the hon. Gentleman has indicated, we are discussing an incident which took place more than eight years ago, in the early hours of 1st August, 1962, during what he has described as an ugly and nasty night of racial disturbance in Dudley. Since that time there have been two police inquiries into this matter. There has been a previous Adjournment debate, as the hon. Gentleman mentioned, in January of 1964, in which three then hon. Members took part, none of whom is any longer in the House.
  I must remind the hon. Gentleman and the House that as long ago as January, 1963, a senior police officer reporting on this matter commented:
  "It is almost impossible now to re-create the atmosphere of confusion prevailing at that time. It must also be appreciated that after five to six months memories are bound to be affected and inaccuracies occur."
  That was said by the senior police officer holding the inquiry in January, 1963, and now, seven years later, inevitably so much greater is the possibility for confusion and inaccuracy. But, despite the previous inquiries which have taken place, I fully accept, as the hon. Gentleman has said, that if there is reason to believe that there was a miscarriage of justice, it would be right that we should look at this case again. Despite the length of time that has elapsed, I entirely accept, as I have made clear to the hon. Gentleman, and appreciate his reasons for raising this matter again now.
  I am bound to say at this stage that, having looked very carefully into the whole of the evidence and having listened to what the hon. Gentleman has said tonight, I am not satisfied that there is ground on which the Home Secretary would be justified, after this lapse of time, in intervening in the conviction that occurred. I do not wish to repeat what the hon. Gentleman said, although much of it is common ground. He reminded the House of the facts which led to the
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  conviction of both Francis McEvoy and Hugh Reeve. As he said, the incident started with a fight in a public house on 28th July, 1963, which then led to a series of disturbances on later evenings of the following week.
  As a result, on the night of 30th/31st July some 29 people were arrested, and on the following night a further 18 people were arrested, including McEvoy and Reeve, and charged under section 5 of the Public Order Act with using threatening behaviour with intent to provoke a breach of the peace. They appeared before Dudley Magistrates' Court on 1st August, 1962, when evidence was given by two police officers, one of whom—and this is important—claimed that he knew McEvoy well, having been at school with him, and knew Reeve by sight. Both of those officers described how they had seen McEvoy and Reeve run into the road in front of a police van which was conveying prisoners and how they had seen them hammering on the side of the van and shouting, clearly intending to incite the crowd to rescue the prisoners in that van.
  I looked at the notes of evidence of that hearing while the hon. Gentleman was speaking. As I understand the evidence—and I accept that it is not a complete transcript—it appears to me that both of those officers maintain that they had seen them banging on the side of the van. But McEvoy and Reeve, I accept, insisted that they had been in no way involved in that incident. Their case was that they had parked their car along Hall Street and they admitted that an incident occurred in that street but said that McEvoy had remained in the car throughout, and that Reeve had walked a short distance from it but had returned to it, and as he did so, the police van arrived. Then they described how two youths named Poston and Bott, strangers to them, had jumped into the back of the car, and the police came and, according to them, dragged the two men out of the back of the car and also arrested McEvoy and Reeve.
  That was their evidence about this affair. However, it must be accepted that, having heard all the evidence and the submissions made on behalf of the defendants, who were represented at the hearing, the magistrates found the charges proved and committed the defendants to a detention centre. The defendants had

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  the right to appeal. In fact, they gave notice of their intention to appeal but later decided to abandon it.
  Shortly after they had completed their sentences, as a result of representations made by the hon. Gentleman's very distinguished predecessor, Lord Rowley, and by Lord Wigg, the Home Secretary arranged with the chief constable for the case to be reinvestigated by an experienced senior police officer; namely, Superintendent Tilley of the Gloucestershire Police Force.
  I do not think that the hon. Gentleman can say that it would be unsuitable to put this inquiry into the hands of a police officer, because, whatever may be argued about the right means of handling complaints about the police force, it is undoubtedly accepted that this is the normal channel by which such complaints are investigated.
  As Mr. Henry Brooke, as he then was, told the House in the Adjournment debate to which the hon. Gentleman has referred, this very careful report—anyone seeing the report would accept that it was a careful report—although including evidence which was consistent with the account of the night's events which both McEvoy and Reeve had given, did not in his opinion contain anything which clearly established that they had not been guilty of the conduct of which they were convicted.
  In deciding whether to recommend the exercise the Royal Prerogative of mercy, it has always been accepted by successive Home Secretaries when a court has convicted that they should exercise the Royal Prerogative only if they are satisfied that the man is not guilty of the offence of which he has been found guilty.
  Mr. Henry Brooke, as then was, referred Superintendent Tilley's report back to the Dudley justices. The hon. Gentleman says that that was unusual, but it was done in an attempt to achieve justice and to make sure that no avenue was ignored in the interests of these young men. The justices, having had the opportunity to consider whether, has the evidence which was available to the superintendent also been available to the court, they would have reached the same conclusion, decided after careful consideration that in their view there was nothing in the report that led them to
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  think that either of these young men ought not to have been convicted. With that advice from the magistrates, and in the face of the superintendent's report, Mr. Brooke concluded that he could not properly recommend the men to a free pardon.
  What has happened since then on which the hon. Gentleman bases his request now, eight years later, that the Home Secretary should change his mind? There are two matters, about which the hon. Gentleman has written to me and to my predecessor last summer.
  The first piece of fresh evidence, which I agree is very important evidence and which I assure the hon. Gentleman I have studied with great care, consists of a television film taken at the time of the disturbance. The other, on which I noticed that the hon. Gentleman did not rely—I think rightly, having looked at it—was the evidence of a Mr. Ivan Parkes.
  Mr. Peter Archer: It may assist the Under-Secretary to know that in the light of what we now know about that evidence I do not pursue that aspect of the matter.
  Mr. Carlisle: I am grateful to the hon. Gentleman for saying that. All I say about it is that, with the lapse of eight years, that gentleman's evidence must either have been of another incident which occurred that evening or—which is equally reasonable—was so hazy as a result of the lapse of time that it was not of a type which one could ask the Home Secretary to act on in a matter of this kind.
  I come now to the film strip, which, I agree, is important. Referring back to 1963, as the hon. Gentleman knows, Superintendent Tilley, when carrying out his inquiry, was told by Mrs. McEvoy that there was such a film strip available, and, as the hon. Gentleman himself pointed out, he approached A.T.V. He arranged for a run-through of the film in the presence of Mrs. McEvoy and her son, and, when the film was played through, it had no part which related to the Hall Street incident. He made further inquiries. He was told, as the hon. Gentleman said, that the missing material had been edited out. I have seen—I have it here with me—a copy of

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  a letter written to him by the authorities concerned in A.T.V. saying that the film was no longer available.
  I hope that the hon. Gentleman will not—I know he does not—for a moment think that there was any attempt by the police to cover up on the matter.
  Mr. Peter Archer: Of course not.
  Mr. Carlisle: Now, apparently—I have for the first time learned where it came from—as a result of a showing in 1969, this piece of film has been miraculously revealed. I do not say "miraculously" in any unkind sense, and I accept it as an authentic piece of film. The hon. Gentleman was able to send it to the Home Office, and we have had it studied.
  It consists of four separate sequences which have been spliced together and copied. One of those sequences clearly relates to McEvoy and Reeve. There is only—I think that the hon. Gentleman will agree here—a brief flash of a part of the incident around McEvoy's car. It has been examined by the police. It has been shown to a number of police officers in an effort to identify the various police officers on the film concerned. It shows only one of the police constables who gave evidence against McEvoy and Reeve, and he, assisted by an unidentified officer, is shown struggling with the man Poston in the roadway. Other police officers are shown escorting Reeve, McEvoy and Bott out of the picture. The one police officer who can be identified, who was not interviewed before, when the police inquiry was carried out in 1962, has been interviewed since, but, perhaps not surprisingly, he cannot after this lapse of time recall the incident itself.
  I say to the hon. Gentleman quite honestly that I accept what he said: I accept that the evidence shown in the film is inconsistent with the evidence given in the court so far as it relates to the arrest of these two men. But, as the House will appreciate, there was obviously a great deal of action both before and after this brief flash of film. I think there is no doubt that the film covers the moment when McEvoy and Reeve were first detained by the police, and it shows that they were escorted from the immediate scene out of the picture by two unidentified officers, who were
  214
  certainly not the two who gave evidence of having arrested them.
  However, it does not, in a way, surprise me that a number of other officers might well have been involved in detaining the four young men, in addition to the officers who eventually charged them. This is what one expects in a confused situation. It is not uncommon in such cases for other officers to assist in removing the suspected offenders from the scene of the incident and detaining them until the officer who had witnessed the suspected offence was free to make the formal arrest and charge the persons concerned. This may well have occurred in the short space of time during which these two young men were taken into custody. Having said that, however, I am bound to say that the officers who gave evidence against McEvoy and Reeve did not in their evidence refer to having the assistance of other officers in detaining the defendants as shown in the film.
  Therefore, having studied the case, I accept the point made by the hon. Member that there is a discrepancy in the film and the evidence of detention as given by the two officers. What we have now to consider, however, and what the Home Secretary must ask himself is, accepting that the court was not fully informed as to the precise circumstances in which the arrest was effected, whether it is established that the court was wrong in deciding that the accused men had committed the alleged offence. This is what it comes down to in the end.
  The House is, I am sure, aware that the Home Secretary cannot contemplate recommending interference with a conviction by a court unless it is clear from fresh evidence—which was not before the court—that the accused did not commit the offence alleged. The final point, therefore, is not who detained the men, but whether, prior to the scene shown in the film strip, McEvoy and Reeve were indeed shouting and banging on the side of the police van. The plain fact is that we are not any further forward in establishing this than we were before the film strip was seen.
  Despite careful inquiry—and I am grateful to the hon. Member for what he said; I assure him that I have looked thoroughly at the police reports—nothing

  215
  has come to light, either recently or earlier, which proves conclusively in the way that would be needed for the Home Secretary to establish that the defendants did not do what they were convicted of doing. I can only rely on what Lord Brooke said in the previous debate, when he said that much of what had appeared was consistent with the explanation of arrest as given by the young men without anything going to prove that they did not commit the offence of which they were convicted.
  I realise, as does the hon. Member, how difficult it is for these men now to prove their innocence in that situation at this point in time. I appreciate the anxiety which the hon. Member feels about the
  216
  case. I assure him that I am no less anxious as to the possibility of a miscarriage of justice, and I assure him that this is a case which has given the Home Office considerable concern. I can only say, however, after the most careful consideration, that the position must remain as explained to the House by the then Mr. Henry Brooke as long ago as 20th January, 1964.
  The Question having been proposed after 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 three minutes to Twelve o'clock.

TRADE AND INDUSTRY
  Merchant Shipping (Pilot Ladders) Rules, 1965 (Amendment)
  Merchant Shipping (Pilot Ladders) Rules, 1965 (Amendment)
  Horticultural Produce (Quotas)
  Horticultural Produce (Quotas)
  Trade Barriers (Commonwealth Countries)
  Trade Barriers (Commonwealth Countries)
  European Economic Community
  European Economic Community
  Northern Region (Job Requirement)
  Northern Region (Job Requirement)
  British Steel Corporation and National Coal Board (Chairmen)
  British Steel Corporation and National Coal Board (Chairmen)
  Steel Industry (Denationalisation)
  Steel Industry (Denationalisation)
  Private Investment Profits (Developing Countries)
  Private Investment Profits (Developing Countries)
  Contracts Preference Scheme (Development Areas)
  Contracts Preference Scheme (Development Areas)
  Third London Airport
  Third London Airport
  Euratom
  Euratom
  Consumer Protection
  Consumer Protection
  Industrial Development Certificates
  Industrial Development Certificates
  Cash Flow (Private Industry)
  Cash Flow (Private Industry)
  Nationalised Industries (Settlement of Debts)
  Nationalised Industries (Settlement of Debts)
  Aircraft Noise (Buckinghamshire)
  Aircraft Noise (Buckinghamshire)
  Central Electricity Generating Board (Coal Imports)
  Central Electricity Generating Board (Coal Imports)
  East Midlands (Industry)
  East Midlands (Industry)
  Steel Industry (Scotland)
  Steel Industry (Scotland)
  Coking Coal
  Coking Coal
  British Steel Corporation (Steel Stockholding)
  British Steel Corporation (Steel Stockholding)
  Insurance Company Failures (Protection of Public)
  Insurance Company Failures (Protection of Public)
  Motor Insurance (Inclusion in Price of Fuel)
  Motor Insurance (Inclusion in Price of Fuel)
  Leather Glove Industry
  Leather Glove Industry
  Bananas
  Bananas
  Caledonian/British United Airways (Routes)
  Caledonian/British United Airways (Routes)
  English Channel (Hazardous Cargoes)
  English Channel (Hazardous Cargoes)
  Industrial Development Certificates
  Industrial Development Certificates
  Oil Prices
  Oil Prices
  Nationalised Industries (Gas and Oil Exploration)
  Nationalised Industries (Gas and Oil Exploration)
  Romanian Oil Imports
  Romanian Oil Imports
  Hovertrain
  Hovertrain
  Swindon (Jobs)
  Swindon (Jobs)
  Shipbuilding Industry
  Shipbuilding Industry
  Hartlepool (Industry)
  Hartlepool (Industry)
  Brewery Tied House System
  Brewery Tied House System
  Investment Incentives (Welsh Council's Report)
  Investment Incentives (Welsh Council's Report)
  British Overseas Trade (Carriage in Soviet Ships)
  British Overseas Trade (Carriage in Soviet Ships)
  Monopolies Commission
  Monopolies Commission
  Preferences (Generalisation)
  Preferences (Generalisation)
  Toffee Apples (Imports)
  Toffee Apples (Imports)
  Irish Republic (Major Exports)
  Irish Republic (Major Exports)
  Jute Imports
  Jute Imports
  Paper and Board Industry (Departmental Meeting)
  Paper and Board Industry (Departmental Meeting)
  Sale of Goods Act (Services and Repairs)
  Sale of Goods Act (Services and Repairs)
  Caldercruix, Lanarkshire (New Industry)
  Caldercruix, Lanarkshire (New Industry)
  Tourist Industry (Local Employment Act)
  Tourist Industry (Local Employment Act)
  Goods and Services (Prices)
  Goods and Services (Prices)
  Companies (Registration)
  Companies (Registration)
  Fertilisers
  Fertilisers
  Investment Projects
  Investment Projects
  Toffee Apples
  Toffee Apples
  Horticulture (Anti-Dumping Levy)
  Horticulture (Anti-Dumping Levy)
  Shipping Conferences (Code of Practice)
  Shipping Conferences (Code of Practice)
  Merseyside (Redundancies)
  Merseyside (Redundancies)
  Coal (Imports)
  Coal (Imports)
  Livingstone
  Livingstone
  Hong Kong
  Hong Kong
  Pinnock Finance
  Pinnock Finance
  E.F.T.A. (United Kingdom Exports)
  E.F.T.A. (United Kingdom Exports)
  World Trade (United Kingdom Share)
  World Trade (United Kingdom Share)
  Insurance Law (Changes)
  Insurance Law (Changes)
  Liquidation
  Liquidation
  Shoe Sizing (Uniform Systems)
  Shoe Sizing (Uniform Systems)
  Oil from Coal Plants
  Oil from Coal Plants
  Airline Fares (Increase)
  Airline Fares (Increase)
  Coffee and Brandy (Imports)
  Coffee and Brandy (Imports)
  Fire Losses
  Fire Losses
  Coal (Prices)
  Coal (Prices)
POSTS AND TELECOMMUNICATIONS
  Post Office Board (Chairman)
  Post Office Board (Chairman)
  Post Office Act, 1969 (Section 9)
  Post Office Act, 1969 (Section 9)
  Private Postal Services
  Private Postal Services
  Postage Stamps (Advertising Space)
  Postage Stamps (Advertising Space)
  Postal and Telephone Services (Denationalisation)
  Postal and Telephone Services (Denationalisation)
FOREIGN AND COMMONWEALTH AFFAIRS
  South-East Asia (Defence Aid)
  South-East Asia (Defence Aid)
  Broccoli
  Broccoli
  European Economic Community
  European Economic Community
  Chancellor of the Duchy of Lancaster (Paris Visit)
  Chancellor of the Duchy of Lancaster (Paris Visit)
  European Movement
  European Movement
  Rhodesia (Members' Questions)
  Rhodesia (Members' Questions)
  Disarmament (Conference)
  Disarmament (Conference)
  Mediterranean Countries (Aid)
  Mediterranean Countries (Aid)
EMPLOYMENT
  Employers' Liability (Compulsory Insurance) Act, 1969
  Employers' Liability (Compulsory Insurance) Act, 1969
  General Index of Retail Prices
  General Index of Retail Prices
  Lanarkshire
  Lanarkshire
  Redundancies (Scotland)
  Redundancies (Scotland)
  Hairdressing and Allied Services Industry Training Board
  Hairdressing and Allied Services Industry Training Board
NATIONAL FINANCE
  Retirement Annuity Contracts (N.H.S. Practitioners)
  Retirement Annuity Contracts (N.H.S. Practitioners)
  Manufacturing Industry
  Manufacturing Industry
  Net Weekly Income
  Net Weekly Income
  Productivity Per Capita (European Countries)
  Productivity Per Capita (European Countries)
  Tax Changes
  Tax Changes
  Invisible Earnings
  Invisible Earnings
  Goods and Services (Prices)
  Goods and Services (Prices)
  Members of Parliament (Salaries)
  Members of Parliament (Salaries)
  Banks (Interest Rates)
  Banks (Interest Rates)
  Petrol Companies (Promotional Gifts)
  Petrol Companies (Promotional Gifts)
  European Economic Community
  European Economic Community
SCOTLAND
  Infrastructure Facilities
  Infrastructure Facilities
  European Economic Community
  European Economic Community
  National Health Executive Councils
  National Health Executive Councils
  Drugs
  Drugs
  General Practitioners
  General Practitioners
ENVIRONMENT
  Regional Development Policy
  Regional Development Policy
  Special Economic Aid (Designation of Areas)
  Special Economic Aid (Designation of Areas)
  Senior Local Government Personnel (Salaries)
  Senior Local Government Personnel (Salaries)
  Motorways
  Motorways
  Sewage Disposal
  Sewage Disposal
  Public Inquiry (Marwell Hall, Owlesbury)
  Public Inquiry (Marwell Hall, Owlesbury)
  Kirkgate Redevelopment Scheme, Bradford
  Kirkgate Redevelopment Scheme, Bradford
  Local Authority Houses
  Local Authority Houses
  Government Hospitality
  Government Hospitality
  Housing Finance
  Housing Finance
  Temple Bar (Preservation)
  Temple Bar (Preservation)
  Demolition Industry (Code of Practice)
  Demolition Industry (Code of Practice)
  Regional Sports Councils
  Regional Sports Councils
  Pollution (Motor Vehicles)
  Pollution (Motor Vehicles)
  European Economic Community
  European Economic Community
  PERSONAL INJURIES (COMPENSATION)
  PERSONAL INJURIES (COMPENSATION)
  GOODS AND SERVICES (PRICES)
  GOODS AND SERVICES (PRICES)
HOME DEPARTMENT
  Probation Service, Newcastle-upon-Tyne
  Probation Service, Newcastle-upon-Tyne
  Goods and Services (Prices)
  Goods and Services (Prices)
  Road Junctions (Experiment)
  Road Junctions (Experiment)
  Parliamentary Constituencies, Leeds
  Parliamentary Constituencies, Leeds
  General Hatzipetros
  General Hatzipetros
  GOODS AND SERVICES (PRICES)
  GOODS AND SERVICES (PRICES)
  Broderick Committee on Coroners' Courts
  Broderick Committee on Coroners' Courts
  Crime
  Crime
  ROLLS-ROYCE LTD.
  ROLLS-ROYCE LTD.
  THE LITTLE RED SCHOOL-BOOK
  THE LITTLE RED SCHOOL-BOOK
AGRICULTURE, FISHERIES AND FOOD
  Goods and Services (Prices)
  Goods and Services (Prices)
AVIATION SUPPLY
  Goods and Services (Prices)
  Goods and Services (Prices)
EDUCATION AND SCIENCE
  Goods and Services (Prices)
  Goods and Services (Prices)
DEFENCE
  Armed Forces (Pay)
  Armed Forces (Pay)
SOCIAL SERVICES
  Goods and Services (Prices)
  Goods and Services (Prices)
  Immigrants
  Immigrants
  Family Income Supplement (Manchester)
  Family Income Supplement (Manchester)
  Old Persons' Accommodation, Newcastle-under-Lyme
  Old Persons' Accommodation, Newcastle-under-Lyme
  Supplementary Benefit
  Supplementary Benefit
  Homelessness, London (Greve Report)
  Homelessness, London (Greve Report)
  Manchester Regional Hospital Board (Orthopaedic Surgery)
  Manchester Regional Hospital Board (Orthopaedic Surgery)

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

POSTAL DELIVERIES
LORD WAKEFIELD OF KENDAL: 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 when it is expected that the first-class postal delivery service will return to normal.]
LORD DENHAM: My Lords, this is a management matter for the Post Office, but I understand that it expects service standards to be fully restored soon after Easter.
LORD WAKEFIELD OF KENDAL: My Lords, while thanking my noble friend for that reply, may I ask him whether he is aware that the first-class postal service continues to be very erratic, and that some letters are taking four or five days, or more, to reach their destination? Do not the Government think that the time has arrived when we
2
should follow the practice in Holland of having an alternative service, so that the customer may have a choice and there can be competition in the provision of a really good service for the public?
LORD DENHAM: My Lords, with regard to my noble friend's first supplementary question, the acting Chairman of the Post Office warned on television and at a Press conference that it will take about six weeks to get services running properly again after the strike. The suggestion contained in my noble friend's second supplementary question is a little wide of the original Question, but I will certainly draw it to the attention of my right honourable friend.
LORD WAKEFIELD OF KENDAL: My Lords, I am much obliged to my noble friend.

SANDFORD MANOR HOUSE: PROPOSED RESTORATION
LORD STRABOLGI: 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 steps are being taken to save Sandford Manor House, Chelsea, the reputed home of Nell Gwynne, from further deterioration and threatened demolition.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, it may help and

3
reassure the House if I make two preliminary remarks before I answer this Question. First, I am not aware that there is, or ever has been, any connection between my own family and Sandford Manor House, or, indeed, with the lady named in the Question. Also I may say that Sandford Manor House used to be in the Borough of Fulham, is now in the Borough of Hammersmith but has never been in the Borough of Chelsea. Having got those matters out of the way, my Lords, in answer to the Question I would say that the Hammersmith Borough Council have refused consent to the owners to demolish this building and are now considering a new application from other persons to restore it for use as a club and restaurant. As either of those applications might come before the Secretary of State for decision, I cannot comment any further at this stage.
LORD STRABOLGI: My Lords, while thanking the noble Lord for his reply and noting that there is no connection between the noble Lord and Nell Gwynne, may I ask him whether the Government are aware of the absolutely disgraceful condition in which this building is and how much it has been allowed to deteriorate? Will they do their utmost to persuade the owners, the Gas Board, to live up to their responsibilities, so that if planning permission is given there will be something left to save?
LORD SANDFORD: Yes, my Lords. There are a number of responsibilities in this field and I am anxious, as well as not to be drawn too far into this matter for the reasons I have given, also not to trespass on the responsibilities of the Borough Council. The responsibility of the Department is to see that if the building is of sufficient importance it is listed. That has been done, and it is Grade II. As to the other responsibilities, these are, in the first case, for the London Borough of Hammersmith, and they are fully aware of the importance of this building and have made that position clear to the owners.
LORD STRABOLGI: My Lords, may I ask the Government whether they agree that this brings to light a loophole in the present legislation, and will they consider closing it? Whilst, in law, an owner is obliged not to pull a building
4
down, there is nothing to make him look after it.
LORD SANDFORD: No, my Lords, I would not entirely agree with that. I think the North Thames Gas Board, who, strangely enough, are the owners of this building, have been made aware of their responsibilities, and I have no reason to suppose that satisfactory use will not be found for it in due course.

INDUSTRIAL RELATIONS BILL
.41 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I beg to move that this Bill be now read a second time. My Lords, this is an important Bill and a long one. I see that there is a long list of Members who have put their names down to speak—40, in fact, although I do not suppose there is any special significance in that number—but I should like to say right away how sorry we are on this side of the House are that the noble Lord the Leader of the Opposition is not present with us this afternoon. I am sorry for the reason, and hope that he will be with us to-morrow.
I hope that your Lordships will forgive me if, in attempting to describe the purposes and the provisions of the Bill to you, I speak for rather longer than your Lordships consider to be normally appropriate. This is a Bill which has been discussed very widely, even if it has been very much less widely read. What I shall try to do is to explain as many of the salient issues as I can without, I trust, exhausting your Lordships' patience and tolerance. I cannot hope to cover everything in the Bill or to describe in detail any single part of it. As your Lordships will have seen, it contains some legal niceties, especially in Part VII, which your Lordships would very rightly prefer my noble and learned friend the Lord Chancellor to deal with. What I shall do is to try to convey the broad tenor of the Bill and to sketch out the major provisions.
There are not many proposals that have come before Parliament that have been so much the subject of such profound and prolonged study and such

5
widespread public examination. And yet this Bill is probably as widely misunderstood as any measure which has ever come before this House; for it has been dogged and befogged by the rather quaint myth that the law should have no place in industrial relations. My Lords, it has had for a century; it has now; and it ought to have. That myth reveals a profound misconception of a function of law in a civilised free society: the function of arriving at—and holding—a fair balance between the rights of the individual and the necessary constraints of belonging to a community.
This concept has long been part of our British way of life. The law exists to protect both personal liberty and public interest in all aspects of our society. Because public interests may encroach on individual freedoms, and because personal liberty can degenerate into licence, the balance is delicate. It is the duty of Parliament to try to hold it fairly through laws that are just and appropriate to the times and circumstances. For society is never static. To survive, a civilised society must continually develop and progress. And so Governments and Parliament have from time to time to review the laws which govern the different needs and activities of the community. As the structure of our society has grown more complex, the tendency has been for legislation to become wider in scope and more complex in content. In the last twenty-five years we in Britain have seen a steady flow of reforming legislation initiated by Governments, both Tory and Labour, systematically bringing up to date our statutory controls over activities of our industry and commerce and other sources of employment.
For example, there have been two Companies Acts, two major measures regulating sale of goods, three limiting monopolies and restrictive trade practices and two in the field of safety, health and welfare. In the employment field, there have been three Wages Councils Acts, the Terms and Conditions of Employment Act and the Contracts of Employment Act in all of which this Bill will make changes. There have also been the Industrial Training Act 1964 and the Redundancy Payments Act 1965.
6
All these Acts in the employment field affect directly, or indirectly, the terms and conditions of employment.
But in the vitally important sphere of general industrial relations there has been no permanent major change in legislation for half a century; and there has been no comparable comprehensive legislation in the field at all. That is not because industrial relations have been the one area where all was well. Nobody really thinks that—though it is of course true that wide areas of our economy have had histories of unbroken industrial peace—and thank goodness for that! It is something in which we can take pride. Without such histories we could not have held our own among the world's trading nations. But the evidence around us compels us also to acknowledge that the areas of harmony have shrunk of late, and that the character of the prevalent forms of industrial action in Britain today are peculiarly damaging to industrial morale and economic efficiency. For many years some 95 per cent. of all our strikes have been unofficial, and most of them in breach of agreements. In advanced economies like ours, for which stability of production is so important and the effects of its disturbance so widespread, even a small lightning strike can do damage out of all proportion to the number of man-hours lost. In the 1950s, strikes, excluding those in coal mining, rose from an average of under 600 a year to over 2,000 in 1968, almost 3,000 in 1969 and nearly 4,000 last year.
My Lords, no responsible Government dare ignore a trend like that. The last Administration were well aware of this. They quickly set up the Royal Commission, which devoted three years to studying our industrial relations in depth. Their Report in 1968 pointed to a range of problems and defects as main causes of the trouble. The Donovan Report stated flatly:
"An Industrial Relations Bill should be passed".
The then Government recognised that legislation was needed. Their proposals were published as the White Paper,In Place of Strife. We did not agree with all that they proposed; but at least they thereby acknowledged that the law has a role in improving industrial relations.
Later they were prevailed upon to let the T.U.C. show what it could do to secure

7
the changes that the Donovan Report had advised. We all know what happened. Despite the solemn and binding undertaking the T.U.C. gave—and the very real efforts of its General Secretary and his staff—there is little evidence of improvement. We here know it; and public opinion showed that it knew it, too. For it returned us in last year's General Election with a specific mandate to reform industrial relations on lines that we had been advocating publicly since 1965. The electorate preferred the Party which boldly and explicitly pledged itself to face the issues and deal with them forth-with.
What do we seek to achieve by legislation? The Donovan Report attributed the country's industrial relations ills in large measure to the confusion and uncertainty of our collective bargaining patterns and practices. It advocated further safeguards for the individual in his dealings with both his employer and his union. It pointed to ways in which employers' associations and trade unions each might better serve their members' interests. It recommended certain changes in the existing law on industrial relations. In broad terms we agree with the Commission's diagnosis. But what about the remedies and the priorities?
Let me first outline our aims. They are wholly constructive: to preserve all that is best in our industrial relations—and there is very much of which we as a nation can be justly proud—and to extend it so as to bring the levels everywhere up to the best. The Bill rests on four basic principles; collective bargaining freely and responsibly conducted; the development and maintenance of orderly procedures for the peaceful settlement of disputes by negotiation, conciliation or arbitration, with due regard to the general interests of the community; free association in independent trade unions and employers' associations which are representative, responsible and effective bodies; and freedom and security for workers, with protection against unfair practices, whether from employers or others. Those principles are placed in the forefront of the Bill—in the very first clause, which also lays a duty on all who have functions under the Bill to abide by these principles.
8
Those bound include the Secretary of State himself, the Commission on Industrial Relations, which have been doing most valuable work and is to be established as a statutory body, as Donovan recommended, the Registrar, the industrial tribunals and the National Industrial Relations Court—a new body which is called throughout the Bill the Industrial Court; not to be confused with the existing Industrial Court, which is to be re-named Industrial Arbitration Board. Besides this, the Secretary of State must prepare a code of practice to amplify the principles and give practical guidance to managements, unions and their officials about how to apply them. The aim of the code will be to promote their wider understanding and observance and a better grasp of their importance. There will be full consultation on the code and it will have to be approved by both Houses of Parliament. The code is to be admissible in evidence and where relevant taken into account in any proceedings under the Bill, in very much the same way as the Highway Code.
My Lords, I come to the safeguards for the individual. A large part of the Bill is devoted to establishing and strengthening workers' rights. It gives us the most comprehensive and progressive code of workers' rights in our history. The Bill establishes without equivocation the right of every worker as between himself and his employer to be a member of the union of his own choice—where there is a choice—and to take part in trade union activities. Infringement of this right by an employer will entitle the worker concerned to take his complaint to an industrial tribunal; and to compensation for any loss he may have suffered as a result of such unfair discrimination. The Bill also secures the right of any worker not to belong to a union or to any organisation of workers. An employer will be able to encourage a worker to join the appropriate union, and bind himself to use his best endeavours to encourage his workers to join the union or unions which he recognises; but he may not compel a worker to join.
Some say that the right not to belong to a union will undermine the position of strength built up over many years by unions in many industries. Some unions contend that the outlawing of the closed

9
shop as such will threaten solidarity by encouraging anyone dissatisfied with their union to withdraw support. Many employers take a similar view. Both sides are genuinely concerned that the removal of the discipline and control which a closed shop agreement enables unions to impose on members will intensify the problems that the Government are trying to solve. My Lords, I do not share those views. If I did, I should not be recommending these provisions to the House to-day. For in the "agency shop" proposals I believe that we have struck a fair and reasonable balance between an individual's right to elect not to belong to a union and his social responsibility to contribute toward the support of union negotiations from which he benefits.
One or more employers and one or more trade unions will be able to enter freely into an agency shop agreement, under which every employee will be required either to become a member of a union which is party to the agreement; or to pay an equivalent financial contribution to union funds; or, if he has genuine conscientious grounds for doing neither, to contribute an equivalent amount to an agreed charity. Since the employee will have to pay his contribution anyway, he is mach more likely than not to join the union and participate in its activities. Surely effective union organisation and responsible and constructive union leadership should be materially assisted by arrangements under which a union has exclusive bargaining rights in respect of employees in an undertaking, or part of an undertaking, and is financially supported by virtually all those employees.
My Lords, the Government believe that a high degree of union membership improves and maintains stable and responsible collective bargaining; but they stand on the principle that union membership must be achieved through voluntary action. They believe, as many trade union leaders have believed and do believe, that a union with a high percentage of voluntary support—support which it must win and retain—is the stronger for not compelling a tiny minority of employees into membership against their will. With the measures which the Bill provides to assist trade unions and their members to establish
10
their rights, there can be no need and no justification for compulsory membership. The Government attach great importance to ensuring that an individual's livelihood is not dependent upon the discretion of a union, however enlightened, and that a man with the necessary skill and qualifications to pursue an occupation should not be prevented from doing so because he is unwilling or unable to belong to a union, or to a particular union.
Nevertheless, my Lords, the Government have recognised that in a few special cases the "agency shop" provisions may not be adequate to safeguard collective bargaining and the integrity of collective agreements. Possible examples are actors and seafarers. For the very limited number of exceptions, where certain carefully drawn criteria are satisfied, employers and trade unions who are free and willing parties to a post-entry closed shop agreement may apply to the Industrial Court to have their agreement approved. We believe it to be right and proper that any registered trade union which is recognised by the employer as having negotiating rights and enjoys substantial support in a company, should be able to secure an "agency shop agreement"; if it cannot get it by consent, then through application to the Industrial Court. Failing voluntary agreement, any union so recognised will be able to apply for a statutory ballot to determine whether the employees on whose behalf it negotiates want to have "an agency shop agreement".
The Bill also strengthens security of employment. It entitles long-service employees to longer notice and shortens the qualifying period for others. In addition, for the first time it provides protection against unfair dismissal. I do not say that it is the first Bill to do so, because the last Government's Bill provided it; but when it becomes an Act it will be the first Act. I think, therefore, our proposals here need not prove controversial, even though they differ in detail from those of the earlier Bill. When we come to the Committee stage, we hope to convince any critics that we have not in fact tilted the burden of proof against the employee. Moreover, the Bill provides a higher maximum compensation for the employee than the previous Bill provided. Under the Bill, a dismissal is to be regarded as unfair unless the

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employer can show a good reason for it, such as redundancy, or a reason connected with conduct or capability—this is as recommended by the Donovan Report. And even if the employer does show that he dismissed the man on one of those grounds, he still has to show that he did not act unreasonably—and that covers unfairly—in doing so. The tribunal will award such compensation as is just and equitable in all the circumstances, including any denial of reinstatement which it had recommended.
My Lords, I come to registration. It is said that the Bill is intended to weaken the position of trade unions. In fact it will strengthen and secure their position in important respects. In return, the Government ask the unions to accept two things: first of all to accept registration, and secondly, to accept that some kinds of industrial action are unfair to the community at large, and in consequence that those responsible for unfair actions must accept liability for the harm they inflict. The Donovan Report laid great stress on the importance of unions registering and of their complying with certain standards as to their rules. Those principles are spelt out in the Bill.
There have been so many misleading statements made about our registration proposals that again I feel that I must explain what is and what is not involved. In the first place, there is nothing in our proposals that interferes with the basic right of workers to associate, whether they choose to register their association or not. The existing immunities in respect of conspiracy are preserved. The crucial change is that the immunity for inducing breach of a contract of employment will no longer be available to unregistered associations, who will not be protected for breach of any other contract either. We believe that this statutory privilege should be enjoyed only by a body that is prepared to accept the status and obligations of registration. The same goes for the new positive rights created by this Bill—the right to statutory recognition and the like. We are confident that once the heat of the present controversy has cooled down, once our provisions are in force, trade unions will quickly come to recognise that this right should be confined to properly established independent bodies like themselves and
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should not be available to any ad hoc splinter groups of workers.
What, then, are the obligations of registration? They are essentially fair, moderate and reasonable; no union that conducts itself in a democratic, constitutional way should find them inconsistent with basic trade union principles; nor will it have much difficulty in complying with them. The Bill sets out certain guiding principles—principles of democratic right and constitutional process with which the rules of trade unions, and employers' associations, must conform. In addition rules must meet certain statutory requirements. It is not true that the Bill prescribes the precise terms of any union's rules. Unions are voluntary bodies and it is for them to frame the rules to meet their own circumstances. The Bill merely requires that their rule books shall contain clear rules about certain things, such as which committees or officials within the union have authority to organise industrial action and in what circumstances.
LORD DAVIES OF LEEK: My Lords, may I interrupt the noble Lord? The phrase "unions are voluntary bodies" will no longer be true if this Bill becomes an Act.
LORD DRUMALBYN: My Lords, there are any number of voluntary bodies in this country and all are subject to rule, one way or another.
I do not say that it is easy to ensure that the rules are comprehensive, but I do say that it is both practicable and essential. The rules must also cover important matters like the election of officials, conduct of meetings and the procedure for altering the rules themselves.
These principles and requirements apply in three ways. The Registrar first has to satisfy himself that an organisation of workers is independent and has power to alter its own rules and control its own property and funds; next to issue a certificate of registration which will confer corporate status. He has then to examine its rules and to give it an opportunity to bring them into line with the principles and requirements within a reasonable time if registration is to continue. Of course, that time can be extended. Secondly the Bill gives any

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member the right to complain if the rules or guiding principles are contravened. Finally, the Registrar may himself look into serious or persistent contraventions. The Registrar is throughout the custodian of the rules, but he will not interfere in the day-to-day affairs of unions. He will intervene to protect individual members against unlawful and autocratic treatment. But he does not act by administrative fiat. He cannot himself penalise a union or employers' association. If a union persistently disregarded its own rules, he would have to apply to the Industrial Court for a judicial order directing the cancellation of registration. Where any contravention of the rules is brought to his attention and he cannot settle the matter amicably, he must bring it to the Industrial Court or industrial tribunal, who may make an appropriate order determining rights, awarding compensation or requiring the offending party to take or refrain from taking action specified in the order.
I now come to collective bargaining. Part III of the Bill contains the Government's major proposals relating to the development of collective bargaining and the improvement of collective agreements—and in particular, procedure agreements. First, under Clause 32, every collective agreement which is made in writing after—I stress, after—the coming into effect of the Act will be conclusively presumed to have been intended by the parties to be a legally enforceable contract, unless the agreement contains a specific provision to the contrary. I shall come hack to this in a moment. Secondly, there may be a complete breakdown in orderly industrial relations, whether because procedures are non-existent, or because they are defective, or because procedure agreements have been flagrantly disregarded. If so, it will be possible for one side or the other to seek the help and advice of the Commission on Industrial Relations to improve procedures, and, if the improvements recommended are not voluntarily adopted, to apply as a last resort to the Industrial Court. Bat, first, notice must be given to the Secretary of State, who must try to bring about an agreement and may ask the Commission to help. So, there are both the conciliation officers of his Department and the Commission. If they fail, the Court will ask the Corn-
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mission to seek the agreement of the parties to new or revised proposals.
Thirdly, where an unsolved recognition problem seriously threatens to undermine or prevent the establishment of a satisfactory bargaining structure, and leads to disorder, the problem can be referred to the Commission, and their recommendations if necessary made enforceable, provided they are endorsed by a majority of the employees. Finally, there will be a statutory requirement on employers to disclose to unions with whom they negotiate, information which is essential to the conduct of effective collective bargaining. Practical guidance on this is to be given in the code. The sharing of information about the performance and prospects of an enterprise is particularly important in establishing in the long run the right attitude of shared responsibility for success of the enterprise. This is the essence of participation.
Let me now briefly summarise the legal status of collective agreements. The Bill does no more than create a presumption that, in the future, when parties enter into a collective agreement they intend that it shall be binding at law. It does not require that collective agreements should be enforceable willy-nilly where neither party wants to be legally bound. The purpose is very different. It is, first, to secure greater certainty about the legal status of collective agreements. Secondly, it is to encourage greater clarity and comprehensiveness in collective agreements, and particularly in relation to their procedural aspects. And, thirdly, it is to engender a due sense of responsibility on both sides in honouring agreements into which they have entered voluntarily, and in using their best endeavours to see that they are honoured. We believe that the knowledge that procedure agreements need to be re-examined and improved, on the one hand, and that in future procedure agreements will have the backing of the law unless the parties contract out, on the other hand, will exert a strong influence on the parties to treat collective agreements as binding. At the very least, this change in the law will also encourage both sides to consider how best to secure compliance with rules which they have agreed upon.

