Sitting of 5 July 1972

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CULAG (LOCHINVER) PIER ORDER CONFIRMATION BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  ENVIRONMENT

    Motor Vehicles (Exhaust Emission)
    Mr. Pardoeasked the Secretary of State for the Environment whether the consultations on proposals to control the emissions from petrol-engined vehicles with interested organisations have been completed; and if he will make a statement.
    The Minister for Transport Industries (Mr. John Peyton): Not yet. Interested organisations were asked to comment by 14th July.
    Mr. Pardoe: Is the right hon. Gentleman aware that his recent statements in reply to Questions on this matter have been scandalously complacent? Is it not a fact that his proposals for British cars in April, 1973, and beyond are worse than those for America in 1970? Is it not a fact that American cars will be virtually pollution-free by 1975? Why should British cars exported to America not be allowed to poison Americans but when sold here be allowed to poison Britons?
    Mr. Peyton: I do not doubt that the hon. Gentleman has his own standards of complacency, and he is welcome to them.
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    On the matter of substance which he raises, I am concerned with pollution here, not in America. We are endeavouring, on a European basis, to get a sensible, orderly system of rules applicable in Europe. The Americans have special problems which they must look after in their own ways and I must leave them to it. I should not dream of interfering.
    Mr. Gorst:Will my right hon. Friend give an assurance that when the report is available the residents in Hendon, where the M1 starts and whose flats are a few feet away from it, can look for some rectification of the desperate pollution and noise from which they are suffering?
    Mr. Peyton: I realise that there are instances such as the one described by my hon. Friend where pollution is bad and oppressive. We are attempting to deal with the problem, but it is important that these things should be dealt with in a sensible, long-term way so that the remedy is effective.

    Thames Estuary (Industrial Concentration)
    Sir Bernard Braineasked the Secretary of State for the Environment whether he will order an inquiry into the total effect on the local environment of the concentration of oil refineries and other industrial plant, existing and planned, in the Thames estuary with special reference to Canvey Island, Benfleet and Southend-on-Sea.
    The Secretary of State for the Environment (Mr. Peter Walker): I assure my hon. Friend that, when proposals for new developments of this sort are before the local planning authorities, or being considered by me on call-in or on appeal, the wider effects are taken into account.
    Sir Bernard Braine: Will my right hon. Friend take into account the fact that there is deep and widespread concern in South-East Essex—where many people have made their homes, and more are coming as a result of the Government's decision to site the third London airport at Foulness—about the deterioration of our environment by piecemeal development, with oil refinery after oil refinery being authorised? If my right hon. Friend means what he says about protecting the human environment, will he set up a planning inquiry commission

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    to inquire into the totality of the threat to our environment?
    Mr. Walker: As my hon. Friend knows, when I was last concerned with a major decision on this matter he was satisfied with the manner in which we took account of all the environmental factors in the region in which he takes such an interest. It is also true that, as a result of the activities of various sections of my Department, air pollution in Southend and other areas has diminished rather than increased during the more recent period. I do not consider that there is any evidence of a need for a further wide inquiry into this matter, but again I assure my hon. Friend that we shall carefully consider any application in this area in terms of its effect on the totality of the area and not in isolation.

    Pollution (International Monitoring)
    Mr. Norman Lamontasked the Secretary of State for the Environment what part Great Britain will be playing in the global monitoring programme agreed at Stockholm.
    Mr. Peter Walker: I welcome the conference recommendations for improved Earthwatch programmes, particularly for monitoring of the atmosphere. The United Kingdom will make a full contribution. Details are being worked out in the World Meteorological and other international organisations, and I shall make a further announcement as need be.
    Mr. Lamont: Is not this an area in which Britain has considerable experience, both in techniques and sophisticated instrumentation? As my right hon. Friend recently said that were he starting in business today he would be in the anti-pollution field, will he encourage the development and use of British technology for this purpose?
    Mr. Walker: There is a wide range of activities in this field. There is immense opportunity for this country, particularly in this respect, and we shall liaise with the Department of Trade and Industry to see that every advantage is taken of it.
    Mr. Blenkinsop: Would not the right hon. Gentleman agree that monitoring in all three elements—land, water and air—is vital as they are intimately connected?
    Mr. Walker: I very much agree.

    Ocean Dumping
    Mr. Skeetasked the Secretary of State for the Environment what progress was made at Stockholm towards a global agreement on ocean dumping.
    Mr. Peter Walker: The conference recommended that Her Majesty's Government, in consultation with the Secretary-General of the United Nations, should convene a conference before November, 1972, for the purpose of agreeing a global convention on ocean dumping on the basis of draft articles which were agreed at previous meetings in London and Iceland. I am pleased to say that the conference is to take place in London. It is the intention that the convention should be open for signature by the end of the year. The Government are happy to accept this recommendation.
    Mr. Skeet: Following from the Stockholm conference, is my right hon. Friend prepared to adopt the European approach to the Commission so as to get the association of the Ten countries plus also the littoral States? Will he also bear in mind that a system of priorities would be useful when considering chlorinated hydrocarbons, pesticides and such things?
    Mr. Walker: The North Sea countries have already agreed to a convention, and I can assure my hon. Friend that there will be close collaboration with our friends in Europe.
    Mr. Wingfield Digby:Does my right hon. Friend agree that the dumping of solid atomic waste should be included, as it is estimated that the containers in which it is dumped last only for a period of 15 years?
    Mr. Walker: I envisage that the convention will cover that aspect.

    Computerised Information (Confidentiality)
    Mr. Leslie Huckfieldasked the Secretary of State for the Environment whether he will make a statement about the personal information being processed by his Department's vehicle licensing computer at Swansea, and its use by commercial organisations.
    Mr. Peyton: The personal information required by the Department will be available on the same basis as before; that is, the name and address of vehicle owners will be given to local authorities, the police and others showing "reasonable cause". Only personal information which is provided voluntarily by the public will be made available to the motor industry.
    Mr. Huckfield: What business can the right hon. Gentleman's Department have in asking those who register new cars, their age, their sex, and their financial means of purchasing their cars? What possible business can the Department have in so inquiring? Will information go to commercial organisations and, if so, what rules will govern confidentiality?
    Mr. Peyton: The information which goes to commercial organisations—that is, the motor industry—will only be information which is given voluntarily by the public. At the time of its inception the form was thought to be one helpful to the customer, the motor industry and the Government.
    Mr. McBride: I accept that a high sense of confidentiality will be observed in the Swansea office. More important, however, can the right hon. Gentleman say when the central vehicle licensing office which is to be situated in my constituency will become fully operational?
    Mr. Peyton: I beg the hon. Gentleman's pardon, but I did not quite get the point about his constituency.
    Mr. McBride: When will the central vehicle licensing office become fully operational in Swansea?
    Mr. Peyton:That is another question but I think that it will be within the next two years. If the hon. Gentleman cares to put down a Question on the subject, I will try to answer it.

    United Nations Conference
    Mr. David Steelasked the Secretary of State for the Environment if he will place in the Library a copy of the public speech he made to the United Nations Conference on the Human Environment in Stockholm on 6th June.
    Mr. Fowlerasked the Secretary of State for the Environment how much will
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    the United Kingdom be subscribing to the Environment Fund agreed at Stockholm.
    Mr. Laurance Reedasked the Secretary of State for the Environment what response there was in Stockholm to his offer to house the new United Nations Environment Secretariat in London.
    Mr. Douglas-Mannasked the Secretary of State for the Environment whether he will make a statement concerning Her Majesty's Government's contribution to the United Nations Conference on the Environment at Stockholm.
    Mr. Peter Walker: In addressing the United Nations Conference on the Human Environment on 6th June, I put forward an eight-point programme of practical and attainable international action. In brief this covered ocean dumping, clean rivers, monitoring, information exchanges, technical assistance, a new United Nations institution and a fund, and a declaration. I am glad to be able to inform the House that our objectives in all these areas were attained. I am satisfied that the conference has laid a firm basis for future international co-operation on environmental problems.
    My offer of London as a home for the new United Nations secretariat was well received and will be evaluated together with other offers. Pending the result of this process no firm figure can be given for the United Kingdom contribution to the voluntary fund but it will not be less than 5 per cent. of the total.
    I took the opportunity while in Stockholm to meet a number of representatives of developing countries, and I am convinced that the conference brought about a greater degree of common understanding of environmental problems between industrialised countries and the developing world. The latter welcomes the prospect of technical aid on these problems to which the new United Nations fund will make a valuable contribution.
    I have placed in the Library copies of my speech to the conference and I will place provisional texts of the agreed declaration and action programme. When study of the action programme has been completed I will consider whether further publicity is needed.
    I should like to express my gratitude to the right hon. Member for Grimsby (Mr. Crosland) and to others representing

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    interests outside the Government who joined our delegation and helped to make a success of our participation.
    Mr. Steel: I shall confine my supplementary question to one part of the right hon. Gentleman's statement. While we welcomed and fully supported the proposal that the United Nations Environment Agency might be set up in this country, does the Secretary of State agree that there is a feeling about the number of public agencies already in London? If it is not possible for the agency to go elsewhere, would he consider a proposal to move some other agency from London and so not add to environmental problems here in inviting this agency, which is very welcome, to this country?
    Mr. Walker: I shall certainly bear that view in mind.
    Sir D. Renton: At what stage and to what extent was it acknowledged at Stockholm that the threat to the environment is due to a combination of economic development and population growth?
    Mr. Walker: This subject formed a considerable part of the discussions that took place, and a United Nations conference on problems of population will take place in the foreseeable future.
    Mr. Douglas-Mann:Does not the right hon. Gentleman agree that there is considerable concern about the difference between what was said at Stockholm and the actions of Governments throughout the world? Will he consider setting up not a departmental inquiry, as was suggested at Stockholm, but a Select Committee of this House to consider the implementation of some of the recommendations of his own working party report, particularly "Sinews for Survival", in particular paragraph 192 of that report? Is the Secretary of State aware that the working party concluded that there is not much time to spare?
    Mr. Walker: My Department is carrying out an extensive inquiry, but the setting up of a Select Committee is not a matter for me to decide.
    Mr. Crosland: I believe that the United Kingdom Government delegation at Stockholm made an extremely impressive contribution to the success of the conference. I should like to put two points to the right hon. Gentleman. First.
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    will he agree, as I am sure he does, that Stockholm will prove to be important not for the eloquent speeches that were made but for such follow-up action as may occur? It is, of course, too early to comment on that, but will the right hon. Gentleman consider, perhaps in the autumn when the House reassembles, presenting a White Paper telling us what follow-up action has been taken?
    Secondly, as to the new United Nations Environmental Fund, which I greatly welcome, may I put it that the British contribution should not come from the existing aid programme but must be in addition to it?
    Mr. Walker: I am most grateful to the right hon. Gentleman for his kind comments and I must express gratitude for the part he played in the conference. I shall certainly consider the suggestion of publishing a White Paper in the autumn outlining follow-up action. I agree that it is the follow-up to Stockholm that is all important. The fund will be additional to existing aid.

    Heavy Vehicles (Port Weighbridges)
    Mr. Costainasked the Secretary of State for the Environment whether he will seek powers to make it obligatory for all car ferry terminals to make available in close proximity to the docks weighbridges capable of checking the weights of heavy lorries entering the United Kingdom.
    Mr. Peyton: No, Sir.
    Mr. Costain: Is my right hon. Friend aware that that is the shortest and most disappointing reply I have ever had from a Minister? Before my right hon. Friend made that decision, was he satisfied that all car ferry terminals have a weighbridge? Does he realise that the opening of the new car ferry at Folkestone on Saturday is causing real concern to the people living in the all too inadequate streets there and that it is no satisfaction to them to know that lorries have to go through those streets before they can be checked for weight?
    Mr. Peyton: I am sorry to disappoint my hon. Friend, now and always, but my answer had the merit of being both brief and accurate: I always understood that neither was a vice.

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    Having said that, let me tell my hon. Friend and the House that 12 out of the 17 roll-on/roll-off ferries have adequate weighbridges and that for four out of the remaining five my Department provides temporary facilities. I am very well aware of the problem. Indeed I believe that my hon. Friend quite rightly makes the most of every opportunity to bring to my notice the problems of Folkestone, and if I can help him in this respect I shall certainly look into the matter and do what I can.
    Mr. Leslie Huckfield: Is the right hon. Gentleman saying that all our docks and harbours can weigh vehicles of 40 tons gross, which looks like being the new limit? He must be aware that we do not have a sufficient number of weighbridges for such vehicles throughout the country. Is the right hon. Gentleman aware that in the debate on the Road Traffic (Foreign Vehicles) Bill his hon. Friend the Under-Secretary said that in future most emphasis would be put on weighing these vehicles at the ports?
    Mr. Peyton: That is quite right, and it is a problem we have to look at increasingly. I have given the hon. Gentleman the figures.

    Building Land
    Mr. William Hamiltonasked the Secretary of State for the Environment if he will introduce legislation for the public ownership of building land.
    The Minister for Local Government and Development (Mr. Graham Page): No, Sir.
    Mr. Hamilton:Can the Minister explain how the Government propose to make sure that the increased profits arising from land speculation accrue to the public purse, since the increase in prices is generally due to public works and developments of one kind and another? Before giving another reply of that curt nature, will he read the speeches made a few years ago by the present Secretary of State for Social Services when he indicated that the public ought to ensure that the profits accruing from land speculation and land development should accrue to the public purse and not to the private speculator?
    Mr. Page: A certain amount of the profit is taken in capital gains tax. But
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    the policy of the Government is to bring forward as much land as possible and thereby stabilise the prices, and that is the policy enunciated by my right hon. Friend on 27th April.
    Mr. Peter Rees: Does my right hon. Friend agree that the ill-judged introduction of betterment levy by the previous Administration is at least partially responsible for the present increase in land prices?
    Mr. Page: Yes, Sir.
    Mr. Paget: Why is it that on clearance areas local authorities can pull down the houses and pay outrageously low compensation but cannot get vacant land except at quite outrageous prices and after outrageous delay? This is becoming a scandal.
    Mr. Page: My right hon. Friend the Secretary of State has announced that £80 million of loan sanction funds would be available for the acquisition of land by local authorities.
    Mr. Carterasked the Secretary of State for the Environment if he is satisfied with the amount of land being made available in inner city areas; and if he will make a statement.
    The Minister for Housing and Construction (Mr. Julian Amery): The Government's measures to ensure that sufficient land will be available for housing should help in inner city areas as elsewhere. It is in the first instance for the local planning and housing authorities to decide what land should be used for housing.
    Mr. Carter: With sky-rocketing land prices in city centres and scandalous development like that of Centre Point, is not land for purely housing purposes rapidly diminishing? What do the Minister and the Government intend to do to arrest the decline of purely city centres into concrete deserts?
    Mr. Amery: I am sure that the hon. Gentleman is aware of the package announced by my right hon. Friend the Secretary of State for making more land available and the facilities being given to local authorities to assemble land. The new slum clearance and rising cost subsidies envisaged under the Housing Finance Bill should also help from the point of

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    view of redeveloping cleared land. The price of land very largely follows the price of houses, and the price of houses has soared in the way it has in response to the effective demand in people's pockets at present.
    Mr. Evelyn King: If I were to ask my right hon. Friend by how much the supply of land for building purposes had increased in recent months or in the last year, would he be able to give the figures for particular districts? The House has been demonstrably short of these figures and should have them.
    Mr. Amery: I have not got the figures from the differentlocal authorities. I have figures, though not with me, for London, where the Action Group headed by my hon. Friend the Under-Secretary has been extremely active and vigorous on Government land that is released for housing. I will write to my hon. Friend about that.
    Mr. Lipton: Bearing in mind the shortage of land in the inner city areas, what will the Government do about Centre Point?
    Mr. Amery: My right hon. Friend the Secretary of State has made his position on this matter extremely clear. While I acceptthat the question is broadly related to the amount of land being made available in the inner city areas, perhaps the hon. Member would put down a separate Question.
    Mr. Crosland:For my part I support what the Secretary of State is doing about Centre Point, but let us be realistic—
    Mr. Skinner: He is doing nothing.
    Mr. Crosland: I said let us be realistic.
    Mr. Skinner: It is just talk.
    Mr. Crosland: At this moment people are being turned out of GLC flats in the Covent Garden area in order to make way either for office building or for additional road widening. Is not the Minister aware that the only way in which he will settle the problem is to respond to the demand by the Opposition in the debate on Piccadilly and Covent Garden that the Government must have a plan first for restricting the amount of office space in inner city areas and, second, for restricting private motor traffic? Without a plan for both
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    these matters there is no possibility of solving the housing shortage.
    Mr. Amery: There is very close co-operation between my Department and the GLC in all these matters and I do not believe that there is an absence of good planning. The work of the London Action Group has been extremely helpful and will lead to—[An Hon. Member: "More offices."]—and I scarcely dare to say it—to a solution to the problem in the course of the next few years.

    Land and House Prices
    Mr. Willeyasked the Secretary of State for the Environment whether he will make a further statement on his assessment of the results of the measures taken about land prices.
    Mr. Graham Page: I refer the right hon. Member to the reply I gave him on 14th June.—[Vol. 838, c. 1506–8.]
    Mr. Willey: Is the Minister aware that this is wholly inadequate? If he will not pay attention to anything I say, will he pay attention to the CBI? Is he aware that the CBI has said
    "The present escalation of land prices calls for most urgent action."?
    Is the Minister further aware that the CBI has declared that the scandal of rising land and house prices is a running sore poisoning its whole efforts to combat inflation? In view of this, does not the Minister realise that the time has come when he simply must do something?
    Mr. Page: I do not wish to belittle the importance of the problem in any way. It is the Government's policy to stabilise home prices by building more homes and increasing the supply of developable land with financial support for land acquisition and for providing services.
    Mr. Trew: Does my right hon. Friend agree that if the Labour Government had maintained the level of private housing starts which they inherited there would now be 300,000 more private homes and considerably less pressure on the housing market?
    Mr. Pardoe: Does the Minister recognise that the best possible way of dealing with the problem of land prices and bringing more land on to the market is simply to introduce site value taxation? The

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    mere fact that the Liberal Party has been advocating this for about 20 years is only one reason why it is right to do so, but it is also a reason why both of the other parties will eventually accept it.
    Mr. Page: That goes a little beyond the Question. If the hon. Gentleman cares to table a Question on that subject, I shall answer it.
    Mr. John Silkin: Regarding the reply given to my right hon. Friend on 14th June, will the Minister also confirm the reply to which he had to admit on that occasion that since his right hon. Friend abolished the Land Commission the price of land has risen by 53 per cent., and that it is going up at a rate, between one time and another, of about £250 per week? In the event, is it not time that the Government took more action than merely making available £80 million to local authorities?
    Mr. Page: I certainly do not accept those figures. It is possible to produce any statistics of that sort by selection of areas throughout the country. Of course there is pressure in certain areas, but there is certainly no evidence that nationalisation of anything has in itself lowered prices.
    Mr. Willey:In view of the unsatisfactory nature of the reply from the Minister, I beg to give notice that I shall endeavour at an early opportunity to raise this matter on the Adjournment.
    Mr. Skinnerasked the Secretary of State for the Environment what are the latest available figures for house prices in the United Kingdom as compared with a year ago and two years ago, respectively.
    Mr. William Priceasked the Secretary of State for the Environment by what percentage house prices rose in England and Wales between June, 1970, and the latest date for which figures are available.
    Mr. Amery: The average price of private houses in the United Kingdom mortgaged with building societies in the first quarter of 1972 was 21 per cent. higher than in the corresponding period of 1971 and 32 per cent. higher than in the corresponding period of 1970. The increase for private houses mortgaged with building societies in England and Wales
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    was 33 per cent. in the first quarter of 1972 compared with the second quarter of 1970.
    House prices in Great Britain over the two years April, 1970, to April, 1972, rose by 29 per cent. while earnings rose by 24 per cent. In the first half of this period earnings were rising substantially faster than house prices; since then the position has been reversed.
    Mr. Skinner:Why does not the Minister tackle this problem instead of the Secretary of State making speeches about Harry Hyams? There are plenty of Harry Hyams causing the problem of house prices. The Minister talks about money supply being adequate to provide a greater number of houses and his right hon. Friend the Chancellor of the Exchequer says that there is a 23 per cent. increase in the money supply. But if house prices are rising, according to the right hon. Gentleman's figures, by 32 per cent., how on earth can people buy more houses?
    Mr. Amery: The short answer is that they are buying houses. A larger number of houses have been bought on mortgage than ever before. A higher percentage of people aged 25 or under are included among those buying. Twenty-six per cent. of new houses are going to people aged 25 or under and about 25 per cent. of all mortgages are going to people earning £30 or less. It would be perfectly easy to bring down the price of houses—
    Mr. Raphael Tuck: Why does not the right hon. Gentleman do it?
    Mr. Amery: I could do it if I asked the building societies to restrict credit to where it stood in 1970 so that there was a 20 per cent. deposit and a 20-year repayment period instead of virtually no deposit and a 30-year repayment period. Then, while the better off would always be able to afford the deposit and the repayment, those at the lower end of the market would be unable to afford the loan and the supply of houses would dry up because builders would cease to build. I would have no part in any such restrictions.
    Mr. John Hall:To get the matter into perspective can my right hon. Friend tell us how the price of houses has risen over the last 10 years compared with the rise in prices generally?
    Mr. Amery:The rise in house prices since 1967 has been consistently somewhat above the general retail price index. Only between 1969 and the end of 1970 was it less than the rise in earnings and the position has since been reversed. House prices over the last two years have risen by 29 per cent. while earnings have risen by 24 per cent.
    Mr. Freeson:On the tape this afternoon at 1 p.m. it was announced through a report from the Nationwide Building Society's latest survey that there has been a 17 per cent. rise in new house prices in the first six months of this year. Will the right hon. Gentleman please explain, on the question of supply and demand which he constantly comes back to, how it is that every month he stands at the Dispatch Box and announces increased percentages in new housing under construction and yet, according to figures from his Department, there are fewer houses under construction today than there were in June, 1970? The figures have dropped from 416,000 to 396,000. How can that be in view of what the right hon. Gentleman has been telling the House during the last two years?
    Mr. Amery:The hon. Member is quite wrong. Last year showed a 26 per cent. increase in starts of new houses in the private sector and this year already the first quarter has shown a further 14 per cent. rise.
    Mr. Hardyasked the Secretary of State for the Environment what further steps he is now taking to ensure that increases in house and land prices will not continue and that they will be stable by the autumn of this year.
    Mr. Amery: Our policy is to create a situation in which the supply of building land and of houses will increase fast enough to meet the demand for home ownership.
    Mr. Hardy: That is a demonstrably complacent reply, revealing that the Government now have nothing to offer save excessive over-optimism. Will the Minister confirm the report which some of us have received that at this morning's conference he suggested that one way of reducing house prices was greatly to increase the deposit which would-be purchasers would have to put down for a mortgage?
    Mr. Amery: I never suggested or advocated that we should increase the deposit so as to reduce house purchase demand. I said exactly the opposite: that I would have nothing to do with such a policy. A few minutes ago I pointed out that it would be easy to stabilise house prices by doing just that but that it would deprive people who could not afford the deposit or could not afford a short repayment period of the chance of getting a home, and I would have nothing whatever to do with it.
    Mr. Rost: Can my right hon. Friend say to what extent the rise in the price of houses and land is due to the disgraceful failure of the previous Government to build enough houses?
    Mr. Amery: When we took office, home loans were hard to get, requiring a substantial deposit and a comparatively short repayment period, there were more bankruptcies among builders than at any time since the war and houses were not being built. We have been able to create an effective demand by co-operation with the building societies and by lifting the local authority ceiling on mortgages. House are now being built.
    I take this opportunity to correct a figure which I gave the hon. Member for Willesden, East (Mr. Freeson) a few minutes ago, which may have misled him. I said that in the first five months of this year the increase in private sector housing had been 14 per cent.; in fact it was 16 per cent.
    Mr. Freeson: Is the right hon. Gentleman aware that when his party took office there were 416,000 dwellings under construction in England and Wales? Today, on the latest figures available from his Department, there are 396,000 houses under construction. Therefore, is it not correct to say that, far from increasing the rate of building, there has been a slowing down in the rate under the present Government?
    Mr. Amery: When the hon. Gentleman's party was in power there was a fantastically long delay in the completion of houses. The 1971 figures show an overall increase in starts. The first five months of 1972 show an overall increase in starts, taking the public and private sectors together.

    Rivers (International Pollution Control)
    Mr. Dalyellasked the Secretary of State for the Environment what proposals he is putting forward on an international basis for the cleaning up of big river systems which pollute the seas; and if he will make a statement.
    Mr. Rostasked the Secretary of State for the Environment what response he had at Stockholm to his proposal for a world clean rivers programme.
    The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): The conference agreed to recommend that Governments should strengthen national controls over land-based sources of marine pollution together with a programme of research and classification. This is in line with my right hon. Friend's present policy for the cleaning up of our rivers and we look forward to co-operating with neighbouring countries in putting it into effect.
    Mr. Dalyell: What capital is involved and what time scale?
    Mr. Griffiths: So far as this country is concerned, a very substantial increase—more than 50 per cent. in real terms—in cleaning up our rivers. It is £1,300 million over the next five years.
    Mr. Rost: While other countries may not have been prepared to give an undertaking to do very much very quickly, may we have an assurance from my hon. Friend that he will continue his excellent work in making sure that this country continues to set a first-class example?
    Mr. Griffiths: Yes, Sir. We are particularly well placed to do that, because due to my right hon. Friend's policies we now have a pollution of rivers survey that is the best in the world, we have more experience in mathematical modelling than any other country, we are providing the money, and under the new proposals for water reorganisation we shall be bringing sewerage and water management together.
    Sir G. de Freitas:In considering any future proposals, will the Minister consider the Council of Europe charter on pure water which was adopted by about 17 countries four or five years ago?
    Mr. Griffiths: Yes, Sir. I think that this country is making good progress in that direction.

    Driving Licences (Photographs)
    Mr. Woodhouseasked the Secretary of State for the Environment if he will introduce legislation to require every driving licence to carry a photograph of the licence holder.
    Mr. Peyton: I would refer my hon. Friend to the answer given to my hon. Friend the Member for Keighley (Miss Joan Hall) on 8th March, 1972.—[Vol. 832, c. 1420.]
    Mr. Woodhouse: Is my right hon. Friend aware that in a number of recent cases people who have been disqualified by the courts from driving have used stolen driving licences to hire cars, with the consequence that the firm or individual hiring out the car was deprived of insurance cover in the event of an accident? Will my right hon. Friend therefore carefully reconsider this matter?
    Mr. Peyton: I have looked at the matter very carefully. I looked at it again when my hon. Friend tabled his Question and before I gave the reply. On the whole, I am satisfied that photographs would not prevent forgery or misuse of a licence. Moreover, if we implement the very helpful idea of licences which are valid for life, the purpose would be largely invalidated if photographs were to accompany licences, as unfortunately even Members of Parliament would need to renew their photographs because they change slightly in appearance.

    Local Government Districts (Size)
    Mr. Evelyn Kingasked the Secretary of State for the Environment if he will instruct the Boundary Commission-designate to withdraw its letter of 25th April, 1972, in which it states its policy towards local government districts below 75,000 in population until after the local evidence is heard.
    Mr. Graham Page: No, Sir. The Commission-designate's letter of 25th April does not exclude alternative proposals for new districts below 75,000 population. I understand that such proposals have been made by some of the local authorities in

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    South Dorset and the Commission-designate will of course consider these when reviewing its draft proposals.
    Mr. King: If that reassurance is as total as I think, indeed we are grateful. Is it not strange that the Boundary Commission-designate should be prejudging the issue before hearing the evidence and has said something that was in conflict with the assurance that Ministers have given? It is vital that the Commission-designate should take account of local opinion and listen to people from local organisations. I hope my right hon. Friend accepts that.
    Mr. Page:That is what the Commission-designate intends to do, and I did not interpret the letter as my hon. Friend does. The facts show that of the 278 districts proposed by the Commission, 76 are below the 75,000 figure. The Commission has an open mind on this matter, and I urge my hon. Friend to put his case for South Dorset to the Commission.

    Small Properties (Rent)
    Sir Gilbert Longdenasked the Secretary of State for the Environment if he will seek powers to enable the rents of small properties to be fixed with a view to enabling their owners to keep their property in repair and at the same time receive what is assessed to be a reasonable income there from.
    The Under-Secretary of State for the Environment (Mr. Reginald Eyre): This is being done; fair rents are being extended to rent-controlled dwellings in a phased programme under the Housing Finance Bill.
    Sir Gilbert Longden: I thank my hon. Friend for that answer, of which I was fully aware. Will he say how long it will be before owners of these small properties will be able to charge such rents as will enable them to let their properties and to keep them in repair and enjoy a decent income?
    Mr. Eyre: All the circumstances are taken into account in assessing the fair rent, as my hon. Friend knows, including responsibility for repairs. The period of phasing reasonably takes into account the changing circumstances.
    Mr. Hardy: The Minister has just made it clear that the rents of private
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    houses as well as council houses will increase very markedly as a result of the Housing Finance Bill. Will he therefore comment on the report that his right hon. Friend the Minister for Housing and Construction, at a conference this morning, described the Housing Finance Bill as a weapon against inflation? Will the Minister say how much more ridiculous the Government can become?
    Mr. Eyre:The hon. Gentleman must remember that under the provisions of the Housing Finance Bill very generous help is to be given to people in need and to the lower income groups. This is distinctly disinflationary in its effect.
    Mr. Ashley:Is the Under-Secretary aware that, if this proposal were to be accepted, some landlords would exploit the situation and carry out minimum repairs and take the increased rents for their own profits? Will he bear in mind in future that landlords' action should be very carefully scrutinised if there is to be any change in rent control on a policy basis for improvements and repairs?
    Mr. Eyre: The hon. Gentleman should remember that the protection of the tenant is in no way diminished under the Housing Finance Bill and that local authorities have statutory powers to require a landlord to do works where a dwelling is in need of repair.

    Specialist Work Teams
    Mr. Duffyasked the Secretary of State for the Environment if he will advise local authorities to take steps to keep together specialised work teams such as the West Riding County Council land clearance and dereliction team during the period of reorganisation of local government.
    Mr. Graham Page: There are many specialist teams operating in local government which should be kept together during and upon reorganisation, and my right hon. Friend intends to issue guidance on the ways in which this might be done.
    Mr. Duffy: I thank the Minister. Is he aware that there is anxiety in the West Riding not only that the Minister should devise an interim solution so as not to prejudice the very important work on which a very fine team of specialists of this kind, with its support staffs, is at

    541
    present engaged, but that he should also look forward to the time when the area is divided between the Sheffield and Leeds metropolitan areas, so that the team can be preserved for that time? At the moment the team divides its work as to60 per cent. in the South Yorkshire area and 40 per cent. in the West Yorkshire area.
    Mr. Page: I entirely agree with what the hon. Gentleman has said about the West Riding County Council reclamation unit. The unit is responsible for approximately half the reclamation to be undertaken in the Yorkshire and Humberside region up to 1980, and unless it continues in some form it will be impossible to achieve the target set by my right hon. Friend the Secretary of State of reclaiming all major derelict sites within 10 years. Clauses 101 and 113 of the Local Government Bill afford the opportunity for the continuation of the unit.

    Housing (Southampton)
    Mr. R. C. Mitchellasked the Secretary of State for the Environment how many starts in local authority housing in Southampton have taken place in 1971 and up to the present time in 1972; and if he will make a statement.
    Mr. Eyre: In 1971 there were 214 starts and up to the end of May, 1972, there were 201 starts.
    Mr. Mitchell: Is not the figure for 1971 absolutely disgraceful? When the Labour Party held control of Southampton Council before 1967 the figure of starts was running at over 1,000 a year. Is not this a good example of Tory local government?
    Mr. Eyre: It is for each local council to consider its housing needs and how best it can meet them. The present Government, unlike the last one, placed no restriction on the amount that local authorities may borrow to build houses.
    Mr. James Hill: Does my hon. Friend agree that in the past, when Southampton was Labour-controlled, the rate of building of council properties was at the ratio of two to one to private development, and that it is now more like one to one? Is not this a more equitable and good social mix?
    Mr. Eyre: My hon. Friend is right in explaining that there are a number of ways in which local needs for housing can be catered for.

    Motorways (Maintenance Costs)
    Mr. Raphael Tuckasked the Secretary of State for the Environment how maintenance costs of black top and reinforced concrete on motorways compare on a lane-mile basis in the first five years after construction and in the last five years, respectively.
    The Under-Secretary of State for the Environment (Mr. Keith Speed): I regret that information is not available which would enable this comparison to be made. Maintenance costs are affected by many diverse factors which can vary greatly between different motorways.
    Mr. Tuck: Is the Under-Secretary aware that a recent answer he gave me shows that there is a vast discrepancy between the maintenance costs of black top and those of reinforced concrete, showing the vast superiority of reinforced concrete? Is he aware that we all hope he will bear that in mind when deciding in future between black top and reinforced concrete?
    Mr. Speed: Yes. The Transport and Road Research Laboratory is carrying out a very full study of this question. I hope to have the report early next year.
    Mr. Sydney Chapman: Although my hon. Friend should bear in mind the economic costs, should he not also bear in mind the environmental issue, remembering that black top is far superior visually to reinforced concrete which easily scars and is dreadful in appearance after a period?
    Mr. Speed: This shows that very great differences of opinion exist. All these matters are being investigated.

    Corby New Town (Industry)
    Sir G. de Freitasasked the Secretary of State for the Environment whether he will make a statement on his discussions with the Chairman of the East Midlands Economic Planning Council on the encouragement of new industries in Corby New Town.
    Mr. Amery: My right hon. Friend the Minister for Local Government and Development was to have met the Economic Planning Council on 23rd June but has had to defer the meeting until later this month.
    Sir G. de Freitas: Is the Minister aware of the opinion of the Chairman of the Economic Planning Council that it is wrong from an economic and national viewpoint to deny Corby the right to diversify its industry?
    Mr. Amery: All these matters can best be discussed when my right hon. Friend meets the council and has a talk with the chairman.
    Sir G. de Freitas:This was 10 months ago. In view of the unsatisfactory nature of the reply, I shall try to raise the matter on the Adjournment.

    Highway Maintenance
    Mr. Roger Whiteasked the Secretary of State for the Environment whether he intends, in view of the Loft house Report and the Marshall Report on Highway Maintenance, to introduce legislation to amend the Public Utilities Street Works Act, 1950, to give effect to their recommendations.
    Mr. Speed: The Public Utilities Street Works Act conference of interested parties has this matter under consideration, and I shall study any recommendations of that conference for amending legislation.
    Mr. White: While expressing gratitude to my hon. Friend, may I remind him that the Act is 22 years old and that many local authorities responsible for highway maintenance are experiencing considerable difficulty? Many of the recommendations made in both reports commend themselves and would assist those authorities in discharging their duties.
    Mr. Speed: My Department is preparing a guide to the 1950 Act which will help to improve the knowledge of local authorities. This guide should be published in the autumn. I am anxious that we should make further progress and get on with this matter, which infuriates the public.
    Mr. Robert C. Brown: Is it not high time that the Government ceased the
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    practice of accepting reports and then passing the buck to a conference or a committee to decide on action or inaction? The Marshall Report should have been acted on many months ago. I agree with the hon. Member for Gravesend (Mr. Roger White) that there are many ideal proposals in the report which should be put into effect as soon as possible.
    Mr. Speed: I accept that this is a problem. I am very interested in it and anxious to get on. It was the hon. Gentleman's Government which set up the conference.

    Emsworth Bypass
    Mr. Ian Lloydasked the Secretary of State for the Environment what consultations he has with delegations from Emsworth and from Havant and Waterloo Urban District Council on his decition to reject the findings of the court of inquiry into the Emsworth short bypass.
    Mr. Speed: No final decision has yet been taken on this scheme. I have written to my hon. Friend explaining why we are unable to receive deputations on the matter from particular groups of interests.
    Mr. Lloyd: Does my hon. Friend recognise that while my constituents appreciate that no decision has yet been taken, they are greatly disappointed that the Secretary of State has refused to receive them?
    Mr. Speed: We took legal advice on this matter. It is improper at this stage, when my right hon. Friend the Secretary of State is acting in a quasi-judicial capacity, to receive this sort of deputation.

    Convicted Women Motorists (Age)
    Mrs. Doris Fisherasked the Secretary of State for the Environment for what administrative purposes the age of a woman is required to be given when she is convicted in the courts for a motoring offence.
    Mr. Peyton: Date of birth will be needed to identify drivers when driving licences begin to be issued centrally from next March.
    Mrs. Fisher: In view of the sensitivity which males and females feel about divulging their ages, cannot the Minister think of a more sophisicated way to

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    register drivers instead of a jumbling up of the birth dates of all motorists?
    Mr. Peyton: If I may say so, the hon. Lady is the last person to need to feel sensitive on this subject. The numbers giving the date of birth were chosen as desirable to help in this case because they have the merit that most people remember them with a degree of accuracy.
    Mr. Simeons:Would my right hon. Friend the Minister consider reverting to the old adage that a woman is as old as she looks and that a man is old when he stops looking?
    Mrs. Fisher: You must be very old.
    Mr. Peyton: I do not think I could possibly, with profit, intervene between the hon. Lady and my hon. Friend.
    Mr. Speaker: I thought the hon. Lady was addressing the Chair.

    Use Classes Order (Restaurants and Cafés)
    Mr. Worsleyasked the Secretary of State for the Environment whether he will amend the Use Classes Order so that planning permission is required for a change of use from a shop to a restaurant or café.
    Mr. Graham Page: As my hon. Friend is aware, representations about these changes of use have been considered and discussed with interested bodies; but a wider range of questions is involved in the current review of the Use Classes Order and we are not ready to make a new order.
    Mr. Worsley:Is my right hon. Friend aware that that is a very disappointing reply? He told me a year ago that he had received representations from local authorities. Will he please take a decision on this in advance of the general discussion on these matters?
    Mr. Page: I find it a disappointing reply too. I had hoped that we should be able to put before the House the amended Use Classes Order and the amended General Development Order at the same time. I want to do them both at once. The consultations with the local authority associations are taking a rather long time.
    Mr. Robert C. Brown:I do not agree with the hon. Member. It is not a disappointing reply: it is a scandalous reply. Does the Minister realise that it is nearly 12 months since he told me precisely what he has just said, namely, that he hoped to do this in a few weeks' time? I told him a few months ago that if he did not get his finger out and have the order made I would have more chop suey shops in my constituency than bus shelters, and we are now approaching that situation very rapidly.
    Mr. Page:I get blamed if I do not consult the local authority associations and I get blamed if I do. I will try to keep the promise that I expect to reach a final conclusion before the Recess.

    Local Government Members (Allowances)
    Mr. James Lamondasked the Secretary of State for the Environment when he expects to announce the scale of attendance allowances to be paid to members of the new local government bodies.
    Mr. Graham Page: Early next year.
    Mr. Lamond:When coming to that decision will the Minister bear in mind that good government cannot be had on the cheap, and will he ensure that the allowance is sufficient to cover the costs and out-of-pocket expenses of members who may have to travel considerable distances to attend meetings of the new bodies? Since costs are escalating under the present Government, may I suggest an allowance for members of about £15 a day?
    Mr. Page: We shall look to the local authority associations for advice, but it is my right hon. Friend's general intention to be generous in fixing these allowances.

    Housing Accommodation (Personal Preference)
    Mr. Sydney Chapmanasked the Secretary of State for the Environment what research his Department is undertaking into the type and size of accommodation of dwellings in which families prefer to live.
    Mr. Amery: Surveys of the preferences of families are a major part of the

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    Department's continuous research into user requirements in housing. The results are published in Design Bulletins and other publications. I am sending my hon. Friend some recent examples.
    Mr. Chapman: I thank my right hon. Friend for that answer but I remind him that 99 per cent. of families prefer to live in low-level development rather than multi-storey blocks of flats, and the proportion of multi-storey blocks being built is much greater than the 1 per cent. Since it is now proved that one can have just as great densities by low-level development as by multi-storey blocks of flats, will my right hon. Friend look into the problem urgently, because research should be done to ensure that people have what they want, and they can have it if all concerned put their mind to it?
    Mr. Amery: I entirely agree that the duty of both Government and local authorities is to give the widest possible choice to families. I have always advised that families with children are better housed at ground level, but our studies show that many adult households like high rise and that some older people, though by no means all, prefer the higher densities and the view which is afforded at the higher levels.

    Motor Vehicles (Insurance Discs)
    Mr. John Hannamasked the Secretary of State for the Environment if he will introduce legislation to make compulsory the display of insurance discs on motor vehicles.
    Mr. Peyton: No, Sir. I doubt that this would achieve the result my hon. Friend has in mind.
    Mr. Hannam: That is a very disappointing reply. Does not my right hon. Friend agree, from the correspondence which I have sent him, that there is ample evidence that many innocent victims of car crashes are unable to obtain the necessary ownership and insurance particulars from the guilty party? Will he take steps to require the inclusion of such information about ownership and insurance on the existing Road Fund licence disc?
    Mr. Peyton: That is another question. I take this opportunity to say how sorry
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    I was to read of my hon. Friend's unhappy experience. I am sorry to add to it by giving a disappointing answer, but I greatly doubt that the sort of thing he has in mind would be helpful. I am looking into the matter raised in his letter. If one could produce an effective answer to the problem, no one would be more pleased than I.
    Mr. Raphael Tuck: But what harm is there in acceding to the hon. Gentleman's request? What is against it?
    Mr. Peyton: If the hon. Gentleman thinks that the best criterion of good regulation is that it does not do any harm, I beg leave to differ.

    Road Casualties
    Mr. Dormandasked the Secretary of State for the Environment what proposals he has to reduce the number of road casualties, in the light of the latest figures.
    Mr. Peyton: I am greatly concerned about the recent increases in casualties. I hope that the doubling of expenditure on road safety publicity will achieve results.
    Mr. Dormand: The latest figures issued, those for April, show a 6 per cent. increase over April, 1971, and the trend is always upwards. Does the right hon. Gentleman realise that the 570 people killed on the roads in April represent the equivalent of five times the recent tragic Trident accident, and that this happens every month? Will he rid himself of his horrifying complacency in this serious situation?
    Mr. Peyton: I should not begin to quarrel with anything the hon. Gentleman said until his last sentence, which, if I may say so, did a lot to spoil the effect of the rest. No one with my responsibilities is in any way, or would ever be, complacent about the brutal toll of road accidents, and I very much regret that the hon. Gentleman saw fit to introduce the note he did.

    Motor Vehicles (Seat Belts)
    Mr. J. H. Osbornasked the Secretary of State for the Environment whether he will now introduce legislation to make the wearing of safety belts for front-seat passengers in motor vehicles compulsory

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    unless devices for the automatic harnessing of passengers coupled with the ignition and starting system are fitted, in the light of research and development into fully automatic systems.
    Mr. Peyton: I would prefer first to see whether persuasion can produce a marked increase in seat belt wearing.
    Mr. Osborn: What statistics does my right hon. Friend have to prove that the wearing of seat belts reduces injury after accidents? Bearing in mind that cars in the United States are now fitted with alarms which operate when the ignition is switched on and without the safety belt being in position, and bearing in mind that we in Britain have developed an automatic harness through the Transport and Road Research Laboratory and the Motor Industry Research Association, would it not be cheaper to make the wearing of safety belts compulsory rather than force people to install these other systems?
    Mr. Peyton: I acknowledge the weight of what my hon. Friend says. I would gladly use any device which persuaded people to wear them voluntarily. If they do not, any responsible Government, I am sure, will have to consider seriously the question of compulsion, in view of the large number of lives and serious injuries which could thereby be saved.
    Mr. Leslie Huckfield: Has the Minister seen the research, sponsored by the British Safety Council, carried out by the University of Aston in Birmingham showing that only 15 per cent. of motorists regularly wear their safety belts? Further, is he aware that even when he tried one of his so-called massive campaigns in the North-East, even that raised the level to only 25 per cent.? In the light of those two disastrous statistics, will the Minister now make the wearing of these belts compulsory?
    Mr. Peyton: I cannot usefully add to what I have said.

    Waste Dumping
    Miss Fookesasked the Secretary of State for the Environment if he will seek powers to control fly dumping, by compelling the owners of vehicles to identify the drivers of the said vehicles.
    Mr. Eldon Griffiths: Further action to prevent irresponsible dumping of wastes will be taken if existing powers prove inadequate.
    Miss Fookes:I remind my hon. Friend that the Greater London Council already regards this as such a problem that it has included an appropriate Clause in a Private Bill. Will my hon. Friend therefore take swift action?
    Mr. Griffiths: If there is a Clause in a Private Bill, it will be for the House to decide what should happen to it.

    Street Lighting
    Mr. Loveridgeasked the Secretary of State for the Environment if the Government will reduce the maximum limit of 200 yards between lights in built-up areas for all future installations; and if he will allow 30 miles per hour speed-limit signs to be placed on roads where the lights are over 100 yards apart.
    Mr. Peyton: No maximum limit for the spacing of street lighting in built-up areas has been laid down. The answer to the second part of the Question is "No".
    Mr. Loveridge: I am sorry to hear my right hon. Friend say that. Is he aware that in streets in which the lights are fixed at extreme distances, when such streets are used, as they sometimes are, by by passers, lorry drivers and others tend to miss the fact that they are passing through a built-up area and drive at speeds above the limit? Will my right hon. Friend change the regulations to allow 30 mph signs to be placed in such streets?
    Mr. Peyton: I acknowledge that there is weight in what my hon. Friend says but I feel that one should avoid a proliferation of signs.

COLDHARBOUR HOSPITAL, SHERBORNE (FIRE)
Mr. Wingfield Digby(by Private Notice) asked the Secretary of State for Social Services whether he will make a statement on the fire at the mental hospital, Coldharbour, Sherborne, in the early hours of this morning which resulted in the deaths of 30 patients.
The Secretary of State for Social Services (Sir Keith Joseph): It is with deep regret that I have to inform the House of the deaths early today of 30 mentally handicapped patients in a fire at Cold-harbour Hospital, Sherborne, Dorset. The police, together with the fire department and the hospital authorities, are making immediate inquiries into this tragic accident, and I myself am going to the hospital this afternoon.
I am sure that the House will wish to join me in expressing deepest sympathy to the relatives of those who died.
Mr. Wingfield Digby: Will my right hon. Friend assure me that he will conduct the fullest inquiry into this pathetic tragedy? Will he make it clear that the local fire services did everything possible in the circumstances? May I express my sympathy, and, I am sure, that of every hon. Member, to the relatives of the unfortunate people who died?
However, does my right hon. Friend accept that the care of patients of this sort presents very special problems? Is he satisfied that war-time constructions like this former naval hospital are suitable places for mental patients? Is he sure that the electric wiring of the huts at this hospital has been renewed since the war, and that it was wise to introduce wooden furniture into them? Will he review the priority which he gives to the construction of hospitals for people like this, especially in areas like Dorset where we enjoy a low priority, as we have seen in the case of our county hospital, because our population is not expanding very fast?
Sir K. Joseph:I hope that my hon. Friend and the House as a whole will understand that at this stage, intensely anxious though I am to discover what lies behind this tragedy, I can give virtually no information yet. But once the immediate inquiries have done their work I shall be considering what further inquiry, if necessary—and I am sure that it will be necessary—should be held and I will inform the House. All I know as a fact is that the ward involved was only recently—two months ago—opened after upgrading, and I am told—I cannot yet be sure of this—that the design and construction of the upgrading were agreed with the fire authorities.
Dr. Summerskill: I know that all hon. Members on this side of the House would like to be associated with the expressions of sympathy to the relatives of those who died and to pay tribute to the efforts of the staff in dealing with the fire. It was a particularly tragic fire because the victims were among the most helpless and vulnerable in the community—people whom we have a particular responsibility to care for and protect.
The inquiry and the right hon. Gentleman's proposed visit are both to be welcomed, but will the right hon. Gentleman recognise that this disaster is the latest in a series of at least four other hospital fires—at Shelton Hospital in 1968; Carlton Hayes Hospital in 1969; Exeter City Hospital in 1970; and Exe Vale Hospital in 1971? Will he bear in mind that all these fires occurred at night and in wards where elderly or mentally ill people were being looked after? Therefore, does he agree that for these categories of patient extra special and additional fire precautions are needed and that particularly vigilant night-time supervision by staff is required?
Sir K. Joseph: I must agree with all those comments. The Government have been sufficiently concerned about the position in hospitals to encourage regional hospital boards to give the question of the improvement of fire precautions very high priority. Spending on those purposes has increased sharply, and the monitoring by my Department of the fire drills and other essential procedures has been sharply tightened up.
Sir D. Renton: While acknowledging the compassion and promptness with which my right hon. Friend is acting in this matter, may I ask him whether he is aware that many mentally handicapped people also suffer from physical handicaps, sometimes severe handicaps? Will he ask all persons who have residential care of the mentally handicapped to review their fire precaution arrangements without delay?
Sir K. Joseph: I have so asked. I know that regional hospital boards have followed my wishes and their own wishes, and I am sure that this latest disaster will intensify their anxiety. But I should say, before hon. Members say it to me, that we have not yet achieved the full staffing required at non-acute hospitals.

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although the staffing position has improved, thanks to the extra resources found by this Government. But no one pretends that we yet have enough. I make that merely as a general background comment.
Mr. David Steel:My colleagues and I would wish to be associated with the general expressions of sympathy and regret about this appalling tragedy. Does the right hon. Gentleman accept that this tragedy should bring home to all of us the fact that war-time temporary hospitals, however upgraded and improved, are not adequate in 1972 and that it should increase our collective determination to secure a greater share of the nation's resources for their proper replacement?
Sir K. Joseph: I do not think the hon. Gentleman's comments should be accepted. We have 3,000 hospitals in this country, and inevitably, however big the building programme, it will take time to renew them. The fire authorities are being asked to consider the fire vulnerability of all hospital structures, and I do not think it is inevitable that wartime building, if suitably treated, maintained and looked after in the fire sense, leaves the patients exposed in any special way.
Mr. Raison:Will my right hon. Friend bear in mind that if staff shortage proves to have been a factor in this awful disaster it cannot be right that staff shortages should be allowed to persist at a time of very high unemployment?
Sir K. Joseph:I do not want to be misunderstood. My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) made a general point, and I made a general point in reply. The proportion of staff to patients at this hospital was well above the recommended minimum ratio. I do not believe that that is so in every hospital, but it certainly was at this hospital. I merely make the general point that, although we have increased the staff, we still need more.
Mr. Crossman: Does the right hon. Gentleman realise that anyone who has borne his responsibility shares the dread with which he looks forward to the results of an inquiry? Will he have a look
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at the report of the Shelton Hospital inquiry, which showed the gravest failings at the hospital? Will he look particularly at one problem? Has any effort yet been made to ensure that every member of staff is trained in rescue operations in the event of fire? Until that is done, these tragedies will recur incessantly while people are waiting with unfortunate, crippled people for the fire brigade to arrive, and the only hope is that members of the staff are trained in exactly what they should do if a fire occurs.
Sir K. Joseph: I am grateful to the right hon. Gentleman for being so understanding. I will certainly study the Shelton inquiry. I see that in the questionnaire which went out last year and again this year to regional hospital boards, on my instructions, one of the questions, to which all hospital authorities had to reply, was whether all nursing staff had had recent instruction in the methods of movement of patients, particularly the elderly and non-ambulant, from danger areas in an emergency, in addition to other instruction.
Mr. Mayhew: Is the right hon. Gentleman aware that whatever the results of this inquiry, and whatever the staffing position at this hospital, the risk of these continued disasters at mental and psychiatric hospitals—and not only through fire—is likely to continue when hospital staff, especially nurses, have far too many patients to look after? Is he aware of the widespread support he will have in any efforts he can make to increase the number of patients continuing in accommodation within the community so that they do not have to go into hospital but can live outside?
Sir K. Joseph: That is precisely the Government's policy, in which, I know, we have the stimulus and support of all Members of this House. It cannot be done overnight, but it is our policy and we are making progress. My understanding is that in this particular hospital the staff ratio was well above the minimum recommended, but that is one of the matters which I have to confirm on my visit.
Sir Clive Bossom: In the meantime, will my right hon. Friend consider having automatic sprinklers installed in all wards

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of our old mental hospitals—I have one of over 100 years old in my constituency—and also an electrical system which automatically opens all locked doors when a fire breaks out?
Sir K. Joseph: I would like to consider my hon. Friend's suggestions in the light of what comes out of this tragedy.
Mr. Pavitt: I would like to share in the tributes which have been paid by hon. Members to the staff, and to all the devoted staffs in these hospitals, but may I ask the right hon. Gentleman, when he makes his investigation, to look not only at the staffing establishment but also at the ratio of disposal of staff within each establishment—the ratio of disposal ward to ward and at different times of the day—and will he, arising from this tragedy, not only consult fire officers and so on but also bring into play people in the Confederation of Health Service Employees and the National Union of Public Employees, who have a considerable amount of practical knowledge which may be of assistance?
Sir K. Joseph: Yes, Sir.

ORDERS OF THE DAY

  EUROPEAN COMMUNITIES BILL
  [12th ALLOTTED DAY]
  Considered in Committee [Progress 4th July.]
  [Sir ROBERT GRANT-FERRIS in the Chair]

New Clause 11

  DECLARATION OF THE ULTIMATE SOVEREIGNTY OF PARLIAMENT
  It is hereby declared that nothing in the Treaties or in this Act shall detract from the ultimate sovereignty or supremacy of Parliament or shall prejudice the power and right of Parliament to repeal this Act or to alter any of its provisions or effects; and any determination of the European Court or of any of the Communities or their institutions which is inconsistent herewith shall be null and void.—[Sir Elwyn Jones.]
  Brought up and read the First time.
  3.45 p.m.
  Sir Elwyn Jones: I beg to move, That the Clause be read a Second time.
  We meet to discuss this important and fundamental Clause against what seems to be an extraordinary challenge not only to our parliamentary sovereignty but even to our national sovereignty by the President of France, who seems to think that it is he who should settle our exchange rate and not the Government of this country. No doubt we shall be returning to this interesting theme at some suitable moment in time.
  At first blush in considering this Clause, which I have the privilege to move, it may seem to be astonishing in this year of grace 1972 that it should be necessary to make such a declaration as is contained in the Clause when the British doctrine of parliamentary sovereignty is the political and legal concept at the very heart of our system of parliamentary democracy. It is an article of faith sustained by the sacrifices of the Civil War and the overthrow of two tyrannical Stuart Sovereigns, matured by centuries of commitment adhered to in the House of Commons by generations

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  of our predecessors. We, as the Members of Parliament sent here by our constituents, are its guardians and its trustees.
  The question which, I submit, arises in this debate on this new Clause is: is this Bill the requiem of the doctrine of parliamentary sovereignty? We ask—and it is our duty to ask at the very end of the Committee stage of the Bill—whether the Government accept that if this Bill becomes law our courts will still be free and able to accept the present doctrine of parliamentary sovereignty, whether our judges will still be entitled to regard it as their duty to give unquestioning obedience to the will of Parliament as expressed in an Act of Parliament and a later Act of Parliament which may amend or repeal an earlier Act. Will the judges, I ask, still be able to sustain the position that the latest expression of Parliament's will is in law supreme? Or will our judges be expected to apply the new principle of primacy of Community law which, speaking in one voice, as distinct from what they say in another, Ministers have so desperately sought to entrench in this Bill?
  They are irreconcilable conceptions, the sovereignty of Parliament and the primacy of Community law. Irreconcilable, too, are Ministers' statements in regard to them. On the one hand, on more than one occasion the Chancellor of the Duchy of Lancaster has sought to assure us that, of course, nothing in this Bill abridges the ultimate sovereignty of Parliament. That is the very language we have embodied in the new Clause, and presumably the right hon. and learned Gentleman, in that voice, will be ready to accept it.
  The Government's White Paper of 1971 said:
  "There is no question of any erosion of national sovereignty."
  If they believe that, then, presumably, the Government will support the new Clause. If they do, we shall be reassured. It will be taken as a mark of their good faith, and some indication that they mean what, in that voice, they have said. It will put the position beyond doubt. We think it right, as lawyers say, ex abundante cautela, for the purpose of establishing it as a matter beyond doubt, and for the avoidance of doubt, that it
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  should be stated expressly in this Bill. It will be a kind of constitutional fail-safe provision if that is done.
  It is necessary to do it for three reasons: first, because of the contradictory ministerial statements on this fundamental matter, which have left it in a state of uncertainty; second, because the European Court decisions have rejected the conception of parliamentary sovereignty in the field of Community law; third, because if the Bill becomes law as it stands it will leave the law of this land in a state of uncertainty as to which of the irreconcilable conceptions which I have mentioned our courts will be expected to apply.
  The right hon. and learned Gentleman the Chancellor of the Duchy of Lancaster has told us that there is no need to worry about the future; we can easily undo what we have so painfully done. He has not put it quite like that, but that is the effect. With great respect to the right hon. and learned Gentleman, I prefer the authority of the Master of the Rolls, Lord Denning, whose name is to be conjured with in this honourable House. He considered this matter in June of last year in the case of Blackburn v. Attorney-General. The Master of the Rolls said:
  "It does appear that if this country should go into the Common Market and sign the Treaty of Rome, it means that we will have taken a step which is irreversible. The sovereignty of these islands will thenceforward be limited. It will not be ours alone but will be shared with others."
  The Master of the Rolls returned to this point later in the judgment—and I make no apology for citing the judgment in the Court of Appeal at a little length—when he said:
  "We have all been brought up to believe that, in legal theory, one Parliament cannot bind another and that no Act is irreversible."
  That is the line that has been taken by some Ministers:
  "But legal theory does not always march alongside political reality. Take the Statute of Westminster 1931, which takes away the power of Parliament to legislate for the Dominions. Can anyone imagine that Parliament could or would reverse that Statute? Take the Acts which have granted independence to Dominions and territories overseas. Can anyone imagine that Parliament could or would reverse those laws and take away their independence? Most clearly not. Freedom once given cannot be taken away. Legal theory must give way to practical politics."