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What is to be done where a procedure agreement does not exist or is defective? The underlying thought is that, as the Donovan Report implied, where industrial relations are disorderly, the fault most commonly lies not so much with either side but with the inadequacy of the procedural arrangements for settling disputes or grievances promptly and fairly. First, the provisions are to be invoked only in exceptional circumstances where a company or plant—or it may be two or more units of the same group of companies—has a history of unconstitutional industrial action or where a procedure agreement was defective or non-existent. But the provisions could not be applied across a whole industry. Secondly, it is not intended that anyone should be able to get the Court to enforce an existing procedure agreement as it stands. It would first need to include whatever improvements the Commission had recommended after a thorough examination. Thirdly, before an application is even considered by the Industrial Court, the Secretary of State must have an opportunity of offering advice and assistance to the parties and of referring any question about it to the Commission for examination. Fourthly, the outcome will not necessarily—I would hope, not often—be an enforceable order. It is only if the Commission have failed to get the parties to agree to their recommendations that a trade union or the employer concerned is likely to apply for one. Even then the Industrial Court may make the order only where it is satisfied that an order is necessary to ensure that the recommendations are implemented and observed and may revoke it on the application of any party to the reference, if the Court considers it no longer necessary to secure observance of the order.
So these provisions for remedying procedural shortcomings should be seen not as antithesis or denial of free collective bargaining, but as a means whereby collective bargaining which has degenerated into a chronic state of conflict can, by expert help, be given the chance to make a fresh start on a new and sounder basis. We want procedures to be revised by agreement. Mr. Jack Jones recently declared his union's resolve to sort out its procedures with companies and management, so that he will not need
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to use the Bill. This is splendid. We hope he succeeds. The Bill is starting to have the effect we want it to have even before it becomes law.
I turn now to trade union recognition and collective bargaining structures, to which Clauses 42 to 53 relate. Their purpose is to help in difficult cases to establish a single negotiating agent for a single defined group of workers—an objective to which the Donovan Report attached importance. The issues which under these provisions the Commission may be asked to examine will all involve, in one form or another, two basic questions: First, what should be the bargaining unit or units? Secondly, what organisation, if any, should be the sole bargaining agent for this unit, or those units? These are the major questions the Commission have to answer in every "recognition" case.
Recognition problems may be of several kinds. First, there is the claim by a union for recognition by an employer who is unwilling to concede negotiating rights to the union. Then there is a variety of inter-union disputes about which union should be recognised in respect of which workers—in most such cases the employer is prepared to negotiate with one or more unions, if only they can agree among themselves which it is to be. Thirdly, there are situations where a union is already recognised in respect of one group of workers but seeks similar recognition in respect of other groups. Clause 43 deals with cases of all these kinds. It permits an application to the Court by either one or more of the unions concerned, by the employer or by the Secretary of State.
Where a recognition problem is referred to the Commission, they will be able to recommend that one union should become sole bargaining agent for a given unit; or they can recommend that several unions should together form a joint negotiating panel which would be the sole bargaining agent. Provided such a panel is properly mandated by the constituent unions and reflects the preferences of the workers involved, it should often provide a better basis for orderly negotiation than the alternative of giving only one union recognition to the exclusion of all its rivals. This is a peculiarly British solution, to a problem not confined to Britain.

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To discover what the workers really want, the Bill requires that in two situations the Commission shall put their proposed solutions to a ballot. In the first, for which Clause 47 provides, the employees will vote on whether the union, or panel of unions, recommended by the Commission, shall become their sole bargaining agent. A majority of those voting will decide the issue, and the employer will be obliged to accept their decision whichever way the ballot goes. If it goes in favour of the sole bargaining agent, the Industrial Court will direct the employer to recognise it as sole bargaining agent. Failure on the part of an employer to bargain with it, will be a breach of duty and will lead to an order of the Court referring the union's claim to the Industrial Arbitration Board.
The other situation arises where employees become dissatisfied with the union which is the sole bargaining agent, and no longer want it to negotiate for them. This is something which many of your Lordships find difficult to accept. Here it is important to the future stability of the unit's industrial relations to distinguish passing disgruntlement, fomented perhaps by a chronic moaner or a congenital agitator, from a more deeply-rooted and lasting loss of confidence. The Bill therefore applies safeguards. At least one-fifth of those affected must support the application for a ballot where a sole bargaining agent has been set up by agreement (or two-fifths where it has been set up by order). After that, the Commission must first try to resolve the issue by conciliation. Only where that fails to bring a settlement may a ballot be authorised. Not all unions may relish these provisions, but they are, after all, essentially democratic. They will enable a union to secure negotiating rights where that is the majority wish, however reluctant the employer. On the other hand, subject to sensible safeguards, a union which has forfeited the support of the shop floor will not be able to override the considered wish of the majority that it should be superseded.
I turn now to the concept of responsibility. We are convinced that orderly industrial relations are achieved only by the proper exercise of responsibility on both sides—by managements quite as much as trade unions. Indeed, the Bill recognises the primary responsibility of
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management for the promotion of good industrial relations. We believe it to be the duty of any democratic Government to ensure that those who act responsibly are protected from harm at the hands of others who do not. We have reviewed the protections and immunities which the existing industrial relations law affords, and in the Bill we propose a number of changes.
Trade unions which register under the Bill will continue to enjoy the full protection now provided by Section 3 of the Trade Disputes Act 1906, for an act done in contemplation or furtherance of an industrial dispute to induce another person to break a contract or prevent him from performing a contract, except where they behave unfairly towards individuals or unfairly influence collective bargaining. These unfair industrial practices include violations of the principles laid down in Clauses 63 and 67 or to threatening, instigating or financing lock-outs, strikes and other forms of irregular industrial action for unfair purposes. Unregistered unions and individuals acting without their union's authority will no longer be protected, if they induce, or threaten to induce, a breach of contract in contemplation or furtherance of an industrial dispute. We believe this is right. If a union wants such protection, it should be prepared to accept the responsibilities of registration. In the case of individuals, the restriction will discourage unconstitutional action which undermines the free collective bargaining system, weakens union authority and involves individual workers in breaches of the law of contract. But it is not intended in any way to affect freedom of speech.
The Bill will also make it unfair to enforce a secondary boycott against an innocent third party. What this means is that it will be an unfair industrial practice to call a strike with a clear intention of forcing a supplier or customer who has nothing to do with a dispute to break a commercial contract with a party to the dispute and a remedy against such strike action may be sought before the Industrial Court. It does not mean that any sympathetic strike will be unfair. The Bill does not say that; nor is that the Government's intention. Where sympathetic action is not deliberately intended to break commercial contracts or is not in support of a strike which is itself

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unfair, a registered union will not be at risk by engaging in a sympathetic strike. We do not believe that a secondary boycott which deliberately damages innocent third parties is a justifiable form of industrial action in our complex modern society.
LORD DIAMOND: My Lords, I hesitate to interrupt the noble Lord, but we are all trying to follow what is an extremely complex part of his speech which he is finding it difficult to put in simple terms. I do not know whether or not it was an aside, but he referred to "freedom of speech". He said that nothing that he had said was intended to be a limitation of freedom of speech. Can the noble Lord expand on that a little? Does "speech" include things like an editorial in a newspaper, or is it limited to spoken words? To what extent is speech free when a person is seeking to make an argument as a result of which he would induce another person to take a certain course of conduct?
LORD DRUMALBYN: My Lords, I should prefer to leave this highly technical point to my noble and learned friend. At this stage I would only say that there is no intention on the part of the Government to interfere with freedom of speech, and that there is a distinction between comment and inducement. I prefer to leave it there at the present time.
On the other hand, the Bill will continue the protection now afforded to groups of workers by the 1871 and 1906 Acts from civil and criminal actions for conspiracy and from actions in tort for interfering in another person's trade or business. And the Bill preserves explicitly the right of an individual to take part in a strike; and prevents a court ordering anyone to remain at work or return to work.
One of the problems which has most exercised the country is this: what is to be done where a strike is likely to cause serious damage to the economy or to endanger life or health? The Bill provides that in such an emergency the Secretary of State can apply to the Industrial Court for an order requiring those responsible for organising the industrial action to defer it, or desist from it, for a specified and limited period not exceeding 60 days, either to enable negotiations
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to take place to achieve a settlement, or to allow a ballot to be held to determine whether the industrial action is supported by the workers concerned. The Secretary of State will use his right of application to the Court only in the most exceptional circumstances and for a specific purpose. It will be for the Court to decide whether or not the emergency is of a nature as to justify a restraint order or a strike ballot order.
The White Paper In Place of Strife would have given the Secretary of State power to make the orders. We thought then and think now that it is better to entrust it to a body whose impartiality nobody can reasonably challenge. Where two parties both think their cause is just, someone must decide between them where truth and justice lies. The bodies which are to decide under the Bill are the National Industrial Relations Court—perhaps the most important innovation—and the industrial tribunals. The Industrial Court is there to guarantee that the Bill's provisions shall be implemented—not at the whim of the current Secretary of State, but by the rule of law. The Court itself will be something new in British justice. It will have the same status as the High Court, but it will consist not only of lawyers but also of laymen who have special knowledge or experience in industrial relations. This pattern has already proved its worth in the industrial tribunals set up under the Industrial Training Act. I have already indicated what the role of the Court will be in regard to applications for an agency shop, for recognition of sole bargaining agents, and in connection with collective agreements. It will determine rights, but it will not itself propound solutions. It will consider whether applications comply with the statutory requirements and will give effect, where appropriate, to the recommendations of the Commission.
The Court will be informal and readily accessible. It will be able to sit anywhere in the country, and litigants may appear in person or he represented by their trade union 'or employers' association. Nevertheless, it is not intended to encourage litigation. On the contrary, it will be bound by the four basic principles underlying the whole Bill. That means that when cases come to it, the Court must where appropriate be satisfied that all the possibilities of negotiation, conciliation or voluntary arbitration have

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first been exhausted. The Court may also call upon Government conciliation services where opportunity offers.
The jurisdiction of the existing industrial tribunals will be extended to provide the lower tier of this new system of industrial relations adjudication. Broadly speaking, they will deal with individual cases and the Industrial Court with collective issues. There will be a right of appeal from tribunals to the Court of points of law. The remedies which may be granted by both the Industrial Court and the Industrial Tribunals are definition of the rights of the parties and award of compensation. The Court alone may make "cease and desist" orders. Where a Court or tribunal decides that there has been an unfair industrial practice on the part of the respondent, it cannot order a fine or imprisonment. The remedies are normal civil remedies where the complainant is suffering or has suffered detriment unfairly. If the civil remedies are defined, they are the normal remedies. Both Court and tribunals are given latitude to do what is just and equitable in the circumstances of each case.
This Bill is about older and industrial relations. But it is also about justice in industrial relations—justice for the individual worker; justice between employer and trade union; justice between one group of workers and another; justice as between sectional and national interests. We all want to see order in our industrial relations—all, that is, except those few who are bent on destroying them, or those who simply do not understand the effect of what they are doing. This Bill will provide the framework of justice—of fair dealing—within which industrial relations can be conducted in greater freedom and greater harmony, to the benefit not only of workers and employers but of us all. I commend the Bill to the House. It is a good Bill, and I hope that in the course of our discussion of it we shall make it a still better Act, an Act of which the British people will say: "We have had to wait a long time for this; but it was worth waiting for". My Lords, the nation can wait no longer. I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Drumalbyn.)
3.28 p.m.
LORD DELACOURT-SMITH LORD DELACOURT-SMITH rose to move, That as the proceedings on the Bill have been curtailed in such a way that many of its clauses have not even been debated in the elected Chamber and the Bill is already causing grave division within industry and the nation, the debate on the Second Reading be adjourned in order that Her Majesty's Government may now enter into negotiations with both sides of industry free from the conditions on which the Government have so far insisted with a view to seeking agreed solutions to problems of industrial relations and the publication of a workable code of industrial practice. The noble Lord said: My Lords, I beg to move the Amendment standing in the name of my noble friend Lord Shackleton. I am grateful to the noble Lord opposite for the reference which he made to my noble friend. We are all extremely sorry that illness prevents him from being with us at the moment. He tenders his apologies to the House, and hopes to be with us during the course of the debate.
The Amendment that I am moving appeared to my noble friends to be a siutable course on this Bill, because many of them, however strong their feelings of opposition to the Bill, would not consider it consistent with practice to divide against it on Second Reading. The noble Lord who moved the Second Reading put before the House a piece of legislation of great length and complexity. There are many points in the noble Lord's speech which I am tempted to take up, and in the event that this Amendment is not adopted by your Lordships' House it may be that, subsequent opportunity will offer itself for discussion of some of the detailed points that he made.
The essence of the Bill now before us, which is felt by so many with knowledge of the realities of industry to be likely to have effects so very different from those which the noble Lord persuasively put before us, is to import from the United States of America a system, new to us, of applying legal regulation in an extreme degree to industrial relations. In doing so the Bill transforms completely the legal basis on which the trade union movement in this country has rested. Apart from other important statutes which it modifies, it completely

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repeals the Trade Union Act 1871 and the Trade Disputes Act 1906, the two principal pieces of legislation on which the position of trade unions has been based for many years, and also the Trade Disputes Act 1965.
High claims have been made for the effects which this legislation will produce. It has been implied many times, before the Election and since, that legislation upon these lines will produce a dramatic improvement in the industrial atmosphere—at a stroke, if I may coin a phrase—a great improvement in the reliability of deliveries in industry and in international competitiveness. But as the Bill has proceeded and some of its effects have become more widely appreciated, not only have more and more people become opposed to it, but the claims of its supporters have tended to become more modest. One can find this in the Report of the proceedings on Third Reading in another place.
I see that very recently in the Press the Minister of State at the Department of Employment was quoted as saying that
"The Government did not regard the Industrial Relations Bill as a cure for all strikes or as a recipe for happiness at work, …".
He said:
"It is an intelligent and well-prepared offer by the Government to do all that a Government can do to try to create conditions under which responsible management, responsible trade unions and responsible individuals can more easily work together in harmony."
My Lords, those are admirable sentiments, but we have to ask ourselves whether this is the framework which is required for these admirable purposes.
This Bill is legalism run mad. It is the wrong way to tackle our important and serious problems in the field of industrial relations. These can be tackled only by recognising that strikes and disputes are not the heart of the problem; they are the symptoms; and what is needed is to get at the causes of industrial disputes and inadequate industrial relations. This is not a job for lawyers, nor are lawyers the best people to provide so detailed a framework for that work to be done. A singular fact has been the little enthusiasm shown publicly, even by employers, for this Bill. They
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have cast their expectations consistently lower than the supporters of the Government have done. Of the unanimous opposition of the trade unions to the proposals of the Bill, there is no doubt. There may be differences of opinion about the way in which opposition should be expressed, or about the timing of its expression, but there is no difference of opinion in the trade union movement about the quality and intensity of the opposition. Even the Economist, the Bill's most constant and vociferous champion, says that the Bill may well lead to more days being lost in industrial disputes, rather than fewer. This would be hardly surprising in view of the experience of the United States of America, where they have had this legislation for many years and where the days lost in industrial disputes have consistently run at a level four times as high as ours.
It is said that after the passage of this Bill strikes will be official rather than unofficial. I must confess that I should not want to enter into a long discussion of the relative merits of official and unofficial strikes if the official ones, in particular, are to be on a larger scale. It seems to me a gloomy prospect if this is the type of case which the realists among the supporters of the Bill, put for it. As I quoted earlier, more and more we are being told that the Bill will achieve a better framework for individuals, trade unions and employers to work together. Therefore if the Government are not prepared to accept this Amendment, the first question that I want to put to any noble Lord who is to speak on the Government's behalf is this: what is now claimed for this Bill in terms of improving industrial relations and reducing the incidence of disputes—not in terms of generalised statements about bringing a framework of law into industry, but in terms of what in the reasonably near future the Government believes the country will gain? If the Government's answer to that is still the happy cliché that it will provide a framework within which men can work, then I ask: what do the Government expect from this framework when one side, the employers, seem so lukewarm, and the other side, the trade unions, so hostile?
It is common ground in this House, and in this discussion, that there is need to improve industrial relations in this

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country. It is common ground that there are some matters in this Bill which ought to be the subject of legislation. I was surprised that the noble Lord seemed to speak as though some of us were altogether opposed to any kind of legal framework for trade union activity. There is need for better protection against unfair dismissals; there is need for employers to give employees more information; and it is arguable that legislation is necessary for both these purposes. That is not to say that the present Bill deals with the subjects in an ideal fashion, but if this were the total subject matter of the Bill it would not have aroused the intense resentment that it has done. The good things in the Bill, such as they are, are lost in the bad and are prejudiced by them.
The issue, then, is not that no action is needed to improve industrial relations; nor that there are not some matters, such as those I have mentioned, which can properly be dealt with by legislation. The issue is whether industrial relations, and the utilisation of men and women, are going to be improved in industry, and the number of days lost in disputes reduced by a Bill which is framed and conceived as this is, and which imports the intense degree of legal intervention and regulation into industry that this Bill proposes, and which has had the effect, as we all know, of arousing such deep resentment, at any rate on the trade union side.
This Bill comes to your Lordships' House in a most extraordinary condition. It is admittedly complex and contentious; it sets up, as the noble Lord said, new courts and is regarded as having a constitutional significance because of that. Yet the arrangement of Government business in another place has been such that, out of the original 150 clauses and 8 Schedules, only 39 clauses were discussed in Committee and none of the Schedules. The Report stage was almost entirely absorbed by discussion of Government new clauses. The Bill now has 160 clauses and 9 Schedules, and between two-thirds and three-quarters of the Bill has not been subjected to detailed discussion in another place at all. I think I am right in saying that indeed even the clause which establishes the National Industrial Relations Court, to which the noble Lord referred as being of particular importance—perhaps the most important
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measure in the Bill—was not subjected to detailed consideration in another place. And at the Report stage there came forward a shoal of Government Amendments. Many of them were voted upon without debate. Forty-two of them were not moved at all and will no doubt appear for consideration in your Lordships' House.
If indeed the House rejects the Amendment which I am privileged to move, and the Government proceed with this Bill, a very heavy responsibility will rest upon this House for its detailed examination. I would make quite clear—and I have the full support of my noble friends in doing so—that we on this side have no intention of obstructing the passage of this Bill for obstruction's sake. And, as in the other place, there will be no attempt at a filibuster. But, my Lords, we do expect the most full, considered and serious response to the very large number of points of substance and of detail which are bound to arise in any responsible consideration of such a Bill as this, which has come to this House in the condition that this Bill has come to it. I believe we shall find many uncertainties, many inadequacies, many injustices and many sheer impracticabilities in the course of our detailed examination. But we urge the House at this stage not to proceed further, but to take the wiser course set out in our Amendment. The present situation which we have reached has indeed been the climax of a process of failure by the Government to take any serious account of any views other than their own.
On March 22 the noble Lord, Lord Drumalbyn, was good enough to give me, in a Written Answer, some information about the genesis of this Bill. There was of course not a White Paper preceding it but a Consultative Document. This was issued on October 5; it was available generally on the 8th, and 127,000 copies of it were issued. It stated:
"It would be helpful if comments were available before the end of October and it might not be possible to take account of views received after the 13th November."
This was in respect of a document of great length and complexity, made available on October 8 and said to be the presage of the most important Industrial Relations Bill in this country for at least a century.
Moreover, the trade unions were told that, while during this period or subsequently they might express views on detail, the Minister's mind was closed on what he called the principles of the Bill. With so short a time for consideration and, if I may say so, so cavalier an attitude at any rate towards the trade unions, it is perhaps not surprising that the Bill as tabled in another place was virtually identical with the Consultative Document. The process of consultation before the tabling of the Bill was a sham, and that is why so much has needed to be done later in the much more difficult circumstances which apply when a Bill is already part way through the legislative process and everyone is naturally under pressure. But, despite this, in his reply to me on March 22, the noble Lord, Lord Drumalbyn, insisted that the Government were:
"fully satisfied that the time allowed for the preparation and consideration of comments was adequate."—[OFFICIAL REPORT; 22/3/71, col. 762.]
He went on to explain why. He said:
"The substance of the Government's policy was already well known, and this policy and a wide range of proposals for the reform of industrial relations (many of them similar in form or intent to those outlined in the Consultative Document) has been under intense debate for at least two years." (col. 762.)
I hear expressions of assent from the other side of the House.
It is so important an argument that it requires detailed examination, because in fact the sequence of events was that in 1968 the Conservative Party produced a publication,Fair Deal at Work. It was after the publication of that document that the Donovan Commission reported. The Donovan Commission's findings were not available when Fair Deal at Work was compiled. The Donovan Commission were a widely-based body with a great range of expert knowledge and experience divided among their members. They carried out their own research programme. One might have thought that the Government would have modified, or that the Conservative Party would have modified, their pamphlet and their policies to take account of the Donovan recommendations.
The present Bill shows little, if any, sign of this. Any major divergencies between the present Bill and Fair Deal
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at Work, as I shall try to show, are certainly not the result of having taken account of the Donovan Report. Indeed, on major points, the present proposals run quite counter to Donovan. As one of the members of the Donovan Commission said, in writing in The Times on November 24:
"In spite of what they have in common, the Government proposals and the Donovan Report represent the main conflicting trends of opinion as to how to deal with Britain's labour troubles."
There are marked differences between the Bill and the Donovan Report on a range of issues—on sympathetic strikes; on cooling-off periods; on compulsory ballots; on recognition disputes. But let me mention two particular points of difference. A central feature of the Government proposals, as the noble Lord has made clear, is to build a new framework of law with obligations upon the trade unions. The Donovan Commission examined proposals of that character and concluded either that they could not be operated or that they would do more harm than good.
Then there is the assertion in the present Bill that every individual should have a right not to join a trade union and that the "closed shop" should be prohibited. The Donovan Commission had a very clear view on the "closed shop". Again I quote:
"In our view prohibition of the closed shop must be rejected. It is better to recognise that under proper safeguards a closed shop can serve a useful purpose and to devise alternative means of overcoming the disadvantages."
It is indeed no secret that concern about the proposals in the present Bill on this point are by no means confined to the trade union side of industry.
However, to return to the reply which the noble Lord gave me on March 22, can it be said that, even though the Donovan recommendations have been taken so little into account, the public and industry knew what they were in for because they had learnt of the proposals from Fair Deal at Work?There are many differences even between the present proposals and Fair Deal at Work—not, I emphasise, as a result of their being modified, so far as I can see, to any serious degree by consideration of Donovan, but for quite other reasons. For example, there is the concept of an unfair industrial practice which does not

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appear in Fair Deal at Work; the right to be a non-unionist, with all the complexities and difficulties which arise from the desire to assert that principle, is far more emphatic in the Bill than it is in Fair Deal at Work, and the whole elaborate procedure for securing recognition for determining bargaining units, for enabling workers to pay contributions to unions without being members. I was really astonished that the noble Lord in his reference to this did not seem to realise the difficulties and problems to which that incredible suggestion would give rise. None of these, so far as I am aware and so far as I can see, were in Fair Deal at Work.
Further, the Bill proposes—and this is regarded by some people as its most objectionable characteristic—the concept of an enforceable procedure agreement (agreement so-called) imposed without the agreement of the parties. The Donovan Report did not of course favour legal enforceability even of agreed procedural arrangements, but the Bill proposes that the National Industrial Relations Court should be given the power to force unions to accept at least the procedural parts of an agreement drawn up by the Commission on Industrial Relations in default of agreement between the parties. In other words, the situation would not be an agreement but an imposition.
On this issue the Donovan Report said:
"A disputes procedure must be operated by the two sides of industry working together. They work together if they have accepted the procedures. They cannot be expected to make the procedure work unless they have freely agreed to do so."
Later on, the Report went on to say that to seek to compel the parties to co-operate in the settlement of grievances and to do so through the force of law is one of the things no law can do. It cannot make people co-operate if they do not want to do so. When one looks at the divergence between the present proposals and the Donovan Report, and when one looks at how much is new in the proposals in the Consultative Document which did not appear even in Fair Deal at Work, the claim that there was adequate prior consultation, because in fact people knew what was going to
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be in the Consultative Document, is a completely unconvincing claim.
This inadequacy of consultation is brought into high relief if one looks at the Government's proposals on the code of practice. We have all been told how important this code is, and I understand that the Minister originally indicated that he would begin discussions with the T.U.C., the C.B.I., the Industrial Society, the Institution of Personnel Management and with other bodies in the spring, with a view to presenting the code to Parliament in the autumn of the present year—he would in fact do much better than the time limits laid down in the Bill would suggest. Is this still the plan? If so, how far has it got? That is the second question which I should like to put specifically to noble Lords opposite who will be contributing to the debate.
I particularly want to recall what the Secretary of State himself said on the Report stage in another place. I suggest that by implication he criticises severely his own handling of his own Consultative Document, for this is what he said about consultations on the code:
"… we certainly hope to provide months not weeks for the code to be thought about and consulted about. I stress that the document will be open for genuine consultation and views by honourable Members and other people and bodies outside the House for a period of months, not weeks."—[OFFICIAL REPORT, Commons, 23/3/71, col. 410.]
It would be helpful if somebody would comment upon the strange contrast between the handling of the code and the handling of the Consultative Document. We are suffering—or perhaps the Government are suffering and we are suffering with them—from the fact that the Conservative Party have for a number of years over-simplified the industrial relations problems of this country. They have over-simplified them by presenting them always in terms of strikes, taking a situation in a few fields as though they were typical of the whole of industry (which they are not), and implying that the blame rests always on the trade unions and the workers, which it does not. Ministers indeed have repeatedly referred to anarchy and chaos in our industrial relations. Of course it is true that in some industries the loss of working days in disputes is high. This is true over a period of years of three industries—the

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car industry, the docks, the shipbuilding and ship repair industry. Together these cover less than a million men, and the figures of days lost in them are high because of problems peculiar to those industries which changes in the law are most unlikely to resolve. They are circumstances that would be much better dealt with by detailed examination by the Commission on Industrial Relations.
But if one looks at the whole of the rest of industry, even in 1970, which was a bad year, our loss of time through industrial disputes was one-third of one day per worker per year. That was, and is, at a time when, while in a year on an average there is a loss of a third of a day's work by a worker, on every day of that year two men are killed and a thousand men are injured in industry. There is something a little out of proportion in the way in which the emphasis is always upon strikes and so little upon some other very important aspect of the daily life of industry.
The Bill and the attitudes associated with it are already doing harm from the point of view of improving industrial relations. The Bill is bound to hamper, as it is already hampering, the constructive work of the Trades Union Congress. The Conservative Party have never given credit to the Trades Union Congress for its constructive work. They have occasionally made a reference to it, as the noble Lord did in the course of introducing this Bill to the House, but the Trades Union Congress has not got, has never had and has not under the present Bill any place in their plans, despite the great value of the work which the Trades Union Congress can do in developing better attitudes and better relationships in industry.
Under this Bill the Government are now going to make the Commission for Industrial Relations a permanent statutory body. They had better be quick about it, while there is still a Commission for Industrial Relations to have a statutory basis; for they are changing its character and its purpose, and they appear to me to be coming already within an ace of killing the Commission for Industrial Relations, which was so fruitfully developed from the Donovan Report. Trade union members have resigned; the Chairman has resigned. It was reported in the Press that academic people held in respect have
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declined invitations to join. In these circumstances, while normally we should welcome the proposal to put a Commission for Industrial Relations, as originally conceived, on a statutory basis, the third question which I must put is: what are the intentions of the Government? What really is the Government's view of the future of the Commission?
Let me conclude by saying that to many of us the Bill before us seems to be a profound mistake. Nobody can predict the full consequences which it will have, and the proceedings in another place suggest that sometimes even the Law Officers for the Government have difficulty in finding their way through some of the complexities which it has already developed. Although, no doubt, the Government will deny it, what they are doing is creating the impression of a desire to weaken the trade union movement and to shift the balance of power even more decisively in favour of the employers. Fewer and fewer people outside the ranks of the Government believe that the Bill will contribute usefully to solving our industrial relations problems. More and more people are viewing it with resentment or with hostility, or in some cases with alarmed bewilderment. I have spent my working life in the trade union movement, and I do not believe that the Government have yet fully grasped the depth or the extent of trade union opposition, or the degree of non-co-operation to which the trade union movement may find itself forced.
This country has benefited in peace and in war from the breadth of mind, from the public spirit and from the maturity of the trade union movement, and I do not believe that the Government have yet understood that the trade union movement feels itself demeaned and feels the country demeaned by the course which is being followed. When I speak of the trade union movement, I speak not only of national representatives and national officials; I speak of the hundreds of thousands of voluntary workers in the trade union movement who render constructive service to industry, often so little appreciated, and who in many respects often render service to the community as well, outside their industrial work.
This Bill largely ignores the recommendations of the Donovan Commission, certainly where they conflict with Party

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doctrine. It contains many new principles on which both the time and the basis for consultation have been inadequate. It has passed through another place two-thirds or three-quarters of it undiscussed. Above all, it is a measure which, if pursued, may prove to be a socially divisive one. There are other countries, wealthy and powerful, which present to-day a spectacle of classes and groups, and generations sometimes, which appear to be in danger to an increasing degree of losing communication with one another. We are, thank God! far from that situation in this country; but I believe that this Bill and the attitudes associated with it could take us upon that road. I believe it would be the course of wisdom and the course of statesmanship at this stage to recognise the goodwill and the constructive abilities of both sides of industry, and to take the course which this Amendment suggests. I commend the Amendment to your Lordships.
Moved, That, as the proceedings on the Bill have been curtailed in such a way that many of its clauses have not even been debated in the elected Chamber and the Bill is already causing grave division within industry and the nation, the debate on the Second Reading be adjourned in order that Her Majesty's Government may now enter into negotiations with both sides of industry free from the conditions on which the Government have so far insisted with a view to seeking agreed solutions to problems of industrial relations and the publication of a workable code of industrial practice.—(Lord Delacourt-Smith.)
THE LORD CHANCELLOR (LORD HAILSHAM OF ST. MARYLEBONE): My Lords, the original Question was that this Bill be now read a second time. On that Motion the noble Lord has now moved—he described it as an Amendment, but. I think it is a fresh Motion:
"That, as the proceedings on the Bill have been curtailed in such a way that many of its clauses have not even been debated in the elected Chamber and the Bill is already causing grave division within industry and the nation, the debate on the Second Reading be adjourned in order that Her Majesty's Government may now enter into negotiations with both sides of industry free from the conditions on which the Government have so far
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insisted with a view to seeking agreed solutions to problems of industrial relations and the publication of a workable code of industrial practice."
In these circumstances I understand that the Question which I have to address to the House is, That the fresh Motion be agreed to; and that is the Question which I therefore put to the House.
4.5 p.m.
LORD ROCHESTER: My Lords, in the enforced absence abroad of my noble friend Lord Byers, I should like from these Benches to offer general support for much of what is being aimed at in this Bill and for a good many of its provisions. Your Lordships' House will have noted that in the Division on Third Reading in another place Liberals voted against the Bill. That was because the opportunity for debate in Committee was not considered adequate, and in this respect we sympathise with the view expressed in the first part of the Amendment, or Motion, moved just now by the noble Lord, Lord Delacourt-Smith. On the other hand—and I hope that the noble Lord will not think this discourteous of me, as someone who is seldom able to attend your Lordships' debates—I do not see for myself how some of the nocturnal activities of the Labour Party in another place in recent weeks can be said to have contributed to the more detailed debate that they now seem to wish there had been. However that may be, we hope that the deficiency in this respect will be made good in your Lordships' House, for it is most important that the Bill, when it is enacted, should be made to work as well as possible in the interests of all concerned.
We on these Benches see no future in the kind of negotiations proposed in the Amendment, if I may continue to call it such. Noble Lords on the Labour Benches must surely know this too, in the light of the experience of the Labour Government less than two years ago. It is understandable that they should feel that advocacy of these negotiations is to be preferred to outright opposition to the Bill, when there are so many points of similarity between the Bill and the Labour Government's own proposals in the White Paper In Place of Strife, but that is not sufficient reason for us on these Benches to go along with them.

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Like many others who will be taking part in this debate, I have to declare an interest. For the last 25 years or so I have been engaged in the management of people in a large-scale manufacturing industry, for much of that time negotiating with trade unions on behalf of my company and playing an active part in many of the operations referred to in this Bill. In previous debates in this House on industrial relations I have spoken from first-hand experience of what might be called the technicalities of the subject. On this occasion I should like first to speak rather more in political terms. I looked at the OFFICIAL REPORT of our debate on In Place of Strife, and I must say that it has a familiar ring about it. For one thing, there was a strike on at Ford's at the time. For another, if your Lordships will forgive a personal reference, I found that in referring to the activities of certain trade unions I had said that if there was one kind of conduct that the British people would not indefinitely tolerate it was that of the bully, that we had seen too much bullying lately, and it was evident that an increasing number of people, including trade unionists, were not prepared to put up with it much longer—they could hardly be blamed for feeling that if there was no other way in which it could be brought under control there would have to be further legislation. I said I was sorry about that. I continue to feel sorry, but since then things have gone from bad to worse and, like many others who hoped that it would not be necessary to have further recourse to the law, I have come to feel that we cannot afford to carry on any longer without giving it a chance. It is true that management and trade unions will continue to have to solve the problems. The question is whether, on balance, the provisions of this Bill will make it easier or harder for them to do so.
I was much impressed by what I understood the noble and learned Lord, Lord Devlin, to say recently in his summing-up at the end of the so-called trial of the Bill in an Independent Television programme. It was to the effect that at the heart of the matter there was the question of power; that those who thought that our trade unions or their representatives now had too much power would vote for the Bill, and those who
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thought otherwise would vote against it. I have reached the conclusion that in the last few years certain trade unions, some of whom claim to be the representatives of trade unions, have exercised their power in a way such as to justify the community in seeking to curb it.
The strike which took place on two days last month may be cited in evidence. We had the two largest unions in the land—and those, moreover, which make considerable play about how questions affecting industrial relations should be decided at the lowest possible level—pressing their members from the top to engage in a strike which was political in nature, damaging to the economy and illegal, and then allowing those who refused to take part in that strike to be fined for their pains. We shall give differing replies to the question whether, on balance, there is more to be said for or against this Bill. But in the last resort there is something that we should all care more about than the answer to that question; namely, as I see it, whether sovereign power is to be exercised by Parliament or by the unions, and on that Point my view is clear.
I have given reasons for supporting the Government in placing a Bill of this kind before us, and I should like next specifically to comment on some of its features. First, I should like to commend the provisions for the registration of trade unions; the principles governing the conduct of workers' organisations in relation to their members; Clause 92, making it an unfair industrial practice for anyone not so authorised to induce or threaten to induce a breach of contract, and also the conditions under which ballots can be ordered in relation to industrial action. I welcome also some of the requirements to which management will have to pay more attention, such as the need to see that employees are better informed than they may have been in the past, and the proposals in the Bill relating to unfair dismissal.
There are other features of the Bill that I view with less enthusiasm. One of these has already been referred to and concerns the legal enforceability of collective agreements. There are a number of reasons why, in my view, this part of the Bill is likely to prove rather

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ineffective. Once the Government took the basic decision, I think very sensibly, that such an agreement would not be regarded as legally enforceable if this were contrary to the expressed wish of the parties to it, the lion, as it were, became a mouse. The unions show every sign of seeing that these agreements are so framed that they are incapable: of enforcement, and even when they become enforceable I do not see employers generally hurrying to law to enforce them.
The second point concerns the vexed question of the closed shop. Any fair-minded person must acknowledge that in this matter the Government faced a very difficult problem in trying to weigh the freedom of the individual against the exigencies of everyday industrial life. I understand how the concept of the agency shop has arisen from the desire to achieve a balance in these matters, but I am also aware at first hand that the post-entry closed shop (providing always that people may contract out of it on grounds of conscience) provides certain benefits for employers and for trade unions. These include the point on which great stress has been placed by Mr. Garnett, director of the Industrial Society, that in this way employees generally are best encouraged to play a full part in the affairs of their union. At least the post-entry closed shop has the virtue that it has been operating smoothly in large parts of industry for some time, whereas the agency shop is necessarily untried and, as an unwanted child by many people on both sides of industry, its birth pangs are bound to be somewhat poignant. Now that the new Schedule has been introduced permitting closed shops under certain conditions, I wonder whether with appropriate safeguards, post-entry closed shops should not be made negotiable between employers and trade unions on a wider basis. I do not want to strike an attitude on this point, but rather would suggest that the whole question calls for a great deal more debate in Committee in your Lordships' House before the Bill is finally enacted.
I should like to end on as constructive a note as possible. I realise that there are cogent political reasons why the Government want to have this legislation passed during the first year or so of
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office, but to us on these Benches it is cause for regret that the Bill is not accompanied by the code of practice that it promised in Clause 2; and on this point we have sympathy with the last few words of the Amendment which has just been moved by the noble Lord, Lord Delacourt-Smith. This is because as the Secretary of State readily acknowledges, the Bill itself will not solve our major industrial problems, and, in his own words (and I should like to quote from col. 986 of the OFFICIAL REPORT of the debate on Second Reading on December 14, 1970 in another place):
"It"—
that is the law,
"will he judged by the extent to which it supports the constructive evolution of the voluntary system of industrial relations in British industry. That is the test we set, and that is the test we shall be judged by."
I think that is a very fair test. If remedies for our troubles are to be found, as they must be, it will not be within the clauses of a Bill such as this; but I very much hope that they will feature prominently in the promised code, and they must not go unmentioned in this debate. The remedies I have in mind require a change in the behaviour of people; that managers should gain a better understanding of the effect of their behaviour on those whom they manage; that in keeping with developments in society generally people at all levels in industry should have more say in the making of decisions that affect them. Work must be directed towards objectives that are clearly defined, understood, and accepted, and communications have to be improved up and down the line. Managers have to be trained in leadership and negotiating skills and in how to solve problems and work together in groups. The role of supervisors has to be defined much more clearly than it sometimes is at present, and employers and trade unions need to join forces in the training of shop stewards. Eventually, if there is to be real improvement in our industrial relations, management and unions will together have to agree on objectives that they hold sufficiently in common to enable supervisors and shop stewards to be trained together.
I am sure that this joint approach will have to come, because it is plain from my experience recently in helping to give training in the management of

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people that the problems which keep cropping up are those concerned with communications and relationships between people representing different levels in an organisation. It follows, as I see it, that these problems can be solved only if the people between whom the problems lie face them together. In all these matters it is of course management who must take the lead, and I hope that when the code of practice is eventually published it will clearly say as much. I am sorry that I shall not personally be able to play much part in the discussions at the Committee stage of the Bill. But I should like to say, in conclusion, that we on these Benches support the Bill in principle, and we hone that in the national interest all will now do their best to see that it works as well as it possibly can.
4.22 p.m.
LORD DONOVAN: My Lords, Britain needs an Industrial Relations Act. So far in our history we have not had one. All we have had is a succession of Statutes dealing piecemeal with problems as they arose. We have never had a comprehensive code. Economic developments, economic difficulties and great social changes now require one. The question is whether this Bill will successfully fulfil that need. In other words, the problem is not one of ends, but means.
The Royal Commission itself recommended the passage of an Industrial Relations Act, and it specified certain matters which should be included in it. A number of those are implemented in this Bill, so we did not labour entirely in vain. There are also numerous items in this Bill which we did not recommend, or at least did not recommend for immediate enactment. This does not mean that we were right and the Government are wrong. Neither my colleagues nor I would claim any monopoly of wisdom for the Commission. If the Executive prefer measures, however draconian, either because they are thought to be better, or because they are thought to be imperative in the light of events during the last three years since the Commission reported, then it is obviously both the right and the duty of the Executive to proceed in accordance
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with its own opinion. But there is one overriding principle to which all legislation of this kind, if it is to be successful, must conform. It must be such as to offer the best hope of co-operation from both sides of industry. Not only does common sense require it, but all our industrial history proclaims it.
So far as workers are concerned, that history includes some 600 years during which wages were fixed by justices of the peace pursuant to Statute, and combinations of workers to do the job for themselves—which is what trade unions largely are—were criminal conspiracies. When to this situation were added the abuses of the Industrial Revolution, workers could not look to their own representatives in Parliament for help because they had none. The Representation of the People Act 1867 first gave the franchise to adult male workers in the towns, and the Act of 1884 gave it to male workers in the countryside and the mines. Two consequences have inevitably followed: first, that workers came to regard the law as their natural enemy; secondly, that if they were to improve their conditions they could not rely upon the law being changed in Parliament; they had to rely upon their own industrial strength expressed in combinations.
These inheritances are, I believe, unique to this country and they go far to explain how our industrial relations system has come about. They raise a big question mark over the relevance of the comparisons frequently drawn between our own and other systems in other countries, which developed later and differently; and also over the argument based on these comparisons: "If there, why not here?" Because these inherited attitudes do, not die; they crystallise into traditions, the force of which is immense. They are with us today, despite all the improvements in conditions which have come about, and they are implicit in the myriad of banners bearing the device "Kill the Bill!", borne by thousands who have never read it.
So far as the employers are concerned, their history over the past 60 years exhibits among other things, an almost invincible, though understandable, determination not to invoke the law in the conduct of industrial relations if they

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can help it. The quick injunction, yes, in the few cases where it can be obtained; but beyond that, no. There has been no prosecution for breaches of Section 4 of the 1875 Act, dealing with gas, electricity and water; no prosecution for any breach of Section 5 of the same Act, although breaches of both of those sections have occurred recently; no civil action for damages for conspiracy arising out of the recent one-day stoppages, although such action may well have been competent and, if so, could have resulted in immense damages against the leaders. The reason for this of course is that the remedy would only make matters worse, and for like reason the Government seem to share the same reluctance.
Two conclusions emerge which are relevant here to-day: first, that if we are to give ourselves the best hope of co-operation, this legislation must he made as fair as we can make it; secondly, that so far as the sanctions of the Act are concerned, then if they are to be made credible few hopes can be pinned on employer enforcement. In order to attract worker co-operation, the Bill could do more than it does at present. I could give several examples; I content myself with one. It declares that everyone should have the right to join a trade union and also the right not to join one. Put simply in that way, the proposition sounds absolutely right and unexceptionable. It is, however, now expressly conceded by the Minister that the equation of the one right with the other is unsound and, in consequence, he is making provision for a post-entry closed shop, subject to very strict conditions.
But this is not the limit of fair and desirable concession, for the trade unionist quite understandably sees in the right, at any rate, of free secession the risk of gradual erosion of trade union strength to a point where it ceases to count, and he regards that prospect with much more concern than the loss of a few pounds of dues each year because of the presence of a handful of free-riders. The breakaway union formed by seceded dissidents is still a menace, and we could do something to reduce it by copying part of the industrial legislation of Australia and New Zealand. There it is provided by Statute (or was when I last looked at their laws) that the Registrar of Trade Unions is to refuse to register
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any trade union if he is satisfied that the workers concerned are already catered for adequately by some existing union. If such a provision could be introduced into this Bill, it would serve two useful purposes: first, it would allay to some extent trade union fears about breakaway unions, the risk of which is implicit in the Bill at the moment; and, second, it would provide a curb on the proliferation of trade unions, of which there are still too many.
There are a number of other matters in the Bill which I think should be looked at again with a view to improving it. A defendant who is taken before the ordinary courts of this country by an employer seeking damages for inducement of a breach of contract of employment is entitled as of right to be absolved if he can prove justification, but before the new Industrial Court in like circumstances he must, under the Bill, rely upon the court's discretion as to what is just and equitable. The end result may be the same, but not necessarily so; and it is this which makes the muchcriticised advertisement of the T.U.C.—"Shut up and keep working"—as a matter of words literally true when it refers to the possibility of fines. The remedy is to provide in this Bill that any defence which would be open on the same facts before the ordinary courts should be available before the Industrial Court.
Then under Clause 54 of the Bill it is the duty of employers to supply relevant information to a trade union for the purposes of collective bargaining, but under Clause 151(1)(e) the employer can refuse to do so if disclosure would be seriously prejudicial to the interests of the undertaking. It would seem that under the Bill the opinion of the employer on this point is conclusive. If so, should it not he capable of challenge? Otherwise, the value of this provision may be seriously diminished. Incidentally, something seems to have gone wrong with the Bill in this connection. Clause 98 indicates that a complaint under Section 54 of the Act can be made the subject of a claim to the Industrial Arbitration Board under Section 122. But on turning to Section 122 you find that it relates to terms and conditions of employment, and not to the withholding of information at all.