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  The Master of the Rolls then cited Lord Sankey in a 1935 case:
  "…the Imperial Parliament could, as a matter of abstract law, repeal or disregard section 4 of the Statute of Westminster. But that is theory and has no relation to realities."
  Lord Denning went on to say:
  "What are the realities here? If Her Majesty's Ministers sign this treaty and Parliament enacts provisions to implement it, I do not envisage that Parliament would afterwards go back on it and try to withdraw from it. But, if Parliament should do so, then I say we will consider that event when it happens. We will then say whether Parliament can lawfully do it or not."
  Lord Denning cited an article by Professor H. W. R. Wade, which said:
  "sovereignty is a political fact for which no purely legal authority can be constituted…".
  The Master of the Rolls concluded:
  "That is true. We must wait to see what happens before we pronounce on sovereignty in the Common Market."
  That is the state of total uncertainty about the matter. That is the alarming conclusion to which one comes from that statement of the Master of the Rolls. In his view, Parliament is embarked upon irreversible action, not something that can be changed overnight, and that is the grim significance of our debate today and of our discussions throughout the passage of the European Communities Bill.
  It therefore seems that if in due course a judicial decision comes to be made by the courts on an Act of Parliament which purports, for instance, to repeal the Bill after it has become an Act, unless we do something about it in the Bill the matter will be left in a state of total uncertainty. The terms of the Bill are, therefore, crucial, and in our view, which I suspect will be shared on both sides of the Committee, inclusion of the new Clause will be clear guidance to our courts that, whatever future course political events may take, our judges will still be able to say if the matter is put to the test in court that the latest expression of Parliament's will is in law supreme. In that sense, fiat justitia, ruat coelum. If the new Clause is passed, the judges will know where they stand; so will Parliament; so will the people of this country.
  The new Clause is also necessary because the Community treaties give little indication of the Community's actual legal nature. The Luxembourg Court has filled
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  in and supplied the details. The court's case law has expressed it. There is an interesting article on this theme by Mr. David Hall, a solicitor, who was until recently a member of the Commission's legal service, in a Community hand-out, "European Community, No. 6" of June, 1972. He expressed it in this way:
  "It is the case law which, for instance, confirms that the Community legal order has priority over national law with which it conflicts—even over subsequent national legislation."
  There is no doubt how the European Court regards the matter. It takes the view that Community regulations must be uniformly applied, and may not be modified or capable of modification by member States. Several cases have been cited in Committee to illustrate this matter. I have come across another one, which, so far as I recollect, has not yet been mentioned. It is on the somewhat unedifying subject of turkey tails, which in my part of the country used irreverently to be called parsons' noses. It is the case of Hauptzollamt Hamburg-Oberelbe v. Firma Paul C. Bollman.
  By Regulation 22 the Community had imposed a common customs tariff on certain goods. Mr. Bollman was a German importer of turkey tails from the United States. Regulation 22 did not, however, contain sufficient elucidation whether turkey tails were to be regarded as "backs", "edible offal" or "other parts of domestic poultry". Each classification allowed a different levy to be imposed.
  Mr. Bollman claimed that the turkey tails were "edible offal" but the German Government and the European Commission claimed that they were "backs". The German Government also considered that they had a national power of interpretation because the Community regulations were not clear.
  The European Court clearly indicated that the German Government did not have any power at all to deal with this matter:
  "Regulation 22 is directly applicable in all the member States. In the absence of provisions to the contrary, the member States are prohibited from adopting measures for the implementation of the regulation intended to modify its scope or add to its provisions…they no longer have the power to make legislative provisions in this field."
  The member States were not empowered by Regulation 22 and their

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  national authorities were therefore unable—
  "to make binding rules of interpretation for the application of these definitions."
  The court finally decided that edible offal should be interpreted to include "turkey tails".
  As I have said, this is not a very exciting or important illustration, but it is the way of the law that great principles are often decided upon trivial issues of fact and on cases of no great importance. It would clearly seem from that decision that the power of the Community regulation is indeed very sweeping, and, according to the European Court in the Bollman case, the Community regulation would override any present, or, what is perhaps more significant and important, any future national legislation which was in conflict with it.
  This, then, is the state of the matter. Our own courts are left in a state where they may not find it right, least of all necessary, to apply the doctrine of parliamentary sovereignty.
  One of our most eminent judges has expressed the view which I have adopted on this matter. In my submission, it is absolutely imperative that there should now go out as the clearest possible statement of the constitutional position that nothing in the treaties or in this Act shall detract from the ultimate sovereignty or supremacy of this Parliament. If this is rejected by the Government, it will put in doubt the whole of their good faith in this matter. If it is accepted it will at least be some comfort.
  4.0 p.m.
  Mr. Michael English: I support my right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) in his request for certainty, and indeed that is all the Clause asks for. The situation that will face a judge if a subsequent Parliament attempts to repeal this legislation will be quite intolerable. The judge will be told in this legislation that he is to interpret Community law and is to regard it as superior to English law—or, for that matter, Scots or Northern Irish law. Yet it will be possible for a Parliament to wish to repeal this legislation. It will be possible for the simple reason that the legislation will have been passed without
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  the consent of the people of this country. Therefore, since it is quite likely at some future date that a future Government might wish to repeal it, this is a possibility we must consider.
  It may be that the supporters of this Measure believe that eventually the people of Britain will settle down as happy members of a prosperous European Community. In that case the matter will never arise. But it is possible, to put it no higher, that the alternative may occur. The people of this country may object to being taxed and to having laws passed for them by a private body which is not elected by anybody. Unless those institutions are altered, they may wish to repeal this legislation.
  The situation of a judge in such circumstances would be intolerable unless this Clause were incorporated in the Bill. The judge will be told that Community law is superior to British law. He has then to say to himself that it is clear that under Community law the Treaty of Rome and its attendant treaties are well nigh irrevocable. They are not strictly irrevocable. They could be revoked, but only by the unanimous consent of all the 10 parties to the treaty. That unanimous consent is unlikely to be given. Barring that unlikely situation, the treaties are irrevocable. They have no term, no time limit and, by the ordinary rules of international law, cannot be revoked except in the circumstance which I mentioned.
  It is clear from the decisions of the Court of the European Community that Community law is to be regarded as superior to the law of the subordinate States of the Communities. It is also clear that no one of those States can unilaterally revoke its adherence to the Communities once it is given. Yet what will be the situation facing a judge in this situation? He will be told that the repealing legislation has been enacted by the direct will of the people since it is they who elected the Government which produced the legislation, that both Houses of Parliament have passed the Bill, that it has received the Royal Assent and has become an Act. The ancient traditions of English law say that that is superior to anything.
  In those circumstances a judge will be in exactly the situation of the judiciary

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  in the reign of Henry VIII. The argument was then not whether people were Catholics or Protestants, but it was about the Act of Supremacy. It was about the simple issue of whether any other system of law should prevail in England than the English system of law.
  Henry VIII had no objection to people believing in the doctrines of the Catholic Church on matters that one may describe as purely religious. He did not object to people going into Catholic churches and adhering to their religion by the ceremonials appropriate to that church. That was not the issue. Indeed, he did that himself. The simple issue was whether there was another system of law superior to English law also operating in England which was allied with another legislature, the Papacy, and with another court, the Court of the Papacy.
  In that case, although for centuries there had been two systems of law operating in this country. Parliament decided unilaterally that one of them should cease to be obeyed in this country. The decision has always been held to be correct in English law. It is equally clear that at the time it was quite improper and illegal in canon law. It was a decision that was ultimately imposed by force and, in the minds of many highly rational and sensitive men, it was difficult for them to reconcile with their consciences.
  The most notable example has a great connection with Westminster Hall and relates to the case of Sir Thomas More, or St. Thomas More as he now is to the Catholic Church. He was tried, and in due course executed, simply for facing that difficulty. He felt that he could not in his conscience say that he would pay allegiance to a king and a legislature as supreme when he had been brought up to believe, and had operated as Lord Chancellor of England in the belief, that that was not the situation. Eventually it became the law not by strictly legal means but by force, and the head of Thomas More fell as a result.
  Mr. J. Selwyn Gummer: Is the hon. Gentleman suggesting that Sir Thomas More was a martyr to his belief in the supremacy of canon law in England rather than to his belief that the faith of the Roman Catholic Church was
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  correct and that what he was required to subscribe to was incorrect? If he is suggesting that, he is producing an historical theory unknown to any specialist in this subject.
  Mr. English: The hon. Gentleman will realise that he is making a distinction without a difference. Sir Thomas More was presented with two alternative sets of beliefs. If taken as a set of religious beliefs, they also incorporated a complete legal system which is operaable in every State throughout Christendom. Those who accepted the beliefs of the Catholic Church had to accept that. Alternatively, one could take the view which was prevalent earlier in the Middle Ages, that the Papacy was of less importance than the Church as a whole in some abstract sense.
  However, I do not think we need get too involved in the intricacies of mediaeval theology. We may put our judges not in a theologically difficult situation but in a situation of rather difficult law. They will eventually be brought up in the systems of Community Law, two separate situations will apply and they will be left to make the decision. I suggest, therefore, that with this Clause my right hon. and learned Friend is putting certainty into the Bill where at the moment there is a simple gap.
  If the Government did not wish to accept the Clause the alternative would be to say that in future this Parliament was limiting itself, and to say so in explicit terms. But surely this Parliament should decide specifically on that issue. I should prefer to add "the people" as well, but apparently they are not to be allowed to have their say. In any event, we should not produce a Statute which omits one essential fact, which is what is to happen if a subsequent Parliament wishes to repeal or—it may be—even only to amend it. Are we really to leave that to the discretion of a few individual judges appointed and deliberately given a position of independence because they are not supposed to be representatives of the country in the way that the Legislature is? It is not a decision which should be left vaguely open to them. It should be made here and now by the House of Commons.
  Mr. J. Enoch Powell: In my view, the hon. Mem-

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  ber for Nottingham, West (Mr. English) has correctly reminded the Committee that the principle of the supremacy of Parliament goes back even further in our history, and has claimed even more sacrifices, than the revolutions and conflicts of the seventeenth and later centuries.
  I shall support the Second Reading of the Clause because I believe that the intentions behind it and the assertion which it means to embody are vital and ought to be upheld. Yet the Clause carries within it a fatal paradox, though that paradox in turn proves how wrong and unjustified is the action of the House of Commons in passing the Bill before us—assuming that it does so.
  There is an omission in the drafting of the Clause. It does not say whether it is to apply to itself. It does not include the words "including this part of the Act" or the words "excluding this part of the Act." It is of the very nature of parliamentary supremacy that either of those provisions—whichever way the right hon. and learned Member for West Ham, South (Sir Elwyn Jones) had attempted to draft the Clause—would ultimately be futile. The assertion of the supremacy of Parliament is the assertion that any Act of Parliament, small or great, or any part of any Act, including this part, is at the mercy of the decision of a subsequent Parliament so long as Parliament remains supreme.
  In this respect we differ from nations which have written constitutions. If we were debating this matter within the terms of a written constitution, we could frame a Clause as a part of the constitution and entrench it so that special procedures had to be gone through and special safeguards observed if ever in future it was to be altered or abrogated. That would be the position in the United States. Congress is not supreme in the sense in which Parliament is supreme. Congress is subordinate to the constitution of the United States, the constitution is not subordinate to Congress. In this country the living reality is Parliament itself. In a sense, our constitution is an abstraction: it is what is said about, and what attempts to describe, the living reality of Parliament.
  However, the existence of this contradiction at the heart of the Clause reveals its significance in a political sense. In this country the guarantee of the
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  supremacy of Parliament and of our legislative independence as a nation does not lie in words on paper. It does not lie in vellum and parchments. It lies in a political will and the continued exercise of that will, the political will of those of whom the House of Commons is the expression. The people themselves, their political will and their determination to exert it, are the ultimate guarantee, and the only ultimate guarantee, of the sovereignty of this House and of the legislative and political independence of the nation.
  That fact, which I do not believe can be contested, is the reason why to pass this Bill lies outside that unwritten contract which all Members of this House have with those who sent them here. We have not been charged by that political will, on which alone rests the independence and sovereignty of Parliament and of this country, with the duty or the permission to share it or to abrogate it.
  4.15 p.m.
  The longer we have debated these proposals, the clearer that has become. Even here, no one in the Committee can say that as the House of Commons over these many sittings has learned to know the European Communities Bill better, it has come to like it better. There has been no gradual reconcilement on the part of Members of this House to what is here being done. Indeed, though this must be subjective, I venture to assert the contrary. As we have had an opportunity, however limited, to familiarise ourselves with the implications and the consequences of what the Bill makes possible, the reluctance with which a narrowly divided Committee is doing what it is doing has become more, not less, perceptible. The relief with which hon. Members think they are about to part with the Committee stage is not untinged with the feeling that it is a business in which on either side of the Committee and on either side of the debate they are sad to have imbrued their hands.
  Hon. Members: Nonsense.
  Mr. Powell: In their own consciences my hon. Friends must speak for themselves. But if it be open to dispute what these digital majorities betoken—under all the influences of power and patronage, which we well know operate in this

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  House, and amid all the cross-currents which we understand and are familiar with—whatever be the judgment of the atmosphere here, there can be no doubt about the sense out of doors. The most determined attempts which have been made month after month by all forms of persuasion to shake the political disinclination of the great body of the people towards what is being done by this Bill have proved unsuccessful.
  Whether it has been presented on the one hand as a fait accompli, as something which is over and done, something which is all over bar the shouting, which people must make shift to get used to, or whether it has been presented in the most glowing colours as new opportunity, as accretion of sovereignty or power, the great mass of the people, whose sovereign expression in this House is at stake, have remained unmoved. The only practical effect of this long Committee stage has been to expose to those outside even more clearly what is at stake. Their reaction to that clearer understanding, to which perhaps our debates have contributed, is such that it is a usurpation for a House of Commons, well knowing the state of opinion in the country, to seek by the Bill to surrender or diminish the sovereignty of Parliament, and the ultimate authority of our courts, including the High Court of Parliament over the subject in all matters and causes.
  That act of usurpation could hardly have been attempted at a more unfortunate time; for this is a time when the rule of law—the acceptance by the country of law made in this House—is being questioned as perhaps it has not been questioned for decades, if not generations, past. There is an Act on the Statute Book of the last Session, the Industrial Relations Act. Whatever our differing opinions of that Act may be, I say without fear of contradiction that if it does not prove acceptable, credible and tolerable to those in their hundreds of thousands, their millions, who are to be bound by it, it cannot in the long run remain upon the Statute Book. I say that as one who, apart from certain aspects of the Act, hopes that its provisions will prove to be acceptable, intelligible and workable; but that does not alter what I think is an axiom, that the validity of what we
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  do here depends in the last resort on the political will and consent of the people. If that is not forthcoming, if it is denied or withdrawn, then we cannot protest: "But it is an Act; we have passed it." If the people do not share our view, they have the right, and they must have the power—through our successors or through us—to dispose otherwise.
  If that be true, as I think it must be, of a relatively subordinate piece of legislation—though I do not underestimate its importance—how much more must it be true of a Bill like this, which is the sole parliamentary expression of a deliberate and, in intention, permanent cession and abridging of the sovereignty of Parliament and the independence of the country? Over that matter the ultimate decision lies, and must lie, with the people at large.
  So the question arises, since that is the reality, the true and the sole entrenched protection of our independence and sovereignty: can they and will they?
  All belief in democracy, above all in parliamentary democracy, is an act of faith, as the maintenance of all free institutions is an act of faith. It depends on the faith that the political will of the people is capable of self-expression and of impressing itself upon those free institutions and ultimately moulding them to its will. If that be not so, then democracy and Parliament and all their theory are empty husks. So it is a question of faith whether the people will defend, are determined to defend, have the desire and purpose to defend, or, if it is lost, to restore and regain, the supremacy of Parliament and the political independence of this country.
  What is certain is that if they will, they can. We know already that when this Parliament has run its course, one of the two great parties in the state will be continuing in the face of the electorate, and indeed of Europe and the world, the same opposition, and on the same grounds, to this proposal and to this legislation. Yet it is in a deeper sense than this that the electorate, the people of this country, will still have, if they care to exert it, the choice and the power. On a question such as this, public opinion exerts itself not through the exclusive channel of a single political party—it exercises its effect upon all parties. If that will, to

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  which I have referred, is present over the coming months, even though the Bill should be forced through, even though the treaty should be ratified, it will still lie with the opinion of the people—through their sovereign power over us here, through our duty to render an account to them—to regain if it has been lost, and to restore if it has been diminished, their sovereignty, of which we are only the explicit expression.
  When I vote for the Clause I shall be giving my personal vote for the maintenance of that sovereignty and independence. I do so recognising that the question will be decided not in the Lobby when we come to vote, not even by the House of Commons at all. It is a question which will be decided by the people.
  Mr. Russell Johnston: The right hon. Member for Wolverhampton, South-West (Mr. Powell) has a great capacity for speaking with power and logic. However, the logic leads to the wrong apocalyptic conclusions in the end.
  I shall start by quoting twice, once from the right hon. and learned Member for West Ham, South (Sir Elwyn Jones) and once from the right hon. Member for Wolverhampton, South-West. The difficulty is that many of the things which they said are fundamentally and basically true, but many of the conclusions which they drew from their axiomatics were wrong.
  First, the right hon. and learned Gentleman said that legal theory does not always march beside political theory. That is well reflected in the new Clause. Secondly, the right hon. Gentleman said that our sovereignty—I paraphrase him slightly—does not ultimately rest upon vellum or parchment but political will. That is true as well. The new Clause is not talking about terms; it is talking about principles. There is no question about that. I will return to that matter. If the official Opposition from the Labour Party is "Not on Tory terms", I should point out that this is not about Tory terms; this is about the principles of the institutions and whether one accepts the idea or not.
  4.30 p.m.
  What is meant by the "ultimate sovereignty" of Parliament? The right hon. Member for Wolverhampton, South-
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  West said that the ultimate sovereignty of Parliament rests upon the will, the consent, of the people. That we accept. The problem always is: how do we arrive at such consent? That is a perennial problem.
  When we here talk about the sovereignty of Parliament, we are presumably talking not about the sovereignty of the Front Benches, but about that of the back benches—the sovereignty of the capacity of the individual back bench Member of Parliament to influence the executive. After all, the executive is the replacement of the various kings who were quoted earlier in historical references. The executive now is the Treasury Bench. It has the power.
  The new Clause presumably means what is says, and it says,
  "nothing in the Treaties or in this Act shall detract from the ultimate sovereignty or supremacy of Parliament".
  We are talking about the ultimate sovereignty not of the Treasury Bench but of Parliament.
  What is the reality? The reality, which the right hon. Member for Wolverhampton, South-West was reaching over and to, is that, again to use his expression, both the great parties in this country believe in strong government. That is a fact. They believe in a strong executive. That is a fact as well.
  Mr. Michael Foot Mr. Michael Foot (Ebbw Vale) indicated dissent.
  Mr. Johnston: The hon. Member for Ebbw Vale (Mr. Michael Foot), who, after all, is poacher turned gamekeeper, may interrupt on that point, but it is a fact. It will not detract from what I am saying.
  If I talk about electoral reform to a Conservative or a Socialist, he will decry it. Why? He will not decry the argument simply because there might be a notional increase in Liberal support. He will say, "If you have a change in the electoral system it may lead to a more fluid situation. It may lead to that most dreadful of things, coalitions. It will result in a flexible situation." A flexible situation in a democracy means less power for the Executive. That is why the two great parties are opposed to any such change.
  Mr. Foot: What I was dissenting from in the hon. Gentleman's argument was that I believe that one of the major matters about which we have been arguing in these debates is whether we shall yield a whole series of powers from the legislature to the executive and to executives outside this country. That has been a major matter of dispute. In that dispute the Labour Party has been defending the rights of the legislature while the Liberal Party has been consorting and colluding with the Government in surrendering powers to the Executive.
  Mr. Johnston: I will not go into the question of consorting with the Chancellor of the Duchy at the moment. I will return to this point in a few minutes. This is certainly a profound argument and I want to deal with it.
  If all the sound and fury which at the moment is being directed theoretically, despite what the hon. Gentleman has just said, on behalf of the back bencher against the Front Benches and against these notionally oppressive Community institutions, were directed rather at examining our own systems of arriving at decisions, I should respect those objections much more.
  How does a back bench Member of Parliament affect the executive? How does he influence it? Everybody agrees that he can be a very good long-stop social worker, but his problem—
  Mr. Eric Deakins: Untrained social worker.
  Mr. Johnston: I accept that. The point is that his capacity to influence the policy of the executive is very limited in the House of Commons. [Hon. Members: "Oh."] I repeat, it is very limited in the House of Commons. There is no use balking that fact. I willingly concede that it will be even more difficult when we enter the Common Market. However, we should direct ourminds to looking at ways in which we can improve this participation and influence rather than at knocking down notional bogies.
  When I asked the Chancellor of the Duchy at Question Time on Monday whether it should be possible or desirable for Members of Parliament to go to Brussels frequently to talk to the Commission, he got up and, with a bland smile, urbanely said:
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  "I am all in favour of hon. and right hon. Members…going to Brussels as frequently as possible."—[Official Report, 3rd July, 1972; Vol. 840, c. 9.]
  That is fine and dandy. But Members of Parliament cannot afford to go regularly. Unless we do something practical to change that, they will not go. We should bear that in mind. There is the question of Select Committees and many other things.
  I want to move on to other arguments apart from a change in the electoral system. Whenever I hear people shouting about referenda for the Common Market, I am reminded of people—for example, the right hon. Member for Bristol, South-East(Mr. Benn)—whose sudden conversion to this idea has not been paralleled with any interest in general in electoral reform from what I can see. This does not impress me at all. Equally as important as electoral reform is how the ancient nations of Wales and Scotland should, could or may express their corporate will and protect their communal interests within an enlarged Community. We have heard nothing of this, even from the mover of the new Clause, the right hon. and learned Member for West Ham, South who is himself a Welshman. We heard nothing about effective decentralisation.
  I want to make four brief points. First, I will return to the intervention made by the hon. Member for Ebbw Vale. A new Clause which questions the whole concept of supranationalism questions the Community per se. [Interruption.] I repeat, any new Clause which questions the idea of supranationalism, as this does, questions the idea of the Community. Therefore, it is not logical for the Leader of the Opposition to go to Vienna and to say, "We are not against the idea; it is these incompetent, inefficient, dreadful Tory terms we are against". That attitude of mind is one thing and one can argue about it, but it is very different from the attitude of mind in the new Clause.
  Mr. Peter Shore: Whatever the hon. Gentleman may say about the attitude of the Opposition on this matter, I must remind him that the words in the new Clause are taken from the repeated affirmations of the Government. I very much doubt whether ultimate sovereignty will be unaffected by the proposition of

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  entry, but it does not lie with the Chancellor of the Duchy of Lancaster to say that, because he has assured the House in the White Paper and elsewhere, that that is precisely his belief. What does the hon. Gentleman say to that?
  Mr. Johnston: I say that if we enter the Community we are agreeing to share sovereignty and that changes its nature. Whether it increases or decreases our degree of influence is another argument, but its nature undoubtedly changes.
  The old well-worn argument which presumably will be used by the Government against the new Clause is that of the veto in the Luxembourg Agreement.
  Mr. English: There is not one.
  Mr. Johnston: There is not one. All right. Nevertheless, at the end of the day we come back to the political realities about which the right hon. Member for Wolverhampton, South-West and, indeed, the right hon. and learned Member for West Ham, South spoke. The political realities are that if a situation arose in which something was totally unacceptable in this country, it would be rejected.
  That is the political reality, but if one goes into the Community arguing, as the new Clause does, that national institutions must in all circumstances have preference and triumph over supranational institutions, that is contrary to the European idea. If someone does that, he should not have applied to go in in the first place.
  Mr. Raymond Gower: Will the hon. Gentleman go further and agree that anybody who supported any of the applications made by this country did so in the obvious knowledge that there must be some sacrifice of the ultimate sovereignty of this House?
  Mr. Johnston:The Chancellor of the Duchy of Lancaster—
  Mr. Donald Stewart: I apologise for interrupting the hon. Gentleman so soon after he has given way, but he said that anything that would not be accepted would simply be rejected. How far did Scotland get in this Parliament with any of the breaches of the Treaty of Union against which she protested? The hon. Gentleman knows that none of the breaches was ever repaired.
  Mr. Johnston: The answer to the first question is that neither I nor the Chancellor of the Duchy of Lancaster would regard entry into Europe as a sacrifice, but rather as an accretion. The answer to the second question is contained in the speech of the right hon. Member for Wolverhampton, South-West. We are talking about political reality, and if feeling in Scotland had supported what was written on the vellum of the Treaty of Union then something would have been done about it.
  The third point is about sovereignty, and this again bears on what was said by the hon. Member for Ebbw Vale. It is all very well talking about de jure power. There is also de facto power, and both major protagonists recognised this essentially in what they said. Let us consider, for example, three countries—Finland, Rhodesia and Mexico. All those countries, de jure, have sovereignty. What is the sovereignty of Finland? How is it influenced by Russia? What is the sovereignty of Rhodesia? How is it influenced by South Africa? What is the sovereignty of Mexico? How is it influenced by the United States of America? We must take cognisance of the fact that whatever one may have written on this piece of vellum—and it is a good expression used by the right hon. Member for Wolverhampton, South-West—external influences are affected by the power which surrounds them.
  If we do not enter the EEC, oddly and paradoxically enough we shall be engaged upon a de facto limitation of our sovereignty—I say that quite consciously—because we should find ourselves wedged between Europe and the United States of America.
  Mr. George Cunningham: Power has nothing to do with sovereignty.
  Mr. Johnston: That is the hon. Gentleman's view, but my view is that power has everything to do with sovereignty. Power is what sovereignty is about. There is no point in claiming theoretical sovereignty unless one has power to ensure that it is exercised.
  Mr. Cunningham: If the hon. Gentleman goes on talking nonsense, he must expect to be interrupted. Of course power and sovereignty belong together, but there is a conceptual distinction. The new

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  Clause is about legalities and sovereignty, not about power, and it is important to maintain that distinction.
  Mr. Johnston:It is all very well for the hon. Gentleman, who started in a clear and didactical way to suggest that I was talking nonsense, to conceptualise distinctions; one can always do that. But the basic answer is that if we do not enter the EEC, in the end we shall engage in a reduction of our sovereignty.
  [Miss HARVIE ANDERSON in the Chair]
  4.45 p.m.
  I said that the right hon. Member for Wolverhampton, South-West, for all the pertinence of many of the things that he says and the framework of logic which he builds around them, is arguing an apocalyptical view of life, that it is a choice between his way and the other way which leads almost immediately to Armageddon. I sometimes wonder why there is all this worry anyway because, on balance, I should have thought that the chance of out-and-out conflict between members within the Community was minimal. We depend very much upon each other. During the years that the Community has been in existence there have been arguments—there always will be—but there is no point in entering the Community if one goes in thinking that one will get one's own way all the time.
  Mr. Michael Foot: Pompidou's way.
  Mr. Johnston: Pompidou may be a bright star on the political horizon now, but in 15 years it may be somebody else. It may be a latter-day British Premier.
  Mr. Michael Foot: Whether Pompidou stays or not, he has said that the only terms upon which we can enter the Common Market are that we agree that there shall be a monetary union, with control over our exchange rates, and even if Pompidou goes that provision will stay.
  Mr. Johnston: With respect, that is yet another example of a situation that has arisen, recently, in this case about exchange rates. This question will be discussed heatedly for three, four or perhaps six months. If someone bases his attitude and outlook upon a whole policy
  576
  which is to stretch forward for 15, 20 or 30 years on such an issue, in my view that is a most unwise way for him to proceed.
  If we are becoming paranoiac about sovereignty, going into the Community is not a good venture to embark upon, but if we approach this as a joint venture for mutual benefit then it will be constructive and to our advantage. The right hon. Member for Wolverhampton, South-West is right in saying that the political will of a nation affects what it can do. I believe that our political will in Europe must be to work for co-operation and not to work for some kind of Little Englanderism.
  Mr. Selwyn Gummer: Already in this debate we have heard three kinds of arguments for adding this particular and specific restriction to the Bill.
  I suggest that the Committee should address itself to the argument of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who used a mystical argument. He suggested that there was a will of the people, and that the interpretation of that political will allowed him to believe that on this issue, it being so great an issue, the House of Commons has no right to restrict or to share its sovereignty. I believe that my right hon. Friend was asking us not just to accept the concept of a will but to concept his interpretation of it.
  That is an argument which my right hon. Friend has previously invited the House, and people outside it, to accept. When he has done it in other areas of policy, members of the Opposition have attacked him violently and have said that he has no right to abrogate to himself the ability to discern and to articulate the will of the people of Britain. They are right to attack him on that ground, and we are also right to disagree with him on the same basis. My right hon. Friend claims that he, and he alone, can feel what the people of Britain think on these basic issues—[Interruption.] Perhaps Labour Members will allow the discussion to proceed.
  It will be seen that the danger of the argument based on the will of the people is that the interpretation of that will is the key factor. We can all say that the people want this or that the people want that, but we in this country have a method

  577
  of determining the will of the people—[Hon. Members: "Hear, hear."]—and it is called democracy. It is done by the election of a Government, and the decision of the people has been to elect a Government and a Parliament which decided in this House by an overwhelming majority that they supported our entry into the European Economic Community.
  The fact is that if people believe in parliamentary sovereignty—those who have tabled the Clause do so believe—it is curious for them to howl when it is suggested that the first element in parliamentary sovereignty is that Parliament may make up its mind. That is what we are proceeding to do now. As we are making up our mind, it is right, first of all, to refuse to accept that kind of dangerous, mystical argument.
  But then we are presented with the historical argument. I am sorry that the hon. Member for Nottingham, West (Mr. English) is not here at the moment, because I believe that in seeking to lam Sir Thomas More with having laid his head on the block in defence of the principle of the superiority of Roman canon law over English law he was, if historically inaccurate, trying to make a comparison which is most important. But what is important about this incident is that when Henry VIII said "The law of England shall be supreme" the law of England was supreme. But it was supreme not because he won the legal argument, not because he chopped off Anne Boleyn's head, but because he was powerful enough to make it supreme.
  Therefore, the lesson of history is not that there is some kind of comparative situation which can be imported into the present situation and from which we can learn detailed applications, but that sovereignty is, as the hon. Member for Inverness (Mr. Russell Johnston) pointed out, so closely connected with power as to be not usefully distinguishable; and that, much as one may say that we have sovereignty over this country, it is a question of limited sovereignty inside or outside the Common Market.
  It is here that we come to the practical argument—
  Mr. Raphael Tuck: The hon. Gentleman said that the people had
  578
  been consulted, but perhaps he can tell the Committee two things. First, have the people been consulted at all as to this great step which the Government are contemplating taking? Second, if they have been consulted, have they ever come to a decision on whether this Parliament can fetter its successors?
  Mr. Gummer: If the hon. Member had been present throughout the Committee debates he would realise that that argument has been thoroughly thrashed out, and that what we are now discussing is the question of parliamentary democracy. Parliamentary democracy involves the concept that the people's representatives in this House of Parliament shall decide, and that if the people dislike what their representatives have decided they shall kick them out on their ears, or on any other part of the anatomy which the hon. Gentleman likes to pick. At the next General Election the hon. Gentleman will see that the people of Britain will, if he is right, kick me out, or if I am right, they will kick him out.
  But it was on the practical argument that the hon. Gentleman interrupted me. The practical argument, he says, is that it may be well to say that the mystical argument is wrong and that the historical argument is inappropriate but, practically speaking, once we have passed this Bill we cannot change it. The argument is that this is a Bill so important that we really must treat it as being in a category wholly dissimilar from any category we have ever thought of before.
  First of all, there is a practical fact which we ought not to forget, and it was pointed out by my right hon. Friend the Member for Wolverhampton, South-West. He said that at the next General Election one great political party will say to the electorate "We do not accept this Bill. We will at best modify it fundamentally"; and if the members of that political party really want to lose that election by 200 seats they will say "We will remove it entirely."
  Mr. Nicholas Ridley: But perhaps my hon. Friend will agree that they are in fact saying that if elected they will wait a year, then hold a referendum, and then decide what they will do.
  Mr. Gummer: Whichever technique they decide to adopt, all techniques are based on the belief—the clear, unadulterated belief—that if members of that party wish they can amend, change, throw out or utterly dispense with this Measure. That is what they believe. They are totally of that opinion. If that is so, the most that can be said for the Clause is that it is not necessary.
  That, indeed, was the tenor of the speech of the right hon. and learned Member for West Ham, South (Sir Elwyn Jones). It was a moderate and reasonable speech, in which he said to the Government "You know, this is an extra help. There are some people who are worried about the precise interpretation"—but not, of course, the Labour Party. There may be a certain judge, but not the Labour Party. The hon. Member for Ebbw Vale (Mr. Michael Foot) is perfectly clear, and has said so repeatedly, that he has no intention of forgetting to fight when we have the Third Reading: he will fight, fight and fight again against the proposal. He believes that if he wins he will not win just a paper victory; that it will not be only on paper that he can withdraw the Bill, but that he can withdraw it in fact. We are therefore restricted in the number of people who are worried and concerned to members of the legal profession as interpreted and presented by the right hon. and learned Member for West Ham, South.
  But what was Lord Denning's argument? It was an argument not on legal fact but. as he distinguished, on legal fact in the context of political situation. He suggested that it is inconceivable that a Government having given freedom to countries which were once our own could then withdraw that freedom. It may be inconceivable to Lord Denning but hon. Members can think of a number of situations in which that action could be possible. Let us say, for example, that we had given total independence to Gibraltar, and the people of Gibraltar then said, "We do not want to be totally independent. We think that we are safer if you legislate for us." Does any right hon. or hon. Member believe that we could not then withdraw the Gibraltar Independence Bill and replace it by a Gibraltar Non-Independence Bill? That would be quite possible and it is a serious point—but extremely unlikely.
  5.0 p.m.
  If we come into the realms of likelihoods and unlikelihoods, if what the right hon. and learned Gentleman is saying is that it is unlikely that anyone would want to go to the trouble or, indeed, to the lack of trouble—whichever point at which it was done—of reversing the Bill, we are on a totally different argument. We are not then saying that it is impossible or that it might be impossible but that it might be very inconvenient. If that is the argument, that the special nature of the Bill is such that it is such a wide ranging Bill that it is the kind of Bill which is difficult to repeal, that is an argument which restricts the sovereignty of the House of Commons enormously because it says that the only sorts of Bills that the House of Commons ought to pass are Bills which are very easy to repeal, and that the more difficult a Bill is to repeat, the more unlikely it is that the House of Commons should be asked to pass it.
  Mr. Shore: That is silly.
  Mr. Gummer: The right hon. Gentleman says that that is silly. If it is silly, the right hon. Gentleman should never have proposed that the major argument against the Bill—I think that we all agreed about this at the end of our last discussion of this matter—is not that it is in essence irrepealable but that it would be extremely difficult to repeal. If one carries that argument to its logical conclusion we would never have agreed to the NATO treaty and we would never have joined NATO. Although that was a 20-year agreement, it was one under which, without Parliament agreeing, our forces could go to the aid of any member State attacked, without even an affirmative Resolution, no matter whether we agreed to that. That would be very difficult to reverse.
  It is here that we ought to look at sovereignty a little more closely. Why is it so difficult to reverse the NATO treaty? It is because this country has so much sovereignty that it cannot, on its own, defend itself. When we are arguing about sovereignty in this ancient House of Commons we are arguing about it in a unique situation because for about 30 years Britain alone has not been able to defend herself. If, therefore, we say that our sovereignty is the ultimate

  581
  sovereignty of Parliament, as the tanks roll in—as they would if it were not for alliance and the automatic nature of the NATO agreement—that is an ultimate sovereignty which is a misuse of the word "ultimate". It is at the very least a conditional, constrained and corralled sovereignty. We ought to decide whether by "sovereignty" we mean the high-flown mystical belief that the House of Commons can will and, having willed, do anything it wants to do. I believe that we all know that that sort of sovereignty has not existed since the days of the Empire.
  Mr. Powell: Ever.
  Mr. Gummer:Even if it has never been ours, sovereignty has always been in some senses not ultimate. If we are merely arguing that the House of Commons can agree to anything whether or not it can do it, we could do that whether or not we pass the Bill or whether we meet only on alternate Fridays. We could always pass anything if that was all it meant. But if by "sovereignty"' we mean that the House of Commons has the ability to do certain things it wishes to do and that no law or no outside authority can arbitrarily fetter it in what it can physically do, that sort of sovereignty is the kind about which we ought to be talking.
  Mr. Powell: I think that my hon. Friend is confusing sovereignty with omnipotence. Every country, sovereign or not, is limited in what it can do. But sovereignty is concerned with whether there is another human political authority which can, not by force but legally, override the resolutions of a national authority. This is what is meant by countries which aspire to be free. The emerging countries of Africa know that their power is limited in an infinite number of ways. But they are determined to be sovereign and they will defend their sovereignty.
  Mr. Gummer: My right hon. Friend makes that right distinction between omnipotence and sovereignty. But once one makes that distinction one brings in the element that if sovereignty is to mean anything, and the ability to carry out that which one sovereignly wills, one must agree that for all practical purposes no hon. Member of the House of Commons
  582
  actually believes that if after the next General Election a Government were elected who wanted us to get out of the Common Market and who passed that in the House of Commons we would not get out of the Common Market. It is just not true. Not only is it not true, but I should be prepared, as would right hon. and hon. Members who believe in our entry to the EEC, to take the names of those right hon. and hon. Members of the Opposition who will be prepared to go round the country saying "After the Bill is passed, fight it no longer because it is now impossible to reverse."
  Mr. George Cunningham: Will the hon. Member give way?
  Mr. Gummer: Perhaps the hon. Gentleman wishes to say that he will go round the country saying that.
  Mr. Cunningham:Will the hon. Gentleman imagine that the time is not after the next General Election but 30 years from now? Does he think that it is inconceivable that the courts in this country would hold that time had so worked that Parliament had lost, overtime, the right to take this country out of the Market? Does the hon. Gentleman regard it as totally inconceivable that a court would so hold?
  Mr. Gummer: Totally inconceivable.
  Turning to the effect of the Clause and the way in which it is worded, I suggest that there are two reasons, apart from it being unnecessary, why the House of Commons should refuse to accept it. The first is that it is not what it purports to be. It is not the innocent addition, the clarificatory phrase, the carefully worded protection which the right hon. and learned Member proposed it as. It uses a number of words which have begun to be used as cult words by those who wish us not to enter the EEC, and it does so with a very precise purpose. The right hon. Member for Stepney (Mr. Shore) has shown that purpose in many of his speeches to the House of Commons. But the purpose is to state at every possible opportunity that he and many others who think like him believe that Britain should continue in no way to change the nature of her sovereignty or the method of using it, whether by giving it away, sharing it. pooling it. adding to it or changing it. But the right

  583
  hon. Member for Stepney does not speak for his whole party.
  Mr. Shore: I thought that the hon. Gentleman would at least add to that interesting sentence "Until the British people have had a chance to decide the matter themselves once and for all."
  Mr. Gummer: The right hon. Gentleman has to say that, but that is not what he has said in his speeches in the country. It is certainly not what he said in his speeches before the last General Election. Nor is it what he would say if he really believed in the sovereignty of Parliament, because the sovereignty of this Parliament is unlike that of any other Parliament in the world, in that we can decide. Some other Parliaments believe in delegation and not in representation. That is a point of difference which is very much held by the right hon. Gentleman in his speeches.
  We must also consider whether this fairly represents the Opposition's view. In discussing the Clause it is essential to be clear about what right hon. and hon. Members opposite believed when they were discussing the background to the whole matter of our joining the Community. I am sure that it will not have escaped the Committee's attention that the joint statement about the future of Europe issued in 1969 by the then Prime Minister of the United Kingdom, now the Leader of the Opposition, and the Prime Minister of Italy, made it clear what the future was meant to be. They said:
  "…the development of a European identity is intended to lead to the creation of a united Europe…"
  Mr. Deakins: What does that mean?
  Mr. Gummer: It was written by the present Leader of the Opposition, so no doubt he will explain what it meant. The one thing that it cannot mean is that the United Kingdom will not share its sovereignty with any other country on any grounds. Those words can mean many things, but they cannot mean that. That was true of the whole range of statements made by right hon. and hon. Members that were in charge of the country's affairs.
  If that is true, it explains why right hon. and hon. Members who support this Clause, and, indeed, many of the other
  584
  changes which have been proposed to the Bill, were not in any way involved with the discussions for our entry into the Community. It would have been embarrassing if they had been.
  The last point is that the Clause is subject to enormous objection because of its wording—
  "It is hereby declared that nothing in the Treaties or in this Act shall detract from the ultimate sovereignty or supremacy of Parliament."
  I believe that in a very profound sense that would write down the whole nature of the Bill, diminish its whole concept, and diminish the concept of our entry into the Community.
  Before right hon. and hon. Members say that that is an embarrassing statement to make, let me make it clear that Governments of both major parties have stated their belief that our entry into the Community, far from detracting from our sovereignty, enhances that sovereignty and makes it more meaningful.
  It is for that reason that I believe that we should enter the Community. I believe that even to suggest in this unnecessary Clause that this is the possibility is wrong. Not only is it wrong, but it diminishes the greatest enterprise Britain has entered upon to a miserable legalistic, unacceptable, unadventurous activity.
  Mr. Douglas Jay: The hon. Member for Lewisham, West (Mr. Selwyn Gummer) said that, if the electorate does not like what Parliament does, it can throw out that Parliament and elect another to do something different. That is exactly the point of the Clause. It is for this very reason a crucial Clause, because it puts to the test the sincerity of those, who apparently include the hon. Gentleman, who say that there is no fundamental surrender of sovereignty in the Bill because Parliament could always in the last resort repeal the Bill itself.
  There has been a great deal of dispute about whether the act of joining the EEC is irreversible. The facts, in non-legal language, arising from all our debates are fairly simple. Because by the most valuable of all the principles of the British constitution any decision of a previous Parliament can be reversed by a new Parliament, by our constitution the decision is not irrevocable. But by the Treaty

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  of Rome and in the eyes of the EEC and the EEC court it is irreversible.
  5.15 p.m.
  That means two things. The first is that the Treaty of Rome and the British constitution are flatly incompatible. That is one of the best of all reasons, as if there were not many others, for not signing the Treaty of Rome and not passing the Bill. It means also—this is what the hon. Gentleman and others blithely ignore—that if Parliament repeals the Bill when enacted Britain would be in breach of the Treaty. That fact cannot be just brushed aside by those who say that there is no loss of sovereignty because all Parliament has to do is to repeal the Bill when enacted, which would be as easy as passing it.
  We should not sign a treaty which we have the intention of breaking at a later date. Despite that, those authorities are perfectly right who say that by our own constitution if the Bill is passed it can be repealed. My right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever), earlier in our debates, rested the whole of his case for the Bill and signing the Treaty on the ground that there was no loss of sovereignty because the Bill could always be repealed. This seemed to me to be a frivolous argument for a Member of this Parliament to advance who, after all, like all the rest of us, has been entrusted with all the powers and liberties of this Parliament for which former generations have fought so hard and so long.
  To argue that we lose no freedom and no sovereignty by handing over our independence to the EEC because we do so voluntarily and could always take them back again is rather like arguing that a man who serves a gaol sentence loses no liberty or independence because he voluntarily committed the crime and will no doubt be released one day in the future. This is not a serious argument.
  My right hon. Friend the Member for Cheetham and those who agree with him and who rest their whole case on the argument that nothing can deprive Parliament of the right to repeal the Bill when enacted can show their sincerity by supporting the Clause. If my right hon. Friend the Member for Cheetham took this constitutional issue rather more seriously, he would be here with us today
  586
  to speak in support of and to vote for the Clause.
  It is no good arguing, as the hon. Member for Lewisham, West argued, that there is no need for the Clause and that Parliament's right to repeal the Bill when enacted is beyond doubt. There is doubt and this issue is not beyond doubt. The question whether entry into the EEC is legally irrevocable has been debated up and down the country, from learned legal articles in The Times to many less learned articles and speeches in other and less learned publications, not to forget the Master of the Rolls, who is always in our thoughts at present.
  There are many other parts of the Bill—I will not enumerate them now—which have been included for the removal of doubt, though it could be argued that Clause 2(1) made those Clauses not strictly necessary. For the removal of doubt, therefore, on the most vital of all issues raised by the Bill, let all those who genuinely believe that there is no fundamental breach of parliamentary sovereignty accept the Clause. If they do not they are destroying their own argument and the inference in that case for those who sincerely believe in parliamentary Government would be perfectly plain—the Bill itself should be rejected.
  It is now more certain than ever, and here I agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell), that if the Bill is passed in its present form it will be repealed by some future Parliament. In spite of all the vast flow of propaganda we have had in weeks and months past, the opinion polls now show an even larger majority of people than ever before stubbornly opposed to entry on these outrageous terms. When they read the remarks of President Pompidou dictating what this country's future currency policy is to be, that majority will grow.
  A Government can no more mutilate our whole constitution in the teeth of the opposition of the majority of the electorate than it can enforce the law on industrial relations in the teeth of the dissent of the working population. One would have thought that the Prime Minister would have discovered by now that other people can be as obstinate as he is. Since, therefore, the electorate will decide this issue let us remove all doubt

  587
  about their right to do so. We would achieve that by inserting the crucial new Clause into the Bill.
  Mr. Michael Grylls: I hope we shall be able easily to follow on from the argument with my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) to show that the new Clause is unnecessary. We have seen once again as we have experienced continually throughout the Committee proceedings, the short-sighted and nationalistic approach of the Opposition to the prospect of wider European unity and co-operation. That is something that the Opposition can only laugh at, but statesmen throughout the world have striven for centuries to achieve it. It does not seem to me to be something to scorn.
  On this the last day of the Committee proceedings I make an appeal to the Opposition, and particularly to the Opposition Front Bench. Is it too much to ask them to raise their eyes a little from the simple, lush pastures of Ebbw Vale, Stepney and West Ham and to look at the wider world that we have an opportunity of gaining? It is both tragic and pathetic that when the whole of British industry and commerce is preparing to take up the challenge of going into Europe, all the Opposition can do is to fight the Bill in principle, as they have done throughout the Committee stage.
  Mr. Harry Ewing: What evidence does the hon. Member have that the whole of British industry is gearing itself to take up the challenge?
  Mr. Grylls: That intervention seems to indicate that the hon. Gentleman is not very knowledgeable about what is going on in British industry. One has only to be in contact with the greater part of British industry and commerce to know exactly that this is what it is doing.
  Mr. Eric Deakins: Tell that to the British Steel Corporation.
  Mr. Grylls: Industry is enthusiastically waiting for 1st January, 1973, but the sad thing is that in Britain today the only people who are still the King Canutes of the political world, the
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  Labour Party, are maintaining their dedicated opposition to our joining the Community. They alone are trying to turn their back on the movement towards European unity and a stronger Western Europe. They alone are turning their back on Europe for party political reasons.
  Dr. Kuipers, President of the Economic and Social Committee of the European Communities, said in London yesterday that the purpose of the Community
  "is simply to achieve by joint action more than we could have done alone; and to solve economic and social problems which in some cases we could hardly have attempted to tackle independently."
  Mr. Jay Mr. Jay rose—
  Mr. Grylls: I will give way in one moment. We have heard a lot of talk in recent speeches about sovereignty, and that is what the new Clause is about. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) quite correctly said that if Parliament has the political will to do something it can do it, so why are people worried about sovereignty? If the House has sovereignty, which I believe it has, surely it is our duty to do something that we believe is in the best interests of all our constituents and of the country as a whole.
  It has been clear from the debate, however, that the Opposition have not been attacking only the detail of the terms, but are continuing to attack the principle of British entry. If the new Clause is accepted it will be diametrically in opposition to the principle and method used to run the Community. When the fragile fabric of Labour's policy is stripped away it shows their root and branch opposition to joining the Community, and this applies particularly to the right hon. Member for Stepney (Mr. Shore).
  Mr. Jay: Is the hon. Gentleman intending to say anything about the new Clause when he has finished his Second Reading speech?
  Mr. Grylls: I am sorry that I gave way. I was conscious that I had forgotten to give way a few moments ago, but I thought the right hon. Gentleman had a constructive point to make. If he had

  589
  listened to what I was saying he would have realised that I was talking about sovereignty, and if he examines the Clause he will see that the subject is touched upon there also.
  The Labour Party knew perfectly well what they were about when they were in Government. We seem to have to remind the Opposition on almost every occasion what was in the 1967 White Paper. The whole tenor of the White Paper showed that the Labour Government knew perfectly well what they would have to accept. A speech made by a Labour Party spokesman a month before the last election put the matter very clearly. He said they were ready and committed to accepting the Treaty of Rome. That statement was made by the right hon. Member for Dundee, East (Mr. George Thomson)—[Interruption.]—The Opposition may laugh at that, but that is what a lot of people in this country thought would be the view of a Labour Government, if elected. It was just as well that the Labour Government were not elected, because the electorate would have been hoodwinked once again.
  There has been a clear majority in Parliament in favour of entry. Those hon. Members in favour firmly believe that the enlargement of the Community is in the interests of all our people, and that the political advantages are very strong. As has been accepted by almost every speaker who has opposed the Clause, we have the sovereignty to repeal the Bill if we want to and the provisions of the Clause are therefore not needed. The second half of the new Clause is unsuitable because it is destructive and would make it impossible for us to join the European Economic Community. I hope, therefore, that the Committee will reject it. It is destructive in its object. It is proof only that the Opposition are dedicated to carrying through their opposition in principle to entry into the EEC.
  5.30 p.m.
  Mr. Elystan Morgan: Those who move Amendments to the Bill are sometimes accused of attempting to wreck the whole concept of the Bill itself. But I do not think that anyone could level such a charge at this new Clause, for it would do no more than spell out in this most important of all
  590
  Measures a guarantee which has already been given by Ministers. It does no more than seek an assurance on a matter of crucial importance to the British nation as now constituted and for the generations yet to be born.
  The Clause deals with revocability. There is nothing in the Bill as it now stands about that matter. There is nothing either in the Treaty of Rome or in the treaties creating the European Coal and Steel Community and Euratom.
  There is so much at stake—great and priceless freedoms which have been won at considerable cost and sacrifice over the centuries. Already, in the context of the Bill, we have had many grim instances of unexpected perils. We have already found it to be a more tyrannical machine than was ever envisaged. Already, as regards a major part of the Bill, we have had the shock of finding that the House had lost a power which it had for all time hitherto managed to exercise in relation to every piece of legislation, namely, the power to make amendments to each and every part thereof.
  Mistakes may again be made by Ministers. In the near future, perhaps, the Government will discover that, unbeknown to them, the Bill cannot for some reason or other be repealed. If that unhappy day comes, I can think of no one more appropriate to make such an announcement to the House than the Solicitor-General, who will make it with all the conviction and all the holiness at his command.
  Even if Ministers are at present happy in their own minds that there is not the slightest danger in relation to that most important of all aspects of the Bill, we on this side can only recall that, within the last two years, the doctrine of ministerial omniscience has suffered some cruel buffetings. Ministers of the Crown have a duty towards the British people; they are their servants, not their masters. We are talking here about the right of future Parliaments. This Parliament has come to its decision, albeit by a slender majority, but if there be any doubt as to the right of future Parliaments, the matter should be so settled as to ensure absolutely that the interests of the British people are protected. That is what the Clause is about.