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Again, under Clause 135 of the Bill the Industrial Court can make an order that during the cooling off period no person is to take industrial action, and that he shall call off any already taken. The sanction for disobedience is to be found not in the clause itself but in paragraph 25 of the Third Schedule, and includes imprisonment for contempt. But returning to Clause 135(3) one finds that a trade union official acting within the scope of his duty is exempt from committal for contempt. By contrast, under Clause 139 the Industrial Court can make an order for a compulsory ballot, and again order any person not to take industrial action meanwhile and call off any already begun. But in this case there is no provision exempting the trade union official acting within the scope of his duty from imprisonment for contempt, and it is difficult to see any rationality in the distinction.
Here, may I interpose what may be a word of comfort for Fleet Street? If an industrial correspondent says to workers, "Come out on strike", he does not thereby induce a breach of contract, because if the workers take this advice they can do so simply by giving the appropriate notice and so no breach of contract is involved or has been induced. One cannot assert that the reporter or industrial correspondent in such a case has advised the unlawful means rather than the lawful. Clauses 108 and 145 give the Minister power, among other things, to alter an existing Act of Parliament without laying the Statutory Instrument before both Houses for Affirmative approval. I hope that omission can be remedied.
Coming back now to matters of principle, I am heartened to see that the Bill does nothing to endorse the fiction that to make collective agreements legally enforceable is the solution to all our worries. So far as concerns the substantive agreement laying down terms and conditions of employment, trade unions do not themselves agree to man the machines or work the hours. As the lawyers say, there is no real privity of contract between the employer and the union; and if a union thinks that the time has come for their members to get a rise, they give reasonable notice to end the agreement and start new negotiations;
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and that is precisely the position which would obtain if the agreement were legally enforceable. If we could have an agreement with a "no strike" clause in it and binding for two years, then indeed a significant contribution to industrial peace might well result, but this Bill does not aim that high.
As regards procedure agreements laying down the procedures to be gone through before there is resort to industrial action, again trade unions seldom break them, though there have been a few regrettable exceptions. It is the members who habitually break procedure agreements, not the unions; but the members are not bound by these agreements because trade unions do not enter into them as agents for their members. And it is strictly inaccurate to speak of these members breaking procedure agreements: they simply ignore them. This is the reason why the Bill imposes no sanction upon them for doing so, apart altogether from the impossibility of prosecuting masses of workers.
The presumption of enforceability in certain circumstances is therefore being used in this Bill simply as the foundation of action against a union if it does not use its best endeavours to see that the agreement is observed by others who are not bound by it. But for this purpose legal enforceability is surely an irrelevance. If there has to be legislation on these lines, one would expect the Bill to say that trade unions should use their best endeavours to see that a procedure agreement was observed by its members, whether that agreement were legally enforceable or not. All that the present Bill ensures is that almost no such agreement will be legally binding; and that situation is worse than the situation which exists at present where the parties acknowledge, either explicitly or by implication, an obligation in honour.
In truth, the teeth of this Bill are in the unfair industrial practice and the penalties which it attracts. The term "unfair industrial practice" tends to conjure up an idea of something which is not quite cricket—like bowling too many bumpers. What is really connotes is a new kind of tort attracting a heavy fine. And if one takes the trouble to count up the number which the Bill creates, he will arrive at the figure of at least 179. If these provisions turn out

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in practice to be unjustly repressive they will fail, just as all legislation in this field having that effect has failed before.
Industrial peace cannot come that way. Industrial relations are a domain where peace comes only by willing co-operation. In other walks of life, where people disagree they can simply part; but if management and employees disagree they cannot just pick up their marbles and go home. They still have to learn to live together if the enterprise to to continue and to prosper. To a large extent they must forge their own law of association and forget contracts and tort and ether legal chains. They must, in a word, evolve the common law of the shop. They cannot do that by fighting each other in the courts—nor do I think they will spend much time in doing so. Indeed, when the dust settles it may be found that those who feel the impact of this Bill most will be the dedicated minority who have less interest in industrial peace than in the substitution of a new order of society and regard industrial unrest as one road to that goal.
As I have mentioned the courts, it would be wrong not to express the anxieties that some of us feel about the proposed permanent intrusion of the High Court into this sensitive field where all its decisions of fact will be final. I know that the experiment will be carefully watched, for no analogy drawn from the success of the Restrictive Practices Court can be relied upon; the field is too dissimilar. In general terms, the big difference between this Bill and the kind envisaged by the Royal Commission is the priority which we accorded to the treatment of causes rather than symptoms. But it would be wrong to say that in this respect the Bill reflects nothing of our thinking. The Commission on Industrial Relations is there. It could do much lasting good and. I hope that it will be able to do so. The "yellow dog" contract is gone. An impartial tribunal for trade union grievances is established. Unfair dismissals, a chronic cause of trouble, are to be compensated. An attempt is made to deal with multi-unionism; non-recognition is now justiciable.
I wish that I could include, in this catalogue of efforts, a cooling-off period for prices. That really would do some good. Nevertheless, if I were once again a trade
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unionist my vote in these circumstances would not be cast for a policy of total non-co-operation. My argument would be that to do so would be to risk getting the worst of both worlds: the loss of advantages in the Bill and the inability to prove the failure of the Bill by experiment. Nor is it either advantageous or realistic to demand now from those who may form an alternative Government in the future an unqualified undertaking that they will then repeal the Bill, lock, stock and barrel. It will never be wholly and finally repealed. After all, it implements some eight recommendations of the Royal Commission favourable to trade unionists. But in that context it is reasonable to recall that trade unionists in this country number some 10 million; the total work force, some 26 million; the whole population over 50 million. All that 50 million have a stake in the creation and maintenance of good industrial relations.
Statesmanship surely therefore requires that those who may take over power in the future should say, "When that time comes we will examine the working of this Bill with strict objectivity. We will retain those parts of it which have improved industrial relations, even if they have done so contrary to our expectations; but we will repeal or amend those which have done the opposite or which have worked unjustly; and throughout the operation we shall bear in mind not merely the interests of one section of the community but the welfare of the country as a whole."
4.57 p.m.
LORD THOMAS: My Lords, it is clear from the list of speakers that this is my maiden speech. I should be unhappy in conscience if I did not here and now pay tribute to the courtesy extended me on my entrance into your Lordships' House. I should like to convey this sense of sincere thanks to all concerned.
As an industrialist, I believe that this Bill is one of the most important documents that has ever been drafted in the industrial life of this nation. I have been in industry all my life, starting immediately after school as an apprentice in an engineering factory in Birmingham, where I worked on the shop floor for the noble sum of 4s. a week. This occupation was interrupted by a tribal dispute between Britain and Germany that took me away to foreign parts and other occupations for

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a number of years. When I returned to "Civvy street", I went back immediately to the lowly paths of industry, and since then I have had my nose kept to the grindstone by the simple pressures of appetite, ambition and cupidity.
My Lords, I have worked for men, with men, and I have had men working in large numbers for me, in both private enterprise and nationalised industries—and in this sense man embraces woman. During 55 years I have witnessed with sorrow the degration of relations between the men who receive wages and the men who pay them. If one looks analytically at the whole complex of industrial relations one sees that it boils down simply to the fact that the employer wants to get as much work done for as little money as he can afford; the employee wants to get as much money as he can for as little effort as he comfortably and continuously afford. Let me say at once that I am an ardent believer in trade unionism: I think that it is a great pillar of our economic structure. But even essential pillars can become distorted and be subjected to side forces that defeat their original purposes.
There is no doubt that the economic health of any nation depends on the units of monetary value paid for the units of productive effort that are exchanged for them; and anything that disturbs the economic balance more than strikes do I have yet to come across. A strike is the culminating point of a difference of opinion between the man who pays the wages and the men who receive them. In my judgment that disagreement, if it becomes accepted as a major philosophical policy in a community, leads to ill-health; it worries the community, it causes discomfort and diseased conditions all round.
It is to control the development of strikes for vastly increased wages that this Industrial Relations Bill—to me, at any rate—is all about. As I read it, the Bill does not impose any one-sided pressures. It seems to me to bring about, in general, a far better balance of power. A former Minister of Labour said in another place, that "Power is on the shop floor". Those words are absolutely true. But they should, I think, be heard in the context of the old adage, that "Power tends to corrupt, and absolute power corrupts absolutely."
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My Lords, I have a distinct feeling that the excessive exercise of shop floor power has begun seriously to corrupt our industrial relations and our economic well-being.
Let me give a practical example. Between the wars the British motor industry flourished exceedingly, gradually building up a great business—with the benefits of growing employment and higher earnings—and increasing export trade. That increase, was based on what is known as the piecework system. If a part had to be machined, or stamped, or press-forged and whatever raw material was changed in size, shape or quality, a price was fixed for doing that operation. The more of those operations the worker carried out, the more he earned. That involved a rate-fixing system; and so long as the relationship between the employer and the employee was good that rate fixing was reasonable. It resulted in increased output and better earnings for the worker; and, incidentally, a better price to the consumer.
But after the 1939–45 war men on the machine shop floor who had been—let us face it—earning very good money indeed making munitions naturally wanted to have the same take-home pay for making motor cars, civil aeroplanes and farm machinery, or any other consumer goods that were then, of course, in great demand. And so the piecework system began to break down because the price per unit had to be set very high to achieve a big take-home wage on a low production rate. There was shortage of raw material, and so there was upset all round. As soon as materials began to get flowing again the piecework prices multiplied by the quantities produced, and the wages became relatively very high indeed. That my Lords, was the start of our post-war inflation. The useful scheme of piecework had to be abandoned and a "leapfrog" system of day rates became inevitable.
My Lords, inflation is nothing new; indeed, it has been going on for dozens of centuries in this and other countries. It is manageable so long as it retains reasonable proportions; but when it becomes a galloping runaway inflation something has to be done about it. I put it to your Lordships that over the last two decades inflation has been stampeding away at a rate that makes the

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Guadarene swine look like a traffic block on Ludgate Hill. In the early postwar years the demands for wage increases could be expected, understood and contained. When I was Chairman of B.O.A.C. it was quite understood that if an increase of 5 per cent. in wages was needed by the workers, a claim was put in for 10 per cent. We went into negotiation, and cut the claimed figure by half; the workers got the 5 per cent. that they wanted and everybody was quite happy. But of more recent years, claims for 40 per cent., 35 per cent., and other quite impracticable figures have been made. The resulting industrial action, as it is euphemistically called—because it really is industrial inaction—has resulted in massive disruption of service to the public, quite frankly, has given rise to lowering standards of living.
I believe that the accelerated rate of claims and strikes of the past two or three years has been brought about by the alarm of monetary inflation. It was triggered off by devaluation. It fed on the prolonged squeeze, freeze, high taxation, growing unemployment, stagnant production and falling standards of living for many people; and that led to the avalanche of unprecedented wage claims. This Industrial Relations Bill is a well-designed and carefully erected barrier against that avalanche. I think it very important that this Bill should be looked at not in isolation hut as part of a carefully balanced policy. Taken alone, comprehensive as it is in the areas to which it particularly applies, it is only one instrument; a part of a larger system.
It seems clear to me that the recent Budget, last week's change in the bank rate and changes in subsidies and allowances, are all part of an integrated, interlocking policy. This is not "instant government"; it is what we in industry call planning for progress along a critical path—and we all know how very critical that path is to-day. And, in their practical approach to this philosophy, how heartening and emboldening it is to see a still new Government fulfilling their Election pledges!
My Lords, we have heard a great deal in the past about the failures of management. Well, no management is perfect, any more than any other branch of industry is perfect. But I can assure your Lordships from my own experience that
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management is the most fluid element in industry. If there is any body of men who have less security of long-term employment than the management and executive class, I have not met them. Management can be changed overnight, whereas the bulk of the workers on the shop floor or in the offices are far more static and immobile. I believe that this Bill will go a long way to iron out many of the difficulties that I have described. It has been prepared with great care. Politically, it seems to me to have the great virtue that it is, in broad philosophy, the almost identical twin of the Bill which was presented by the previous Government but which did not get the backing it deserved.
The particular aim of the present Bill is to get better understanding between the shop floor and the management. Long and loud are the railings by disgruntled strikers against the board, the bosses and the executives. Clearly, the strikers do not understand, or are not allowed to understand, that a business cannot live and cannot provide employment and wages unless it gets orders from customers. How often do we hear of a union leader proudly proclaiming that he and his mates have gone out into the market and brought in an order for tens of thousands of pounds worth of the product they make? When do they ever sell? I have never heard of any of them actually generating any business. What I have experienced is the opposite—business being lost through prices being forced up by wage demands backed by threats of strikes.
My Lords, we have severe unemployment on our hands at the moment. My honest belief is that militant labour is creating its own redundancies by pricing its products out of both export and home markets by these trigger-happy strikes. I repeat, inflation starts on the shop floor. In my view, this Bill has deliberately avoided embellishments and coat-trailing gimmickry. Indeed, to my mind an omission is that it does not declaim on bargaining methods. There is a body of opinion in industry that holds that if an offer of a wage rise is rejected, and industrial action ensues, that offer should be withdrawn. Then talks would start afresh from the original square one, so to speak, and not take off from a higher base. But in their wisdom the sponsors of this Bill

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have not gone into what might be highly controversial details of executive procedures. They appreciate the need for quick adoption of broad principles.
The antipathy that exists in many factories nowadays is illustrated by the wide prevalence of what is known as "ringing." If the workers in a machine shop see a comparative stranger come into the shop—he might be a visitor from headquarters, an efficiency consultant or a time-and-motion study man—they heat on some handy, resonant piece of material with a spanner or such-like, using a repetitive rhythm rather like the V for Victory cadence that was common during the last war. It is to-day an ominous, subversive noise, the sound of war drums through the industrial jungle. It is indicative of the abrogated right of some workers, even when at work, to show their right of rebellion against authority and discipline. Therefore I do not believe that industrial reorganisation can be left to wholly voluntary action. It is not in the nature of the human animal to adhere to loosely drawn understandings, especially when they refer to the fundamentals of making a livelihood. There have already been solemn undertakings to observe certain rules. In the 16 months following the solemn and binding undertaking made after the capitulation of June 18, 1969, there were 6,707 disputes—over 30 per cent. more than during the 16 months preceding that undertaking.
My Lords, in this my first speech I am sure that your Lordships would prefer me to have brief maiden modesty rather than attempt a meandering of marathon proportions. That would be, to my mind, completely out of place when there are so many experienced and more important speakers in this discussion. But I should like to make it abundantly clear, in conclusion, that I earnestly want to see this Industrial Relations Bill become law.
5.3 p.m.
LORD WILLIAMSON: My Lords, first, I should like to congratulate the noble Lord, Lord Thomas, on his maiden speech. I am very pleased that I am able to do so, because the noble Lord and I were close friends in British industry for many years. We worked together and I think that he and I made some
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contribution in various fields towards industrial peace and efficiency. I am sure that the House will join me in offering the noble Lord hearty congratulations. We sincerely trust that he will give us the benefit of his great wealth of experience on many occasions in the future.
This Bill originally consisted of 150 clauses and it has reached this House with 160 clauses. After listening to the brilliant and masterly exposition of the Bill by the noble and learned Lord, Lord Donovan, I sincerely hope that some help can he given to ordinary, intelligent trade unionists to understand this massive, complicated and involved Bill. These proposals have raised a storm of protest and opposition on all sides. Because of this, I shall willingly support the Motion for the adjournment of this debate so that another look can be given to many of the clauses. I believe that this Bill intends to put the whole trade union movement in a straitjacket because of the strike-happy actions of a small minority. In 80 per cent. or more of British industry there are harmonious industrial relations, good working agreements and negotiations without stoppages of work and there is no need at all for any intervention by the Government, either in the form of this Bill or in any other way.
I think of all the great British industries which have joint industrial councils under the Act of 1919, industries which have never had a stoppage of work, or at any rate a major stoppage of work, and which in 1971 are to be subjected to a great deal of interference while both sides, trade unionists and employers, are working together with good working agreements and industrial efficiency. The trouble is that a small minority, a small section of industry, has been indulging in unofficial action. I quote the statement in the appendix to In Place of Strife, which identified the industries where this was taking place in the main as docks, motor vehicles, shipbuilding and ship repairing.
There is absolutely no justification for a massive Bill of this description to cover the whole of British industry. If legislation is necessary or warranted at all, it is legislation not to deal with the exaggerated trade union tyranny of the closed shop or of resentful membership. It is legislation which could be short, sharp and simple, to deal with the outstanding

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curse of the industrial scene—the unofficial strike. Such a Bill would have been accepted on all sides and would have been law by now. This is the one damaging factor in our affairs and all the rest seem to pale into insignificance. Here then is a lost opportunity to deal effectively with unofficial strikes, very often in breach of contract.
I back the noble and learned Lord, Lord Donovan, in what he said on this question. Where workpeople, whether trade unionists or not, are engaged, it is usually under an agreement, or it is inferred, that there shall be seven days' notice on either side, either for dismissal or when the worker wishes to give up his job. Therefore, where unofficial strikes take place suddenly without notice, I say that that is a clear breach of contract with the employer. Of the days lost through strikes in 1970, 95 per cent. were lost through unofficial strikes. We heard to-day of the number of days that had been lost through strikes, but that figure is not the real one. The only days calculated officially are those that have been lost by strikers. The days lost by the thousands thrown out of work in consequence of strikes is not included in the figure. Therefore, if we have a figure of 10 million days lost, would say that the true figure is more like 20 million days, if all the time lost through the consequences of the strike are taken into consideration.
I will not abuse the privilege of the House, because there is a long list of speakers. I will make only two references to two parts of the Bill. The first is on the closed shop. I was pleased to hear the noble Lord, Lord Rochester, give qualified approval to the closed shop in certain circumstances. The Bill makes heavy weather of the alleged trade union policy of the closed shop. It alleges, by inference, the tyranny of trade unions forcing workers against their will into trade union membership. What justification is there for legislation on that question? There are some 20 million work-people (the noble and learned Lord, Lord Donovan, gave the figures as 26 million), and there are now 91½to 10 million trade unionists. For a hundred years or more trade unions have been following the policy of the closed shop, thereby forcing, so it is alleged, workers into trade unions against their will. My Lords, if after
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a hundred years of coercion, the trade unions have succeeded only in securing less than 50 per cent. of the workpeople of this country, then I say that the allegation is a myth. The allegation that there is trade union tyranny in regard to the closed shop in this country is a myth, otherwise in the T.U.C. there would be 18, 19 or 20 million trade unionists. Certainly this hullabaloo about the widespread injustice of the closed shop is nothing more than eyewash.
The noble and learned Lord, Lord Donovan, referred to there being too many unions in this country. With this I agree. For many years a criticism of the trade union movement in this country has been that there ought to be a smaller number of unions. Until quite recently there were about 190. Now, due to the T.U.C.'s taking action in suggesting mergers and amalgamations, there are about 130; so that substantial progress has been made to reduce the number of unions. But not enough has been done.
LORD DONOVAN: My Lords, may I ask the noble Lord whether his figures are really right? The total number of trade unions is 574: the number of trade unions affiliated to the T.U.C. is 174.
LORD WILLIAMSON: I thank the noble and learned Lord for that correction. I should make it clear that the number of unions affiliated to the T.U.C. was 180, and is now down to about 130; so there has been a substantial reduction. The large unions of the country are affiliated to the T.U.C. But many unions outside the T.U.C. are small, and they ought to be able to amalgamate and make larger units.
It is sometimes said in this connection that we ought to follow the German method, and have some 16 unions. If in a factory, or in a particular industry there is one union, it is axiomatic that there must be some method of preventing workpeople in that factory from joining some other union. This Bill provides that any trade unionist may leave his union and join another union. There are many instances in this country of employers having good harmonious relations with one union and they make membership of that union a condition of employment. If this Bill becomes an Act a disruptionist inside that factory will be allowed to suggest to the rest of the workpeople that

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the union which is making agreements is in the hands of the bosses, and that they ought not to accept an increase of £1 or £2 a week but ought to be going for £10 or £15 a week. Disruptionists can create this incitement, and they have the right under this Bill if it becomes an Act to leave the union; and if they can get a sufficient number of their fellow workers to join they can form another union and have it registered inside that factory, so creating the disharmony that we have been trying to do away with over the years. I regard this as one of the serious aspects of the proposed legislation, and sincerely trust that at this late stage it can be looked at a little more closely.
5.15 p.m.
THE LORD BISHOP OF SOUTHWARK: My Lords, I should like from this Bench to join the previous speakers congratulating the noble Lord, Lord Thomas, on his maiden speech. We are delighted to have him as a Member of this House and to have him speak to us with such brevity and clarity. Brevity and clarity I hope will be my guide as I try to speak to your Lordships.
For some of us who are not in the trade union world or the industrial world this must be one of the most difficult Bills we have ever had before us. Speaking for myself, never have I had to do so much homework or to consult so many people—with or without result is for your Lordships to determine rather than myself. There is a part of me which would like to agree with the Amendment. I should like time for reflection. Yet there is another part of me which says, "Well, the other side"—though here I speak as an Independent and I mean the other side of the House geographically—"were in power for a number of years. Surely there was more than enough time to bring the two sides together and to have produced something then". Whatever one's views may be on that question, one must be a realist. I should have thought that almost certainly, no matter what we may do, the Bill is going to become law. Not only will it become law, but it is most unlikely, as the noble and learned Lord, Lord Donovan, said, that any subsequent Government will completely repeal it. Would it not be wiser to fulfil our
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function as a revising Chamber, and do our best to improve the Bill so that we shall send it back to the other House a better Bill than it was when it reached us?
Here are the reasons why I find that I can support the Bill. First, my political views are well known to your Lordships. I was not delighted with the result of the last Election. Be that as it may, the electors determined that we should have a Conservative Government and it was quite clear what their mandate was. They had a mandate to do something about trade unions. Secondly, the Opposition, when in power, frankly admitted that the position was serious and that something had to be done. I must say that one of the most difficult exercises in my homework, which I know has been shared by some other noble Lords because they have told me so, is to put side by side the proposals and the Bill, and see exactly how they differ one from the other. They differ on some important points, but I cannot help feeling that there are many more things common than there are opposed. Then another reason is that all of us know that something must be done. Those of your Lordships who have to commute to-day and are faced with difficulties on the railway, those who were faced with problems in the recent electrical work to rule, all know that something has to be done. It is not only that the Government say that something must be done. So do the Opposition; so do most of us.
Another reason why I can support the Bill is that it declares an intention which I should think would be acceptable to most people. Let me explain what I mean. It is declaratory in the same sort of way as the Race Relations Act. That Act makes it perfectly clear that as a country, whether we are Conservatives, Socialists, or whatever we are, we take our stand on race relationships with regard to certain values and priorities, no matter what difficulties we may experience in implementing that Act in some respects. It is a declaration of intent. Similarly, I think that this Bill is declaratory in that it states that certain agreements which are entered into must be respected.
Then I agree with the declared general purposes of the Bill, which seem to me

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to he quite simple and come under four heads: first, the principle of collective bargaining, freely and responsibly conducted; secondly, the principle of developing and maintaining orderly procedures in industry for the peaceful settlement of disputes by negotiation, with regard to the general interests of the community; thirdly, the principle of free association of workers, independent trade unions and of employers in employers' organisations so organised as to be representative, responsible and effective bodies for regulating the relations between employers and workers; and fourthly, freedom and security for workers, protected by adequate safeguards against unfair industrial practices, whether on the part of employers or others. Those are the four principal purposes and, in so far as they are principal purposes, I should have thought that most of us could agree with them.
Why then are they opposed? This is where I have a good deal of sympathy with what has been said by noble Lords on the other side of the House, and I hope that the Government, perhaps reflecting upon this debate, will take into consideration these points that will help to improve the Bill as a result. The first matter relates to the old people. I am thinking of those trade unionists whom I meet in South London, who are often the people who help absolutely to maintain the very framework of our society; faithful men, but men who have very long memories.
We have been reminded of the history of trade unionism. We have a great deal to live down in this country, not merely in the recent past but in the more distant past. Our trade unionists, perhaps like some of us in your Lordships' House, can remember the pre-war miners and pre-war railwaymen, to say nothing of the shipyard workers in Jarrow. It is easy for us to become irritated with people who are always harking back to those days, but I am sure that those fears are still very real to an older generation. However unfair we may think their judgment may be, they really feel that this Bill is an attempt to "clobber" the unions. That is something that we must face, and I hope we can remove those suspicions, perhaps by certain improvements that we can make to the Bill during the Committee stage.
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Then there are other trade unionists, certainly of the younger generation as well as the old one, who think that this Bill seems to attach too much blame to them and too little to management. That may be just a wrong reading of the Bill —I do not know—but it is a very real grievance: that the managers get away too easily, whereas they are held too much responsible for what occurs. There are others who wonder whether these legal penalties really will help. Once one goes to the court, is it not possible that the position will get worse? One has only to envisage the collection of damages from the funds of a trade union, or the possible gaoling of a trade union leader, to see how easily an explosion could be sparked off.
Another criticism of the Bill, which from my experience is perhaps the one most widely shared, is the misunderstanding with regard to what is meant by a legally binding collective agreement. I must say that, with my lack of technical knowledge, I find it difficult to know exactly what is implied by that. I hope that the noble and learned Lord on the Woolsack will be able to clear up this point for most of us who have not quite the expert knowledge that others have. Am I right in thinking that what these clauses do is merely to introduce a legal presumption that a contract is binding unless it says otherwise? As every union will insist, I assume, on writing such an escape clause into the agreement as the price of signing, then this section of the Bill would seem to be to be almost meaningless. It would appear to be little more than a political gesture. For, if I understand it aright, as things stand, even to-day there is nothing to stop unions and individual employers from signing legally binding agreements, although they seldom do. It is not the law that stops them; it is just that they do not want binding deals. Those, I believe, are the main difficulties that occur in the minds of the critics, some of whom are really friendly critics and want to see an improvement.
I pass from those criticisms to what I hope will be helpful suggestions in regard to improvements. First, I should like the Bill, in its amended form, to attach a greater importance to voluntarism. I want it more obviously to encourage voluntarism. British trade unions and

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employers do not have ideological objection to each other, however much they differ on practical issues. They accept each other as equals in negotiation, and respect each other's right to exist, realising of course that they seek their own interests in industry. They accept that, saving their autonomy in the right to strike or the refusal to employ, they can, through collective negotiation, agree on wages, hours and conditions which are mutually satisfactory. On this basis they ought to be able to build up a fully integrated system of organisation and agreements from shop floor to national level so that matters can be dealt with at the required level.
That is why I hope the Government will perhaps look again at that part of the Donovan Report which emphasises the need for discussion concerning the improvement of voluntarism. The only way to improve industrial relations ultimately, surely, in any industry is by strong organisation for collective bargaining based on mutual trust and extending to all matters about which the parties wish to negotiate. Once we part from voluntarism and place our trust in legal sanctions, one is moved to doubt how far the very complicated legal framework of this Bill will serve to stop or deal with the spontaneous disputes which arise on the factory floor and which trigger off so many strikes. The remedy, surely, is for better communications between management and men. Secondly, what is important, surely, is a greater influence on the development of more coherent factory-based agreements. What the Bill seems to ignore is the dramatic change that has taken place in the distribution of bargaining power in favour of bargaining units based on the plant or work place.
Then, thirdly—and this has come out already more than once in the debate this afternoon—the Government should have another look at the closed shop. Much has been said about the reality of making union membership a condition of employment. Much of it has been adverse criticism, but surely there are two sides to the question. Even if a man has to pay the equivalent to union dues, a non-union man gets the benefits without sharing in the responsibility of making the sacrifices which union member
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ship entails. In so many walks of life we have a closed shop. Many of us here, I am sure, have organisations and clubs to which we belong which are closed shops.
Speaking from these Benches, I may say that no clergyman may officiate in my diocese unless he joins a closed shop; in short, he has to have a licence or the equivalent. If you were to go to a man who did not have one and were married by him, then your marriage would, presumably, be declared null and void, because he would have had no right to officiate. We in the Church are accustomed to a closed shop, and a great many professions and industries have the equivalent. I think that this has become rather a bogey. While I have tried very hard to understand the opposition to the closed shop, and have tried to read all that has been put forward by the Government, I think it is a subject which it might be well to look at, because I hope that this debate, and the debate in the other place and, with humility, perhaps what I have said to-day, will, to use ecclesiastical terms, help to exorcise this ghost from our thinking.
Fourthly, the Government would have less difficulty in persuading the trade unions to accept the Bill if they had not abolished the Prices and Incomes Board and the Consumer Council. That was a most inept action. Surely the Board and the Council needed to be strengthened, not abolished.
The passing of the Bill is, in my judgment, certain. Therefore the right approach is to accept it and improve it during our Committee stage; to look at each clause and say, "Will this clause, and this clause, help to bring about reconciliation?". It should not be done in the spirit of Party politics, but of a constructive approach to see what we can do to bring about an improvement. I cannot help feeling, especially as I agree so wholeheartedly with the noble and learned Lord, Lord Donovan, that no matter what Government may come in the future, this Bill will never be wholly repealed; that we shall look back upon all the rows and furies of this present dispute in much the same way as we look back upon the rows and disputes of the Peerage Act some years ago, when some people thought it threatened the Constitution. Now we wonder what all

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the fuss was about. It will be much the same with regard to this Bill in ten years' time. It is going to pass; we shall all ultimately accept it, and as the years go by I hope it will be greatly improved.
I hope it will pass, with improvements, for two reasons. First, I am well aware of what has been said about the divisions in the country. That this Bill may be divisive is possible. It is also true that there is a division in this country between trade unionists and those who are not trade unionists which is getting deeper. One had only to go about, as we all did, at the time of the recent strikes, and now there are the present difficulties with regard to transport, to know how bitter people can become. It is a tragedy if a division of that sort should deepen in our country. The second reason is that when I first became interested in politics and studied Marx, I found he was so clear that social democracy could never work. He said that class interests, on all sides, will always be such that together we should join in digging our graves and we should lay social democracy to rest. I believe we are faced at this time—and I do not want to be in the least dramatic about it—with a really serious challenge to our whole way of living. I hope that, granted our rightful differences of opinion and the right to fight these fiercely, one against another, yet together we shall try to combine to work for something which will safeguard our democracy and give to our industrial workers, and to management, a fair Bill.
5.35 p.m.
VISCOUNT BLAKENHAM: My Lords, my noble friend Lord Amory has kindly agreed that I should intervene in the debate at this time, and I am hoping that he will be speaking to your Lordships to-morrow. We agree with what the right reverend Prelate, the Bishop of Southwark, has said, and with what was pointed out by the noble and learned Lord, Lord Donovan, that every thinking person in this country knows that something has to be done about industrial relations. Mr. Wilson and Mrs. Castle recognised that, and I think it was with very real regret that they were forced to abandon their own proposals, which in some ways were more punitive than proposals contained in this Bill. They had to abandon them because of the pressure
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that the trade unions brought to bear on the Parliamentary Labour Party.
The noble Lord, Lord Williamson, made the point very strongly that there are those who want to see something done about industrial relations, those who know that something must be done; and there are the militants, who wish to destroy our existing institutions, and build anew from the wreckage of the foundations. I was interested in the point that the noble and learned Lord, Lord Donovan, made, and I hope your Lordships noted it. He felt that, despite certain criticisms of the Bill, those who would feel the effect of it would be the militants. So it was something of a tragedy that the opposition to this Bill in another place was often so hypocritical. We all know that much valuable time has been lost in purely doctrinaire argument and sheer obstruction. How different was the attitude of the noble Lord, Lord Delacourt-Smith, who made it clear right at the beginning of his speech that so far as this noble House was concerned he wished to see neither obstruction nor filibustering. So it has been left to your Lordships' House to give this Bill the cool, critical and unbiased examination which it should have received in another place. I am sure that the calmer atmosphere of this House will prevail. Great credit should be given to the noble Lord, Lord Delacourt-Smith, for the well-reasoned, reasonable and persuasive tone of the speech he gave to the House.
I agree with the right reverend Prelate that there has been much talk about this being a Bill to "clobber" the unions. In our debate last November, both the noble Lords, Lord Brown, and Lord Byers, went out of their way to say that they considered that this was not a "union-bashing" Bill. I am sure we all agree with that. If I remember correctly, my noble and learned friend the Lord Chancellor in winding up our debate last November gave perhaps rather scant justice to what I thought was a helpful speech from the noble Lord, Lord Brown, who opened from the Front Bench in that debate. The truth is that much of the Bill is designed to strengthen official trade union leadership and, at the same time, place heavy further responsibilities on employers, chiefly on dismissals procedure and in the duty to provide more detailed

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information to their workpeople concerning the financial position of the individual business.
The noble Lord, Lord Thomas, in his excellent maiden speech, said that he felt there was little chance of our industrial relations system or set-up being improved voluntarily at this stage. I personally regret that I believe what he said is right: because the sad truth is that the trade union movement has missed the opportunity which has long been open to it to modernise its structure. I made this point when I spoke in this House in November. But I must repeat it because few people seem to remember that in 1962 the Trades Union Congress General Council never acted on their Congress resolution of that year when they were asked:
"to examine and report on the possibility of reorganising the structure of both the T.U.C. and the British trade union movement, with a view to making it better fitted to meet modern industrial conditions".
The noble Lord, Lord Douglass of Cleveland, will remember that resolution, I know. Unfortunately no action was taken on it. No report ever came back to Congress, and I am afraid that as a result the chance of voluntary reform within the union movement was lost.
LORD DOUGLASS OF CLEVELAND: My Lords, if I may interrupt the noble Viscount I would say that quite a lot of action was taken. The General Council had a number of meetings in order to get the structure of trade unions modified and the number of unions reduced. As my noble friend Lord Williamson pointed out, this was actually done. If it was not done with waving of flags, that does not alter the fact that it was done.
VISCOUNT BLAKENHAM: My Lords, I know the constructive attitude that the noble Lord, Lord Douglass of Cleveland, has always taken on this question. But the truth is that a report never went back to Congress. Only certain isolated action was taken within the T.U.C. General Council itself.
Again, none of us argues about the fact that to-day we have this highly dangerous position. It was no use the noble Lord, Lord Delacourt-Smith, trying
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to argue against this in very persuasive tones. Quite frankly, we are losing more days, we have lost more days through unofficial strikes last year, than has ever been known in our history. This is not a tolerable position for a great trading nation such as ours. Therefore there is this urgent need for action now.
I notice that one of the criticisms of the noble Lord, Lord Delacourt-Smith, was that Her Majesty's Government are copying in this Bill many of the labour laws of the United States where, it is true, strike figures normally compare unfavourably with our own. But I do not think this accusation, if I may say so with respect to the noble Lord, Lord Delacourt-Smith, is quite fair, because of the modifications that are being made in the British proposals. I will give your Lordships three examples of this. First, in America labour contract interpretation is in the hands of judges who are not necessarily specialists in industrial relations, whereas under this Bill, as your Lordships know, a specialised tribunal, the National Industrial Relations Court, will in fact be set up. That is the first difference.
The second difference is that in the United States the law imposes an 80-day cooling-off period where a strike endangers national health or safety. This Bill provides for a 60-day cooling-off period, but we have a broader application of it; namely, where the stoppage may be grievously injurious to the national economy or where there is a serious risk of public disorder. This broader application is quite definitely an improvement on the American procedure.
Thirdly, and perhaps most important, there is a difference also in the provision of the ballot. Here I am sure Her Majesty's Government's proposals are right and are a great improvement on the U.S.A. procedure. In America a ballot is required automatically as part of the cooling-off period, whereas in this country it is proposed that a ballot may be called for at the discretion of the Secretary of State, but it has to be approved and agreed by the Industrial Relations Court itself. I am sure that the rigid application of a ballot as we have seen in America has been a real weakness in their system. I am told that the impact of the ballot in the United States has, if

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anything, hotted up the dispute rather than cooled it down, and automatically workers have always voted to support their union leadership. So I am glad that there are these differences, and I think that what I have said meets some of the points made by the noble Lord, Lord Delacourt-Smith.
We have heard of the threats by some trade union leaders that they will endeavour to boycott the Bill when it becomes law. Again, I think the wise advice of the noble and learned Lord. Lord Donovan, and also that of the right reverend Prelate the Bishop of Southwark, should be considered. How foolish to boycott when in fact their best interests will be served by co-operation! And, in any event, to endeavour to thwart a law for which an Election mandate was granted less than a year ago is not a democratic way of proceeding. I do not think the unions have any more right than any other section of the community to put themselves above the law.
The Labour Party itself must also, surely, think carefully about how they act once this Bill becomes law. In the emotional atmosphere of to-day there is, I understand, talk of repealing this Bill when the Labour Party are returned one day to power. I agree with the noble Lord, Lord Donovan. I do not believe this for one second. Nothing is going to persuade me to believe that the Labour Party would not be forced in the national interest to replace this Bill with something not dissimilar. Therefore, how much more sensible to learn lessons from the successes or failures of the various ingredients embodied in this measure! Surely it is only common sense to watch and see how all this works out over a period of years. Nobody has claimed that this Bill is going suddenly to produce some short-term spectacular successes. By all means therefore, I suggest to your Lordships, improve where necessary; but it must be wise for the Opposition, if they ever come back to power, to amend through experience and not through prejudice.
I spent three and a half years as Minister of Labour, and during that time I became more and more aware of the difficulties which trade union leaders have to contend with. I remember that in those days I saw a great deal of the noble Lord, Lord Douglass of Cleveland,
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the noble Lord, Lord Williamson, who has just spoken, and the noble Lord, Lord Cooper of Stockton Heath, who are all in the House this afternoon. I had great sympathy for them in many of the real difficulties they had to face. In all too many cases, not through the fault of the leaders, leadership came from behind and not from the front. All too often it was these militant shop stewards about whom we have spoken, and not the officials of the union concerned, who dictated policy. Here, management must take some share of the blame for not stimulating better relations with their workpeople in the individual factories concerned. Where they have done so (and Lord Williamson has already made this point) there has generally been far less trouble than has occurred where no action has been taken.
The truth is, unfortunately, that all too many of the strikes we have seen over the last years have been in breach of contracts entered into by the unions. And, alas, many of these strikes have been against the public interest and have greatly damaged our economy. I think this Bill will establish what in the public interest are the basic rights and matching obligations of employers and trade unions. Above all, the new machinery to be set up has one main purpose in mind, and that is to encourage a stable and effective collective bargaining without Government interference. This of course must strengthen official union leadership.
In ending, I should like to say just one or two words to my trade union friends. First, if the General Council of the T.U.C. is to speak with real authority, individual unions must be prepared to delegate some of their present powers to the Council. First George Woodcock and now Vic Feather have both struggled—and in my opinion have struggled valiantly in their time—to get the General Council to speak with one voice; but all too often they failed because individual unions have reserved their right to act unilaterally and not support the collective view of the General Council. Only recently we have had the most misguided examples of the one-day strikes, where certain unions acted quite contrary to the policy of the General Council, and indeed now of the Trades Union Congress itself. This failure to preserve unity is in my opinion a danger to the trade union

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movement as a whole, and the unions will continue to fail to attract public support and respect—which I think they deserve—until they can show that they are prepared, as individual unions, to act together.
Secondly, I would say this. Surely the time has come when individual trade union leaders and their officials, right down the line, should be entitled to a proper wage. It would be interesting to know what the rise in the wage of the average trade union member has been over the last twenty years and to compare it with the salaries of the officials of the unions who have been largely responsible for securing extra benefits for the individual members of the union. The fact that most union officials are grossly underpaid in relation to their very great responsibilities. More effort should be made to recruit bright young men and women, from the universities and elsewhere; and union members should not expect their movement to be run on the cheap. I am not suggesting that there should be the sort of level of salaries that are paid, I understand, to many union officials in the United States of America: what I am saying is that a trade union official to-day has a right to a salary which will permit him to give his wife and family a reasonable security and a decent standard of living.
My Lords, I support this Bill because I believe that Robert Carr, for whom I have a deep admiration, has produced a measure which, to use his own words, is "fair and reasonable" to all whom it will affect. Therefore, although there are many improvements that must be made before this Bill becomes law, I congratulate the Government on their courage and determination in pressing ahead with a measure which they are convinced, and I am convinced, can do much to revitalise our future.
5.54 p.m.
LORD SOPER: My Lords, may I first felicitate the noble Lord, Lord Thomas, on his maiden speech. If his ideas of original sin went rather further than is required, I am sure he indicated his fellowship of controversy in your Lordships' House, and we shall listen to him with interest when he speaks again.
In a controversial matter of this kind it is a great advantage if a speaker can
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polarise his attitude and can see things in black and white. Any speaker at a temperance rally who regards alcohol as the devil in solution gets off to a splendid start, and I wish in one way I could regard this Bill as the devil in statute form. But, unfortunately, I have two difficulties in this regard. The first is that, as your Lordships have already heard from many speakers, there is ample need for a readjustment and reappraisal of, and indeed an improvement in, industrial relations. That is beyond question. Furthermore, there is ample evidence, at least in the approach to this Bill of those who have endeavoured in various ways to meet these needs, to secure these reappraisals and to secure these improvements.
The other affliction to my wholeheartedness is that I have a certain unease at the somewhat synthetic indignation of some members of my own Party at this Bill when, although there are manifest differences between it and that which was in the pipeline of the previous Government. there are also manifest matters on which the two are congruent. Therefore I repaired myself to the Bill itself. and it is rather on some kind of an inquiry into the Bill and an attempt to understand it that I find myself wholeheartedly opposed to it and equally wholeheartedly in support of the Motion standing in the name of my noble friend Lord Delacourt-Smith.
In the first instance, having read the Bill continuously and assiduously. I find it a most complicated and difficult document, and it is no surprise to me that the noble Lord, Lord Drumalbyn, says that it has been widely misunderstood. Of course it has. In many cases it is inconceivably complex, and when the noble and learned Lord, Lord Donovan, points out obvious mistakes in its drafting, which apparently the Government have not already seen, it persuades me that there must be a great deal more in it that is obscure. In any case it is such a labyrinth of legal and other matters that I speculate that if we in the Methodist Church endeavoured to arrange our ecclesiastical affairs on the basis of such a document the Kingdom of Heaven would be indefinitely postponed.
My Lords, as it is, this is no Bill which can either find acceptance or understanding among the vast majority of

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people who will be required, if it goes into law, to seek to operate it, or indeed to contract out of it. But I do not believe that it is capable of suitable amendment, for reasons which lie beneath the individual clauses of the Bill. I do not believe that there is such a thing as a good curate's egg, for whatever ecclesiastical benediction you have on an egg that is partially bad, in principle it is inedible; and I believe that this Bill, although it contains certain admirable concepts and quite trustworthy attempts to secure better treatment both for employer and for labourer within the framework of industrial relations, in fact is corrupted at its source. It is corrupted, in my judgment, because it transfers the entire voluntary system away from an arrangement by which that "voluntarism" is supported by legislation. to a principle in which, as it says, legislative activities form the main framework of the Bill itself. I believe that that is bad, and it somewhat surprises me that the noble and learned Lord, Lord Donovan, did not in fact point out how resolutely—and he will correct me if I am in error—his Royal Commission was opposed to this total transfer. I believe that there is an innate inability to work a principle of legality within the framework of industrial relations, for reasons which I will postpone for a moment but will come back to later.
In the second place, having read the Bill with considerable care, although I do not believe that it is a wholehearted and malevolent attempt to "clobber" the unions, yet I find on page after page that the emphasis is against the unions. The main emphasis is still a residual legatee of that principle by which it is assumed that on general terms the employer is right, and that on general terms he is wise to regard the other side with suspicion. For instance, in the collective arrangements for bargaining, I am quite sure that the closed shop is in fact a necessary part of any system which will work in present day industrial relations. That closed shop is eroded and the curious creature called the "agency shop" is assumed to take its place. I do not believe it can.
Again, on the question of unfair industrial practices, they are spelled out with great care in the matter of the worker
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and what he will not be able to do unless he comes within the framework of legal penalties; but there is nothing on the other side as to the innumerable unfair practices that an employer can operate, short of dismissal.
Finally, it seems to me that in the whole area of organisation this Bill will encourage the "scab" union. I am no trade unionist, and I do not even belong to as close a society as my ecclesiastical friends across this Chamber. Nevertheless, I am perfectly well persuaded that, on balance, although this is not a Bill to "clobber" the unions it is a Bill which affects them as if they are the supposed culprits and it is for them to behave, in that admirable proposition of the late General Eisenhower, who once said, "If only the Russians would behave themselves what a happy world it would be!", which is asimpliste over-simplification and certainly not true.
The reasons for which ultimately I believe this Bill is unacceptable go a lot deeper. I was not particularly impressed with the great rally three or four Sundays ago. I was in the middle of it. I thought there was a great deal of enthusiasm, and that a great deal more heat than light was generated. What impresses me is that some of my most respected friends, those whom I trust, are resolutely and implacably hostile to this Bill. I have tried to ask myself why, because I am sure they are reasonable people and not merely victims of prejudice. I think that the explanation—and this has ultimately changed my mind from a certain flaccidity in this matter to resolution—is that the reason behind this Bill goes deeper into the very roots of the political situation and the social situation which we have inherited and which still persists with us.
How interested I was when the noble and learned Lord, Lord Donovan, remarked upon the suspicion that working people have of the law! They have that suspicion of the law because, under a capitalist system, whatever changes are made in the law, the presumption will always be that it will be in the interests of those who possess rather than those who do not. I make this witness. I am a Socialist and I see no reason why, in a debate like this, I should not confess it or declare it. I believe that the political background of this Bill is a capitalist

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background, and I remind myself, and dare remind your Lordships, that we are presently thinking of a Bill which emphasises individual liberty; and over against it the trade unions believe in collective solidarity. And why? Because they have not much use as individuals for the so-called virtues of liberty; they have not enjoyed them; they cannot make much use of them. Their only strength lies in their collective ability to scaffold and buttress their individual feebleness by the majority vote or corporate activity.
These are precious things that belong to the trade union movement, and I see that it is precisely for these reasons that some of my friends in the trade unions have taken this resolute attitude of implacable hatred of this Bill. I believe they are right, and I confess my conviction that ultimately this Bill cannot contribute to peace in industry, because politically it is rooted in a system that needs to be replaced. It is for that reason that I support the Motion. I support it, of course, practically, because this Bill at the moment is a "shambles". It has not been properly discussed, and many clauses have not been discussed at all, I think there ought to be much mole time for discussion, for instance, of some of the matters raised by the right reverend Prelate the Bishop of Southwark. I am quite sure that there is ample opportunity for accommodation in some of the matters, provided that that accommodation does not come within the framework of the Bill but obeys the second part of this Motion, that we adjourn the matter in order that we may turn again to the possibilities of such voluntary agreements, buttressed in places by legislation, as will bring together those who in the present state of society are manifestly at loggerheads, to their own discredit, in some cases to their own disadvantage, and to the disadvantage of the community in general.
Lastly, I do not subscribe to the inevitability of this Bill becoming law. I believe in miracles, and if a miracle is that which creates faith, I would endeavour to create a little faith in this House now that if we obey the proposition of this Motion we are serving the best interests of the community, and not jeopardising or sabotaging the true
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interests of those who are responsible for this Bill.
6.5 p.m.
LORD REDCLIFFE-MAUD: My Lords, I rise as a Cross-Bencher and my first and simple task is to say how delighted we all were by the breezy introduction of the noble Lord, Lord Thomas, into our debates. We shall hope to hear him speaking very often from his wide experience. That is an easy thing for a Cross-Bencher to do. Nor is it too difficult a thing for a Cross-Bencher to intervene in a matter which transcends the normal Party lines of division, such as capital punishment or even local government reform. But it is a rather different question for a Cross-Bencher when the matter before the House is something which so deeply divides the Parties and indeed the country as that which we have before us to-day. We Cross-Benchers must ask ourselves whether we should heed the rather abrasive comment of a noble Lord last July in the debate on the Queen's Speech, who asked what should the House think of those Members
"who skulk on the Cross-Benches, only to dart out from the ivory tower to deliver themselves of crassly partisan political nonsense, shyly wrapped in the white garments of a neutral vestal virgin."
I asked that question before coming into this Chamber and I answered it quite emphatically: I was not going to be deterred by that kind of warning, however ill-informed though well-meaning a Cross-Bencher I might be, from saying something in this historic debate. If I still had any doubts they were completely dispersed by the astonishing speech which another Cross-Bencher, the noble and learned Lord, Lord Donovan, delighted us with some time ago. Here was a perfect example, it seemed to me, of the rightness of my own conclusion: that independence of Party political attachment does not require neutrality on great political questions. It certainly is a complex Bill; but I must admit, though I am not a lawyer and I dislike legal language, that in giving this Bill my own personal second reading I found it astonishingly light reading. Many have criticised its language and I should not of course myself like to explain it to anyone else. But I was left at the end with a very clear impression of what it

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was trying to do; and what it was trying to do, it seemed to me, was to extend the rule of law—to extend the rule of law which in my history books goes back to 1215 and Magna Charta, when at last our ancestors were able to find some protection from their stronger neighbour and from the Government.
Over the last 750 years the rule of law has, in my opinion, most beneficently been extended not only to protect us from arbitrary power but as a positive help to generate good things: the Education Acts of 1870 and 1944, giving children through a Statute the chance of education, the Labour Exchange Act of 1909, and many others. The Statute Book since 1215 has many examples of a bold breakout into new country, efforts to adapt the law so that it became an instrument whereby neighbours could better serve each other and men of different types live rather more easily in harmony. As I read the Bill, its intention is precisely that: to make it rather more likely that the rights and duties of men at work will be reconciled with the rights and duties of their fellow citizens. This, surely, is something that everyone in the House can willingly support.
And as this Bill comes to us with the sanction of a majority in another place, it seems to me that we could not easily throw it out even if all the things the noble Lord, Lord Soper, said against it were true. We cannot throw it out. But if ever the House of Lords had a chance of proving its value as part of the Legislature, surely it has it to-day and to-morrow and at the later stages in considering this Bill. When I last counted there were 111 clauses that had not been debated in another place. Even if that were not so, after hearing the speech of the noble and learned Lord, Lord Donovan, there is every possible reason for us to believe that we could, and must, improve the Bill. I greatly hope that is what the House will succeed in doing.
There are two conditions of success. First, that Her Majesty's Government will listen with intelligence and sympathy to what is said constructively from the other side. The speech of the noble Lord, Lord Drumalbyn, made me hopeful that that would be their attitude. Secondly, that those representing Her Majesty's Opposition will address themselves to the improvement of the Bill in the same con-
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structive way as the noble Lord, Lord Delacourt-Smith, with the one aim of making it more like the sort of measure that it ought to be.
6.12 p.m.
VISCOUNT WATKINSON: My Lords, I support this Bill, but rather as one who stands outside it, and certainly not with any pride of authorship in it. Therefore, perhaps it is easier for me to say that this measure, complicated as we all agree, and controversial and highly contested in another place, has become for many of us much more than the sum of its parts. I think we would all agree that it is a kind of watershed in industrial relations, something which perhaps one never envisaged when I was in the Ministry of Labour many years ago. Yet the point I want to make is that because of this fact perhaps its importance has been overinflated and somewhat misrepresented. I think argument about it in the country in particular has been elevated at times to a point when some might really fear, or pretend to fear, that we are about to witness a kind of bloody revolution in the day-to-day conduct of industrial relations between management and employees on the shop floors of Britain. Frankly, I do not think we are going to witness anything of the sort, because, on the whole, the good sense of the people involved will triumph over even these sort of problems.
I must say I was much encouraged by the approach to this matter of the noble Lord, Lord Delacourt-Smith, when he moved his Motion—I think it is a Motion now, not an Amendment. I should like to say in regard to that Motion, that to ask for delay now is not a realistic thing to do. Just on the noble Lord's point about lack of consultation and all the rest, whatever one may say about that document called Fair Deal at Work—I read it very carefully at the time and I have read it since—I think it set out plainly and clearly what the Conservative Party intended to do if they won the Election.
Why nobody took very much notice of it was that nobody conceived at that point that the Government would have the courage to legislate on the basis of this document if they were returned to power. That is perhaps one of the reasons why there was inadequate discussion and consideration of what was

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there set down. There is not any doubt (and I think we ought to take account of it in your Lordships' House) that the reform of industrial relations was clearly a very important part of the Government's programme at the last Election. I think it is equally fair to say that there is still a large and unfulfilled expectation in the country, and I suspect a majority view—rightly or wrongly, I am not arguing about that—that industrial relations need reforming and should be reformed.
As one who, I hope, has always supported the trade unions since I was first really taught about them many years ago under a great Minister of Labour, and a great Permanent Secretary in those days, and as one who came under the tutelage of another great man, Mr. Arthur Deakin, and others, and learned about the hard facts of industrial life, I find it very sad that almost every time I open a newspaper now I see the whole fabric of British industrial relations is represented as "erupting" and being "bitter" and all the rest of it. It is very sad; but one has to take account of the influence that this has on the ordinary people in this country, and I think that influence has been deep.
I raise this point because the Motion in front of us is really to withdraw this Bill, and I want to put it to your Lordships that this is a somewhat academic argument. The Government, as I see it—and as I have said before, I played no part in this measure in any way—are committed to passing this Bill. They have a clear mandate for it. I do not believe the Government would have a shred of authority left if they now withdraw the Bill, or indeed modified it in any very material way. I think that is a plain statement of fact. Therefore, may I address my remarks shortly to what, if anything, your Lordships' House might do in this whole complex and difficult matter.
I think the noble and learned Lord, Lord Donovan, with his great experience, has made it plain to us this afternoon how extremely complicated this Bill is and how much work there is probably to be done on it to refine it and to try to make it as understandable as possible. I think that this House is the right place to perform that task. We have wider
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experience here; we have almost every kind of experience, from the shop floor, management, politics, the law and from the church. I would suggest that it is our responsibility to try to see that a Bill which is certain to become an Act is as workable a proposition as we can present to the nation.
After all, what is the situation against which it is set? Whether we have more strikes than other countries is irrelevant. We have clearly too many strikes for a nation that is still fighting for its economic life, and whose customers abroad would rather like to have their goods delivered when they want them and not when we think they should have them. Nor am I with those apologists who claim that our industrial relations are still the best in the world. I think in some ways they are. But would anyone in your Lordships' House stand up to-day and say that the total deployment of our human resources is the best we could manage, is the most effective or perhaps even the most human that we could achieve? I do not think anybody can maintain that principle; and if they cannot, then, despite what the noble Lord, Lord Soper, said, reform is necessary and inevitable.
Therefore, is it not our primary responsibility to try to make this Bill as workable an instrument as we can? This is not the place to go into great detail, but I hope that my noble friends on the Government Front Bench will have listened carefully to what the noble and learned Lord, Lord Donovan, said. Perhaps I may also express some of the difficulties in my own company, where we have a number of closed shops. We can manage under the pre-entry shop, and we have looked very carefully at it.
On the whole, I am not sure that we should not like the Government to go a little further towards the post-entry closed shop. They have conceded the principle now in a very limited form, and if they felt they could broaden this out a little more it would do no great damage to the Bill. It might ease some difficult friction points, because I agree with the noble and learned Lord, Lord Donovan, that in the end this Bill is going to stand or fall on its human relations. It is not going to work any miracles. I do not think the Government have ever said that

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it would. The day the Bill is law is not somehow going to be a quite different day in industry from the one that went before. We shall still have the same problems, and we shall still be the same people facing one another and trying to work together. So this is not an argument that in any way imputes that this Bill is not necessary. As I said, I believe it is inevitable, and the sooner it becomes law and the sooner we can get on and cope with it, the better.
Equally, I do not believe many noble Lords here could challenge the necessity for the Bill. Most of them would feel that we in this House have a duty to try to make it as workable as we can, and I am sure that my noble friends on the Front Bench will listen carefully to points made, from wherever in this House they come, in this debate. If we can strip the subject of some of its emotion, if we can get this rather more balanced consideration, then surely we can make it rather easier for trade unions and for management to cope with this new framework, when it comes to them with all the force of law and the backing of Parliament. Frankly, that is what I am interested in, because I am on the receiving end, as are some other noble Lords. The policy for my own company, with the 30,000 people who work with us, is to try to do all we can now to make this Bill completely unnecessary; and I am glad to hear that Mr. Jack Jones is trying to do the same. I agree with my noble friend Lord Drumalbyn that if that is what we are doing, it is presumably what the Government wanted us to do. So the Bill is already beginning to work as one hoped it would.
But there is one matter here to which I should like to refer. I think the noble Lord, Lord Soper, said that although this is not a "union bashing" Bill it still seems to be aimed rather more at unions than at management. Many noble Lords may take a different view when they see the code of industrial relations practice, because I suspect that that code will bear very hard on management—and so it should, because many bad industrial relations are the fault of management. I hope that the Government will speed up their consultations on this matter and bring the code forward as quickly as is humanly possible. I know that they will want to have full consultations, and I
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very much hope that they will, because that will make the total understanding of the Bill by those who have to work it much plainer and much more acceptable. I am assuming that the code of industrial relations practice will be very mandatory on management, and I hope that it will. So far as my company is concerned, all I can say is that we will still try to be ahead of the code if we possibly can. But we should like to see it and know what it asks us to do, and then the Bill will be a total package, instead of per-haps a slightly one-sided one as it is, quite inevitably, at the moment.
This will be a long debate, and those of us who come now should not stand in the way of those who have still to come. But may I sum up by saying that I still think this measure is going to become the law of the land and, hopefully, we may do something to improve it here. I believe that in the course of these debates our primary responsibility is to try to give it a chance of working as its authors hoped it would work: to improve the general pattern of relationships, and to try to put a spur on both management and trade unions to take their jobs more seriously.
If I may add my support to the point made by my noble friend Lord Blakenham—it is not really relevant to the Bill—I certainly hope that one of the things which will come out of the greater professionalism that will follow the passing and implementation of this Bill is that the management of the trade unions will get the sort of conditions and pay that they have long deserved and have never yet had. That is not being polite to the trade unions. One has only to study the management pattern—and one could go to the British Institute of Management and ask them to do a study—to find that, in simple terms, the present union leadership are not paid a due reward for the responsibilities they bear. Strangely enough, I think this will be easier to achieve when this Bill becomes an Act, when we have this greater professionalism.
But the main point I want to reiterate, if it is not too pretentious a statement to make, is that I believe it is the sense of the nation that your Lordships' House should try to turn this Bill into an Act that will do what I believe the majority of the nation wants; that is, to see a greater professionalism, a higher standard

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of behaviourism and, in total, a better deployment of our human relationships, not for the sake of the Government but for the better job satisfaction of all of us who have to work in industry to-day.
6.25 p.m.
LORD BROWN: My Lords, this is a bad Bill—not in all its parts, but bad because it will not work. I submit that it will not work because those who sired it and their advisers have failed to recognise the real causes of wage inflation. Let us be in no doubt, though few have mentioned it, that the fundamental purpose of this Bill is to tackle wage inflation—at any rate, I hope so. Everybody will agree that one does not prescribe a dangerous drug for a disease which has not been properly diagnosed, yet that is exactly what the Government are doing. They are prescribing drastic treatment for a problem which they think they have identified, but which I do not think they have. If fact, they have fallen into the same trap as other Administrations before them.
The reason for this lies in economic and political dogma which has coloured the thinking of various Governments since Keynes. The world has changed, yet Keynes's theories on how it should be managed still apply. Even 2,000-year old religions are taking note of modern problems and requirements, but not modern economic theory. Government after Government have been relying, almost blindly, on the cures and the placebos prescribed by their economic advisers. These 20th century sages remind me of semi-extinct volcanoes: they produce smoke from time to time, but very little lava. Whatever their particular beliefs, they have come up time and again with the same answers to this problem. Their answers have not solved the problems, and yet they go on presenting them just the same and fail to produce any fresh ideas to solve this great problem of inflation.
Most of them continue to assume that the cost of labour is a function of the level of demand for labour, as though wages and salaries behaved, pricewise, like a commodity on the market. They seem to be incapable of accepting that wage inflation stems mainly from a growing number of trade unions which to-day exercise almost uninhibited power. They
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cling to the notion that wages and salaries ought to be the result of quite uncoordinated individual bargains between different groups of employers and trade unions or shop stewards, and all at different times. This Bill is based on precisely that thinking. The Government's economic advisers, like other sane people, must surely desire to see the importance of individuals' work reflected in the level of the wages or salaries which they earn. That is surely axiomatic. But they cling to the idea of employee/employer bargained wages which is now producing a situation where ever higher earnings go to the powerful, and the already poor, the weak and the aged are slowly being driven to the wall. We in this House all know this too well already. Even the present position of maximum post-war unemployment coinciding with maximum post-war inflation—evidence which runs completely counter to the dogma of most economists to-day—seems to leave them quite unmoved.
A great Lord Chancellor once wrote these words:
From a few examples and particulars (with the addition of common notions … and received opinions which have been most popular) they flew at once to the most general conclusions … taking the truth of these as fixed and immovable. They proceeded … to reduce and prove from them the inferior conclusions. After that if any new particulars or examples repugnant to their dogmas were mooted … (they) coarsely got rid of them by exceptions".
My Lords, those words were written by Sir Francis Bacon in the year 1620, and he was concerned then about the attitude of alchemists, astrologers and quasi-scientists of his time. It is beginning to look like fair comment on many of our economists to-day: they are behaving like the astrologers of old.
The continuous attempt since the war to tackle inflation by slowing down the economy has failed. Had we earlier discovered other means of preventing wage inflation, then to-day our standard of living might well have been 30 to 40 per cent. higher than it is. Wage differentials are the key to the situation. It has long been axiomatic that people's earnings, from managing directors to machine operators, should reflect the importance of the work they do; and somehow we must ditch the idea that wages based on power bargaining will do. We

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must move towards equitable differentials based on a national sense of fairness; and we cannot continue to let the weak go to the wall and the strong exploit the rest of the community, as is happening on a continually increasing scale now. An equitable pattern of wage differentials is one which must be acceptable to the representatives of all occupations. It is subjective and not an objective thing, and it cannot therefore be decided for people by arbitrators or tribunals, or even by fashionable job-evaluation techniques.
I propose a method which would end power bargaining. I have put this briefly before the House before: I dare to do it again. It would gradually lead to equitable differential earnings for all over a number of years; it would allow us to run the economy at full blast without wage inflation; and it would materially assist our balance of payments, eliminate unemployment and, perhaps most important of all, increase people's opportunity to find for themselves jobs which fulfilled their own creative and work capacity—and it is the failure to do this, I think, that is responsible for a great deal of unrest in industry. But the method I propose involves such large changes in our thinking and practices that I believe it would have to be imposed by Parliament. It would probably also need the agreement of the two major Parties. We may not be prepared to accept changes of this magnitude now, but as the current crisis over inflation deepens, and the standard of living of all of us becomes more and more threatened, changes of this magnitude may become acceptable.
As a first step, Parliament must set up a body. I would call it the National Council for the Regulation of Differential Wages, N.C.R.D. Elected representatives of every trade union would make up its membership. Every occupation wanting to take part in setting the new differential wage pattern would have to form a trade union to obtain that right. Council members would be full-time and paid accordingly. The Council would have a substantial secretariat of economists, research workers and others of experience in trade union and industrial affairs. The Government, assisted by perhaps the National Economic Development Council, would each year decide by how much the total national wage could be in- creased. Within that limit, the function
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of the N.C.R.D. would be to recommend to Parliament how the total cake was to be distributed differentially between the different occupations. If Parliament accepted the proposal, it would make it law.
The N.C.R.D. would be, in effect, a mass bargaining session between representatives of all occupations, and, as in all bargaining between different associations of people, every party would have the right of veto over proposals put forward by others. This means that by constitution it would have to agree virtually unanimously on the new pattern. For practical purposes, 95 per cent. unanimity would prevent the possibility of a small number of representatives combining to prevent agreement. Parliament would insist that unless 95 per cent. unanimity was achieved then no change at all to the total wages bill of the country would be permitted.
During the first year of the Council's existence a wage freeze of a limited sort would, I think, have to be applied, and in each subsequent year wage changes would take place only in accordance with the new pattern of differentials worked out by the Council and approved by Parliament. The use of power bargaining would be eliminated by removing employers from the process of charting the pattern of wages (they would have to pay the going rate as decided by law), and by making union representatives reach near-unanimous decisions as a body. As a process I think it would be much more in tune with democracy than the one which is in current use to-day, or, indeed, the processes that will emerge if the Bill before us becomes law. A wages court would have to be set up, not to decide pay but to arbitrate on the interpretation of the new wage laws. Parliament would have the power to use sanctions against those who sought to reject the new wage pattern by striking. Sanctions against strikers is a horrible phrase, but law without ultimate sanctions is not effective law. It is the existence of sanctions rather than their actual use that prevents the law from being broken.
My Lords, it is one thing to strike in order to Force an employer to give a better bargain; it is quite another thing to strike in defiance of the law, especially a law founded on agreements between all the trade unions of the country. But

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sanctions, I believe, would be little used, despite their existence. Any sanction which could ultimately mean taking a large body of men into a court, as we all know in this House, is not viable. Therefore sanctions would penalise any employer or trade union official who paid money to strikers against the new legal differential wage adjustments. They would also deprive such strikers of back pay, income tax refunds and, in the last resort, supplementary benefits until they returned to work. This is not an attack on the family, because any wage-earner could safeguard his dependants from hardship simply by returning to work. Sanctions against strikers to-day are rightly regarded as immoral because they interfere with an ostensibly free bargaining situation between two parties. But a strike against law based on this Council's agreement and approved by Parliament is not against a hard-bargaining employer, but against the differential wage rights of every other type of employee, and against the law.
Many, my Lords, will doubt whether near-unanimous agreement would ever be obtained by the Council that I propose, but industrial experience shows that such proceedings can work. The essential conditions would be as follows: a first-class secretariat to assist the Council; an independent chairman; full-time salaried members; a complete year to work out the differential wage pattern for the following year; a procedure which allows continuous straw voting on one proposition or another to discover the extent of agreement; a realisation on the part of Council members that, through them, their membership—now over 90 per cent. of the population of this country; that is to say, over 90 per cent. of this country are now employees—have for the first time been given the task of shaping the differential wage pattern of this country. The membership would also have to face the fact that if they were not prepared by an extended series of compromises to agree this, then for the following year there would be no increase of wages by law. Finally, there would have to be a degree of economic discussion in this Council which would enable members to realise that a solution to wage inflation would for the first time unleash the full productive potential
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of Britain, with all its immense beneficial consequences.
My Lords, this is no easy solution—indeed, there are secondary problems which time does not permit me to mention now—but the push of a deepening crisis and the pull of a fuller realisation of the benefits that would flow from controlling wage inflation could generate the courage required to initiate these radical changes. The alternatives look very frightening indeed.
A majority vote for the Amendment proposed by my noble friend Lord Delacourt-Smith would provide the country with time to consider these great issues. Let us delay going ahead with this Bill, which will plunge our industrial relations (I regret to feel this) into a jungle of legal complexities, will not solve the problems of wage inflation and will not provide us with solutions to some of the most pressing problems that we face in our society to-day. Let us face the fact that until we have the economic mechanisms capable of beginning to move us towards equitable wage distribution, we shall never get rid of the current hate, strike and envy which are the real source of our problems in industry.
6.40 p.m.
LORD PLOWDEN: My Lords, may I first congratulate the noble Lord, Lord Thomas, on his maiden speech. I am sure that from his great experience in industry he will be able to make many valuable contributions to our deliberations. Perhaps I should declare an interest as I am the chairman of an industrial group which employs some 70,000 men and women in this country and 8,000 to 10.000 overseas. I have an interest, a very real interest, in the success or failure of this Bill when it becomes an Act. In my group we are proud of our labour relations, and even over the past two difficult years we have had little labour trouble except in one or two places.
Since the war there have been great changes in the industrial scene, the most important of which is that we have had full employment for all of that time. No one who worked in industry or in commerce before the war would want to change that situation in any way. As

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a consequence of that full employment the power of the trade unions has been greatly increased—although many people in and out of Parliament speak as if they are still as weak as they were between the wars, when men were waiting at the factory gate to be hired.
As the noble Lord, Lord Redcliffe-Maud, said earlier, when individuals or organisations arrogate to themselves or have thrust upon them power which the people as a whole consider to be too great in relation to the interests of the people as a whole, they have to be brought within the rule of law. It is not necessary to go back more than 100 or 150 years to know of the many Acts that have been passed to curb the power of industrialists: hours of work, employment of women and children, safety, restrictive practices, monopolies and resale price maintenance in the last decade. All these Acts have, rightly, been passed in the interests of the people as a whole. Because of the great power that the trade unions now have as a result of full employment, and because of the great power to very small groups of men as a result of modern technology to disrupt the work of many tens of thousands of men and the way in which some of those small groups have used that power, I support this Bill.
But I support it even more strongly than I otherwise would because the last Government introduced a Bill very similar to this one, a Bill perhaps in some ways even tougher. They declared it to be essential to their economic policy to get it passed: but because of the opposition of the trade unions they withdrew it. The present Government—and I speak as a Cross Bencher—in their Election programme asked for a mandate to bring industrial relations within the law. That may have been right or wrong: but they were elected and that was in their programme. So I believe that if this Bill were to be dropped now because of the opposition of a section of the community, it would be the very negation of democracy.
As an industrialist I accept that the main responsibility for industrial relations rests with management. But here the trade unions and the shop stewards have a great part to play. Management cannot successfully play its part unless the trade unions are enabled to ensure that the bargains into which they enter can
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be carried out. It will be in the minds of all of us that quite recently we have had industrial disputes which have been in contravention of agreements entered into by the trade unions: the electricity supply workers, the Post Office workers and, recently, the workers of the Ford Motor Company. The trade unions say that they cannot control their members; but, as the noble Lord, Lord Rochester, pointed out, in the last month we have had two political strikes and the unions who called out their members did not hesitate—at least at local level—to levy fines on those people not willing to strike. Whether they will be confirmed by the National Executive is another matter. This shows that when it suits them the unions can discipline their members.
As the noble Lord, Lord Redcliffe-Maud, said, this House can do much to amend this Bill, and I feel that there are many places in which it does require amendment. For me, I think, a great loss is the suggestion in the Bill that the post-entry closed shop is no longer permitted. I am in agreement with the noble Lord, Lord Williamson, on this point. We have certain works where the post-entry closed shop is operating, and is operating to the advantage of management and workers. I hope that the Government will think again on this and will not think in doctrinaire terms. I suspect that there is some doctrinaire thinking in this particular matter. If they do not agree to permit the post-entry closed shop, I think that consideration of the definition of "bargaining unit" and "sole bargaining agent" in the Bill will require amendment if it is not to lead to fragmentation of bargaining, thus vitiating one of the major recommendations of the Donovan Report: that companies should negotiate, so far as possible, at factory or company level.
Balloting is something to be supervised by the C.I.R. I suggest that it should be made mandatory upon employers that they should provide facilities for balloting at the place of work. Disclosure of information is one of the most important features of the Bill. The general obligation on employers to disclose information about matters under negotiation is very far-reaching. I do not quarrel with that, but the Bill as it stands is unclear about the nature of the information to be disclosed. It

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appears that this is to be specified in the code of good industrial practice. I suggest that the guidelines to be incorporated in the code must rest on the principle that the nature and scope of the information to be disclosed must be decided according to its relevance to a particular case in all its aspects. Any rigid obligation to disclose a standard range of information might—and I suggest would—promote misunderstanding suspicion and conflict, thus militating against the aims of the Bill.
Since the interpretation of the code on this point appears to rest with the N.I.R.C., which will, presumably, create its own case law, it seems very important to establish that the criteria applied at the outset are sound and realistic. It would, in my opinion, be quite wrong if the Government's natural desire to make swift progress with the preparation of the code were to preclude full consultation with the employers and unions at the draft stage of this and other matters to be embodied in it.
My Lords, the purpose of the Bill is to promote good industrial relations, but no law can by itself put this aim into practical effect. On the side of management there needs to be positive initiatives towards improving procedures and towards better understanding through joint consultation—and I emphasise "joint consultation"—and better communications generally; for instance, in relation to disclosure, by involving employees and their representatives in an understanding of the company's financial structure and of the relationship between the company's commercial environment and its ability to provide employment and pay wages.
Experience in some of our companies has shown that this process of employee involvement and education, which underlies the development of constructive and responsible relationships, is a progressive one which may extend over several years, and demands a continuous commitment of management attention. A comprehensive training programme is called for, so that management is fully equipped at plant level with the necessary expertise to operate the whole system effectively. On the trade union side, there is a need to train shop stewards, both in the provisions of the Bill and also in the field
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of better industrial relation practices and procedures. It is important, most important, that industrial training boards should make such training eligible for grant, as this would provide a direct incentive to employers to carry out such training.
My Lords, I think that the Bill is a fair and realistic framework for improving industrial relations. I recognise that there is a very general feeling among trade unionists that it is a device to "clobber" the unions. But I think it is a fair framework, provided that we recognise, and it is seen as, the opportunity for constructive initiative by employers and unions and not as an excuse to abdicate their responsibilities. The establishment of a set of ground rules to regulate collective bargaining is long overdue; and (I say this with deference to noble Lords who have spoken before) the voluntary system has clearly failed to supply those in the conditions that prevail to-day. The definition of rights and obligations is of equal value to employers, unions and employees in pursuing their recognised and respective interests. The controversy aroused by the Bill, both inside and outside Parliament, has, perhaps paradoxically, involved the public in the realities and implications of industrial relations problems in a way that is quite unprecedented and, I believe, wholly beneficial. For the reasons I have given, I support this Bill.
6.55 p.m.
VISCOUNT CALDECOTE: My Lords, I must also declare an interest in an engineering group with some 20,000 employees as a full-time director. I listened very carefully to the sincere, moving and persuasive speech of the noble Lord, Lord Delacourt-Smith, but I think he over-simplified the position. The gist of what he was saying seemed to me to be something like this: that too much was being made of the troubles caused by industrial disputes; that trade unions are excellent organisations—as indeed they are—and that they resented, and were deeply hurt by, the Bill before your Lordships' House; that the employers were lukewarm about it, and, therefore, the obvious solution was to abandon it all and return to consultation and use of the good offices of the T.U.C.
It is always attractive to proceed by consent, but that has been attempted, as

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has already been pointed out, for the last ten years; and the outcome was more strikes in 1970 than any year since 1926. The last Government knew that action was necessary but, sadly, they lost their nerve. This Government know that action is necessary, but they will not lose their nerve. It is not an easy problem. This Bill is about people, the most difficult, the most unpredictable and important factor in any organisation; it is about relations between people in industry and commerce—the owners, managers, trade union officials, trade union members and the other employees. In order to keep this in perspective, I think it is necessary to look back a little into history to remind ourselves how these groups developed, what are their objectives and their responsibilities.
My Lords, 150 years ago all combinations of workers were illegal and the power of the owner-manager reigned supreme. Through the repeal of the Combination Act, and later by the Trade Disputes Acts—the first one enacted exactly 100 years ago—the trades unions were given rights and made into effective institutions. Since then there has been a steady shift of the balance of power from the employers to the employees, but the balance of power continued well into this century firmly on the side of the employer.
Of course there were many good and enlightened employers, but there were others who, in a seller's market for labour, widely abused their powers to retain for owners an unjustifiably large share of the wealth produced. That was the issue; how the wealth should be shared. It was the issue up to some 25 years ago. Over that period of some hundreds of years the unions have fought a hard and often bitter fight, with much sincerity and courage, for power to give the employees, their members, a fairer share of the wealth produced. So far as any war is ever won that fight is won. No doubt, as Mr. Victor Feather has said, the power they have won is still necessary to protect their members' interests. But, my Lords, it is a tragedy that, like the generals of old—and surprisingly enough, like the noble Lord, Lord Soper, too—they are still fighting the last war.
While the trade unions have fought, conditions have changed. No longer is
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Britain the workshop of the world and way out ahead of competition. No longer do we have captive markets in a widespread Empire. Now we have to fight in very tough world competitive markets, and the main issue now in industry is how to create more wealth in Britain; not principally how to share it fairly, though that of course is still important. The purpose of this Bill is "to amend the law relating to employers and workers" for the purpose of promoting good industrial relations. Its objective is to reduce destructive conflict in industry which prevents the creation of wealth. It is not to emasculate the trade unions nor to oppress their members. It is to help all the unions and managements to achieve the standards already achieved by the best.
My Lords, let us for a moment look at the people involved; the owners who provide resources and money to buy buildings, plant and materials; the managers whom they employ to optimise the use of those resources and earn the rewards for their investment, and the other employees who work with their hands or brains within the system organised by the management. Each class is dependent on the others for the creation of wealth and rewards for their services. A number of years ago managers were much closer to owners than they are now. Very often they were the same people. The manager's job was to obtain both physical and human resources at a minimum cost. They obtained their labour in a seller's market and their results by the fear of sacking and starvation.
The outlook to-day is totally changed, not only because of the shift of power. Most managers know quite well that the best results are obtained from consent or, failing that, after discussion and consultation and before a decision is taken. In that sense only managers can fairly claim the right to manage. The vast majority of managers in industry want to see high pay for good work, but the limit is set by what the job will stand and what the market will pay. No longer is it set by the greed of the owner. To a great extent the interests of the managers and the employees are the same—the prosperity of the business. And prosperity requires competitive prices to attract customers and good

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profits to provide capital to run the business. The Rolls-Royce affair has emphasised an often forgotten truth: it is only the lack of money that will put us all out of business—managers, trade unionists and employees of all kinds. That happens when more money goes out than comes in.
Why, then, if it is so simple, is there so much destructive conflict and such damaging strikes? I believe that there are too many managers and too many union leaders who are still living in the past. And I have no doubt that there are at least as many bad managers as there are bad union leaders in industry, and a few who are selfish or hungry for power, have no interest in the men whom they are representing. They are all fighting old battles over irrelevant issues and in the process doing great damage to the community.
The Bill is aimed against those people in industry—the managers who want to keep the workers in their place and the union leaders who want to teach the employers a lesson. May I give your Lordships a few short examples of the kind of thing I mean. Not long ago some directors were discussing the building and re-equipment plan for a works. The plan included improvements in washing and lavatory facilities for their employees. That part of the plan was deleted, because the managers said that the men had never had these facilities before and they did not need them now; they could use the roadway.
A docker I know set himself to improve his position by going to night school, where he won a prize at the City and Guilds Institute, which he was due to be given by the Lord Mayor. He asked for a day off and was told that he certainly could have it but he would lose his job. Then there is a type of shop steward convenor who is only interested in his own future and not in the men whom he represents. I heard the other day of one shop steward who took no interest in the prosperity of the company or of the union members and was only interested in getting elected to the position of district secretary.
I heard recently of the behaviour of union leaders in a factory threatened with closure, because of the indiscipline of union members. After many warnings
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two men were suspended by the management. The rest of the work force went on strike. After further warnings that if this went on the factory would close, and everyone would be out of a job, they still did not call off the strike, and the factory was closed. The men came to the managers and said they never thought that the managers would carry out what they said they would do—because the trade union leaders had persuaded them that the management were talking through their hats. These are not fairy tales, my Lords. I have spoken first-hand with those who have knowledge of each case I have quoted. But it is just as well to remember that there is another side. There are progressive union leaders who travel long distances to fight for their men and sometimes are involved in disciplining their own members. I heard the story the other day of the head of one great national union who went quickly to the scene of a dispute in a Midlands factory, where he found that three union officials had flouted the regulations of the union. They were brought to London, given a fair hearing and dismissed, and the dispute was settled—not a very happy thing for the head of that union to do; but he did it.
There are conscientious managers, too, with big responsibilities for many people; who work long hours, perhaps battling against militant shop stewards with no interest in the company or the people they represent. These union leaders and managers get no headlines and little thanks, and far more kicks than ha'pence. They provide the reason why much of industry runs smoothly, why our exports per capita are the third highest in the world and nearly double those of the United States. This Bill is aimed at strengthening their influence.
But, my Lords, we must understand that many of these union leaders sincerely and genuinely believe that this Bill is wrong. They are sincerely concerned with the basis of at least part of it, and with the practical working of other parts. I hope that we can reach more common ground when the Bill is passed, when there is a better understanding of what it is trying to do. I make no apology for drawing attention to the background of this Bill, even at this late hour, for I believe that there is a real danger of misunderstanding its purpose.