  591
  Even if the Clause were to be accepted and passed, one could only describe it, in the terms used by mediaeval lawyers, as a tabula in naufragio, a plank in a shipwreck, for whatever happens, if the Bill is passed in its present form, the right of Parliament to legislate for the life of the British nation—that is what sovereignty is about—will be infringed.
  This is what sovereignty is about. It is no narrow issue of nationalism, it is not about dreams of empire, not about the power to send a gunboat to any part of the world to exercise one's tyrranical will and dominion over other peoples. Sovereignty means that there is no barrier between the British Parliament and the British people, that nothing intervenes in that intimate relationship between Parliament and people, whether Britain be a powerful or a weak nation. That is the sovereignty about which we are talking. But whatever happens, whether the Clause is accepted or not, that sovereignty as we understand it will already have suffered its severest frustration in modern history.
  I say that for three reasons. First, if the Bill becomes law, Parliament may, technically, have the power to regain the sovereignty which it had before passing it; but, even if it has, it could exercise that power only at the expense of being liable to be sued for breach of contract by other European nations for a sum in damages probably totalling many tens of thousands of millions of £s. There can be no question about that. If the Clause were inserted in the Bill, it might well affect our liability on that count.
  Sir John Foster: The new Clause merely says, does it not, that the right of the United Kingdom through Parliament to breach its treaty obligations is hereby confirmed?
  Mr. Morgan: It is not a case of breaching obligations, as the hon. and learned Gentleman puts it. It is a case of withdrawing lawfully. It is a statement before we have entered the European Economic Community that we are entering on those terms. In short, we spell into the contract now in its formative stage something which will guarantee our own position if we wish to withdraw later.
  I am grateful to the hon. and learned Gentleman for drawing attention to that
  592
  point, for the very absence of such a Clause may well mean that we are wholly unprotected in relation to that very real peril. We may be sued—we shall undoubtedly be sued—if we withdraw unilaterally, for tens of thousands of millions of £s, a ransom which will lie for many generations upon the head of every man, woman and child in this country a tax which will effectively be upon every building, every items of property and every rood of land.
  The freedom which we exercise, having entered the European Economic Community, is the miserable and agonising freedom of bartering a massive surrender of sovereignty for a monumental insolvency in place of it.
  Second, I am sure that all hon. Members will agree that it is difficult at any one time for anyone to know just how much sovereignty we have, in fact, surrendered. It is inherent in membership of the EEC that its provisions have absolute paramountcy over our own institutions. That is true not only of specific Acts which have been passed but of constitutions as well. The Germans found to their cost earlier this year that even guaranteed human rights which were entrenched in their constitution were not inviolate from the effect of that principle. Indeed, in so far as they conflicted with the provisions of the EEC and its satellite bodies, they were ipso faco abbrogated by the pact of membership of the European Economic Community. What I put to the Committee is this: when we have a written constitution, we know what we are surrendering; when we do not have a written constitution, we do not know the exact limit and extent of our surrender. The same is true also with regard to the commercial and other aspects generally.
  We have been dealing with this Bill in Committee for 21 days. No one in the Committee can say with certainty how such treaties, directives, declarations, exchanges of letters and thousands of instruments which are already in existence and the shades of many more which will come into existence will affect some of the most important matters touching the lives of each and every citizen in this country. No one knows to what extent it will still be possible through industrial development certificates to channel the resources of our economy to the areas in greatest

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  need of them; whether regional employment premium will be payable; whether agricultural marketing boards can function as anything other than completely truncated and emasculated institutions; whether agricultural grants and subsidies can be paid. I could give dozens of other examples.
  The Government's attitude has been one of cynicism and complete lack of candour. They seem to feel that it is better for us to surmount the obstacles when we come to them. If anybody wishes—and this point was commented upon by the hon. Member for Inverness (Mr. Russell Johnston)—to destroy the Welsh economy and thereby bring about further disintegration of the national community of Wales, all he has to do is to do nothing. All he has to do is to disentitle Wales from the operation of bold and dynamic regional policies, which are a condition precedent to the welfare of the Welsh people.
  The third reason which I advance in this connection is that there is no certainty whatsoever in the Bill as drafted about what will happen in relation to Acts which are wholly or in part inconsistent with the Treaty of Rome or the other main treaties or any of the ancillary provisions. Has the classic parliamentary principle that where two Acts of Parliament are in conflict the provisions of the latter prevail been abandoned? Has it been destroyed by Clause 2(4), which reads:
  "…any such provision (of any such extent) as might be made by Act of Parliament, and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section.…"
  If that means that all future legislation will be bound by the provisions of this Bill which relate to what already exists by way of finding legal provisions in the EEC and those that will be created in future, what is to be the position of a judge in a British court? Will he say that he looks to the totality of the Act, considers its purpose and then looks at the particular provision as against the background of that, as British judges have interpreted statutes up to now; or is he to say that he will be bound by European law? If he is to be bound by European law, the question must be asked: is this the function
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  of a British judge? Is this within the terms of the oath which he took when he was created a judge under Section 2 of the Promissory Oaths Act, 1868, which every judge must take? Under that he swears loyalty to the Sovereign, not to any officer of the EEC.
  Mr. Alexander W. Lyon: My hon. Friend has read the terms of Clause 2(4), which says that Parliament is telling the judge that for this limited purpose only he should have regard to the rulings of the European institutions.
  5.45 p.m.
  Mr. Morgan: This is our case. The provision is not limited; it is open ended in so many respects. The judge will find himself applying European law as European law. We say that the oath which he has taken—"to do right by all manner of persons according to the laws and usages of this Realm"—is wholly inappropriate for the task he will be seeking to discharge.
  Two ways out have been suggested by Professor Wade in an article in The Times published on 18th April this year. One is to pass an annual Act as the first statute for each year, declaring that for the ensuing 12 months all other statutes will be completely bound by the provisions of the EEC and by what will then be the European Communities Act, 1973. The other alternative is to write into each and every piece of legislation the subservient nature of that legislation to the European system. If either of those things is done, it will bring home to the British people in a way not brought home to them up to now the absolute dominion of Europe over their lives and conditions.
  We were sent here by people who believed that we would act honestly, fairly and assiduously in the protection of their rights and privileges. Even after making every allowance for all our fallibilities and imperfections they still believed that we were in a position to discharge that solemn trust uninhibited, unhampered and unfettered by any outside body. The moment of truth is not very far away. Many people in Britain will soon realise that the measure of loss of rights, and the ability of Parliament to better their lives is very much greater than has been described up to now by the bitterest opponents of the Common Market.

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  The British people are losing to Europe, on account of the selfishness, irresponsibility and unwisdom of Ministers, rights, privileges and advantages which could never have been wrested from them in war. The House of Commons is facing the loss of rights and privileges which could never have been taken from it by a tyrant. When an arrogant Stuart monarch burst into the House of Commons on 4th January, 1642, and demanded of the Speaker of the House of Commons the surrender of five very gallant men. Speaker Lenthall turned to him and said:
  "I have neither eyes to see nor tongue to speak in this place but as this House of Commons shall direct me."
  After 1st January, 1973, the Chancellor of the Duchy of Lancaster and his colleagues will have neither eyes to see nor tongues to speak save directed to them by their masters on the other side of the Channel to whom they will have surrendered the fundamental interests of the British people.
  Sir Anthony Meyer: The hon. Gentleman the Member for Cardigan (Mr. Elystan Morgan) and many of his hon. Friends talk about the importance of Parliament in defending the freedom of the British people, and yet he and his hon. Friends keep saying that Parliament has no right to take a decision on behalf of the British people. Therefore, the quotation with which the hon. Member concluded his speech fell a little oddly. I am a great admirer of the talents of the hon. Gentleman the Member for Cardigan, but my admiration was not increased by the speech he made tonight. He started by saying that this new Clause is not intended to wreck the principle of the Bill but merely to support it with certain assurances. It will be my purpose to argue that this Clause would wreck the principle of the Bill and is so intended.
  In the latter part of his speech the hon. Gentleman talked a lot about the importance of defending and assuring the rights and liberties of our people. It seemed to me that that part of his speech, and the rest of his speech, was shot through with this negative, fearful attitude which is so prevalent on the other side of the Committee, and which
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  assumes that there is a body of liberties which must be defended lest they be eroded—[Hon. Members: "Hear, hear."]—but surely, this is the most timid, the most fearful, the most backward looking attitude to adopt. Surely our object should be to enlarge, to widen, to give deeper significance to these freedoms, and this can only be achieved in an expanding, dynamic economy.
  I do not want to deal at any great length with the legal issue of sovereignty. I thought that my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) dealt with this, in one of the best speeches I have heard during these debates. Of course, there is always room for argument on the legal aspect, and I listened with fascinated interest, as, I am sure, all hon. Members did, to the speech of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). I did not agree with anything that he had to say on the subject of sovereignty, but I did think he had a valid point when he talked about the need for law to be acceptable if law is to be obeyed. However, he was leaving out of account, it seemed to me—and here, I think in some respects I shall carry hon. Members opposite with me—the duty of Government to give a lead.
  Were I to quote as an instance of where, I believe, it was the duty of the Government to give a lead, against a background of public hostility, I would quote the Race Relations Act, manifestly a highly unpopular one, not, I think, supported by my right hon. Friend, but I believe most Members opposite would accept that the Government had a clear obligation to give a lead and to influence public opinion. Clearly, I am not going to carry hon. Gentlemen opposite with me when I say that in the matter of the Industrial Relations Act the Government likewise had a duty to give a lead, and to maintain that lead, however temporarily unpopular with hon. Members opposite it may be.
  To return to the new Clause, whatever one's views on sovereignty—and, as I have said, I think there is room for legitimate difference on the legal interpretation of sovereignty—this Clause must be superfluous. No Parliament can in fact legally bind its successor. What it can do, and what this Parliament may do in

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  the decision it is about to take, is to make it difficult for its immediate successor, more difficult for the successor after that, and very difficult indeed for later successors, to undo what it does, but this has absolutely nothing to do with legal concepts of sovereignty, or with one Parliament attempting to bind its successor. It has a great deal to do with the growth of interdependence of bonds which grow up in the political, economic and military spheres.
  This is where I think my hon. Friend the Member for Lewisham, West was so right to bring in NATO, because Britain's ability to defend herself alone—I do not think there is any room for argument on this—is now non-existent.
  Mr. Deakins: Tell that to the Queen.
  Sir A. Meyer: I do not suppose she would disagree.
  This is partly due to our membership of the North Atlantic Alliance, but it is due inflintely more to what has followed from our membership of the North Atlantic Alliance. It has very little to do with the North Atlantic Treaty being valid for only 20 years unless prolonged. It has a great deal to do with the fact that because we are members of the alliance we have so organised our defence that it is totally interdependent on the defence capacities and contributions of our NATO allies, and British policy has been conducted, since the formation of the North Atlantic Alliance, in the confident expectation that we shall have the support of our allies in the event of a war, and, therefore, we have not attempted to construct for ourselves a military machine which, alone, is capable of defending this island. It is capable of certain operations which may be necessary in various parts of the world, but it is not so designed as to ensure the defence of this island by our own capacities.
  In exactly the same way, what will follow upon the decision which we shall take to enter the European Economic Community is that our economy will evolve in the same kind of way our Armed Forces have evolved, so that it will be totally enmeshed with that of the European Economic Community countries. It is in this way that our sovereignty will be limited, but this has absolutely
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  nothing whatever to do with concepts of one Parliament binding its successor.
  The reason why I say that this Clause is not merely superfluous but highly objectionable has nothing to do with its stating something with which I disagree. It is impossible to disagree with what the Clause actually says; it is incontestable. I very strongly object to putting this Clause into the Bill because the effect of the Clause, and, without any doubt at all, the intention of those who are proposing the Clause, is to raise doubts in the minds of our future partners in the European Community of British good faith, to raise doubts as to the permanence of our intention, once the decision has been taken, and once the debates are concluded, to remain wholehearted contributors to the European Community.
  Mr. Denzil Davies: If the Clause raises doubts, the doubts were raised by the Chancellor of the Duchy of Lancaster. It is he who has used these words time and time again, and used them here.
  Sir A. Meyer: I am not sure whether that is just a debating point. I am trying to address my mind to a rather serious point.
  Such success as the European Community has had, and it has been a very considerable success, has been due in very large measure to the confidence factor. It has been due, rather surprisingly, to the very rigidity of the Treaty of Rome. It has been due to the fact that entrepreneurs in the Community countries have been able to feel certain that the obligations imposed on member Governments by the Treaty would be respected even if they were temporarily embarrassing or inconvenient for those member Governments. It has been due to the confident expectation that nothing could occur within the European Community similar to that which occurred within EFTA in October, 1964, when the Labour Government imposed the 15 per cent. surcharge on imports, including imports from EFTA countries, in contravention of the EFTA Convention. Such an act would not have been possible within the European Community. Because it was known by business men within the European Community that

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  there could be no such backsliding, they embarked on the programmes of expansion and the limited programme of cross-frontier integration which have been the major factors in economic growth within the Community.
  [Sir ALFRED BROUGHTON in the Chair.]
  6.0 p.m.
  That has not been a totally uninterrupted process. There has been the long period of French non-co-operation. The attitude of the French Government, from the moment of General de Gaulle's veto in 1963, has gravely prejudiced the chances of the Community achieving all it hoped to achieve. None the less, the survival and continued development of the Community in these circumstances is nothing short of a miracle.
  Persistent nationalist feelings and persistent distrust have been evidenced in most of the speeches we have heard from the Opposition benches this afternoon. That distrust is exemplified not by the Clause but by the proposal to insert it into the Bill. To insert the Clause would be like adding a new phrase at the end of the marriage service saying that nothing in the proceedings so far shall in any way limit the right of bride or bridegroom to go off on their own whenever they feel like it.
  Either we are embarking on a great new project of ever closer integration, or we are not. If we are, it is no good our going in saying that we reserve the right to come out whenever we feel like it. That right is there, it exists, but to put it into the Bill is to display from the outset our intention not to take seriously our obligations. It is part of the general refusal of the Labour Party to accept change and to move forward which has been so well exemplified in speech after speech.
  The right hon. Member for Stepney (Mr. Shore) and the hon. Member for Ebbw Vale (Mr. Michael Foot) are like the counsellors of King Canute, not like King Canute himself. Maybe King Canute did not accept advice, but King Harold did. The reason why the Leader of the Opposition is no longer a credible figure, either in this country or abroad, is that he has accepted a change of policy which goes far beyond
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  the denunciation of the Tory terms—a change of policy which is illustrated by the new Clause. I cannot see how any right hon. or hon. Gentleman opposite who believes that it is to the benefit of the country to become a member of the Community can possibly bring himself to vote for the new Clause.
  Mr. Donald Stewart: I am surprised to hear the hon. Member for Flint, West (Sir A. Meyer) denounce what he sees as nationalism in those who have put forward the new Clause. I find it curious that Tories who conduct their meetings in front of a table draped with the Union flag should be opposed to any manifestation of nationalism. I intend to devote my few remarks to this question from the point of view of a Scottish Nationalist.
  The hon. Member for Lewisham, West (Mr. Selwyn Gummer) argued strongly that Parliament should make the decision whether or not we should enter the EEC. Many quotations were bandied about by the hon. Gentleman and other opponents of the Clause. The only quotation which has been omitted is of what the Prime Minister said in May, 1970, about our entering with the full hearted consent of Parliament and people. He made that distinction. He did not refer only to the full hearted consent of Parliament. That betrayal, despite all the casuistry, cannot be explained away.
  Detraction from sovereignty is the nub of the legislation. A Scot who has studied the history of his own nation knows what it means to Scotland to have surrendered sovereignty in 1707. I make no apology for going back to that date. The hon. Member for Flint, West, talking in the EEC jargon of forward-looking dynamic politics, backed up what he said by a reference to King Canute.
  When this great debate started the Government Front Bench spokesman denied vehemently that there would be any derogation of sovereignty. As we have gone along, they have admitted that there will be. No country in the world is entirely sovereign, but surely 75 per cent. sovereignty is better than 25 per cent. sovereignty. The right hon. Member for Wolverhampton, South-West (Mr. Powell) made the good point that as the debate has been going on the people have become more and more aware of

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  what is involved. As each wrapping is taken from the mummy, the people are beginning to see the dust on the dry bones in the bottom of the casket. The Government cannot go into Europe with the full hearted support of the people; they cannot go in with the full hearted consent of the Scottish people or of hon. Members representing Scottish constituencies because the majority of them, of all parties, have voted against entry.
  The arguments in favour are similar to the arguments put forward in the Scottish Government in 1707, the arguments of people who have lost faith in their own nation and their own destiny. In the view of those whom I represent in Scotland, the United Kingdom is going the way of the Austro-Hungarian Empire. Presently, Wales and Scotland will be self-governing countries again. Because of the opposition of the Scottish people and of Members of Parliament representing Scottish constituencies, the party I represent has served notice in Brussels that we will not be bound by any of the agreements made by this Government.
  The hon. Member for Inverness (Mr. Russell Johnston), if I may paraphrase his words, said that if we dislike any of the legislation coming from the Common Market we can simply reject it. Seven years after the Treaty of Union a tax was placed on salt, which was expressly forbidden by the Treaty. The Scottish people protested, but they were quite unable to do anything about it. That will be the position when this country goes into the Common Market.
  Mr. Russell Johnston: I did not say that if we disliked any legislation from Brussels we could automatically reject it. I do not think that we can necessarily do so. If we enter an agreement to accept certain regulations, we must adhere to the agreement. What I said was that the Clause indicated a fundamental objection to the institutions, and that is a different matter.
  Mr. Stewart: I ask the hon. Member's pardon if I have done him an injustice or misunderstood him. Scottish interests have never been represented in the House of Commons in a way which satisfies the people or the country. I forecast with confidence that, if we enter the EEC, in
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  a few years' time I shall be joined on these benches not only by Scottish and Welsh Nationalists, but by English Nationalists determined to take this country out of the EEC.
  The Prime Minister recently said that on accession to the Community we should have a day of music and drama. I believe that a national day of humiliation and prayer would be more appropriate. If we are to have drama, I feel that when the curtain is rung down the stage instructions will be quite clear: exit Britannia. That is the future that is ahead for all of us. There is no mandate to take this country into the EEC because the people are still opposed to entry. Therefore, I support the new Clause.
  Mr. Tom King: It is perhaps not inappropriate that I have been called to speak after the hon. Member for the Western Isles (Mr. Donald Stewart) since I represent a constituency in which the last emergents of an independent English nationalism unfortunately met a sad end—namely, at the Battle of Sedge-moor.
  The hon. Gentleman expressed with considerable individual passion his belief about opposition to the Bill in Scotland. If my own contribution is lacking some of the passion and vigour of some of the contributions we have heard today, notably from my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer), it is perhaps due to the fact that the clock has a familiar look about it since it is exactly12 hours since I last rose to my feet in this Chamber. My speech on this occasion will be a little longer, since this morning I spoke for only two minutes.
  The feeling that I have been here before is not connected in any way with my earlier contribution today. I have a feeling that the issues which are being discussed in the context of the new Clause are the same central issues around which debate has raged in this Chamber throughout the Committee stage of the Bill. One of the weaknesses of the Clause is that it tries to stand on two feet at the same time.
  Mr. Powell: It may be a good idea.
  Mr. King: It may be a good idea, as my right hon. Friend the Member for

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  Wolverhampton, South-West (Mr. Powell) says, but if neither leg is very sound it is an extremely dangerous posture.
  The first of the two principles is the basic question of sovereignty. Every hon. Member has tried to master the conceptual difference between the two elements in the Clause—ultimate sovereignty and total supremacy. They are two different things which have been frequently confused in the contributions from the Opposition benches today The question of ultimate sovereignty is not in doubt. The question of total supremacy is something which must be affected by our accession to Europe.
  The Opposition appear to be impaled on twin hooks of their own making. They insist that the problem of the Bill is that it is irreversible but they also insist on their intention to repeal it. Their second hook is that they challenge the sovereignty of Parliament to take the decision towards which Parliament is proceeding while at the same time claiming to be the great defenders of the sovereignty of Parliament. This argument has been destroyed very effectively by my right hon. Friend the Member for Wolverhampton, South-West, who made the situation clear in a spell-binding contribution. The conclusion of his argument seemed to have the opposite result to that which he appeared to deduce from it. If I quote him correctly, he said in regard to the will of the people, that if the people will, they can. Is that not the ultimate judgment on the question of irreversibility in terms of any treaty of accession?
  Mr. Donald Stewart: Surely that situation can arise only if people break their pledged bond. Is the hon. Gentleman advocating that?
  6.15 p.m.
  Mr. King:The hon. Gentleman misunderstands my argument. The argument relates to the people and to the question of who is sovereign. My right hon. Friend made the point that the sovereign will of the people is expressed through Parliament, that ultimately the will of the people will be reflected in Parliament and that what they wish to achieve they will achieve. This argument, which was forcibly made by my right hon. Friend, effectively demolished the argument of irreversibility.
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  The second half of the Clause—the second rather weak leg on which it stands—was described by the right hon. and learned Member for West Ham, South (Sir Elwyn Jones) in terms of Regulation 22. He referred to the restraints on individual Governments in making separate interpretations of Community regulations.
  The new Clause would fly in the face of that idea. How could it be otherwise? How can we possibly expect to move into a community, accepting common arrangements, common tariffs, common undertakings and obligations, and then to reserve for ourselves the independent and separate right to vary them as we wish? Not only do I insist that this must be an obligation recognised by us if we accede to the Community but I believe that it is an obligation which we must require and which it is essential for us to see is observed by the other countries as well. We must see that they also respect the obligation and are prevented from unilateral variation of Community regulations.
  Mr. Raymond Fletcher: If what the hon. Gentleman says is true about the spirit and letter of the Treaty of Rome, why did every one of the original six signatories insist on annexes preserving some of those rights—in many cases even wider rights than those on which we insist in new Clause 11?
  Mr. King: It would be quite wrong to introduce that point as an argument against the general principle that individual Governments do not have a general power—I am not here referring to separate reservations which may be entered—to made individual and separate amendments to Community regulations to suit their own situations. If we enter a community and accept certain obligations, we expect those obligations to be accepted by the other countries as well.
  This regulation is as much a safeguard for us as it is an obligation upon us. That is the point which is so often missed in all these debates and in the circular argument which has gone round and round the question of our entry into the Community. We are accepting obligations. In return we are receiving obligations and benefits from others and the

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  acceptance by the other members of the responsibilities they owe to us.
  It is because we must approach this matter in a constructive spirit that I endorse entirely the analogy adduced by one of my hon. Friends of the marriage service. If we entered the caveat that the marriage service did not remove from the parties the right to divorce, what a prospect that would be for the marriage. It is because we approach this matter in the knowledge that we do not lose the ultimate safeguard that we require, because we retain not total supremacy but ultimate sovereignty, that the Clause is superfluous to the Bill.
  Mr. Raphael Tuck: The right hon. Member for Wolverhampton, South-West (Mr. Powell) highlighted the fact that the validity of a law depends upon the consent of those who receive that law. In other words the political will of the people expressed through Parliament determines the supremacy of Parliament. On that the ultimate supremacy of Parliament depends. Given that political will, the sovereignty of Parliament is the keystone of our political arch. Our whole constitution is an historical growth based upon the sovereignty of Parliament. Parliament cannot bind its successor. One Parliament is able to repeal or alter Acts of a former Parliament.
  If this new Clause is negatived, in my opinion a future Parliament will be unable to repeal or to alter the Bill when it becomes an Act. If that is so, Parliament is fettered and powerless and will become a mere debating society shorn of all its former powers. If my mathematics are correct, the salaries alone of hon. Members of Parliament total £2,835,000 a year. That is a lot of money for the Community to have to pay for a debating society. If the Clause is defeated, therefore, we might as well dissolve Parliament permanently. Its continued existence would be a mere sham.
  I urge the Government seriously to consider this grave step. They have said time and time again that the sovereignty of Parliament will not be impaired. I call upon right hon. and hon. Gentlemen on the Government side to honour that pledge and to show their sincerity by accepting the Clause.
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  The Clause is a protection. It might be termed an escape clause. How the 13 Confederate States of the United States would have loved an escape clause letting them out. How Scotland would have loved an escape clause letting her out of the treaty of 1707. How Ireland would have welcomed an escape clause allowing her to get out of the treaty of 1801.
  Mr. Ridley:In relation to Scotland, how does it come about that only very occasionally does a Scottish Nationalist succeed in being elected to this Chamber if all the Scots are longing to get out of the treaty?
  Mr. Tuck: I do not quite understand that intervention. Time and time again Scotland has declared that she would like to get out. That does not mean that she will do it by force. The Scottish Nationalists form an extreme sector of that community. However, we know that Scotland as a whole would like to be free from the shackles which the treaty of 1707 placed upon her.
  If the Government do not accept this Clause their bland assurances have a hollow ring and, in my view, will show them to be wholly insincere.
  Sir J. Foster: The hon. Member for Watford (Mr. Raphael Tuck) has cut across the arguments on both sides of the Committee that Parliament has sovereignty. The argument from the Opposition benches is that the Clause would merely bring into the Bill a pledge already given by my right hon. and hon. Friends.
  We ought to look at what the Clause really says. One may take a legalistic view about the word "ultimate" by contrasting it with what would be penultimate sovereignty, temporary sovereignty and so on. However, in political terms we are entering the European Community and this Clause would say that we reserve the right to break our treaty obligations. That is an unattractive Clause to have in the Bill, in any event.
  The reason behind it is obvious. The opponents of entry into the Community cannot accept that Parliament has endorsed the principle of entering the Community by a very respectable majority—
  Mr. Raphael Tuck: A majority of eight on Second Reading?
  Sir J. Foster: I said that Parliament had supported the principle of entry. It is for internal political reasons that the strugle to get the Bill through has resulted in majorities not reflecting the principle supported by a large majority.
  The Clause is intended to serve notice on our partners in the European Community and to other opponents in this country that we reserve the right to break our treaty obligations.
  I happen to belong to the school of thought which believes that Parliament has the right to do that. However, I ought to bring to the notice of the Committee that there is a respectable school of lawyers who say that a judge will not enforce an Act of Parliament which does it. I do not belong to that school, but it exists, and Mr. Gough has written a very interesting book about it.
  If a law were passed saying that no coloured person might marry a white person in this country, that would be a breach of our obligations under the European Convention of Human Rights. It would be most unattractive legislation. But the ultimate sovereignty school, to which I belong, would say that Parliament had the right to enact it. The courts have avoided this kind of clash by having a very strict rule of construction which says that unless it is clear that Parliament intended to breach our treaty obligations, our courts will not enforce a Statute which does that.
  So far no legislation has been passed saying that notwithstanding our treaty with Ruritania we hereby abrogate it and say the opposite. However, there are threats from right hon. and hon. Members opposite to do that. That is why they want to embody in a Clause a right which undoubtedly exists in the last resort.
  The great objection to the Clause is the political one that there should not be a Clause in a Bill saying that we reserve the right to break it. That is a breach of honour. It is a breach of one's word and of one's obligation. I am surprised that right hon. and hon. Members opposite put forward this view without any shade. They say that if the people want to break their word they should
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  have the right to do so. But if the British people are honourable, in my view they will want to abide by their given word—
  Mr. Tuck: Whose word?
  Sir J. Foster: The word given by the Executive and supported by Parliament duly elected. I do not shrink from that.
  My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) destroyed the argument for the new Clause. He kept on talking about the will of the people being the expression of sovereignty, yet he supports a provision which refers to the sovereignty of Parliament.
  6.30 p.m.
  Mr. Michael Foot: Perhaps we might have accepted the interpretation of the matter by the hon. and learned Member for Northwich (Sir J. Foster) if it had not been so constantly said by Ministers "Of course, it is open to Parliament to break its word if it wants to." That has been the principal defence which the Government have offered when we have made the charge that effective power is being transferred away from the House of Commons.
  Sir J. Foster: It is legally true that Parliament has the right to break its word, but it is the last thing it should do. If a civilised country has entered into a treaty it should not break it although it has the legal right to do so. Therefore, the whole struggle of opponents of entry is to prevent the United Kingdom entering the Common Market in the first place.
  My right hon. Friend the Member for Wolverhampton, South-West spoke in metaphysical terms about the right of the people. He was supporting the revolutionary theory that they would first work through both parties. I remember he was saying eloquently that the people would work through both parties and the will of the people would make itself felt. But in a civilised democracy, which we have, the will of the people is expressed through a General Election.
  Mr. Powell: No.
  Sir J. Foster: That is what my right hon. Friend was talking about but he avoided saying it all the way through.
  Mr. Powell: I am sure that my hon. and learned Friend wishes to be fair. I prefaced my remarks by reference to the point of time by which this Parliament would have to come to an end.
  Sir J. Foster: I maintain that the record will show that my right hon. Friend did not say that the will of the people would be manifest through a General Election. He spoke of the will of the people acting on both parties or all parties and of that will coming through. That seemed to negate the whole point of the Clause, which refers to the purely legalistic view that Parliament can, if it so decides, determine that the United Kingdom shall break its treaties.
  Incidentally, it is possible for Parliament to bind its successors. It is not difficult to draft a Bill to do so. Of course it would be contrary to the spirit of the constitution and it is rather an irrelevancy at this stage. One need only draft a Bill with the last Clause saying, "No Bill altering this Act or this Section shall be introduced into Parliament until there is a petition signed by 40 million people over the age of 21."Parliament can do that; it is sovereign. If a Bill were subsequently introduced which did not comply with that requirement, it would be ruled out of order. So it is not at all difficult to draft a Bill to that effect. Of course the commonsense answer is that it is politically impossible and contrary to the spirit of the constitution.
  This is not only a legalistic debate regarding the legalistic concept of the sovereignty of Parliament. There are many different ways of looking at what "sovereignty" means. Some people say that every treaty limits our sovereignty. I say that sovereignty remains but that treaties limit our actions. When we say that we will not indulge in the slave trade, that is not limiting our sovereignty; it is saying that slavery is something we will not have.
  We are entering the Common Market as a form of partnership. We are agreeing with all the other countries that we will not act on our own and that we will follow Community law. We have agreed to do so. I do not regard that as a limitation of sovereignty. I do not quarrel with the argument that one can have a system of semantics which does so. The matter is put into proper perspective if
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  one regards the treaty as an agreement between one or more States to carry out certain actions and to refrain from certain actions. No sovereignty is limited by that concept. We have the sovereignty to do it and the sovereignty to break our word.
  However, it is important that the opponents of entry should realise that they are pressing for the right to break their word and for that to be spelt out in this legislation. Some people do not shrink from that. They justify it by saying "We feel that the majority of the people are against it, and that justifies us." I can understand that argument but I do not agree with it. I hope I do not sound priggish when I say that that attitude is immoral and unethical.
  Mr. Shore: If the hon. and learned Gentleman takes the view, which most of us do, that we should not give our word lightly as a country and bind ourselves with other countries in matters which affect their welfare as well as our own, that is a solemn matter. Because it is so solemn, surely the obligation falls upon the proposers of our joining the treaty to ensure that they have the broad consent of both main parties in the land and all the people. That is the whole point. They do not have that consent.
  Sir J. Foster: I can see that argument but it does not affect the Clause. I disagree with that argument because at the General Election it was indicated that the Conservative Party would press on with the policy of the previous Government in joining the European Community.
  Mr. Raphael Tuck: To negotiate.
  Sir J. Foster: Yes, negotiate, and after negotiation one agrees. Obviously there is no point in simply negotiating. Having negotiated and rightly gone into Europe because there was sufficient support, one cannot under the British constitution keep going back for referenda and General Elections. The Executive has been elected through Parliament to enter into the treaties.
  Mr. John Mendelson: The hon. and learned Gentleman is now saying that "negotiating" in the Conservatime election manifesto meant going ahead and entering. But the Prime Minister, who spoke for the Conservative

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  Party at the time of the General Election, carefully avoided going that far. The words he added were, "no more, no less", which is something quite different from what the hon. and learned Gentleman is now saying.
  Sir J. Foster: I do not agree. I interpret the words as entitling my right hon. Friend after he had negotiated to accede to the treaty.
  The whole of the General Election was founded on the principle by both parties that we should go into the Common Market. It was not envisaged that the Labour Party would turn itself round and say "We do not agree with these terms." That would negate the whole idea of the Common Market because one cannot enter the Common Market on any terms without the 1967 White Paper principles. One cannot go into the Common Market without giving supremacy to Community law and without saying that one's partners and oneself will come to the decisions. The Left wing of the Labour Party has been opposed to entry from the start, but it is impossible for the great centre and the other wing of the Labour Party consistently now to say "We do not want to have Community law as the governing law. We do not want to follow the decisions of the Community Court." ft is impossible logically to enter the Community on those terms.
  Let us assume that all the Conservative terms are wrong. Whatever terms the Labour Party agreed, however, it would have to agree that it could not say, "We are going into the Community but we will reserve the right to pay no attention to anything the Community does." That is the political difficulty the Labour Party is in.
  We have great speeches about this realm of England and all the traditions of thousands of years. That is a lot of emotional language which is designed to oppose the concept of entry into what I call this partnership with foreign countries. I welcome it. I can understand people saying "No, we want to keep England apart from the European Community", but their case was given away by the majority of the Labour Party.
  For these reasons, the new Clause should be rejected. The main reason is a political public relations exercise. One
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  does not write into legislation to carry out a treaty "And I reserve the right to abolish it." If we put into every treaty into which we have entered—for example, for the abolition of slavery, the Declaration of Human Rights and double taxation—a Clause stating "And nothing in this treaty shall affect the right of Parliament to undo or to abrogate it" and if we specifically added "And we reserve the right to disregard any Community law which interferes with this Clause", we would find ourselves in the position referred to by the hon. Member for Cardigan (Mr. Elystan Morgan) who was afraid that the United Kingdom would be sued for thousands of millions of pounds. I do not think that is a possible danger. The hon. Gentleman was dramatising that the United Kingdom would be responsible for breaking a treaty and would incur a good deal of odium. Having solemnly entered into a treaty, at whatever stage we may decide to give notice, we would incur a great deal of odium and the odium would be all the stronger if, from the moment it was enacted, the United Kingdom reserved its right to abolish it. Our potential partners in the EEC would point to the Clause and say "We do not think the Clause shows great sincerity, because you are still thinking of leaving the Common Market."
  For those reasons, I believe that the Clause should be totally rejected.
  Mr. Alexander W. Lyon: I support the new Clause. I do not think it will do much harm, and it might conceivably do a great deal of good.
  I agree with the hon. and learned Member for Northwich (Sir J. Foster) that the arguments for and against the Clause depend not on the psychology of the situation but on its legality. The hon. and learned Gentleman said there is a respectable body of legal opinion which suggests that Parliament can act in such a way that it can fetter its successors and limit their power to withdraw from the treaty. I beg to differ from such legal opinion, if it exists. It is clear that if Parliament passes an Act which allows us to accede to and to undertake the obligations of the Treaty of Rome, at some future date it can, if it wishes, pass an Act saying that we can withdraw.
  I do not think that the Master of the Rolls, in the case quoted by my right hon.

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  and learned Friend the Member for West Ham, South (Sir Elwyn Jones), went as far as he suggested. It is clear from the passages in the judgment to which my right hon. and learned Friend referred that the Master of the Rolls was saying that it may be true that the power to bind successors would exist and that going into the Common Market might be an irreversible step. But he went on to say:
  "I will assume that Mr. Blackburn"—
  the applicant in the case—
  "is right in what he says on these matters. Nevertheless, I do not think that these courts can entertain these actions."
  The Master of the Rolls was saying that he was prepared to agree with the arguments put forward by the applicant for the purpose of that action but that he was not recording a legal opinion that the step would be irreversible. I do not think it is.
  It is also clear that an equally distinguished judge, Lord Justice Salmon, who added a concurring judgment, was not making any such pronouncement, even in the form of an obiter dictum, because he said:
  "Nor have the courts any power to interfere with the treaty-making power of the Sovereign. As to Parliament, in the present state of the law, it can enact, amend and repeal any legislation it pleases."
  I think that power exists, despite the provisions of Clause 2(4).
  6.45 p.m.
  If in due course Parliament decides that it is right for the British people to withdraw, I entirely agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) that if the people will, the people can, and the people can will through Parliament.
  The question then arises: should we say it in the Bill? Should we make this provision plain so that people can be reassured on this matter? There is a good deal to be said for reassuring that quite large section of the British people who have reservations about going into Europe that, if the going gets as rough as my hon. Friends have been telling them for so long, they can at that stage withdraw. This would seem to give them reassurance on going in. It is not undermining their faith; it is not a suggestion that they are not wholehearted in their
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  belief in Europe. Many of them are not wholehearted in their belief in Europe.
  It does not need a Clause in the Bill to tell Europe that. Europe has seen what has been going on in the political discussion on the Common Market over the last two years. It has observed the Labour Party's position on the matter. It has seen and heard a number of assertions that there will be an attempt to renegotiate the terms agreed by the Government. It does not need a Clause in the Bill to lead to a certain amount of uncertainty in Europe about what the future might hold.
  The new Clause will not cast doubt upon the sincerity of Britain; it will reassure the people of this country that the sovereignty of Parliament is not being diminished by the Bill. It is not. The words "ultimate sovereignty" appear in the Clause. The hon. and learned Member for Northwich suggested that there might be a difference between "ultimate" and "penultimate" and so on. I believe that sovereignty is sovereignty.
  Sir J. Foster: Hear, hear.
  Mr. Lyon: If Parliament says to some other institution "For the purpose of this area of our law-making power we will cede these powers to you to the point where we say we will take them back so that in the meantime you will be able to make laws which will be binding upon us", that is not to diminish the power of Parliament, because Parliament has given the power to that body and in due course it can take back that power if it so wishes.
  Sovereignty is not simply legalism. Sovereignty is where the political power is. In the judgment to which my right hon. and learned Friend referred, the Master of the Rolls said that in 1931, in the Statute of Westminster, Parliament gave the dominions their complete independence from this country and that no one could suggest that Parliament could or would take back that power. I suggest that Parliament can but that it would not. It would not, because the plain realities of political power are that we could not enforce it.
  I do not like to touch on the controversial issue between the parties concerning Rhodesia, about which I have strong feelings, but we know the limits

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  of our legislative power compared with the rôle of political power in such a situation. Clearly we would not say to Canada "We gave you independence in 1931, but we are going to take it away now" because we have not the power to enforce it. However, that does not curtail the sovereignty of this Parliament to deal with the matter if it wished. That, therefore, is the situation. Sovereignty rests with us up to the moment when physical power has taken away that sovereignty.
  I am an unabashed federalist. For the purpose of argument, I am prepared to concede to those of my hon. Friends who want to make a political point out of the issue that I believe that the Community should gradually grow into a federal union in which the power is shared by all the people of the Community and is expressed in their institutions.
  Mr. Deakins: Prejudiced.
  Mr. Lyon: I am prepared to accept that. I wear it as a badge of honour and not as a charge. As far as I can see, the world would be vastly improved if all nation States gradually moved towards such institutions.
  I look forward to the time—I do not see it in the reasonably near future—when we shall live under a system of international government that is binding upon all the people of the world. We have not got there yet, and I see the Community simply as a stepping stone to it. That being said, however, I maintain that within that kind of institution it is not impossible to allow for the sovereignty of Parliament of the member States, up to the point where the union is so close—where the concept of the people's community is so obviously expressed and the power and the forces of the community are under the dominance of the central federal institutions—that no one would then argue, any more than we would argue with Canada, that the sovereignty of the individual States could then be taken back.
  That position was reached in the American Civil War when Lincoln denied the States which had joined the union the right to withdraw—because the union had merged together to such a point that it had become inconceivable that it should break up. That position
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  in relation to Europe, however, is so far ahead that we need not consider it. Up to the point where that position began to exist there would always be the right to withdraw. As I see it, that is both the legal position and the position in terms of physical power. I merely say that the Clause would be useful in our present fevered debate about the Community in order that our people can be reassured of the legal position.
  If in five, 10, or 15 years' time it became plain that, contrary to my hopes and beliefs, and consistent with the hopes and beliefs of many of my hon. Friends, the Community was not felt to be in the best interests of the British people, we could withdraw. I am certain that such an assurance would to some extent still the passions that have been aroused on this issue. Nothing has caused so much upset among the ordinary people as the feeling that we are doing something irreversible, something that we shall not be able to change. I do not believe that is true. I believe it is reversible, and I believe that our people should be reassured that it is reversible.
  For that reason I am prepared to vote for the Clause, because it says no more than I believe to be the exact position.
  Mr. Ridley: The hon. Member for York (Mr. Alexander W. Lyon) made an entirely correct and rather courageous speech, with which I found little to differ. In passing, I would say that for hon. Members to believe that the word "federalist" is a term of abuse, denoting a kind of sexual perversion, is rather shocking. I should have thought that as a member of a party that used to proclaim its internationalism—the Socialist Party—the hon. Member for Walthamstow, West (Mr. Deakins) would find nothing obnoxious in the word "federal". I do not. There are many federations in the world, and if the European Community in the end proceeded to federalism I should not object. I should welcome it.
  The hon. Member for Walthamstow, West was a little disingenuous in finding, as usual, an excuse to vote against the Government although he believes in the cause that the Bill seeks to enact. It is a pity that so many hon. Members on the Opposition side who are in favour of the Bill have found convenient excuses not to

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  let their thoughts and their votes go together. I do not think it is true to say that by adding the Clause to the Bill the British people would in some way be enlightened about the true nature of the legal position in terms of sovereignty. They are not likely eagerly to pick up the Bill on the day of Royal Assent to see whether this Clause is in it. The hon. Member for York can spread the gospel in the country as he has done in the House of Commons this afternoon. What he said is clearly true.
  The new Clause seems to me to be objectionable. Half of what it says is a declaration that Parliament is sovereign. That subject has been talked about so much that there is no need to add any more to the universal acceptance by the Committee that Parliament is sovereign and cannot bind its successors—exceptto say that possibly now, after hundreds of years of sovereignty, with full knowledge of the doctrine that we cannot bind our successors, solemnly to write it into the Bill in a way casts doubt upon the position and certainly casts doubt about the certainty of our own powers, doing so at this stage in our development for reasons which I feel to be inadequate.
  The sense of the new Clause is that we shall not obey the articles of the treaty. the Court of Justice and the edicts and directives from Brussels if we find them inconvenient. It is wrong to mix up the two concepts—that the sovereignty of Parliament continues and that we are not going to obey the treaty if we do not like it.
  As my hon. and learned Friend the Member for Northwich (Sir J. Foster) said, the Clause represents a declaration in advance that we shall breach the contract if we can. We shall be entering the Community on a contract, or a partnership. Some have referred to it as a marriage. All such things are forms of contract. In a contract it is possible to have a break clause, but if there are no break clauses we accept the full implications of the contract that we sign. I believe that acceptance of the Clause would create an appallingly bad impression. We should be saying that we reserved the right to break the contract in the future.
  The right hon. Member for Battersea, North (Mr. Jay) agreed that we must
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  not break treaties, but I remind him that he himself, as President of the Board of Trade, broke the EFTA Treaty on the first occasion by the imposition of the import surcharge and on the second occasion, unless he had left office by then, by building the aluminium smelters. At any rate, his Government did that in clear breach of the EFTA treaty.
  It was not as if there were a saving clause in the EFTA treaty that said that it would not be binding on us to observe it; there was an express clause in that treaty which said that it was binding upon all signatories to keep the terms of the treaty. If the right hon. Gentleman is against breaking treaties, let him first agree that we should include in the Bill no saving clause which would enable us to break the treaty in the future and, secondly, that it is better to have instruments such as the Commission and the Court, which can enforce our keeping our word—because we have not proved all that able to keep it in the past.
  Mr. Jay: Is not the real moral that we should not take on obligations that we may not be able to fulfil?
  Mr. Ridley: The right hon. Gentleman may not wish to fulfil the obligations under the Treaty of Rome; most of my hon. Friends and I do. Therefore, we would not like to see any waiver in the Bill. It has been assumed in the debate that if at a later stage we wish to opt out of membership of the Community, that if in 10, 20 or 30 years' time the British people make it manifestly clear that they do not wish to continue membership, the only way to deal with that situation will be to break our Treaty obligations. I do not believe that that will be the only way. I believe that it will be possible to go to the Commission and say that we wish to negotiate our way out, just as we negotiated our way in. I grant that it will be appallingly complicated. I grant that poor terms may be available to us because we shall be the supplicants in a contract from which we are seeking to disengage, but it does not follow that we shall have to break the Treaty.
  7.0 p.m.
  Indeed, no Government in their senses would put through a Bill revoking the Bill now before the Committee and expect

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  that everything would be ended by so doing. They would have to negotiate. We might get poor terms. If the terms were onerous, we might have to withdraw illegally, just as we have from other treaties. We broke the treaty with Portugal over Goa. We broke the EFTA treaty. We cannot be smug about treaties which we have kept but, if in the negotiations we are provoked beyond what is reasonable we may do something unreasonable. That is why the American colonies left us. Countries have gone to war against us for their independence because they believed that the maintenance of the contract was onerous and not supportable, and the ultimate right of a sovereign power, as we shall remain, is to do that.
  I think that the right hon. Member for Stepney (Mr. Shore) summed it up when, in answer to an interjection about a speech of his right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) in an earlier, similar debate, he said that the concept of sovereignty remaining with this House was unanswerable but meaningless. I want to go back to those two words. It is now agreed that our sovereignty in a legal sense remains with us and cannot be taken away. The hon. Member for York agrees. I do not know anybody, not even the hon. Member for Stepney, who has not conceded that when power to take action is diminished by the Bill that is really what the Committee is saying and what we are meaning. The right hon. Member for Stepney believes that it will be meaningless for us to try to move against that situation in the future; that having conceded some powers they have gone. I do not quarrel with that, because I believe that these powers have gone and because we are building something else which is an alternative and which will be found acceptable to the people of this country.
  The hon. Member for the Western Isles (Mr. Donald Stewart) spoke about Scotland and the Act of 1707. But in that Act there did not remain a sovereign Scottish Parliament. It was abolished, and instead the Scots took 72 seats in the House of Commons, which they still have. They gave up their sovereignty but, contrary to what the hon. Gentleman said, they have never wanted to opt out
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  of the common market between England, Scotland and Wales. Of those 72 seats, I can think of only individual occasionson which one has been occupied by a Scottish Nationalist, let alone their voting overwhelmingly for the suggestion that Scotland should break away from the United Kingdom and its succour for that country.
  The Scots gave up their power as described in the Clause. We do not do that, and our position becomes stronger if we join the Common Market but, as has been said by both the supporters and the opponents of the Bill, as the years go by we shall find ourselves, our economies, our political systems and our military systems—this was the point made by my hon. Friend the Member for Flint, West (Sir A. Meyer)—so much more integrated and so much more involved that the question of the transfer of sovereignty will become meaningless.
  [Sir ROBERT GRANT-FERRIS in the Chair]
  Mr. Deakins: I shall try to be fairly brief, because I know that a number of other hon. Members wish to speak and we have several other new Clauses to consider by the time the whole Committee stage is guillotined at 11 o'clock.
  At long last the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has admitted that he is a federalist. I have been warning the Committee for some time that gradually more and more of the pro-Marketeers would emerge from their lairs and declare themselves publicly to be federalists. Whatever is said about the issues discussed at the last General Election, one thing that is clear is that the issue of federalism was not put before the British people. One hopes that at the next General Election those who are federalists will have the courage of their convictions and declare themselves so and justify themselves to the British people.
  The argument in this debate has been a little confused between parliamentary sovereignty, parliamentary power and the will of the people. I wish to concentrate first on the power aspect and try to separate it from the issue of sovereignty.
  There can be no denying that in the Bill there is a great loss of parliamentary power. There can also be no denying

  621
  that in the Bill there is a great increase in power of both the Executive in Brussels and, more important, the Executive in this country because it has power to decide what needs parliamentary scrutiny and what does not.
  The Bill is promulgating a new constitional doctrine, a kind of divine right of the Executive. We are discussing, not the sovereignty of Parliament, but the sovereignty of the Executive, and that sovereignty is being embodied in the Bill, both in the content of it, and in the manner in which it is beng presented to the Committee. Never before has there been a perfect Bill of this importance unable to be amended. Never before, certainly not in the two years that I have been here, has a Committee of the House been treated with such arrogant contempt by those who have to answer the detailed questions put to them in debates.
  The fact is that the Bill makes major changes in constitutional practices relating to taxation and the passage of laws, and it is a bad argument to say that these issues were clearly put before the people at the last General Election. The issues that were put before them then were those of rising prices, and so on. They were domestic issues, not issues related to the Common Market and what it involved for parliamentary power.
  Parliamentary financial control is one of the roots of parliamentary sovereignty. It was affirmed in the Bill of Rights of 1689, which was a Bill of Rights for Parliament. If this Bill is passed, it will be a Bill of Rights for the Executive of this country, the first time that we have had one in the history of Britain.
  The Bill also weakens the principle of ministerial responsibility to Parliament, since although Ministers will still be under an obligation to come to the House from time to time to justify their actions at Brussels, Strasbourg and elsewhere, they will no longer have to go through the procedure of having to come to the House first and justify themselves in the Committee stage of legislation going through the House.
  If one turns from the issue of power—and no one can deny that we are losing power—to that of sovereignty, we are told that we shall still have parliamentary sovereignty. The Pro-Marketeers are trying to get it both ways. Until
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  today the argument from the Government Front Bench and from most pro-Marketeers has been that there is no loss of parliamentary sovereignty, but we are now told by a number of right hon. and hon. Members that we shall be losing parliamentary sovereignty. It seems to me that if they cannot make up their minds the issue of parliamentary sovereignty must be a matter of grave doubt, and therefore it is all the more important that the issue should be clarified both for our purposes and for the British people.
  One is all the more worried about sovereignty because of the Government's failure to include in the Bill a right of veto under the Luxembourg Agreement. That is surely a necessary safeguard of parliamentary sovereignty, because it lies with any future Executive in this country to disregard the assurances given about our power of veto and to accept an agreement made in Brussels or elsewhere which Parliament would normally have expected our Government to veto.
  Once we are in the Common Market there will be a great deal of horse trading in which Parliament will play no part but the Executive will play a great deal. There is the trading of parliamentary power against the alleged economic advantages, but eventually we shall trade the reality of parliamentary sovereignty, and not merely power, if that is considered by a future Executive to be necessary.
  Why are the Government so reluctant to accept the Clause? It is true that we do not have a written constitution, but if we pass the Bill we shall have a precedent for making explicit that which is implicit in the unwritten constitution, that no Parliament can bind its successors. The Government will refuse to accept the Clause for the very obvious reason that they, like the hon. Member for Cirencester and Tewkesbury are increasingly of a federalist turn of mind, and believe fervently that Parliament must be weakened in order that the progress to federalism can be smooth and easy.
  The next step on that path after the passage of the Bill is the acceptance of full economic and monetary union. No one can deny that that would mean further removal of parliamentary financial and legislative power. Once we are

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  enmeshed in that economic and monetary union, not the most ardent pro-Marketeer can say that parliamentary sovereignty continues to exist, even in theory. But the final steps on the road to a completely federal State in Western Europe will be much easier for the Executive to take.
  Our concern for parliamentary sovereignty and rights has been scorned throughout this Committee stage. We have been treated like little children. If we point to the flaws in the Treaty of Rome and the Treaty of Accession, the Government say, "Do not mind this—look at the practice of the Communities." If we point to the flaws in the practice of the Communities we are told, "Do not mind this—we shall be able to change it all when we go in." These are not only illogical replies but are at the very lowest level of political argument.
  Throughout the Committee stage, as on so many other occasions, we have been treated with supreme contempt. It was Burke who said:
  "…a great empire and little minds go ill together."
  We have lost our empire, but are still ruled, and I do not refer only to politicians, by men of little minds who are bewitched by this mirage of power and prosperity across the Channel. In my opinion, they are corrupted by their own mediocrity.
  Open federalists should seek to justify what is in the Bill, and the exclusion of this Clause. If the Government are federalist, as one increasingly suspects, let them say so, and let them justify it to the Committee and to the country at large. They must not pretend that we are not taking a major step and have no need to worry. The Bill, frankly, attempts to escape responsibility for deciding where sovereignty will lie in the future. If it still lies in Parliament the Government should accept the Clause. If not, as we strongly suspect, they should make clear to the British people and Parliament what is being done in their name. But the fact is that it is being done without their knowledge, and certainly without their consent.
  Ultimately, under constitutional practice and procedure, the rights and sovereignty of Parliament are the rights and sovereignty of the people. To
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  undermine the one is to undermine the other, and in doing so the Government are opening the way for people to have to take their own action to defend their own rights. If Parliament fails to speak, what are the people left with except to take action themselves? Parliamentary democracy and parliamentary sovereignty are inseparably linked: if we sacrifice the one, we sacrifice the other. That is why the Committee should support the new Clause.
  7.15 p.m.
  The Solicitor-General (Sir Geoffrey Howe): No one would deny that this debate has been about important issues at the heart of the matter with which we have been concerned for so many days. Some arguments have been advanced which go well beyond the new Clause, and take us back to challenge once again in principle the whole concept of accession to the Communities, as the hon. Member for Inverness (Mr. Russell Johnston) pointed out. I do not propose to spend a great deal of time on that now. When such arguments are advanced, as they were, for example, by the hon. Member for Western Isles (Mr. Donald Stewart), one can respect their full sincerity and sense of responsibility, though one can disagree with them, but I would remind him of what the Lord Advocate had to say, now many weeks ago, about the compatibility between accession to the Treaties and the Act of Union.
  As a Welsh expatriate, like the right hon. and learned Gentleman the Member for West Ham, South (Sir Elwyn Jones), I share the concern that this Committee should be acting in these proceedings on behalf of the Welsh people as on behalf of the English and Scottish people, and I can respect equally the concern of the right hon. and learned Gentleman.
  I cannot, I fear, respect the way in which the hon. Member for Cardigan (Mr. Elystan Morgan) set about denouncing in principle, root and branch, in intemperate and emotional language, the transfer and transformation of the rights of the British people, and the way in which he asserted, in terms dramatic enough to command attention outside the Committee, that we were tearing away from the people rights never wrested from them by any tyrant. That argument

  625
  sits uneasily in the hon. Gentleman's mouth as a member of the previous Government. It sits uneasily in his mouth to say that we are doing something indefensible by transferring the rights of this Parliament, and that the powers of legislating for the British people will have passed away, in view of what the right hon. Gentleman the Leader of the Opposition acknowledged quite frankly in May, 1967, about the extent of the transfer, as we have discussed so often, of treaty and law making powers from this country. I therefore spend no more time on that statement.
  Mr. Elystan Morgan:Perhaps the learned Solicitor-General will accept from me that if I had been a member of a Labour Government, however strange that might seem, which had brought in a Bill of this nature, I would have tendered my resignation.
  The Solicitor-General: I do not wish to speak intemperately, but that will not do, in fact, because, however and in whatever form or under whatever Government accession to the Communities was prepared, it would have had to make provision for transfer in the terms outlined by the Leader of the Opposition of a certain degree of legislative and other powers from this House of Commons, as the hon. Member for Ebbw Vale (Mr. Michael Foot) has always asserted. There is no point in trying to conceal that. Therefore, it is not strictly acceptable to me for the hon. Member for Cardigan to denounce that which was inescapable.
  The right hon. and learned Member for West Ham, South, with characteristic tranquility, uttered the same sentiment when he spoke of his harkening now to a requiem to parliamentary sovereignty. If it is indeed a requiem—and, as the right hon. and learned Gentleman knows, requiems can be cheerful as well as cheerless in certain circumstances—it is one which he helped to compose, and which, had he been in office, he would now have been helping to conduct. But the right hon. and learned Gentleman had other arguments of some substance to which I shall refer later.
  The hon. Member for Cardigan advanced other arguments which generate, or can generate, fears which are wholly unworthy, and which actually serve to
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  demonstrate the reality rather than the fantasy of what we are about. He said that if we were to withdraw from the Treaty of Accession we would face incalculable claims for damages, and in answer to that statement one asks: who would enforce such claims for damages, and how? It is the absence of any realistic or compelling answer to that question that underlines the reality as opposed to the fantasy. If the hon. Gentleman is right in saying that, how could the mere enactment of a domestic provision along the lines of the new Clause affect those fearful organs that would pounce upon us from outside. It does not relate to what is going on.
  Mr. Jay:The Solicitor-General would agree, however, that although it may be that damages could not be enforced, we, nevertheless, should be in breach of the Treaty if we were to do that.
  The Solicitor-General: The right hon. Gentleman knows something about actions in breach of treaties. No one has ever sought to challenge that. That is why we are all regarding this as a massively important Measure and why it has been debated and discussed by successive Governments for so long.
  Taking up another point made by the hon. Member for Cardigan when he embarked upon his description of Her Majesty's judges being dragged away from their oaths of loyalty to the Sovereign, again that will not do. The accession to the Communities, as the righthon. and noble Lord, Lord Gardiner pointed out in 1967, is in itself an exercise of parliamentary sovereignty. Parliament, with the Crown to which the judges have taken their oaths, is by this enactment making changes in our law allowing us to accede to the Treaties. The hon. Gentleman's argument was beside the point.
  The right hon. and learned Member for West Ham, South was right to focus upon the heart of the matter—although I do not agree altogether with his presentation of it—when he said that the hear of the matter was how to reconcile the irreconcilable, the supremacy of Community law with the sovereignty of Parliament. Those are certainly the two factors that this country has always had to balance in a way uniquely different from

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  other countries in approaching its membership of the Community. But they are not in the end irreconcilable. This is a task which would have had to be undertaken by any Government that succeeded in negotiating access to the Communities. The Clause will not help in the reconciliation.
  Mr. John Mendelson: Why?
  The Solicitor-General: I shall answer that question. I am delighted to find the hon. Member for Penistone (Mr. John Mendelson) uncharacteristically impatient to listen to what I shall say.
  The Clause will not help because the first part of it contains, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) pointed out, a fatal paradox—I shall explain that again shortly—sufficient to make the first part of the Clause futile, as he said, and really a hollow sham. The second part of the Clause, as has been pointed out by a number of my hon. Friends, particularly my hon. and learned Friend the Member for Northwich (Sir J. Foster) is itself quite irreconcilable with the Treaty obligations.
  What is the position concerning the ultimate supremacy of Parliament? I suggest to the Committee—and this is consistent with what we have all been saying, from the Government side of the Committee, from the beginning of these debates—that the position is that the ultimate supremacy of Parliament will not be affected, and it will not be affected because it cannot be affected. If one returns to everything that has been said by successive Lord Chancellors about this, one finds that way back on 2nd August, 1962, my right hon. and noble Friend Lord Dilhorne said:
  "Parliament could repeal the Act applying these Treaties; it cannot be prevented from doing so. But it must be recognised that, in International Law, such a step could be justified only in exceptional circumstances; and if it were taken without such justification, and without the approval of other member countries, it would be a breach of the international obligations assumed on entry into the Common Market."—[Official Report, House of Lords, 2nd August, 1962; Vol. 243, c. 421–2.]
  The same sort of impossibility, in theoretical terms, was echoed by the noble Lord, Lord Gardiner, on 8th May, 1967, when he said:
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  "There is in theory no constitutional means available to us to make it certain that no future Parliament would enact legislation in conflict with Community law. It would, however, be unprofitable to speculate upon the academic possibility of a future Parliament enacting legislation expressly designed to have that effect."—[Official Report, House of Lords, 8th May, 1967; Vol. 282, c. 1203.]
  Finally in this line of distinguished occupants of the Woolsack, my right hon. and noble Friend Lord Hailsham said on 27th July last year:
  "If we enter, we enter without thought of going back, as the others have entered and stay in without thought of going back. But we will remain as the others remain, sovereign. We are not in the habit of going back on our word. We do not treat treaties as scraps of paper; but we have always in practice had the power to do so, since power is a question of fact and power is the reality of sovereignty."—[Official Report, House of Lords, 27th July, 1971; Vol. 323, c. 203.]
  That is why whatever the Clause sought to say would make it, in the last resort, a hollow sham.
  With respect to the arguments advanced by my hon. and learned Friend the Member for Northwich, I do not dismiss what he said absolutely, but on balance I should have thought that if the Clause were to say, "This Act cannot be repealed", that would, in the last resort, be an empty sham. I know that there are respectable arguments to the contrary—I do not wish to go into them now—but on balance that seems the better view.
  Equally, if we were to say, "This Act can be repealed", it would be a pointless exercise because what the House of Commons says about the nature of its sovereignty can scarcely affect what is one of the ground rules of our constitutional system. An article by Professor H. W. R. Wade, cited in the judgment of Lord Denning which the right hon. and learned Gentleman quoted, says:
  "If no statute can establish the rule that the courts obey Acts of Parliament, similarly no statute can alter or abolish that rule. The rule is above any beyond the reach of statute…because it is itself the source of the authority of statute. This puts it into a class by itself among rules of common law, and the apparent paradox that it is unalterable by Parliament turns out to be a truism.…Legislation owes its authority to the rule: the rule does not owe its authority to legislation."
  That is the underlying reality and why the first part of the Clause cannot affect the position. That is the reality of which Lord Denning, and Lord Sankey too.

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  spoke in the British Coal Corporation case.
  I do no resile from the analysis of my right hon. Friend the Member for Wolverhampton, South-West of the foundation upon which the will of the people is based in the last resort. It is that from which we derive our sovereignty and which gives us a due sense of responsibility. But that will is expressed through ourselves as their elected representatives. That is why our democracy is a representative rather than a direct democracy, And that will having been expressed in Acts of Parliament is then regarded by the courts as the structure upon which on constitution depends.
  It is worth reminding the Committee that Lord Diplock, in his talk on 1st December last year to the Association of Teachers of Public Law said, representing the reality:
  "If The Queen in Parliament were to make laws which were in conflict with this country's obligations under the Treaty of Rome, those laws, and not the conflicting provisions of the Treaty, would be given effect to as the domestic law of the United Kingdom."
  That is a proposition I asserted during the debate on Clause 3, and that is the sovereignty which is being exercised here and now, with the support of successive Parliaments, this Parliament supporting successive Governments on behalf of the people of this country, as we believe and as many hon. Members on both sides of the Committee believe, for their greater advantage.
  My hon. Friend the Member for Chertsey (Mr. Grylls), my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) and the hon. Member for Inverness have all asserted that that is the way in which we exercise our sovereignty. The same proposition was well put long ago by the right hon. Gentleman the Leader of the Opposition. This is where we come back to 8th November, 1962, and I take the opportunity of paying tribute to the right hon. Gentleman's consistency on this matter. He said then:
  "I hope that there is no doubt where we stand on this issue. Our position is that if we can get the terms, then we go in.
  The third thing which I must say—and it is perhaps a pity that I need say it, but our position has been misrepresented so much—is that our attitude is not based on national sovereignty. We are not clinging like woad-painted aboriginal Britons to outmoded concepts of national sovereignty."
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  The right hon. Gentleman went back even further when he said:
  "In our first debate in August, 1961, I said: 'The question is not whether sovereignty remains absolute or not, but in what way one is prepared to sacrifice sovereignty, to whom and for what purpose. That is the real issue before us. The question is whether any proposed surrender of sovereignty will advance or retard our progress to the kind of world we all want to see.' That has been our attitude right through."—[Official Report, 8th November, 1962, Vol. 666; c. 1271.]
  By joining the Communities on this basis and upon that judgment, which Parliament has made on so many occasions as to the balance of advantage and disadvantage, we must accept, as was pointed out by my hon. Friend the Member for Flint, West (Sir A. Meyer), that the system of the Community provides for the supremacy of Community law, and inevitably for the uniformity of that system of Community law.
  [Mr. JOHN BREWIS in the Chair]
  7.30 p.m.
  It is to our advantage as much as to the advantage of other members of the Community that it should be uniformly applied. The workability of such a system depends upon the acceptance of decisions by the European Court of Justice and of decisions, within the scope of the Treaty and lawfully arrived at, of the institutions. Yet it is that which the second half of the Clause seeks to set aside.
  It is for that reason that the second part of the Clause would be, as my hon. and learned Friend the Member for Northwich pointed out, a breach of honour, a breach of obligation, inevitably arising from the Treaties—an attempt in one and the same Bill to set aside what follows, as the hon. Member for Cardigan pointed out, from Clause 2(4) and Clause 3(1), an inconsistent provision sitting alongside them; and it would be positively misleading to those on whose behalf we seek to enact the legislation.
  How can we in this context seek to write in as it were a blanket exclusion Clause at the end of legislation designed to put us into the position to implement our obligations? It is not only in the context of the marriage contract that that kind of thing is unacceptable.
  I do not under-estimate the importance of what the Committee, the House of Commons, and Parliament have been

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  about throughout all these long debates. I hope I shall be forgiven for saying that it was my duty to consider the way in which we set about implementing these obligations and putting ourselves into the position to do so; and I hope that I did so. I certainly did not do it without being aware of the responsibilities which rested upon me. I read the book containing the collected speeches of my right hon. Friend the Member for Wolverhampton, South-West, and with the help of many people studied most of the articles and propositions that have been advanced by hon. Members on both sides of the House of Commons in the course of the debates.
  At the end of all that, I believe, and the Government believe, that in law and in policy the way in which the Bill seeks to fulfil these tasks is a correct and effective way of doing it. Certainly I assert, and I think that it is important to assert, that we are doing this—again I hope to be forgiven for quoting words used by the Leader of the Opposition when he was Prime Minister—
  "to create a new unity…a unity the greater and more real because it builds on, and does not reject, the rich diversity of those nation States whose national aspirations, culture and characteristics will become more vigorous and more fruitful by being welded together in a wider outward-looking unity inspired by a common purpose and a common resolve for peace."—[Official Report, 8th May, 1967; Vol. 746, c. 1097.]
  It is not an unworthy end. The Bill will not be assisted in fulfilling it by the addition of the Clause.
  Mr. Ronald King Murray: This is obviously an occasion for declarations. The Solicitor-General has at least accepted that it is an occasion for him to make a declaration of his responsibility for the terms of the Bill. We respect him for that. Perhaps he will take the inclination for express declaration just one stage further and follow the logic of his own argument by accepting the Clause, not merely in principle but as a useful addition to the Bill.
  It is not in dispute in the debate that the provisions of the Bill make substantial inroads into the sovereign power of Parliament, into its power of decision and its power of control. That is common ground, although I suspect it is a matter that has been giving the right hon. and
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  learned Member for Hertfordshire, East (Sir D. Walker-Smith) some doubts.
  The substance of sovereignty is, at this stage of the Committee proceedings, past praying for. The hope at this stage is that something of the essential form of sovereignty can yet be salvaged. So the Clause seeks to save the ultimate legal sovereignty of Parliament by express reservation of it. The argument is that express reservation is legally desirable, as my right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) put it, for the avoidance of doubt.
  I could not hope to add to the eloquent and forceful case pressed by my right hon. and learned Friend as to why this declaration of sovereignty should be embodied in our internal law for the benefit of the citizens of the United Kingdom. I may perhaps add a footnote dealing with the reasons why this declaration is also desirable in terms of our external legal relations. Here I tend rather, to my surprise, to agree with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) than with my hon. Friend the Member for Cardigan (Mr. Elystan Morgan), because I believe that my hon. Friend perhaps exaggerated the extent to which a change in the Community arrangements can be made without breach of the treaties if it is made in the right way.
  Paragraph 22 of the 1967 White Paper dealt with the manner in which the writ of Community instruments would run in this land after entry. It proceeded:
  "These instruments, like ordinary delegated legislation, would derive their force under the law of the United Kingdom from the original enactment passed by Parliament."
  The corollary is that, if Parliament could and did repeal the Bill, all Community law would cease to have legal effect in this country. I take it that the Solicitor-General has conceded that.
  That might be constitutionally permissible but yet repugnant to the European Court. Hence the wording of the Clause. It is because of our anxiety that we should face this apparent conflict between the power of the European Court and the ultimate sovereignty of the House of Commons that the wording of the Clause stands as it does.
  We on this side are not ashamed of the paradox that it presents because.

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  as the right hon. Member for Wolverhampton, South-West (Mr. Powell) recognised, the paradox is a real one and not an abstract one. We on this side believe that we should face fairly and squarely the possibility of such conflict between sovereignty and the Community's writ—indeed, that we owe it to our future partners in Europe to declare ourselves openly and frankly on this matter.
  How does the external legal position stand then? Article 240 of the Treaty of Rome states:
  "The Treaty is concluded for an unlimited period."
  It is for ever. It is not like a partnership, despite what the hon. and learned Member for Northwich (Sir J. Foster) said, because the analogy on which the hon. and learned Member founded the analogy of partnership, will not suffice. Partnerships can be dissolved by unilateral act. Nobody is suggesting that that can be done in the case of the Community. The treaty, then, is for ever. It provides no machinery for secession. It provides no machinery for denunciation.
  I say that there is nothing particularly unusual about international treaties which are intended to be binding nevertheless containing provisions under which those treaties can be dissolved, altered or denounced or by which members can withdraw from them. That does not prevent international treaties from being forged and being maintained honourably.
  We are asking for no more and no less than that. There is no provision in the Treaty of Rome for unilateral withdrawal. Equally there is no formal sanction against such withdrawal. Again, I agree with the Solicitor-General's view and disagree with that of my hon. Friend the Member for Cardigan.
  The treaties can be amended. They have been amended—Article 203 is a case in point—by agreement. No doubt withdrawal by a member State agreed to by its partners could be legally effected by amendment of the treaties. It would be subject to a single veto. Dissent by a single member State would make the withdrawal illegal at international law.
  To avoid the stigma of a breach of international law of this kind, we would have to negotiate our way out; and this could prove at least as difficult—I should have thought very much more difficult—
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  than negotiating our way in. We might make the process easier—it certainly could not make it more difficult—by an express declaration of ultimate sovereignty in terms of the Clause. It would be the honest and straightforward way of dealing with our future European partners, particularly in view of what has been said from time to time by the Chancellor of the Duchy of Lancaster about the veto and about vital national interests.
  The 1971 White Paper said:
  "If unacceptable situations arise the very survival of the Community would demand that the institutions find an equitable solution."
  The corollary of that must be that the right is recognised for a member State to withdraw honourably and legally. That is all that the Clause asserts and it does it openly and honestly. No real criticism has been made the Clause concerning its drafting or its effects. The criticism is criticism of style and the suggestion, which I hope I have refuted, that it somehow impugns our honourable intentions of maintaining an agreement to which we are bound.
  The Government and their supporters are on the horns of a dilemma. Either the Clause is unexceptionable in what it contains, in which case it should be accepted; or it is objectionable. But if it is objectionable the Government must reject the assurances of their Ministers to the same effect which have been made not once but repeatedly. The Ministers are tied by their own words. They must accept the Clause. The Solicitor-General did not depart from the pattern.
  Sir Derek Walker-Smith: Will the hon. and learned Member deal with this point? This is what troubles me about the new Clause. If there were to be a withdrawal from the Community by agreement, or if the Community were to be dissolved by mutual consent, clearly there could be no difficulty in the exercise of the sovereignty of Parliament to repeal the Act, irrespective of whether the new Clause says anything about it. If on the other hand there is no such agreement to our departure from the Community, would not the exercise by Parliament of its constitutional rights involve necessarily a breach of international obligation, and is not this a dilemma which is not resolved by putting into the Bill a declaratory new Clause

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  which could be fulfilled only in the relevant circumstances by breach of international obligations? That is an inescapable dilemma which I have indicated now for about 10 years. I do not feel very happy about the way in which the Clause seeks to resolve it.
  Mr. Murray: I understand the right hon. and learned Gentleman's difficulty and we appreciate the consistency and clarity with which he has put his view. I do not pretend that the new Clause resolves the difficulty, but it is more honest and frank. It at least states the position, as we on this side regard it, clearly and honestly. It gives fair and reasonable notice to our future partners in Europe about where we stand on the matter.
  Mr. English:Is not the answer to the question by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker Smith), as I believe has happened with other treaties ratified by Measures of this character, that were the Clause to be accepted it would be possible for Her Majesty's Government when ratifying their accession to the Treaty of Rome to insert in the ratification provision a statement similar to that which would have been put into the Bill by the new Clause? Would not that have the effect in international law that we desire?
  Mr. Murray: My hon. Friend has made a useful suggestion. The paradox facing the Government, however, is how it can be right for the words which are substantially those of the new Clause to be correct in the mouths of Ministers but wrong when added to the Bill.
  To me the most compelling argument for the express reservation of sovereignty in the Bill is not so much legal or constitutional, but political. This country has no written constitution and no constitutional guarantees. The protection of the people against political oppression and against financial imposition—they are both vitally important in connection with the Common Market—is the sovereignty of Parliament, because it is the sovereignty of the people that is entrusted to the House of Commons. It is that sovereignty which protects the people of this land against tyrants at home and oppressors abroad. The House of Commons is an
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  instrument of the people's sovereignty; it is not the people's master. John Stuart Mill put the point a century ago in his essay on representative government.
  7.45 p.m.
  Mr. Tom King: At the end of this long Committee stage, is not the hon. and learned Gentleman in confusion in what he says about the ability to protect the inhabitants of this land? Is he yet again failing to distinguish between omnipotence and sovereignty?
  Mr. Murray: Perhaps if the hon. Member listens he will see what John Stuart Mill had to say on the subject. It is more relevant. He said:
  "There is no difficulty in showing that the ideally best form of government is that in which the sovereignty, or supreme controlling power in the last resort, is vested in the entire aggregate of the community; every citizen not only having a voice in the exercise of that ultimate sovereignty, but being, a least occasionally, called on to take an actual part".
  When it is true to that ideal Parliament fulfils its trust to the people. The new Clause would allow the pledge of that trust to be redeemed, mortgaged as it is in the Bill in security for the onerous terms of entry which we owe to the Community.
  No doubt with that trust in mind the Prime Minister made entry subject to the full-hearted consent of Parliament and people. It follows from that, does it not, that express reservation of sovereignty in terms of the Clause is a direct moral obligation upon the Government in view of that express undertaking? But the Prime Minister has already defaulted on that promissory note. He said last year:
  "I have always made it absolutely plain to the British people that consent to this course"—
  that is, consent to entry—
  "would be given by Parliament…Parliament is the Parliament of all the people."—[Official Report, 28th October, 1971; Vol. 823, c. 2212.]
  He had already forgoten the people and he had moved on to Parliament because
  "Parliament is the Parliament of all the people".
  The next stage, following the inexorable logic of repeated marginal majorities in the Committee stage, would be to forget Parliament and to go for the full-hearted consent of the Government because it is the Government of all the

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  people. Perhaps the consent is more full-hearted in No. 10 Downing Street than elsewhere in the Government.
  The Prime Minister has already broken the trust given by that undertaking, and he has forgotten the people. "Our sovereign, the people" are the words of the toast by which Charles James Fox lost his membership of the Privy Council in 1798. We on the Opposition side cannot accept that we can substitute for the consent of the people the full-hearted consent of one Prime Minister.
  Mr. Douglas Dodds-Parker: I was quite willing to go straight to the vote but I saw an hon. Member on the Oppositionside rise to speak. If he wants to continue the debate I am prepared to respond, I hope in moderate terms, to some of the insults by the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray). If anyone has broken a trust it is the Leader of the Opposition who has put in such little appearance in our debates in the recent months. [Hon. Members: "What about the Prime Minister?"] My right hon. Friend the Prime Minister has other duties which are not like those of the Leader of the Opposition, who is going about spending most of his time writing memoirs about his so-called colleagues and avoiding his duties in the House. Whenever I have been a member of the Opposition, my leader has always been in attendance on important matters.
  The hon. Member for Walthamstow, West (Mr. Deakins) spoke about arrogant contempt. He should have seen particularly the 1945 Parliament and the "We are the masters now" attitude. I saw a Socialist Law Officer of the Crown make that statement from the Front Bench. I recall the arrogant contempt with which the hon. Member for Ebbw Vale (Mr. Michael Foot), who is now the Shadow Leader of the House, used to deal with his right hon. Friend the Member for Stepney (Mr. Shore) during the last Parliament. One had only to watch the hon. Gentleman when he was leader of the "no-go area" below the Gangway to understand what arrogance and contempt was. I am not surprised that he leads the Opposition now.
  I do not wish to take up the time of the Committee—[Hon. Members: "Then
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  sit down."] I have been waiting here the whole afternoon—
  Mr. Arthur Lewis: I have been attending these debates for 12 weeks.
  Mr. Dodds-Parker: So have I, which is more than many other hon. Members can say. I have waited hoping that I could speak before the winding-up speeches came, and I have some observations to deliver. The new Clause challenges the whole concept of the United Kingdom joining the Community. That is what is intended, as the hon. and learned Member for Leith made clear.
  We are back to square one. I do not mind. I have no quarrel with those hon. Members on both sides who have objected, some over many years, to our joining the Community. They have argued again the issue of sovereignty, but that argument was destroyed by my hon. and learned Friend the Solicitor-General in his speech a few minutes ago.
  In 1945 Parliament transferred from the Government of this country to NATO decisions which have been of far more significance in the last 25 years, in my view, than the transfer of economic power now proposed can ever be. I often wonder whether right hon. and hon. Members opposite really believe that they can go it alone, or whether they have some other proposal for the way this country should face the future without entering into more co-operative ways of working. What has happened to the £ over recent years, and especially over the past few weeks, stresses again the need for a far more settled and ready way of working together within Western Europe if we are to protect our currency.
  It is a pity that hon. Members on the Opposition side exaggerate. They do not strengthen their case. We recall what was said by those who supported entry in 1967 and 1970, above all by the right hon. Member for Stepney, who was then a Cabinet Minister. Time and again he has avoided answering the question: how could he make the statements which he now makes when he was at that time a member of the Government and supported the 1967 White Paper, making a number of speeches in support of his right hon. Friend who is now the Leader of the Opposition?

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  We have heard from the Opposition that they will not break treaties but will renegotiate them. I am not too unhappy about that, because I remember how they said they would renegotiate the Nassau agreement, and I am delighted to know that the Nassau agreement still remains.
  The Opposition's speeches have presented a travesty of the future conditions in which hon. Members on both sides will work together with our European friends. I am one of those—we come from both sides—who have the privilege of attending several of the international assemblies, and I know what the reaction is to the sort of speeches which hon. Members opposite now make, especially among the Social Democrats who, since the end of the war, have been looking to the British Labour Party for a lead in building Europe and to this country for a lead in building institutions to maintain freedom under the law. The speeches we have heard today from the Opposition will be no help whatever.
  As my right hon. and hon. Friends have said—some hon. Members opposite have made the same point—we may have a diminution of sovereignty but the correct way to look at it is that we are pooling sovereignty. That is the way it has often been expressed. We are going into a partnership in which this country, without arrogance and without contempt, may play a useful and constructive part.
  Mr. Denzil Davies: I shall not detain the Committee, and I shall keep to the terms of the Clause, unlike the hon. Member for Cheltenham (Mr. Dodds-Parker).
  When I played a small part in the preparation of the new Clause, I did not expect that it would cause such excitement among the poor Europeans. In my naive way, I thought that the Clause would do no more than incorporate into the Bill words which had been uttered time and again by the Chancellor of the Duchy of Lancaster. I imagine that the right hon. and learned Gentleman must feel a little slighted to find that his hon. Friends do not want to see those hallowed words of his incorporated in legislation. One wonders why not. Why do not the poor Europeans want to take this final step of incorporating in the Bill assurances which the Government have given?
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  As I read it, the Clause is in no sense an attempt to torpedo the idea of our entry into the Common Market. On the contrary, it is an attempt, in the light of the assurances given, to resolve any future doubt which might arise in the mind of the judiciary when interpreting the Bill. We have heard a lot about sovereignty, and I do not want to go over that argument again, but I hope that the Committee realises that sovereignty is a legal concept, too, and the question is: how will the courts of this country interpret the Bill, and how will they interpret future Acts possibly designed to repeal or substantially modify it?
  Although this Parliament may do what it likes, it is the courts of this country, and ultimately the European courts, which will decide whether later legislation is to take precedence over former. For this purpose, in order, so to speak, to make the matter clear to the judges—not only our own judges who are familiar with the doctrine that Parliament cannot fetter its future actions but the European judges, too—this Parliament should make clear that future legislation shall not be encumbered or restricted by the present Bill.
  If the Government had introduce a different Bill, it might not have been necessary to insert these words. However, after long consideration and discussion in Committee, it is by no means clear to me, whatever the views of eminent lawyers may be, that a future Measure seeking substantially to modify this Bill would take precedence over it in our courts and the courts of Europe.
  I was surprised to hear the Solicitor-General referring to the declaration by Lord Diplock, I think it was, in 1962. I cannot remember his words exactly, but I understand that Lord Diplock said something about future legislation overriding any obligations under the treaty and being enforceable in our courts.
  The Solicitor-General: I want to be sure that there is no misunderstanding of fact. The quotations I made from 1962 came, one, from the Leader of the Opposition, and, two, from Lord Dilhorne. The quotation from Lord Diplock was December, 1971.
  Mr. Davies: All right, December, 1971. But I understood the Solicitor-General

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  to say that Lord Diplock meant that if a future Act of Parliament contravened an obligation arising under the treaty, the courts of this country would give precedence to and would enforce the later Act of Parliament as opposed to the obligation under the treaty. That is how I understood what Lord Diplock had said in 1971, according to the Solicitor-General.
  Later in his speech, the Solicitor-General said, "Of course, Community law is superior in these matters. Community law takes precedence in these cases". He has drafted a Bill—or the parliamentary draftsmen have drafted it—from that standpoint. Clause 2(4) makes clear that any future enactment shall take effect subject to this Bill. By Clause 3 we are told that the courts of this country must take into account the principles laid down by the European Court of Justice.
  Thus, the Government have drafted a Bill which, on the face of it, is designed to limit the future ability of Parliament to repeal this legislation. To say that Lord Diplock said that it could not be done and then bring in a Bill which seeks to do it, whether it can do it or not, is a complete paradox in the Solicitor-General's argument.
  8.0 p.m.
  This is the kind of confusion which will arise and which the Clause seeks to do away with. It tells the judges, "You are not sure whether a later Act takes priority over this Act. That doubt is resolved for you," because it tells the judges that in a matter of doubt the sovereignty of Parliament always overrides in the ultimate. The purpose of the Clause is to resolve the kind of doubt which arises from the legislation.
  The Solicitor-General said that if we were to pass legislation which had the effect of taking us out of the Rome Treaty the payment of damages could not be enforced. The Clause is intended to enable us to withdraw legally from the Treaty of Rome, because any European judge, looking at a future Act, would have to interpret that Act on the basis of the sovereignty of Parliament. But if the Clause is not accepted, the European Court—and the final arbiter would be the European Court—would seek to say, "The earlier Act takes precedence over
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  the later Act," and then we shall be in the position of breaking our treaty obligations.
  The Solicitor-General said that damages could not be enforced, but he did not deny that if we broke our treaty obligations damages could be asked from us or we would be liable to pay damages. I should not be so sure that some of those damages could not be enforced, because we are not living in a simple peasant society in which we have no trading relationships with Europe. What about the British subsidiaries in Europe? What about their assets? What about royalty agreements and payments of money arising under European agreements? Why could not the European Court sequestrate those assets in Europe in order to exact damages or raise tariff barriers against us in order to seek to obtain those damages from us because of our breach of obligations? We should not dismiss this matter as lightly as the Solicitor-General sought to dismiss it.
  The fear of damages will prevent us from passing that kind of legislation. I do not know the history of the Concorde project, but it has been suggested in the newspapers that perhaps one reason why we did not feel impelled to break our obligation was that we might be sued by the French in the International Court of Justice. I do not know whether there is any truth in that. But Parliament, if it were to seek to repeal this legislation, would have to consider the effect, not only of damages being called from, but of damages being extracted from, our European trading organisations.
  The Government do not want to include the Clause in the Bill. One is left with the suspicion, as happens so often in these debates, that they make statements at the Dispatch Box, but when it comes to the point and they are asked to incorporate the effect of those statements in legislation they will not do so. This calls their credibility into account.
  At the election, the Prime Minister said that we would not enter the Community without the full-hearted consent of the British people. He has refused to honour that pledge. He said that we would only negotiate—no more, no less. He has refused to honour that pledge. Now the Solicitor-General has said time and again that there will be no derogation of

  643
  sovereignty. When we ask him to put that in the legislation, he is afraid to do so because it is another pledge which he knows he cannot honour.
  Question put, That the Clause be read a Second time:—
  The Committee divided: Ayes 265, Noes 278.

  Division No. 267.]

  AYES

  [8.5 p.m.

  Abse, Leo

  Ewing, Henry

  Lyons, Edward (Bradford, E.)

  Allaun, Frank (Salford, E.)

  Faulds, Andrew

  Mabon, Dr. J. Dickson

  Allen, Scholefield

  Fell, Anthony

  McBride, Neil

  Archer, Peter (Rowley Regis)

  Fitch, Alan (Wigan)

  McCartney, Hugh

  Armstrong, Ernest

  Fletcher, Raymond (Ilkeston)

  McElhone, Frank

  Ashley, Jack

  Fletcher, Ted (Darlington)

  McGuire, Michael

  Ashton, Joe

  Foley, Maurice

  Mackenzie, Gregor

  Atkinson, Norman

  Foot, Michael

  Mackie, John

  Bagier, Gordon, A. T.

  Ford, Ben

  Mackintosh, John P.

  Barnett, Guy (Greenwich)

  Forrester, John

  McMillan, Tom (Glasgow, C.)

  Barnett, Joel (Heywood and Royton)

  Fraser, John (Norwood)

  McNamara, J. Kevin

  Baxter, William

  Freeson, Reginald

  Mahon, Simon (Bootle)

  Benn, Rt. Hn. Anthony Wedgwood

  Garrett, W. E.

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

  Bennett, James (Glasgow, Bridgeton)

  Gilbert, Dr. John

  Marquand, David

  Bidwell, Sydney

  Ginsburg, David (Dewsbury)

  Marsden, F.

  Biffen, John

  Golding, John

  Marshall, Dr. Edmund

  Bishop, E. S.

  Gordon Walker, Rt. Hn. P. C.

  Marten, Neil

  Blenkinsop, Arthur

  Gourlay, Harry

  Mason, Rt. Hn. Roy

  Boardman, H. (Leigh)

  Grant, George (Morpeth)

  Mayhew, Christopher

  Body, Richard

  Grant, John D. (Islington, E.)

  Mellish, Rt. Hn. Robert

  Booth, Albert

  Griffiths, Eddie (Brightside)

  Mendelson, John

  Bottomley, Rt. Hn. Arthur

  Griffiths, Will (Exchange)

  Mikardo, Ian

  Bradley, Tom

  Hamilton, William (Fife, W.)

  Millan, Bruce

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Hamling, William

  Miller, Dr. M. S.

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

  Hardy, Peter

  Milne, Edward

  Brown, Ronald (Shoreditch & F'bury)

  Harrison, Walter (Wakefield)

  Mitchell, R. C. (S'hampton, Itchen)

  Buchan, Norman

  Hart, Rt. Hn. Judith

  Moate, Roger

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

  Hattersley, Roy

  Molyneaux, James

  Butler, Mrs. Joyce (Wood Green)

  Healey, Rt. Hn. Denis

  Morgan, Elystan (Cardiganshire)

  Callaghan, Rt. Hn. James

  Heffer, Eric S.

  Morris, Alfred (Wythenshawe)

  Campbell, I. (Dunbartonshire,W.)

  Hilton, W. S.

  Morris, Charles R. (Openshaw)

  Cant, R. B.

  Hooson, Emlyn

  Morris, Rt. Hn. John (Aberavon)

  Carmichael, Neil

  Horam, John

  Moyle, Roland

  Carter, Ray (Birmingh'm, Northfield)

  Houghton, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Carter-Jones, Lewis (Eccles)

  Howell, Denis (Small Heath)

  Murray, Ronald King

  Castle, Rt. Hn. Barbara

  Huckfield, Leslie

  Oakes, Gordon

  Clark, David (Colne Valley)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Ogden, Eric

  Cocks, Michael (Bristol, S.)

  Hughes, Mark (Durham)

  O'Halloran, Michael

  Cohen, Stanley

  Hughes, Robert (Aberdeen, N.)

  O'Malley, Brian

  Coleman, Donald

  Hughes, Roy (Newport)

  Oram, Bert

  Concannon, J. D.

  Hutchison, Michael Clark

  Orbach, Maurice

  Conlan, Bernard

  Irvine,Rt.Hn.SirArthur(Edge Hill)

  Orme, Stanley

  Cox, Thomas (Wandsworth, C.)

  Janner, Greville

  Oswald, Thomas

  Crawshaw, Richard

  Jay, Rt. Hn. Douglas

  Owen, Dr. David (Plymouth, Sutton)

  Cronin, John

  Jeger, Mrs. Lena

  Padley, Walter

  Crosland, Rt. Hn. Anthony

  Jenkins, Hugh (Putney)

  Paget, R. T.

  Crossman, Rt. Hn. Richard

  Jenkins, Rt. Hn. Roy (Stechford)

  Palmer, Arthur

  Cunningham, G. (Islington, S.W.)

  John, Brynmor

  Pannell, Rt. Hn. Charles

  Cunningham, Dr. J. A. (Whitehaven)

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

  Parker, John (Dagenham)

  Dalyell, Tam

  Johnson, Walter (Derby, S.)

  Perry, Robert (Liverpool, Exchange)

  Darling, Rt. Hn. George

  Jones, Dan (Burnley)

  Pavitt, Laurie

  Davidson, Arthur

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

  Peart, Rt. Hn. Fred

  Davies, Denzil (Llanelly)

  Jones, Gwynoro (Carmarthen)

  Pentland, Norman

  Davies, Ifor (Gower)

  Jones, T. Alec (Rhondda, W.)

  Perry, Ernest G.

  Davis, Clinton (Hackney, C.)

  Judd, Frank

  Powell, Rt. Hn. J. Enoch

  Davis, Terry (Bromsgrove)

  Kaufman, Gerald

  Prentice, Rt. Hn. Reg.

  Deakins, Eric

  Kelley, Richard

  Prescott, John

  de Freitas, Rt. Hn. Sir Geoffrey

  Kerr, Russell

  Price, J. T. (Westhoughton)

  Delargy, H. J.

  Kilfedder, James

  Price, William (Rugby)

  Dell, Rt. Hn. Edmund

  Kinnock, Neil

  Probert, Arthur

  Doig, Peter

  Lambie, David

  Rankin, John

  Dormand, J. D.

  Lamborn, Harry

  Reed, D. (Sedgefield)

  Douglas, Dick (Stirlingshire, E.)

  Lamond, James

  Rees, Merlyn (Leeds, S.)

  Douglas-Mann, Bruce

  Leadbitter, Ted

  Rhodes, Geoffrey

  Driberg, Tom

  Lee, Rt. Hn. Frederick

  Richard, Ivor

  Duffy, A. E. P.

  Leonard, Dick

  Roberts,Rt.Hn.Goronwy (Caernarvon)

  Dunn, James A.

  Lestor, Miss Joan

  Robertson, John (Paisley)

  Dunnett, Jack

  Lever, Rt. Hn. Harold

  Rodgers, William (Stockton-on-Tees)

  Edelman, Maurice

  Lewis, Arthur (W. Ham, N.)

  Roper, John

  Edwards, Robert (Bilston)

  Lewis, Ron (Carlisle)

  Rose, Paul B.

  Edwards, William (Merioneth)

  Lipton, Marcus

  Ross, Rt. Hn. William (Kilmarnock)

  Ellis, Tom

  Lomas, Kenneth

  Rowlands, Ted

  English, Michael

  Loughlin, Charles

  Sandelson, Neville

  Evans, Fred

  Lyon, Alexander W. (York)

  Sheldon, Robert (Ashton-under-Lyne)

  Shore, Rt. Hn. Peter (Stepney)

  Summerskill, Hn. Dr. Shirley

  White, James (Glasgow, Pollock)

  Silkin, Rt. Hn. John (Deptford)

  Swain, Thomas

  Whitehead, Phillip

  Silkin, Hn. S. C. (Dulwich)

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

  Whitlock, William

  Silverman, Julius

  Thomas, Jeffrey (Abertillery)

  Willey, Rt. Hn. Frederick

  Skinner, Dennis

  Thomson, Rt. Hn. G. (Dundee, E.)

  Williams, Alan (Swansea, W.)

  Small, William

  Torney, Tom

  Williams, Mrs. Shirley (Hitchin)

  Smith, John (Lanarkshire, N.)

  Tuck, Raphael

  Williams, W. T. (Warrington)

  Spearing, Nigel

  Turton, Rt. Hn. Sir Robin

  Wilson, Alexander (Hamilton)

  Spriggs, Leslie

  Urwin, T. W.

  Wilson, Rt. Hn. Harold (Huyton)

  Stallard, A. W.

  Varley, Eric G.

  Wilson, William (Coventry, S.)

  Stewart, Donald (Western Isles)

  Walker, Harold (Doncaster)

  Woof, Robert

  Stewart, Rt. Hn. Michael (Fulham)

  Wallace. George

  Stoddart, David (Swindon)

  Watkins, David

  TELLERS FOR THE AYES:

  Stonehouse, Rt. Hn. John

  Weitzman, David

  Mr. Joseph Harper and and Mr. James Hamilton.

  Strang, Gavin

  Wellbeloved, James

  Strauss, Rt. Hn. G. R

  Wells, William (Walsall, N.)

  NOES

  Adley, Robert

  du Cann, Rt. Hn. Edward

  Kaberry, Sir Donald

  Alison, Michael (Barkston Ash)

  Eden, Sir John

  Kellett-Bowman, Mrs. Elaine

  Allason, James (Hemel Hempstead)

  Edwards, Nicholas (Pembroke)

  Kershaw, Anthony

  Amery, Rt. Hn. Julian

  Elliot, Capt. Walter (Carshalton)

  Kimball, Marcus

  Archer, Jeffrey (Louth)

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

  King, Evelyn (Dorset, S.)

  Astor, John

  Emery, Peter

  King, Tom (Bridgwater)

  Atkins, Humphrey

  Eyre, Reginald

  Kinsey, J. R.

  Awdry, Daniel

  Fenner, Mrs. Peggy

  Kirk, Peter

  Baker, Kenneth (St. Marylebone)

  Fidler, Michael

  Knight, Mrs. Jill

  Balniel, Lord

  Finsberg, Geoffrey (Hampstead)

  Lambton, Lord

  Barber, Rt. Hn. Anthony

  Fisher, Nigel, (Surbiton)

  Lamont, Norman

  Batsford, Brian

  Fletcher-Cooke, Charles

  Lane, David

  Beamish, Col. Sir Tufton

  Fookes, Miss Janet

  Langford-Holt, Sir John

  Bennett, Dr. Reginald (Gosport)

  Foster, Sir John

  Legge-Bourke, Sir Harry

  Benyon, W.

  Fowler, Norman

  Le Merchant, Spencer

  Berry, Hn. Anthony

  Fry, Peter

  Lewis, Kenneth (Rutland)

  Biggs-Davison, John

  Galbraith, Hn. T. G.

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

  Blaker, Peter

  Gardner, Edward

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

  Boardman, Tom (Leicester, S.W.)

  Gibson-Watt, David

  Longden, Gilbert

  Boscawen, Robert

  Gilmour, Ian (Norfolk, C.)

  Loveridge, John

  Bossom, Sir Clive

  Glyn, Dr. Alan

  Luce, R. N.

  Bowden, Andrew

  Godber, Rt. Hn. J. B.

  McAdden, Sir Stephen

  Braine, Bernard

  Goodhart, Philip

  MacArthur, Ian

  Bray, Ronald

  Goodhew, Victor

  McCrindle, R. A.

  Brinton, Sir Tatton

  Gorst, John

  McLaren, Martin

  Brocklebank-Fowler, Christopher

  Gower, Raymond

  Maclean, Sir Fitzroy

  Brown, Sir Edward (Bath)

  Grant, Anthony (Harrow, C.)

  Macmillan, Maurice (Farnham)

  Bruce-Gardyne, J.

  Gray, Hamish

  McNair-Wilson, Michael

  Bryan, Paul

  Green, Alan

  Maddan, Martin

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

  Grieve, Percy

  Madel, David

  Buck, Antony

  Burden, F. A.

  Griffiths, Eldon (Bury St. Edmunds)

  Marples, Rt. Hn. Ernest

  Butler, Adam (Bosworth)

  Grylls, Michael

  Mather, Carol

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

  Gummer, Selwyn

  Maude, Angus

  Carlisle, Mark

  Gurden, Harold

  Maudling, Rt. Hn. Reginald

  Carr, Rt. Hn. Robert

  Hall, Miss Joan (Keighley)

  Mawby, Ray

  Cary, Sir Robert

  Hall, John (Wycombe)

  Maxwell-Hyslop, R. J.

  Channon, Paul

  Hall-Davis, A. G. F.

  Meyer, Sir Anthony

  Chapman, Sydney

  Hamilton, Michael (Salisbury)

  Mills, Peter (Torrington)

  Chataway, Rt. Hn. Christopher

  Hannam, John (Exeter)

  Mills, Stratton (Belfast, N.)

  Chichester-Clark, R.

  Harrison, Brian (Maldon)

  Miscampbell, Norman

  Churchill, W. S.

  Harrison, Col. Sir Harwood (Eye)

  Mitchell, Lt.-Col.C.(Aberdeenshire,W)

  Clark, William (Surrey, E.)

  Haselhurst, Alan

  Mitchell, David (Basingstoke)

  Clarke, Kenneth (Rushcliffe)

  Hastings, Stephen

  Money, Ernle

  Clegg, Walter

  Havers, Michael

  Monks, Mrs. Connie

  Cockeram, Eric

  Hawkins, Paul

  Monro, Hector

  Cooke, Robert

  Heseltine, Michael

  Montgomery, Fergus

  Coombs, Derek

  Higgins, Terence L.

  More, Jasper

  Cooper, A. E.

  Hiley, Joseph

  Morgan, Geraint (Denbigh)

  Cordle, John

  Hill, James (Southampton, Test)

  Morgan-Giles, Rear-Adm.

  Corfield, Rt. Hn. Frederick

  Holland, Philip

  Morrison, Charles

  Cormack, Patrick

  Holt, Miss Mary

  Mudd, David

  Costain, A. P.

  Hordern, Peter

  Murton, Oscar

  Critchley, Julian

  Hornby, Richard

  Neave, Airey

  Crouch, David

  Hornsby-Smith,Rt.Hn.Dame Patricia

  Nicholls, Sir Harmar

  Crowder, F. P.

  Howe, Hn. Sir Geoffrey (Reigate)

  Noble, Rt. Hn. Michael

  Dalkeith, Earl of

  Howell, David (Guildford)

  Normanton, Tom

  Davies, Rt. Hn. John (Knutsford)

  Howell, Ralph (Norfolk, N.)

  Nott, John

  d'Avigdor-Goldsmid, Sir Henry

  Hunt, John

  Onslow, Cranley

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

  Iremonger, T. L.

  Oppenheim, Mrs. Sally

  Dean, Paul

  James, David

  Osborn, John

  Deedes, Rt. Hn. W. F.

  Jenkin, Patrick (Woodford)

  Owen, Idris (Stockport, N.)

  Digby, Simon Wingfield

  Jessel, Toby

  Page, Graham (Crosby)

  Dixon, Piers

  Johnson Smith, G. (E. Grinstead)

  Page, John (Harrow, W.)

  Dodds-Parker, Douglas

  Johnston, Russell (Inverness)

  Pardoe, John

  Drayson, G. B.

  Jopling, Michael

  Parkinson, Cecil

  646

  647

  Peel, John

  Shelton, William (Clapham)

  Tugendhat, Christopher

  Percival, Ian

  Simeons, Charles

  van Straubenzee, W. R.

  Peyton, Rt. Hn. John

  Sinclair, Sir George

  Vaughan, Dr. Gerard

  Pike, Miss Mervyn

  Skeet, T. H. H.

  Vickers, Dame Joan

  Pink, R. Bonner

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

  Waddington, David

  Pounder, Rafton

  Soref, Harold

  Walder, David (Clitheroe)

  Price, David (Eastleigh)

  Speed, Keith

  Walker, Rt. Hn. Peter (Worcester)

  Proudfoot, Wilfred

  Spence, John

  Wall, Patrick

  Pym, Rt. Hn. Francis

  Sproat, Iain

  Walters, Dennis

  Quennell, Miss J. M.

  Stainton, Keith

  Ward, Dame Irene

  Raison, Timothy

  Stanbrook, Ivor

  Warren, Kenneth

  Ramsden, Rt. Hn. James

  Steel, David

  Weatherill, Bernard

  Rawlinson, Rt. Hn. Sir Peter

  Stewart-Smith, Geoffrey (Belper)

  Wells, John (Maidstone)

  Redmond, Robert

  Stodart, Anthony (Edinburgh, W.)

  White, Roger (Gravesend)

  Reed, Laurance (Bolton, E.)

  Stokes, John

  Wiggin, Jerry

  Rees, Peter (Dover)

  Stuttaford, Dr. Tom

  Wilkinson, John

  Rees-Davies, W. R.

  Tapsell, Peter

  Winterton, Nicholas

  Renton, Rt. Hn. Sir David

  Taylor, Sir Charles (Eastbourne)

  Wolrige-Gordon, Patrick

  Ridley, Hn. Nicholas

  Taylor, Frank (Moss Side)

  Wood, Rt. Hn. Richard

  Ridsdale, Julian

  Taylor, Robert (Croydon, N.W.)

  Woodhouse, Hn. Christopher

  Rippon, Rt. Hn. Geoffrey

  Tebbit, Norman

  Woodnutt, Mark

  Roberts, Michael (Cardiff, N.)

  Temple, John M.

  Worsley, Marcus

  Roberts, Wyn (Conway)

  Thatcher, Rt. Hn. Mrs. Margaret

  Wylie, Rt. Hn. N. R.

  Rossi, Hugh (Hornsey)

  Thomas, John Stradling (Monmouth)

  Younger, Hn. George

  Rost, Peter

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

  Royle, Anthony

  Thompson, Sir Richard (Croydon, S.)

  TELLERS FOR THE NOES:

  Scott, Nicholas

  Tilney, John

  Mr. Tim Fortescue and Mr. Marcus Fox

  Sharples, Richard

  Trafford Dr. Anthony

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

  Trew, Peter

  Question accordingly negatived.

New Clause

  SELECTION OF DELEGATES TO THE EUROPEAN ASSEMBLY AND MEMBERS OF PARLIAMENTARY SCRUTINY COMMITTEE
  'Any selection of or provision for selection of United Kingdom delegates to the European Assembly or members to serve on any Parliamentary committee for the scrutiny of proposals for Community secondary legislation shall be subject to approval by resolution of the House of Commons'.—[Mr. Michael Foot.]
  Brought up, and read the First time.
  Mr. Michael Foot: I beg to move, That the Clause be read a Second time.
  Discussion on the new Clause which we have just been debating ranged very widely and dealt with an extremely important subject. I am not saying that the matter of this new Clause is not important, but it is not of the same scale of significance as that of the Clause the Committee has just finished debating. As we are operating under the guillotine and are extremely eager that before it falls at 11 o'clock we should have opportunity to discuss the other two new Clauses after this one we hope to keep this debate brief, certainly as brief as we can, although we shall try to cover all the matter in the Clause.
  First, I would recite as speedily as I can the events which led to our putting down this Clause. It deals with two
  matters. One is the so-called ad hoc committee to survey the instruments which may be coming out of the institutions in Europe before those instruments are settled and decided upon, and how this Parliament can intervene to discuss them. The second is the composition and nature of the British delegation to be sent to the European Assembly and what should be the rights of this Parliament in such matters. Those are the two subjects which arise upon this Clause.
  I would trace briefly the discussions we have previously had here on these two matters. I think the first suggestion for having the ad hoc committee was made by the Chancellor of the Duchy of Lancaster in an earlier debate in this Committee. If I have it aright, he suggested that there should be an ad hoc committee set up to discuss what sort of committee should then be set up to survey the instruments which would be coming out of the European institutions.
  When he made that proposal some of us on this side of the Committee and, maybe, in other parts of the Committee, felt that to be a proposal, in so far as it was a way to deal with instruments coming from the Community, which should be incorporated in the Bill. We did not think it right that at the same time as the House of Commons and its Committees were sitting to discuss these matters there should also be an ad hoc committee discussing the same matters, for we thought that a most extraordinary way of

  649
  proceeding. Even so, we put down an Amendment referring to this. The Committee rejected it. I am not saying that the Amendment was the best devised Amendment, but it was an Amendment which sought to deal with the suggestion at that stage. However, it was not adequately dealt with then, so we are seeking to deal with part of the question in the new Clause.
  On an earlier Amendment we discussed the composition of the delegation from this country to the European Assembly and how Parliament should retain some control over it. Our proposal was rejected by the Government, but during the debate it was suggested that a Select Committee should be established to examine the whole question of the proper form of the British delegation to the European Assembly. When the right hon. and learned Gentleman gave a forthcoming response to that suggestion, I said that we on this side would be prepared to consider it.
  The Times and The Guardian newspapers have both discussed these matters as being questions which should be surveyed and examined by the House of Commons. I do not, therefore, wish there to be any misunderstanding about the state of the game. I am not giving away any secrets, and I am sure the right hon. and learned Gentleman will have no objection to what I say on this. On the initiative of the Minister in charge of the Bill and the Leader of the House, we had a meeting to discuss the proposed ad hoc committee. At the same time we discussed the suggestion of a Select Committee to consider our delegation to the European Assembly. Although there had been no decision by the Opposition on either of those matters, I expressed the view that the Opposition would be prepared to participate in the manning of those two bodies, if they were established, on one modest condition, which was that the Government should agree to accept our Amendment on the subject. This Clause is the Amendment.
  It was perfectly open to the Government—and it would have been the most graceful way for them to deal with the matter—to have come forward with the Amendment, or an Amendment in a slightly different form, and the matter could have proceeded on that basis. Our only condition was that Parliament
  650
  should retain control by the passage of an Amendment such as that which is incorporated in the Clause.
  I hope it will be fully understood by all those who write about these matters, whether in The Times, The Guardian or elsewhere, that the Opposition have not rigidly refused to discuss these matters. We have not refused to participate in those bodies, but we did not think it was proper for us to participate in them while these matters were being discussed in Committee. We certainly have not rejected the idea of participating in these bodies if they were to be set up. All we ask is that the Government should make some concession in return and give us the elementary, modest, parliamentary safeguard for which we asked in the original debate, in the meeting which I had with the right hon. and learned Gentleman and for which we are now asking.
  I think the right hon. and learned Gentleman will also not dissent when I say that the meeting which I had with him did not formally end, but dissolved, in the sense that once we suggested that an Amendment might actually be made to the Bill to incorporate, however modestly, the conclusion of our findings, the Government lost interest.
  The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon): Just to make the record clear, it dissolved because the Committee re-commenced its proceedings.
  Mr. Foot: The right hon. and learned Gentleman was not present until the end. He had to come into the Chamber because there were proceedings on the Bill, and my right hon. Friend had to come here to move an Amendment. Therefore, I was at the meeting for a bit longer than was the right hon. and learned Gentleman. He will not dissent when I say that when I suggested this modest Amendment he expressed his distaste. It is extremely serious that the Government should have refused such a modest Amendment.
  To take first the ad hoc committee, it is right that the House of Commons should have some possibility of surveying instruments coming from the Brussels Commission and other bodies of Europe before they are settled. That is a poor

  651
  third best to the precise detailed systems of parliamentary control which we and all hon. Members who oppose the Bill have been putting forward throughout the proceedings. Such proposals for surveillance over the instruments before they go to the Council of Ministers to be finalised are quite inadequate, but they would be a third best. No doubt we shall have to have a body to survey the best way of looking at these matters and a Select Committee of the House might be better than an ad hoc committee. The Select Committee on Procedure might be the best body. We are not opposed to it, but we hope that the Government will accept the Clause as a safeguard.
  8.30 p.m.
  I turn to the rather larger question, which has much more serious ramifications. I refer to the proposals for the composition of the European Assembly and the British delegation to it. This is a matter of major importance. Even enthusiastic supporters of the Common Market realise that the institutions which exist in Europe at present are undemocratic and irresponsible, in the sense that they are not responsible to any elected body. Both the Brussels Commission and the Council of Ministers are not responsible to any democratic parliament.
  Some hon. Members argue that the way to deal with the situation is to transform the European Assembly into a properly effective democratic body. I am doubtful about that proposition because the more people who seek to remedy the position the more it will interfere with the rights, authority and influence of the House of Commons. We believe that the only proper democratic protections inside the Community must be founded in the House of Commons or in the other individual parliaments of Community countries. We feel that no substitute for that will be satisfactory. Moreover, the attempt to build the European Assembly into an effective, powerful, democratic assembly could mean a further erosion of the influence and authority of the House of Commons.
  Whatever view may be taken, the question of how Britain is to send a delegation to such an Assembly is of paramount importance. It is also an extremely complex matter, as various
  652
  articles in the Press have suggested. We have sought to argue that, whatever decision may be made about such an Assembly, it must be brought back to the House in the end for decision. We are not prepared to have any other system.
  The Chancellor of the Duchy may say that this would happen if we were to have a Select Committee to examine the matter, or if the matter could be referred to the Select Committee on Procedure. No Select Committee of the House makes decisions on its own without being answerable to the House. But that proposition would not necessarily deal with the situation. We feel that it is a peculiar state of affairs when in a European Communities Bill, which seeks to deal with the changes required to carry Britain through into the enlarged Community, there is no reference to the composition of the British delegation to the European Assembly.
  The Government may now suggest that the matter should be referred to a Select Committee, and I think that is a proper course. If we are to go ahead with the Bill and are to send a delegation to the European Assembly, all the ramifications of so doing could be considered by a Select Committee. Indeed, I wish that a Select Committee had sat much earlier on this subject so that it could by now have reported to the House. Many of the matters with which we have dealt so inadequately under the guillotine could have been much better dealt with if we had set up three or four Select Committees to examine the financial and constitutional aspects and if those Committees had reported to the House.
  However, the Government's proposal for dealing with this matter was not that we should deal with the subject in open debate in the House. No doubt they will say that the matter will eventually come to the House. In this connection, I should like to read to the House a document which was sent by the Government Chief Whip to the Opposition, a letter dated 28th April this year. I read this document to show how serious are the constitutional implications of what is being proposed. Parts of this letter have already been published and the facts and figures are generally known, but I believe that the statements it contains should be known to the Committee.