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How does it seek to effect its purpose of promoting good industrial relations? First, through strengthening the basis for friendly and responsibly conducted collective bargaining. It is not true, as the General Council of the Trades Union Congress has stated, that one of the central purposes of the Bill is to limit the right to strike. That sort of statement is neither helpful nor enlightening. It is totally misleading. Nowhere in this Bill is that stated or implied. Indeed, Clause 124 specifically prevents the courts from compelling an employee to do any work. The Bill sets out the rights of employees in many ways, with the purpose of ensuring that the standards of bad and reactionary employers will come much nearer to those of the best.
There are two provisions which have caused particular trouble and opposition. First, there is the closed shop, which has been mentioned many times to-day. In principle, it is highly objectionable and a denial of freedom to insist on membership of a particular union before a man can work. In practice, as those who work in industry know, especially when reasonably applied, there is much in favour of the discipline and simplicity of negotiating with one union, representing all employees.
The agency shop is an attempt to meet divergent views, but we cannot help being concerned at the detailed implications of it. As an example, in one works where there are perhaps two unions, we may be faced with conscientious objectors paying to charity, other non-union members paying to the agency union, non-agency union members paying to the agency union and members of the agency union paying their own dues. It is going to be a complicated and difficult tangle to sort out. Such arrangements are perhaps better than a rigidly applied closed shop, and certainly they are a better balance between the freedom of the individual and conformity with majority opinion. But they are much less satisfactory than many existing councils and less formal arrangements at national, company and works level.
Such arrangements could lead to appalling complications in practice, and I implore the Government to look again at this part of the Bill. It does need further study, particularly in relation to bargain-
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ing units, mentioned in Part III of the Bill, and particularly as to its effect on professional people in industry. I hope that we shall look at this Part of the Bill very carefully on Committee stage, and that the Government will be prepared to look at it again and be responsive to constructive Amendments that are put forward.
My Lords, the second question that I want to touch on is the registration of unions and employers' associations, but this matter was so well dealt with by my noble friend Lord Drumalbyn that I will pass quickly over it. The fact is that there is much emotion and apparent opposition to it in the unions. I say "apparent" because, from talks and discussions which I have had with a good many people I do not believe that there is so much opposition to it as appears on the surface. There is very little logical basis for the opposition, though I accept that the opposition is sincerely based. Why should not unions be accountable in law to the community, as many other similar organisations are? The fact is that the existing framework of law gives to unions many privileges but few obligations to the community. The provisions of this Bill will help to restore the balance and strengthen the influence of fair dealing and common sense. It is not surprising that power seekers, the militants in the unions who are the beneficiaries of the present situation, oppose these changes. In times past employers similarly opposed changes which took away from them the unbridled power that they then had to oppress their fellow men.
My Lords, am confident of the need for change and the soundness of the principles behind this Bill. It is clear that to make the changes needed requires Parliament to act and amend the law, and every day shows the danger of further delay, but the Bill is complex and many clauses have not even been discussed; I have no doubt that it can be improved and we can improve it here. I hope we shall have the fullest possible chance to amend it and get the full co-operation from the Government to accept constructive Amendments. Surely, to-day, from the Opposition point of view, is very like the times in the 1945 to 1951 Parliament when many nationalisation measures came before your

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Lordships' House to which many of us intensely objected. We did not try to oppose them, but we did try, and I believe we succeeded, in improving them.
I am delighted to hear the noble Lord, Lord Delacourt-Smith, promise the full co-operation of noble Lords opposite in constructive debate and in improving this Bill on the Committee stage. The Bill is no panacea, it is no substitute for good management or wise union leadership, and it is certainly no let-out for management. It will not end conflict, but the hope is that it will help to end destructive conflict, for whatever the T.U.C. may say, it is no fiction that the British economy is being threatened by industrial disputes. I only wish that more members of the General Council and more union members could travel abroad, as many of us do, and hear the comments of our many friends in other countries who want to trade with Britain and who observe with sorrow the delays and dislocations that follow industrial disputes here.
My Lords, I support this Bill because it will help to restore the balance of power between those anywhere in industry, in trade unions or in management, who seek the interests of their neighbours in the community and those who, through selfishness, greed or anarchy are working for the destruction of the whole British way of life. Above all, I support it because it will help to create conditions where conflicts in collective bargaining will no longer impede the creation of wealth and of jobs which will give greater satisfaction to everyone in industry—perhaps the most important achievement of all.
7.15 p.m.
Lord BROCKWAY: My Lords, I listened with great interest, but also great disagreement, to the speech which has just been delivered by the noble Viscount, Lord Caldecote. I was specially interested in the opening part of his speech when he dealt with the history of the trade union movement. He spoke of its beginnings 150 years ago. I was very interested, after some research, to find that the earliest organisation of workers dates back to the period of Cromwell when the Levellers in a feudal society organised the peasants. My dear old friend H. N.
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Brailsford has written a good hook about their story. Perhaps I should add, to be fair, that I recognise that in the growth of trade unionism in the last century the Party opposite was more tolerant to the workers' organisations than the Whig Party, representing the new industrialists, used to be, and that it was the Party opposite which introduced the first factory legislation. What the noble Viscount said towards the end of his speech I found superficial and failing to deal with the real, deep causes of industrial conflict to-day; but to that I will refer later in my speech.
My Lords, I am a little disappointed this evening, because I thought that among all the Members of this House I had the longest membership of a trade union—I joined my union in 1910—but only this week I learned that the noble Lord, Lord Taylor of Mansfield, joined his union in the year 1908. But may I say to the noble Lord that I have since investigated my own history and I find that I joined a previous union in the year 1907 and only transferred to my own union in 1910. So, after all, I probably am the oldest trade union member in this House to-day.
I regard this Bill as absolutely disastrous. I do not propose to deal with it in detail, because that can take place at the Committee stage. The noble and learned Lord, Lord Donovan, delivered a devastating analysis of the details of the Bill. Noble Lords who supported the Bill have indicated that they will propose Amendments during the Committee stage, and I can promise the House that on these Benches we will go through every clause of the Bill, however long it may take, and seek to remove the limitations on trade union activity which are now engaged in this measure. I therefore do not propose to deal with the details of the Bill, but, like the noble Viscount, Lord Caldecote, though in a very different way, I propose to deal with the background and its principles.
There are not many reasons why I appreciate the Government on the opposite Benches, but one of those reasons is that they are very honest in their actions. They are not so honest in their speech, but they are honest in their actions, because they believe in the present capitalist system of society; they

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believe in free enterprise, which is really free enterprise for the great monopolies against the majority of our people. They believe in those things.
VISCOUNT CALDECOTE: My Lords, would the noble Lord like to expand on that a little? To talk about the great monopolies as being against the majority of our people is not, I think, very accurate.
LORD BROCKWAY: I am sorry, but I think it is. I think that one of the facts of life which we are now failing to realise is that the economy is increasingly passing into the hands of great monopolies. To suggest that we are now living in a society where the individual has free enterprise to make progress, when in fact industry after industry is now passing into the hands of monopolies which control our economy and give little opportunity for individual effort and enterprise, is an inaccurate description of our present society.
VISCOUNT MASSEREENE AND FERRARD: My Lords, what does the noble Lord say about the State monopolies, which are far greater than any private monopolies, and invariably show a loss, to the detriment of the standard of living of the public?
LORD BROCKWAY: My Lords, in a sense, I feel encouraged that I appear to be delivering a provocative speech and encouraging noble Lords opposite to intervene. There is a great difference between a private monopoly, representing a section of the community, making itself profitable, and a public enterprise representing the whole nation and seeking to serve the whole nation. That difference in monopoly is very great.
VISCOUNT MASSEREENE AND FERRARD: Nonsense!
LORD BROCKWAY: My Lords, I was saying that we appreciate the fact that we now have a Government very different from past Governments. They are different from our own Labour Governments, which said that they were Socialists but did not carry out Socialist policies. We now have a Government which is carrying out capitalist policies, of which this Bill is a reflection. They introduce a Budget to give presents to the rich. They hive off the profitable elements in public industry
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for profit for private industry. They are intransigent to the workers in public industries. Now, in the steel industry, they do all they can to dismember another public industry. I welcome the fact that the conflict between the Government and the Opposition is now clear. The Government stand for the present system of society, and this Bill, which is limiting the power of trade unions, is another reflection of that attitude.
I do not congratulate the Government upon their speech. The speech of the Prime Minister last Saturday favoured national unity in this country, at a time when the Government are introducing this Industrial Relations Bill, which is, in effect, a declaration of war upon the organised workers of this country.
If we were really seeking national unity at this time, the Amendment which was so ably moved from our Front Bench to-day would be accepted. That Amendment proposes that this Bill, which has so divided our nation, should be adjourned so that there may be discussions to seek a solution of this problem. I have been amazed at the way in which the Government have rejected the constructive contribution which the Trades Union Congress are now making to help solve the difficulties of our economy. It has been the one hope of recent years that the Trades Union Congress, representing the trade union movement, have come forward with constructive proposals for the expansion of the economy, for the absorption of the 700,000 unemployed and for the use of the machinery of production in our society for great development.
Those proposals have been heard almost with indifference by the Government. If they were really seeking national unity at this stage, and seeking to secure the co-operation of the trade union movement in the development of our economy, they would not be proceeding with a Bill which is a challenge to the whole of the trade union movement, but would be inviting them to discussion and consultation with a view to the advancement of our whole economy.
It is difficult to describe the seriousness of the national division which this Bill has occasioned. I think, for the first lime in history, we now have the trade union movement declaring in favour of a policy of non-co-operation with legislation carried by Parliament. This is a

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terribly serious situation. We have national unity on Saturday. On Monday, in this House, there is introduced a Bill which means national division, and which is so repugnant to a main partner in our economy, the trade union movement, that they say that if this legislation is carried they will even adopt an attitude of non-co-operation.
I hope therefore that this House will accept the moderate Amendment which has been moved from our Front Bench. I hope that even at this late hour a majority in this House will accept the view that this Bill is not only a danger to the trade union movement and to the organised workers, but that it is a danger to our country, to the expansion of our economy, and to the whole reputation of our society. I hope that the majority of noble Lords in this House will accept the Amendment that has been moved, and that Her Majesty's Government will be willing, in order to gain the national unity which they declare is their purpose, to put this Bill on one side for the time being while discussions take place for some co-operation with a great element in our economy, the trade union movement.
7.28 p.m.
LORD BOURNE: My Lords. I was not able to be here at the beginning of this debate when the noble Lord, Lord Drumalbyn, introduced it and the noble Lord, Lord Delacourt-Smith, moved his Amendment. So if I cover the same ground, I apologise. My remarks will be quite short. I speak not as an industrialist but as one who has lived under discipline all his life and was not allowed to strike, although I was totally dissatisfied with the conditions and pay—which, when I started happened to be 10s. 6d. a day. Nor were the gunners or the drivers allowed to strike. That is the introduction to my remarks.
I have three points to make. In 1969, when the Government of the day were defeated by the trade unions and told that it would be better to employ the voluntary system to reduce the number of strikes, I think that many of us hoped—certainly I did—that they were right. Unfortunately, they were not: and, as many noble Lords have said in this House, 1970 was the worst year for strikes, of one kind and another, that we
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have ever had: the result was worse than ever. Comparisons with other countries are to my mind totally irrelevant. I entirely agree with the noble Viscount Lord Blakenham, when he says that the United Kingdom cannot afford these strikes.
I come to my second point, the question of law. When I was talking with Mr. Feather not very long ago I asked him whether a set of Queen's Regulations would be a good idea for industrial relations. He said that it would be a splendid idea so long as it applied to management as well as to the shop floor. I said that of course that would be the case: under Queen's Regulations, a General cannot hit a corporal, any more than a corporal can hit a private. If he does, he is up under the same law. So we agreed about that. I noticed on reading this Bill that under Clause 2 the Secretary of State has to produce, not a set of Queen's Regulations but something called a code of practice. He has to do it within a year of the Bill's being passed. Contrary to what the noble Lord, Lord Brockway, has just told your Lordships, when he said that this Bill was against the unions, the shop floor, Clause 2(2) says that:
"… the Secretary of State shall have regard to—
(a)the need for those who manage undertakings to accept the primary responsibility for the promotion of good industrial relations …"
It could not be put better. I am longing for the day when that code of practice it written, published and accepted.
Turning to America, I shall never forget going round a Ford engine factory in Cleveland, Ohio. A fellow, who was an expert, was inspecting Ford V8 engines before they went out of the shop. I said to him: "Are you satisfied with your pay and conditions?" He said: "Good heavens! no. I think they are terrible." So I said, "In that case why don't you go on strike?" This was in August 1959. He replied: "I am not allowed to go on strike by law until next May, when the end of our three-year contract comes up, and my union will negotiate a fresh contract." In other words, that Ford V8 engine factory, and all the other Ford factories, had a perfectly good agreement which meant industrial peace for three years. I know that the noble and learned

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Lord, Lord Donovan, in his magnificent speech at the beginning of this debate, said that this Bill does not aim so high. The fact remains that if we can get even a two-year agreement between the workers and the management, and industrial peace during that time, it will be a very good thing.
My last point is the quotation which has often been made: "Power has moved to the shop floor." We all realise that. But with power goes responsibility. Power means absolutely nothing if you do not accept the responsibility at the same time. Why do not the British workers accept the offer, when they are invited to sit on the boards of their companies? I do not understand that. Volkswagen, one of the biggest companies in the world, have three shop floor workers on the board. The Ford Cologne factory have one worker on the board. This principle was introduced (and I am sorry to take his name in vain) by a fellow Cross-Bencher, the noble Lord, Lord Roberston of Oakridge. He was advised by officials from the Ministry of Labour not only to do this, to put shop workers on the boards so that they could have the same information as the board members— in fact they would be dead level with the shareholders—but also to organise the unions in such a way that a works had only one union to deal with—that is to say, a chemical union, a steel and iron union, et cetera. That is a very good system and it would be a good idea to move towards that here.
My conclusion is, first, that I see no harm in living under the law. We all do it. Why should the unions be excepted? Secondly, the day-to-day business should be covered by the code of practice, or Queen's Regulations, whichever you prefer. These are the reasons why I support the Bill.
7.35 p.m.
BARONESS EMMET OF AMBERLEY: My Lords, after a long list of expert speakers who have gone into the details of this Bill much more ably than I can, I should like to speak on rather a different general line—not on the line of the noble Lord. Lord Brockway, who, I am sorry to say, has brought the first bit of anger and bitterness into this debate, although one recognises that he is immensely sincere. I am neither an industrial tycoon nor a member of a trade
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union, unless one can call grandfathers and grandmothers members of a rather special trade union. Perhaps in this mature House, after this Bill has gone through, we might register in that trade union, and I should be willing to offer myself as a shop steward. At three score years and ten I can, I suppose, after a long time of experience, claim to have distilled a little wisdom, rather like old wine, to be taken in little sips.
I have recently had rather an interesting experience. I, used to paint quite a lot when I was young, and I had great difficulty with my perspective—those lines which should all meet on a focal point but which seemed to escape in all directions. In my old age I have taken to painting again and I find that to pinpoint the focal point and to converge the lines does not now present the same difficulty. This conjured up a train of thought in my mind with regard to this Bill. My contemporaries here who remember the First World War, the subsequent desolation of unemployment in the 1920s, the exhaustion of the seven years of the Second World War and the slow rehabilitation of our people, and now the industrial unrest, increasing violence in crime, the taking of drugs and the widespread, money-spinning pornography, will, like me, sometimes wonder how this country has survived and will survive.
I can see a focal point to which all the saving qualities of our nation converge, one which has pulled our country through and will do so again. There is in our race, I am certain, a sense of fairness and justice, a respect for law and order and a dogged determination to see it through. That is why this Bill is now before the House as a mandate from the country. I think my noble and learned friend on the Woolsack will bear me out that Aristotle said:
"The rule of law, is the rule of Reason, unaffected by desire."
Could we regard this Bill in that way—without bitterness and anger, as an honest attempt to put the industrial life of our country into a. framework, not a straitjacket, of law and order, unaffected by the presumption of the trade unions to dictate from time to time to the nation, unaffected by the employers to use labour as they wish instead of taking them into partnership, unaffected by the interference of Government which will inevitably

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seem to be partisan on one side or the other?
As the right reverend Prelate, the Lord Bishop of Southwark, said, there is an important measure of agreement on this Bill. I personally would take off my hat, if I had one, to a certain lady in another place who had the courage to say that something needed to be done, only to be overruled; to those trade union leaders who have lately, in the Press and in speeches, also been quite blunt in their statements that something needs to be done; and also to the good management which exists in this country, alongside the indifferent and the bad; as, for instance, in agriculture where there has been the greatest productivity and no strikes, and where the master and his men work side by side. The nation showed at the General Election that it expected Parliament to act, and this is why we are now discussing this Bill. And I think the nation also expects that in this House, this very wise and mature House, the discussions will be conducted with dignity and in the tone set by the noble Lord, Lord Delacourt-Smith, at the beginning of this debate. After all, this House is mature; it has no axe to grind, no voters to consider, and we can examine this Bill, surely, without any bitterness, taking as our focal point the country's interest as a whole.
I should like to leave with your Lordships a quotation which I am very fond of. I do not know the author—if anybody knows who it is I shall be very glad to hear. It seems to be apposite to our present work. It is this:
"It is not in our power to master the tides of the world but to do that which is in us for succouring the years wherein we are set. Uprooting evil in the fields which we know so that those who live after may have clean earth to till, what weather they may have is not ours to rule."
My Lords, in this spirit, and appealing to the great sense of law and order of this House and of our people, I hope we shall proceed with this Bill.
7.42 p.m.
BARONESS LEE OF ASHERIDGE: My Lords, I have agreed to disagree with the noble Baroness, Lady Emmet of Amberley, in another place for a good many years, but I am very conscious that, although our views have been dia-
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metrically opposite, she has always spoken with great personal kindness and immense sincerity. I am afraid that the gap between our philosophies and our views of the world is as wide as it has ever been. Here we are discussing basically whether the trade union movement of our country has gone too far; whether it now has too much power and must be curbed. Of course the trade union movement has gone a very long way; it has travelled a long distance since the time when trade union leaders were sent to Botany Bay. Indeed, looking round these Benches we see that the fate of our most distinguished trade union leaders these days is to be sent to your Lordships' House.
In looking at fellow members on this side of the House I observe that almost all of our great trade unions are represented. In their personal histories, in their memories, in their life-long struggles, they know what it has taken to build up the unions of the labourers, of the miners, of the seamen—indeed, the whole world of trade unionism. But I do not think there is a single shop steward on our Benches. I stand to be corrected, but I believe that is so. Yet the whole tenor of speeches from the opposite side of the House has seemed to assume that there were the shop stewards, the rank and file leader, on one side, and that there was also the mature, serious, responsible, elderly trade union leader; and that never the twain shall meet.
If it was the ambition of Members opposite to encourage a division between the shop steward, the rank and file leader, and the top tycoons, the top bosses, of the trade union movement, they certainly could not have gone about it in a worse way than by this Bill. I have certainly never seen the bottom and the top—the shop stewards and the national leaders of our unions—more closely united. I think anyone present would agree—never. So I want courteously to suggest that, when we are talking about trade unions, there is ample experience on this side that can warn your Lordships' House of the dangers of going ahead with this Bill. It will unite our trade union movement more solidly than it has ever been united. But, unfortunately, it can divide the

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nation. And I still cling to the optimistic hope that, just as our union leaders have progressed from Botany Bay to your Lordships' Benches, so we may be able in the years ahead to solve the problems that must be solved in the unions and in industry by peaceful methods and not by violence, by constitutional methods and not by setting aside the rule of law. The most precious thing we have gained from generations, indeed centuries, of struggle is that we thought we had developed constitutional methods in this country that could help us to keep moving forward towards greater measures of social justice. But this Bill, which our trade union members—and I, too, am one—from top to bottom, of every kind, every point of view, are agreed in opposing, is being debated at a time when the divisions in the nation are being dangerously enlarged.
I do not want to repeat what has been said already, but there is no denying the fact that when a working man is looking at this Bill he is also looking at the recent Budget statements. Once he gets over the brainwashing of Press headlines and comes down to an exact examination of how he is going to be affected, it is going to be very hard to explain to him why the surtax payer is going to have his taxes reduced; why the children of the well-to-do are going to be made better off. And bless them all! I want to see every child given a good education and good opportunities of health, but it is a strange atmosphere when the children of the well-to-do are being made better oil and the children of the poor are being made worse off. The fathers are becoming increasingly aware that, although a e grandparent generation may get £1 on its pension, it is the middle generation that is going to have to pay for that increase; that in all kinds of ways the division is becoming sharper. We ought to be using both the machinery of industry and the machinery of the trade union movement to solve grievances, to make it easier to give men a sense of fair play. That, I believe, is the way to increase production. But, instead of that, on every side we are going in the opposite direction.
Of course, all sorts of objections may seem illogical. For instance, if we were speaking in terms of abstract concepts we should be against the closed shop; we
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should say, "Let every man and woman do exactly as he or she pleases". But we are not speaking in abstract concepts; we are talking in terms of a social situation where it is one thing to face the world with a comfortable, independent income, and something else to face the world if all you have is your labour power. Through the years, solidarity for ever, standing together, has been the armour of the working man and woman. They have known that alone they were helpless and powerless. They have known that if they stood together they could advance together—and surely it is a wonderful concept that people should seek to advance together, instead of advancing at one another's expense.
Of course our unions have a great deal wrong with them. Talk to any trade union leader, or rank and file member, and you will find we are all agreed that there is a great deal to put right. There is a great deal wrong with some differentials within unions, and there is a great deal wrong with some differentials between one type of job and another. I hope that we shall address ourselves to those problems. It is a good thing that the power of the General Secretary is increasing—and I think we shall all agree that it is not increasing enough. In the end we may be grateful to noble Lords on the opposite Benches, because it is the experience of legislation such as this which teaches the individual unions, however powerful they may be as individual unions, that they are not powerful enough. Therefore we can see not only a closing of the ranks from top to bottom within the unions but also a much closer coming together of the various unions.
It is because we feel so strongly on this matter that many of us on these Benches are utterly opposed to this measure, and when we have the opportunity to-morrow of course we shall vote for the Motion that has been so ably moved from our Front Bench. There is just one other thing that I want to say. I am in a dilemma when it comes to the Second Reading of this Bill. I could not he more opposed to the philosophy and the surrounding circumstances of the Bill, but what I have to keen in mind is that there will never be a Labour majority in your Lordships' House. And there will certainly never be a Liberal

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majority—although I do not want to hurt the feelings of any noble Lords on the Liberal Benches.
LORD DIAMOND: My Lords, if my noble friend would forgive me for intervening just this once, there was another occasion when it was said that never is a very long time.
BARONESS LEE OF ASHERIDGE:
My Lords, I accept that; and, like the noble Lord, Lord Soper, I am prepared to believe in miracles. But I think that, in any foreseeable future, for historical reasons, there will be an overwhelming Conservative majority in your Lordships' House. When we have had a Labour Government we have assumed that your Lordships' House would not vote against the Second Reading of important measures. There have been exceptions, but that has been the assumption; and I believe it is a very important assumption.
The other House consists of the elected representatives of the people of this country. We here are not elected; we are selected, and in the way that history has a habit of turning into its opposite I think it might even be said that we are the "Mary Anns" of the Constitution and it is at the other end of the building that one finds the "Queen Annes". As the elected representatives they must have the major power. I do not want to see your Lordships' House ever seeking to become a Second House of Commons. I think that would create confusion; indeed I think it would be the end of your Lordships' House. Of course I consider—and noble Lords will forgive me for saying this—that if the world had been sane and adult it might have managed to dispense with the services that your Lordships' House has been able to give. But in the present circumstances we here have a job to do in amending legislation.
In recent years there has been humanist legislation dealt with at a very high level indeed in your Lordships' House. We can listen to speeches of very great distinction from the world of medicine, of science, of the arts and of business. There can be leisure to discuss problems of education, of the arts and of humanistic values, the opportunity for which is not available to the same extent in the other place. But your Lordships are not
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going to have a situation such as you had in the early days of Lloyd George, when he threatened to swamp your Lordships' House because it was overruling the elected Chamber.
In my view, it is most unwise to set the precedent of voting against the Second Reading of a major Bill, although I know how strongly some of my noble friends and colleagues feel about it. Their answer would be, "Why not?", because if we have a Labour Government, as we hope and expect to have (and that will not be a miracle; it will just be plain progress and common sense) in the near future, I know that some of my colleagues will say that whatever we do now will not prevent noble Lords opposite, if need be, from voting against Labour measures. I hope that is not true. I hope that we shall try, in our own, sometimes illogical, sometimes indirect, way, to make constitutional government work in this country, and that there will be a clear acceptance of the different functions that have to be carried out by the elected Chamber and by the selected Chamber. And we shall have an opportunity—and I believe a very important opportunity—at the Committee stage to go through this Bill with the greatest possible care.
I have been greatly encouraged, not only by comments that I have heard today from the Benches opposite but by other comments that I have heard from very distinguished Cross-Bench Members, and indeed Members in all parts of the House, who have said, "We will have a real look at this Bill; we will look at it clause by clause." And, after all, as the noble Baroness, Lady Emmet of Amberley, said, we do not have to look over our shoulder. Unfortunately one cannot expect any Chamber to be made up entirely of saints, and there are always some people in the elected Chamber who will say to themselves, "What will my constituents think about this?" We in this Chamber really are free—free to give our best thoughts to this legislation; and I hope that your Lordships who disagree strongly with a point of view which some of us are putting forward will please consider very carefully not only what we are saying but why we are saying it.
What is it we are trying to achieve? We are trying to hold the progress that has been so dearly bought by the struggles

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of the past centuries. We know that we have an old industry, much of it needing to be brought up to date. We know that we have an old trade union movement. We did not lose the last war; we won it. The Germans lost it, and they got a brand new trade union movement as one of their prizes. It is not easy to move men; it is not easy to move institutions from where they are to where we want them to be. We have a whole world of constructive work waiting to be done if we will do it in that sense. But any attempt to coerce the trade union movement of this country by punitive legislation will mean not only that an attack on anyone will be resented by all, but that we shall be endangering more than the gains of the past: we shall be putting in jeopardy our dearest hope, which is that we shall continue to make progress by peaceful constitutional methods.
7.58 p.m.
THE EARL OF HALSBURY: My Lords, in rising to address your Lordships' House this evening I would add my plea to that of my noble friend Lord Redcliffe-Maud that we should labour to make this Bill a better Bill. It may mean a lot of hard work; if all its critics are right we shall have a lot of hard work to do. I do not suppose for one moment that this will be the last word on this subject but it may be a useful contribution. I should like to speak very briefly because the hour is late and there are still over half the speakers on the list to follow. I wish to speak on one aspect of the Bill only; namely, its potential impact on the professional classes, among whom it has caused much dismay.
The words "professional" and "amateur" discriminate between men or women who do things for gain as opposed to those who do things for fun. However, I am not concerned with professionalism in this sense, but with its other meaning. To me, a professional man is a member of a corporate body, admission to which is by examination to university degree standard, followed by the incumbency of a responsible position. The body publishes a code of conduct protecting the public from malpractices, and also possesses a disciplinary apparatus for enforcing that code. That is what I mean by a professional man—a member of such a body.
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Professional men in this sense fear that the agency shop and the sole bargaining positions of this Bill will place them between two fires: that of conformity with the regulations of some union into which they have been unwillingly dragged, and the responsibility to clients and employers required by their code of professional conduct. This, generally speaking, in one form or another, requires them to identify themselves with their employers' or clients' interests in a number of contexts where membership of a union might require them to do the opposite. In many cases they are the management to whom the employers entrust the conduct of union negotiations. How can they be members of the body against whom they are bargaining? Who is the employer? Presumably, a corporate body. Who does the bargaining? The management They therefore search the Act for means of emancipating themselves from this situation, but they discover no protection of a sufficiently positive character.
A great deal of whatever protection, or the lack of it, will prevail turns upon the interpretation of the words in Clause 10(l) of the Act, "in respect of workers of one or more descriptions". What is a description? A description is presumably classificatory. My Lords, I should be perfectly prepared to classify porcupines with peanuts, on the grounds that they both begin with "P", but this would not be a classification of biological relevance. A solicitor, a member of the Law Society, may work in an office, but he is not in the ordinarily accepted sense an office worker and would greatly resent being inspanned into an office workers' union dominated by non-professional members of that union.
The Bill in its original form did not contain adequate safeguards to protect small minorities and groups of workers, with different interests from those of larger groups, from being forced to take part in collective bargaining arrangements designed to meet the needs and wishes of the larger groups, but quite unsuitable and unacceptable to the small professional minority. The amendments to the original Bill relating to sole bargaining put forward in another place go some way towards meeting this. What we need is similar safeguards in respect of agency shop agreements. I think it essential, therefore, so to amend the Bill

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as to impose on both unions and employers a legal obligation to devise homogeneous descriptions of workers; and the C.I.R. should have a duty to look closely at such descriptions before following the procedures with regard to ballots as laid down in the Bill.
I know that the professional institutions have made representations to the Ministries and to the Law Officers of the Crown, and have been told that all this should be put into the code of practice. But they are not content with this; they are just as uneasy about it as the noble Baroness, Lady Lee, is about the effects on the unions, and we cannot regard the world as divided into the unions and the others; there are the professional men as well.
Chartered engineers involved in collective bargaining must have separate representation to their satisfaction in any agency shop arrangement. There must be a medium within the context of the Bill to enable chartered engineers to be represented so that the chartered engineers can establish their requirements to the appropriate statutory agencies; and there must be satisfactory provision in the Bill for a category of workers, as exemplified by the chartered engineers, who have special obligations to the public and in the public interest, which they must discharge according to their conscience—and their professional conscience at that.
Apart from the chartered engineers, there is the Council of Scientific and Technological Institutions who must have the same sort of protection. They must be classified according to their training, qualifications, experience and duties. They must not be overridden by such bodies as A.S.T.M.S. and D.A.T.A. because they work in a laboratory where they are in a permanent minority in relation to their unqualified laboratory assistants.
I have referred to the close connection between professionalism and higher education, The educational system of this country is, mercifully, a transparent one. One can begin almost anywhere, and, if one is prepared to work hard enough and possibly by a circuitous route, get to the top in due time. Thus, a man in mid-career can acquire professional status after he has involved himself in trade union activities during the earlier pant of it. He
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should at this point be free to emancipate himself and declare himself a member of the management when he feels the time appropriate, and he should be the sole judge of that, the management consenting.
I will not allow any third party to come between myself and a client, trade union movement or no trade union movement. I will not be told on what terms I may work for someone. Such a man should at this point be free to emancipate himself, as I have said. But where does management come into this Bill? Is it to have separate representation? Because there are very often members of the professional classes who are members of the management, but the converse proposition is not true; managers are not necessarily members of the professional classes. You cannot "run with the hare and hunt with the hounds." You cannot belong to the body you are bargaining against; you cannot bargain against yourself.
I shall not pursue this matter further. A more detailed examination of these matters belongs to the Committee stage of this Bill; but my remarks will serve to give notice in general terms of the Amendments I hope to see. Subject to that, were I able to attend to-morrow, I should vote for the Second Reading of this Bill against the Amendment of the noble Lord, Lord Shackleton, which merely returns us to talk of which we have had far too much. Unfortunately, this will not be possible, and therefore brevity demands that I should say no more this evening.
8.7 p.m.
LORD TEVIOT: My Lords, in such an important and prominent debate as this one, and with so many speakers, it is difficult to offer much originality of thought, like the noble Earl who has just spoken, and easy to run into the usual pitfalls of repetition. However, in my short intervention I should like to dwell on certain aspects of the rights of workers which has been one of the biggest bones of contention here this afternoon. The worker, in my opinion, up to now has been grossly misled on the facts of this Bill. The impression that he has been given, that the Bill is an employers' charter and sets out further to crush the working man, is entirely wrong. I am repeating a view shared by other

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noble Lords to-day. Although I admired greatly the speech of the noble Lord, Lord Delacourt-Smith, I wholeheartedly disagree with his view that the Conservative Party traditionally disagrees with trade unions and sides with employers. Of the two great Parties, I would say that the Conservative Party is the most impartial.
Many working men are aware that certain conditions and rights are now afforded to them that there have never been in history before. I will quote only two out of the eight. One is that the employee will now have the chance to appeal to the industrial tribunal if he feels that he has been unfairly dismissed. Admittedly, he can only do so if he has served two years with his firm, but that is to be extended at a later date. This is a significant breakthrough for workers' emancipation. Another very important factor is the code of industrial relations practice, by which the union has the right to information from employers. So often in the past many hours have been lost due to ineffective communications between management and employees. Workers are often—and probably very inadvertently on the part of management —regarded as of little intelligence and they would not have been outraged if the facts of the matter or dispute had been explained properly beforehand.
I now come to the main argument of my speech; that is, the right of joining or not joining a trade union. I do not mind admitting that this part of the Bill has given rise to considerable doubts and thoughts in my mind. On the face of it, one can come easily to the conclusion that if a man works for an organisation where the conditions of employment and wages are negotiated by the trade union, he is morally bound to belong to that union because he receives all the benefits that are gained by those negotiations. In many cases where there has been a dispute, the man who does not belong to the union and who does not go on strike is hailed as a hero and a man who is a conscientious worker and stands by his principles by not going on strike. If one goes deeply into the matter, very often this fellow does not have these splendid attributes at all. One will probably find that he has had some domestic upset over not paying his dues, or does not belong
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because he does not want to pay. He exclaims, "What have they done for me?".
What has not been covered here this afternoon is the question of where a man's duty lies—and I go into this moral aspect with great trepidation—when he makes a decision in trade union matters. We have surely to realise that a man has a duty to himself and his family, to his fellow workers and his employers. A man sometimes neglects his family when he agrees to take part in unofficial actions. It is so easy to be gullible in the heat of the argument and to agree to a persuasive but wholly irresponsible strike.
In spite of all this, I still believe that a man has the right not to belong to a union apart from conscientious grounds. When I was a union member, I was fortunate in having a branch chairman who at times, in spite of great pressure, resisted all attempts to enforce a closed shop. He rightly held the view of striving towards 100 per cent. membership, although not by enforcement but he thought that every encouragment should be given to men to join the union.
The analogy of a professional man having to belong to an association does not hold much water. It has been said that barristers and solicitors have to pay their subscriptions and that the same should apply to workers and the unions. But the difference here, surely, is that a barrister has to obtain certain laid-down qualifications before he can call himself a barrister, and he has to maintain a certain code of discipline when he is called to the Bar. This also applies to the medical profession and engineering profession.
THE LORD CHANCELLOR: My Lords, the only trade union among barristers is the Bar Council, and it has only 80 per cent. membership among practising barristers.
LORD TEVIOT: My Lords, I thank my noble and learned friend. A man who belongs to a union does not have to hold any particular qualification, and I believe that even in some craft unions it is not necessary for men to have served an apprenticeship. I hope that my noble and learned friend will agree with me on the analogy which is so often drawn on this point.