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  The letter reads:
  "It would be very helpful to have your preliminary views about how our delegation to the European Parliament will be composed from 1973. As you know there are to be 36 delegates. Presumably this would break down into 18 Conservatives, 16 Labour and two Liberals (it could be 17 Labour and one Liberal)."
  The Liberals are not here to hear what was proposed in their name. It may be that they would withdraw their support if they knew how cavalierly the Government proposed treating them.
  "We then have to consider the breakdown between the two Houses. Our first thoughts are that we should have about one-third of our delegation from the Lords. If so, and you thought it would be appropriate to have four members from the Lords, the effect would be to equalise the numbers each side in the Commons. Until any new or alternative system is worked out the delegation will have to comprise mainly of members of the Commons and in view of the amount of time that has to be spent in the European Parliament, the delegation would have to be—in effect—permanently paired. We have also thought it would be right to make one of our places available for a Cross-Bench Peer, and you may feel that you might wish to do the same. The commitment of members of the delegation is very considerable—almost 100 days per year, mostly during United Kingdom parliamentary sessions. The annual session of the European Parliament begins on the second Tuesday in March and consists of (approximately) monthly sittings lasting from two days a week upwards. In addition the major committees (Political, budgetary, agriculture, etc.) meet about once a fortnight. None of this operates before next year, but it would be particularly helpful to know your preliminary attitude to the breakdown and construction of the delegation. I have given it much preparatory thought and would very much welcome your views."
  There are many propositions, and I shall not delay the Committee by discussing them all. However the one preparatory thought to which much consideration was given was the possibility of a large number of the delegation in effect being permanently paired. In my opinion that is a very serious proposition.
  As I pointed out on an earlier occasion, although I wish to elaborate it slightly now, during the war some Members of Parliament were given the right under the dispositions made by the war-time Government to be absent from Parliament for a period. One was Mr. Malcolm MacDonald who was sent as our High Commissioner to Canada. There were others. In order to do that the House of Commons had in effect to rupture the
  654
  relationship between Members of Parliament and their constituents, and a special Bill had to be passed to give them the right to be away. Many hon. Members at the time disputed whether it was proper for the House as a collective body to interfere with the association between a Member of Parliament and his constituents.
  Any proposal for Members of Parliament of this House to be away permanently paired over some of the most important period of a parliamentary year—even though it may have occurred in the secrecy of some of the arrangements of the past—is an extraordinary one to put before the House. What is even more extraordinary is that it should have been suggested by the Government that this was a proper way to deal with it, with out it being brought to the House of Commons at all—
  Mr. Ivor Stanbrook: Will the hon. Gentleman give us the terms of the reply to that letter?
  Mr. Foot: I shall be happy to do so.
  Mr. Stanbrook: It will be helpful if they can be given to hon. Members now.
  Mr. Rippon:Before the hon. Gentleman does so, perhaps I might interrupt him again. Of course, discussions through the usual channels do not preclude matters being brought to the House. The hon. Gentleman will also recognise the difficulties which have arisen in the Consultative Assembly of the Council of Europe. Hon. Members have been brought back quite unnecessarily for Divisions when there have been equal numbers of Labour and Conservative Members in Strasbourg. Many people have thought that action should be taken to rectify the position.
  Mr. Foot: The Whips are under our control. We do not have to accept that. I give the hon. Member for Orpington (Mr. Stanbrook) the answer to which he is entitled. I will read the whole letter. Our reply is in accordance with the White Paper. I said:
  "I am replying to your letter of 28th when you asked for my 'preliminary views' about the composition of delegates to the European Parliament.
  This is not a matter which my Parliamentary Committee thinks can be properly dealt with by discussions between us. These matters all

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  come within the ambit of the Common Market Bill now before Parliament. Clearly the nature and composition of any European Parliament, in which this country might participate, is a matter which touches upon several of the issues in the Bill itself. We therefore suggest that the Government should put down amendments to the Bill dealing with this important question, and the House of Commons would then have the opportunity to discuss all aspects of the question in the open. The composition of a delegation to a Parliament is not a matter to be settled behind the backs of our Parliament."
  That is and remains my view. We put down the Clause so that the matter could not be dealt with behind the back of Parliament.
  In order that there shall be no misunderstanding, I make my position clear. I understand that there are many matters in the House of Commons which can be dealt with only through the usual channels, and if those channels are blocked, or incapable of operating, there are many difficulties in the conduct of parliamentary business. I also understand that there are some questions which touch upon major constitutional matters, as this one does, which can be dealt with properly only in the House of Commons itself. I say that as one who has spent most of his parliamentary life on the back benches. I have not changed my view because I have been transferred, perhaps temporarily, from the back to the front.
  I have always held the view that many of the questions of the composition of delegations, particularly if they are to official bodies, should be dealt with in the open as much as possible. These are not matters to be dealt with by systems of patronage if that can be avoided. I am not saying it always can be avoided, but in the main I believe it can. Certainly, when we have anything so official as the composition of a delegation to a permanent European assembly, particularly one that is to be given considerable powers which are to be transferred from us, it is a matter of major significance.
  The Government's suggestion was that we settle this matter through the usual channels. Had it not been for our reply, perhaps they would have continued to think that we could settle it that way. This is not a question of being pro- or anti-Common Market. I am sure that no hon. Member will argue that this is
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  not a question for the House of Commons. If we wish, we can insist that the matter shall eventually be brought to the House of Commons.
  We are not laying down in the Clause how the composition of the delegation should be comprised. We are not saying what should be the numbers; we are not saying that we are opposed to the principle of having Members paired over a long period; we are not prejudging any of the issues of merit. All we are saying is that the final decision should be brought back to and passed by resolution of the House of Commons so that the House of Commons will have the same kind of control over the composition of the delegations as it has, as I said on a previous occasion, over the composition of the Kitchen Committee or some of the other Committees of the House.
  This is an extremely modest proposal. It would not interfere with the proposals which the Government wish to advance and which we will certainly consider with open minds—the question of participation in the ad hoc committees or Select Committees or of referring these matters to the Select Committee on Procedure. We are prepared to consider these matters, in as objective a spirit as we can. All we are saying is that the Government should in return incorporate into the Bill not a major Amendment but a modest one which at least has this safeguard. Perhaps I can guess the reason why the Government did not like our proposition. Everything else in my speech I have proved, but we had a conversation with the right hon. and learned Gentleman and his colleagues on this matter and they did not like our proposals. I presume this was because they did not wish to have any Amendment to the Bill. We know that that would involve other difficulties.
  [Miss HARVIE ANDERSON in the Chair]
  8.45 p.m.
  How we are to keep final control over this matter in the Bill, which deals specifically with this question, is more important than the prestige of the Government. Having decided they would not have any Amendment to the Bill on other grounds, which no doubt we will debate at other

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  times, that decision, if it was a decision to refuse any Amendment to the Bill, was outrageous. It means that not only were they rejecting individual Amendments which, on their merits, might otherwise have been accepted, and therefore the House of Commons passes a worse Bill, but, having made up their mind not to accept any Amendments, they do not care about all the other arguments.
  That was one of the reasons why I thought the Chancellor of the Duchy of Lancaster had treated the Committee with gross discourtesy. I do not believe it is because he is naturally discourteous, but because the Government have decided not to accept any Amendment anyhow, and have conveyed this feeling to the Committee. We have argued from every angle, and almost none of of the Amendments conflicts with the principle of entry, because such Amendments are forbidden. We have sought to improve the Bill; we have sought to change it by proposing Amendments concerning matters which we are entitled to discuss. Yet the Government have refused Amendments of this modest character.
  I trust that we shall have the enthusiastic support of those of my right hon. and hon. Friends who are supporters of entry into the European Economic Community on this matter. They may say, "We did not know this was happening." Some of them have written rude letters to the newspapers on the composition of the European Parliament. If they are interested enough to write letters and articles in the newspapers on this subject, they might be interested to come and debate it when we provide time under the guillotine procedure.
  I am glad to see some of my hon. Friends here. I do not know whether they will participate in the debate. However, I hope they will understand that the new Clause is a genuine attempt to ensure that this Parliament keeps control over these matters, control which we will not necessarily have if these matters are referred only to Committees afterwards. Once the Bill is passed the major legislation dealing with it will be out of our control and we shall have lost the possibility of enforcing our rights.
  Mr. Dennis Skinner: Taking the long or middle term view, the fact
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  that we shall be in the Market in January, 1973, and that we have no Report stage, as suggested by my hon. Friend, may I ask him to consider the proposition that it is just feasible—no more than that—that the Parliamentary Labour Party at its annual conference could take a decision whereby we shall be under instructions not to send anybody to the European Assembly? That would put the Government in some difficult straits.
  Mr. Foot: It may be so.
  Mr. Rippon: The hon. Gentleman says, "It may be so". Surely he wants to repudiate the suggestion that Members of Parliament act on instructions from outside?
  Mr. Foot: I did not interpret what my hon. Friend said as implying that. As for Members of Parliament acting under instructions, that is an extraordinary state of affairs. I am not quite sure by what process of spontaneous combustion Government supporters have agreed that there shall be no Amendment whatever to a Bill of this character. The right hon. and learned Gentleman should not talk to me about not acting under any kind of instructions.
  Mr. Rippon: From outside.
  Mr. Foot: From outside. Everybody knows the procedures by which the Labour Party defines its policy. It is a more democratic procedure than that by which the Tories arrived at their suggestion that it was only with the full-hearted consent of Parliament and the people that they would be able to carry these matters into effect. That was not passed at any conference. It may be partly on that account that the Prime Minister thought he could tear up his propositions.
  I will conclude on this aspect. It may be said that we do not have to worry very much about the European Assembly—that we do not have to worry our pretty little heads about that. After all, M. Pompidou is against it. If he can control the British exchange rate he can make sure what form the European Assembly will take, especially since, as we heard today, the new Prime Minister of France is the very man who teaches us to stand by our obligations.

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  We had a debate earlier today about standing by our obligations, and we have been lectured by the right hon. and learned Gentleman and his legal friends as to how we must stand by them. That is why we must be careful what the obligations are. How does the new Prime Minister of France talk about his obligations to the people with whom he signed? What he said has been quoted in the House by myself and by the right hon. Member for Wolverhampton, South-West (Mr. Powell). M. Messmer, the new Prime Minister of France, dealing with the question of New Zealand said:
  "We must not forget that New Zealand is on the asking side. At the time of Britain's entry into the Common Market she (New Zealand) came on her knees to beseech us to allow her to go on exporting to Britain. We have condescended to grant New Zealand guaranteed exports to Britain for a period of five years."
  Condescended! He is almost as condescending as the French President.
  "We have condescended to grant New Zealand guaranteed exports to Britain for a period of five years. If New Zealand now refuses to export to France this limit of five years could be reconsidered and reduced and we could look at the application with disfavour."
  When we quoted that passage before it did not make as much impact upon the right hon. and learned Gentleman and his Friends as might have been expected. But we are now quoting the Prime Minister of France, on the 4th July—I suppose that it will be known as "British Dependence day". M. Pompidou says that he is not going to allow the right hon. and learned Gentleman in unless he has fixed his exchange rate according to the prescription of M. Pompidou. Perhaps he has a little longer to think these matters out than he thought—unless he is going to comply exactly at the prescribed date. One way or the other, having saved the country a fortnight ago by floating the £—either he will push the country back into catastrophy by putting us back on a fixed rate, according to the prescription of M. Pompidou or—
  Mr. Rippon: These are matters outside the scope of the election of Members of Parliament to the parliamentary assembly but, for the record, on 29th June the Chancellor of the Exchequer said
  "I have made it clear that we intend to return to a fixed parity as soon as possible
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  when conditions permit. I recognise that there are some in this House who favour the permanent floating of the £. I would only add that I have spelled out my own view's at some length on previous occasions."—[Official Report, 29th June, 1972; Vol. 839, c. 1706.]
  Mr. Foot: The right hon. and learned Gentleman surely notes the difference in tone between that statement of the British Chancellor of the Exchequer and the statement of the French President on British dependence day, 4th July, when he said that an indispensable condition of Britain's entry into the European Economic Community is that we should have returned to a fixed parity before the date of entry. The right hon. and learned Gentleman has said that that does not affect what we are discussing. He has always tried to pretend, in his breezy manner, that all these matters are settled and that nothing will be altered by arguments of this nature.
  The right hon. Gentleman spoke without the arrogance of the French President. I do not know whether he thinks that that statement is acceptable, and whether Britain should listen to that kind of instruction. I can understand his saying that when the Prime Minister met M. Pompidou the terms were fixed so clearly that M. Pompidou was merely repeating what the Prime Minister had said to him on that occasion. But what M. Pompidou thought when he made the agreement at the previous meeting, and opened the door for Britain's entry, was that we would stand by a fixed parity—and M. Pompidou, in his statement yesterday, says that our unilateral action was a departure from the agreement.
  The right hon. and learned Gentleman knows that he has to sort out these matters so he need not complain about the whole question. He may have more time than he expects, that is if he is going to retain the power of Britain to settle the exchange rate. The right hon. and learned Gentleman should not talk about settling the rate "as soon as possible". President Pompidou does not say "as soon as possible". He says "1st January". The right hon. and learned Gentleman may have much more time on his hands than he thinks. Alternatively, the right hon. and learned Gentleman may accept the dictation of the French President.
  I hope that the right hon. and learned Gentleman will begin to realise, even at

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  the end of these debates, that events will provide the real judgment on the Bill. Events are already overtaking the Government. Events are proving that what the Government have said in the course of this Committee stage is untrue. Events will prove that to be so next year even more than they are proving it now, if by any chance we have to enter on 1st January.
  The right hon. and learned Gentleman has plenty of time, if he wants to, to settle these matters properly and fairly. Why not accept the Clause? Why not say that whatever may be settled by the Select Committee, whatever may be settled in further discussions, eventually it will be brought back to this House of Commons to decide two simple questions, the form in which we shall participate in the ad hoc committee to discover the instruments which come out of Brussels, and the form in which we are to settle the composition of our delegation to the European Assembly.
  The Government have only to say "Yes". If they do, they will at least show that our charge that they have determined to drive the Bill through without any Amendment is misplaced. At least one of our accusations will be disproved. I invite the right hon. and learned Gentleman, if he has any respect left for the rights of Members, to agree that this is a matter which should be settled by the House of Commons and not by the Executive acting alone and contemptuously of the rights of Members of Parliament.
  Mr. Percy Grieve: All my life I have found that one of the labels which the Labour Party is most anxious to attach to itself can be summed up in the word "progressive". I suppose that, having regard to his position in the spectrum of politics of the Labour Party, no one in this Committee would lay greater claim to that label than the hon. Member for Ebbw Vale (Mr. Michael Foot) to whose speech we have just listened.
  I am, however, bound to say that if one examines the word "progressive" in its true meaning one finds it astonishing that those who arrogate to themselves that label are those who, in the second half of the twentieth century, turn their
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  backs upon any concept of international co-operation in the European field and upon the ideal of European unity which is the finest ideal to have emerged from the war.
  9.0 p.m.
  The speech of the hon. Member for Ebbw Vale demonstrated this turning of the back by the Labour Party and their rejection throughout our debates on this Bill of that European ideal to which our adhesion to the European Economic Community will materially commit us. Turning their backs, Labour Members have sought every opportunity in our debates to denigrate what not only we on this side but large numbers of their own colleagues are seeking to do to secure adhesion to the European Economic Community.
  This Clause is not what it appears to be on the face of it, a constructive contribution to our discussions, but another attempt to undermine the efforts which the House and the country are making to secure adhesion to the Community and to take part in the movement towards that united Europe which I believe will be one of the greatest foundations for future peace in Europe and in the world.
  I agree at once that selection of the delegation from this Parliament to the European Assembly will present very great difficulties to Members in servicing that Assembly. Let there be no doubt about that. Those of us, and there are many on this side of the Committee, who serve on the Council of Europe know the very great efforts that are required in order to serve our constituencies, the House and the Council of Europe. Those problems will be not less but greater for those who will be serving in the European Assembly.
  Article 138(3) of the treaty establishing the European Economic Community looks forward to the day when there will be elections to the European Parliament by direct universal suffrage. It states:
  "The Assembly shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all Member States.
  The Council shall, acting unanimously, lay down the appropriate provisions which it shall recommend to Member States for adoption in accordance with their respective constitutional requirements."

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  I have no doubt that the time will come when there will be a form of direct election to the European Assembly. It is a day to which I greatly look forward. I believe that the House and the country are greatly indebted to all those who are giving considerable thought to the way in which this shall be done in future, and not least to the right hon. Member for Fulham (Mr. Michael Stewart), who has made his own proposals which are a serious contribution to our discussion.
  But it would be idle to believe that in the period which will elapse between the end of our present debates here and our adhesion to the European Economic Community on 1st January next, those problems can be resolved. They are unlikely to be resolved in that time. For that reason I believe that the best course open to the House is to see whether, through the usual channels on which the hon. Member for Ebbw Vale (Mr. Michael Foot) has cast such aspersions, we can arrive at a mutual means of providing for the delegation to the Assembly in the same way as over the years, satisfactorily I hope, the delegations to the Council of Europe and to Western European Union have been selected.
  I do not see how it is possible in this Bill, without prejudging problems which yet have to be solved and without prejudging the form in which the delegation shall be selected, and the way in which the delegates, when there is direct election, shall serve both in this Parliament and in the European Parliament, conveniently to incorporate provisions for selection which would not, as it were, put selection into a straitjacket. This seems completely unrealistic. It is an idle dream to think that between now and 1st January, 1973, we could conceivably arrive at a method of selecting the delegation which could be properly incorporated in an Act of Parliament.
  For these reasons I oppose the new Clause. I hope that the Committee will reject it. I oppose it also because I believe that, like so many of the proposals made during our debates, the real reason for making this proposal is not what appears on its face, a constructive contribution to our discussion, but yet another attempted blow aimed at our adhesion to Europe, which is likely to be the most important way in which we can
  664
  provide for the peace of the world ant the future of Britain.
  Mr. George Darling: I disagree with almost every word that has come from the hon. and learned Member for Solihull (Mr. Grieve). I hope that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will not be surprised if I say that I agreed with almost everything he said about the need for the new Clause. I am sorry that it appears that the Government will not accept it. As my hon. Friend the Member for Ebbw Vale has said, there are two other new Clauses we wish to discuss. Therefore, I shall not make a long speech. I shall concentrate on the question that arises if we have to send 36 delegates—from the House of Commons, I hope; not from the other place—to the European Parliament.
  I disagree with my hon. Friend the Member for Ebbw Vale on only two counts. One is that I think the strengthening of democratic control by the European Parliament and its committees over the Commission and the Council of Ministers will help to strengthen the influence of the national Parliaments on the work of the Commission and the Council of Ministers. That is something we can debate.
  I disagree with my hon. Friend, secondly, in that in the new Clause we are asking that
  "Any selection of or provision for selection of United Kingdom delegates…shall be subject to approval by resolution of the House of Commons."
  This is somewhat in conflict with my view that each party should decide for itself how it selects its delegates. If the Labour Party contribution to 36 is 17, the Labour Party should decide for itself how those 17 will be selected or elected. I strongly advocate that view.
  I want particularly to deny the proposition that keeps coming forward that a delegate to the European Assembly and the committees of the Assembly will somehow be divorced from the work of the House of Commons, will have to spend a long time on the Continent and will require to be permanently paired. I disagree with all that.
  Let us take what will be the situation in the European Parliament for the next

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  six months. From the beginning of July to the end of the year, it is due to meet for 19 days in five sessions. But two of those sessions, lasting seven days, will take place during our parliamentary Recess, so that whoever goes will be away for 12days in six months. I have worked it out that this will amount to about 25 to 30 days a year during the time that this Parliament is meeting. As for the suggestion that this will interfere with constituency work, I remind the Committee that the European Parliament does not meet at weekends. It meets for four or five days a week, and sometimes for only two days in a week. Every Member of the House of Commons who gets selected or elected as a delegate can return to his constituency as often as he likes at weekends. What is more, I do not know whether in the course of the letter my hon. Friend has received the suggestion is made that the European Parliament and its committees will take up 100 days a year. The maximum number that anybody attends is 70.
  If the work of the committees of the European Parliament and their methods of operation are improved, the two days a week could be reduced by one-half. To a large extent, the ineffectiveness of the European Parliament and its committees arises from the stupid way the committees work. Anybody who has examined the working of the European Parliament and its committees can see clearly how the procedures, the methods and the servicing need greatly to be improved. If somebody set about it in the right way, far more effective work could be accomplished in far less time.
  Most of the committee meetings will take place within an hour or an hour and a half by plane from Heathrow. If the proper transport is established to get people backwards and forwards from Parliament to Heathrow and from the airport on the other side to wherever the committee is meeting, there will be no need for a great deal of time to be spent away from the House of Commons at these committee meetings. Sometimes a committee meets for two days. After voting in the House of Commons, a Member can catch the night ferry or a night plane and arrive the other side in the morning. I do not suggest that this should be done regularly, but it can be
  666
  done. A member could spend two days there and then return to carry on with his work here, just as if he had been attending a Select Committee outside the House.
  I was attending the meeting of a committee at The Hague last week which had to send for a Member of the House of Commons to take part in a discussion about the proceedings for the next Assembly of the Council of Europe. The Member arrived, concluded his business there and returned to the House of Commons to take part in the vote on the Motion of censure last Thursday.
  I therefore support the views of my hon. Friend the Member for Ebbw Vale. I hope that the Government will think again about rejecting the Clause. Many hon. Members, journalists and letter-writers to The Times talk a lot of nonsense about the amount of time that must be spent in the European Parliament and its committees. If we set about it in the right way, we can make the European Parliament more effective and at the same time do what my hon. Friend wants, which is to strengthen the hands of the national Parliaments over the Commission's work.
  I hope that the letter that my hon. Friend received will not be withdrawn and that we can set about establishing the representation on sensible lines, assuming that we are to go into Europe. The sensible lines are to let each party decide for itself how it is to select or elect its own membership.
  Sir J. Foster: The question is: should the Clause be accepted? The method which should be adopted to select Members is not directly in point. I was interested, however, in what the right hon. Member for Sheffield, Hillsborough (Mr. Darling) said.
  I shall try to persuade hon. Members that this form of Clause is not the right way to deal with a problem which cuts across parties. The request in the Clause—
  "Any selection of or provision for selection of United Kingdom delegates to the European Assembly or members to serve on any Parliamentary committee…shall be subject to approval by resolution of the House of Commons"
  —presupposes that somebody has decided what the selection or provision for selection is.

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  The Clause is inapt. It deals with procedure and with the conventions of the House of Commons. For instance, so many Supply Days are for the Opposition. The House of Commons works with the minority allowing the Government to get their business through and the majority allowing the Opposition to have quite a lot of rights and a lot of methods of voicing their opinion. Parliament cannot work properly without that arrangement. It would work in a very different way without it, because the majority have only to pass a Bill saying that no one on the Opposition side should be allowed to speak to give the Government a very easy time. The whole thing depends upon agreement between the parties. That is part of our democratic way. All elected assemblies have to deal with this.
  9.15 p.m.
  But here there is a new problem where agreement must be reached between the parties and it must be reached under the conventions of the constitution. If the Clause was accepted what is to stop the Government saying the Labour Party shall not be represented in the European Parliament? There is no legal way of preventing that, but the minority must be allowed to have their say.
  A Select Committee is only a very important way of having a talk between the usual channels. A talk between the usual channels will decide whether each side chooses its own people, which is much the most likely way of solving the problem. Each side could decide how many representatives it wanted from the House of Lords. I am not trying to prejudge what is the best way but I am suggesting that the Clause will not be suitable. We have to have a Select Committee and it must be debated by the House but it must not be subject to approval in the usual sense because unless approval is within very limited spheres the majority could wipe out the minority in the European Parliament. That is not what is intended.
  Sir Robin Turton: Can my hon. and learned Friend explain why every Select Committee of this House is subject to the approval of the House by Resolution of the House? He must try to get some knowledge of parliamentary procedure.
  Sir J. Foster: All I am saying is that it should be done by agreement between the usual channels and then subject to debate in the House. Otherwise, the majority could oppress the minority and it would therefore be for the protection of the Labour Party that the Clause should not be passed.
  I am assuming that the only wish is that what is being sought should be done in the best way. If it is wished to put difficulties into the way of the Bill I can see the point of trying to force the Clause through the Committee. But I am not assuming that that is what is desired. I am assuming there is a problem to be dealt with and, in my submission, on the selection of members it is not right to seek approval of the House of Commons for matters which must depend on the conventions in the functioning of the House. There must be agreement about some form of voting or not voting or else we must alter our voting procedure. It seems ridiculous that if we had a Motion of censure and five Members of the Government were down in a field because of engine failure, a General Election would have to be called. I see the Opposition Chief Whip smiling, but I am assuming he will be very careful not to run this risk. One could, I suppose, alter our voting procedure in the House, but that also would be a matter of convention.
  It is not sufficient just to say that no one should be paired. I understand the hon. Member for Ebbw Vale (Mr. Michael Foot) to be against pairing. I can understand his objection to that—
  Mr. Darling: I understand our complaint to be against the idea that, for a fairly long period, hon. Members would be permanently paired. I do not know whether I am correctly paraphrasing the words of my hon. Friend the Member for Ebbw Vale, but I understand that to be the point. We say that Members are paired for the job which they do, just as we arrange it now for the Council of Europe.
  Sir J. Foster: I understood the hon. Gentleman to be against pairing for the people who have these jobs to do. How-ever, if I am wrong in my understanding, so much the better.

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  Here again, one has to be careful about this and have a lot of conventions between the two sides. All of us as parliamentarians—I say this subject to the stricture of my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton)—understand the conventions of the House. We understand that this place works only through a partnership between the minority and majority parties. It would not work otherwise.
  We have to start from this angle: let us see what we can agree about in the way we deal with the European Parliament. I feel sure that, once the Bill is passed, the Labour Party, as it has in the past, both when the majority and the minority party, will make the democratic procedure work. But it will not work if our conventions and agreements are all subject to the approval of the House of Commons, for then the majority party could get its own way and wipe the minority party right down by insisting on things on which it ought not to insist. It is very unwise, therefore, to propose this Clause. If it is proposed merely to make the passage of the Bill more difficult, that is another matter, but the suggestions in it are unwise.
  The second part of the Clause deals with the scrutiny of Community secondary legislation. Here again, I assume that everyone takes it that the Bill will be passed. But I recognise that there is a serious problem here. I raised it with one of the letter writers to The Times, The conventions of the constitution do not apply here in quite the same way.
  Both political parties will be anxious to ensure that we have some form of parliamentary control over the legislation which is passed. That is certainly my view. For this purpose, resolutions of the Community of importance to this country—even a directive might be of importance—must be brought to the notice of the House at an early stage. But we must in this context remember that, under our constitution, once we have elected a majority party and it has chosen a Government, the Executive has wide powers not all of which are subject to the direct control of Parliament. Indirect control, yes, but not direct control. In the treaty-making power, for example, there is a wide gap where control by the House of Commons is not
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  very effective. In any case, a House of over 600 Members is not the best instrument for controlling detail.
  All this needs careful consideration. I suggest that it might call for the setting up of a committee consisting not only of parliamentarians but having within it some form of outside representation—partly Members of Parliament, partly people with experience of foreign legislative processes, perhaps a few academics—
  Mr. Darling: Oh, no.
  Sir J. Foster:The matter would then be put before a purely parliamentary Committee to sift it through. Again, one would have to go by agreement between the parties. Undoubtedly, it would be difficult, but, in my submission, it is no way of doing it to say that it must be subject to the approval of Parliament. The crunch will come at the stage of agreement in the Committee. The matter will then be debated by Parliament, and alterations may be made in the light of the debate, as the Government or Opposition see the force of recommendations or suggestions made. But just to have approval or non-approval is an inept way of dealing with these subjects because there does not seem to be any way of amendment. If there are amendments, the agreement of both sides must be obtained.
  For those reasons, I think that the passing of this Clause would be completely useless and that it should not take its place in the Bill.
  Mr. English: I am grateful to you, Miss Harvie Anderson, for calling me because I was bursting to speak whilst listening to the outpourings of rubbish from the two hon. and learned Members on the Government side whom I believe to be, in their varied ways, distinguished but who on this issue are obviously somewhat at sea. I wish to put one or two simple questions which may make the point clear.
  The letter to which reference has been made says that Members who serve on the European Assembly would need to be away from the House of Commons for perhaps 100 days a year. That has been ably demolished by my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), who has served for so long on the Council of Europe and knows

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  many European institutions. Has anyone considered the real reasons why we are paired? One is that we need not be present on an occasion when we would otherwise be voting. In fact, that is the only reason. I should have thought that a similar situation would apply to the European Assembly.
  The first question we should ask about the European Assembly is whether it votes. I see no reason for a Member saying that he must be in Brussels in order to vote at an Assembly which does not vote. I understand that its more normal custom is to endeavour to reconcile the opinions of all parties in the Assembly and to arrive at an agreed resolution. Even if it did vote, the outcome would not matter because it has very little power. Admittedly one may wish to be in Brussels to make a speech. But is it suggested—I doubt whether other European parliamentarians would accept the fact—that every one of our 36-strong delegation will make a speech on 100 days a year? It is possible that a Member of the House of Commons serving on the European Assembly will consider that on a given day there is a more important reason for his being here rather than in Brussels—unless he simply wants a trip to Brussels.
  The sheer arrogance of the Government Chief Whip, who suggests that Members should be permanently paired is beyond belief. I sincerely hope that every Member will decide for himself where he wishes to be. I hope that every one of the 36 people in our delegation will decide for himself, according to his individual conscience, where it is more important for him to be. On one occasion it might be important for him to be here during a debate on the equivalent of the Third Reading of the Industrial Relations Bill if he was a member of my party—or, indeed, if he was a Conservative. Members may legitimately feel that they do not need to be here to discuss a White Fish Authority order and that they should be in Brussels to discuss the European agricultural policy.
  These matters cannot be determined on a basis of permanent pairing. The 36 members of the delegation will be competent, reasonable people and they should decide for themselves.
  Sir J. Foster: What will happen if a large number of members of one party
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  feel that they should be in Brussels and the others do not? How would the voting be arranged?
  Mr. English: I suggest that the ancient principles of the House of Commons should be followed.
  We have long experience of this sort of difficulty, and that is precisely why we have pairing. It is also precisely why we have Whips on both sides who say to Members "We know that you are totally bored by this subject. We know that it has been raised by the other party. But it is desirable that some of you should stay so that we may keep a respectable majority." I should have thought that since we are quite used to reconciling difficulties of this character in general the addition of one more additional case would not be beyond the wit of the Patronage Secretary and his opposite number on this side.
  9.30 p.m.
  I turn to more serious issues, because I think they are more serious issues. Everybody has made the simple assumption that the delegation should consist of members of both parties. I would point out that this is an assumption based, as somebody said, upon the traditions and conventions of this place in the past. I think it will be quite clear to everybody that conventions of the past are not necessarily appropriate to a completely different situation in the future. There is every reason why, when we set up a Select Committee for example, it should consist of Members from both parties; it should consist of a distribution of opinion because it is a body which will report to the House and it would be futile if it reported only one opinion, which the House as a whole might not share. However, when we as a country are represented elsewhere it does not necessarily follow that we should be represented by Members from both parties. It may well be that we should be represented only by Members from the governing party in the State, which party the electorate decides.
  One extremely important nation in Europe which adopts this principle is France. France sends to the very Assembly we are talking about a delegation which does not include the second party in the State. The Italians include in their delegation representatives of the

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  second party in the State, the Communists. It is not for me to decide whether the French are right or wrong, but we should discuss here—this is the point of the new Clause—what procedure we should adopt.
  It might be that the House of Commons as a whole would prefer to have a delegation representing both parties but it might be—and if hon. Members would consider the implications they would see there is a case for the alternative view—that the House would in fact prefer the delegation to consist of Members from the majority party in the State, not perhaps out of a fit of pique by the Opposition but as a general principle that the members of the delegation should belong to the party governing the State, since they represent this country in a European institution, as, indeed, it is the party governing the State which is represented in the Council of Ministers. I would say that is something which commends itself for discussion here and that it cannot well be taken for granted.
  Finally, I would say that I do part company with my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) when he says, in effect, that he distrusts the possibilities of direct election to the European Assembly. I do not. I think the Committee knows the consistency of my views about entry into the Common Market. I have been against it continuously, even when my own party was in power, and I am against it still, but once we are in it I would wish to democratise it. If we are to hand over to a European body power—as indeed the Bill does—to tax and legislate, personally I wish to try to restore some of that power to the electorate as a whole, even if it is to be a European electorate. I should like the people of this country to decide first whether they wish to enter the Common Market or not; but if they were to decide that we should go in, and that we should remain in, we should set our mind to considering the implications of the undemocratic nature of the institutions themselves. It is, in my view a pity that the Government have taken the most extreme Gaullist line on this question of democracy inside Europe. It is a tremendous pity because we could have gone into Europe and could have made it quite plain that we are a democratic
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  nation and that we believe that the European institutions should be democratic too.
  The hon. and learned Member for Solihull (Mr. Grieve) said we could not possibly within the next three months draft a Clause to settle the method of selection or election of our representatives to the European Assembly. I am not an hon. and learned Member as he is, but I suggest that if he would look at my new Clause 8 he would see that there is nothing in it—I do not think there is anything in it—which could not be carried out under the law of England. I am not suggesting that he would agree with the principle of my Clause, but I suggest that it is a perfectly feasible proposition.
  I should have liked to have seen this Committee discussing not merely the possibility of whether the House should discuss the election of the delegation but whether we should ourselves allow the electorate to determine the composition of the delegation, and there is nothing in the Treaty of Rome to prevent us from doing so. This would solve the problem of whether peers or Members of the House of Commons should be included. A peer could stand for election; if he was elected, well and good; if he was not, he would not be a representative. Meanwhile, as it is, the suggestion that we should include Members of the House of Lords in such a delegation is ridiculous.
  Do we want to be the laughing stock of Europe? Do we want to be the only country sending a delegation consisting of unelected persons? In assemblies in Europe which have two Chambers, the representatives in both Chambers are elected. I know of no other Assembly within the 10 countries where the representatives of one House are not elected. Do we want to be made the laughing stock of Europe by sending representatives of an unelected House, representing nobody but themselves, or the Government that appointed them in the case of life peers, or their ancestors in the case of hereditary peers?
  I suggest that we could well have applied the alternative and said that we would have a democratic delegation. The Government and, alas, my own Front

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  Bench are not as yet ready to countenance such a radical thought as that we should actually elect a delegation. That being so, I believe that all hon. Members who believe in democracy will support this new Clause [Interruption.] In referring to my own Front Bench I am speaking of my hon. Friend the Member for Ebbw Vale. There may be others on the Front Bench who disagree.
  Mr. Grieve: Would not the hon. Gentleman concede that foreign countries and their delegations are far more likely to judge our delegation by the quality of its Members than by the fact that they come from one or other House, and that many Members from the other place have served extremely well on the Council of Europe and will serve extremely well in the European Parliament?
  Mr. English: I have always believed that the quality of members selected by a democratic electorate, though it may be different, is rather more varied than the quality of members selected by any other method of election or selection. I strongly suspect that throughout a large part of Europe the fact that our delegation was elected would make it respected. The hon. and learned Member for Solihull has had a distinguished career. At one time he was associated with General de Gaulle during the war, but I do not take the Gaullist view that democracy is to be frowned upon and selection is better.
  However, I have made my point. I would prefer us to be as democratic as possible rather than to take a perpetual Pompidou line as the Government Front Bench does. At least the House of Commons, as the Clause requires, should discuss these issues as and when they arise. On that basis I support the new Clause.
  Sir Robin Turton: I wish to be brief, although I have to cover a fair amount of ground because of the history of this and my peculiar position as Chairman of the Select Committee on Procedure.
  To take first the question of the delegation to the European Assembly, there has always been a good deal of dissatisfaction in the House of Commons over the system of selection of members to the
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  Council of Europe and Western European Union. Those are the only cases where selection of members is by the Executive and not by the House. Representation on the Commonwealth Parliamentary Association is decided by the Speaker on the advice of an advisory committee of Members.
  My hon. Friend the Member for Cheltenham (Mr. Dodds-Parker) was in the same position as I was in the selection of Members to the Council of Europe. In 1954 I had to make the selection and faced a good deal of criticism. The complaint was that certain Members had been on the Council of Europe for 10 years and it was said that it was the party hacks who went. This is nothing to do with whether one is pro- or anti- the Common Market. It is a House of Commons matter and it is vital that the selection of members to the European Assembly is brought before this House, as happens with the appointment of every Select Committee.
  The situation distresses me. I have great respect for my hon. and learned Friend the Member for Northwich (Sir J. Foster), but he obviously has not studied the matter in detail.: Those who have done the ordinary back bench "hack" work for many years have examined the system of the appointment of committees. I think my hon. and learned Friend exaggerated the importance of the party caucus. The value of putting a matter on the Order Paper is that it is brought out into the light. The House of Commons and the general public then know who will carry out this very important service of working in the European Assembly.
  The hon. Member for Nottingham, West (Mr. English) made a fair point. If there were to be outsiders on such a committee, it would of course be unlike the normal Select Committee. The House would have to approve any decision, and it may be a good thing to have as delegates members from universities, but the whole matter must be handled by the House of Commons.
  The hon. Member for Ebbw Vale (Mr. Michael Foot) appeared to suggest that the problem of the selection of members for the European Assembly should be put to the ad hoc committee. That may have been a slip of the tongue, but I should

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  emphasise that these are two quite separate points. It is not a matter of procedure. The question of selection is a matter entirely for the House of Commons and should be dealt with by the House of Commons.
  I turn to the matter of procedure, and I have had a certain amount of experience in this respect. We have been looking around the subject but not actually looking at it, because of all the curious letters which have been passing between my right hon. and learned Friend the Chancellor of the Duchy and the hon. Member for Ebbw Vale. That has prevented anything being done for a long time.
  Mr. Rippon: No letter passed from me.
  Sir Robin Turton: I beg my right hon. and learned Friend's pardon. It was a letter which passed between the two Chief Whips. We heard it read by the hon. Member for Ebbw Vale a little earlier.
  I must emphasise that it is important that this matter should be looked at urgently. The subject was mentioned as long ago as last November by the then Leader of the House, my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw).
  This is not such a narrow matter as that which is embraced by the terms of the new Clause. We must have not merely proposals for scrutiny of Community secondary legislation, but a much wider inquiry as to how far the House will have to change the whole of its procedures and many of its Standing Orders to carry out the duties involved should we become a member of the wider European Community.
  We have been a little late in dealing with this matter. A Select Committee, whether it be the Select Committee on Procedure or some other Committee, should have got down to this matter months ago if a report was to be ready in time for accession to the Community on 1st January, 1973. It is a pity that the Government have not moved earlier on this matter. We in the Select Committee on Procedure have felt frustrated by not being allowed to go forward with this inquiry earlier.
  Mr. English: I accept all the right hon. Gentleman said—bar one small point. Will he accept that many of us have a certain dubiety about the Select Committee on Procedure as at present constituted since, with the exception of the right hon. Gentleman himself, it consists almost entirely of people who believe passionately in Britain going into the Common Market, whereas we all know that half the Members of the House do not?
  Sir Robin Turton: The hon. Member for Nottingham, West has misunderstood the position. This is not a matter between those who are pro-Market and those who are anti-Market. It is a House of Commons matter.
  I have been very fortunate in the membership of my Committee. We have considered every problem that has been put to us, and, curiously enough, in our dozen or so reports we have reached unanimous conclusions. That is not to say that my Committee wants the work. I only remind the Government that this is a very big job and that the House is failing in not having appointed a body to look at this matter months ago.
  As for the suggestion of my hon. and learned Friend the Member for Northwich (Sir J. Foster) that this is not a matter for a parliamentary Committee and that it can be done by the Study of Parliament Group, in my view that is to make the greatest surrender of our parliamentary rights that I have ever heard in all my time in the House. This is a matter that we must do. Every other member State in the Community has looked at the matter before entry. With the exception of France, in the course of negotiations for entry they have made special provisions for parliamentary control.
  I fear what may happen to this Parliament if we enter on 1st January, 1973, without any expert examination and without any adjustment of our rules. Let us take the one small matter of financial control. How are we to work our system of financial control which is geared to a financial year which ends on 5th April, with a financial control which is geared to the end of the year?
  Mr. George Cunningham: We shall have to change ours.
  Sir Robin Turton:That may be so. However, seven years ago the Select Committee on Procedure looked at the possibility. We were given expert advice from the Treasury that if we moved the close of our financial year from the present date to the end of the year it would make life impossible in the Civil Service. It would mean changing the whole parliamentary system. The Committee was told that it was quite unworkable.
  I know that many other hon. Members wish to contribute to the debate. I conclude my remarks by asking the Government either to accept the Clause or to make it clear that they will see that a Committee is appointed immediately to look at this problem. Whichever Committee is given the task, it will have to be given power to go abroad in order to study what is happening in the other countries of the Six. I do not think that it should try to do it by taking evidence alone. It will require power to move abroad and, naturally, rather special powers because otherwise the work cannot be done.
  I warn the Committee that unless we can get this procedure right, Parliament will not have the powers and we shall not be as good representatives as those from the other countries of the Six. We must see to it that there is proper consideration not only of the draft proposals but of the directives. That is probably the subject of the next Amendment.
  If we fail, we shall fail Parliament, and we shall thoroughly deserve that fate.
  Mr. George Cunningham: I must first apologise to the Committee for having missed the opening of this debate. I intend to intervene briefly on a narrow point.
  I agree wholeheartedly with every word that the right hon. Member for Thirsk and Malton (Sir Robin Turton) has said. In his dual capacities of Father of the House and Chairman of the Select Committee on Procedure, when he speaks with the strength that he has employed today it behoves the whole Treasury Bench to pay great attention to what he says.
  It will be a very sad day when this House of Commons has to take lessons from the German Bundestag on parliamentary methods of controlling the
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  Executive and on methods of controlling the actions of the Executive in the Community. The Bundestag, as no doubt has been referred to earlier, has methods of doing the second of those two things which no one in the Committee, certainly no one representing the Government, has yet begun to suggest we should adopt. That illustrates the fact that the House, which likes to cherish the idea that it is still in a vigorous state of life, has fallen upon days of decadence. Not only does it not have the power but it does not notice that it no longer has the power and does not take steps to restore its former position.
  The narrower point which I want to state in answer to the case, if that is the rightword for it, stated by the hon. and learned Member for Northwich (Sir J. Foster) relates to a recent incident which involved me and in which it was extremely important that a certain Select Committee, of which I am a member, was one whose composition had to be approved by the House.
  A few weeks ago, for reasons which I shall not go into, it occurred to the authorities that it would be a desirable thing to expel me from that Committee. It occurred to them at roughly the same time to take similar action in respect of one or two other hon. Members. It so happened that the action in respect of the other hon. Members related to bodies or positions which were not within the control of the House. One of them concerned the delegation to the Council of Europe. A change was made in the representation of the House at the Council of Europe without the House knowing anything about it or having a chance to discuss it, on a ground which had nothing whatever to do with the merits of the person involved or the desirability of his continuing to form part of our delegation to the Council of Europe.
  Precisely the same point applied in my own case. I am a member of the Select Committee on Expenditure, and as a result of what I shall euphemistically call a misunderstanding it was desired to remove me, quite wrongly, from that Committee. However, because the Committee has to have its composition determined by the House, it could not be done. I was able to stop the wrong action—it is now admittedly a wrong action—whichwas being taken erroneously as

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  part of party discipline. It was only stoppable because the Committee's composition has to be decided by the House.
  I am devoted to my right hon. Friend the Member for Bermondsey (Mr. Mellish), but it occasionally happens that Whips on both sides of the House get things wrong and get over-enthusiastic in the job of party discipline. I do not know but I doubt whether that situation will change radically in the near future. Therefore, it is vital for that if for no other reason that the composition of Committees of the House and the composition of all delegations representing the House should be decided by the House. It is not only an academic matter, by which I mean the usual channels determining something, whether it is formally decided by the House or not. The power of formal appointment by the House can in certain circumstances mean a great deal, and the incident to which I have referred illustrates its importance.
  Mr. Rippon: It might be helpful if I intervene at this stage to answer some of the points which have been raised.
  As the hon. Member for Ebbw Vale (Mr. Michael Foot) said, the new Clause refers to two quite different but equally important matters. The Government have always recognised Parliament's concern with both. There is no question of the House of Commons not being able to discuss and, if necessary, decide these matters either through the usual channels, about which the hon. Gentleman knows more than I do because he is part of them, or on the Floor of the House.
  I was grateful for the indication in the hon. Gentleman's speech that the Opposition were now ready to discuss matters of procedure and how we should deal with some of these issues through an ad hoc committee, a Select Committee or the Select Committee on Procedure.
  My right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) was a little unfair in his strictures on the Government. We raised these matters over five months ago and suggested that they should be dealt with in the way the Housenormally deals with them.
  I am in a little difficulty over what the hon. Member for Ebbw Vale, who is the shadow Leader of the House, said about what has gone on through the usual channels. I have no objection to
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  the hon. Gentleman indicating what my views were at the meeting. My views on these matters are not secret. I am not part of the usual channels. I thought it was a confidential meeting, but no matter. We have no transcript of these proceedings. However, I have said all along that I did not believe these matters could be dealt with by way of Amendment to the Bill; they are matters of procedure over which the House of Commons has and always would have full control. It is important that there should be a proper degree of flexibility. We discussed the ways that other Parliaments dealt with these matters and how Members of Parliament thought existing procedures could be improved.
  We have heard a wide variety of ideas on how these matters should be handled. We have heard criticisms of the way that existing delegations are selected, and about problems of pairing, and so forth. These matters cannot be dealt with in an Act of Parliament, but we all recognise that, whether through the usual channels or otherwise, they have to be dealt with.
  The hon. Member for Ebbw Vale quoted a letter which he had received from my right hon. Friend the Chief Whip. I know nothing about these matters. I understood it was a preliminary exchange of views. It is for the hon. Gentleman to determine, because he handles these matters all the time, how far letters and communications of this kind are confidential. I only know that on one occasion when I wanted to refer to a letter which had emanated from the Opposition, I was told I could not even refer to it because such things are confidential. It must be possible in our parliamentary system, as my hon. and learned Friend the Member for Northwich (Sir J. Foster) said, for some discussions to go on through the usual channels. That is what we have been trying to do.
  Mr. Michael Foot: I gather there have been some expressions of disapproval of the fact that I quoted the letter. I entirely agree, as I indicated in my speech, that the usual channels are essential to conduct a great deal of the business of the House of Commons. I fully appreciate that such matters have to be conducted on a confidential basis. I said to the right hon. and learned Gentleman,

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  concerning our discussions on the ad hoc committee, that I trusted he would not mind me referring to that matter, and he did not object in any way. I thought I did the same about the letter. If he had intervened to stay that I should not quote the letter, I should have understood. I thought it was proper to quote the letter, because I had referred to it on previous occasions. Moreover, I felt that it dealt with a matter of considerable public interest. We replied on behalf of the Parliamentary Committee of the Labour Party, so I thought it right to quote the letter. But if the right hon. and learned Gentleman's right hon. Friend thinks that I should not have done so, and feels aggrieved on that account, I am sorry. That was not my intention. I thought that I was entitled to quote the letter, because I was under the impression that it was an exchange of matters of public interest.
  [Sir ALFRED BROUGHTON in the Chair]
  10.0 p.m.
  Mr. R. J. Maxwell-Hyslop: On a point of order. Now that the letter has been referred to, can it be laid upon the Table of the House?
  Mr. Rippon: It will be reported in tomorrow's Hansard. That will be all right. The hon. Member for Ebbw Vale is the usual channels, which I am not. I therefore assume that he cleared his position before he started. It is not a point for me to make. He has dealt with it, and I think that I can now move away from it. I am sure that my right hon. Friend will appreciate what the hon. Member had to say about the question.
  All I say on this matter, which affects every hon. Member, is that there has to be some method whereby we can have a general discussion about procedure. If a proposition is put forward through the usual channels and the Opposition disagree with it they have only to start talking and to say what they want. In that way we shall make progress. I am glad that the hon. Member has said that the Opposition are now ready to participate in these discussions.
  But I do not believe that participation in discussions about the procedure of the House—which the House already controls in full—can be linked to an agreement
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  to incorporate a totally unnecessary and bad Clause into this Measure. The first part of the Clause covers much the same ground as that which the Committee discussed on 13th and 14th June, on an Amendment to Clause 2. We were then debating the proposition that the House should approve the list of names of representatives to the European Assembly.
  The hon. Member now says that that Amendment may not have been as well drafted as the one that he has now put before the Committee. Certainly the new Clause goes slightly wider, because it calls for the approval of
  "Any selection of or provision for selection of"
  delegates, which I take to mean approval not only of the final list but of the machinery from which it emerged and any changes in membership that might subsequently take place. The right hon. Member for Sheffield, Hillsborough (Mr. Darling) pointed out one difficulty in dealing with a matter in this way, in that the majority might amend the proposals of the minority.
  However that may be, I do not believe that the new Clause raises any point that we did not cover in the debates on 13th and 14th June. I remind the Committee what I said on 14th June, namely:
  "There is no possibility of the House of Commons being by-passed, without there being discussion and debate on the composition of the delegation.
  Several hon. Members, including the hon. Member for Ebbw Vale (Mr. Michael Foot), have mentioned the procedure adopted in other countries. Others have said that we should have regard to our experience in the Council of Europe Assembly and Western European Union, and there may be other considerations.
  If it is the wish of the Committee, the Government are perfectly willing to propose the setting up of a Select Committee to consider the ways in which members could be nominated for the European Assembly. That would provide a full opportunity for views to be expressed and examined. The Select Committee could report to the House, and the report could be debated if the House so wished. I hope that I have clarified the position.
  What I emphasised last night is that it is not right for matters of procedure to be dealt with in the Bill. It is unnecessary and would create an unreasonable restriction, but I agree that these matters should be discussed, and I hope the Opposition will be ready to do so in the usual way. I give the assurance that we should be happy with procedure such as a Select Committee, which would ensure that

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  the matter was debated and considered."—[Official Report, 14th June, 1972; Vol. 838, c. 1515–16.]
  Mr. Nigel Spearing: I have been listening with great attention to the right hon. Gentleman's argument. Does not he agree that it is not strictly a matter of procedure but of representation—not only of this House and the EEC, but of the British people? Does not he agree that, prima facie, his apparent refusal to accept this Clause or any other shows the degree to which he holds this Parliament in contempt?
  Mr. Rippon: There is nothing that I can add to or subtract from what I said on 14th June. Many people share the hon. Gentleman's view that we have not put this into the Bill because we do not think it is important. That is not so. The Bill, like all Bills, has a particular and limited purpose, and I have explained it often enough. Its purpose is to make such changes in our domestic law as are necessary to give effect to our obligations under the Treaty and so, under our constitutional procedures, enable us to be in a position to ratify. It is not necessary—indeed, it is undesirable—to try to write into the Bill matters of procedure over which the House has always had and always will have complete control.
  In so far as it is a matter of representation—and possibly that is not a way in which we can conduct our affairs—it is a matter which is still under the control of the House. Proposals may be made through the usual channels, but the House controls the usual channels. The hon. Member for Ebbw Vale, though he is now the usual channels, always took the view—and says that he still does—that in the last resort the usual channels were no substitute for parliamentary decision, and I agree with him. There is no dispute between us about that.
  The House can control these matters in any way that it likes, and things may change. After all, we have this evening heard a whole host of ideas about how we should deal with this matter; whether it should be a delegation composed of the House of Commons in part, or of peers in part; whether it should be a delegation in which the representatives are chosen by the House as a whole; or whether, as the right hon. Member for
  686
  Hillsborough said, each party should make its own selection. We have heard anxieties expressed about the way in which certain Members are removed from various bodies as a matter of party discipline. That is something which many of us probably wholly deplore, but all these matters can be considered in whatever forum the House considers to be appropriate.
  Sir Robin Turton: How could the House approve or disapprove the selection of Members for the European Assembly without having either a statutory power or a substantive Motion?
  Mr. Rippon:The House can have a substantive Motion. My right hon. Friend explained to my hon. and learned Friend the Member for Northwich (Sir J. Foster) the difference between a Select Committee and some other form of committee. We do not necessarily have to have a Select Committee but, assuming that we do, it could be brought before the House. The House has within its power—it does not have to exercise the power that it has—to deal with these matters other than by making provisions in the Bill; provisions which, as I have said, are not only unnecessary but unduly restrictive.
  There is nothing in our statutes to inhibit Parliament from making whatever arrangements it thinks best for dealing with these matters, whether it is the selection of the delegation to the European Assembly, on which we have spent most of our time this afternoon, or examining Community secondary legislation. These matters are governed by Standing Orders and not by statute.
  Mr. English: It is important to get clear the meaning of the right hon. and learned Gentleman's undertaking, because he is speaking from the Front Bench. When he says that these matters will always be under the control of this House, is he giving a positive assurance on behalf of the Government that the delegation will not be appointed by the Executive in the way that the delegation to the Council of Europe is appointed?
  Mr. Rippon: These matters can be determined by the House. The House might determine to appoint the delegation in the same way as it now appoints, or accepts the appointment, of the delegation to the Council of Europe. These are

  687
  matters, not for me, but for the House as a whole. All I am saying is that they are not matters which are properly dealt with by Statute.
  Mr. Jay:If, as the right hon. and learned Gentleman says, this is a matter for control by the House, why should not the House exercise that control by adopting the Clause?
  Mr. Rippon:This is really going back over and over the same ground. We must bear in mind that the purpose of the Bill is to make the necessary changes in our domestic law in order to comply with our treaty obligations. No change in our domestic law is required in order to select representatives to the European Assembly by any means we wish to adopt. What is absurd, with respect, is to write into an Act of Parliament a procedure which would thereby be fixed and rigid, when even the right hon. Gentleman is now accepting the concept of an ad hoc committee or a Select Committee or a procedure committee to deal with these matters.
  Why should we prejudge what views a Select Committee might come forward with after considering how the European Assembly works? Why should we prejudge in any way the recommendations of the Brooke Committee on delegated legislation? It would be an absurd way, if I may say so with respect, for Parliament to proceed. In those circumstances, I trust that the Committee will not accept the Clause.
  Mr. Michael Foot:We do not accept that the right hon. and learned Gentleman has answered our arguments, still less that he has answered the Father of the House in the most powerful case he has put. None the less, we hope that the Committee will now be prepared to reach a decision because we wish, if possible, to have a debate on the subsequent and extremely important new Clause.
  Mr. W. R. Rees-Davies: I will not detain the House now—[Hon. Members: "Oh."] I am seeking to speak on a most important matter which has been raised and about which I want to put a number of important questions to my right hon. and learned Friend specifically with regard to the future. I go with my right hon.
  688
  and learned Friend 100 per cent. in believing that the Bill is not the appropriate vehicle for the purpose of this new Clause. It is perfectly plain that the Clause deals with domestic legislation and not with matter which ought to be encompassed by the Bill. I shall therefore vote against it.
  It is quite plain, however, that there will have to be a parliamentary scrutiny committee, and I should like to know when and how it is proposed to deal with that matter, because time is now short. Will the Government be able to indicate their views as to the type of scrutiny committee that should be set up? Is the committee to be similar to the Public Accounts Committee or the Estimates Committee? How is it to be selected?
  Mr. English Mr. English On a point of order, Sir Alfred. I accept that the hon. Member for Isle of Thanet (Mr. Rees-Davies) desires to have these questions answered, but a view of the Patronage Secretary was read into the record of the House of Commons by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). The whole issue has been discussed at considerable length, and I suggest that the hon. Member should read Hansard in order to see some of the answers.
  The Temporary Chairman: According to the Standing Orders, the hon. Member for the Isle of Thanet (Mr. Rees-Davies) has the right to speak.
  Mr. Rees-Davies: And, if I may say so, Sir Alfred, the hon. Member made a thoroughly irrelevant and incompetent intervention. It was irrelevant because it was out of order, and also because it misquoted the Patronage Secretary's letter which did not express a view but merely canvassed ideas. It did not express the Patronage Secretary's personal view at all. It merely suggested a number of considerations. The hon. Member's intervention, therefore, was totally irrelevant and wrong.
  It was incompetent because it failed to recognise that what I am seeking to do, after he himself had made a lengthy speech, is to make relevant observations for the assistance of the House in future. I am not here to waste the time of the

  689
  House, but to try to assist those who have already spoken and who have certain misgivings.
  I believe that this public scrutiny committee may well be, and ought to be, an elective committee from each side of the House, and that fairly soon we ought to know what is to be the composition of such a public scrutiny committee. For reasons given tonight, this should be made known soon, because if we are entering the European Economic Community early next year it is urgent to know that such a committee will be set up fairly soon and will be able to go to Europe and consider the whole volume of the relevant legislation.
  I therefore ask the Government to come forward fairly soon with their policy suggestions on this matter and to indicate whether hon. Members will be entirely selected by the Government Chief Whip and the Opposition Chief Whip through the usual channels or whether some type of elective method will be adopted.
  10.15 p.m.
  Turning to the other point about selection, the present method of selection is not a suitable one for the future because in the future we shall go on to have an elected Parliament. We should therefore, in the first stage, go to some form of election. Each of the two major parties has its methods. In our case, the Conservative Party has its Executive Committee, popularly called the '22 Committee. The Labour Party has similar methods. With the assistance of the usual channels and the Chief Whips, it is possible to get at least the feeling of the party on each side as to those who would be appropriate to serve on the Committee.
  I share entirely the view of the right hon. Member for Sheffield, Hillsborough (Mr. Darling) when he says that it is quite wrong to suppose that Members of Parliament will have to be away for very long periods in order to conduct their duties. Some of us are quite willing to give up all other careers to serve in this regard for the necessary period, and
  that will be found true in the future. [An Hon. Member: "Canvassing?"] If hon. Members want me to be brief, they should not make fatuous interventions. It may be 40 or 50 days at most. It is perfectly easy to arrange transport by airliner, and thence by helicopter to the House of Commons, to enable people to engage in debates in Brussels during the day and still be back here in the evening perfectly easily. Many Members of the House of Commons conduct their commercial business overseas during the day and are back here in the evening.
  To summarise this, the new Clause represents a totally wrong view. It is obviously quite unnecessary to try to put our domestic affairs into a Bill dealing with the Treaties. It is quite beyond argument to say that my right hon. Friend was not right when he had already given the whole case clearly on 12th June. This raises the important matters upon which there may well be divergences within the Conservative Party and the Labour Party, as to whether these matters ought to be dealt with by some form of election. This should be carefully considered and we ought to have the Government's guidance and their views about it at the earliest possible date.
  I am sorry to have taken these few minutes at this stage but as no one had expressed that view—it was not relevant to the Minister's observations, otherwise he would have dealt with it—I thought it right to place on the record for the Government's consideration the question whether the committee is ad hoc or a Select Committee.
  Mr. Rippon: I am grateful to my hon. Friend for that contribution. Now that the Opposition have indicated their willingness to talk, as it were, I hope that we shall make speedy progress. I am sure that my hon. Friend is right about the importance of this matter.
  Question put, That the Clause be read a Second time:—
  The Committee divided: Ayes 265, Noes 274.

  Division No. 268.]

  AYES

  [10.19 p.m.

  Abse, Leo

  Atkinson, Norman

  Bennett, James (Glasgow, Bridgeton)

  Allaun, Frank (Salford, E.)

  Bagier, Gordon A. T.

  Bidwell, Sydney

  Archer, Peter (Rowley Regis)

  Barnett, Guy (Greenwich)

  Biffen, John

  Armstrong, Ernest

  Barnett, Joel (Heywood and Royton)

  Bishop, E. S.

  Ashley, Jack

  Baxter, William

  Blenkinsop, Arthur

  Ashton, Joe

  Benn, Rt. Hn. Anthony Wedgwood

  Boardman, H. (Leigh)

  Body, Richard

  Heffer, Eric S.