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Noble Lords opposite have given the impression that they distrust this new agency shop. I have a feeling that they are being rather conservative because they do not know anything about it, and want to resist it. I think it is a good idea that a man will have to pay willy-nilly. I forecast a big increase in union membership. Whereas there has been great apathy in a union in the past, members will vote for an agency shop where there has not been a closed shop before. The noble Lord, Lord Rochester, explained a right, which was expressed at the Report stage in the other place, that a post-entry closed shop may be used in some cases. I think we should be very careful on this point, although we must realise that this will be possible. A man is more likely to pay into a union than into a charity, and he will become a more active member and express his approval and disapproval more than he has done in the past. I do not share the view of the noble Lord. Lord Williamson, that excessive splintering will cause great dissension, but that is another thing that we shall have to discuss in Committee. I do not think it is so dangerous as he supposed.
People have given great bouquets to management and supervisors, and some to shop stewards. But from this side of the House I want to go into this question, as I think it is important. The role of the shop steward or union committee member is not easy, neither is it very enviable. Frequently it means a man's giving up his leisure hours and disrupting family life, as well as being rarely appreciated. He must be a diplomat at all times, be ready to listen, and try to understand everyone's point of view. When he has to negotiate a wage claim, or represent a union member on a dismissal charge or a complaint of victimisation, or whatever, he must have the attributes of a lawyer. To sum up, this man must be a thoroughly dedicated, conscientious and worldly man, ready to make decisions and be firm on one side or the other.
Here I should like to make one comment or suggestion, rather than a direct criticism, about some trade union officials. I sometimes wonder whether they really represent the true interests of the working
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man, or whether they do not become rather out of touch. In most cases it is true that they probably started off as working men and then became trade union officials, and in all probability they then removed themselves from their former environment. Managing unions, after all, is management. Surely one suggestion is that union officials should go back incognito on to the shop floor for a specified time every year, to reassess their feelings and the present and future needs of the members.
The Socialist view of reducing working hours and thus giving more leisure time does not seem to work out in practice. Of course I am not suggesting anything longer than 40 or 42 hours as a basic week of five days or five and a half days. I used to work six days, and sometimes it was very unpleasant. The Socialists always seemed shocked, and basically disapproved of people doing overtime, but the fact of the matter is that people should be allowed to do what they want. I see no harm in people becoming materialistic if they want to be; and if a young man with a young family wishes to work all the hours he can to buy a house, a car, a washing machine, or expensive holidays and whatever he chooses, let him do so. The Government have properly reduced the level of income tax, which will give a man more incentive to earn. Surely the criterion of democracy should be a free society.
I sincerely mean what I am going to say now; that is, that I should hate to be an operative in any non-union firm. I have worked for both types of firm, and I had excellent personal service from the union when I worked on the buses. The unions have a great future, and I am sure we shall see a great transformation in them shortly. Another point of comment rather than criticism is the sometimes offhand and brusque manner in which union officials speak to their members. I am quite sure that an employee would not accept that kind of language from an employer. It would be nice if some union officials in future were a little more paternal, and even avuncular, rather than the elderly fraternal bully.
Before I close, I should like to reiterate what other noble Lords from this side have said. This Bill will do more for the working man than ever before,

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by improving working conditions and giving greater security and greater freedom of choice before striking. A Conservative Government, by making greater all-round incentives (as shown by the last Budget), gives the working man a better and a fairer deal than he ever receives under socialism.
8.19 p.m.
LORD LLOYD OF HAMPSTEAD: My Lords, I intend to concentrate, as briefly as I can, on one or two of the legal aspects of this Bill. First, I should like to deal briefly with the suggestion which has frequently been put forward that what is now needed for industrial relations is to put them on some sort of legal framework. It is really rather absurd to suggest, as this argument does, that at the present moment we have no legal framework, and that what we want is to put a legal framework on to a situation of anarchy. In fact, if we look at the position generally, we see that up until 1871 there was a disarmingly simple legal framework; it consisted simply that trade unions were totally unlawful and proscribed unless in fact they were prepared to confine themselves to the activities of mere friendly societies. Then in 1871 we had the great Trade Union Act which recognised their legality. I would recommend anybody who doubts that we have a legal framework for our unions at the present time to have a look at the 800 pages of Citrine's monumental treatise on the subject, Trade Union Law. I think that anyone who does so will see from the many hundreds of reported cases that there is a very considerable legal framework.
In fact, what has been consistently rejected by every qualified official body and Royal Commission, from the great Commission of 1869 right up to Donovan in our own recent times, is the imposition of a comprehensive and minute régime of legal regulations. Despite the mythology of the recent months, the fact is that if one looks at the matter in perspective one finds that we have really done quite well without any such minute régime of legal regulation. It is not true that our industrial relations are in such a mess that only minute legal regulations can rescue us. Of course great improvements are needed, and the Donovan Commission pointed the way towards such improvements. But this
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does not mean to say that what we must do is to introduce a minute system of regulation, such as this Bill proposes. As we all know, we have recently had a series of major strikes backed by the unions, due primarily no doubt to the inflationary situation in which we all find ourselves. One of the results of the present legislation, as United States experience shows, would very probably be a movement towards just this kind of strike on a yet more extensive scale.
We hear a great deal of talk to-day about the experience of other countries under a closely regulated legal system. But it is idle to draw an analogy between this country and the countries of Western Europe, such as Sweden, Western Germany, France, Italy and so on; for the conditions and the historical background of those countries are so completely different from our own. In fact, some of those countries do worse than ourselves; and even those, like Sweden, which do markedly better are still faced with very acute problems, as indeed those of your Lordships who saw an article on March 30, in The Times Business Supplement, will have seen very exhaustively discussed. If we wish to compare our system with closely regulated systems, a far better analogy is with the United States and the Commonwealth countries, such as Australia. If the test is to be the incidence of strikes, I think your Lordships will find that there the regulated systems come out a good deal worse than our own. If you doubt that, I would commend to your attention paragraph 363 of the Donovan Report, and Appendix 17 of the Ministry of Labour's evidence submitted to the Royal Commission.
What is now proposed is to move from the traditional system of this country, which since 1871 has been primarily one of flexibility and voluntary regulation, to an extreme of legal intervention which can only be likened to clothing our industrial relations in a spider's web of rigid legislation. It is in many ways strange, for a Government who propound the philosophy of laissez faire and non-intervention, that in the sphere of industrial relations their aim is seemingly almost to eliminate room for freedom of choice or action. I venture to think that the process is particularly ill-judged when it results not from industrial agreement, as it did, historically speaking, in the case

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of Sweden, but from being forced upon the unions in the teeth of their deeply felt sense of outrage and hostility.
What is the reason for this extraordinary volte-face? We are told, disarmingly, that the Bill is aimed at strengthening the unions, making them masters in their own home. We are assured that if only unions would consider the position dispassionately they would really welcome this measure with open arms. Despite this, the unions turn aside from the poisoned chalice and decline what they consider to be the kiss of death. Might we perhaps test this situation in relation to one or two of the key provisions of this Bill? First, let us take the question of legally binding collective agreements. Of course, as your Lordships are aware, it is perfectly possible now, under the existing law, to bargain for a binding collective agreement, provided that both sides agree; indeed, this is sometimes done. On the face of it, therefore, it seems extremely odd to have a provision that it is to be conclusively—I emphasise the word "conclusively"—presumed that the intention is for the agreement to be legally enforceable unless there is express provision to the contrary. What is the point of this strange provision?
One significant fact is that under the Clause 35 procedure, even when the parties have an express agreement, an express term, excluding enforceability, the Industrial Court may still direct by its order under Clause 39, that it,
"… shall have effect as a legally enforceable contract as if a contract consisting of those provisions had been made between those parties."
In other words, what the union has to be thankful for under this legislation is the privilege of having a contract made for it by duress, against its consent, and then having it made enforceable under threat of severe sanctions. This process is perhaps not totally unknown in our legal history. Hitherto, however, so far as my researches go, it has been confined to such cases as labourers after the outbreak of the Black Death in the 14th century, under the Statute of Labourers; or, to take a more recent example, Lascars under the Merchant Shipping Act of 1894, under which, as I understand it, a superintendent used to write out what he thought was a
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proper contract and the so-called party went to gaol if he broke the terms of the contract. Your Lordships may well think that they do not provide very promising examples.
Then, my Lords, what are the consequences of a legally enforceable contract under the Bill? Clause 34 makes it an unfair industrial practice to break a legally enforceable contract. It then goes on to make it an unfair industrial practice for the union
"not to take all such steps as are reasonably practicable"—
those are the words in the Bill—to do one of two things: to prevent persons acting or purporting to act on its behalf from taking any action in breach of such agreement; or, secondly, to prevent any members taking any such action. In other words, the union is apparently to be responsible, without any agency whatsoever, for its members breaking an agreement to which those members are not themselves parties. What an extraordinary provision! What does it mean? What sort of action is the union supposed to take?
So far as I can make out, what this provision is trying to do is to make the unions responsible for the acts of other people, which acts might have been in breach if the unions themselves had committed the acts. And what is the union supposed to do? Is it supposed to threaten those other people, assuming they are members—and they may not be—with fines or expulsion, under risk of being held liable for compensation to the tune of £100,000? When the Government speak of strengthening unions, one can only hope they have not in mind trying to create the sort of autocracy hitherto associated with the corporate State, where a union is not even in name a voluntary body but is simply a means of exerting control through its executive. If this is legislation for a free society, then it seems a curious method of trying to promote industrial harmony.
Then, my Lords, there is the question of legal immunities. The Donovan Report recommended that the immunity conferred by Section 4 of the 1906 Act should be limited to cases in furtherance of a trade dispute—a proposal which I think was generally regarded as extremely reasonable and sensible and which for my own part I entirely applaud. What

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the present Bill does, however, is first to abolish this immunity altogether. Then it goes on to make it an unfair industrial practice to induce another person to break a contract unless the inducer was a trade union or was somebody acting within the scope of his authority on behalf of a trade union. Then we have Section 93, which makes it an unfair industrial practice to call any strike, or to "aid and abet" (I draw attention to those words) another person in doing anything—and again I draw attention to these words—
"which by virtue of this Act is an unfair industrial practice on the part of that other person".
So far as I am aware, the words "aid and abet" have never been used hitherto save in a criminal context. It is a concept which is peculiar to the criminal law and it adumbrates the sort of thinking which underlies this kind of provision.
As for the words themselves, these are so wide that no one can at this stage, at any rate, even guess where liability might end. If it turns out that the other person in question has somewhere, somehow, committed an unfair industrial practice—and there are about twenty different forms of such practice set out in the Bill—then the union is liable. To take an example, suppose a union in London receives a message from Leeds that employers are denying recognition to a union in Leeds—a typical trade union type of situation—and there is a request to "black" supplies. How is anyone to know whether someone, somewhere in Leeds, or anywhere else for that matter, has been guilty of an unfair practice within this farrago of obscurities? It does not end there, because Section 94 then goes on, within exceedingly ill-defined limits which may take years of litigation to expound, to render unlawful most kinds of sympathetic strike.
What it really boils down to, as I see it, is this: that under this legislation, which we are told is so beneficial to the unions, the only strike which you will be able safely to call is a strike which, first, is confined to your own place of work; secondly, is confined to issues which actually arise in your own place of work; thirdly, is called by a registered trade union or by an official to whom express authority is accorded in the rule book; and, fourthly, is not in breach of a bind-
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ing or an imposed collective agreement. So the so-called right to strike, which has hitherto been regarded as the very basis of our labour law, has assumed, I think one must concede, the most shadowy proportions.
Lastly, ray Lords—and I apologise if I have encroached unduly on your Lordships' time, but these matters are a little difficult to expound as they are embedded in highly technical provisions—I should like to draw your Lordships' attention to the fact that we are told that, whatever the Bill may do to restrict union rights, nevertheless in return it confers great boons upon them. I should like to conclude by analysing as briefly as I can one of these notable boons which the trade unions are to welcome enthusiastically, with open arms. This is the provision in Clause 54 imposing on employers the duty to disclose information. The more one scrutinises this section the more one is baffled as to whether to describe it as humbug or sheer effrontery. In the first place, the unionist has to show two things: first, that without the information he is seeking he would to a material extent be impeded in carrying on collective bargaining; secondly, that it would be in accordance with good industrial relations practice that the employer should disclose the particular information for the purpose of collective bargaining.
My Lords, how on earth does the wretched unionist establish whether non-disclosure of material is going to impede him in carrying out collective bargaining when he has no idea what the information is until he gets it? As for what is or is not good industrial practice, the scope for argument about that is, of course, absolutely endless. But that is not the end—indeed, it is only the beginning. Because if one looks at Clause 151, it is there provided that even if a union official is entitled to information there are still no fewer than five escape routes which are provided behind which an employer may take refuge and avoid having to give the information. These include such matters as information conveyed in confidence, information relating specifically to individuals and—a very delightful long-stop—information where disclosure will seriously prejudice the interests of the employer. What conceivable hope has the unionist of getting any relevant information pending urgent negotiations or, indeed, at all?

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Nor, indeed, does the matter end there, because even if the official gets his information he is not allowed, under the provisions of Section 54, the production or even the inspection of any document. Nor is he allowed to make copies or extracts of any document. All he must do is just take whatever the employer tells him at its face value, with no means whatsoever of checking it. Suppose, then, the employer refuses to supply the information. What remedy has the unionist got? This, again, is a delightful puzzle under the clause. He may complain to the Industrial Court, which has a discretion to order disclosure after, presumably, a lapse of time, by which time the information is either totally out of date or is useless. In addition, there is an alternative. The matter may be referred to the Industrial Arbitration Board under Section 122. This provides a piece of chicanery which is almost unbelievable, because if the matter is referred to the Board, what can the Board do? The Board operates under Clause 123, under which it can make an award specifying terms to be implied in a contract. This seems to lead one into a total procedural jungle, because so far as I can see all that can happen then is that you are left with an action in the ordinary courts to enforce the terms which have been implied into your contract. Then in due course, presumably, you apply for discovery in the action, and by this means you get sight of a document. But how long this process will take I leave it to your Lordships to assess.
One could, of course, go on at length about this matter, and I apologise to your Lordships for having spoken for so long as I have. I do not intend to say another word more about it. All I venture to suggest is that I have shown enough at least to indicate that the hostility of the unions to this legislation is indeed well founded; that the legislation, quite apart from the underlying philosophy, which is an arguable matter, is based on extremely muddled thinking. Although, for my part, I share the view of my noble friend Lady Lee that on the constitutional situation it is not appropriate for this side of the House to vote against the Second Reading of a Bill, an important Bill, which has been passed by the other place, nevertheless I warmly
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support the Motion in the name of my noble friend Lord Shackleton, and I propose, therefore, to give my vote for that Motion.
8.40 p.m.
LORD MILFORD: My Lords, under the present social system there will always be conflict of interests between employers and employees. At one time, the employers had all the power. During the last hundred years the working class fought for and legally gained their present organisations. The voluntary system of bargaining evolved and was accepted by both sides. Between the wars there was mass unemployment, and this weakened the unions' bargaining powers. There was so much unemployment and people seeking jobs that the whole bargaining business became very difficult. But after the last war we had a period of full employment, and the working class became very strong, because they could always bargain and because there was such a shortage of labour. It was during this period, when the working class were really strong under full employment, that the idea of bringing in laws to curb the powers of the unions began to rumble; because this situation, in which, under full employment, the trade unions were very strong, was a threat to our whole capitalist system here. So it is from that history of full employment in this country and the strength of the unions that this Bill was born.
This Bill will never improve industrial relations. But that is not its real aim. This Bill is a declaration of war against the trade unions. It is designed to cut them down; and however cleverly and smilingly the Front Bench opposite deny this, that is the fundamental object. It is a Bill to cut down the trade unions. It is an open class Bill, and as soon as it appeared it brought the class war right out into the open, up and down the country, in a way that has not happened for years. Of course this Tory Government, by its very composition, is on the side of the employers. The Budget has explained to everyone that Tory philosophy is to enrich the already well-off so that they have more surplus to invest to make even more surplus. This being the solution to our economy, the Government think that anything which even slows down this movement is against the national interest. Of course, any increases

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in wages eats into this privately owned surplus.
In the last eighteeen months the workers have increased their share of the national cake by a minute crumb, thus reducing by a very little the gross inequality in our society. But this is dangerous: it must be stopped; for it will slow down investment and economic expansion. That is the attitude. This Bill starts straight off with its attack on the trade unions, blaming them for all the difficulties that this country is in. It makes no attempt whatever to analyse the problem of the stresses and strains in our society now or any of the fundamental problems of society. No: it is all the fault of the trade unions.
The whole face of industry is altering so fast, causing upheavals and restlessness. From my own experience in Gloucestershire, I know that huge, remote firms and combines have taken over local, intimate, often long-established businesses. Management has become more impersonal, distant, faceless. The workers have become more alienated and feel more dehumanised; just a number on a computer card, no longer human beings to the employer. This has led to a tremendous feeling of frustration and bewilderment. "Things must be altered. What is life about?" ask the younger generation. We must all be aware that this feeling is running through a large section of our society, through the youth who are the next generation of the blue-or white-collared workers. Surely the only way to counteract this frightening alienation is by more democracy in industry, more discussion at all levels, treating the workers as highly intelligent knowledgeable people. The way to make matters worse is to push them further away through the law, the courts, the judges, fines and legal proceedings.
Modern industry, with modern techniques, has needed and caused to be needed a completely new kind of shop floor worker and white collar worker. They have to be highly educated, quick in understanding; and they cannot be prevented from questioning the things they see around them. Something is wrong with a society which produces three-quarters of a million unemployed. What is it? Why is there such inequality in wealth? Is it true that the rich have to get richer to make the economy turn
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over? Why does the increased technical skill which should increase production per head not mean far higher real wages? Why do prices have to go up? This is the sort of discussion that goes on in the Labour club and in the pub on the housing estate. These people cannot be dismissed as irresponsible militants. By doing so, Mr. Carr insults them. They feel that things could be changed. They are not being swayed by a few "wild cat" demagogues; they are frustrated by things to-day.
Look at what happened at Rolls-Royce! The workers, proud of their work and skill, were never allowed a hint of the problems and of the situation dangerous for them all. They were never consulted at any level. Suddenly out of the blue, they found themselves redundant. Or take Fords. An American comes here for cheap labour; runs his factory on foreign lines; makes colossal profits from each worker and refuses to pay them the equivalent of what other British workers get to do the same job in other British factories. Of course there is fury.
The Government openly declare that it is the trade unions, the workers, who are the cause of the mess in the British economy; and the Government claim that they have a mandate to curb their powers. They have no such mandate. The public fell for their promises to reduce prices and unemployment—promises they never intended to fulfil. The Government want to get us into the Common Market, They know that if we go into the Common Market, prices will soar, and that it will be better if we have prices going up now so that the Common Market does not look so expensive to the British public.
Are the trade unions responsible for rising prices? It is an absolute fact that prices really started to go up because of the devaluation of 1967, which led to a rise in the cost of imports and basic materials for manufacture. Secondly, rising prices are due to increased taxation imposed to keep down consumption and divert resources to exports. Thirdly, the bank rate was raised from 6½ per cent. to 8 per cent. in 1967, which led to increasing loan charges, causing higher rents and rates. Fourthly, according to the Economic Committee of the T.U.C.

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wages account for one-third of the increase in prices. The Government hold down wages and raise the cost of living, and then call the trade unions the culprits responsible for any unrest. We are about to have cuts in school meals and welfare milk, increased prescription charges and travelling fares. Only a strong trade union movement can fight this reduction in the standard of living—hence this Bill to weaken the trade unions, and hence Keith Joseph's proposed further kick in the groin for anyone attempting to halt this policy.
Toryism has always shouted for less Government interference in the affairs of the employers. The slightest whiff of public control is anathema to them. At elections they wave the banner of more personal freedom; yet for the working class they demand more and more Government interference in all the internal and external aspects of their organisation. The very speed with which they are pushing through this Bill reflects their hostility to the trade unions. On such an important issue, affecting the whole nation and the intimate lives of millions of families, this Government have refused to debate 111 clauses in the elected Chamber of Parliament, and have left 14 pages of Amendments undiscussed. What contempt for the working classes! What contempt of Parliament!
In recent discussions that I have had with union organisers and shop stewards it has been pointed out to me that it took many months of negotiation to get agreement about the wages of one man They compared this patient trade union procedure with the Government's treatment of this Bill. It is said that the national interest demands this Bill against trade unions, and the Government, the Judiciary, must strictly interfere in their rules, organisation and procedure of negotiation. But are not unemployment, increased prices, the cutting of social services and sickness and health payments, mismanagement, vast export of capital and foreign economic penetration also against the national interest? Why are not the Government moving with speed to fight these running sores? Why is there nothing in this Bill about the acts of employers which cause strikes? Not negotiating seriously; ignoring procedure; sudden redundancy; altering
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conditions of work—where is the big stick against those matters? These should be classified as unfair acts liable to high fines.
The penalties in this Bill are far more severe on the workers' organisations than on the employers. It takes two to make a quarrel. Workers and management are fully aware of the causes of conflicts, and nine-tenths of them are settled peacefully; the other one-tenth may require action. Without being free to strike, or to take other action as needed, the workers will be reduced to being serfs. The present era has many new problems. There is unrest and strife. These are growing pains; I think there is a tremendous amount of growing pains as industry moves into the computer-automation-electronic age. The whole field of labour is going to change out of all recognition, and there will be needed more highly educated and skilled blue and white collar employees, which calls for a new relationship—even a new society.
To attempt to solve these problems by putting the clock back a hundred years, when things were completely different in industry, is not only lacking in vision but will also produce greater strife, sullenness and non-co-operation. We have to find a way to reverse this trend of increasing dehumanisation of the workers to reduce democracy at all levels in industry. In fact, my Lords, somehow we have to find a new relationship leading to a new society. That is what is needed. You cannot go on pushing. You cannot push this much needed new wine into an old bottle; the bottle will burst.
8.56 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I understand that the noble Lord, Lord Milford, is a member of the Communist Party. He will forgive me if I do not go into great lengths on his speech, but I would just say two things. I would suggest first (perhaps he has already done so) that when he next goes on holiday he should go behind the Iron Curtain and compare the standard of living of the workers behind the Iron Curtain with the standard of living of the workers in Britain. The other thing I would say to him is that no one, and certainly not the Conservative Party, objects to powerful unions: we want very powerful unions. All we

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ask is that the unions use their power with responsibility.
Having said that, my Lords, I turn to the Motion moved by the noble Lord, Lord Delacourt-Smith. I cannot support it, and I will explain why. I agree that another place has not discussed this Bill in Committee as it ought to have done: it did not have the time. But surely this House is even better qualified to discuss the Bill; because on the Benches opposite we have noble Lords who in their day were extremely responsible trade union leaders, and I think that the majority of them have been members of a trade union. So on the Benches opposite we have a great fount of knowledge of trade unions and on both sides of the House we have a great fount of knowledge as employers. So it seems to me that your Lordships' House is particularly qualified to judge this Bill.
The Amendment asks whether the Government can go back to "negotiations with both sides of industry free from the conditions", and so on. My Lords, we have for years, under various Governments, been discussing with both sides of industry, and we have got nowhere. This Bill is at least an attempt to get somewhere, and I cannot understand the tremendous hullabaloo that it has caused in the country. We are told that the Bill will victimise the workers. But who is speaking, my Lords? Is it not a case of the pot calling the kettle black? We think of the "kangaroo courts" for example. The last thing this Bill will do will be to victimise the workers, or the employees, as I prefer to call them.
One thing that the noble Lord, Lord Delacourt-Smith, said amused me, and I was tempted to interrupt him. He said that in his opinion (I hope that I quote him correctly) the law could never make people work in co-operation. It would be very interesting to know whether the noble Lord applies that principle to the Race Relations Act. I should like to have his answer to that. Of course, the law gives a lead to people. We can have no liberty without law.
The present Bill has been compared in one newspaper to the great Reform Bill of the 1830s, but we cannot compare them, because the Reform Bill had a lot of teeth and this Bill has no teeth—
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well, I cannot find them. It is the mildest of Bills. It is completely voluntary. The Government are setting an example, are laying down a code of behaviour for industrial relations. Compulsion is conspicuous by its absence. I cannot understand all this row. If this measure is entered into by the unions in the right spirit, it may well usher in a new era of industrial relations. Take, for example, the registration of unions. They do not have to register, but if they do they are fully protected under the trade union Acts. If they co-operate in the Bill, it will bring great benefits. It will strengthen the authority of the unions. Noble Lords opposite may not agree with that statement, but I believe that the Bill will strengthen the unions against "wildcatters". I have had some experience of those people and I can assure noble Lords that it will.
It will also be of great help to employers with their costing problems. It is impossible for an employer to do accurate costing if he makes a wage agreement and before he knows where he is it is broken. All his costing goes to hell, and before he knows it he is broke, but he still has to pay wages. Nobody likes sacking people. If only the unions will co-operate with us, it will be of inestimable help to working people. It will increase the purchasing power of their wages. It will benefit them immeasurably. I implore the Party opposite to think again. I know in my heart that many of them really want this Bill.
LORD DIAMOND: My Lords, I do not want to interrupt the noble Viscount, but I know full well that he is most anxious to support us against the Bill, by the same logic that he has provided.
VISCOUNT MASSEREENE AND FERRARD: No, my Lords, the noble Lord is off the rail there a bit. I saw the Prime Minister quoted in a Sunday newspaper as saying that some unions pressed their claims to such an extent that they forced firms into bankruptcy and themselves into unemployment. That does not surprise me. I have frequently brought the matter up in your Lordships' House and likened the people of this country to the Gadarene swine rushing to their doom. But we cannot blame the

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workers. In my opinion, we should blame certain shop stewards, certain managements and certain professional politicians. For years politicians of both Parties have been telling people that they will get more and more by doing less, if only they will vote for them. Naturally the average man, who has been so used to being told by politicians that he can get more for less, thinks that his employer has a bottomless purse. He is also urged on by the militant shop stewards. It is a pity, when we think of the £2,500 million spent on education, that we cannot get basic economic facts into people's heads; it would then be a much happier country. I wish to heaven that we could get more of them into the head of the noble Lord, Lord Milford, but I am afraid that is too much to hope for.
May I now turn to the Bill. I welcome Clauses 54 and 55 regarding information to employees. I have often advocated this policy in your Lordships' House. With small firms it is comparatively easy, but it could also be done by big firms. Some of them already do give their employees information, by news sheets and other means. It is difficult for the average man to understand a balance sheet. There may even be one or two Members of this House who may not understand a balance sheet. It is quite a difficult thing to do.
Then there are Clauses 20 to 31, the clauses on unfair dismissals. I quite agree with what is proposed, except that the compensation of £4,000 maximum may for many small businesses be a rather big sum; but presumably the maximum would not be given. It seems rather illogical that there should be maximum compensation of £4,000 for unfair dismissal of an employee sacked by I.C.I., and the same compensation for an employee wrongfully dismissed by a man employing four people. That does not seem quite logical. Of course a great number of farmers would come under this, too, and I hope that when we come to the Committee stage we may make some alteration here.
May I just say about the closed shop that I appreciate the argument on the other side, but I had hoped that we might get away from the closed shop from the
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point of view of the freedom of the individual. I appreciate that as the unions have sought to better the wage conditions of their members it might be rather unfair in some respects if they did not have a closed shop. But I was rather interested to see that the noble Lord, Lord Diamond, roared with laughter when my noble friend Lord Drumalbyn said that a man would not be forced to joint a union but that would be made up for by the fact that he had to contribute to the union or some charity. The noble Lord seemed to think that quite impossible, but I cannot think why. After all, the unions will get the money. They will not get the support of the member, but they will get the money and that would be some comfort, I should have thought.
My Lords, there is another clause about which I am not very happy—Clause 16. Under that clause sailors, and I think actors, are to be completely protected by the closed shop. Under "actors" would presumably come "musicians". The history of the Musicians' Union, as regards their behaviour to some people, is not very good, and I know one or two members in the Musicians' Union who have been very victimised by the closed shop. Victimisation is a very nasty thing. I presume that we shall have a number of Amendments on the closed shop.
There are very many conundrums in the Bill, and I must say that I think it is going to be rather a bonanza for the lawyers. I must say that I should not like to be a lawyer and have to understand it. Take sympathetic strikes. How are you going to define a sympathetic strike? That is up to the lawyers, but I can see no concrete definition in the Bill of a sympathetic strike. Thank heavens! that will not be my job. But, my Lords, I support the Bill, as it does give a lead. It is at least an attempt; it is a framework of law. The noble Lord, Lord Delacourt-Smith, said that it is impossible to make individuals co-operate by law, but I do not agree with him. Other countries have done so. It is said to-day that our traditions are so different that it cannot work here. But, for heaven's sake! let us try. After all, your Lordships opposite always hold up Sweden, the most socialist country in the world, as the Utopia. I am not of course

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talking about Communist countries, because they are beyond the pale. The noble Lord, Lord Milford, was talking about this Bill turning the workers of this country into serfs. He should go behind the Iron Curtain to see serfs. There they have no unions in practice: they are told to work, where to work, and what wages to work for; and if they do not comply they are shot.
I will end by saying that I support the Bill. As I was saying, in Sweden they have much stronger legislation than this, and noble Lords opposite love Sweden. For heaven's sake! co-operate on this Bill. As I say, I support the Bill; I wish it every success, and I am extremely glad that it has come to this House in its present form, because it will give us great opportunities to improve it, as I am sure we shall.
LORD MILFORD: My Lords, before the noble Viscount sits down, he mentioned trade unions behind what he calls the Iron Curtain. I have been there several times, and the trade unions are very powerful. They have a tremendous say, and are in the Government in everything.
VISCOUNT MASSEREENE AND FERRARD: Of course they are in the Government; they are the rulers. But the individual worker has no power at all. I, too, have been behind the Iron Curtain.
9.16 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, the noble -Viscount who has just sat clown poses a problem for me. I do not know whether lie is serious or joking. To take one of his statements, he said that the Party opposite him want this Bill. He surely must be joking about that, after listening to the many speeches that we have heard to-day. It seems to me that two things have emerged from the speeches that have been made. First, on both sides there has been unanimity on the need to improve our system of industrial relations. The Trades Union Congress have been saying that for a long time, and not only that, but trey have made every effort they can to bring it about. As against that, there has been a noticeable conflict of opinion in the speeches to-day. From the other side
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of the House we have heard it said by many noble Lords that this Bill is the right way to improve our system of industrial relations. On this side of the House every speaker whom I have heard—and I echo their sentiments—has said that by no stretch of the imagination is this Bill the way to sweeten our system of industrial relations.
On this point I would say that industrial relations are not out of the nursery class yet; or, to use another metaphor, they are a very tender plant indeed. I am not absolutely sure, but I think the noble Lord, Lord Brockway, gave me the accolade of being the oldest serving trade union member in this House. It is only within recent times—actually at the beginning of the last war, and 30 years is not a great time in the life of a nation—that opinion was focused on this idea of industrial relations. That is really when the birth of this plant, this child, whatever you like to call it, took place. After all the customs and traditions in our industrial life over the past 150 or 200 years, we should be foolish to expect miracles overnight in this field. This plant of industrial relations needs nurturing; it needs care and proper attention, so that in due course it will grow up to be something of which we in this country can be extremely proud. All my trade union life this has been my policy, this has been the path that I have sought to tread, and I shall continue to do so, so that industrial relations in our complex, modern and sophisticated society shall become sweeter. I say this to the noble Viscount. We on this side sincerely believe that this Bill is not the way to achieve the object which we all have in mind.
I know that the time is getting late. In my lifetime I have worked days, afternoons and nights, but, quite frankly, I do not like working all the three shifts at one time. I got up fairly early to get here; there are many speakers after me, and there are quite a lot of things that I should like to say.
A NOBLE LORD: Carry on, then.
LORD TAYLOR OF MANSFIELD: This field of industrial relations cannot be dismissed in a ten-minute speech when the Donovan Commission took three years

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to consider it. They met people representing 420 organisations. To cover the subject in a ten-minute speech is too fantastic to think about. I want to say one or two words on behalf of the men and women who comprise all branches of our industrial system, manual, administrative and management. I do not rule out anybody, because all of them have had, still have, and are likely to have, a big contribution to make in the industrial and economic life of our nation. I think of the men and women who work in our fields, pits and factories, in offices and shops. As I am standing here in your Lordships' House I have all of them in my mind. The older I become, the one thing I feel certain about is that we are not sufficiently articulate in the recognition of the service that all these people render to the nation. Personally speaking—and I should like it on the record that I am saying it to your Lordships—I pay my debt of gratitude to the many millions of people in every department who are running our industrial life. Let us not forget one thing—and I think we are inclined to overlook this important fact—that without the labour of miners, farm-workers, those in our factories, in our transport industries, the folk in government, our teachers and our administrative workers, life in this 20th century would be a very dismal business indeed.
What is the position? What are we really considering to-day, as distinct from, say, a hundred years ago? The noble and learned Lord, Lord Donovan, I think said that 10 million people are organised in their respective trade unions. Why is that? There must be some reason for it. I will state it as I see it, as I have understood it and still understand it. It is simply this: to protect their hard won rights; to improve their standards materially and culturally, and to participate in the pleasure of a fellowship wherein an injury to one is an injustice to all. That is the purpose of the trade union movement. It is as simple as that.
These things have been the right of individuals and of organisations certainly for the past hundred years. Prior to the 1871 Act, unions had no legal recognition. The noble and learned Lord, Lord Donovan, particularly spelt out this point. Between that time and now there have been many legal judgments, and some of
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them have not been very helpful to the trade unions. I think of one in particular: the Taff Vale judgment of 1901. Then that spiteful piece of legislation of 1927 was enacted: one cannot describe it otherwise than as a penalty for 1926. However, in spite of those things, trade unions have now been legally recognised, with certain prohibitions, for at least a century.
To-day we have this Bill. I have seen it described in the following language—and personally I subscribe to the description; I will not conceal my feelings about it at all:
"It is the most industrially disruptive piece of legislation by any post-war Government. It is the new reactionary philosophy which the Tories are now committed to."
I wanted to say one or two words on the question of trade unions and industrial relations in historical perspective. I feel I cannot leave this one out; it should go on the Record. As I read history—and I know we can all put our different interpretations upon it, but I am giving my view now—the Tory Party never wanted the trade unions. At the first sign of any movement to combine, steps were taken to prevent it. The best known instance, of course, is the story of the Dorchester labourers. The Dorset landowner magistrates had no compunction at that time in having those Methodist Nonconformists banished to Botany Bay. But those people sowed the seeds of combination and, in spite of the chilly winds of oppression and persecution since that time, the tree of trade unionism has grown. What we see to-day in the trade union movement is a tribute to the memory of those Dorchester labourers.
If I had time to-night I would describe one most moving thing that has happened to me, when that grand old lady of the stage, Dame Sybil Thorndike, came into Nottinghamshire during one of the bitterest disputes we have had and there, on the only parcel of ground available in the open air, she gave to the striking miners episodes from that book,Six Men of Dorset. When it became apparent that it was impossible to prevent the will to combine from erupting, the technique changed to toleration and the combination laws were repealed. But even to-day there are unenlightened employers who refuse to allow trade unionists near their premises; and there are some who are

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so 18th century-minded that they even apply the sanction of the sack to those who make an effort to form a trade union. Now this Government are proposing a new technique in this field, the purpose of which, in my view, is to hamstring and shackle the trade union movement by importing from America the proposals of the Taft-Hartley Acts. One has not time to go into that matter.
I have given some thought and time to the study of the process of thinking of the Tory Party during the last ten years, and my conclusion is that this Bill is the culmination of a process of thinking in this very important and delicate field in industrial relations which started way back in the 'sixties in the Tory Central Office. I wonder how many of the "back-room boys", if any, had experience in industry, either in management or in the trade unions? It is quite possible that most of them were either lawyers or academics—able people, I have no doubt, in their own field, but I have grave doubts whether they had experience on the shop floor, at the pit or on the farm.
These back room boys produced a pamphlet Fair Deal at Work, and this was published before the Donovan Commission was set up. I need only say, in a word, how much I appreciate the work done by those 11 men and one woman on the Commission in giving their time to this important question of industrial relations. But what happened? The Tory Party were so impetuous that they were in no mood of contentment to wait for the Report. Into the arena they rushed like a tornado and, pre-Donovan, this pamphlet, Fair Deal at Work,was published on the bookstalls. It is the un-thought-out conclusions in this pamphlet that were spelled out, first in the document of List October which we debated the following month, and which are now embodied in the Bill.
In this respect I must quote the statement of the T.U.C.:
"Members of the Government seem to have learned nothing. First, they were indifferent to the fact that a major Royal Commission was nearing the end of its work, and secondly, they have cast aside an agreed report on the reform of Britain's industrial relations."
So one could go on, but I will say only this. In the interim, particularly since the publication of this Bill, what have the Government been doing? They
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have been hawking it round to Tory Party Conferences and, like the fishmonger, they have not been crying "stinking fish" about it, either. That would be too much to expect. No pedlar denigrates his wares, but for an exercise in salesmanship the Secretary of State, Mr. Carr, as reported in the Press last Saturday, takes the prize. I quote the words as reported in the Guardian. He said:
"I am convinced that the time will come when the unions will be the staunchest supporters of this Bill."
All right, he is entitled to his opinion. He is entitled to say that at a Tory Party Conference in Cardiff. But the most charitable thing you can say about it is this: it is based not on facts but on hope, and hope deferred makes the heart sink. He may be a simple optimist to-day but he could be a very disappointed man to-morrow. The unions at no time have changed their mind about the 1927 legislation. They campaigned for its repeal, as they have done about this Bill even before it becomes law, and all the evidence that we have in no way supports the prophetic statement of Mr. Carr last Saturday.
There is a great deal more that I should like to say, but there are so many speakers to come, and therefore I will begin to conclude. This is a Second Reading debate, and discussion centres on general principles: the detailed examination will come during the Committee Stage. But I would summarise this Bill as I see it. In operation it will be an El Dorado for the legal profession. Secondly, it provides for the opportunity for the rise of company unions; and thirdly, instead of sweetening it will sour relationships in the industrial field. I should have liked to make some observations about all those three points.
May I say this one thing, at any rate? This Bill is a paradise for legal ambiguity. All the lawyers who have spoken to-day indicate that to me; it is as ambiguous as it can be. I have seen an estimate this week-end that it will give employment to scores of solicitors and lawyers, and 11,000 civil servants. What about the creation of the N.I.R.C., with status of the High Court, with a member of the Judiciary as President? The industrial tribunals will have new and greater powers. The whole new pattern emerging

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is this: that those who know the most about the business of industrial relations are going to be out, and the legal profession, who know very little from a practical angle, are going to be in. In addition to this, I have an estimate that it is going to cost £5 million annually to operate—and this at a time when cuts are being made in the social services.
May I quote from Professor Wedderburn? He is a Professor of Law at London University, so he cannot be a "mug", can he? This is what he says:
"The Bill is at least an irrelevance. At worst it is a legal nightmare. It is the biggest piece of public mystification of this century. It will not deal with any of the causes of industrial disputes. It will restrict trade union rights and run labour relations into a swamp of legal squabbling."
Would I not like to say something about the opportunity that is likely to be created by the rise of company unions! However, I would say this to the Government, very seriously. Have you heard of or read about Harworth, in Nottinghamshire? Have you any knowledge of what took place in Bedwas in the South Wales coalfield, between 1926 and 1937? I would ask noble Lords to acquaint themselves with that. If what I say is possible about the rights of company unions, and the same bitterness is engendered nationwide as was prevalent in the Nottinghamshire coalfield during the period that I have mentioned, it will be a sad thing for this nation.
I want to give one quotation. It is an important quotation, from an important man. This is what he said:
"It is not good for trade unions that they should be brought into contact with the courts, and it is not good for the courts either."
Who said this? I was somewhat amazed when I read it, but it was said by a man who occupied a place at the front of the political and Parliamentary stage. At the time he said it he was not the darling of the Tory Party; he was a thorn in their flesh. If noble Lords will read the Report of the debates in the House of Commons on May 30, 1911, they will find that it was Mr. Winston Churchill who made that statement.
In conclusion (and I apologise for going on for so long: I could go on all night if you like, because this has been my life), I want to say that this Bill in the field of industrial relations will be a
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stumbling block, a hindrance, not a help. Legally it is complicated; industrially and socially it is undesirable; and, apart from two of its proposals, on unfair dismissal and extension of notice, with which I agree, my irrevocable conclusion about this Bill, in contradistinction to what was said by the noble Lord who opened the debate, is that it is indeed a very bad Bill. I cannot support it. In fact, to me it is so unsatisfactory that I am reminded of a statement in the other place, some few years ago, by (I think I am right in quoting the name of the author again) Sir Winston Churchill. He was commenting on a Bill that he did not like. He thought it was a very bad Bill, and to-day on this Bill I re-echo his words:
"Take it away. Take it outside and cut its dirty throat."
I shall vote for the Amendment, and when it comes to Second Reading I shall be among the "Not-Contents".
9.44 p.m.
THE LORD BISHOP OF BLACKBURN: My Lords, as the noble Lord, Lord Taylor of Mansfield, has said, time is passing on and this is an occasion when we should abbreviate anything that we have to say, because we all have our eyes on the clock and there are still 12 more speakers. Therefore, let me follow his example by cutting out some of the things that I had intended to say. I should like to start with a question which may be in some of your Lordships' minds, as to what all this has to do with Bishops.
In the first place, I should declare myself to be a member of the Municipal and General Workers' Union, as I have been for a number of years because I find it gets me the most valuable contacts with those engaged in industry. For the last 25 years, I have worked as a Bishop in two industrial dioceses where my great concern has been to promote good relationships in industry between management and unions. It is, I suppose, understandable, but I hope that it is not inevitable, that there should be this continual talk about two sides in industry. Unfortunately, the reaction to this present Bill has been a hardening of this division, until we are almost approaching the Tweedledum and Tweedledee situation, with the plaintive cry, "You have spoilt