  O'Malley, Brian

  Booth, Albert

  Hooson, Emlyn

  Oram, Bert

  Bottomley, Rt. Hn. Arthur

  Horam, John

  Orbach, Maurice

  Bradley, Tom

  Houghton, Rt. Hn. Douglas

  Orme, Stanley

  Brown, Robert C. (N'c'tle-u-Tyne W.)

  Howell, Denis (Small Heath)

  Oswald, Thomas

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

  Huckfield, Leslie

  Owen, Dr. David (Plymouth, Sutton)

  Brown, Ronald (Shoreditch & F'bury)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Padley, Walter

  Buchan, Norman

  Hughes, Mark (Durham)

  Paget, R. T.

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

  Hughes, Robert (Aberdeen, N.)

  Paisley, Rev. Ian

  Butler, Mrs. Joyce (Wood Green)

  Hughes, Roy (Newport)

  Palmer, Arthur

  Callaghan, Rt. Hn. James

  Hutchison, Michael Clark

  Pannell, Rt. Hn. Charles

  Campbell, I. (Dunbartonshire, W.)

  Irvine,Rt.Hn.SirArthur(Edge Hill)

  Parker, John (Dagenham)

  Cant, R. B.

  Janner, Greville

  Parry, Robert (Liverpool, Exchange)

  Carmichael, Neil

  Jay, Rt. Hn. Douglas

  Pavitt, Laurie

  Carter, Ray (Birmingh'm, Northfield)

  Jeger, Mrs. Lena

  Peart, Rt. Hn. Fred

  Carter-Jones, Lewis (Eccles)

  Jenkins, Hugh (Putney)

  Pentland, Norman

  Castle, Rt. Hn. Barbara

  Jenkins, Rt. Hn. Roy (Stechford)

  Perry, Ernest G.

  Clark, David (Colne Valley)

  John, Brynmor

  Powell, Rt. Hn. J. Enoch

  Cocks, Michael (Bristol, S.)

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

  Prentice, Rt. Hn. Reg.

  Cohen, Stanley

  Johnson, Walter (Derby, S.)

  Prescott, John

  Concannon, J. D.

  Jones, Dan (Burnley)

  Price, J. T. (Westhoughton)

  Conlan, Bernard

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

  Price, William (Rugby)

  Cox, Thomas (Wandsworth, C.)

  Jones, Gwynoro (Carmarthen)

  Probert, Arthur

  Crawshaw, Richard

  Jones, T. Alec (Rhondda, W.)

  Rankin, John

  Cronin, John

  Judd, Frank

  Reed, D. (Sedgefield)

  Crosland, Rt. Hn. Anthony

  Kaufman, Gerald

  Rees, Merlyn (Leeds, S.)

  Crossman, Rt. Hn. Richard

  Kelley, Richard

  Rhodes, Geoffrey

  Cunningham, G. (Islington, S.W.)

  Kerr, Russell

  Richard, Ivor

  Cunningham, Dr. J. A. (Whitehaven)

  Kilfedder, James

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Dalyell, Tam

  Kinnock, Neil

  Robertson, John (Paisley)

  Darling, Rt. Hn. George

  Lambie, David

  Rodgers, William (Stockton-on-Tees)

  Davidson, Arthur

  Lamborn, Harry

  Roper, John

  Davies, Denzil (Llanelly)

  Lamond, James

  Rose, Paul B.

  Davies, I tor (Gower)

  Latham, Arthur

  Ross, Rt. Hn. William (Kilmarnock)

  Davis, Clinton (Hackney, C.)

  Leadbitter, Ted

  Rowlands, Ted

  Davis, Terry (Bromsgrove)

  Lee, Rt. Hn. Frederick

  Sandelson, Neville

  Deakins, Eric

  Leonard, Dick

  Sheldon, Robert (Ashton-under-Lyne)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lestor, Miss Joan

  Shore, Rt. Hn. Peter (Stepney)

  Dell, Rt. Hn. Edmund

  Lever, Rt. Hn. Harold

  Silkin, Rt. Hn. John (Deptford)

  Doig, Peter

  Lewis, Arthur (W. Ham, N.)

  Silkin, Hn. S. C. (Dulwich)

  Dormand, J. D.

  Lewis, Ron (Carlisle)

  Silverman, Julius

  Douglas, Dick (Stirlingshire, E.)

  Lipton, Marcus

  Skinner, Dennis

  Douglas-Mann, Bruce

  Lomas, Kenneth

  Small, William

  Driberg, Tom

  Loughlin, Charles

  Smith, John (Lanarkshire, N.)

  Duffy, A. E. P.

  Lyon, Alexander W. (York)

  Spearing, Nigel

  Dunn, James A.

  Lyons, Edward (Bradford, E.)

  Spriggs, Leslie

  Dunnett, Jack

  Mabon, Dr. J. Dickson

  Stallard, A. W.

  Edelman, Maurice

  McBride, Neil

  Stewart, Donald (Western Isles)

  Edwards, Robert (Bilston)

  McCartney, Hugh

  Stoddart, David (Swindon)

  Edwards, William (Merioneth)

  McElhone, Frank

  Strang, Gavin

  Ellis, Tom

  McGuire, Michael

  Strauss, Rt. Hn. G. R.

  English, Michael

  Mackenzie, Gregor

  Summerskill, Hn. Dr. Shirley

  Evans, Fred

  Mackie, John

  Swain, Thomas

  Ewing, Harry

  Mackintosh, John P.

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

  Farr, John

  McWillan, Tom (Glasgow, C.)

  Thomas, Jeffrey (Abertillery)

  Faulds, Andrew

  McNaman, J. Kevin

  Thomson, Rt. Hn. G. (Dundee, E.)

  Fell, Anthony

  Mahon, Simon (Bootle)

  Torney, Tom

  Fitch, Alan (Wigan)

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

  Tuck, Raphael

  Fletcher, Raymond (Ilkeston)

  Marquand, David

  Turton, Rt. Hn. Sir Robin

  Fletcher, Ted (Darlington)

  Marsden, F.

  Urwin, T. W.

  Foley, Maurice

  Marshall, Dr. Edmund

  Varley, Eric G.

  Foot, Michael

  Marten, Neil

  Walker, Harold (Doncaster)

  Ford, Ben

  Mason, Rt. Hn. Roy

  Walker-Smith, Rt. Hn. Sir Derek

  Forrester, John

  Maxwell-Hyslop, R. J.

  Wallace, George

  Fraser, John (Norwood)

  Mayhew, Christopher

  Watkins, David

  Freeson, Reginald

  Mellish, Rt. Hn. Robert

  Weitzman, David

  Garrett, W. E.

  Mendelson, John

  Wellbeloved, James

  Gilbert, Dr. John

  Mikardo, Ian

  Wells, William (Walsall, N.)

  Ginsburg, David (Dewsbury)

  Millan, Bruce

  White, James (Glasgow, Pollok)

  Golding, John

  Miller, Dr. M. S.

  Whitehead, Phillip

  Gordon Walker, Rt. Hn. P. C.

  Milne, Edward

  Whitlock, William

  Gourlay, Harry

  Mitchell, R. C. (S'hampton, Itchen)

  Willey, Rt. Hn. Frederick

  Grant, George (Morpeth)

  Moate, Roger

  Williams, Alan (Swansea, W.)

  Grant, John D. (Islington, E.)

  Molyneaux, James

  Williams, Mrs. Shirley (Hitchin)

  Griffiths, Eddie (Brightside)

  Morgan, Elystan (Cardiganshire)

  Williams, W. T. (Warrington)

  Griffiths, Will (Exchange)

  Morris, Alfred (Wythenshawe)

  Wilson, Alexander (Hamilton)

  Hamilton, William (Fife, W.)

  Morris, Charles R. (Openshaw)

  Wilson, Rt. Hn. Harold (Huyton)

  Hamling, William

  Morris, Rt. Hn. John (Aberavon)

  Wilson, William (Coventry, S.)

  Hardy, Peter

  Moyle, Roland

  Woof, Robert

  Harper, Joseph

  Mulley, Rt. Hn. Frederick

  Harrison, Walter (Wakefield)

  Murray, Ronald King

  TELLERS FOR THE AYES:

  Hart, Rt. Hn. Judith

  Oakes, Gordon

  Mr. James Hamilton and

  Hattersley, Roy

  Ogden, Eric

  Mr. Donald Coleman.

  Healey, Rt. Hn. Denis

  O'Halloran, Michael

  692

  693

  NOES

  Adley, Robert

  Galbraith, Hn. T. G

  Maudling, Rt. Hn. Reginald

  Alison, Michael (Barkston Ash)

  Gardner, Edward

  Mawby, Ray

  Allason, James (Hemel Hempstead)

  Gibson-Watt, David

  Meyer, Sir Anthony

  Amery, Rt. Hn. Julian

  Gilmour, Ian (Norfolk, C.)

  Mills, Peter (Torrington)

  Archer, Jeffrey (Louth)

  Glyn, Dr. Alan

  Mills, Stratton (Belfast, N.)

  Astor, John

  Godber, Rt. Hn. J. B.

  Miscampbell, Norman

  Atkins, Humphrey

  Goodhart, Philip

  Mitchell, Lt.-Col.C.(Aberdeenshire,W)

  Awdry, Daniel

  Goodhew, Victor

  Mitchell, David (Basingstoke)

  Baker, Kenneth (St. Marylebone)

  Gorst, John

  Money, Ernle

  Balniel, Rt. Hn. Lord

  Gower, Raymond

  Monks, Mrs. Connie

  Barber, Rt. Hn. Anthony

  Grant, Anthony (Harrow, C.)

  Monro, Hector

  Batsford, Brian

  Gray, Hamish

  Montgomery, Fergus

  Beamish, Col. Sir Tufton

  Green, Alan

  More, Jasper

  Bennett, Dr. Reginald (Gosport)

  Grieve, Percy

  Morgan, Geraint (Denbigh)

  Benyon, W.

  Griffiths, Eldon (Bury St. Edmunds)

  Morgan-Giles, Rear-Adm.

  Berry, Hn. Anthony

  Grylls, Michael

  Morrison, Charles

  Biggs-Davison, John

  Gummer, J. Selwyn

  Mudd, David

  Blaker, Peter

  Gurden, Harold

  Neave, Airey

  Boardman, Tom (Leicester, S.W.)

  Hall, Miss Joan (Keighley)

  Nicholls, Sir Harmar

  Boscawen, Robert

  Hall, John (Wycombe)

  Noble, Rt. Hn. Michael

  Bossom, Sir Clive

  Hall-Davis, A. G. F.

  Normanton, Tom

  Bowden, Andrew

  Hamilton, Michael (Salisbury)

  Nott, John

  Braine, Sir Bernard

  Hannam, John (Exeter)

  Onslow, Cranley

  Bray, Ronald

  Harrison, Brian (Maldon)

  Oppenheim, Mrs. Sally

  Brinton, Sir Tatton

  Brocklebank-Fowler, Christopher

  Harrison, Col. Sir Harwood (Eye)

  Osborn, John

  Brown, Sir Edward (Bath)

  Haselhurst, Alan

  Owen, Idris (Stockport, N.)

  Bruce-Gardyne, J.

  Hastings, Stephen

  Page, Rt. Hn. Graham (Crosby)

  Bryan, Sir Paul

  Havers, Michael

  Page, John (Harrow, W.)

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

  Hawkins, Paul

  Parkinson, Cecil

  Buck, Antony

  Heseltine, Michael

  Peel, John

  Burden, F. A.

  Higgins, Terence L.

  Percival, Ian

  Butler, Adam (Bosworth)

  Hiley, Joseph

  Peyton, Rt. Hn. John

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

  Hill, James (Southampton, Test)

  Pike, Miss Mervyn

  Carlisle, Mark

  Holland, Philip

  Pink, R. Bonner

  Carr, Rt. Hn. Robert

  Holt, Miss Mary

  Pries, David (Eastleigh)

  Cary, Sir Robert

  Hordern, Peter

  Proudfoot, Wilfred

  Channon, Paul

  Hornby, Richard

  Pym, Rt. Hn. Francis

  Chapman, Sydney

  Hornsby-Smith,Rt.Hn.Dame Patricia)

  Quennell, Miss J. M.

  Chataway, Rt. Hn. Christopher

  Howe, Hn. Sir Geoffrey (Reigate)

  Raison, Timothy

  Chichester-Clark, R.

  Howell, David (Guildford)

  Ramsden, Rt. Hn. James

  Churchill, W. S.

  Howell, Ralph (Norfolk, N.)

  Rawlinson, Rt. Hn. Sir Peter

  Clark, William (Surrey, E.)

  Hunt, John

  Redmond, Robert

  Clegg, Walter

  Iremonger, T. L.

  Reed, Laurance (Bolton, E.)

  Cockeram, Eric

  James, David

  Rees, Peter (Dover)

  Cooke, Robert

  Jenkin, Patrick (Woodford)

  Rees-Davies, W. R.

  Coombs, Derek

  Jossel, Toby

  Renton, Rt. Hn. Sir David

  Cooper, A. E.

  Johnson Smith, G. (E. Grinstead)

  Ridley, Hn. Nicholas

  Cordle, John

  Johnston, Russell (Inverness)

  Ridsdale, Julian

  Corfield, Rt. Hn. Sir Frederick

  Jopling, Michael

  Rippon, Rt. Hn. Geoffrey

  Cormack, Patrick

  Joseph, Rt. Hn. Sir Keith

  Roberts, Michael (Cardiff, N.)

  Costain, A. P.

  Kaberry, Sir Donald

  Roberts, Wyn (Conway)

  Critchley, Julian

  Kellett-Bowman, Mrs. Elaine

  Rossi, Hugh (Hornsey)

  Crouch, David

  Kershaw, Anthony

  Rost, Peter

  Crowder, F. P.

  Kimball, Marcus

  Royle, Anthony

  Dalkeith, Earl of

  King, Evelyn (Dorset, S.)

  Scott, Nicholas

  Davies, Rt. Hn. John (Knutsford)

  King, Tom (Bridgwater)

  Scott-Hopkins, James

  d'Avigdor-Goldsmid, Sir Henry

  Kinsey, J. R.

  Sharples, Sir Richard

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

  Kirk, Peter

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

  Dean, Paul

  Kitson, Timothy

  Shelton, William (Clapham)

  Deedes, Rt. Hn. W. F.

  Knight, Mrs. Jill

  Simeons, Charles

  Digby, Simon Wingfield

  Lament, Norman

  Sinclair, Sir George

  Dixon, Piers

  Lane, David

  Skeet, T. H. H.

  Dodds-Parker, Douglas

  Langford-Holt, Sir John

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

  Drayson, G. B.

  Legge-Bourke, Sir Harry

  Soref, Harold

  du Cann, Rt. Hn. Edward

  Le Merchant, Spencer

  Speed, Keith

  Eden, Rt. Hn. Sir John

  Lewis, Kenneth (Rutland)

  Spence, John

  Edwards, Nicholas (Pembroke)

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

  Sproat, Iain

  Elliot, Capt. Walter (Carshalton)

  Longden, Sir Gilbert

  Stainton, Keith

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

  Loveridge, John

  Stanbrook, Ivor

  Emery, Peter

  Luce, R. N.

  Steel, David

  Eyre, Reginald

  McAdden, Sir Stephen

  Stewart-Smith, Geoffrey (Belper)

  Fenner, Mrs. Peggy

  MacArthur, Ian

  Stodart, Anthony (Edinburgh, W.)

  Fidler, Michael

  McCrindle, R. A.

  Stokes, John

  Finsberg, Geoffrey (Hampstead)

  McLaren, Martin

  Stuttaford, Dr. Tom

  Fisher, Nigel (Surbiton)

  Maclean, Sir Fitzroy

  Tapsell, Peter

  Fletcher-Cooke, Charles

  Macmillan.Rt.Hn.Maurice (Farnham)

  Taylor, Sir Charles (Eastbourne)

  Fookes, Miss Janet

  McNair-Wilson, Michael

  Taylor, Frank (Moss Side)

  Fortescue, Tim

  Maddan, Martin

  Taylor, Robert (Croydon, N.W.)

  Foster, Sir John

  Madel, David

  Tebbit, Norman

  Fowler, Norman

  Marples, Rt. Hn. Ernest

  Temple, John M.

  Fox, Marcus

  Mather, Carol

  Thatcher, Rt. Hn. Mrs. Margaret

  Fry, Peter

  Maude, Angus

  Thomas, John Stradling (Monmouth)

  694

  695

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

  Walker, Rt. Hn. Peter (Worcester)

  Wood, Rt. Hn. Richard

  Thompson, Sir Richard (Croydon, S.)

  Wall, Patrick

  Woodnutt, Mark

  Tilney, John

  Walters, Dennis

  Worsley, Marcus

  Trafford, Dr. Anthony

  Warren, Kenneth

  Wylie, Rt. Hn. N. R.

  Trew, Peter

  Weatherill, Bernard

  Younger, Hn. George

  Tugendhat, Christopher

  Wells, John (Maidstone)

  van Straubenzee, W. R.

  White, Roger (Gravesend)

  TELLERS FOR THE NOES:

  Vaughan, Dr. Gerard

  Wiggin, Jerry

  Mr. Oscar Murton and

  Vickers, Dame Joan

  Wilkinson, John

  Mr. Kenneth Clarke.

  Waddington, David

  Winterton, Nicholas

  Walder, David (Clitheroe)

  Wolrige-Gordon, Patrick

  Question accordingly negatived.

New Clause

  PROCEDURE IN ORDERS IN COUNCIL AND STATUTORY INSTRUMENTS
  'Notwithstanding the foregoing provisions of this Act any Order in Council or statutory instrument to be made in pursuance thereof which is not subject to affirmative procedure shall be submitted for the approval of the House of Commons if notice has been given by not less than one hundred Members of Parliament of a Motion to that effect'.—[Mr. Shore.]
  Brought up, and read the First time.
  10.30 p.m.
  Mr. Shore: I beg to move, That the Clause be read a Second time.
  In spite of the obvious importance of the two new Clauses which we have managed to debate today, it is a welcome fact that we have been able to reach this one, however brief the time we have for it. It is an important Clause in its own right, and as this appears to be the last opportunity we shall have to amend this apparently unamendable Bill, the Clause takes on a special and extra importance because of the occasion. Apart from its inherent importance, the Clause, as I hope to demonstrate, puts to the test the whole approach of Ministers to the Bill, to this Committee, and to Amendments.
  The first point to make is that the Clause does not ask that there should be the affirmative procedure for all Orders in Council issued under the Bill. It does not ask for that. Under Clause 2 and Schedule 2 Ministers have the right to choose as they think fit either the negative or affirmative procedure for getting an order approved. That is the present situation. What we are asking for in the new Clause is that the affirmative procedure should be brought into play if at least 100 Members of Parliament putdown a Motion to that effect. This is obviously a very modest proposal. Matters of genuinely small importance, for which the Minister would, presumably, recommend the negative procedure, would not, I think, be likely to be affected at all by what we are proposing, for one would not easily get 100 Members of Parliament to put down a Motion on a matter generally thought to be of no great weight.
  However, what the Clause allows for is that on those occasions—there will not
  698
  be many—on which 100 Members of Parliament disagree with the Minister about the importance of an Order in Council which seeks to impose obligations upon us under the Treaties they—the Members of Parliament—should then have the opportunity under the affirmative procedure to debate the order. That is what the Clause seeks.
  This is a small but important proposal. Hon. Members on both sides are by now acutely aware of the problem we face on secondary legislation of all kinds. The volume of it has grown and will continue to grow. At present the Brooke Joint Select Committee is looking at the matter, but it has not even been able to produce the interim report we hoped to have before the conclusion of these Committee proceedings on the problems that will arise in dealing with secondary legislation under the Bill.
  We must take the facts as they are, and the facts are simple and have been stated on a number of occasions. Under our negative procedure, we have reached the stage when many important matters are prayed against and no time is found for debates to take place. The only real guarantee we have that an Order in Council under the Bill will be debated is the occasion on which it comes under the affirmative procedure. It is only then that the Government need to seek the positive assent of the House.
  I turn to what I expect will be the only serious argument against adopting the proposal. Hon. Members object if the volume of secondary legislation—Orders in Council, statutory instruments—under the Bill turns out to be so great that, even with this rather guarded procedure of invoking the affirmative resolution procedure, the House could be swamped by the number of orders that came forward. That would be a serious argument against what we are proposing.
  I have a strong reason for assuring the Committee that this worry would not be justified in the case of the Bill. It is a curious fact that we do not face armies of Community regulations which have to be turned into statutory instruments by the House. We do not face this situation, not because there are no great armies of Community law that will soon be on the march, but because, since they will move under the command of Clause 2(1),

  699
  they will not march through the House at all. That is the point. Therefore, the procedures of the House, whether affirmatime or negative, will not be invoked at all.
  What we are concerned about is not the bottleneck which might be caused by the thousands and thousands—as there will be—of regulations and decisions, the self-enacting directly applicable law which we shall have no right to inspect, so far as I can judge, and certainly no right to approve or disapprove. We are not concerned about the great armies of Community law, but only the occasional straggler or deserter who will wander into the House under the requirement of translating a directive into a piece of secondary legislation in this Parliament.
  Sir Robin Turton: Surely the right hon. Gentleman must also mention that there is already a large phalanx of directives, going back to 1962, lying there waiting to be brought up to this House after our entry.
  Mr. Shore: I shall be coming to that point shortly and it will be of interest to the right hon. Member for Thirsk and Malton (Sir Robin Turton). I have asked questions of the Chancellor of the Duchy about these matters, and perhaps he may now be able to answer them. I am surprised to learn that only six statutory instruments need to be laid this year under Clause 2(2), which is the only provision of the Bill which relates to statutory instruments. Furthermore, he has a requirement to lay only 12 in the whole of 1973. That is the position as it emerges.
  Partly the answer to the right hon. Member for Thirsk and Malton is that a number of very important matters which have to be translated from Community directives into English law will not be introduced under the procedures of this legislation but will be enacted through the secondary legislation procedures in relation to other British legislation into which the new wine Community law is about to be poured. In other words, if we are forced to accept the unacceptable Eurolorries, the new regulations which will pertain to the length, size and weight of lorries in this country will be enacted by means of
  700
  a Statutory Instrument under the Road Traffic Act of 1972, changes in our exchange control system will come through the Exchange Control Act, 1947, and so on. That is why there are only six instruments in 1972, only 12 in 1973, and not all that many more after.
  One reason for this is that it is part of the desire of the Community and its institutions to have as much of its law enacted in a way which cannot be challenged by Parliament and which does not even need the translation into our law which a directive forms. Instead, it opts for the unchallengeable, unalterable, unget-atable Community directly enforceable law in the form of regulations and decisions. However, I think that I have made my point. All that we have to deal with is a very small number of directives.
  Even if I had been recommending to the Committee that we use affirmative procedures for all Community secondary legislation, it could not be argued that this was a bit of machinery which would gum up, delay or throw out of gear ministerial timetables or the ability of the Government to bring the law of this land into line with the requirements of the Community.
  Let me sum up my arguments. I said that there are no practical reasons for opposing the Clause. We are dealing with a trickle of subordinate legislation, and that is all. In our modesty, we have not even asked that all such orders should take the affirmative procedure. We have simply made it possible, in those cases where 100 Members ask for that right, that an order should have to go through the affirmative procedure for approval.
  While there is no reason why the Clause should be rejected, obviously there are very strong reasons why it should be accepted. No one with any regard for Parliament and for the democratic process could fail, in the absence of strong opposing considerations which do not operate in this case, to opt for more rather than less parliamentary control. Those who resist this proposal will be doing nothing either for or against Europe. There will be time to talk for or against Europe. There will be time to talk about that matter on other occasions. This debate is wholly about

  701
  whether we choose to give greater power to a Minister to issue Statutory Instruments or whether we keep a bit more of that power for ourselves under the Clause.
  I said at the beginning that this was not only a test of the attitude of pro-Common Market Members on both sides of the Committee but also perhaps the acid test of the approach of the Chancellor of the Duchy to whether we are to be able to amend the Bill. If the right hon. and learned Gentleman turns down this Clause, as he has so many others, he will have demonstrated for all to see that he is not concerned at all with any possibility of improvement, and that he is concerned simply to railroad this Bill through with a minimum of public discussion and in the shortest possible time.
  [Sir ROBERT GRANT-FERRIS in the Chair]
  10.45 p.m.
  Mr. Rippon: The right hon. Member for Stepney (Mr. Shore) has made his last speech in the Committee very much in the same tone as his first. He has made his usual reference to the directly applicable Community law, to which he takes exception but which we must accept, as we must always have accepted if we were ever to have made an honest application to join the EEC. Again he has misunderstood—a kinder description than "misrepresented"—the nature of the Bill.
  This Bill is designed to enable us to give effect to the necessary changes in our domestic law in order to comply with our treaty obligations. The new Clause proposes an innovation, and one which would not be an improvement. Its effect would be that parliamentary procedure for dealing with certain subordinate legislation under the Bill could be determined simply by the number of hon. Members who put their names to a Motion. Such a statutory method of determining parliamentary procedures would be wholly unprecedented and its inclusion in a Statute would be contrary to the long-held, and rightly held, tradition that these matters are decided by Parliament itself without recourse to the Statute Book.
  This indication that the new Clause would be the wrong way to proceed is demonstrated by the fact that the House has set up the Joint Committee on Dele-
  702
  gated Legislation, under the Chairmanship of Lord Brooke, which is at present examining the whole question of the methods of scrutinising subordinate legislation. Schedule 2 already contains a completely flexible provision which enables instruments to be laid in draft for affirmative resolution in particular cases.
  If hon. Members believe that the Government have chosen to make by a negative resolution an instrument which should be debated, the proper course is for them under the appropriate procedures to put down a Prayer. That is the proper procedure and not to try to introduce a new hybrid procedure which would make an instrument in effect neither properly an affirmative nor properly a negative one. The matter was considered recently by the Select Committee on Procedure. It considered among other things the time available to debate Prayers which may be put down in these circumstances. The evidence is that there has never been a case in which there has been tremendous pressure for a particular Prayer where time has not been found.
  But, of course, Parliamentary pressure in a case of this kind is measured not by the number of hon. Members who put their names to a Motion but in terms of the quality and strength of the Opposition. After all, it is possible, although not something which hon. Members opposite want to contemplate, that after the next General Election there will not be 100 members of the Labour Party in the House of Commons, but under the new Clause they would then find written into a Statute a procedure which would enable the Government of the day to say, "We need to take no further action." But we know perfectly well that, as happened in 1931, Parliament evolves procedures which protect the rights of a minority, however small it might happen to be after a particularly disastrous visit to the electorate. These are matters of substance and principle which enable me to advise the Committee to reject the new Clause.
  Mr. Gerald Kaufman: Surely the new Clause does not specify that 100 Opposition Members shall put down a Motion but that 100 Members shall do so. Why should not hon. Members on the Government side of the House be allowed to take action of this kind?
  Mr. Rippon: We do not know what might happen in a future Parliament. It may be that in a future Parliament the Government—it might be a Labour Government—will impose their will on a Conservative minority. Judging by the ferocity with which the Labour Party is inclined to whip its Members against their consciences, it may be a difficult situation.
  Apart from what I believe to be a point of substance and principle, the new Clause is a non-runner by any standards. It is defective, because it is not clear. Instruments concerned, subject to the negative Resolution procedure, will have been made and may be in effect before a Motion is put down. There is no indication of the time within which a Motion must be put down or what happens to the instrument when the required number of signatures has been obtained. Is it annulled, temporarily suspended, or does it continue, as before, until it has been debated and then cease to have effect only if not approved? If it is approved within the time limit for a Prayer for annulment, is it still subject to annulment by a Resolution of the other House?
  All those technical objections are of secondary importance compared with the point of principle which I put to the Committee at the outset and have reiterated throughout the Committee proceedings, namely, that it is inappropriate to deal with matters of procedure in a Bill of this kind and so import an unnecessary and unprecendented degree of inflexibility into our procedures which are properly dealt with by Standing Orders.
  I hope I have said enough to illustrate the good and sufficient reasons for rejection of the new Clause.
  When the time comes for those who wish to write their memoirs to re-read the Committee proceedings, they will find that every Amendment which the Opposition have put forward has been dealt with entirely on its merits and that we have provided good and sufficient reasons for its rejection.
  Mr. Shore:Does the right hon. and learned Gentleman take the view that he has dealt with Amendments which have come from his own side on their merits?
  Mr. Rippon: Most certainly I do. The replies which I and other Ministers have
  704
  given have illustrated that. I firmly hold the view that we have dealt with all the Amendments on their merits.
  Mr. Spearing Mr. Spearing rose—
  Mr. Rippon:Finally, and I hope with the approval of right hon. and hon. Members on both sides of the Committee, although it is probably out of order on this new Clause, I should like to say how much we have appreciated the way that you, Sir Robert, and your colleagues have conducted these long and ar—
  Hon. Members: Arbitrary.
  Mr. Rippon:—arduous procedures with so much good humour and concern for the Committee as a whole.
  Mr. Kaufman: I should like to ask the indulgence of the Committee on the occasion of my maiden speech on the European Communities Bill.
  I am absolutely flabbergasted by the way in which the Chancellor of the Duchy of Lancaster can indulge in the extraordinary acrobatics in which he accuses the Opposition of putting forward a new Clause of unprecedented inflexibility. If ever there was unprecedented inflexibility, the Committee has seen it since the Bill received Second Reading by the way in which the right hon. and learned Gentleman has turned down every Amendment proposed by either pro-Marketeers or anti-Marketeers on both sides of the Committee.
  The right hon. and learned Gentleman tells us that he cannot accept this so-called new Clause because it proposes something new, as though this whole Bill, which has been dragooned through the House of Commons, is not inflicting new, unprecedented, intolerable and undemocratic practices on us of a kind that have never been inflicted upon this Parliament before.
  All that my right hon. Friends seek to do at this stage of the proceedings is to put forward one small, puny, whimpering new Clause asking that if 100 Members wish to debate something they shall be permitted to do so. But when we put this Clause forward the right hon. and learned Gentleman says that my right hon. Friends are indulging in unprecedented inflexibility.
  Mr. Spearing: My hon. Friend has not been in the Committee throughout the day. Does he not recall, however, that at an earlier stage in our debates an Amendment in the names of some of my hon. Friends and myself sought to define the phrase "enforceable Community right"? The question was discussed by hon. Members on this side of the Committee but the Chancellor of the Duchy did not even deign to reply, giving reasons why he wished the Amendment not to be accepted. That was an example of the way in which he has treated the Committee throughout this stage of the proceedings.
  Mr. Kaufman: The miasma of Brussels has fallen upon the right hon. and learned Gentleman. That being so, we scarcely expect him to treat this assembly with respect, especially when accompanied by his hon. and learned Friend the Solicitor-General, who has managed to turn British law into a dog's breakfast. I trust that hon. Members opposite—and hon. Ladies, too—who were elected to this Parliament on the ground that they would not vote for entry into the Common Market unless the people accepted the idea will now, at literally the eleventh hour, find their consciences, look at their election manifestoes, examine their mandates and at least help to defeat this Government and have a Report stage of the Bill.
  Sir David Renton: The speech of the hon. Member for Manchester, Ardwick (Mr. Kaufman) is characteristic of a party that is trying to narrow its base by excluding all those Members who genuinely believe that we should support the Bill. That contrasts with the position of hon. Members on this side of the Committee, who belong to a party that is keeping its base broad
  by respect of the sincerity of those of its Members who oppose the Bill.
  The speech of the right hon. Member for Stepney (Mr. Shore) was rather strange, because it expressed hopes of a procedural point that would not have been fulfilled by the Clause that he was moving. He was dealing with a purely procedural point, which turned on the difference between the affirmative and the negative procedure in the House of Commons. I remind the right hon. Gentleman that the principal difference between those two procedures is that under the affirmative procedure the Government have an obligation to use their intiative and under the negative procedure back benchers have an opportunity to use their initiative if they wish.
  I must come clean and point out that there is one further difference, namely, that often more time is given to the discussion on the affirmative procedure than on the negative procedure. During the course of these discussions it has become clear that hon. Members opposite are much more interested in the length of time spent upon debate than upon its content.
  The right hon. Gentleman's new Clause frustrates his intention because, under it, instead of using the negative procedure and the initiative available to hon. Members anyway, he would have to go—
  It being Eleven o'clock, The Chairman proceeded, pursuant to Order [2nd May], to put forthwith the Question already proposed from the Chair.
  Question put, That the Clause be read a Second time:—
  The Committee divided: Ayes 264, Noes 277.

  Division No. 269.]

  AYES

  [11.0 p.m.

  Abse, Leo

  Boardman, H. (Leigh)

  Castle, Rt. Hn. Barbara

  Allaun, Frank (Salford, E.)

  Body, Richard

  Clark, David (Colne Valley)

  Archer, Peter (Rowley Regis)

  Booth, Albert

  Cocks, Michael (Bristol, S.)

  Armstrong, Ernest

  Bottomley, Rt. Hn. Arthur

  Cohen, Stanley

  Ashley, Jack

  Bradley, Tom

  Coleman, Donald

  Ashton, Joe

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Concannon, J. D.

  Atkinson, Norman

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

  Conlan, Bernard

  Bagier, Gordon A. T.

  Brown, Ronald (Shoreditch & F'bury)

  Cox, Thomas (Wandsworth, C.)

  Barnett, Guy (Greenwich)

  Buchan, Norman

  Crawshaw, Richard

  Barnett, Joel (Heywood and Royton)

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

  Cronin, John

  Baxter, William

  Butler, Mrs. Joyce (Wood Green)

  Crosland, Rt. Hn. Anthony

  Benn, Rt. Hn. Anthony Wedgwood

  Callaghan, Rt. Hn. James

  Crossman, Rt. Hn. Richard

  Bennett, James (Glasgow, Bridgeton)

  Campbell, I. (Dunbartonshire, W.)

  Cunningham, G. (Islington, S.W.)

  Bidwell, Sydney

  Cant, R. B.

  Cunningham, Dr. J. A. (Whitehaven)

  Biffen, John

  Carmichael, Neil

  Dalyell, Tam

  Bishop, E. S.

  Carter, Ray (Birmingh'm, Northfield)

  Darling, Rt. Hn. George

  Blenkinsop, Arthur

  Carter-Jones, Lewis (Eccles)

  Davidson, Arthur

  Davies, Denzil (Llanelly)

  Jones, I. Alec (Rhondda, W.)

  Parry, Robert (Liverpool, Exchange)

  Davies, Ifor (Gower)

  Judd, Frank

  Pavitt, Laurie

  Davis, Clinton (Hackney, C.)

  Kaufman, Gerald

  Peart, Rt. Hn. Fred

  Davis, Terry (Bromsgrove)

  Kelley, Richard

  Pentland, Norman

  Deakins, Eric

  Kerr, Russell

  Perry, Ernest G.

  de Freitas, Rt. Hn. Sir Geoffrey

  Kilfedder, James

  Powell, Rt. Hn. J. Enoch

  Dell, Rt. Hn. Edmund

  Kinnock, Neil

  Prentice, Rt. Hn. Reg.

  Doig, Peter

  Lambie, David

  Prescott, John

  Dormand, J. D.

  Lamborn, Harry

  Price, J. T. (Westhoughton)

  Douglas, Dick (Stirlingshire, E.)

  Lamond, James

  Price, William (Rugby)

  Douglas-Mann, Bruce

  Latham, Arthur

  Probert, Arthur

  Driberg, Tom

  Leadbitter, Ted

  Rankin, John

  Duffy, A. E. P.

  Lee, Rt. Hn. Frederick

  Reed, D. (Sedgefield)

  Dunn, James A.

  Leonard, Dick

  Rees, Merlyn (Leeds, S.)

  Dunnett, Jack

  Lestor, Miss Joan

  Rhodes, Geoffrey

  Edelman, Maurice

  Lever, Rt. Hn. Harold

  Richard, Ivor

  Edwards, Robert (Bilston)

  Lewis, Arthur (W. Ham, N.)

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Lewis, Ron (Carlisle)

  Robertson, John (Paisley)

  Edwards, William (Merioneth)

  Lipton, Marcus

  Rodgers, William (Stockton-on-Tees)

  Ellis, Tom

  Lomas, Kenneth

  Roper, John

  English, Michael

  Loughlin, Charles

  Rose, Paul B.

  Evans, Fred

  Lyon, Alexander W. (York)

  Ross, Rt. Hn. William (Kilmarnock)

  Ewing, Henry

  Lyons, Edward (Bradford, E.)

  Rowlands, Ted

  Faulds, Andrew

  Mabon, Dr. J. Dickson

  Sandelson, Neville

  Fitch, Alan (Wigan)

  McBride, Neil

  Sheldon, Robert (Ashton-under-Lyne)

  Fletcher, Raymond (Ilkeston)

  McCartney, Hugh

  Shore, Rt. Hn. Peter (Stepney)

  Fletcher, Ted (Darlington)

  McElhone, Frank

  Silkin, Rt. Hn. John (Deptford)

  Foley, Maurice

  McGuire, Michael

  Silkin, Hn. S. C. (Dulwich)

  Foot, Michael

  Mackenzie, Gregor

  Silverman, Julius

  Ford, Ben

  Mackie, John

  Skinner, Dennis

  Forrester, John

  Mackintosh, John P.

  Small, William

  Fraser, John (Norwood)

  McMillan, Tom (Glasgow, C.)

  Smith, John (Lanarkshire, N.)

  Freeson, Reginald

  McNamara, J. Kevin

  Spearing, Nigel

  Garrett, W. E.

  Mahon, Simon (Bootle)

  Spriggs, Leslie

  Gilbert, Dr. John

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

  Stallard, A. W.

  Ginsburg, David (Dewsbury)

  Marquand, David

  Stewart, Donald (Western Isles)

  Gordon Walker, Rt. Hn. P. C.

  Marsden, F.

  Stewart, Rt. Hn. Michael (Fulham)

  Gourlay, Harry

  Marshall, Dr. Edmund

  Stoddart, David (Swindon)

  Grant, George (Morpeth)

  Marten, Neil

  Stonehouse, Rt. Hn. John

  Grant, John D. (Islington, E.)

  Mason, Rt. Hn. Roy

  Strang, Gavin

  Griffiths, Eddie (Brightside)

  Mayhew, Christopher

  Strauss, Rt. Hn. G. R.

  Griffiths, Will (Exchange)

  Mellish, Rt. Hn. Robert

  Summerskill, Hn. Dr. Shirley

  Hamilton, William (Fife, W.)

  Mendelson, John

  Swain, Thomas

  Hamling, William

  Mikardo, Ian

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

  Hardy, Peter

  Millan, Bruce

  Thomas, Jeffrey (Abertillery)

  Harper, Joseph

  Miller, Dr. M. S.

  Thomson, Rt. Hn. G. (Dundee, E.)

  Harrison, Walter (Wakefield)

  Milne, Edward

  Torney, Tom

  Hart, Rt. Hn. Judith

  Mitchell, R. C. (S'hampton, Itchen)

  Tuck, Raphael

  Hattersley, Roy

  Moate, Roger

  Turton, Rt. Hn. Sir Robin

  Kealey, Rt. Hn. Denis

  Molyneaux, James

  Urwin, T. W.

  Heffer, Eric S.

  Morgan, Elystan (Cardinganshire)

  Varley, Eric G.

  Hooson, Emlyn

  Morris, Alfred (Wythenshawe)

  Walker, Harold (Doncaster)

  Horam, John

  Morris, Charles (Openshaw)

  Walker-Smith, Rt. Hn. Sir Derek

  Houghton, Rt. Hn. Douglas

  Morris, Rt. Hn. John (Aberavon)

  Wallace, George

  Howell, Denis (Small Heath)

  Moyle, Roland

  Watkins, David

  Huckfield, Leslie

  Mulley, Rt. Hn. Frederick

  Weitzman, David

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Murray, Ronald King

  Wellbeloyed, James

  Hughes, Mark (Durham)

  Oakes, Gordon

  Wells, William (Walsall, N.)

  Hughes, Robert (Aberdeen, N.)

  Ogden, Eric

  White, James (Glasgow, Pollok)

  Hughes, Roy (Newport)

  O'Halloran, Michael

  Whitehead, Phillip

  Hutchison, Michael Clark

  O'Malley, Brian

  Whitlock, William

  Irvine, Rt. Hn. SirArthur(Edge Hill)

  Oram. Bert

  Willey, Rt. Hn. Frederick

  Janner, Greville

  Orbach, Maurice

  Williams, Alan (Swansea, W.)

  Jay, Rt. Hn. Douglas

  Orme, Stanley

  Williams, Mrs. Shirley (Hitchin)

  Jeger, Mrs. Lena

  Oswald, Thomas

  Williams, W. T. (Warrington)

  Jenkins, Hugh (Putney)

  Owen, Dr. David (Plymouth, Sutton)

  Wilson, Alexander (Hamilton)

  Jenkins. Rt. Hn. Roy (Stechford)

  Padley, Walter

  Wilson, Rt. Hn. Harold (Huyton)

  John, Brynmor

  Paget, R. T.

  Wilson, William (Coventry, S.)

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

  Paisley, Rev. Ian

  Woof, Robert

  Johnson, Walter (Derby, S.)

  Palmer, Arthur

  Jones, Dan (Burnley)

  Pannell, Rt. Hn. Charles

  TELLERS FOR THE AYES

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

  Parker, John (Dagenham)

  Mr. James Hamilton and

  Jones, Gwynoro (Carmarthen)

  Pardoe, John

  Mr. John Golding.

  NOES

  Adley, Robert

  Awdry, Daniel

  Benyon, W.

  Alison, Michael (Barkston Ash)

  Baker, Kenneth (St. Marylebone)

  Berry, Hn. Anthony

  Allason, James (Hemel Hempstead)

  Balniel, Rt. Hn. Lord

  Biggs-Davison, John

  Amery, Rt. Hn. Julian

  Barber, Rt. Hn. Anthony

  Blaker, Peter

  Archer, Jeffrey (Louth)

  Batsford, Brian

  Boardman, Tom (Leicester, S.W.)

  Astor, John

  Beamish, Col. Sir Tufton

  Boscawen, Hn. Robert

  Atkins, Humphrey

  Bennett, Dr. Reginald (Gosport)

  Bossom, Sir Clive

  708

  709

  Bowden, Andrew

  Hall-Davis, A. G. F.

  Nicholls, Sir Harmar

  Braine, Sir Bernard

  Hamilton, Michael (Salisbury)

  Noble, Rt. Hn. Michael

  Bray, Ronald

  Hannam, John (Exeter)

  Normanton, Tom

  Brinton, Sir Tatton

  Harrison, Brian (Maldon)

  Nott, John

  Brocklebank-Fowler, Christopher

  Harrison, Col. Sir Harwood (Eye)

  Onslow, Cranley

  Brown, Sir Edward (Bath)

  Haselhurst, Alan

  Oppenheim, Mrs. Sally

  Bruce-Gardyne, J.

  Hastings, Stephen

  Osborn, John

  Bryan, Paul

  Havers, Michael

  Owen, Idris (Stockport, N.)

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

  Hawkins, Paul

  Page, Graham (Crosby)

  Buck, Antony

  Heseltine, Michael

  Page, John (Harrow, W.)

  Burden, F. A.

  Higgins, Terence L.

  Parkinson, Cecil

  Butler, Adam (Bosworth)

  Hiley, Joseph

  Peel, John

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

  Hill, James (Southampton, Test)

  Percival, Ian

  Carlisle, Mark

  Holland, Phillip

  Peyton, Rt. Hn. John

  Carr, Rt. Hn. Robert

  Holt, Miss Mary

  Pike, Miss Mervyn

  Cary, Sir Robert

  Hordern, Peter

  Pink, R. Bonner

  Channon, Paul

  Hornby, Richard

  Price, David (Eastleigh)

  Chapman, Sydney

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Proudfoot, Wilfred

  Chataway, Rt. Hn. Christopher

  Howe, Hn. Sir Geoffrey (Reigate)

  Pym, Rt. Hn. Francis

  Chichester-Clark, R.

  Howell, David (Guildford)

  Quennell, Miss J. M.

  Churchill, W. S.

  Howell, Ralph (Norfolk, N.)

  Raison, Timothy

  Clark, William (Surrey, E.)

  Hunt, John

  Ramsden, Rt. Hn. James

  Clarke, Kenneth (Rushcliffe)

  Iremonger, T. L.

  Rawlinson, Rt. Hn. Sir Peter

  Cockeram, Eric

  James, David

  Redmond, Robert

  Cooke, Robert

  Jenkin, Patrick (Woodford)

  Reed, Laurance (Bolton, E.)

  Coombs, Derek

  Jessel, Toby

  Rees, Peter (Dover)

  Cooper, A. E.

  Johnson Smith, G. (E. Grinstead)

  Rees-Davies, W. R.

  Cordle, John

  Johnston, Russell (Inverness)

  Renton, Rt. Hn. Sir David

  Corfield, Rt. Hn. Frederick

  Jopling, Michael

  Ridley, Hn. Nicholas

  Cormack, Patrick

  Joseph, Rt. Hn. Sir Keith

  Ridsdale, Julian

  Costain, A. P.

  Kaberry, Sir Donald

  Rippon, Rt. Hn. Geoffrey

  Critchley, Julian

  Kellett-Bowman, Mrs. Elaine

  Roberts, Michael (Cardiff, N.)

  Crouch, David

  Kershaw, Anthony

  Roberts, Wyn (Conway)

  Crowder, F. P.

  Kimball, Marcus

  Rossi, Hugh (Hornsey)

  Dalkeith, Earl of

  King, Evelyn (Dorset, S.)

  Rost, Peter

  Davies, Rt. Hn. John (Knutsford)

  King, Tom (Bridgwater)

  Royle, Anthony

  d'Avigdor-Goldsmid, Sir Henry

  Kinsey, J. R.

  Scott, Nicholas

  Kirk, Peter

  Scott-Hopkins, James

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

  Kitson, Timothy

  Sharples, Sir Richard

  Dean, Paul

  Knight, Mrs. Jill

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

  Deedes, Rt. Hn. W. F.

  Lambton, Lord

  Shelton, William (Clapham)

  Digby, Simon Wingfield

  Lamont, Norman

  Simeons, Charles

  Dixon, Piers

  Lane, David

  Sinclair, Sir George

  Dodds-Parker, Douglas

  Langford-Holt, Sir John

  Skeet, T. H. H.

  Drayson, G. B.

  Legge-Bourke, Sir Harry

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

  du Cann, Rt. Hn. Edward

  Le Merchant, Spencer

  Soref, Harold

  Eden, Rt. Hn. Sir John

  Lewis, Kenneth (Rutland)

  Speed, Keith

  Edwards, Nicholas (Pembroke)

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

  Spence, John

  Elliot, Capt. Walter (Carshalton)

  Longden, Sir Gilbert

  Sproat, Iain

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

  Loveridge, John

  Stainton, Keith

  Emery, Peter

  Luce, R. N.

  Stanbrook, Ivor

  Eyre, Reginald

  McAdden, Sir Stephen

  Steel, David

  Fenner, Mrs. Peggy

  MacArthur, Ian

  Stewart-Smith, Geoffrey (Belper)

  Fidler, Michael

  McCrindle, R. A.

  Stodart, Anthony (Edinburgh, W.)

  Finsberg, Geoffrey (Hampstead)

  McLaren, Martin

  Stokes, John

  Fisher, Nigel (Surbiton)

  Maclean, Sir Fitzroy

  Stuttatord, Dr. Tom

  Fletcher-Cooke, Charles

  Macmillan. Rt. Hn. Maurice (Farnham)

  Tapsell, Peter

  Fookes, Miss Janet

  McNair-Wilson, Michael

  Taylor, Sir Charles (Eastbourne)

  Fortescue, Tim

  Maddan, Martin

  Taylor, Frank (Moss Side)

  Foster, Sir John

  Madel, David

  Taylor, Robert (Croydon, N.W.)

  Fowler, Norman

  Marples, Rt. Hn. Ernest

  Tebbit, Norman

  Fox, Marcus

  Mather, Carol

  Temple, John M.

  Fry, Peter

  Maude, Angus

  Thatcher, Rt. Hn. Mrs. Margaret

  Galbraith, Hn. T. G.

  Maudling, Rt. Hn. Reginald

  Thomas, John Stradling (Monmouth)

  Gardner, Edward

  Mawby, Ray

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

  Gibson-Watt, David

  Maxwell-Hyslop, R. J.

  Thompson, Sir Richard (Croydon, S.)

  Gilmour, Ian (Norfolk, C.)

  Meyer, Sir Anthony

  Thorpe, Rt. Hn. Jeremy

  Glyn, Dr. Alan

  Mills, Peter (Torrington)

  Tilney, John

  Godber, Rt. Hn. J. B.

  Mills, Stratton (Belfast, N.)

  Trafford, Dr. Anthony

  Goodhart, Philip

  Miscampbell, Norman

  Trew, Peter

  Goodhew, Victor

  Mitchell, Lt.-Col.C.(Aberdeenshire,W)

  Tugendhat, Christopher

  Gorst, John

  Mitchell, David (Basingstoke)

  van Straubenzee, W. R.

  Gower, Raymond

  Money, Ernle

  Vaughan, Dr. Gerard

  Grant, Anthony (Harrow, C.)

  Monks, Mrs. Connie

  Vickers, Dame Joan

  Gray, Hamish

  Monro, Hector

  Waddington, David

  Green, Alan

  Montgomery, Fergus

  Walder, David (Clitheroe)

  Grieve, Percy

  More, Jasper

  Walker, Rt. Hn. Peter (Worcester)

  Griffiths, Eldon (Bury St. Edmunds)

  Morgan, Geraint (Denbigh)

  Wall, Patrick

  Grylls, Michael

  Morgan-Giles, Rear-Adm.

  Walters, Dennis

  Gummer, J. Selwyn

  Morrison, Charles

  Warren, Kenneth

  Gurden, Harold

  Mudd, David

  Wells, John (Maidstone)

  Hall, Miss Joan (Keighley)

  Murton, Oscar

  White, Roger (Gravesend)

  Hall, John (Wycombe)

  Neave, Airey

  Wiggin, Jerry

  710

  711

  Wilkinson, John

  Woodnutt, Mark

  Winterton, Nicholas

  Worsley, Marcus

  TELLERS FOR THE NOES:

  Wolrige-Gordon, Patrick

  Wylie, Rt. Hn. N. R.

  Mr. Bernard Weatherill and

  Wood, Rt. Hn. Richard

  Younger, Hn. George

  Mr. Walter Clegg.

  Question accordingly negatived.
  Then The Chairman left the Chair to report the Bill to the House, pursuant to Order [2nd May].
  Bill reported, without Amendment; to be read the Third time tomorrow.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]

RAILWAY LINE (WIMBLEDON-CROYDON)
11.12 p.m.
Sir Richard Thompson: I propose to use my good fortune in the ballot to raise a matter of great constituency importance for Croydon, namely, the threatened closure of the West Croydon-Wimbledon railway, [Hon. Members: "Hear, hear."]. From the enthusiastic response to these sentiments shown by hon. Members who are leaving the Chamber, we have learned that the matter is of high importance not only in Croydon but throughout the United Kingdom.
I must warn my hon. Friend the Undersecretary that I have a formidable track record in the matter of keeping open branch lines. It is just about a decade ago that an earlier Minister for Transport, misguidedly as it happens, decided to place under threat of closure the Wood-side—Sanderstead line in my constituency. We fought a battle for a year. I remind my hon. Friend that on 18th December, 1963, my right hon. Friend the Member for Wallasey (Mr. Marples), then Minister for Transport, conceded to me that this line should not be closed. He added a little piece to the effect that he would review the situation after three years if it were not paying by then. Nine years have slipped by and the line is still open so we know that he decided wisely.
Today I am speaking for the Croydon Transport Users' Association, assisted by the Merton Transport Users' Association, which this very day have presented their case to the Transport Users' Consultative
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Committee in Wimbledon, opposing the closure of the line. I want to commend the public spirit of these two voluntary bodies. They have conducted researches and polls, held meetings and taken counts. In short, they have thoroughly researched the question whether the users of the line were prepared to tolerate its closure, and the answer they have received is an emphatic "No". My constituents before the TUCC have to prove hardship if they have any hope of keeping the line open. Although I do not want to go into detail into their arguments, I shall summarise them before going on to some of the wider aspects of the matter.
The people affected by the closure of the line are about 1,500 daily commuters and more than 1,000 other passengers drawn from a wide area. If the passenger services are withdrawn, certain things will happen which, in my submission, amply prove the case of hardship. First, three-quarters of these passengers, mostly the commuters, will pay up to 50p more per week in order to get to and from their work. Secondly, anyone who formerly used the line will have a longer and more tiring journey. Thirdly, we shall see a serious increase in the already intolerable road congestion in Croydon, Mitcham and Wimbledon in the rush hour and on Saturdays. Fourthly, the so-called alternative routes, which I have no doubt my hon. Friend the Undersecretary of State will trot out, are slower, less reliable, usually more costly and always less direct. Fifthly, there will be a loss of easy and convenient access to the social, recreational and shopping facilities which make Croydon, the largest of the London boroughs, a magnet for miles around. Sixthly, this will cause the closure of passenger services which will cause particular hardships to special classes of people who use the line. I am referring to school children who make their daily double journey, handicapped people attending the training centre in Mitcham—a very important group—and almost everyone living on the Bedding-ton Lane estate who have no other means of public transport.
I am certain that the British Railways will counter all this by claiming that the

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line does not pay. It is never difficult to compile figures which the travelling public cannot challenge showing that any particular activity is making a loss. No one can challenge the process which decides which factors are taken into account. There is an old Chinese proverb which says that in a besieged city the cook never starves. British Rail will, if necessary, all find a means of showing that a particular activity does not pay.
Branch lines have never paid by themselves. They must be considered as part of an integrated system which has to be considered overall. The costs of branch lines cannot be isolated.
Let me turn to British Rail's own data on the statistics for operating the line. These show that on Mondays to Fridays 12,671 passenger-miles are travelled every day. Weekly seasons range from 23p to 48p per mile, and monthly seasons from 83p to £1·9p per mile. Let us give the benefit of the doubt to British Rail. Let us take the lower figure; 12,500 daily passenger-miles bring in £125,000 per annum. That is if one does it on 12 monthly seasons—that is to say, assuming that the commuters take out monthly tickets. If one assumes that they take out weekly tickets, which are pro rata more expensive, then the figure comes to £145,000, ignoring altogether Saturday revenue. This shows that we have been given an underestimate of the revenue from the line.
If the line closes for passenger services, according to the Merton survey, some 30 per cent, of the passengers are likely to travel still by rail via Sutton. If they did this, it would produce about £10,000 per annum additional revenue to British Rail. But the rest of the passengers who do not choose to go this way will be forced on to the buses. The revenue of £105,000 they used to pay will be totally lost to British Rail—a net loss of well over £95,000 a year.
Let us look at the flyblown old argument that closure will result in great economies. Of course, it will not. Signalmen, level crossing operators and track maintenance staff will still be required for the freight traffic for which the line, at any rate for some time, is proposed to be kept open.
While we are talking about freight traffic, here is a most astonishing thing.
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I have discovered that the coal for Croydon B power station actually arrives by road—this notwithstanding the fact that the railway track runs through its back yard and there are ample sidings and unloading facilities. Is not this an astonishing thing? One nationalised industry, the National Coal Board, supplies another nationalised industry, the Electricity Generating Board. One would think they would be reasonable and use a third nationalised industry, British Rail, to take the raw material from the mines to the power station. But one would be quite wrong. This coal all comes from Northumberland. It is taken to the coast. It is loaded into coasters. It is ferried down the North Sea. It makes its way up the Medway. It is discharged at Kings-north and then it is fed into lorries which congest the roads of Croydon, the A20 and the South-East of England in order to supply Croydon B power station.