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my nice new rattle." Our chief concern is to establish a proper and tolerant situation, where the two sides can work effectively together to promote the common good of all concerned, and of the community in general which they serve.
I think we are all agreed—even the noble Lord, Lord Taylor of Mansfield, will probably agree—that Clause 1 sets forth in admirable terms what should be the common objective, to which general consent can surely be given. But to that introduction might be added a further clause, laying upon management a direct responsibility for the promotion of good relations in industry. I am bound to confess that what is spelled out so clearly in the introduction is then obscured by the minutia' of detail, the mass of clauses and subsections, so that we can scarcely see the wood for the trees. Nevertheless, the primary aim is sound and commendable, and I hope that it will hold our attention as we debate the details.
There is a further reason why the Church, in the person of the Prelates in your Lordships' House, has a valid contribution to make. The Church can speak as a whole in an unprejudiced manner: I will not say in a disinterested way, because we are interested in the promotion of human relations—and I so often want to call them "human relations"—in industry. In this field the Church is in a position which is denied, for example, to the Government, to management or to trade unions, who when they speak are suspect and can be accused of vested interests. This cannot be said in the same way of the Church. So I believe that the Church really has a considerable contribution to make. May I then, as quickly as possible make certain observations concerning the Bill, in what I hope is a constructive manner, on what are mostly controversial points.
First, there is the question of membership of a trade union. The Bill rightly states that every person shall have an opportunity, if he so desires, to be a member of such trade union as he may choose. That is good and it is a great gain. But the next clause reveals the other side of the coin; that every person shall have a right, if he so desires, to be a member of no trade union. At its face value, this is a case of "what is sauce for the goose is sauce for the gander", but it has appeared to some as
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a direct attack upon the trade unions. I do not believe it.
At a recent meeting of trade union branch secretaries in my town of Blackburn—and it is interesting that the only time the trade union branch secretaries were brought together was when it was done by the Church—it was this provision, that people need not be members of a trade union, which deeply troubled them, since they feared they would lose a lot of members. Human nature being what it is, they may very well do so. There is a good deal of disenchantment with trade unions, and complaints about the rising dues of membership. However, it has to be accepted that the principle of collective bargaining, upon which good industrial relations and the Bill itself rests, depends upon good, responsible and efficient trade unions. We must have them: they are essential to the proper working of industrial relations. I suggest, my Lords, that the weakness of this clause is in the words, "if he so desires", since selfish or individual desire can enter here.
The United Nations Declaration of Human Rights has been quoted in support of the right not to belong to a union, but in actual fact the United Nations Declaration has a different wording. It lays down the right "not to be compelled to join a union", which is a different emphasis altogether in that it implies that a man should join a union but that he cannot be forced to do so; it is not left to his whim or fancy. I hope that when we reach the Committee stage the words, "on the grounds of conscience" can be substituted for the words "if he so desires".
Secondly, let me pass to the register and the Registrar, concerning which we are glad to see that an amendment has been made which prevents the Registrar from making up his own rules. It is surely essential that there should be, as there is now, a register of recognised unions; and, if they are to be recognised, what fair objections can there be to the submission and inspection of their constitution, including their rules and regulations? The fear has been expressed that the general freedom to leave a union if a man so desires could lead to a rash of breakaway unions—"scab" unions, they were called just now. These could

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not be effective unless they were registered, and, in registering, their bona fides would surely be inspected. I find myself in favour of the register and the Registrar, and can see no useful purpose in withdrawing from the register. To threaten to do so, as I regret some unions have, can only in the long run adversely affect their members and penalise the trade union concerned.
Thirdly—and I now come to the main cause of objection, as has come out again and again in this debate—there is the whole question of legal enforcement of agreements. The ill-fated In Place of Strife, which in my opinion was an admirable document, said that agreements would not be legally enforceable unless provision was so made. In the Bill, your Lordships will be aware, the position is reversed: they shall be legally enforceable unless it is expressly stated to the contrary. Now I am well aware of the hazards and problems of which we have been reminded: the bogies that can be raised of war regulations, and what is happening in the United States of America. But some method must be found to enforce agreements in the face of any unprincipled persons who, in a permissive age, are not prepared to be bound by solemn promises, and who openly flout those set in authority over them. It is the hope of most people, and I should like to say all, that the courts will not be used, but they are there in the background, as the magistrates' courts exist in other spheres and are available to us. Most of us order our affairs so that we can keep out of those courts. That is the hope of what will happen here.
Particular care and attention must then be given to the drawing up of agreements—which has not always been the case in the past. There is the opportunity, of which we have been reminded, to exclude these agreements from legal enforcement if desired. The law, if flouted, comes down very heavily on employers and employees in other fields. Why should this matter of industrial agreements be excluded from the protection that the law can afford?
Let me conclude by saying something about the Commission on Industrial Relations and industrial tribunals. We are familiar with these already. They
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are doing good work and are an integral part of the machinery of conciliation as envisaged in this Bill. The Trades Union Congress at its recent Conference apparently took the decision to advise—I doubt that they can require—trade unionists not to sit upon tribunals or on commissions. I cannot follow that reasoning. To me it is non-sense—I mean that: "non sense"—to retreat from a position where you are needed to defend your comrades; to abdicate and to leave the enemy in possession. Such action will not stop the Commission on Industrial Relations from doing its work; there are enough volunteers to be found without having to press-gang people. I have never been able to understand this attitude, which I often find also in the Church: that when you do not approve of some action and cannot get your own way in stopping it, you resign from a committee. It may salve your conscience but can betray a cause.
I am convinced that the voice of the trade unions must be heard in these tribunals. A straight, honest trade union official is respected, and the employers who are straight and honourable are respected, too, by the trade unions. Having said that, I believe that the trade unions at the present time need a new strategy and a different approach. There are some trade unionists who are living in the past. The battles that they fought so magnificently then and won so hardly are not the same battles that they have to fight to-day. Then, they were engaged in establishing the rights of workers and and in taming their employers. Now, it seems to me, their problem and duty consist in no small measure in taming their own members.
The late Leslie Cannon, in a posthumous broadcast said
"The Trade Union Movement has lost its way. It has lost its sense of mission. The sense of brotherhood has no meaning. The powerful get what they can and they leave the weak to get what they can."
The aim must surely be to build up confidence between the two sides in industry: confidence in themselves as well as confidence in one another; confidence in their ability to make good. For the issues behind the Bill, with its many clauses, run deep; and, as we have been reminded, it stirs up memories of the past without breaking hopefully, as

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yet, into the future. I say "as yet" because if this Bill can be made to work then it can help to revolutionise in the right way the industrial situation; but if it does not work it could be overthrown by a different kind of revolution which would destroy the peace and the greatness of our nation.
The need is not so much to find the right words to interpret a variety of clauses; the basic need is to secure the right attitudes to life and to work, and to be able both to practise them and to commend them to others. A recurring question in the past has been: who is to be master? I do not mean this in the actual sense, but who is to win in the struggle which is taking place and which, unfortunately, is emphasised by this Bill? That question is wrong. The question we need to ask is: how can we find that real spirit of trust and cooperation that will enable us to work together for the common good? This Bill, if it is approached in the right way, can be a charter for the stabilising and improvement of industrial relations. But there must first be a willing mind to make it work. With that, all things are possible; without it, my Lords, the situation can only grow worse.
10.0 p.m.
BARONESS GAITSKELL: My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Blackburn, particularly as I agree with some of the essential parts of his speech, though not with all. I have always been grateful for the knowledge I gained during the many years when I accompanied my husband on his visits to factories, steelworks and coal mines, and every kind of industry and institution where manual and other workers are employed. Without that knowledge, I should not feel entitled to speak to-day. I cannot help feeling that this Bill is one written by lawyers exclusively for lawyers, and I confess that for a layman to follow it is just hard labour. However, when I surfaced after struggling through its nine Parts and 150 clauses, I had a pretty shrewd idea of its intentions.
I wonder, my Lords, why lawyers do not draft Bills with the same clarity as we heard in the speech of the noble and learned Lord, Lord Donovan, this afternoon. He made an absolutely magnifi-
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cent speech which was full of wisdom. That is not surprising, when one comes to think of it, because it was his Report that sired both In Place of Strife and also this Bill, though the Report and the White Paper differ from this Bill in various respects. As many people have said, the Bill seeks to establish a framework of law within which industrial relations can develop. This sounds so simple and innocuous, but it seemed to me that it was less a legal framework than a legal cage.
As the noble and learned Lord, Lord Donovan, said, the Conservatives have always over-simplified industrial relations, though a Bill of this gargantuan complexity does not reflect that simplicity. As the Government's Bill has been compared with the Labour Government's White Paper, In Place of Strife, I refreshed my memory by reading it again. I found it a model of clarity and conciseness. It borrows much more from the recommendations of the Donovan Report than does this Conservative Bill, though there are some similar recommendations. But, my Lords, the philosophy that permeates these two documents could not be more different.
The Government's Bill is very authoritarian and rests mainly on new judicial machinery. No one could deny that this Bill is biased against the trade unions, but, even though the unions rejected the White Paper, In Place of Strife, the Labour Government could not be accused of that bias. I supported the Labour Government's White Paper, except for the penal clauses, when it was debated in your Lordships' Chamber. I would mention only one or two respects in which I think that this Bill differs from In Place of Strife. The sections on workers' rights are deliberately weaker than in the Labour Bill. Management is liable for fewer unfair industrial practices. The contracting out and agency shop provisions are designed to weaken the trade union movement, whereas the objective should be to make the trade unions stronger and more responsible. The registration provisions, it seems to me, are a form of State licensing by encroaching excessively upon the freedom of association as guaranteed by the I.L.O. conventions and the European Social Charter.
I should have been in favour of this Industrial Relations Bill if it had made

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a take over of the White Paper,In Place of Strife, if it had strengthened the Labour Party's recommendations. The trade unions rejected In Place of Strife, helped by one or two strategic errors by the Labour Government in putting it across, and now, it seems to me, they are landed with a much more punitive Bill, really a Bill of distilled Tory dogma. Les Cannon, whose death was a great loss to this country, in a Sunday Times article described the T.U.C.'s defeat of the Government's White Paper as a "pyrrhic victory". I myself would emphasise this. It was no victory, but a great missed opportunity for the trade unions and the Labour Party to put forward a policy which could be welcomed by many people in this country.
My Lords, labour relations, when pared down to the bone, are based on collective bargaining between employers and employees. The Tory view of industrial problems reminds me a little of the now out-dated idea of the guilty party in divorce proceedings. Faults are usually to be found on both sides in the breakdown of human relationships, but the Tory Party have somehow made one feel that the trade unions are the guilty party. The problems of labour relations are a joint one, for the trade unions and management, and there has to be a joint solution.
It is obvious that our bargaining institutions are not effective enough and have to be strengthened, especially at this time in our history when workers are demanding a share of power in industry. The fury of the trade union movement against this Bill is quite understandable, as the noble and learned Lord, Lord Donovan, has pointed out, when we consider that after a century of hard-won rights—won against the suspicion and hostility of judges—the trade unions now find in this Bill that the voluntary system they have evolved is to be handed over to the law, with some power for their rules to be altered and imposed.
We are told that the Bill is modelled on the American laws. I wonder whether noble Lords noticed an article in The Times, when the Consultative Document was published, by Mr. Theodore Kheel, a famous presidential mediator and arbitrator in labour disputes and an
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expert on labour relations, in which he analysed the Government's Bill. He wrote the article, I may say, during the strike at General Motors and in an industrial climate of wage and price increases and inflation strikingly similar to our own—and "strikingly" is the operative word. I should like to mention a few of Mr. Kheel's comments on this Industrial Relations Bill. He thought that the Bill eliminated the legal immunity of trade unions which has existed for a hundred years in this country. He was especially enlightening about the enforceability of agreements by law. He said that it was a mistake to assume that in the United States, where they are enforceable at law, agreements are observed merely because they are legally enforceable. He claimed that it was not their enforceability but the wish of the unions and employers to see to it that they are enforced. He added that they wanted them enforced, not because they were more law-abiding than others, but because of the positive advantages in the agreements made for them. This underlines the importance of cooperation, and I think we are back again in what has been called "Donovan country".
Mr. Kheel said that the most important contribution American labour relations had made was the grievance procedure in all contracts, but it was the unions which dealt with this and not the Government. In fact, the Government in this country are much more involved in this field than the American Government. He was simply scathing about the Tory idea of individual freedom not to join a trade union and the way it was equated with the right to join. He compared it with the refusal of a man to pay his taxes if the political Party he voted for was not returned; and paying a contribution to charity was absolute nonsense. It was the union, not the charity, that provided the services and he said that the trade unionists in this country pay far too little for their services. Theodore Kheel states categorically that the enforceability of industrial procedure agreements will not by itself restrict strikes.
My Lords, I do not think that this Bill will achieve what it has set out to do, for all the reasons given in the absolutely brilliant speech of my noble friend

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Lord Delacourt-Smith, in the measured speech he made this afternoon and in his trenchant analysis of the Bill. The many big changes in British industry in the last thirty or forty years which have resulted in many chaotic wage structures cannot be dealt with by any of the numerous clauses. Litigation, my Lords, is poison in industrial relations and it can only cause bitterness and endanger labour relations. On the other hand, my Lords, a small number of extremists encourage anarchy and cause chaos, and the image of the trade union movement in this country is stamped with irresponsibility as a result.
This Conservative Industrial Relations Bill is a challenge to the whole of the Labour Movement. Opposition and protest are emotional releases, but they can
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generate hostility in the public mind, as they have done. The public has not any idea of the real cause of strikes. Both the trade unions and the Labour Party must take a hard intellectual hold of the problems we are facing and work out together in co-operation a policy—a constructive alternative policy—for dealing with the economic and social problems in our society to-day.
Finally, my Lords, the noble Lord, Lord Drumalbyn, said that a code of practice would be drawn up and presented, rather like the Highway Code. I do not wish to push this comparison too far, but only to say that in this Bill the Government are driving on the wrong side of the road, and driving dangerously, and I support the Motion of the Opposition.
10.15 p.m.
LORD FERRIER: My Lards, the noble Baroness, Lady Gaitskell, said that no-one can deny that this is an anti-trade union Bill. With due respect to the noble Baroness, I can. I take the view that the Bill as it stands is nicely balanced, but I believe it is the duty of your Lordships' House, and indeed our intention, that when it leaves this place it will be an even better Bill than it is now. I was much impressed by the speech of the noble Lord, Lord Rochester. When the noble Lord, Lard Milford, said that this was a class Bill and an anti-worker Bill, I remembered that the noble Lord, Lord Rochester, said that if it was anti anything, this Bill was anti-bullies. I believe that it is anti-bullies, not only among the militant labour, but among management, and that that is the intention of the Government. The noble Lord, Lord Thomas, made a maiden speech which we all greatly enjoyed, and he pointed to the corruption that stems from absolute power.
I believe that in picking up the threads of the debate in this way I can save my time and your Lordships' time by leading on to the single, rather narrow issue to which I wish to refer; and ultimately I will refer your Lordships to Clause 134 of the Bill. The issue, as I see it, and as has been made clear in the debate hitherto, is twofold. First, who is to govern? Is it to be the Government or militant labour? Secondly, if the answer is the Government, then what are the rules? The rules, of course, are to be worked out on the Committee stage.
It is, however, upon the first point that I propose to concentrate, as to who is to govern, and when is that Government to begin. In the spring of 1969 trouble with the printing unions (who are gradually throttling their own industry) resulted in the business of Parliament being adversely affected, if not frustrated, for several weeks. On 8th May of that year my noble friend Lord Carrington, who was then the Leader of the Opposition, said:
"It is the duty of Government so to arrange things that Parliament can conduct its business properly."—[OFFICIAL. REPORT, 8/5/69, col. 1288.]
On December 8 last year printing union trouble again struck at the conduct of the
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business of your Lordships' House, though for a shorter period than in 1969. In the early part of this year industrial action by the Post Office workers—which a number of people, including myself, believe need never have become so serious had there been a ballot—resulted in a shocking condition of affairs so far as the conduct of Parliament was concerned. Not only the public, but Members of your Lordships' House were prevented from obtaining copies of Hansard from Her Majesty's Stationery Office depots. This was the case, to my personal knowledge, in Edinburgh. I will not weary your Lordships with details, but an important Committee of Inquiry was to sit in the North of Scotland, and the Scottish Council for Development and Industry were unable to obtain a copy of the Hansard containing the debate on that subject in this House. I gave the Council my copy and went to Her Majesty's Stationery Office and was denied one, quite courteously. But I have reason to believe that the Hansards were there; it was just that the people in the Office had declared them "black".
This leads me to my point in regard to Section 134. It is clear from what my noble friend Lord Drumalbyn said in his opening speech that it is the intention of the Government to use Clause 134 only in most exceptional circumstances. The point I am making is this: if we are to agree that the process of Parliament should not be interfered with except in the absolute ultimate stage of any industrial dispute, then Clause 134(2) should be strengthened in Committee so as to make it capable of being brought into effect in the event of such a happening recurring as occured this Spring.
However, your Lordships will gather that I personally oppose the Amendment, or the counter-Motion, whatever it is, and in doing so I am reinforced by having been deeply impressed by some of the speeches that we have heard from the Cross-Benches. I refer to the speeches of the noble and learned Lord, Lord Donovan, and the noble Lords, Lord Redcliffe-Maud, and Lord Plowden. It appears to me from the guidance that they have given us and the opinions that they have expressed that, as a whole, this House wants to give the Bill a Second Reading. I go further in expressing my own implacable resolve to do all

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in my power, little though that may be, to see to it that this Bill finds itself upon the Statute Book in a properly balanced form, and that as soon as may be.
10.22 p.m.
THE EARL OF LYTTON: My Lords, at this time of night the speaker has only one interest: to try to say something new. Those who listen to him have only one interest: that his remarks, whether new or old, should be brief. I will try to achieve both. I will take as my text "Workers of all countries unite", the concluding words of the Communist Manifesto of 1848, which I often read and have by me. The purpose of this unity was to create power for the workers. I have always been in favour of unity and power for the workers. My complaint about the present situation is that the trade unions are neither united nor do they exercise power. I oppose the Motion before the House, and support the Bill on the grounds that it is going to have an influence towards strengthening the trade union movement.
Let me illustrate what I mean by the loss of power on the part of trade unions, which I think I can do in about a minute. The population in 1966 was about 53 million. Of those, 26 million were working—and that includes every kind of worker, as I read the Donovan Report. Of the total number of workers, 23¾ million were what might be called employees, the people we call the workers, the people Marx called the working men. That is 91 per cent. If you take their dependence on the whole population, we are talking about the interests of nine men and women out of every ten in this country. Of those 23¾ million, 10 million only belong to trade unions according to the Donovan Report—42 per cent. Of those 10 million, 1 million, or 4·2 per cent., attend any branch meeting at all. Those 4·2 per cent. who do attend branch meetings produce a hierarchy; and this official body, as you might call it, is responsible for only 5 out of 100 strikes that take place.
I suggest we must infer from these statistics that power has passed from the trade unions and is being exercised somewhere else. It is my hope that this Bill will restore the authority which the trade unions should have but do not
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exercise, and remove it from whatever you like to call them—wildcats, militants, troublemakers, who should not be allowed to exercise this power. The situation whereby the people who are not authorised to exercise power nevertheless do so has reached such tremendous proportions that one is reminded of Shakespeare's famous dictum about treason—it is a treason against the workers, the trade unions, the public. Shakespeare said:
"Treason doth never prosper: what's the reason? For if it prosper, none dare call it treason."
I have a feeling that the trade unions do not like to call the thing that has usurped their power a treason—which it is.
That is my reason for supporting this Bill, which has minor defects all over the place, which I hope will be corrected. To those who object to the introduction of law into this field, I feel that I really must call attention to the laws which they introduced to the field of industry to which I belong. I thought that the noble Lord, Lord Delacourt-Smith, gave the most persuasive speech, on lines with which I did not agree, that I have heard for a very long time. But I want to bring to the notice of the people who object to this Bill the Agriculture Act 1947 which they introduced, and on which I have congratulated them at least three times in this House as the first step to reinstate British agriculture on the line of prosperity which it has pursued ever since. It is the last thing one expected of those who had promised to expropriate people on the land.
The Agriculture Act 1947 has 111 Sections, with 13 Schedules, and considering that it deals with one little industry only it bears, if one talks about ponderous Acts, a certain proportion to the present Bill. It is a very big Act of Parliament. It intrudes very much in a field where the law had never been before, and in an extraordinary manner. It chooses the agricultural industry, where people work, say, 80 hours a week, as the only industry in this country in which people, if not efficient, can be dispossessed of home and work for inefficiency. At the time many of us said, "This demeans us very much. We are perhaps the most hardworking lot, and

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if we are inefficient it is due to all kinds of historical pressures—the workshop of the world and cheap food from abroad, dumping, and so forth." But we took it in our stride. However, I want to call attention to the kind of things we had to deal with. In the Agricultural Land Tribunal, where I served for a number of years, one had to judge what was good husbandry and bad husbandry; what was good estate management and bad estate management. Let me read the kind of provision we had to deal with, which was laid before us in Section 11(2)(a). We had to examine and be certain, in considering whether the husbandry is good or bad, whether:
"permanent pasture is being properly mown or grazed and maintained in a good state of cultivation and fertility and in good condition".
What is the legal connotation of these sundry words? As to "permanent pasture" the word "permanent" was already obsolete in those days, and the discoveries during the war of Sir George Stapleton regarding the growing of grass revealed that grass is not permanent; it is a crop which, like any other, expires and wears out and has to be renewed. In the phrase "maintained in a good state", what is the definition of "good"? How are you on the ground, when you visit yonder 10 acres, to say what is good and what is bad? In practice, what you do is to go out in the pouring rain with your mackintosh on, you stagger through a lot of mud and yonder 10 acres is presented to you.
One person, a representative of the village estate agents and surveyors (who never have a surveyor on their staff) declares that the ground is filthy, and another person, representing the other side in the same village, declares that it is clean. Now "filthy" and "clean" are not legal words and they are not clear in the Act, or in any guidance to the Act. We on the ground have to decide how many plantains make it filthy, and whether thistles without copses make it filthy; and, after copsing, does it cease to be filthy.
If you wish to deride legislation by introducing illustrations of this kind, this particular Act is open to all sorts of derisions. All sorts of nasty things were done between landlords and their tenants
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which came to light, and many more dirty things were done behind their backs. I tried to operate this, and I do not think it was too unsuccessful. I never protested against it; I served on it. But I do wish that people who complain at the introduction of law into the great field of other kinds of industry would bear in mind what they have done to the agricultural industry; how, in a sense, they demeaned it, and how we have survived the legislation, and how it has done us all a great deal of good.
There is one thing I should like to say about the Bill itself. I think it presents the worst possible image of itself. I looked at the rights of workers, and expected to find a kind of Magna Charta. And it was a fearful anti-climax to see that the first and, apparently, only right was the right to join a trade union, at a time when it is not what one might call the last word in excitement to join. That is the only right. But a great many other rights are hidden elsewhere in the Bill. For instance, in Clause 124 and on page xii of the Explanatory Memorandum, the greatest of all rights is conceded, and I think we ought to put it in the forefront. It is the right of a man to take part in gainful labour—the right to work. We have in practice recognised it during the last 50 years. All round Exmoor, where I live, are the memorials of labour working without reward (I could show them to anybody), because that right was not then recognised.
We have that right today, so why not put it in the forefront: the right to work, the right to compensation for having no work through no fault of his own? That right is hidden away at the end, under the heading, "Restrictions on Legal Proceedings". I read the whole of the Bill five or six times, searching for something of this kind before even knowing that it was there. It is such a glorious declaration to make. Could it not be put right in the front? Also, if we are to improve this Bill, there is one thing I have long hoped to add, and that is the right of a pensioner to a pension protected from price erosion. We had such an excellent debate on a Motion moved by the noble Baroness, Lady Phillips, that I wonder whether that could be added. It would be such a tremendous improvement to

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this Bill if we were to crown the evening of a working man's life with a pension that does not waste away so that he stays in bed half the day in an effort to keep warm.
10.35 p.m.
VISCOUNT MILLS: My Lords, in my contribution this evening I wish to reflect the views of industrial management. We have heard many others talk about the historical, academic, legalistic and ethical sides of the problem, but I want to begin by talking about the efforts of the previous Government and the General Council of the Trades Union Congress. I think it has been made abundantly clear that their efforts have not succeeded in achieving what was desired. I think what has happened is that we have reached the position of lack of control; and when things are out of control they do not stand still; they go backwards and the situation becomes worse.
I was reminded by a colleague the other day of a prominent industrialist who had placed on the walls of his engineering shop, in letters 6 feet high, the following quotation:
"Evil triumphs when good men do nothing".
I want to say that I think this is the position. The noble Lord, Lord Taylor of Mansfield, to whom I listened with great respect, talked about the tender plant of the trade union. But what he missed (and I am sorry he is not here at this moment), it seems to me, is that that tender plant is surrounded by tares and thistles. And, as I see it, what we now have to do is to get rid of the tares and thistles—the situation in which a minority of militants, who are sometimes subversive, exercise an undue influence on the fortunes of this country. I feel that the influence cannot be counteracted by a moderate majority, even where this is a combination of the management and the unions. The proposed legislation relies on the law as the ultimate sanction.
I do not want to go into some of the arguments which have been put forward to-night, apart from saying that I regard the legal framework as a fail-safe device. We are used to these legal constraints on our behaviour in many other fields, and I can see no reason why we should not have these constraints in this particu-
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lar field. Society has the right to protect itself, in the last analysis, and I consider that the point has been reached when we have got to the last analysis. Responsible trade unions and management concentrate on keeping industrial relations on course. They have always done so; I think they will always do so. But the fundamental thing we must get at is the root cause. At the present moment men can down tools at the first rather than at the last resort.
I want to talk for a few minutes about the area that I consider is the area of greatest difficulty: engineering, the car industry and the docks. If my information is correct, the people working in these particular industries number about 4 million out of 26 million. It is a small proportion of industry, but it is one where the economy can be hit hardest by unofficial and unconstitutional strikes; and, of course, it is the exports that are hit particularly hard.
Like my noble friend Lord Rochester, I listened recently to the I.T.V. debate on the question of the Industrial Relations Bill, and I particularly listened to remarks made by Mr. Hugh Scanlon. He dealt with two particular matters, the first, which he called the "crazy wages structure" in the engineering industry; and the second, the need for new procedural agreements when three to eighteen months at the present time were taken to solve any difficulties. He said also that there had been talks with the Engineering Employers' Federation, over the last two years, and they had not achieved resolution of the problems. He could see no reason for legislation in order to achieve solution of the problems.
I decided to talk to the Director of the Engineering Employers' Federation. I remembered that my father was President of this Federation way back in the 1950s. He agreed that there was some truth in what Mr. Scanlon had said. This was always the case in any industrial matter, but it was not quite so black and white as had been made out in the I.T.V. presentation. Efforts were being made to strengthen procedures, but they had been met with union opposition, and progress was at present hampered, awaiting the outcome of the proposed legislation. His own views were that he felt very strongly that legislation would help to create an

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orderly and sensible system of bargaining, and would help to outlaw the unofficial troublemaker. If your Lordships read the Federation's recently issued booklet you will see that this view is reinforced. He also said that parts of the legislation dealing with the sole bargaining agents would assist in lessening the competitive bargaining which took place in the small fragmentation unions under the control of the Federation.
I want to talk for a moment about the motor industry. In the first half of 1966 Mr. Jack Scamp (as he then was), the car industry's troubleshooter, reported to the then Minister of Labour, Mr. Gunter, In his report he said that all but five out of 600 stoppages in the half year had been unofficial. He further remarked that anarchy appeared to be imminent in some of the factories. He went on to say:
"Some way must be found to restrain minority groups of men from selfish purposes of immediate sectional advantage."
When I was reflecting on this my thoughts turned towards the present official Ford strike—at least, we do not know whether it is finished or not. I was thinking about it this week-end, and particularly about Halewood and Swansea.
I read in the papers that at Swansea, in a secret ballot, 703 voted to go back to work, and 339 voted to stay out. However, the convenors were not satisfied with this position; they said that the men "did not understand the position". They therefore held a meeting and had what they called a "democratic show of hands". The ultimate result then was: for staying out, 537; for going back to work, 440. Do those convenors really think that they can fool the public? We have been talking about this plant, but this is the sort of problem that we face. In this particular case it seemed to me perfectly democratic and correct that there should be this way of settling it by a secret ballot, but immediately it had to be reversed by a "democratic show of hands".
My experience in industry lies in the part that management has to play. I consider that all competent management will carry out its statutory duties under the legislation quite willingly enough, but my experience in management training, particularly in teaching negotiating and
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problem solving skills, makes me aware that management has a major part to play outside the law. The message I want particularly to get over tonight is that managements must not sit back and expect the law to do their work. If this Bill becomes law—and I am sure it will—there will be a need for management to redouble their efforts to improve their management styles, to improve management relationships with the group on the shop floor, and to increase the process of involvement and consultation over decisions which affect the shop floor. This is an essential prerequisite for a change of attitude.
There must be a creation of jobs in which people find meaningful satisfaction and not boredom. I need not tell your Lordships that one of the greatest causes of strikes and industrial unrest is boredom and lack of satisfaction. Certain industries are fortunate, in that the disease of continual unofficial and unconstitutional strikes has not yet spread to them. Whether this is due to circumstances or to management's sustained effort to see that the ground is not contaminated, is difficult to tell. But in some industries the activities of a few unofficial leaders with great power have made it impossible for management to concentrate on their proper job—the improvement of relations with their work-people.
When the noble Lord opposite was talking about the agricultural side of industry, I was thinking how I regard the difficulties which the industry faces at the moment. I thought of a farmer who wants to tend and improve his land, but who is in the dilemma that he knows his haystacks are likely to be fired at any moment. What does he do? He concentrates on protecting his haystacks and thinks afterwards about tending and improving his fields.
To sum up, I believe that unions will eventually respond to the need to police their side of industry. After all, the Trades Union Congress believed—and we have heard the Opposition say so to-night—when the last Government were in power, that that should have been done on a voluntary basis, but they did not succeed. I believe that this legislation can be used to create the right climate to stop unofficial and unconstitutional

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strikes, and to provide a framework for management and unions to have greater confidence in themselves to improve their procedures and their bargaining.
10.47 p.m.
LORD POPPLEWELL: My Lords, as the noble Earl, Lord Lytton, said, at this late hour it is very difficult to find something new to say on this Bill. After some thirty speakers, most points have already been covered. However, Clause 1 states quite clearly that the object of the Bill is to lay down a code of conduct for the purpose of promoting good industrial relations. The right reverend Prelates usually use a text when they speak; that is the text which I shall use.
Most speakers have referred to the difficulties of industry, and there seems to be an acceptance that they are not one-sided: there are difficulties of management as well as of workpeople, through the trade unions. We want to find a way to overcome those difficulties. What is disturbing our minds is not so much the number of official strikes, but the phenomenal growth in the number of unofficial strikes since 1951–52. The Labour Government recognised that steady, cancerous growth when they came into office, and in 1965 they established the Donovan Commission. Lord Justice Donovan and his colleagues took some three years to try to establish the facts behind the industrial troubles. According to the records, they interviewed no less than 430 different organisations and various representatives of one type or another.
The Donovan Commission consisted of experienced men and an experienced lady used to dealing with the problems of human relations in industry, and as such they were able to ask the right type of questions. They were able really to get down to what were the facts which revealed themselves as being the causes and effects of these troubles. I suggest that it is rather regrettable that in this Bill the Government have not paid more attention to the Donovan Report than they have. They have certainly paid attention to some parts of it, but the important parts they seem to have neglected. I think it is also very regrettable indeed that, instead of waiting for the Donovan Report to come out, they issued a Tory pamphlet called A Fair Deal, which was evidently thought up more
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by politicians than by people actually engaged in industry.
I think the basis of this particular doctrinaire policy, and the philosophy revealed, is of a most reactionary kind. It seems to me that, to commence with, that policy document of the Tory Party has not got away from realising the change that has taken place in industry and in our industrial life today. The old days of owner-management of firms and industries have gone, and we now have these new powers vested in management and executives. It is natural that they cling to power and do not care too much for any interference coming from the workpeople below them. They think their right is that of management, and that such management must say and workpeople must obey.
VISCOUNT CALDECOTE: My Lords, does not the noble Lord think that that is really rather out of date? As I said in my speech, he is fighting the battles of years ago. That is not the attitude of management today. Surely he will accept that.
LORD POPPLEWELL: Perhaps I may deploy my argument, and then we shall see how far that is so. To me, this appears to be a battle of power more than a question of industrial relations. It is a battle of power and of who is going to give the orders. The noble Viscount shakes his head. My experience—a vast experience in industry—indicates that this is a line that I know very well.
I accept that there are certain very enlightened forms of management, and I may have been a little too sweeping in including all. When I refer to the more enlightened forms of management, I have in mind particularly the publicly-owned undertakings. I think that in the publicly-owned undertakings one can find some of the most enlightened management.
As the Donovan Commission rightly pointed out, this Bill will be a lawyer's paradise. In my opinion, it would be wrong to give a Second Reading to a Bill relying upon the publication of so many regulations that have yet to be thought out and eventually approved by Parliament. The trades unions as a whole are united in their opposition to it. There is no use in the noble Lord shaking his head. It is a fact that the trades

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unions as a whole, their General Council and their executive are opposed to it. They have established their seven principal points of opposition to the Bill; they have decided that it is unworkable and should be opposed in all its stages.
It is to be regretted that the Government have failed to realise that the affairs of this nation cannot be successfully carried out without the fullest co-operation of the organised workers. In times of war and of crisis, the workers' organisations have been brought into joint consultation with the Government and it is regrettable that this has not happened on this occasion. It must be said that the trades union movement has never utilised such circumstances to seek self-aggrandisement. Had the Government brought the trades unions into discussions about the weaknesses of industrial relations and then tried to hammer out a formula in the way that has been done in times of war and crisis, then this Bill, or the objectives behind it, would have had a much better reception than has been the case.
The trades unions have been aware of these weaknesses for a long time; they have pinpointed the difficulties, and their Bridlington agreement was a milestone on the way to eradicating many of them. Some noble Lords have taunted the trades unions with not having moved quickly enough. But, my Lords, it is a Herculean task to require these freely-organised bodies of men, based on the old craft unions with their long history, to sink their identities and hand over sovereignty to a bigger structure. But much progress has been made in the past few years since the Bridlington agreement. One of my noble friends referred to the reduction in the numbers of trade unions affiliated to the T.U.C. from 192 to 132. This is a great step forward. The Government have fallen down badly, in my opinion, in not fostering that type of progress.
Over the week-end, I was reading George Bernard Shaw's Major Barbara. Probably noble Lords will remember the quotation better than I do. Undershaft is saying to Stephen, who fancies himself as a politician:
"Do you think you and others, sitting in a gabble shop, can govern? No, my friend, you
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will do what pays us as industrialists. You will make war when it suits us, keep peace when it doesn't. You will find out that trade requires certain measures, when we have decided on those measures. When I want anything to keep my dividends up, you will discover that my want is the national need. When other people want something to keep my dividends down, you will call out the police and military; and in return you shall have the support and applause of my newspapers and the delight of imagining that you are great statesmen".
My Lords, there is a world of wisdom in that observation. Do we, in the "gabble shop" of Parliament, think that by what we pass here we can impose good relations on industry—just by passing an Act of Parliament? Good relations are something that has to be fostered and developed.
Noble Lords opposite have said that the trade unions claim to be above the law; but that is absolute nonsense. Trade unions have always been subject to the law. Differences arise, but it has been felt that it is better for both sides of industry that there should be voluntary arrangements which both sides should honour. This Bill would have served a more useful purpose had it been designed to try to probe and discover the real trouble behind the unofficial strikes which so bedevil the nation. As was said by a noble Lord opposite, boredom features in many of these troubles. Militants are rampant in the motor car industry. They seize upon a situation in which individuals are working on an assembly line, a continuous belt, doing the same job hour after hour, day after day, month after month. The job does not require the worker to think, his actions are automatic, and his mind can wander in other directions. His grievances, imaginary or real, are fostered. The boredom of his work provides a useful opportunity for the militants to foster strife and stir up trouble. It would have been much more useful had there been an attempt to deal with this problem instead of imposing restrictions on the trade union movement as the Bill does.
This Bill has been launched during a bad period; a time when steep increases in remuneration have been given to Service personnel. We see £4,500 advanced to the field marshal and so on, down the scale to the lieutenant. Top civil servants have received advances approaching £5,000. We see the Government

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yielding to a demand for an increase for the doctors but resisting the demands of postmen, dustmen and other lower paid sections of the community. That is the atmosphere in which this Bill has been launched. We had the mini-Budget, with increases in social service charges, and the last Budget, with easement of taxation. Then we have the Government saying to the workers that they must confine their applications to 8 per cent. The Government and industry are asking the trade unions and the workpeople to enter into productivity agreements for as long a period as possible. If that is possible, I think it is an excellent idea, but with the steep increases in prices taking place all the time, can we expect organised workers to accept this philosophy?
That is the background against which the Bill reaches this House. I was interested to observe how many noble Lords said they wished to make massive amendments to this Bill. I sincerely hope that that will come about. In Committee stage there is time to argue. I hope that noble Lords who made these suggestions will ultimately support us in the various Amendments we shall press to the utmost of our endeavour to secure a better Bill. It is a bad Bill and we cannot make it into a good one; but if we can repair some of the damage it will do, this House will have performed a useful service.
11.7 p.m.
LORD CLIFFORD OF CHUDLEIGH: My Lords, in spite of statistics to the contrary, during the last decade or so those of us who care for the reputation of this country and have travelled abroad have had constantly to put up with references to what is now known as the "English sickness". One cartoon, either German or Swiss, which may have been brought to your Lordships' attention shows a simulated travel advertisement which says "Come to Italy for a hundred kinds of cheese; come to France for a hundred kinds of wine; come to England for a hundred kinds of strike." It is too depressing. I am not sure that this Bill is the right answer, but perhaps it is a step in the right direction.
The previous Administration, I had rather hoped, would proceed with a Bill to follow In Place of Strife. I think
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that everybody knows why they did not do so. The fundamental fact is that where powers and responsibility are separated, it is very easy for chaos to develop. Nowaday, the unions—and I use the word as a generic term, and not as meaning particularly the Trades Union Congress—have the reputation of having the power without the responsibility, and they give their opinions on economics, foreign affairs and other aspects of government.
It seems to me that it would be a way out of the difficulty if we gave to the unions the power and the responsibility on two basic grounds; first if you cannot beat them, join them; and secondly, by reductio ad absurdum, end all government; abolish Parliament and so avoid a wasteful duplication of effort. That is on the principle that if you give responsible people responsibility they will behave as responsible citizens. Does the Bill deal with the real culprits? I picked up the Evening Standard this evening and noted a comment by a man who was turned away by the pickets at the Hale-wood Ford plant—and I quote:
"I don't know why the Government and unions argue about who is running the country; we all know it's these bloody shop stewards."
I think that expresses the doubt that is in my mind as to whether we are attacking the right problem.
My Lords, I have an interest to declare, and all else I have to say is on that particular interest. As a small employer—there are nine on my payroll—I view parts of this Bill with serious misgivings, and unless the Government are prepared to exempt the small employer from some of its provisions I, for one, am uncertain which way I shall cast my vote. Clause 2 is irrelevant, so far as the small employer is concerned. It must be patently obvious that those in agriculture are put in an impossible position, or could be if I read the Bill aright, by Clauses 20 to 27; and when it comes to compensation, under Clause 113, the small employer would be bankrupt. Paragraph (b) of Clause 113 mentions the sum of £4,160. If I make that much profit in one year I think I am doing well—it is generally that much loss—but if I had to pay that sort of compensation, or anything near it, I should go to the wall.