One would think it was within the wit of British Rail to contrive to send this raw material, given its vast elaborate network, to a guaranteed customer somehow or other by rail. I do not altogether criticise the Croydon power station. It has a duty to get its supplies there as cheaply and as conveniently as possible. I suppose it is found that this can be done much better by hiring lorries. But if British Rail wants to improve the economic return from this line, why does it not fix up a system of freight rates which will enable the coal to be brought all the way by rail, as any rational person would think it ought to be?
I say to my hon. Friend that there is no evidence that this line is not covering its costs. The central overheads in the account, which it is so difficult to challenge, are irrelevant because they will not be reduced by the closure. Nobody imagines that great numbers of staff will be sacked by British Rail because passenger services are withdrawn on the Croydon to Wimbledon line. In any case, these overheads, or a share of them, will afterwards be transferred to all the other services, which will correspondingly become less profitable.
I hope that my hon. Friend, when he considers these matters, will look beyond petty economies which save nothing, infuriate regular passengers, and drive yet more people on to the roads. Let him

715
put all that aside and look to his overall strategy for dealing with commuters.
This is the general part of the case I want to make against the closure of this line. No amount of road building in Greater London will help commuters. We are close to saturation now, and every year sees more cars piling on to our roads. In these circumstances my hon. Friend should be promoting his suburban rail services, not abandoning them. Once closed, the line will lanquish for a bit, I suppose carrying a small and dwindling amount of traffic, and then be lost for ever, but the problem of the commuters will remain and get worse.
Let my hon. Friend learn from the experience of the United States where a great many great cities, having allowed their suburban rail services to dwindle away, are now busy re-establishing them and looking desperately round for new public transport to solve the commuter problem. Indeed, the whole point of the recent Transpo exhibition in the States, at which, I am glad to say, British Rail was represented, and which, I believe, officials of my hon. Friend's Ministry attended, was to encourage research into and development of commuter services.
I wonder whether my hon. Friend realises that the two largest car manufacturers in the world, General Motors and Ford, now accept that urban congestion has reached a point which imposes a limit on the future use and, therefore, of future sales of motor cars. In other words, if those giants want to stay in business they have to find something else to manufacture. So it is that, with Government support and subsidy, they are spending enormous sums on research into alternative means of shifting commuters into and out of the cities of today and tomorrow. That is happening in the United States now—in the United States, the land of the motor car. And what has happened there is very likely to be repeated after a short interval in this country.
My hon. Friend should understand that, unlike country branch lines—I am not making a general case for keeping them all open—which often no longer serve large populations and where, clearly, motor transport is more convenient and
716
quicker, urban branch lines like this one ought to be kept open because they do and they can make a great contribution to the relief of the commuter problem. Instead of their being allowed to wither, every effort should be made to attract passengers by improved services, by better publicity, if necessary by differential fares.
A short time ago I put down a Question to my right hon. Friend that, if he were in difficulty over this line, instead of chopping services he might think the other way and perhaps offer half fares to get some of the customers back and to attract more. All I got to that was a curt, "No.". Nevertheless, there is the germ of an idea. If a service is running down, people should not conclude that it is necessarily doomed to death. They should use their wits to try to improve the service, including, if necessary, an adjustment in fares to attract passengers.
The time is coming when congestion at peak hours will bring road transport to a standstill. Therefore, do not let us delude ourselves that X railway passengers can be diverted to cars or buses. Let us remember, too, that Croydon is and was deliberately planned to be the largest shopping employment and communications centre in London outside the central area. It has the communications. Let us put them to good use.
I ask my hon. Friend the Under-Secretary to allow the line to remain open, just as his predecessor did with another line which has justified his faith in it.
The Under-Secretary of State for the Environment (Mr. Reginald Eyre): I am grateful to my hon. Friend the Member for Croydon, South (Sir R. Thompson) for his clear exposition of the problems posed by the Wimbledon to West Croydon railway service, the future of which is currently under consideration, and also for his remarks about the broader aspects of rail closures. This will give me a welcome opportunity to explain the position more fully and, I hope, help to clear away any misunderstandings that may have arisen.
My hon. Friend has made the general point that the closure of minor rail services should be considered not in isolation but against the background of the rail services as a whole and that the London commuter services in particular should be

717
preserved against the possibility of their being needed in the eventuality of restrictions being imposed on the use of private cars in the inner London area. I can assure him that proposals to withdraw individual passenger services are never considered in isolation.
The financial assessments that are made as an essential preliminary in these matters always take account of contributory revenue that would be lost on associated rail passenger services which would no longer have the benefit of passengers using the connections provided by the particular service considered for closure and the increased operating costs which would fall on the other services which shared the use, and therefore the cost, of track and signalling facilities.
In the London area in particular, the services are closely inter-related in the London commuter network. This is reflected, for example, in the arrangements for paying grant under Section 39 of the Transport Act, 1968, to meet the cost of unremunerative services which need to be maintained for social reasons. For the London commuter network, of which the Wimbledon-West Croydon service forms a part, the services are not grant-aided specifically but an overall payment is made covering the unremunerative burden for the network as a whole. But this is not to say that it would be wrong to prune the network or make other adjustments to it from time to time. The operation of these services is reviewed annually to determine what investment should be made to help towards achieving an economically viable service network and to the same end consideration is given to the possibility of modifying the existing services or eliminating those marginal services for which the consumer need might more economically and efficiently be served by other modes of transport.
Now turn to the particular case of the Wimbledon-West Croydon rail passenger service which is the central point of the debate initiated by my hon. Friend. This is a suburban branch line service, providing connections with main-line or semi-fast London services at Wimbledon, Mitcham Junction and West Croydon. Average usage of the eight stations comprised in the service is about 1,700 passengers a day each way, which is low compared with other suburban services of its type. It is one of the heavier loss
718
makers in the Railway Board's London and South-Eastern railway services which are, of course, part of the London commuter network.
These services, as I have already said, form a complex network which for planning purposes is regarded as a single entity. The economics of operating the network is closely linked with policies for the quality of service, investment and Government grants both on capital and on revenue account. These policies together form an element in a general approach directed towards achieving a suitable balance between public and private transport in the area.
My hon. Friend can rest assured that, during the course of the closure procedures, British Rail will be providing my right hon. Friend with very full information, on a well-established basis, about the financial and economic considerations involved. Part of this assessment, which can usefully be made public, is the savings which can be made in real resource terms—that is to say, the physical assets such as station buildings, track, signalling and rolling stock and the longer term cost of renewals.
It was simple indicators such as this which suggested that a closer examination of the social disbenefits of closure would be worth while. A convenient way of doing this, which also has the merit of involving public participation, is to test the case in the closure machinery. This is now in the process of being done, and I must emphasise should not in any way be taken as an indication that my right hon. Friend or the British Railways Board have taken up any firm position in the matter.
A preliminary notice of intention to publish a closure proposal for the service was given last July under Section 54 of the Transport Act, 1968, and the formal proposal was published last March under Section 56 of the Act. This proposal has been open to objection for the prescribed statutory period of six weeks and objections from local authorities and other representative bodies, and also from individual users of the rail service, are being considered by the Transport Users Consultative Committee for London. For this purpose, as my hon. Friend said, they are holding a public hearing today at the Merton Town Hall in Wimbledon.

719
The Committee is particularly concerned with any hardship or inconvenience which would be caused to the travelling public through closure of the rail passenger service—for example, in terms of increased journey times and in using alternative services. I noticed the emphasis placed by my hon. Friend on this aspect of the matter, and he has been supported by strong representations which I have received from my hon. Friend the Member for Croydon, North-East (Mr. Weatherill).
The Croydon Transport Users Association is represented at the hearing and is presenting its report to which my hon. Friend has drawn our attention tonight. I am sure the House will understand my reluctance to pass any comment on the merits of these proposals, or on suggestions which have been made for economising in the cost of maintaining the service at the present early stage of the procedures. In due course my right hon. Friend will receive the report of the Transport Users Consultative Committee following the conclusion of the public hearing. My right hon. Friend will also have advice from other interested bodies, including the local authorities in the area which the railway line serves—the Greater London Council in particular—and the views of the Economic Planning Council for the South East Region, on any longer term future which is foreseen for the line.
A further important factor in this case is the Greater London Development Plan. During the earlier stages of the inquiry
720
into this plan there was considerable debate about the primary road system in Greater London, including the M23 motorway and the orbital ring way systems built to motorway standards. The merits of a southern orbital rail facility as an alternative to the orbital road system was also considered, and the Wimbledon—West Croydon line could form part of such an orbital railway.
These are matters which are as yet unresolved, and I can assure the House that no decision will be taken on this closure proposal without careful consideration of any relevant matters which may emerge from the inquiry into this plan. I cannot anticipate what this decision may be, so that I am not in a position to give my hon. Friend, as he will understand, any reason to hope that the success which he mentioned in the case of a previous closure proposal will be repeated on this occasion. All I can say is that, in reaching a decision, all relevant factors, including all the advice and information which have been mentioned tonight and any further matters which may be brought to my right hon. Friend's attention, will be taken into account.
I appreciate the trouble my hon. Friend has taken in raising this matter which I fully understand is of considerable importance to his constituents.
Question put and agreed to.
Adjourned accordingly at twenty minutes to Twelve o'clock

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Preamble
The House met at half past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Chichester):
THE LORD CHANCELLOR On the Woolsack.

HOTEL DEVELOPMENT GRANTS
LORD INGLEWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give a direction under Section 19 of the Development of Tourism Act 1969 to the National Tourist Boards that where the proprietors of a hotel have vacated or sold their existing premises and rebuilt on another site claiming the appropriate grant under Section 7, no further grant under Section 7 will be payable in respect of any new hotel development on the original site other than for additions for thirty years or other period thought more appropriate so protecting the public from paying what amounts to double grant on such additional accommodation as may have been provided on the two sites taken together.
EARL FERRERS: My Lords, a grant may be claimed under Section 7 in respect of expenditure incurred in providing a new hotel as defined in the Act, and I know of no reason why the purchaser of a hotel should be deprived of a grant under this section simply because the seller has rebuilt on another site with the aid of a grant under Section 7. In such a case there will be no question of the Government's paying twice over for the same accommodation.
LORD INGLEWOOD: My Lords, while thanking my noble friend for that reply, may I ask him whether he is quite sure that he has really understood the Question, which could have relevance to new development such as is happening in the borough of Kensington at this time? I do not want to pursue a narrow
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point, but I should like to ask him to look into this whole question again to ensure that the public does not pay twice over for the same benefit.
EARL FERRERS: My Lords, we do not believe that there are any instances where the Government have paid, or will be likely to pay, twice over for the same benefit. If my noble friend has any evidence of this I should be grateful if he would draw it to my attention. I would only add that the Development of Tourism Act 1969 gives an entitlement to grant if a project otherwise meets the requirement of the Act. The Act contains no power for the Minister to give directions to the Tourist Board which would curtail an entitlement to grant.

PUBLIC TRUSTEE OFFICE
2.33 p.m.
LORD DAVIES OF LEEK: 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 implement the findings of the inquiry into the Public Trustee Office [Cmnd. 4913].
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE): My Lords, as stated in the White Paper on the Public Trustee Office, it is the Government's intention to introduce legislation to relieve the Public Trustee from the duty of accepting new business and to implement the policy of running down his Office as stated in paragraph 3 of the White Paper.
LORD DAVIES OF LEEK: My Lords, while thanking the noble and learned Lord the Lord Chancellor, may I ask him four small questions? Has the number given in the White Paper of 11,910 cases under administration now diminished? Has a move already taken place, or will it need legislation, to merge the Trustee Office into the Official Solicitor's Office? What consideration is to be given to the management of the new investments unit? Is any discussion tentatively taking place with the Law Society anent this matter?
THE LORD CHANCELLOR: My Lords, I cannot give an absolutely up-to-date figure for the cases now under administration, but they do not vary enormously because of course the same cases go on from one year to the next. The Report of the Committee anticipated a continuing decline. I should not like to say without notice whether there has been a continuing decline since the Report. In reply to the noble Lord's second supplementary question, I should like to say that there is no move as yet, and it will require legislation, to exonerate the Public Trustee from the obligation of taking new business. I think it will not need legislation for him to merge with the Official Solicitor's Office, as that would be a matter of administration. What will require legislation is to relieve him of the obligation to take new business.
I am considering the position of the new management unit. My present thought is that there are other parts of my Department which need to conduct investment, notably those concerned with monies in court and the Court of Protection. My thought is that they might well form a small but efficient management unit on their own, but no decision has been taken yet. The Law Society gave voluminous evidence to the Hutton Committee and in that sense was therefore fully consulted. I have had some representations from at least one local law society since. I would not charge my memory with how many.
LORD WADE: My Lords, would the noble and learned Lord the Lord Chancellor agree that the Public Trustee has given and is still giving very valuable service? Arising out of his reply, may I ask two questions? For example, the Public Trustee is assisted by lady visitors, and that kind of service is very much appreciated. If this work is taken away from the Public Trustee will any similar service be provided? Will those who, by their will, have appointed the Public Trustee and still wish the Public Trustee to act as executor and trustee no longer he permitted, when the will comes into effect, to have their wishes carried out?
THE LORD CHANCELLOR: My Lords, I quite agree that the Public Trustee has exhibited a remarkably high standard of service to those who make use
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of his Office, and is continuing to do so. I think that in every way it is a service of which we can be proud. According to the Hutton Report there are 250 cases, out of the 12,000, in which a lady visitor is implied. I understand that similar facilities are available in the private sector if one knows where to look for them. They are very much appreciated. If beneficiaries are under the Public Trustee they will not be compelled to move their services from him, but no new business will necessarily be undertaken—that is to say, it is only those trusteeships and executorships which he has undertaken and is undertaking that he will be obliged to continue with after the change. At least, that is the intention of the Government. I think those were the three questions.
LORD HALE: My Lords, would the noble and learned Lord the Lord Chancellor consider that the remarks he made in his last sentence were a little disquieting? If the Public Trustee Office is going to continue until it runs itself down, case by case, handling the cases already in its hands—I personally make no criticism of the Public Trustee, who operated under strict limitations of investment for a very long time, which placed him under obvious difficulties in competition with banks and so on—we have another example of the constant fact that every time we review anything we make two organisations instead of one. If the business is mainly to be transferred to a new organisation it would be well for the noble and learned Lord to consider transferring all the existing business, too.
THE LORD CHANCELLOR: My Lords, I am afraid I do not understand the noble Lord's supplementary. What we are in fact doing is to merge two businesses into one, and not the reverse. I understand that is what he is suggesting that I should do. If I am right in understanding him, we are at one.
LORD HALE: My Lords, I am very much obliged for that. It may be that I misunderstood the words the noble and learned Lord used in his concluding sentence. Hansard will show whether I have been misled by myself or by the noble and learned Lord.
LORD NUNBURNHOLME: My Lords, do the Government realise what a debt this country owes to the Public

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Trustee? May I also declare my own personal interest, having had my affairs dealt with by the Public Trustee's Office since 1916? The Office has always given the best possible advice, both financially and legally, and I feel it is a retrograde step to do away with the Public Trustee.
THE LORD CHANCELLOR: My Lords, I am grateful for the tribute the noble Lord has paid. I am sure that that has been the almost invariable experience of beneficiaries, although, as with any other part of Government service, one does receive complaints from time to time. My opinion coincides exactly with the noble Lord's. If the noble Lord will study the Report of the Committee he will find that it said that the Office was dying for want of public support. I am afraid that as long as that evidence stands it is difficult to know how it can be continued. The choice which lay before me was, in practice, to let the Office die, which would have saved me a certain amount of trouble but I think would have been inconvenient for everybody, expensive to beneficiaries and inefficient and bad for morale, or to run it down in an orderly fashion, which is what the Committee recommended.

CONSUMER AFFAIRS AND THE E.E.C.
2.41 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the announcement made on June 29 last by the E.E.C. Commission to the effect that it hopes to improve its contacts with European consumer organisations, they are able to make any Statement concerning further progress towards the setting up of an Institute of Consumer Affairs and, if not, what central body is envisaged to make these European contacts.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, on the question of the Institute, I cannot add to what my noble friend Lord Limerick said in answer to the noble
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Baroness's Question on June 19. I do not think, however, that the announcement to which the noble Baroness has referred is conclusive as to the need for such a body. The E.E.C. Commission have announced that they will keep in regular contact with five non-Governmental bodies which were formerly members of the E.E.C. Consumers' Contact Committee. These are the European Bureau of Consumer Unions, the Committee of Family Organisations of the European Communities, the European Community of Consumers' Co-operatives, the European Confederation of the Community's Free Trade Unions, and the European Organisation of the World Confederation of Labour. The Consumers' Association is already a member of the first of these bodies. Other organisations in this country which have interests in consumer protection will no doubt wish to consider whether they should seek to join any of the organisations I have mentioned.
BARONESS BURTON OF COVENTRY: My Lords, is the noble Lord aware that when the Answer is favourable, it is brief? Is the noble Lord also aware that he has told me nothing which I did not already know? May I now ask him, without detracting in any way from what the Consumers' Association has done, whether it is not time that we in this country, whether it be an Institute of Consumer Affairs, or something else, should give consideration to establishing some central body which could deal with these matters?
LORD DRUMALBYN: My Lords, I can assure the noble Baroness that that question is being given consideration at the present time both inside and outside Parliament. What I cannot do is to tell her the result of that consideration. I am sure that she would prefer that that consideration should be careful and thorough rather than that a result be reached by some quick decision.
BARONESS BURTON OF COVENTRY: My Lords, does not the noble Lord hope that perhaps he may be able to give me a brief answer before the House rises for the Summer Recess?
LORD DRUMALBYN: No, my Lords; I am afraid that is unlikely.
LORD BLYTON: My Lords, in the light of the statement of the President of France yesterday in relation to Britain's pounds, does he not think that in the future we shall be singing the great Eurovision song, Puppet on a String?
LORD DRUMALBYN: My Lords, I did not quite catch the end of that question. I would merely point out that the noble Baroness who asked the Question confined her supplementary to the establishment of an Institute in this country.
BARONESS ELLIOT OF HARWOOD: My Lords, may I ask my noble friend whether such an Institute would not play a very important part in bringing together our many consumer groups in this country, so that eventually, or immediately, they would be able to co-operate much more closely with the E.E.C. body? It would be infinitely more effective.
LORD DRUMALBYN: My Lords, the objective of making the consumer's voice heard of course is the same. The question is how best to do this. That is the first question. The second is how best to do it in view of our impending entry into Europe. The point is that none of the European Community countries has a Governmental Institute of that kind either.
LORD SLATER: My Lords, the Minister mentioned in the course of his reply to my noble friend Lady Burton the "European Free Trade Unions". Can he state what connection there is between the International Federation of Trade Unions in regard to the Free Trade Unions of Europe in the context of the reply that he has already given?
LORD DRUMALBYN: My Lords, I cannot answer that question. I imagine that it is a section of it because it is described as the "European Confederation of the Community's Free Trade Unions". But I will let the noble Lord know the answer to his question.

PROBATION SERVICE: THE BUTTERWORTH REPORT
2.46 p.m.
LORD WELLS-PESTELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
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The Question was as follows:
To ask Her Majesty's Government whether they will give the date when the Butterworth Committee will report.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, it is too early to give a definite date, but I understand that Mr. Butterworth hopes that his Report will be available next month. I hope that is a nice and brief Answer.
LORD WELLS-PESTELL: My Lords, while thanking the noble Viscount for that reply, may I ask him whether he could be more specific in view of the fact that this Committee was required originally to report before July 1? If the Report is not forthcoming by the end of August, is there not a possibility that, in view of the Long Recess, it may be much later in the autumn before this matter is reported on?
VISCOUNT COLVILLE OF CULROSS: My Lords, I take the noble Lord's point. The reason why the Report is taking longer is that there are four services involved, and to do justice to it Mr. Butterworth has had to go more deeply into the subject matter than he originally thought would be necessary. I do not think the Report will be delayed until the end of August; I think it will come before that. I do not think that there is any danger of its going over the Recess.
LORD WELLS-PESTELL: My Lords, I hope this is a fair question to put to the noble Viscount. Is he able to say quite categorically, in the event of an award being suggested and accepted, whether it would be backdated to July 1?
VISCOUNT COLVILLE OF CULROSS: My Lords, if that is what the staff want, yes.
LORD SHACKLETON: My Lords, we admire the noble Viscount's ability to answer questions without any notes, but when answering these questions did he say a positive "yes", that it would be backdated.
VISCOUNT COLVILLE OF CULROSS: My Lords, if the staff want the award to be backdated, I said "Yes"; but I presume that the noble Lord would not require me to force it to be backdated if those concerned did not want it.

SUNDERLAND CORPORATION BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
BATH CORPORATION BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

THE ECONOMIC SITUATION: INFLATION AND UNEMPLOYMENT
2.48 p.m.
LORD BESWICK LORD BESWICK rose to move, That this House views with increasing anxiety the Government's failure to maintain the value of money and recognises the consequent threat to full employment, economic expansion and the achievement of a unified society. The noble Lord said: My Lords, I take it that the number of Peers who have put their names down to speak to this Motion is in itself evidence of their anxiety. There is a failure here, and as the Government are the Government the failure must be theirs.
I suggest at the outset that it would be unrewarding complacency of any Minister to try to demonstrate that for a given selected period we had a higher percentage price rise. The truth is that each increase is on the top of others, and the trend is now dangerously upwards. The retail price index has been rising at an annual rate of 6½ per cent. The National Institute estimates point to a rise to 8 per cent. next year, but de facto devaluation and the onset of E.E.C. food prices must of themselves bring forward and push up this projection. The Financial Times of June 27 stated:
"It would not be alarmist to project a rate of inflation running into double figures if nothing is done."
I am not sure what the paper's definition of "alarmist" is, but the "anxiety" in the Motion will certainly need to be changed to "alarm" if the index figures go up about 10 per cent. Above 10 per cent., and bearing in mind the additional and accumulative effect of value-added tax, the impact of C.A.P. and the repercussions of the Government's rents policy, it will be easier to hold a handful of
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mercury than to maintain anything approaching economic stability. I hope, therefore, that the two Ministers who are to reply will not weary the House with a careful selection of comparative price rises.
Nor do we want a fall to over 800,000 unemployed—a figure which is one-third higher than when the present Government took office—to be offered as an answer to the second part of the Motion. As for economic expansion, the provisional figures for the first quarter of this year, compared with the same period of 1971, show a drop of 2·71 per cent. for all industries and 2 per cent. for manufacturing. Even allowing for the distortion effect of the power cuts, I cannot imagine anyone seriously controverting that part of the Motion which states that we are anxious about the failure to secure economic expansion. That brings me to the last part of the Motion—the failure to achieve social unity. Here we come to the crux of the matter. This is the basic failure. Here is both a cause and effect of inflation. The heart of the problem is social and psychological as much as economic.
In the debate following the first speech from the Throne after the present Administration took over, I argued for economic efficiency plus social compassion and I said that one without the other just would not work. The following year our Motion was condemning market forces and asking for a policy of full employment, expanding economy and maximum social justice. All that has happened has justified our insistence upon this theme. I agree that within Her Majesty's Government, and especially on the evidence we have in this House, there are Ministers of compassion and fair-mindedness. We know, too, that the Prime Minister, notably on his appointment, has emphasised the need for social unity. Nevertheless, it is true, and I shall try to show aspects of this truth, that there is a greater sense of unfairness in our society to-day than at any time since the 1930s. The importance of this is shown when we come to judge Her Majesty's Government's alibis for their economic failure. Their principal alibi is the greediness of trade unions. But excessive wage claims are not put forward in a vacuum. They are put forward against a highly relevant economic and social background.

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In a recent feature article in the Financial Times, Mr. Rogaly said:
"It would be easier for the present Government to converse with creatures on Mars than it would be for it to get any kind of meeting of minds with British workers. It does not, and seemingly cannot, know them; that is why it has failed to manage them".
In a society which has never been more highly integrated, when understanding, one of the other, has never been so crucially important, this failure of which Mr. Rogaly speaks has never been more dangerous.
I said that I would seek to show some of the aspects of unfairness. The inflation itself is unfair. It hits hardest those who earn as against those who own. Two families equally deserving, one owning, the other renting, a house: in the first case the house owner finds his modest property increasing in value by £10 a week; and in the second case the Government are actually legislating to put up the rent by the same amount per month. We had high hopes, after the war we won, to move towards an egalitarian society through the National Health Service. How far we are from the ideal we had is indicated by a recent Select Committee Report which gives examples of the difference in status of a private patient as against a National Health Service patient. The waiting period for a private patient needing a gynæcological operation was one week, as against one year for a National Health Service patient; for a tonsillectomy it was two weeks for a private patient and eighteen months for an N.H.S. patient. These are examples which all the ordinary people of the country are able to read.
We all hoped, too, for equal opportunity in education. But how can we claim equality of opportunity when we read in the Report of the National Children's Bureau, after studying 17,000 British children, that by the age of 7 there is an average of four years' difference in ability as between children coming from poorer homes and those from professional families. Half of the under-privileged were poor readers at 7 years, as against one in twelve from professional families. If I am told that professional families make a greater financial sacrifice to educate their children, then I turn to the sort of adver-
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tisement which states that with an investment of £8,000 you can get an expensive education for your child and, at the end of it, £9,000 returned in capital.
On wage claims, I have previously called attention to the notorious poverty trap. It is now beginning to be understood that, with their means test philosophy, the Government have so organised our social services that a worker with a family, and less than £20 a week can lose almost all his allegedly excessive wage increase because of consequent cuts in family income supplement, rate rebate, rent subsidy and the means-tested free school milk and meals. My Lords, it is impossible for me not to comment on the affront to equity, or any sense of fairness, of the top level salary increases announced by the Government ten days ago. How can we justify a wage increase to the Chairman of British Rail ten times that of the award which he tried to deny a railwayman so very recently? In a democracy, how can we convince ourselves that the worker upon whom the country depends will take for granted a wage award to one man of £50 a week, when another man in the same industry was told that he would ruin the country if he took home in total less than half the other's increase?
I would more readily tolerate a large increase to an already large salary if it could be justified by extra effort or productivity; but to try to justify these figures by cost of living arguments is offensive to both common sense and fairness. I say this, knowing that it was my own Government which made so much of the percentage norm. To relate pay increases to a percentage norm across the board—5 per cent. to the man on £20 a week and 5 per cent. to the man on £5,000 or £10,000 or £20,000 a year—is a crude widening of the gap between the poorer and the richer. Increases in living costs are not more in absolute terms for the better-off than for the worse-off; in fact, they are almost certainly less. We have already seen how, in inflationary times, the house-owner fares so much better than the house-renter. And the better off will almost certainly own more than a house. If it is said that average earnings have risen 50 per cent. in the last six years, I would point out that the average stock market increase is 70 per cent.
Moreover, within the official price index the cost of food has increased more than other items. The Daily Mirror's basket of food has gone up, not by 6½ per cent. per year, but by 23½ per cent. in the last two years. According to Government sources, the poorest tenth of the nation, or the bottom decile, as the jargon goes, spent 50 per cent. of their income on food while the top tenth spent only 15 per cent. Why, then, to counter the increased cost of living should the £20,000-a-year man get ten times the amount given to his poorer colleagues?
This Motion was tabled some weeks ago and before events compelled the Government to float or, in fact, devalue the pound. I have no doubt that we shall hear about the need to control international speculators. I am all in favour of that, but, while speculators come in like carrion to eat the meat, they do not cause it to decay. Similarly I have no doubt that we shall, and indeed should, discuss the relative merits of foreign exchange arrangements. Apart from the fixed exchange rate there is the crawling peg, the wide margins and the uneasy European snake within the dollar tunnel. Each possibility has its proponents, but I shall expect from the noble Lord who is to reply a very clear and unambiguous statement that there will be no return to fixed parity at a time to be decided by our French friends. I ask him again if he is able to state categorically whether there is any undertaking on the part of Her Majesty's Government to return to parity as the European Community would wish.
The point I want to make is that no system of aligning exchange rates can function successfully unless both the currency and the economy of the country are soundly based. It used to be said by one Tory Chancellor that the economy could be steered by a touch on the tiller. The trouble with this Tory Government is not simply that they have lost the touch but that they have two tillers and any correspondence between the two is purely coincidental. At one end of the boat they plan to cut the cost of living and at the other they deliberately put up the price of food.
The Prime Minister specifically promised two years ago that he would not spend the taxpayers' money on national-
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isation; yet, while hiving off Skyways and Thomas Cook on the one side, the Government nationalised one of the biggest companies in the country on the other. They defied unprejudiced advice and disbanded the I.R.C. and now seek to put up a counterpart with the Industries Bill. They say it is paramount to cut down Government expenditure but set out deliberately to increase it. A Government of Conservatives, to whom all civil servants are an unproductive on-cost, bring in a Bill like the Housing Finance Bill, which can only be implemented by more officials, and by joining the E.E.C. they plan to pay a disproportionate cost of the biggest international bureaucracy which the Western world has ever known.
One could go on with their confusions and contradictions, but I mention one more major mistake which more than offsets any measure taken to maintain the value of money. I refer to the reckless way in which they have increased the volume of money. The Chancellor actually confesses now that it has been increasing at an annual rate of 23 per cent. Even this astonishing increase could be justified if most of this new money had been going into new capital equipment and increasing our national productivity. But the Treasury Report for June said that there was an estimated fall of about 1 per cent. in manufacturing industry investment in the first quarter of 1972. The Report also said, rather pathetically.
"Private individuals continue to increase their bank borrowing rapidly … although it seems doubtful if much went to manufacturing firms".
The fact is that every propaganda device has been used in recent months to persuade individuals to go into debt. The big banks, once identified with prudent and fruitful industry, have spent thousands of pounds in telling people that, if they want a T.V., a car, a better washing machine or a holiday, they only have to borrow; in other words, to go into debt. I noticed the other day that the Daily Mirror released a whole page from its persistent efforts to uplift public taste and its present powerful campaign to safeguard the pound in order to allow a finance corporation to explain that anything one had set one's heart upon could now be afforded on borrowed money. The interest rate, they said, was only 1½ per cent. a month or, as my noble friend

1353
Baroness Phillips will explain, a rate of 18 per cent. a year. It should be added that if the borrowerer was rich enough and borrowed enough he could get tax relief on nearly half of the interest he pays.
Probably no single change in this year's Budget Statement was more cynical, and more blatantly intended to please Party supporters as against serving the national interest, than the decision to allow tax relief on private loan interest charges, irrespective of the use to which the loan is put. And incredibly the Chancellor took the precaution of excluding the very small borrower from this concession. I would ask the Ministers two questions: can they quantify the amount of borrowed money used to push up share prices, bearing in mind that the share index can be both a reflection of and a stimulus to inflationary pressures? Can they also tell us whether any attempt has been made to assess the value of foreign cars brought in by buyers using Treasury-subsidised borrowed money?
Nothing illustrates the failure of the Government in economic planning more than this experience of the motor-car industry. The Government have stimulated demand without, says Lord Stokes, any consultation with the industry as to its ability to meet the demand. In the first four months of this year between one in four and one in five of all new cars registered came from abroad. So we now see our visible trade balance damaged, indeed whittled away completely, in part by cars brought in on Treasury-subsidised loans. I recognise that this increase in money supply can be interpreted as an honest effort to stimulate demand and create employment. I recognise, too, that the Labour Party and the T.U.C. have demanded economic growth and increased demand. But is it not true that the Government have put increased purchasing power into the wrong hands?
If I am asked what we ought to do, I would say unhesitatingly that increased purchasing power in the hands of the old age pensioners and the lower-paid workers could help stimulate demand without the same inflationary effect and without damaging so much the balance of payments. Much more money needs to be spent on capital equipment and
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modernising British industry before so much goes on consumer durables. The I.R.C. ought never to have been disbanded, but the Industries Bill is needed urgently to help, on a more imaginative scale than so far envisaged, the improvement of Britain's industrial productivity. With spare capacity the Government could have done so much more to improve the physical environment. We could have said triumphantly that not a single out-dated school building or hospital would remain in development areas whilst so much resources were left unused. Selective spending and investment of this kind, according to priorities which we should be proud to justify, would build a much better Britain than the activities of the property speculator and the asset stripper, who thrive in the climate which this Government have created.
It may be that Ministers will insist on repeating again their alibi about excessive wage claims, and I readily agree that economic planning and a free-for-all on incomes are incompatible elements. So we want a policy, too, on prices and on incomes. I believe our trade union leaders are far-sighted enough to recognise this. I believe agreement is possible, but only if the concept of repression embodied in the Industrial Relations Act is abandoned. That Act, like internment in Ulster, has become a symbol. That Act, again like internment, has escalated strife.
There is now talk of a package deal. A package deal is possible, not on the basis of threats of "stark alternatives" but on the basis of constructive economic planning which demonstrably serves fair-minded social objectives. Such economic planning must include an agreement on prices and incomes. If I am told that we have tried and failed to get a prices and incomes policy, I say we must try again; and I say there is an ally which no Government have as yet successfully mobilised—namely, public opinion. Public opinion can be much more powerful than we are prepared to admit if the cause is good. The Government were beaten by the miners in that memorable battle in the continuing war of prices and incomes. And it was not the picketing which helped the miners to win: it was public opinion. The miners, when they picketed, knew that they had public opinion behind them. If we could now

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mobilise public opinion, with proper leadership, for sound social and economic purposes, a sound currency would follow as surely as night follows day, and true social unity would then be ours as well. My Lords, I beg to move.
Moved, That this House views with increasing anxiety the Government's failure to maintain the value of money and recognises the consequent threat to full employment, economic expansion and the achievement of a unified society.—(Lord Beswick.)
3.13 p.m.
BARONESS SEEAR: My Lords, there will be common agreement that the fall in the value of money and the continuous rise in prices are a matter of the gravest concern to all of us, but I suspect that that is where the common agreement will end. The noble Lord, Lord Beswick, devoted a great deal of his speech to the last part of this Motion. I do not deny—of course I do not—the importance of the Government's (in many ways) deplorable social policies, and I was never a great supporter of the Industrial Relations Act, certainly not of many of its sections. But I believe that this is largely irrelevant to the issues which we are facing to-day. What matters to-day is that we should take a cool, analytical look, an un-emotional look, at what these issues are, and then try to define the cures or partial cures—for there is obviously no sovereign cure—for the problems that we face. Let us take, then, a cool look at what we are up against; and do not let us exaggerate. It does not help, my Lords, when people talk of the post-First World War German inflation, as if that is the situation which we are facing to-day. Little could be further from the truth. Of course, if things go on as they are, totally unchecked, then after decades the pound will be worth a penny. This is true: but why should it be supposed that the public will be so foolish as to allow things to go on as they are? That kind of alarmist talk has made it more difficult, not more easy, for us to take the steps that are needed.
Let us look for a moment at some of the facts to get the measure of the problem that we are up against. I have taken the percentage increases between March, 1971, and March, 1972. The percentage
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increase in the basic weekly rates of pay was 11·9; in average earnings, 10·5; in the retail price index, 7·6; and in industrial production, plus 3·3. It is an exceptionally and unusually good period that I happen to have taken for this last item. This is serious, my Lords, but it is not catastrophic, and there is no reason to assume that we are going to allow it to become catastrophic. Why I said a moment ago that in my view much of the speech of the noble Lord, Lord Beswick, was irrelevant, is because before we had the Conservative Government's socially divisive policies and before we had the Industrial Relations Act we had the policies and practices of the late Labour Government; and if we compare the figures that I have just given your Lordships with the figures for the change between the second quarter of 1969 and the second quarter of 1970—the end of six years of Labour Administration—what do we find? We find that the index for production during that period rose from 123 to only 123·5, without the help of the Conservative Government's social policies; we find that the index of retail prices rose from 131·8 to 139·5; and we find that the index of basic rates rose from 195·6 to 214, and average earnings from 94 to 104·8. These are index figures that I am giving, of course.
Now if it was really the social policies and the Industrial Relations Act which led us into the situation we are now in, why was it so difficult for the Labour Government, which did not suffer from those handicaps—and they are true handicaps, I agree—to make a greater success than those figures reveal? We cannot forget that there was a Declaration of Intent, but that the intent was never achieved; we cannot forget that there was an attempted voluntary incomes policy, but that the policy had no satisfactory outcome; we cannot forget that there was an attempted statutory incomes policy which was defeated by the supporters of the Labour Party themselves, along with others. No, my Lords: it is not good enough to blame the present situation on to changes which have taken place when, before those changes took place, the situation was in many ways just as serious; and we on these Benches are entitled, I think, to say this. It may well be said, of course, that it is easy for the Liberal Party to speak in these terms because we have not been faced with the

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problem of making responsible decisions. Through no fault of our own, my Lords, we have been denied the temptations of power.
I have one further remark I should like to make—I had not intended to make it, but I have no option—in relation to the speech of the noble Lord, Lord Beswick. He made considerable play of the recent recommendations of the Boyle Committee on what are called top salaries. I am a member of the Boyle Committee, and, Lord Boyle himself not being here, I do not think it would be proper for me to make no reply to what the noble Lord, Lord Beswick, said. I do not wish, and I am sure your Lordships do not wish, to be drawn into a detailed discussion of this matter. I would merely say in respect of the noble Lord, Lord Beswick, and in comment on some of the letters and remarks that have been made, that it should be borne in mind that the increases recommended in that Report were to cover a period of 2½ years. For all the people covered the average was a 6·8 per cent. increase annually-compounded, and for the people at the very top, whose awards attracted so much attention from the noble Lord, Lord Beswick, the increase was in fact an annual compound of 3·9 per cent. Whether the noble Lord regards this as an unnecessary attempt to enable well-paid people to keep up with the cost of living or whether he recognises that it is giving them (although a reduction in their real earnings; and this was done very carefully) some reward for such increased productivity as there has been, 3·9 per cent. cannot be regarded as a very excessive increase if we are to have leading our great nationalised industries, on whom the well-being of this country so greatly depends, men or women of the calibre that we need. However, be that as it may, I am not denying the seriousness of the situation in which we find ourselves to-day; all that I am denying is the relevance of the analysis drawn by the noble Lord, Lord Beswick.
Better figures for drawing our attention to how serious is the position can be found in the valuable key indicators that the Economist journal gives us in this week's issue. Comparing the situation of seven countries, the U.S.A., Germany, Japan, France, Britain, Italy and Benelux, countries with which we must
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compete for our very livelihood, what do we find? In terms of industrial production, we in this country come sixth in that list of seven; in terms of increase in exports, we come fifth in that list of seven; in terms of retail price increase rates, we are also sixth; in five countries retail prices have risen less fast than in this country. That gives us a realistic measure of what it is we are up against; because it is fatal for this country to look at its problems internally. The problems have to be seen essentially in the context of the industrial world in which we have to compete; the sooner we are outward-looking in the consideration of our problems and the sooner we stop navel-gazing the better for us.
What can we do to get ourselves out of this situation? There is no simple cure. There are three phases to which we could direct our attention with value. There is, first, what can be done immediately; there are the middle-range measures which will take time to bring about; and. last, the long-run economic strategy. The air is thunderous with the voices of economists (of which I am not one) demanding that we should have an incomes policy strictly enforced here and now. It may he that we shall get into a situation in which the Government have to take strong immediate action. But this has been tried before and the difficulties of bringing it about and the injustices that it inevitably causes are as true to-day as they were when the Labour Government attempted it.
If we have to do something of this sort then perhaps the best measure, as a temporary measure, is what is sometimes called the Hungarian formula, a formula which the Economist is pressing once more this week and which has had support in a number of leading journals. The idea is that the Government should fix a figure for prices and for pay increases and that, if this is exceeded, there should be a surcharge on both the employer and the employee operated through the social security contributions system. This is not an impossible thing to do; it has the merit that it could be operated. It would be a most regrettable action to take, but at least it is possible. What is not proved, because of the difficulty of detecting what is really going on and of seeing that action is taken in time to stop it, is that any other method of en-

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forcement is possible and can be made to work. I do not advocate this; I merely say that if it is decided that the situation gets so urgent that the Government must take drastic action then perhaps that, for a short period of time, is the least harmful. But it is no solution in my view.
I believe that it is far more important to recognise that we need a new procedure in handling industrial relations and the settlement of pay disputes. It is highly desirable that the Government should set the stage but should not take a direct part in the determination of levels of pay. The Government should see that the climate and the institutions are right, but should leave it to the parties concerned to reach the decisions themselves. On the other hand, there is no doubt that the public are deeply concerned with what happens and are closely affected by the results of industrial negotiations. So we have to reconcile these two seemingly opposed points of view. We do not want the Government directly coming into the field of industrial negotiations; on the other hand, we need to see that the public voice is heard and the public interest is taken into account when wage claims are being settled and when prices are being fixed. We must welcome the coming together of the T.U.C. and the C.B.I. to try to find some system of conciliation and arbitration that will work. I will draw your Lordships' attention to the fact that it was the Government's attempt directly to influence the levels of wage payments which did more than anything else to kill conciliation and arbitration in this country. From the moment the trade unions perceived that the Government, which had a declared economic policy, had pronounced on a norm appropriate for pay levels, how could you expect them to believe that arbitration machinery, ultimately answerable to the Government through the Minister of Labour, would not be an instrument of Government policy? It is that which killed conciliation and arbitration—much to our loss! We need it again. It is reasonable that the T.U.C. and the C.B.I. say that it should be independent; but we must work into the procedure some representation of the public interest without bringing in the Government directly.
May I suggest ways in which this might be done? I believe there should be a
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committee—it could be of the Office of Manpower Economics, it could be an instrument of NEDDY—which could be reporting on, monitoring and educating public opinion. The noble Lord, Lord Beswick, is right about the importance of public opinion in these matters, but it must be opinion educated as to what the position is and what would be the effect of certain wage settlements. This could be given great publicity and have great standing and objectivity. I believe, too, that NEDDY could prepare a list of people acceptable to both sides, who could be injected into the process of negotiation and arbitration with the purpose of suggesting the effects of the negotiations on the public and announcing the way in which the public are going to be affected by the settlements that are made. These representatives of the public could also hold up settlements and force them to arbitration if they were not satisfied that the public interest was properly cared for in any settlement.
I believe also, my Lords, that it would help very greatly if we could get agreement that pay settlements should be for a fixed term, so that employers would have some certainty as to how long a settlement was likely to last. This would give them tremendous help in their pricing policies. I suggest a fixed period of not less than 18 months. I know this is asking a lot in the present climate. Along with this there should be a cost-of living automatic adjustment. The T.U.C. has been asking for clauses of this kind for a long time, but I should like to make the reservation that the cost-of-living adjustment should be a complete compensation for those at the lower end of the scale and reduced as it moved higher up. Otherwise, a built-in cost-of-living adjustment would be built-in inflation. Of course this would do something to upset differentials, but we have to be prepared to upset differentials. If we could get a fixed-term agreement with the certainty that those worse off would not suffer if prices rose, and with the certainty also that compensation for rising prices would not be total, then the longer-term agreement would be possible, and a longer-term agreement would give considerable economic advantages.
I believe it would be the greatest help in protecting the public interest in negotiations if when a wage settlement is

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reached the employers would say that they believed that this settlement would involve a price increase of not more than x and would commit themselves to seeing that during the lifetime of the fixed-term agreement prices did not exceed the figure which they would have stated publicly. There would, of course, be exceptional circumstances, but the employers could be called on to explain and justify those exceptional circumstances. These are ways in which we could get back to industry running its own affairs without continuous Government intervention, and at the same time bring the public interest more into the whole process of negotiation and final settlement.
But, my Lords, wages and even prices as regulated by the employers are not the whole of the question. There are other things to which the Government could, and should, be paying attention. It is worth while looking to see whether the Restrictive Practices Act might not be made operative with regard to those parts of trade union power which are in fact monopolistic. This suggestion has been put forward before, and in regard to negotiations at industrial level it is a matter which requires serious consideration, because there is indeed an element of trade union monopoly power. If we can get control over the monopoly power of employers in fixing prices I see no reason why we should not get some limitation of the monopoly power of the union in fixing wages, in so far as it is a monopoly power. I believe, too, that we ought again to pick up the Donovan Report, which the Government so foolishly cast on one side, and start moving towards a system of company agreements which, if necessary, as the late Lord Donovan himself suggested, could in the end be legally enforceable. Such agreements would pin responsibility where it ought to be: on the individual employers who pay and on the men who do the work and earn the wages. But in order to do this we need a Works Council Act and we need it quickly.
I believe, my Lords, that more could be done to influence prices in certain particular ways, for our approach to this problem must be many-pronged. One of the worst areas of price rises, as the
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noble Lord, Lord Beswick, illustrated and as we all know, is in respect of land and houses. From these Benches we have long urged the importance of the taxation of site values so that the community gets back the enhanced value of the site resulting from community activities. If ever there was a time to look again at this hoary, but never tried, remedy for these abnormal price increases, this is it. It affects only one aspect of the matter, but each aspect helps. Again, my Lords, it seems extraordinary that we are giving tax concessions for mortgages for the most expensive properties in this country. There is no doubt that one of the biggest factors affecting the prices of houses is the availability of mortgages. We are positively subsidising the well-to-do to buy property at highly inflated prices, and in so doing we are pulling up the prices of houses all the way along the line. I am not suggesting that this tax concession should be totally abolished, but I find it extremely difficult to understand why we should be subsidising that section of the community. This is a matter which needs urgent attention.
Such, my Lords, are the middle-term measures; but in the long run it is the long-term success of the economy which will determine the value of money. It is in this respect that both this Government and also their predecessors have failed so sadly. We do need economic expansion; of course we do. The Government have an extraordinary capacity for doing the right things in the wrong way, and with lamentable timing. Their "lame ducks" campaign has been a disaster. But, of course, it is right to try to see that it is the successful industries that grow, and to try to move away from those industries which cannot produce a profit or pay high wages, so that we may move towards a high pay industry, with a reduction in the number of people employed in the manufacturing industry but with a high level of wages and, as a result, a rapid growth of service industries. It is in this direction that we urgently need to go. The Government should adopt a policy of backing winners rather than talking about "lame ducks ", and of encouraging and re-enforcing success, because it is the successful companies which will in the end improve the value of money.
3.37 p.m.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, we are beoming accustomed to Lord Beswick's annual Motion of semi-censure on the Government's economic policies and, as in the past, none of us on this side of the House can complain of the way in which the noble Lord moved his Motion. By the same token, I should like to thank the noble Baroness, Lady Seear, for once again giving us not only a noteworthy but also a constructive contribution to the debate.
Nor, my Lords, should I wish to take issue with the noble Lord over the importance which he attaches to the maintenance of the value of money. It is important, and the Government recognise its importance. It is obviously important economically. On it depends our competitiveness as one of the great trading nations of the world. But it is equally important morally and socially, in that the scourge of inflation, as we know only too well, falls not on the broad backs of the economically strong in our society but on the weak and the vulnerable.
Where I would take issue with the noble Lord is in the implicit assumption underlying much of what he said: that this problem of inflation may in some way be peculiar to this country, and peculiar to the last 24 months of Conservative dispensation. My Lords, other countries have similar problems, not least to-day, and all Governments since the war have had their successes and failures in this field. I would not seek to deny for a moment the significance, indeed the stern significance, of the figures in the international league tables to which the noble Baroness alluded.
While I do not wish to beat the old inheritance drum unduly hard this afternoon—and I will not beat it long—I must remind the noble Lord, Lord Beswick, and all noble Lords opposite, of the position which the Government inherited on taking office two years ago. True, thanks to the savage but successful policy of deflation pursued by the last Labour Chancellor, we had a satisfactory balance-of-payments position. But that was the only satisfactory dowry bequeathed to us by the Labour Administration on the economic front. Along with the balance-of-payments surplus, as the noble Baroness, Lady Seear, has re-
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minded us, they bequeathed galloping inflation, stagnation and rising unemployment.
The control of inflation and the reduction of unemployment have been the Government's first priorities and we believe that our policies have been the right ones: policies which will produce rapid growth, full employment and a rising standard of living for all of us over a number of years. In his Budget statement on March 21 this year my right honourable friend the Chancellor of the Exchequer said—and I quote his words:
"The prospects of expansion and the growing prosperity of the next five years must surely be better than they have been."
My Lords, judging by the criteria which the noble Lord, Lord Beswick, has himself singled out in his Motion, there are already signs of progress. Take economic expansion—the noble Lord passed very briefly over the picture here—the noble Lord's second criterion. Since the Budget all the indications point to a strong growth in output. It is true that industrial production, as the noble Lord, Lord Beswick, pointed out, fell in the first quarter of this year, reflecting a heavy fall in February resulting from the miners' strike and consequent power cuts; but in April industrial production was 5 per cent. higher than the first quarter's average and nearly 21½ per cent. above that of the fourth quarter of last year. For manufacturing production the figures are 3½ per cent. and 1½ per cent. respectively. Retail sales are rising steadily, and in May new car registrations reached a record figure.
Or take the noble Lord's third criterion—unemployment. In the last two months the total of unemployment in the United Kingdom, as noble Lords know, has dropped by 171,000, a drop which we all welcome. But perhaps a more important indicator is the fact that adult vacancies have increased each month this year and in June stood at 138,000, their highest level since February, 1971. My Lords, I am far from being complacent (more important, the Government are very far from being complacent) about the existing level of unemployment. By the same token it would be wrong not to acknowledge the very significant downward trend in the unemployment figures. I can well

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imagine the play noble Lords opposite would have made, and rightly made, with the unemployment figures to-day had they remained at the intolerably high levels to which we had become only too accustomed in the winter months.
LORD POPPLEWELL: My Lords, they still have been the highest for 20-odd years.
EARL JELLICOE: I am not saying we are complacent about them, but I am saying there is a significant downward tilt and it is one which the fair-minded would recognise. In addition, in the last two years we have paid off the residue of that great weight of short and medium term debt accumulated under the last Administration. Our reserves stand high. And we remain with a surplus balance of-payments position on current account. All in all, my Lords, I see no reason for us to strike a note of doom in looking at the present position. But there is, of course, room for plenty of caution. In this context I would remind your Lordships of the Chancellor's warning in that Budget statement from which I have already quoted that the gap between the rate of increase in money incomes and of productivity had to be further narrowed as, in his words,
"in the end, that is the only sure way that we can keep prices steady, maintain our international competitiveness and substantially improve the prospects for employment".
So far, my Lords, so good. But in what I have so far said I have ignored the problem of inflation, the central problem confronting our economy, indeed perhaps the central problem confronting our society to-day. It is a problem which we must "lick" if we, as a nation, are to achieve the three desiderata in the noble Lord's Motion: a high level of employment, economic expansion and indeed a unified society. Unless we can "lick" this problem our prospects for sustained economic growth will vanish and with them over the long haul the prospect of rising living standards for our people. Unless it can be "licked", our competitive position abroad will be eroded, and unless it can be "licked" the prospects of a more united country will vanish, since inflation is a social evil under which the weak go to the wall.
My Lords, I remember in an economic debate some two years ago expressing the determination of this Government to rein
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in the wild horses of inflation. I would claim that over the past two years the Government have made considerable progress here. We have principally acted to break the accelerating price/wage spiral which we inherited from our predecessors, and we have acted in the first instance through tackling the rise in prices directly. We chose to tackle inflation initially through prices, since a slower rise in prices reduced the need for unreasonably high wage claims. Far from failing to tackle inflation, as the Motion implies, I would remand noble Lords of the steps we have taken to exert downward pressure on prices.
For example, in the Budget last year, my right honourable friend cut S.E.T. by half. Despite the claims of some of the critics, most large firms and many smaller ones reduced their prices in July, 1971, and in some cases before that. Further price cuts followed the 18 per cent. reduction in purchase tax rates in July last year. Moreover, noble Lords will recall that coincidentally members of the C.B.I. agreed to hold price increases below a 5 per cent. ceiling in the coming 12 months, and they did so when retail prices were rising at a rate of some 10 per cent. Nationalised industries exerted the same restraint. Again, noble Lords will remember that earlier this year the Government moved directly on prices of some staple foods—milk, sugar, and potatoes.
My Lords, I am not claiming for one moment that all in the price garden is rosy. But it is important to get the perspective right, and not to be mesmerized by some subjective impression of steady and accelerating escalation. Indeed, inflation is in large part a psychological bug, and because of that I hold it important to recognise at this moment that the statistical facts which are incontrovertible do not warrant the far too general impression that prices are just running away. The reverse in fact is true.
In the last year the rate of increase in prices has been nearly halved. The retail price index in summer, 1971, was around 10 per cent. higher than a year earlier. To-day the figure is down to 6 per cent.—the same figure as in May, 1970. In the six months from November, 1971, to May, 1972, retail prices have risen by about 3½ per cent. This compares with a rise of a full 1 per cent. more—4½ per cent.—in the six months from

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November, 1969, to May, 1970. And within that overall index food prices have risen by some 5 per cent. between July, 1971, and May of this year. This compares with 10 per cent. for the same period the previous year and 6¾ per cent. two years earlier under the noble Lords' benign Labour dispensation. Thus, although I would grant that the rate of price increase is still too high—far too high—and must be diminished, the trend is most certainly encouraging.
By the same token, I would ask your Lordships to recognise that the Government have made progress in reducing the rate of growth of incomes. Hourly wage rates in January last year were nearly 15 per cent. higher than a year earlier. In May of this year that figure had been cut to 11¾ per cent. As another indicator of the position on incomes, average earnings in January, 1971, were over 14 per cent. higher than a year earlier. The comparative figure for April of this year was 11½ per cent. In general, therefore, I am prepared to assert quite categorically that pay settlements, both in the public sector and in the private sector, are now standing at a considerably lower level than in the heyday of post-Election inflation in 1970.
It is true that in recent months the outlook has been clouded by the coal miners' settlement and subsequently by the rail settlement. As with prices, the observer may tend to think that wage inflation is once again spiralling upwards. I would not wish to minimise the significance of these two very high settlements, but the fact remains that since the coal miners' settlement details of some 38 settlements in the public sector have become available. These settlements, covering well over a million and a half employees, average under 9 per cent. I am sure that noble Lords will agree that these figures represent an improvement on the incomes front. But there is still a long way to go before incomes are brought down to reasonable rates of increase. And until we make further progress, our achievements in slowing prices are at risk.
LORD BESWICK: My Lords, I apologise to the noble Earl for interrupting, but would he be prepared to say that in November the retail price index will be lower or higher than it is to-day?
EARL JELLICOE: My Lords, I do not think I should wish to speculate on November now, in early July.
LORD BESWICK: My Lords, the noble Earl is endeavouring to persuade us that the trend is encouraging. If that trend continues, if I may put it this way, would he envisage that by November, when we discuss these matters again, retail prices then will be higher or lower?
EARL JELLICOE: My Lords, I prefer to let the November figures speak for themselves. A great many things may happen between now and November.
It is not only the internal position that is at stake. It would be idle to pretend that underlying fears of inflation played no part in the events that led up to the Government's decision temporarily to float sterling. There were of course other more immediate and transient factors at work. In any event, there was, in my right honourable friend the Chancellor of the Exchequer's view—and I notice that the Leader of the Opposition has said that he shares this view—nothing in our immediate objective situation to justify the very large hæmorrhage of our reserves that began to flow in the latter half of last month. Although our balance of surplus payments on current account has been shrinking—in part due to industrial troubles—your Lordships will have noticed that it has remained in surplus. Be that as it may, the hæmorrhage could not have been allowed to continue, and a tourniquet of some kind was required. Whatever some noble Lords may think about the underlying position, I feel there is general recognition that the decision to float was the right one and that, the decision having been taken, it was carried out promptly and with considerable technical efficiency.
As your Lordships know—and I was asked a specific question on this point by the noble Lord, Lord Beswick—my right honourable friend the Chancellor of the Exchequer has explained to our European friends that we intend to return to a fixed parity as soon as possible. He hopes that it will be before January 1 of next year. But the Chancellor has also made it clear—and this is in reply to the specific question put to me by the noble Lord, Lord Beswick—that he has given no other assurance whatsoever.
LORD PARGITER: My Lords, before the noble Earl leaves that point, can we be quite clear about what is meant by the term "fixed parity"? Is it fixed parity as expressed by President Pompidou yesterday, or fixed parity at a much lower level than the 2¼ per cent. differential proposed in the Common Market?
EARL JELLICOE: My Lords, I think I should prefer to leave it—this is dangerous ground—as fixed parity as expressed by the Chancellor of the Exchequer. In the longer term, this sudden and largely irrational capital flow out of this country demonstrates yet again the crying need, if international trade is to continue to expand and with it our own economy, for all of us to construct a stronger international monetary system. None of us can decry the importance of the Smithsonian arrangements, but more fundamental structural reform is required, and I think noble Lords will acknowledge that Her Majesty's Government in general, and my right honourable friend the Chancellor of the Exchequer in particular, have played and are playing a positive and constructive role in this respect. We must all hope that in time—and in not too much time—a world-wide system more responsive to the needs of the 1970s will emerge.
LORD DIAMOND: My Lords, I interrupt the noble Earl only because this is a matter on which I am regularly attacked whenever I am defending the Government's position abroad, as I have been doing over the last three weekends. Was there, or was there not, consultation on floating the pound with those closely concerned?
EARL JELLICOE: My Lords, I am not a Treasury Minister, and I hope that, rather than giving a snap reply to that question, the noble Lord, Lord Diamond, will allow me to turn the question to leg (if that is the correct term) in the direction of my noble and learned friend the Lord Chancellor.
That said, I am sure your Lordships will agree that floating the sterling rate, wherever it ultimately settles, does not in itself offer a solution to our inflationary problems. If we are to maintain our international competitiveness and our
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internal stability, we must somehow succeed in bringing the level of our wage settlements down to reasonable levels. I should like to make our attitude—the attitude of the Government—clear, albeit in summary form.
Our frank view at present is that a statutory incomes policy, even if it were desirable, will not solve our problems. For one thing, the trade union movement have made it crystal clear that they will not accept it. By the same token we do not, any more than any other Government in this day and age, welcome confrontations over pay. They are arid, and they tend to erode industrial relations. But by the same token we reject, as indeed any other Government would be bound to reject, courses which will allow continued inflation to flourish. This means that we must continue to oppose to the limit of our ability concessions to unreasonable pay demands which can only bring about the acceleration of inflation. But if we dislike confrontation, if we do not wish to see a statutory policy, and if at the same time we wish to rein in inflation, then it is clear that what we must work for, somehow, is a voluntary policy, generally accepted.
In this, the Government can, and in-deed must, play a part. Whatever scheme may ultimately emerge, the Government have a clear duty to ensure the community interest in greater price stability and higher real earnings, both of which can only be placed in jeopardy by high money wage settlements improperly earned. In that I agree with what the noble Baroness, Lady Seear, has said. In all this, every man jack of us is involved in one way or another. All groups, and especially employers or groups of employers and unions, have their part to play. But the three essential legs on which a voluntary system must stand are those of Government, the unions and the employers. That being so, the proposals which the Prime Minister placed before the General Council of the T.U.C. yesterday afternoon at No. 10 are clearly of prime importance.
Your Lordships, having read to-day's newspapers, will know that the Prime Minister proposed the establishment of a Ministerial group to work with the T.U.C. to see whether we could move towards some generally accepted voluntary system.