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The small employer is not like the big employer who can call on hundreds or thousands of shareholders and their capital, and if the reported statement of the young Mr. Cousins is anything to go by—that he would rather see firms go out of business than forgo pay rises—we shall not need the Bill to send us to the wall. Surely it was not the Government's intention to pre-empt the small employer. It is possible to reinstate a man in a big business or factory, when there are hundreds or thousands among whom he can get lost, but it is psychologically impossible when there are only two or three men working on the farm or woodland together. You cannot live and work with a person when you come to that position that he has had to be dismissed. The exemption clause for small employers should be widely extended to include those with 10 employees or under (your Lordships will notice I say 10, because I have nine), and a higher figure for seasonal workers. My Lords, we need something to halt the power of the irresponsible to ruin the country. The trouble is that I cannot see that this Bill will achieve it.
11.14 p.m.
LORD GRAY: My Lords, at this hour the House will be pleased to know that the sight of me a short while ago, working in the Princes Chamber, did mean I was shortening my speech. When one reflects that we in this Kingdom are the inheritors and trustees of Parliamentary and judicial systems respected and envied the world over, it cannot but be with a measure of sadness that we have to admit in 1971 to a state of affairs in industrial relations that appears so often out of step with the good sense with which we are reputed to be endowed, and so out of step with the technological age in which we live. The present situation and our difficulty in agreeing on how to resolve it are born in part out of attitudes which owe much to emotion and to respect for liberties and freedoms in which we take pride.
This may be a reason, but it is certainly not a fit excuse for not legislating to secure improvements which, for years past, one and all who can claim to speak for responsible opinion have said we must secure. It is no excuse, either, that custom and practice which have in such
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large measure been allowed to dominate the scene can be made to continue to serve the interests of both sides. Nor do I think that experience should encourage us to adopt an alternative such as is proposed in Lord Shackleton's Amendment.
No-one denies the proposition that it is through continuing and progressive reform of collective bargaining that the path to industrial peace must lie, or that out of willing co-operation such will be born. But I submit that a pre-requisite is certain guarantees, with force in law, such as are provided by this Bill: guarantees to those who make the efforts on both sides, that the fruits of such co-operation are given a status that protects them from abuse and from the worst effects of unofficial or unconstitutional action.
I also see as essential acceptance of that identity of interest between investment and labour, employers and employees, which, although frequently recognised and often acknowledged, is all too seldom acted upon. In the last analysis, profitable identity of interest lies between the individual employee and his employer. I believe that by emphasising and spelling out in statute form the rights and duties of each to the other, this Bill affords a basis upon which such identity of interest can be better founded for the benefit of the individual and cumulatively of the nation.
The Bill should be welcomed for its proposals designed to tackle unofficial and unconstitutional strikes alone—forms of strike of which the noble Lord, Lord Popplewell, and others have spoken; forms of strike which I think In Place of Strife characterised as the typically British strike; forms of strike that do more economic harm and damage than can ever be properly measured, and, what is more, damage to the image at large of trade unions and trade unionists, and which provide a happy stamping ground for those whose motives have little to do with the interests of their fellows, but owe more to idealogies that find no reflection in Parliament nor sympathy with the majority of our people.
This Bill has certainly been misconstrued and mis-interpreted. Its very length and relative complexity make it

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vulnerable. I hope that we in this House particularly ensure that those sections which specifically spell out the rights and duties of an individual shall be clearer than in some cases they are now, and that we shall be relentless in pressing the claims of clarity against those of the legal niceties of Parliamentary drafting. I urge the House to give this Bill a Second Reading in the belief that it is necessary, and in the belief that through our debates we can achieve an Act which will strengthen responsible trade unions and management, that they may be better enabled to tackle the problems, infinitely more complex than anything they have yet had to face, which lie in the years ahead.
11.20 p.m.
LORD SLATER: My Lords, having listened to many of the speeches that have given support to the Government in regard to this Bill, I still hold to the opinion that we are two nations. This may not be accepted by the present Government, which is understandable, or by the Prime Minister, because of the statements that he made during the course of the last Election and since he came into office. It is understandable because the Government's policy has been, and still is, to keep control, and whatever action is taken it must keep intact such beliefs. The Prime Minister says that we are one nation; I say that we are two. There is an old saying that I have never forgotten since I was a youngster, that "actions speak louder than words". There is another saying, "By their actions ye shall know them" And so it is becoming more exemplified throughout the country with the policies that are being pursued by this Government, and what they are doing to this nation.
Many of us cannot eliminate from our minds the suffering and hardship imposed upon us by previous Governments. The anxiety and frustration for change was ever with us, while on the other hand those who were not so positioned as we were clung desperately to their power and used every device that they could to bring to their command to upset any kind of change. It was only by constant agitation—we have been reminded of it by my noble friend Lord Popplewell—by the men and women of the past, who suffered tremendously from the indig-
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nities imposed upon them by such people who held the reins of power, that find ourselves in a position today when our people can express themselves against policies which, if adopted, could bring untold hardship once more to millions of people in the land. The type of legislation as set out in this Bill will not achieve what its sponsors hope to achieve. It has already been stated that if the Government are successful in winning the day by putting this Bill on the Statute book they will be praised by many for so doing. While on the other hand a former belief has' been' propounded and is still being propounded, that such legislation will go down in history as another piece of legislation providing the legal profession of this country with a lawyers' paradise.
One matter that this Government have overlooked is that people like me who came from heavy industry were constantly reminded by our employers that we were not there to think but to produce. Some noble Lords may have heard me make a statement in the other place that I was a coal face worker before I went to the House of Commons, and about what I was doing at that particular time. But even what happened during that particular period did not stop the laying of the foundation whereby the younger generation of today are not prepared to be pushed around, whether by employers or by Government. What this Bill does—and I hope that noble Lords will take note of this—is to insult the intelligence of the millions of young people who are engaged in industry today. If such were not the case, we should not have seen the demonstrations that have taken place up and down the country since the Bill was introduced and spoken about.
I do not need to tell noble Lords that no Tory Government have ever been the friends of the trade unions of this country. This Bill, as I and others see it, is designed to do what? If it ever becomes law, this Bill is designed to wreck the trade unions. What will it do? It will deform, and not encourage, the voluntary system of industrial relationship. The White Paper was produced and followed up by the publication of the Bill. After reading it, and the many speeches made in its support and against it, I began to wonder to myself how many of the present Government had ever worked on

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the shop floor. I believe I am right in saying that the present Minister responsible for the Bill did in his early days spend some time doing so—I well remember his making a statement to this effect in the other place as far back as 1950. He had done so before taking part in the administration of industry.
But even that has not changed my opinion that those responsible for the drafting of this Bill, irrespective of what some of them have had to say, have not the foggiest idea of industrial relationships. I should very much like to know how many of them have worked in the shipyards or on the shop floor or, for that matter, down a mine. The more I think about it the more I am led to the belief that they have depended too much upon textbook theory and accepted that as authentic in regard to industrial relations. But some of us have spent the greater part of our lives in this field.
May I say, in passing, that no one was more pleased than I was that a formula was found in regard to the Post Office dispute. That is understandable, as I served for five years as Assistant Postmaster General in the last Administration. In that capacity I had to negotiate with no fewer than 21 trade unions attached to and associated with that Department. I travelled up and down the whole country in the various regions, meeting the directors and their boards and talking with them on their policies, and after meeting these boards I was prepared to meet the trade union representatives on my own.
In some of the areas I went to—Birmingham, Manchester, Liverpool, and some of the other great industrial centres in this country—there were meetings with trade union representatives who had never before had the privilege of meeting a Minister who was prepared to meet them on their own ground, listen to their complaints and get to know from them how the Whitley machinery was working inside their industry. There were 420,000 people attached to that great organisation, and that work had to be done. I will tell your Lordships the reason why it had to be done. It had to be done because the previous Administration were responsible for breaking down the good relationship that had existed be-
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tween the Post Office and the Ministers responsible for the day-to-day administration.
Because of the success of this policy of approach, I asked the Prime Minister not to move me but to let me stay, because it was like being associated with a great family. They were a grand people. They were giving a service to this nation which no other section of society has been able to give, and I often wonder how many people in this country have ever thought about those people, occupying offices of trust, going into every house-hold and every industrial hereditament within this country, giving of their services and signing on the dotted line to that office of trust. Having made these references I should like to add that I am pleased that the representatives of the two sides are to meet. I believe that the talks commence tomorrow, and I hope they will be successful. I hope they will arrive at a good conclusion, not only for themselves but for the benefit of the nation as a whole.
My Lords, it leaves me with a fear that when we are faced with this type of Bill, if it goes through in its present setting and becomes an Act, it will turn the clock back beyond 1927. Some are apt to overlook things—they talk about 1926. I know some noble Lords on the opposite side of the House have been saying that we should not talk about 1926, or about the past, but should talk about the present and the future. But we lived through this period; we lived through 1921, which is never mentioned, and we also lived through 1926. It is easy for someone to say, "Well, all that is past and it will not happen again." I want to pose this question to the Government: if it will not happen again, why are they so persistent in seeking to get this Bill through?
It is well to remember that it was the present Prime Minister who, when he was Leader of the Opposition in another place, with his colleagues, was constantly complaining about the dire consequences of inflation, and attacking what they said were large increases in wages and salaries. That is what they said. Read the debates, read the Questions that were being asked on the Tuesdays and the Thursdays by the Leader of the Opposition, as he was at that time. And now

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they are pledging themselves to reduce prices. Well, we are still waiting. Not only are we still waiting for this to happen, but what about their comments in regard to unemployment when we were in Government? Ever since they took over it has been rising, and the policies that they are pursuing will not offset it. It is now nearer the million mark; and when they maintain that they are making progress in Government and that their policies are working, it is just not true. They oppose for the sake of opposing when they are in Opposition, but when they become the Government they have no policies to bring about the recovery of our economic situation which they have talked about so much, not only when they were in Opposition but when they traversed this country during the last General Election.
Now the country is having to pay for its mistake in electing them to office. In the consultative document on this Bill, paragraph 12 (1), what does it say? It gives equal rights on not to join a union. To me this seems quite fair, but when you read further on you find that the contents are a direct negation of everything that the document and the Bill purports to be about; and it is silly and most dangerous to legislate for legal penalties on trade unionists.
I pose this question to noble Lords opposite: what is a trade union leader's power? Whether he be full-time or pan-time, or even a shop steward (I know that some criticism has been directed against the poor shop steward; he has been kicked around a tremendous amount, unfortunately) in many ways, his power lies in the fact that he speaks for the members of his union. That is the power that the leader of a trade union has. He has no other power. His control over the implementation of an agreement is as strong or as weak as the number of people over whom he has control. To set out deliberately to spread and encourage non-unionism is to encourage a bitterness among trade unionists who have won agreements, and threaten them with legal penalties will inevitably cause trouble.
What is the position of the non-unionist in regard to the fixing of wages in regard to this Bill? I have given much thought to this. On the one hand, you have organised labour negotiating with
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management on behalf of their members and arriving at an agreement. What about the non-unionist if he has no one representing him? A non-unionist may find himself in the situation, if the management is so inclined, that he either receives the same terms and conditions agreed with the trade union negotiation, or is offered less or more than has already been agreed with the union. Let no one try to tell me that it cannot happen: I have seen it happen. I know that someone will say that this Bill is trying to put this right. It has happened in the past, and all hell has been let loose. I can see nothing more inflammatory than a situation in which there is no bargaining agent and non-unionists in a factory are left to negotiate on their own behalf. But the Government do not seem to have caught up with the knowledge that industry is changing. New ideas and new techniques have been introduced. Management and employers are faced with a new situation.
I was very interested in what the noble Viscount, Lord Mills, had to say in regard to these particular points, and about the shop floor and so on. I think my line of thought ran parallel more or less with something he has said in his later remarks.
Much time and study has to be given to formulate policies in regard to engagement of labour and conditions. This is not something that can be worked out in a period of 24 hours. Men have to be trained to meet these new innovations. Even management have to seek to form an assessment on the labouring involved, and the unions have to measure, in the interests of their members, the rate for the job. Anyone who has had experience of such knows that the task confronting both sides of industry is not an easy one.
If anyone has been "kicked around" when strikes have been the subject for discussion, it is, I repeat, the shop steward. So many do not seem to understand the duties that fall even upon the shop steward, which are many. In many agreements that are negotiated with management, one can always guarantee that within the terms of a proposed agreement such words would appear "where practicable". Management have tried to have this inserted within their terms of agreement, with the result that negotiations might be held up for weeks and weeks

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until a new form of words could be found, while, on the other hand, the shop steward, seeking to put his interpretation upon an agreement, did not meet with the management's approval. We have all been guilty of this, both management and men.
It has been most interesting reading the two day's debate in the other place on this Bill. A member of the legal profession drew the attention of the House to Clauses 32 to 40, stating that he had had conversations with four other learned Members, and he established the interesting point that what he thought was a simple matter was something on which all five of them disagreed. This example can be found at column 1052 of that debate. If such an admission from the legal profession can arise on this Bill, surely there is every reason for excuse when management and men fail to agree on interpretation.
The provisions of this Bill are an invitation to industrial anarchy. Look at Clauses 48 to 50. There you have an open invitation to workers to leave trade unions which do not serve their purpose, and to join others which promise so to do. Workers will always be tempted to join the most militant of the unions, and these clauses are in themselves an invitation to militancy.
It is common sense that any law will work only if it has the general acceptance of the majority affected by it. This Bill, as I see it, lays down a law that is unacceptable not only to the majority of, but to all, trade unionists. I do not believe that such a Bill can be acceptable until it is fitted into a framework of social justice recognised by those affected by it to be just. This Bill has to be seen against the background of policies introduced by this Government. Looking back, I think of the attitude of the Government and of the promises that they made in the General Election. I am afraid that by pursuing policies such as are to be found in this Bill we could be drifting back to the bad old days which so many of us remember.
In conclusion, I say to the Government tonight that the best thing they can do is to scrap this Bill. If they do not, they will find that as time goes on they will never be able to enforce it when so many
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reject its authority, and it will do nothing to solve the real problems which face the nation at present. The whole basis behind this Bill is to undermine the solidarity of the trade unions in this country; but this the Government will not do, and well they know it.
11.43 p.m.
LORD GORE-BOOTH: My Lords, I always address your Lordships with some trepidation, but I usually try to address the House on something which is my subject. On this occasion I am aware that I am not doing so. But I rise because I think in a case of this kind it is perhaps the duty of those sitting on these Benches to try, if they can, to give something of the view of the ordinary, uncommitted citizen. I am also rather incited to speak by some of the imagery that has been used this evening. We have had spiders, and, on the part of the noble Lord, Lord Soper, the "Kingdom of Heaven postponed". We have also heard a lot about the Bill being a "Paradise for lawyers". That, at least, should give the noble and learned Lord who sits on the Woolsack a comfortable sensation of "paradise regained".
I have few qualifications to speak on this subject, but there are just a few. One is that I have had the privilege of helping people both from the C.B.I. and from the T.U.C. in various operations abroad. I have also taken the trouble to keep in touch with foreign opinion on our industrial affairs. I shall come back to this in a minute. Thirdly, for the first 17 years of my life my home was in South Yorkshire. I shall not try to humbug your Lordships into thinking that I was active in the matters that we are discussing, but you cannot live in South Yorkshire for 17 years without getting something of the feeling of these things. The fact that I have commemorated that period of my life in the title with which I had the honour to come into your Lordships' House shows that it means a great deal to me. One fact of which I should like to assure the noble Lord, Lord Slater, is that it means to me that I belong to one nation and not to more than one.
I should like quickly to refer back to a very notable speech by the noble Lord, Lord Stokes, when this matter was last discussed in your Lordships' House on

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November 4. The noble Lord first castigated management for its deficiencies in the past—and rightly—for not giving this subject what he called "higher priority". He might have added a point which has always impressed itself on me; that is, the feebleness and the almost complete absence, sometimes, of management public relations. I think that the public needs more instruction from management on what this is all about. I know that it is structurally difficult, but public relations are structurally difficult for Government as well and Government do at least try.
The noble Lord then went on to speak about the other side, and he used a phrase which I think is so important to this argument that I must quote a few words to your Lordships verbatim. He spoke of the influence that had been taken over by,
"… unofficial elements … motivated by ideological issues rather than by economic motivations for the benefit of their colleagues."—[OFFICIAL. REPORT, 4/11/70; col. 374.]
That is a very important phrase, because what it means is that in the opinion of the noble Lord—who ought to know—there are dotted about in industry, probably not in the front row, people who, if you complained to them, "You are ruining our economy", would reply, if they replied frankly, which they would not, "Of course we are ruining your economy, and we are ruining it because we want to set up a monolithic State of our own in our image; a monolithic polity and a one doctrine system." It is because there is this dimension to this problem, that it has become so intractable, and this is the one flaw I found in the very thorough exposition by the noble and learned Lord, Lord Donovan. This problem is not simply a problem of trade unions and management working out how to live together; it is working it out in a scenario where there are powerful elements seeking to prevent its being worked out at all.
If I may now go back for a moment into history—and some of my colleagues on these Benches did—I think if you stand back from this argument you have a feeling that, at this moment, we are going through one of those national agonies about a question which I would call by the polite phrase, "a readjustment of vested interests". This goes
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right back 900 years in our history. The Monarchy readjusted the interests of the Barons and then, as the noble Lord, Lord Redcliffe-Maud, said, the Barons readjusted back again with the Magna Carta. In the felicitous words of Mr. Michael Flanders, the Monarchy "nationalised the monasteries" 300 years later and, subsequently, you had similar readjustments of power in our community; in particular, the powers of landowners, of the ruthless early industrialists, and of financiers were similarly readjusted.
Towards the end of this process, at the end of the last century and the beginning of this one, to the great credit of various Liberal Governments, there was a certain exemption granted to the trade union movement. The trade union movement was not put above the law. This is a silly cliché which people should not use. But certain immunities and privileges were given in recompense for the political and economic weakness of organised labour; and also in the methods than were considered legitimate for labour to use in order to make progress.
But latterly, as the noble Lord, Lord Plowden, explained from these Benches, in the framework of organised labour there have suddenly been great accretions of power. I will not go over his analysis again, but I will just tell your Lordships one startling instance of how this hit the public. A few months ago a particular union disliked very much something which the Government were proposing to do, and a prominent official from that union, interviewed on television, said, "We are going to stop this". The interviewer, for once taken aback, said. "How are you going to do that?", to which the reply was, "We have the power and we are going to use it". This was an exaggeration: they had not and they did not. But anybody watching that felt a hit of a shudder. It may even have been said with the tongue in the cheek, but noble Lords can imagine that through our community—and I am now speaking as the ordinary citizen—that sent a little bit of a chill. Of course, this is over-simplification, and an unfair one, of the position, because the difficulty is not so much, or not only, accretions of power; it is that there is power, but that that power then tends to get lost to

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these other elements of whom the noble Lord, Lord Stokes, spoke. That is why we have now the touchy and tense and difficult situations with which this legislation is no doubt intended to deal.
The previous Government anticipated that this situation might well develop, and they had a very right instinct that something would have to be done about it in the way of legislation. So one comes to the question: what sort of legislation should this be? Here, of course, I must refrain from trespassing on the ground of the experts, but I might say one or two things. The first is that I found myself very much in sympathy with what was said by the right reverend Prelate the Bishop of Southwark. It seemed to me that there were asperities (if I might put it this way) in this Bill to which serious attention should be paid, and in particular I should like to associate myself with those many noble Lords who would beg the Government to look again at the clauses on the closed shop. I am sure that this is a more complicated question than the simple one of doctrine, and that there are very good reasons why the matter should be re-examined to try to identify those cases in which the closed shop is in fact of benefit to both sides in the argument, and therefore to industry and the community as a whole.
There are two popularly discussed points on the Bill to which I must quickly allude. I should not like anywhere and in any case to be caught arguing against the cooling off period, and I would suggest to noble Lords on the Opposition side that if they argue against this, on whatever good intellectual grounds, they will appear to the public—and, again, your ordinary citizen is addressing you—to be advocating a quicker "hotting up" period. This is not a fair judgment, but it would be the judgment. Similarly, I should not wish to be caught arguing against the use of a secret ballot in certain circumstances, because if you argue that, then the irrevocable end of your argument must be that you wish to abolish the Reform Bills and return to the rotten borough. I put that as a serious intellectual proposition.
What, then, would I have the temerity to advise? I think I should like to urge
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on the Government that they take very seriously the human argument about this Bill which comes so very strongly from the trade union side and which was also put so eloquently by the noble Baroness, Lady Gaitskell. What I have said about the absence of management public relations in some degree translates itself into management government. I think that it would be wise and might help the deliberations if the Government were to look at the whole presentation on those lines.
The Bill cannot help being long—one cannot complain of that—and I also think that the complaint that it is all slanted one way is not well founded. In my own reading of the Bill, I feel that whoever had drafted it had tried to be fair and if he has not been successful—well, it was not for want of trying. What I would suggest is the reading of one particular passage from the debate in another place. I found extremely clear and moving the concluding passage of a speech, I think on Third Reading, of Mr. Ronald King Murray, Member for Edinburgh (Leith) who, in a sensitive, graphic way, described the process we are trying to achieve as the marriage between the claims of the individual and the whole history and emotion of people who have won their dignity by collective action. This is a very difficult marriage to achieve, yet it must be achieved if we are to achieve one nationhood in this particular and difficult area.
Finally, like other noble Lords, I welcome very much the assurance by the noble Lord, Lord Delacourt-Smith, that there will not be obstruction for obstruction's sake. There will be strong disagreement but I join forces with noble Lords particularly on these Benches who have pointed out that when we have finished complaining about the time not spent in another place on this Bill, we welcome the fact that another place's extremity is your Lordships' opportunity.
I spoke of keeping in touch with opinion abroad If at this point the country were to reverse and say they will not proceed with this Bill it can be taken that a number of countries friendly to us who might order goods from our industries would scratch us from their books, saying, "The British are not going to take their industrial relations seriously after all".

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This may be unfair; but that is what they will do. In this spirit of, I hope, humanity as well as efficiency, I find myself compelled to vote against the Motion and to vote in favour of the Second Reading of this Bill.
11.57 p.m.
THE EARL OF LAUDERDALE: My Lords, to the historical allusions of the distinguished Cross Bencher who has just sat down I shall be returning; but first be it noted that more than two-thirds of the noble Lords who have spoken so far, and nearly all, I think, who spoke from the Cross-Benches, the Liberal or the Bishops' Benches would seem to have been briefed by a pamphlet, The Trimmer, published in 1684 by the first Lord Halifax, who wrote:
"There is a natural reason of State, an un-definable thing grounded upon the common good of mankind, which is immortal, and in all changes and revolutions still preserveth its original right of saving a nation."
All parts of the House agree, I am sure, with the moderate and acceptable promise of the noble Lord, Lord Delacourt-Smith, in opening the debate for the Opposition to look seriously at the serious points of a very serious Bill. We have to relate the Bill to the hard facts of industrial life and to distinguish reality from pretence. The hard facts include the concentration of capital in ever-larger undertakings when the spread as well as the abstraction of shareholding ownerships is matched by a concentration of trade union power; and when full employment and the Welfare State, coupled with the high-gearing of capital per job, have put such a premium on union power and such rewards for plant level pressure that the pot at plant level is now forever on the boil. The hard fact is that at factory level work depends both on the innovations of a new race of professional managers, to whom the noble Lord, Lord Popplewell, referred, not, I thought, with a great sense of appreciation of their worth—but let that pass; but also on the reaction of the work force (I stress the word "reaction"), the work force being protected by a baffling forest of tacit local understandings made with some thousands of unpaid shop stewards on whom, according to the Donovan Report, some 80 per cent. of managers have come to rely in fact for the efficient working of their plants.
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My Lords, the hard realities include rights and freedoms in conflict. As the noble Lord, Lord Gore-Booth, said just now, the rights of the single worker are sometimes at odds with his mates' claims to solidarity, and these beget such tensions in some unions that all that is not compulsory is forbidden, or else is in the fashion that recalls the behaviour of the kings of France "who in practice used their laws pretty familiarly." Only the other day the Transport and General Workers' Union shop stewards at one plant accused their executive of going way beyond their mandate in calling a political strike. Elsewhere, two men promoting a petition against the political strike were hauled before their district union committee; and at Harwell some 50 A.U.E.W. men were fined for ignoring the political strike.
Then there is the mass meeting, at which we have seen an example of the Ford bullies, only to-day and over the weekend, seeking to reverse, by a show of hands, the verdict of a secret ballot.
"Their pride is as loud a beggar as want, and a great deal more saucy."
My Lords,
"All irregularity is catching. It hath a contagion in it, especially in an age so much more inclined to follow ill patterns than good ones."
And so such pressures spill over outside; and five times in the last six months we have had trade union pressure blocking the fair comment of the Press.
In a fragmented society the Government bespeak the consensus when they express that consensus demand both for law and for reform. We find two broad approaches: first, that of the Donovan Commission, broadly behaviourist, which argues, "Put right the organisational defects, register agreements and behaviour will improve." Or you have the individualist philosophy of the present Administration which replies, "Set standards and limits with a whiff of sanctions in the distance (what the noble Viscount, Lord Mills, called a fail-safe device) and behaviour will answer wonderfully."
My Lords, reconstruction and industrial relations, as the Donovan Report reminded us, is a continuous process, and so, whichever our approach, be it behaviourist or individualist, most noble Lords will wish to ensure that this Bill sets sufficiently workable limits within a

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realistically understood situation to provide the foundations for a settlement that in its main lines will be worked by both the great Parties of State in the years to come. The noble and learned Lord, Lord Donovan, and indeed the right reverend Prelate the Bishop of Southwark in, if I may say so with respect, most remarkable speeches, both pointed this particular moral: that the Bill will not be repealed by the next Government, but any Government which follows will naturally want to look at its working objectively.
This Bill is indicative in object, as have been all the settlements in the great ideological social confrontations of the past, whether the Book of Common Prayer in 1662; whether the Hanoverian succession: whether Parliamentary reform from 1832 onwards or whether the Welfare State 25 years back. Those, with the exception of the Hanoverian succession, were all indicative rather than definitive settlements, but they marked a pattern which subsequent Governments of either Party found it prudent broadly to continue.
The public at large wants a legal framework, and I have been struck by the quotations of the noble Lord, Lord Delacourt-Smith, and other noble Lords from American experience, seemingly ignoring that to be had from Australia, to which no reference has been made. Since the hour is late. I must beg your Lordships' indulgence to draw attention to an article entitled Industrial Relations and the Law: Lessons of Australian Experience in the latest issue of the Three Banks Review by E. H. Phelps Brown, Emeritus Professor of Economics of Labour, University of London. I quote two short passages.
" 'The law,' as Professor John Wood has written recently, is going to play a more central part in the structure of British industrial relations. If this is to mean, as it should, a clearer statement of rules, of objectives and agreements made, this itself will be a great gain. But the real gain will be in self-discipline; not as some would have it in the discipline of the law, and rules of enforcement.' Australian experience shows what a mistake it is to judge the effectiveness of laws concerning industrial relations solely by the effectiveness of enforcement in case of defiance."
Later, Profesor Phelps Brown concludes:
"The need that the United Kingdom has sought to meet by improvising a succession
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of institutions is met in Australia by an institution of long standing and wide acceptance."
We are told that these thousands of local factory level agreements can only be made more complicated if lawyers are brought in. But in everyday life all of us make agreements, usually on the basis of standard models which we can buy from a stationery shop to cover the ordinary situations of life. In like fashion model terms for procedural and other factory agreements are readily to hand now from the Industrial Society, under the joint patronage, your Lordships will be interested to know, not only of His Royal Highness Prince Philip but also of Mr. Jack Jones.
The legal framework at least requires a neat system of checks and balances. It seems to me that, given the closed shop, we must ask: under what safeguards should union power extend to the expulsion of a member and with it the power to drive a man from his job? I refer, of course, to Clause 63 (2). Are the Government quite sure that the democratic rights of minorities are sufficiently protected by the conscientious objection clause (Clause 8), especially in the light of the union veto in Section 2? What of the man who approves of his union representation in the battle on wages and terms but deplores its political aims, such as those aiming at the socialisation of industry, which are in the forefront of the purposes of some unions? I ask whether the Government will look again closely at these clauses Nos 8, and 63, together.
Then a fine balance is needed between judicial but authoritarian remoteness, on the one hand, and Parliamentary influence, on the other. Mr. Carr is rather like women in politics, who are said to be either too old or too young. He is open to the charge of doing both too much and too little. It is for the Minister under Clause 2 to bring his code of practice to Parliament for approval. Are we not then in danger of making this a political shuttlecock? On the other hand, in Clause 134 the Government lay on the N.I.R.C. the onus, which Mrs. Castle was going to keep to herself, of authorising emergency cooling-off ballot arrangements. But if the Minister were directly responsible himself, instead of going through N.I.R.C. would he not be more

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amenable to Parliamentary influence? This, too, we must look at with care.
But I believe that the Government were right to bring in their Bill, with all its obscurities. And for a non-elected Chamber to seek to adjourn the Second Reading, only eleven months after the General Election, would be to affront a clear popular mandate. All the same, spared the guillotine, all parts of your Lordships' House are entitled to hope that the usual channels will so arrange our business that the Bill is brought forward and debated in intelligibly coherent chunks. The Bill is worth having for its code of fair practice and for its supporting court structures alone; but noble Lords in most parts of the House, if not all, will surely want these to induce the highest respect for respectable standards amid the hard facts of industrial life, remembering that with or without the guillotine you can never force reality to comply with pretence.
12.11 a.m.
LORD MOTTISTONE: My Lords, it is late and I shall not detain you long. What I have to say is very much in complement to what the noble Lord, Lord Gore-Booth, said recently. In fact, at one stage I thought that he was going to steal all my clothes instead of just my trousers.
Your Lordships will remember that he made the point in this country we have this adjustment of power repeatedly through our history. The only point I would make is that this, unquestionably, is an adjustment of power.
It is quite clear from what has been said from the Benches opposite that several noble Lords, particularly those with trade union backgrounds, see it as a direct affront to such power as the trade union may be said to have.
I question that, and shall elaborate on it shortly. If that is so, it is perhaps worth bearing in mind that in this country, where we have had adjustments of power like the dissolution of the monastories, it did not lead to the dissolution of Christianity in this land. The clerics of the time staggered a bit between what sort of Christianity they wanted, as the Vicar of Bray commemorates for us, but we then went on to chop off the head of Charles I, and
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happily got the monarchy back shortly afterwards. And of more recent date, some sixty years ago your Lordships' House gracefully gave away its own ultimate power but is still here.
This implacable hatred of this Bill, as it has been put, of the trade union members of your Lordships' House rather indicates to me that they are seemingly outside the main stream of action in this country, following all the Bourbons who, I believe, were said to say they neither forgot nor forgave, and who have not ruled in France for some 150 years. So it might be as well if thought was given to the fact that, as the noble Lord, Lord Gore-Booth, and many others have said, this Bill represents a feeling in the country that there is a need for power adjustment and that it would be as well for those who are most closely affected by it to work with it rather than against it.
Now what the power is that it seeks to redress is rather difficult to identify. It stems, as your Lordships know, from a document known as Fair Deal at Work, which was presumably a fair deal for the worker. The worker is subject to various sorts of power: he is subject to the power of the management, which indeed in past days was the main cause for the development of the trade unions, and the power of the management is in many cases perhaps still too great. The discipline of the sack, my Lords, is a very fierce one. If you have never been subjected to it perhaps that is not realised, and so it is perhaps as well that this Bill includes some mitigation on those lines. But there is power of management. It is right in many respects that it should be there, but care needs to be taken that it does not become too great. As noble Lords have said, management is learning fast, and it is probably right to say that the adjustments that are required are coming about by natural processes.
The other powers are those of the immediate trade union with which the worker is concerned, and in particular the shop steward. The degree to which this Bill will deal with the shop steward is perhaps doubtful. It is also perhaps doubtful the degree to which it is necessary to deal with the trade unions. I suggest to your Lordships that the important thing is that the trade unions

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should deal with the shop steward. This may be said to be impracticable in this day and age. It may be that that sort of discipline is not possible, but I think it is something that this will help us to work for.
Finally, the power which is hitting the individual worker is the distant power of the strike in the services which supply him and his wife, or the strike in the other factory or by the other union which has nothing to do with him and which causes his work to stop—one hopes temporarily. Those sort of things, surely, are power centres which need to be modified. The power of the strike is so terribly great these days, because we work with machines, and the stoppage of one or two people can have such tremendous effect. That is why it is powerful.
Having identified what I believe this Bill to be all about, and why I believe it should go through for all its probable imperfections, I think we may have an opportunity in our Committee stage to try to iron out some of them. I also believe that, even if we do our best, we shall find that the application of this will be different from what most people expect. This seems so often to be the case with legislation these days, and perhaps it always was so. Therefore, with all these imperfections, I believe this Bill to be a thoroughly sound one, working in the right direction.
But I implore the Government that when it is passed the most immense trouble should be taken to communicate what it tries to say to the worker for whom it is intended. It is quite possible to say, for example, that to-day and this evening in this House noble Lords opposite were speaking about a totally different document from the document that we on this side of the House have been talking about, because we were each able to pick out this bit or that bit, and this probable consequence and that probable consequence, which might be true or might not be true, but there was a different theme behind us both. I therefore implore the Government not just to get the sort of people who produced their Consultative Document, or the sort of people who produced Fair Deal at Work, which was slightly more imaginative in its presentation, but somebody really expert to present the main features
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of this when it has gone through Parliament.
This brings me finally (I cannot remember which noble Lord it was who mentioned this earlier) to the code of practice. I believe it is terribly important that this is not only a sensible document, covering the right sort of practices, but that it is particularly well phrased so that it may be readily understood. It has been compared to the Highway Code. I do not know how long ago your Lordships passed your driving tests, but I have a daughter who is about to take the test. I read the Highway Code the other day, and though it is very good in that it tries to be bright in its presentation and that sort of thing, it is desperately long and it is extremely difficult to remember all parts of it. So let us have a code of practice which is easy for the ordinary chap to understand. This Bill is terrifying. I can understand the problem of trying to turn it into something manageable and readable. That will require the best brains in the country, and I implore the Government to do their best. I wish the Bill well and I hope that as it goes through the Committee stage we shall give it our best attention to produce the best result.
12.20 a.m.
LORD DONALDSON OF KINGS-BRIDGE: My Lords, I hope that the noble Lord will forgive me if I do not follow his most interesting speech. I have sat up so late to take part in this most important debate in order to represent a point of view which is marginally different from that expressed by most of my noble friends who have spoken from these Benches. I speak as a member of the Labour Party since 1930, a private citizen, neither employed nor employer; in part a small-scale rentier, and one who is looking forward to his old-age pension. I speak as a member of the oppressed public. Whether the unions strike or settle; whether the employers are tough or permissive; whether the Government act or, as seems to be the case at the moment, does not act, we the oppressed public, seem to get the thick end of it each time. I feel like my noble friend Lord Brown: I am in despair about the idiocy of events. I doubt whether we are ready for his solution. But nobody else has put forward

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anything that looks like working, and I find it terribly depressing.
In my Party there have always been two elements, vaguely described as the trade unionists and the intellectuals. I have always belonged to the intellectuals, not through any intellectual merit but through the lack of a union card. The Labour movement could not exist, or have existed, except through its roots in the manual working class. It would be disingenuous to deny that the financial contributions of the trade unions are an essential part of our movement. So it took real courage when my right honourable friends Mrs. Castle and Mr. Wilson made a determined attempt to take action, which they thought necessary and which they knew very well would bring the wrath of the unions down upon them. They finally flinched and gave way, but not before Mrs. Castle had been subjected to some nasty abuse.
Too many of their colleagues thought that the proposed legislation would not really work, at least without a written-in prices and incomes policy, and it was politically absurd to split the Party down the middle for a Bill which was not really sound. In spite of these reasons—some of which were good—I regretted that retreat, and still regret it. I approved of Mrs. Castle's Bill with reservations, and I still approve of it. So it would be difficult for me to vote flatly against this Bill, even though it contains features which were not in Mrs. Castle's Bill, although I hold myself free to make such alterations with my colleagues as we can effect in Committee.
However, I am not being asked to vote against it; I am being asked to vote for a second Motion which seems to be the first constructive attempt to produce a real solution to the industrial relations dilemma since Mrs. Castle dropped her Bill under duress. I am extremely grateful to my noble friends on the Front Bench who have turned a sterile confrontation of two implacably opposed Parties into the possibility of a constructive debate. I am a good deal disappointed that no one, except a few colleagues, seemed to treat the second Motion very seriously. We seemed to be arguing against the Bill rather than for the Motion. Even the noble and learned Lord, Lord Donovan, whose speech was
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a landmark in this debate and will be read as a classic for years to come, exercised the lawyer's privilege of not making it quite clear what he was going to do, either.
Our friends and opponents in the other place have tried the other way, to the embarrassment and distress of the innocent public, who have looked on aghast at the histrionics and time-wasting rigmarole in which both sides have indulged for the past few months. I am thankful that if we fail in our Motion we in this House may, nevertheless, be able to make some positive contribution, instead of the negative example we have been given, to this problem, which is reaching crisis in every advanced State in the Western World. I should like to add that the tone of this debate gives me great hope that this will be possible.
For forty years now I have, in the words of the song, been faithful to my Party "in my fashion". In the thirties, with 2 million unemployed, railwaymen earning 50 "bob" a week, agricultural labourers earning 30s., I was inclined to think the striker was always right. He was striking for bread for his wife and children and he was, it seemed to me, justified in going to extreme measures, whatever harm he might do incidentally to his neighbour. That situation has changed. Strikes are no longer for bread; they are for butter and often for jam, jam which many neighbours cannot afford. I find myself restless under this pressure. I know that men do not strike lightly and I defend the right to strike, but I question to what extent it is one's right to damage innocent people for jam rather than bread.
I believe that if my Party had been returned to power we should have been obliged to try to curb inflationary wage claims and at the same time to impose a framework of law on the unions. I think we should now be nearly as unpopular with them as are the present Government today. But not quite. We should not have blocked all chances of conciliation by provocative statements; by refusing to consult the T.U.C. before the Bill; by rejecting contemptuously their economic proposals; by making personal attacks on Mr. Jack Scamp because he did not propose the settlement the Government wanted. Nor should we have chosen this

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moment of national crisis to make major concessions to the rich by the undeniably class legislation of the two Budgets. These things cannot but make conciliation more difficult.
So we really have a situation not unlike the strike situation which all the talk is about. There is the greatest ill-will between the Government and the unions. No solution other than compulsion of some kind is likely to resolve the present impasse. Yet it is most unlikely that any solution imposed by compulsion will last. In the long run, you cannot make people work if they do not want to and do not like you. I remember the late Ted Hill saying in this House: "If you push us too far we shall ask for our cards." No law can stop that. A solution must come from a recognition of the facts by all Parties, by an agreement, a bargain, to restrain wage demands in return for a determined effort to produce growth. My noble friend Lord George-Brown tried this, but he was wrecked on the rock of the balance of payments. He failed to produce growth. We are now, thanks to the persistent and courageous efforts of my right honourable friend Mr. Roy Jenkins, in an entirely different position, and the possibilities of a voluntary incomes policy are really here at last. But not with ill will all round That is why I think my noble friend's Motion is so important, and why I hope that this debate cannot be on the positive or negative of the Second Reading but on the possibility of constructive action to avoid a head-on collision—which, my Lords, we are heading for, and make no mistake about it!
The Trades Union Congress has just made a hugely significant and conciliatory gesture by rejecting the extremist counsels of Messrs. Scanlon and Jones. This is surely the moment to respond. This Motion provides a specific opportunity which should not be missed. Whether the Bill really deserves the extravagant epithets many of my friends have applied to it or not is not the point. No one claims that it will stop strikes. It seems to me that the Government should seize the chance offered by this Motion to see whether they cannot agree with the unions and employers upon
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something which will stop strikes. All the union leaders believe in the sanctity of contract. I heard Mr. Vic Feather the other day say exactly those words: that he believed in the sanctity of contract. The truth is that the leaders cannot enforce it on their followers when on the shop floor they become for an instant resentful, and the leaders think the Bill will make it even more difficult for them to lead the men whose paid representatives they inevitably are. This has been discussed before and it is a dilemma which it is not easy to solve. But if ever there was a moment in history which required statesmanship, this is it. My Lords, I believe we have the size of man in the T.U.C. and in the Labour Party to react generously to a generous gesture. Is there a statesman on the other side of such a calibre? I wait anxiously to see.
THE LORD CHANCELLOR: My Lords, I beg to move that this debate be now adjourned until tomorrow.
Moved accordingly and, on Question, Motion agreed to.

PROCEDURE OF THE HOUSE
Third Report from the Select Committee made, and to be printed.
NULLITY OF MARRIAGE BILL
Brought from the Commons; read lª, and to be printed.
  BETTING SHOPS
  BETTING SHOPS
  GOVERNMENT CONTROLS OVER LOCAL AUTHORITIES
  GOVERNMENT CONTROLS OVER LOCAL AUTHORITIES