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Initially, four points have been proposed for study: possible conciliation machinery; the position of the more lowly paid worker—and I do not dissent, I think, from the general tenor of much of what the noble Lord, Lord Beswick, said about the lowly paid worker; the possibility of linking wage settlements with the cost of living, and the whole issue of our international competitiveness.
I am sure that the country as a whole, whatever the shriller voices may say, expects the three main parties concerned, Government, unions and employers, to work out some practical basis of agreement. This cannot be done if rigid and inflexible attitudes are taken un from the outset by anyone. There is no room round this board, my Lords, for Fischers and Spasskys. Certainly this has not been the Governments stance here.
LORD SHEPHERD: Oh!
EARL JELLICOE: The noble Lord, Lord Shepherd, from his sedentary position is inclined to query what I have just said. But we have gone a long way over the last two years in meeting many of the requests of the T.U.C. on matters of general economic policy. The Government, for their part, have now put carefully considered and solid proposals to the General Council. These are genuine proposals, and they are genuinely intended to provide the basis for a voluntary system. We need to tackle these problems together before it is too late—and, my Lords, it is already quite late enough.
Again, our prospects of a sounder and stronger economy would be placed at risk if, as a result of temporary or tactical difficulties, we were to allow ourselves—like a previous Administration—to be blown off the course of our longer-term strategies. I should make it clear that, unlike the Administration of the Great Deflectee, the present Government have no intention of being deflected from their major policies. That is why my right honourable friend the Chancellor of the Exchequer will pursue his policies of tax reductions and massive tax reform. That is why we shall continue to do what we can to stimulate new investment and new industry. But, my Lords, we do not need only new plant in this country.—though if one goes abroad and see the
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comparison by obsolescence one must admit that in many instances we do need new plant; we also need new skills. That is why we shall continue to modernise and expand our employment and training facilities. That is why we are prepared to seize the opportunities which entry into Europe offers us. That is why, above all, we propose to persist in a policy of growth.
The Budget measures were designed to raise the rate of growth to about 5 per cent. at an annual rate over the eighteen months to the first half of 1973. This is a much faster growth rate than we have managed to achieve in this country for a great number of years. It is a rate higher than the growth of production potential and it is thus designed to reduce still further the level of unemployment. But it is a rate of growth which is not inimical to the battle against inflation. There are ample spare resources in the economy so that there is little danger of hitting inflationary bottlenecks in the near future. Moreover, faster growth itself through increasing productivity and profitability is an ally and not an enemy in the war against inflation.
The noble Lord's Motion speaks of the threat to a unified society in this country. I do not dissent from the emphasis placed by the noble Lord on national unity. A hundred and thirty years ago, in a phrase which will be familiar to many of your Lordships, Disraeli told us that if
"… the privileged and the poor form Two Nations governed by different laws, influenced by different manners, with no thoughts or sympathies in common; with an innate inability of mutual comprehension … the ruin of our common country was at hand".
We should be foolish to deny the fact that there are tensions and fissiparous tendencies evident in our society to-day to an extent which I think is new to some of us.
I happen to have just returned from a brief visit, on the wings of a slim, elegant bird called Concorde, to the Far East. During that visit I spent a few days in Japan. I had not been there for six years, and even in that relatively short passage of time I was able to witness yet further evidence of Japan's continuing economic surge. The Japanese economy and Japanese society have problems of their own. We do not need to

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ape their systems any more than they need to ape ours. But I do not think anyone witnessing the Japanese scene could fail to be impressed by the fact that much of the Japanese economic miracle has been achieved with natural resources and natural skills certainly no greater than our own, but, above all, as a result of an extraordinary feeling of common purpose between management and labour. There may be lessons for us here.
My Lords, the Government do not require to be told of this need for a more united national effort and of the dangers of two nations. We have recognised this in our regional policy. We agree that we cannot properly be one nation if we allow the persistence within our Islands of great disparities between the favoured and the less-favoured regions. Hence the need, which we recognise, for a strong and effective regional policy. That is why we are bringing together a massive programme of regional support under the ægis of an able Minister.
Again, it does not need the noble Lord, Lord Beswick, to tell us that we shall not get the unity of effort in this country which we require—the common will to tackle common problems—if we think of ourselves as two nations, with organised labour as the one and the rest of us, or some of the rest of us, as the other. I must make it clear that this is far from the way in which the Government regard these matters. I have, I hope, already made it clear that we are seriously and sincerely seeking the co-operation of the trade unions in working out with us and with the employers a common plan to strangle inflation. True, we have no intention of walking back from the Industrial Relations Act, an Act in which we believe, in which we believe most of the country believes, and which has been democratically endorsed by a democratically elected House of Commons. On the other hand, it was made clear to the General Council of the T.U.C. by the Prime Minister yesterday afternoon that when we have had time to evaluate the workings of the Act, and if at that time the trade union movement are able to bring to our attention points in it which in their view, are oppressive or unworkable, we shall be very willing to entertain their representations. When the time
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comes, if they wish to talk, we shall be very willing to listen.
May I in this context just float a thought which may I suspect evoke an echo—if floating thoughts evoke echoes—from the noble Lord the Leader of the Opposition? My simple thought—and it is a personal one—is this. In thinking about these massive problems of industrial relations, I have often felt how beneficial it might be if somehow it were possible to import into the larger arena some of the climate in which we conduct our industrial relations in the more restricted arena—that of the non-industrial Civil Service—for which I have a certain direct responsibility.
My Lords, that climate of negotiation and discussion embodied in the portmanteau word, "Whitleyism", seems to me to have much to recommend it. We of course have our difficulties, our disputes and some very tough negotiation. Sometimes we fail to agree. But we do have the advantage of procedures which, although they may not be perfect, are mutually agreed and understood. We do have the advantage that those procedures include a willingness to go to arbitration and to accept the decision of the arbitrator. Not least, they include a tradition of close contact in what I might term the off-season—when wage negotiations are not in train—over a whole range of other subjects, which helps to create at least some sense of common purpose and of shared identity. All this may sound rather Utopian, given the abrasive climate in which so much of our industrial negotiations appear to be conducted today. But if the three parties of whom I have spoken—Government, the unions and the employers—can make progress in joint discussions, it might be worth their while turning a page or two of the Whitley book.
In outlining the Government's recognition of the need for a unified society, I have instanced our policies towards the regions and the stance which we are adopting towards the trade unions. But it is not only in the treatment of great geographical blocs or large numerical groupings that greater unity can be won. It is perhaps above all in the treatment which we accord to individuals in our society.
There are many speakers to-day, and I will therefore merely single out some

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examples to substantiate my claim that the Government recognise that greater national unity will not be won unless our society is fair, and seen to be fair, in its treatment of those who are weaker or more vulnerable. I will just cite a few examples of our approach. I have never been one, I hope, who underestimates the importance of physical environment. Bad housing and delinquency, in my view, are only too often umbilically linked. My example is that, under my right honourable friend the Secretary of State for the Environment, it is our conscious policy to bring help in their housing to those who most need help, and to concentrate our public sector drive on the quick and speedy obliteration of the slums which so often disfigure many of our towns and cities.
I refer to what we are doing concerning the proposals which my right honourable friend the Secretary of State for Social Services will be bringing forward next Session for a much overdue reform of our National Health Service. There are few areas where more could be done to bring succour and support to those who most need it. As evidence of our seriousness of purpose in this field, I would only cite the fact that the total Government expenditure on health and social services is due to rise from approximately £2,300 million in 1970–71 to no less than £2,800 million in 1975–76—that is, at constant prices. But if these great, massive sums do not tell their truth, I think those noble Lords who interest themselves in the social field will recognise that my right honourable friend has already made a unique contribution in concentrating help on the physically and mentally handicapped and indeed on breaking ground in new fields; for example, in seeing what we can do as a society to assist in breaking the vicious cycle of deprivation; in breaking new ground in fields which our society has left for too long untackled.
That said, I think most of us would in the last analysis agree that the greatest threat, perhaps, to a unified society lies in the continued existence of real poverty within these islands. Paradoxically, as the flood of more general deprivation has receded these last fifty years or so, the remaining pockets of poverty in our society have been the more exposed. They are a reproach to any civilised
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society. But the point I should like to make is that the Government fully recognise that fact. In two years, I would claim that this Government have done more to help those on low incomes than the previous Government did in all their six years. In particular, the family income supplement has been introduced and has been substantially increased. I would grant straight away that this was a far from perfect scheme, but it was the best that could be devised in the short term. For the future, the plans already announced by the Chancellor of the Exchequer for a completely new tax credit system will mean that those at the lower end of the incomes scale will receive the help they need, and will receive it with far less requirement for resented and cumbersome means-testing.
I could point out many other instances. I could point to the increases in National Insurance benefits introduced under this Administration. I could point to the new and crucially important provision for annual reviews of pensions. I could point, too, to the benefits which those on low incomes have received from the increase in personal allowances announced in the Chancellor's last Budget. At a stroke, my Lords, if I may use the now hallowed phrase, the increase in these allowances take about 2¾ million of our fellow citizens out of the field of income tax altogether and substantially ease the problems of the so-called poverty trap to which the noble Lord, Lord Beswick, alluded. I could continue this catalogue, but I will not do so. What I wish to do is to reaffirm, and to reaffirm as categorically as I can, that this Government, no less than any alternative Government, are conscious of the needs of a unified society, and have shown by their actions that they will do all within their power to help to create the conditions in which we can achieve a greater sense of fairness and of common purpose than we have at present.
My Lords, may I say just this in conclusion. I wish to reaffirm that this Government are deeply committed to a policy of economic growth. We realise, as Administrations before us may well have realised, that it is only through raising the growth rate that we can improve the standard of living for everyone in this country. Already that standard of living has been rising faster than it did under

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the last Administration. We have reversed the policies which brought stagnation, and stagnation coupled with inflation, in those six years. Despite the difficulties, which are all too obvious, we shall not permit ourselves to be deflected from our course. On the contrary, we intend to pursue our goals with determination, in the knowledge that they will lead to increasing prosperity, to a happier community, and to that unified society which I believe we all desire to see. But, my Lords, the first priority is to strangle inflation and to ensure that our hard-won achievements over the last two years are not wasted. Whatever the Opposition decide to do about the noble Lord's Motion—and I do not yet know what they are going to do—I would express the hope that those broader goals would command the broad assent of your Lordships' House.
4.14 p.m.
LORD ROBBINS: My Lords, I rise to make a speech about inflation, but I do so with considerable trepidation, having regard to the speeches which have preceded mine. I should conceive myself to be, so to speak, between Scylla and Charybdis. I must be careful not to incur the reproach of my colleague, the noble Baroness, Lady Seear, of being a prophet of doom. Of course, I would agree with her that a prospective rate of increase in the level of retail prices of between 8 and 10 per cent. per annum, as has been predicted in certain quarters, is not the same as the rate of increase during the hyperinflation on Continental Europe immediately after the war, but I submit that it is something to be seriously alarmed about. On the other hand, much as I sympathise with the noble Earl who has just been defending the policy of the Government with much the same determination and ingenuity as his opponent the noble Lord, Lord Beswick, I seem to remember, defended his Government in rather similar circumstances when he was sitting where the noble Earl is sitting today, I refuse so far in the debate to be persuaded by the contention that, although there is certainly something to be a little worried about, there are all sorts of small signs which show that here and there is some statistical improvement and there is nothing more serious than what has been suggested in the last two speeches to worry about here and now.
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May I begin with a comment on the events of last Friday week—the floating of the pound and the fall in the rate of sterling which has followed since that decision. I do not think that the present position in that respect affords any ground whatever for complacency. I believe that what has happened places us and our associates in the Free World in a position of greater danger than we were in before last Friday week. If I turn first to the domestic situation, I would say that what has happened so far—perhaps it may be reversed—will certainly, as I think the noble Lord, Lord Beswick, said, have some influence on the cost of living; and if it has some influence on the cost of living it then makes Her Majesty's Government's task in controlling cost inflation greater than would otherwise have been the case. Secondly, I would submit that what happened is likely to introduce—I choose my words carefully at this point—complications in our progress towards our entry into Europe and participation in progressive policies therein.
I agree with the remark which has been made by several commentators that a float at some stage might well have proved to be necessary; and, to the extent that the step has now been taken, there is some local easement so far as our competitive position is concerned. But one must remember that what is our easement is other people's disadvantage. I do not think that it took the remarks attributed to M. Pompidou only yesterday, or the day before, to convince many of us that if the float continues downwards difficulties of all kinds hitherto unsuspected are likely to confront Her Majesty's Government in their onward progress. Certainly I would say that what happened last Friday week was some menace to the financial stability of the Free World in general.
The noble Earl referred to the desirability of international monetary reconstruction, but for obvious reasons of time he did not reveal at all precisely the thoughts that were passing through his head. It is my submission that a change in the rate of sterling, to put it mildly, is not making it easier for the position of the dollar, and if the position of the dollar is still further weakened, then even the much praised—not by me—Smithsonian agreement (I never thought it would last) will be considerably weakened.

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But, my Lords, having delivered myself of these fears, let me say at once that I believe the decision was a right one. If I had been, as I once was, a public servant, advising Ministers, I should have given the same advice in the circumstances.
But, having said that, I must say—someone must say it—that some, at least, of the explanations and the extenuations which have been given seem to me to be unadulterated nonsense. To me it is almost inconceivable how intelligent and upright and straightforward men can still go on invoking the time-honoured reproaches against speculators. I ask you, my Lords, to reflect upon the impact on humble men and women of the world not involved in the political badminton, so to speak, when they hear once again in a currency crisis this sort of accusation. It only needs a member of the Government to get up and say that "The pound in your pocket will still purchase the same amount" for one to be able to say, "Well, this is where I came in before".
The reason for the pickle that we are in and the figure that we cut in the outside world is not the gnomes of Zurich, not just bad luck, not the wickedness of real estate proprietors, not even (I would say, in slight difference with the noble Baroness) our failure to grow at a faster rate, although of course a faster rate of growth would ease the situation. We deceive ourselves if we think that any conceivable rate of growth achievable within the next two years would eliminate the inflationary danger. No, my Lords, the villain of the piece is clearly in the dock; the villain of the piece is inflation—and our inflation. Since 1962 retail prices in this country have risen over 60 per cent., and certainly the blame for that is not to be attributed uniquely to either of the Parties which have held the reins of power during that period. Surely we should all agree that whenever the inhabitants of one area are subjected to an inflation greater than that which is going on elsewhere—and that, on the whole, is what has been happening here; there are one or two others which surpass us in the table, but not many—then inevitably pressure on the exchanges develops; and if people expect inflation, as they certainly have expected inflation
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and as they had every right to expect it, as the events have proved, then if they have the facilities they take steps to remove their funds to safer quarters. If the inflation goes on, their prudence is justified by the security of money and possibly by a spot of capital gain.
Let us forget the external situation for a moment. Let us forget all about the outside world and be as insular as we like to be these days. In passing, I must say that I view with the greatest apprehension the disposition in certain quarters (not, I am sure, on this Front Bench) to say, "Now the rate is floating the balance of payments will take care of itself". The rate will continue to float downwards if the inflation goes on, and that is all that can be said about that one.
We cannot discuss everything at once. The Motion before us deals generally with internal matters, and it is to these internal matters that I should like to direct your Lordships' attention. Why should we bother about inflation? Why should we be alarmed at whatever rate has prevailed in the last 12 months and the rate which has been predicted by the National Institute of Statisticians (with which I happen for once to agree) for the next few months ahead? I will not detain your Lordships by dwelling on the misery, the anxiety, caused to people on fixed private incomes, although anyone who has friends and relatives in that position will well know all that it involves. But, after all, they are the weaker members of the community; perhaps they are in a minority; certainly if the trade unions continue to be strong, if profits go up, the votes of those weaker members of the community do not matter all that much. I will not dwell on that. I would rather dwell on something even deeper. I would say to your Lordships that inflation as we have known it through history—inflation even at this rate—corrupts and distorts the whole basis of the society in which we live.
My Lords, let me reassure the noble Baroness: I do not say that the world will come to an end if we degenerate to the position of Latin America. I agree with her that we are not that way yet, although we are some way towards it. After all, Latin America survives, after its fashion. What I do say is that inflation of the order of magnitude that

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we are contemplating gradually brings about a radical change in outlook, a change in outlook throughout society generally, which I personally regard as quite deplorable.
Let me give your Lordships a few examples. To keep in step with the noble Baroness, let me start with Latin America. Some years ago I paid a visit to a delightful country in that continent. My wife and I had the good fortune to be met at the boat by an ex-pupil, who conducted us with amazing celerity through the Customs. Having been brought up in the atmosphere of our stable society and in a Puritan household I was certainly extremely shocked when friends told me, "Had you not been accompanied by a Government official you would not have got through those Customs for a week unless you had been prepared to pay a bribe". I say, my Lords, that I was shocked at that. When I learned that those officials had their salaries revised only once a year and inflation at that time was proceeding at the brisk pace of about 5 per cent. per month, I began to realise that after all there was no reason to feel quite so superior. What should we do if we were in a similar position?
But now let us come nearer home and consider for a moment the purchase of property. Supposing a Member of your Lordships' House had been approached in the stable days by a young couple setting up house together. Surely a wise course would have been—and ancient instances would have been justifiably adduced—to counsel prudence against running into debt, prudence in over-optimistic anticipation of future income. "Be careful, my boy", you might have said, "never run into debt if you can help it". But, my Lords, supposing you were in that avuncular position to-day and you were considering the interests of the young couple, you would surely say to them, "Borrow as much as you can and repay in depreciated currency". Is that a happy state of affairs? Is that a state of affairs which is ultimately conducive to a stable moral society?
Let me take a further example which is, I suggest, to people of integrity, much more worrying that that, namely, the sale of National Savings Certificates. Let me take a simple figure. Supposing anyone
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had bought £100 worth of Savings Certificates in the middle of 1967. I choose my dates so as to be equally fair, so to speak, to both sides of the House in this respect. By now, at the rate that was quoted then, that £100 would have appreciated to £125. But in the same period retail prices have risen from 119 to 162 so that the real value of the original investment plus interest would now be just a little below £92; that is to say, this purchaser would have been lending money to the Government at a negative rather than a positive rate of interest.
Surely that is a disturbing thought. I say this with deadly earnestness. It is a disturbing thought that some of the least knowledgeable members of the community have been induced by some of the most patriotic and public-spirited to buy assets supposed to be increasing in value but actually diminishing. Now of course this fact is quite obvious to anyone with any financial training whatever, but it is very seldom mentioned and I think I know why. I have often been asked myself to take a seat on a platform recommending the sale of National Savings Certificates and I have always refused. The reasons why I have refused are two-fold: in the first place I did not want to be an embarrassment to my colleagues on the platform, for whose good intentions I have the highest regard; in the second place I had the feeling, which is certainly justified by analysis, that if the will to save is undermined, and if instead of saving people rush into commodities, then the inflationary pressure is increased. All that is true. But I ask noble Lords in all parts of the House: do we really wish to save our bacon at the expense of the poor and the ignorant? If the Government want to encourage saving—and I submit that they should want to encourage it—then they must provide some assurance that savers will not suffer. In the end they must control the value of money.
What is the cause of all our troubles? To keep our heads in this matter, to establish a proper sense of proportion, let us always remember that the supply of money—the credit base, if you like—and therefore the maintenance of the value of money, is definitely a responsibility of Government. Wherever else a policy of laissez faire may he justified it can never be justified here. It is no

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good any Government saying that the supply of money is something which adapts itself to the needs of trade. We have heard that one many times before. Indeed, I remember when I was a young man and at the time of the great German inflation, and then Governor of the Reichsbank made a public statement regretting that the many factories that he employed in printing paper money were not able to keep up with the needs of trade. No Government can afford to adopt the attitude that money must be passive to the needs of trade. Galloping inflation eventually lies that way.
I would say, as a corollary of what I have said, that few things can be more certain than that if the increase of the credit base passes a certain figure—which of course has to be related to the rate of growth of the economy—then there will be inflation. Few things are more certain Wan that if the rate of increase of the supply of money is limited to the rate of increase of real production, it is unlikely—although not quite impossible—that prices will rise indefinitely. There is no need to be a dogmatic adherent of the quantity theory of money to believe that. Provided the increase of the credit base is restrained then the value of money is not likely to fall for very long at an alarming rate. But, as the noble Lord, Lord Beswick, has pointed out, the credit base in recent months has been increasing at 20 per cent. per annum.
This is not the end of the matter. If we were in a state of pre-existing stable prices, if we continued the control of the money supply and combined it with prudence in public finance, then it is very improbable that the price level would rise very much. But if inflation is already in operation, if people's expectations are geared up to further rises in the cost of living, and if we are in a condition in which there come forward claims for rates of pay far beyond any conceivable increase in productivity, then if extra finance is not available there must he unemployment. I am speaking in very rough terms here. Of course you can conceive of small excess increases which only give rise to small unemployment or small inflation. In such circumstances there might even be a hope that some small increases in rates of pay of that
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sort might be made at the expense of profit after taxation. But certainly any claims for increases of the order of magnitude of recent years cannot be met in that way, by conceivable achievable rates of growth. A 10 per cent. rate of increase of earnings per annum cannot be met save by some inflation; and claims such as, rightly or wrongly, have been reported in the Press in the last day or so for increases of a further 30 per cent., if generalised, must lead either to widespread unemployment or to rampant widespread inflation.
What then must we do? I am quite sure that if the Government regard the money supply as infinitely elastic, to be manipulated, simply to be responsive, passive to the needs of trade, and if interest rates are kept at what, having regard to the rate of inflation, is an artificially low level, any arrangements, however intelligent and well-conceived, will break down. I do not believe that the situation will be cured by mere exhortation, invocations of common solidarity and so on. We have had so much of that ever since the war that, so far as the ordinary man not involved in politics is concerned, it falls stale and unprofitable on deaf ears. Arbitration, special inquiries—well, we have seen the results of arbitration and special inquiries in the last few catastrophic months. Nor do I believe that if employers and employed are left to themselves, even in the most conciliatory mood, much restraint will necessarily follow. As in the case of arbitration proceedings, the disposition will be, especially if the credit base goes on enlarging, to split the difference and take out the rest in rising prices. If the discussions are sectional rather than simultaneous to all industries, then the discussions will almost certainly resolve themselves into acrimonious debates about relativities; and once you start debating relativities once more you are involved in the vicious circle.
Nevertheless, my Lords, having said all that, let me add, lest there be any misunderstanding, that I am quite clear that if the Government were suddenly to put the brakes on national expenditure, either by way of measures of public finance or by greatly slowing down the rate of increase of money, the result would be, with expectations geared up as they are now to inflation, a colossal depression.

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I know no case in history where inflation of the order of magnitude of that from which we are now suffering has been stopped by measures of this sort without that sort of effect.
Hence, although direct control of incomes as a long-run policy is likely to break down, and does indeed carry with it many dangers to a free society, I am forced to the conclusion that in order to create a breathing space in which expectations can be revised and clear understandings reached, I hope between the two parties, on the desirable future financial policy, the Government will be forced to impose some sort of control. I say this without any great hope that it will be very efficient or very just, or that it will be a final solution. And I abstain from discussing possible variants, save that I would express what I have said before in this House, a certain penchant for the solution thrown out by the noble Baroness, which she called the Hungarian solution; namely, the fixing of norms and penalisation of employers if those norms are exceeded. What I am clear about is that if inflation is allowed to proceed at the present rate—and I am sorry to say that nothing the noble Earl the Leader of the House has said persuades me that there is not a great danger (I would simply put it that way) that it will continue at the present rate—then I fear that the very foundations of our free and liberal society will be severely shaken.
4.47 p.m.
LORD WALSTON: My Lords, it is hard to follow the noble Lord, Lord Robbins, and his fascinating speech, in which he told us so clearly and so realistically the dangers that we were facing and showed us the weaknesses of some of the more orthodox means of dealing with these problems. We have to look at this subject in two ways. We have, first of all, the immediate short-term problem, what can be done to stem the present inflation; and we have, perhaps more important, the long-term problem of how we can ensure that it does not happen again. I am not qualified in any way to suggest how we can deal with the short-term problem. I must confess that I am strongly tempted by the proposals put forward by my noble friend Lord Brown—I am sorry he is not taking part in this debate to-day; he
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could have made a valuable contribution—which, as your Lordships may remember, consist, very briefly, of the Government fixing a global sum by which wages can be increased for a period and the unions and the employers then working out between themselves how this sum should be allocated. That seems to me to be realistic and a possible way of achieving some confinement of the present inflation. But I will not labour that point.
There is only one aspect of this matter that I want to take up to-day. The noble Earl, Lord Jellicoe, stated that he was very conscious, and Her Majesty's Government were very conscious, of the need for a unified society, and he went on to say that the first priority was to strangle inflation. If I understood him aright, that meant that the need for a unified society had to wait until inflation had been strangled. I do not believe we can strangle inflation unless we have a unified society. This debate is of national importance, and I hesitate to bring in Party politics, but it seems to me that one cannot discuss this subject realistically in a political context without Party politics coming into it, because this shows up the basic differences between the present Government and the policies, the wishes and the theories, though I am afraid not always the practice, of the Labour Party. Put in a nutshell, it is the difference between a just price and the price of the market place—an economy based on the social contract or one which is based on the survival of the fittest.
My Lords, when we were in office we were accused of basing our policies on the fact that the gentlemen in Whitehall knew best, whereas noble Lords opposite maintained that the gentlemen in the market place knew best. We were accused of making "profit" a dirty word, while noble Lords opposite extolled the profit motive. This Tory philosophy was epitomised when the present Government took office and we were told that, under them, lame ducks in industry would be allowed to sink without help from the Government. With this was the implied corollary that the strong ducks would fly high and outstrip their lesser brethren. That is a policy which in the past has worked well provided one did not have too sensitive a social conscience. A great deal of the wealth of this country, from

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the beginning of the 19th century until well into this century, derived from such a philosophy. The profit motive urged industrialists and bankers to yet greater efforts. They bought cheap and they sold dear; they made great fortunes; they became respected members of society; they even graced your Lordships' Chamber.
One of the main ingredients in their costs was labour. This also they bought cheap, because they were the strong ducks and the workers were the lame ducks. To-day the Government still extol the virtues of the profit motive and of the free play of the markets, but every now and again they are brought face to face with reality and see that the national interest does not always coincide with the interests of individuals or groups of individuals. Just recently we have heard from the Secretary of State that even though it may be in the interests of Mr. Hyams to leave Centre Point empty, it is not in the national interest that this should be done. We do not yet know whether or not the Government are going to take steps to right this, but if they do they will surely be interfering with the profit motive in the belief that here, at any rate, the gentlemen in Whitehall know best.
We are continuously being told—I am sure all noble Lords will agree—that it is not in the national interest that workers should press for higher wages and that they should strike if they do not get them. As we know very well, legislation has been introduced to make it more difficult for them to do so. Once more we see the gentlemen in Whitehall and in Westminster knowing best, in interfering with the free play of market forces. I suppose we on this side of the House should be pleased that noble Lords opposite and their friends are beginning to see the dangers of their policies, but they cannot really expect us, and particularly the trade unions, to accept that after all the gentlemen in Whitehall and in Westminster know best when it comes to wages but the gentlemen of the market place know best in all other respects.
We shall never get out of our present difficulties—the inflationary pressures, the fight for higher wages, the strikes which take place even though people know full well, as the noble Lord, Lord
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Robbins, has pointed out, that it may lead to unemployment for many of their fellow workers—until there is a deep and manifest change of heart on the part of the Government. It must be a manifest change of heart. They must announce, loudly and cleary, that the market mechanism is a false god and and that they are now prepared to worship at the shrine of the just price. They must follow up those words with acts. What the noble Lord, Lord Robbins, said is absolutely true: we have had too many exhortations and not enough actions. I unhappily grant that the previous Government were almost as bad in this respect as the present one.
LORD ROBBINS: My Lords, is the noble Lord saying that the previous Government have not had a change of heart?
LORD WALSTON: Unfortunately the previous Government did not follow up their beliefs with their actions. They had the exhortations; they had the right heart. I am now asking the present Government to have that change of heart and to do what we tried to do but failed to do.
How can anybody with any understanding of human nature expect workers to restrain their demands for higher wages when they read of the colossal profits being made out of land and housing, unrestricted by Government action, while the Industrial Relations Act has actually curtailed their own traditional rights of bargaining and thereby weakened their powers? How can they believe that the Government are seriously concerned to hold down the cost of living when they read, for instance, that beer is to go up a penny a pint and at the same time Watney's Brewery forecast an increase in dividends of over 86 per cent. between 1971 and 1972? Perhaps this is a small matter, but these are the things which affect the workers who want their higher wages and for whom the trade unions are working.
My Lords, in spite of what the noble Earl has told us, how can people believe that the Government really mean to look after the poorest sections of the community when they see the last Budget giving the greatest benefit to income tax and surtax payers and at the same time cutting the supply of free milk to school

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children, while the rents of council houses are about to rise? As my noble friend Lord Beswick pointed out, what can they think of a Government which described the railwaymen's claim for a minimum wage of £20 a week as "blackmail" and then, a few weeks later, endorse and put into operation the rises which we all know about? If I may say so, the defence which the noble Baroness, Lady Seear, made of that decision (I say this with all respect to her) shows that it is very dangerous to be more concerned with statistics than it is with human beings.
Many of your Lordships are employers of labour. In a small way, as a farmer, I am also. In common with other farmers, on the whole, I have good relations with the people who work for me. I am quite certain that if I were to go to them and say that the farm had had a bad year and prices were low, and that reluctantly I had to ask them to forgo a rise in wages, in so far as it was legitimate for me to do so, they would agree. But they would do so only if they knew that I was tightening my belt also. If at the same time as I asked them to do that they saw that I had bought a new Rolls-Royce and had installed a heated swimming pool in my house, I know perfectly well what their answer would be. Yet that is exactly what the Government are doing to the workers to-day. The Government are saying that in the national interest people must restrain their claims for higher wages, yet at the same time by their Budget they give the rich more money to spend. They give the chairmen of their own nationalised industries, their Judges on the Bench, and their own civil servants, big rises in wages. They allow, and indeed encourage, industry and finance to make yet higher profits.
My Lords, the pound may be floated or it may be devalued; wages may be arbitrarily restricted; the freedom of the trade unions may be curtailed. At the best these can be only palliatives; at the worst they can be additional irritants. We shall never emerge from this constant threat to our economy until the concept of a just reward and of a social contract between all members of the community replaces the concept of the free play of the markets, the sinking of the "lame duck", and the high-flying of the strong.
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This must be, I know, a slow, long-term process; it cannot come overnight. The influence of the tradition of generations has to be overcome before we can succeed. But the atmosphere that has grown up over nearly 200 years must be changed. We tried it—the Labour Government tried it—but very half-heartedly, and with many mistakes. I take no pride in their achievements or their failures in this field, though I do give them credit for their intentions. But until the atmosphere is changed we can never be free of the ever-present threats to our economy, and we can never progress towards a just society.
5.2 p.m.
VISCOUNT AMORY: My Lords, I should like first of all to apologise to the noble Lord, Lord Beswick, because unfortunately, owing to another engagement, I missed almost all of his speech. If I say anything which he feels I would not have dared to say if I had heard his speech, I hope that he will forgive me. I am not going to follow the noble Lord, Lord Walston, if he will forgive me, very far, but I should just like to say that I think that the sharp contrast he drew between the social contract and market forces is rather unrealistic to-day. Surely no one will ask us to believe that the present Government's economic policies are solely directed by reliance on uncontrolled market forces. I think he must have muddled the present Government with Mr. Enoch Powell.
The troubles from which our economy is suffering and which are referred to in the Motion are troubles that afford deep concern to us all. Most of them have been with us for some years, and certainly during the last years of the last Administration, as the noble Baroness, Lady Seear, so clearly showed in her most interesting speech. I suppose they can be summed up as being high unemployment, rising prices, reducing international competitiveness, low industrial investment and an intermittently weak exchange rate. It is a formidable collection. I was very glad to hear from my noble friend the Leader of the House that the number of vacancies is increasing again now, because I think that that is generally an encouraging factor—perhaps a more important indicator in the short term than the actual aggregate figures of unemployment themselves,

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which can, for one reason or another, be distorted over the short term.
What have been the present Government's policies? Would it be fair to suggest that, in a nutshell, they have been: first, to use their influence in every way within their existing powers to discourage inflationary rises in money incomes; second, to encourage expansion of output by increasing consumers' spending power and by a reduction of taxation; third, to encourage an increase in industrial investment by expanding the availability of credit and a reduction in the rate of corporation tax; fourth, at any rate until this unilateral floating of sterling, close co-operation with the international monetary authorities, and by massive repayment of our international debts. Of these, the first aim, the discouragement of inflationary increases in money incomes, is surely the most urgent and important, and I believe that the Government's policies are in themselves correct. I think that argument and criticism are most likely to be directed, when we get down to it, not so much to the policies themselves as to the ways in which they have been implemented, and perhaps sometimes to the psychological impact of the methods adopted. As I do not want to make a long speech I will confine my remarks to one or two of the main factors that have already been referred to.
First, the recent floating of sterling. In the circumstances, I think it is clear that there was no alternative. The drain on the reserves, in the light of the speed and size of the pressures which developed, would, I think, on any historical analogy, have been unbearable. Therefore the reserves alone could not have stood the pressures. But what were the circumstances? I suppose without any doubt the main factor was the loss of confidence in our capacity to halt the wage-and-prices spiral; that is to say, a failure to do something which it ought to be within our own abilities as a nation to do. We must be under no illusion that, although it was the right action in the circumstances—and I think the Government and my right honourable friend the Chancellor of the Exchequer are to be congratulated on the promptness of their decision—in itself floating cures no long-term problem. I entirely agree with what the noble Lord, Lord Robbins, said on
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that in his extremely lucid and important speech.
In passing, I would venture to forecast that never again in the foreseeable future are we likely to see such a long period of fixed exchange rates as we have experienced during the last 25 years. One can only guess, but I imagine that what we shall be seeing is some kind of compromise between the fully floating and fully fixed rates. I confess here that I have been—surreptitiously—over the last few years what is known as a "crawling pegger", and I could develop that at some length. Whether I am going to continue to "crawl" I do not know, but I believe that something of that kind is what we shall find. Having to float so precipitately is without question a set-back to the Government's policies—I think a setback and not a defeat, because military history is full of cases where campaigns have had many setbacks but final victory has been assured.
Without any question, the main problem is still the rate of internal inflation. It is quite clear that this has been, and is now, causing us to lose competitiveness in international trade. I am not going to quote figures (they have already been quoted, I think, in two speeches) to illustrate this, but they are impressive. Our prices are certainly rising a good deal more than the prices of our main competitors. Another indicator is that the percentage of imported finished manufactured goods is rising. When those two things happen they are danger signals. In January, 1972—and here perhaps I shall quote one or two figures again—the increase in earnings over the previous 12 months had come down to 9 per cent. Then the railway settlement came at about 13 per cent., and by April there was an increase over the past 12 months of something like 11·5 per cent. I shall be corrected if I am wrong. I do not know, but I would guess that perhaps the rates to-day are running at about 10 or 11 per cent. If the noble Lord, Lord Beswick, asks me to forecast, I shall refuse to do so. I am not willing even to forecast whether I am going to be willing to attend the discussions of your Lordships' House during the month of August. I am certainly not going beyond that.
LORD BESWICK: My Lords, may I say to the noble Viscount that I would

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not even dream of asking him to forecast? It was only because his noble friend was so confident that the trend was right that I put the question to him.
VISCOUNT AMORY: That is quite all right by me, my Lords. As regards the Government's actions over the past few months, there are two which, with hind-sight, one might be inclined to question. The first has already been referred to by, among others, the noble Lord, Lord Robbins; and here it is very easy to understand the acute dilemma which the Government were in. I am referring to the rate of increase in the money supply. Between October, 1971, and March, 1972, the annual rate of increase was running at about 20 per cent., which seems a dangerously steep rate; but anyone who criticises that must not at the same time criticise the Government for doing nothing to stimulate the level of activity in the country. Secondly, I wonder whether my right honourable friend the Chancellor of the Exchequer was wise in his last Budget to restore completely full tax deductability for personal interest. I shall come back to that point later.
I wish to say a word or two about an incomes policy. Your Lordships will not remember, but in our last debate I think I advocated—I certainly meant to do so—a voluntary policy, worked out by the Government in consultation with the C.B.I. and the T.U.C., which might eventually grow into some kind of scheme which would be backed by statutory authority. I still believe that that would be best, but I am now beginning to fear that time may be too short. I still hope that it may not be necessary to fall back on something quite so drastic as the Hungarian technique, to which the noble Baroness, Lady Seear, referred, but if it was necessary I would not completely rule out even that. Anyway, a practical programme of action must be worked out by the Government in consultation with the C.B.I. and the T.U.C. I was delighted to read in my newspaper this morning what my noble friend the Leader of the House reported the Prime Minister as saying to the T.U.C. yesterday, which is extremely good news.
I personally believe that there must now be a short-term, as well as a longer
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term, scheme. The noble Baroness talked about three phases. I am quite sure that there will have to be two phases at least, and that the Government must be prepared to play a positive and authoritative part in both. I am not much enchanted with a literal freeze, unless to gain a very short time for the development of a longer term plan which has already been worked out. But I consider that some form of short-term statutory control of increases in wages, salaries, dividends and rents may have become necessary; and, if it has, I believe it will be accepted by the nation at large.
I am certain that any long-term incomes policy must develop within it the principle of true arbitration, not merely conciliation. Perhaps I have bored people by always reminding them how different the two things are. There is a place for both, but we must not muddle them up too much. I believe that the principle of arbitration must be an integral part of a long-term policy, of a kind which will be accepted and respected by the parties directly involved and by public opinion. That will not be easy to achieve. The noble Baroness, Lady Seear, made some interesting suggestions in that direction.
I remember that years ago, when I was in the Government, we tried one or two experiments to see whether we could deal with the difficulty that, immediately the Government said what they thought was just, reasonable and right, it lost a great deal of force, because the Government were thought to be saying it in order to give support to their own economic policies. The last Government tried an experiment of that sort. But we must go on with those experiments until we find something rather more independent than Government pronouncements. We must gradually build up a body of individuals who will increasingly command the respect of the public for their independence and judgment.
I think, too, that some statutory action may be needed in the short term to mitigate the fantastic rise which, as a result of inflation, is occurring in the values of land and buildings. It know that this is extremely difficult but, apart from the other disadvantages, the ridiculous rate

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of increase is, psychologically, a disastrous handicap to the forces of moderation and restraint in industrial negotiations. It must be better to adjust the salaries of the higher levels—the chairmen of nationalised boards and people like that—at the same sort of intervals as incomes lower down are adjusted, so that we do not have these rather embarrassingly big increases presented which, as my noble friend has said, often cover two, three or even more years.
The crucial problem is to get a really constructive degree of co-operation between the C'.B.I., the T.U.C. and the Government. Each must contribute something. The C.B.I. has already contributed something, which has proved very valuable, in their 5 per cent. limitation which has been generally followed over the past year. I hope very much that if there is some comparable response from the unions' side the C.B.I. will be willing to continue that restraint. But I regret having to say that, to date, the unions do not appear to have made much of a constructive contribution. Is this because they do not want to do so, or because they do not have the power? I know that in these matters personalities count for a lot and the big unions have been exerting their full power.
Some of their leaders would have the nation believe that the Industrial Relations Act has destroyed fairness in industrial relations. Can this charge really be substantiated? I can imagine that Act being criticised for excessive complexity. I can imagine doubt being expressed as to whether its provisions will turn out to be effective. But by no stretch of the imagination can that Act be called an unfair piece of legislation. The original concept was nothing if not fair. It does not weaken the power of the unions in any reasonable aspirations. Throughout its nearly 170 clauses, it is riddled with appeals and safeguards to ensure scrupulous fairness. From my own very limited experience at the lower levels in industry, I have noted very little feeling of unfairness about this Act. So I submit that the allegation of unfairness must fail. Since its inception it has produced some new problems, but nothing remotely unfair. If it can be improved in the light of experience—and I was so glad to hear what the Prime Minister said about this
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—I am quite sure that the Government, and all of us in this House, will be ready to have another go at it.
LORD POPPLEWELL: My Lords, we accept the point of view of the noble Viscount, whom we all respect very much indeed, in saying that in his opinion the Industrial Relations Act is not unfair. In view of the fact that the vast majority of the trade union movement feel that this Act is grossly unfair because of the serious problems of inflation which the country now faces, would the noble Viscount, Lord Amory, agree that as an experiment it might be worth postponing completely the operation of this measure in order to win the good will of all sides in solving this difficulty?
VISCOUNT AMORY: My Lords, I am always ready to make some concession in order to secure goodwill. But the difficulty is that I am not convinced, in spite of everything that has been said by trade union representatives, that there is anything unfair in this Act. I shall always be ready to listen to arguments and to discuss this matter and, if I can be persuaded that there is anything unfair, not simply something that may weaken a trade union power which in itself was unfair—that is a different thing—I should be prepared to go along with the noble Lord, Lord Popplewell. If the Act can be improved let us improve it. In the meantime, it is a carefully threshed-out piece of legislation to meet a need; it is a modern legal framework within which free bargaining can continue. Unless we find something better I submit that the Act should remain on the Statute Book.
I hope the unions will try to match the contribution which has been made by the C.B.I. in an attempt to deal with the problem of rising incomes. Perhaps in the short term threshold agreements may offer some advantage. I have never been keen on them because by their nature they contain some built-in element of inflation. But all schemes have some weaknesses and it seems to me that threshold agreements may in the short term fit the practical necessities of the situation. The Government, in discussions with the C.B.I. and the T.U.C., must be n prepared to make some contribution in mitigation of short-term price rises. The object of the Housing Finance Pill, which concentrates on direct subsidies to those

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who are most in need, is a very sound one. But if it is found that with the general rise in rents which would ensue a postponement of the Act's operation for a short period would be valuable in order to prevent any further sharp rises in the cost of living, then I should have thought that that was something which might be worth considering.
In conclusion, may I say that I remember an article written by Mr. Samuel Brittan in the Financial Times last February in which he said that every age accepts the doctrines evolved to deal with the previous one and neglects the message most relevant to its own time? There is always some truth in that, but to-day without any question internal inflation remains our crucial national problem. It can be solved only by the efforts of the whole nation pulling resolutely together in the same direction. In the present circumstances the right policy must surely be that which is most likely to mobilise a united national effort. That seems to me to call for the burying of a number of political hatchets; and, if one buries a hatchet, it is a good thing not to mark the spot. I hope that we shall give our enthusiastic and unqualified support to policies that have as their primary aim the achievement of a combined national effort, regardless of Party.
5.25 p.m.
LORD BOWDEN: My Lords, we have heard from several of your Lordships already that inflation and industrial recession are inextricably associated. It is important to begin by emphasising that this is true. For many years there has been a process of inflation which has passed almost unnoticed. I refer to the tremendous investment that has been made in all kinds of things such as paintings and ancient silver. Anything that could have been bought and sold has been used as a medium of speculation during the last twenty years, in much the same way as General Motors stock was used in America until 1928. The speculation to which I have referred has come about in the last few years. It has been dramatic and has drawn our attention to a trend as nothing else could possibly have done, but it is only the culmination of a trend that has been going on since the end of the war. It is extremely important to realise that we have been engaged in much the same kind of speculation as
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preceded the crash in America in 1929, except that instead of speculation in scrip and General Motors stock we have been speculating in other things the price of which could be manipulated and would surely rise.
I come from a part of England in which the recession has never gone away. In the North-West of England housing is bad. We heard in a debate in your Lordships' House a year ago evidence that the amount of derelict land in Lancashire is higher than it is anywhere else in England. It is only too evident that the trade which made England great at one time is leaving Lancashire and that all the industries upon which for so many years our national survival depended are in a state of growing anxiety and depression. From 1961 to 1968 75,000 jobs disappeared from the North-West. In the single year from February, 1971, to February, 1972, 22,000 more people became unemployed. It is difficult to know which industry to emphasise. The textile trade is still suffering very acutely, particularly because of the increased imports of cheap cloth from overseas countries, but other trades have also suffered acutely.
I can remember a time when the trains of the underdeveloped world—Africa, South America and so on—were hauled by locomotive engines which had been made in Manchester. The factory in which they were made has been closed and the site is now being used for a housing estate. There has been a total collapse of what was one of our greatest industries. Much of the machine tool trade upon which in the end the whole of our industrial productivity depends was once concentrated in Manchester. Twenty years ago there were 25,000 people in the trade. By next September the number will have dropped to 500. This is a spectacular decline in an industry of enormous importance. There is no factory in England to-day in which a really large lathe can be made. We have lost the power to make the machines which make our factories possible.
Last week there was a great exhibition of the machine tool trade in Olympia. I hope that some of your Lordships were there. I went to it myself. It was an extraordinary demonstration of mechanical ingenuity, skill and enterprise. The trade has suffered more acutely than any

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other in the country from the recession of the last few years, which has been made almost inevitable by the attempts which the Government were making to try to stop the otherwise inevitable inflation. The great complex in Trafford Park, which used to be the proudest and probably most famous factory in Europe, had 25,000 employees in it ten years ago. The number has now declined to 6,000 or 7,000, and it is still going down. The research department there, which had 1,000 people in it, is down to a few hundred to-day. The place has lost its morale; it has lost its purpose; it may soon disappear.
My Lords, these are the contemporary facts of life as I see it in Manchester, and they give us furiously to worry not only about inflation but about the effects of remedies which purport to cure it but in fact cause a far more serious disease—that is to say, the disappearance of the industry upon which our prosperity depends and which, were it successful and prosperous, would undoubtedly prevent inflation from occurring at all. This is a curious phenomenon. We are attempting to restrict inflation, and thereby we seem to be destroying the industry upon which we depend far more than we depend upon the actual value of the money we have in our pockets. It is the goods we need; it is the manufacturers we need. We are losing the industries upon which we depend—and in the North-West, at least, far too many people seem to be becoming prosperous because the price of land in Wilmslow is rising so fast. This is not a stable situation; and it is not one which can long endure or is even in the remotest degree tolerable. It is perfectly natural that working men, seeing the fortunes that are being made by speculators in property, and in other things, should resent so bitterly that they themselves are not as prosperous as they should be and that the means of their livelihood are being destroyed by the remedies we take to prevent inflation from getting worse.
These are very serious things, my Lords, and I stress the fact that, as a country, we must emphasise the importance of our manufacture and the opportunities that young people will have. And, let us face it, my Lords: we are trying to create a world in which the young can grow up with confidence.
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What are they to do? Where are the young people to go? Where are our graduates to go? Where are the graduate engineers to go, from whom so much is expected and upon whose success so much depends? This is not the time to speak at length upon the problems of graduate unemployment, but I would remind your Lordships that something like 8 or 9 per cent. of all the people who graduated last summer were still unemployed last Christmas. I expect the situation will be worse this year.
Not only is there a considerable amount of unemployment, but the pattern of employment itself is changing dramatically. I think it is a sign of the times that I should be able to tell your Lordships that the three largest firms of chartered accountants in this country—Peat Marwick & Mitchell; Price Waterhouse; and Coopers—recruited more graduates than the two largest and most important of all our scientifically based firms—namely, I.C.I. and I.C.L.—put together. There cannot be a more extraordinary commentary on the way in which our country is growing than that we should be recruiting more accountants than we should be recruiting chemists, electrical engineers and mathematicians into these two great firms, in whose hands so much of the technology of the country rests.
LORD SHACKLETON: My Lords, may I interrupt my noble friend? It is a striking fact that he has just told us. Has he the figures for I.C.I.?—because I always understood I.C.I. to be ahead of almost everybody in this country in the matter of recruitment of graduates.
LORD BOWDEN: I can quote last year's figures from memory, my Lords. For several years I.C.I. recruited between 580 and 700 graduates, and I.C.L. recruited 493 last year. This year, I.C.I. recruited about 130 and I.C.L. about 50. Each of the three firms of accountants recruited about 110. So in fact I.C.I. and I.C.L. together recruited very many fewer graduates than three large firms of chartered accountants. If in fact British industry collapses through lack of modern technology, we shall at least know in detail what is happening to the financial books of the companies as they go down.
Now, my Lords, there are many things in which accountants are involved, and

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I should like to mention one of them which has not been referred to so far this afternoon. That is the extraordinary effect of inflation on the system of book-keeping which a firm must use if prices are constantly rising. This is a matter of enormous complexity, and I will content myself with saying merely that unless the books are properly cast it is entirely possible for a firm to distribute its capital as dividends because it constantly values its assets more and more highly in a manner which is prescribed by law. This problem will not be solved unless and until the fiscal policy of the Government is specifically designed to cope with the inevitable consequences to the books of a company of a steady rise in the book value of fixed assets and a constant amount of stock and work in progress.
We have seen over a period of twenty years that the relative position of this country, in terms of its national product, has declined with respect to other countries, both those inside and those outside the Common Market. We have seen, for example, that the national productivity of Sweden, outside the Common Market, the national productivity of Germany, inside the Common Market, and the national productivity of Japan have all enormously surpassed our own. For many years I have compared as best I could the way in which we have spent our money. We are spending less money on roads per head of the population than most of the countries of Western Europe. We are spending less on all sorts of things which one would imagine to be crucially important to the success of the community. But there is in the Budget one particular item on which we have consistently spent more than other countries, and this, I believe, may be significant. In 1953, the noble Earl, Lord Avon, who was then Prime Minister, negotiated in Germany to pay a major contribution towards the cost of the Rhine Army. For a period of many years—almost 15 years, I think—as long as we maintained both a Rhine Army and our presence East of Suez, we were spending across the exchanges a sum of money of the order of £400 million or £500 million. It is worth remarking that this was equal at the time to the total value of the export sales of the British motor car industry, which for so many years has
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been our single largest earner of foreign exchange.
To-day we are no longer East of Suez. Last year, the total cost of all our overseas commitments for the Armed Forces was of the order of £300 million, of which the Rhine Army cost about a half. The total value of the export of motor cars last year was about £500 million, so at last we have reached the stage at which the motor-car trade itself can pay for the cost of the Rhine Army and all the other military commitments abroad. But we have been paying this money across the exchanges for nearly 25 years. and it is very difficult to compute what it has really done for the economy of this country and for the economy of Germany. Germany, for the first time since the reign of Henry VIII, has a higher gross national product per man than we have, and the change has all come about in the last 25 years. One must ask oneself very anxiously whether this is one of the primary sources of their relative prosperity and our relative poverty. To the extent that we have been obliged from time to time to engage in various processes designed deliberately to cut down demand in order to save foreign exchange, it is evident that this enormous contribution we have made across the exchanges may have had an importance far greater than the actual sum itself might suggest. It is a very dramatic and remarkable thing to do, to devote almost the whole of the current production of our largest single industry to one particularly significant item, the Rhine Army and our other military overseas commitments. It is so much greater a contribution than that of any other country in Europe. Europe has benefited, at our expense, throughout the whole of this time.
It is also true to say, when we look at the expenditure on research which this Government undertake, and categorise it according to the purposes for which it is intended, we find that we are spending a larger proportion of our total research Budget on matters connected with defence than any other country in Europe. It is evident that if Germany and France are going to trade with Europe, we are aiming to defend it. It may be that this is right; but we must be aware of the price that we are paying.

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Finally, my Lords, I come to the events that we must face in the very near future. We are going, so we are told, to join the Common Market. The cost across the exchanges for supporting the Common Agricultural Policy has never been accurately assessed by anybody, but I believe it to be of the order of £500 million or £600 million a year. I have never heard a definitive statement which is not substantially in agreement with that figure. This suggests that the total output of the motor car trade, including both cars and spare parts, which contribute altogether about £900 million towards our balance of payments will be pre-empted by paying the costs of the Common Market and the costs of our military commitments and expenditure across the exchanges.
Had we been able to join a common customs union, as in 1959 we hoped to do (and as we should have done had it not been for General de Gaulle), we could take every car that we sell abroad and give it to a French farmer and still be in pocket. We are committing ourselves to enormous payments across the exchanges, payments which tax the economy of the country more than anything else. We have to sell some vendible commodity to compete with the rest of the world in a market which is resistant, and growing resistant, to all the attempts to do so. We are going to be in a position in which almost the entire efforts of our biggest industry will hardly suffice to pay for the cost of the entry into the Market. I hope we realise the price we are paying. I hope that someone believes that the political advantage which will accrue will be worth it—because unless it is, we cannot afford it, and inevitably the decline in British trade which has been going on for 20 years and which is largely attributable to costs incurred across the exchanges will become worse rather than better.
5.45 p.m.
THE EARL OF DUDLEY: My Lords, it is not often that I find myself able to agree with a speaker from the Benches opposite. I do not intend to follow the noble Lord, Lord Bowden, down the path of regional development and employment which was a most valuable contribution to this debate, but I agree with him that the very large and substantial payments
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that we have to make every year, particularly for defence, across the exchanges, is one of the major factors leading to the balance-of-payments difficulties with which this country is faced from time to time. This has been the experience of previous Governments as well as of this one. It is nothing new; but I agree with the noble Lord that it is a constant menace to our balance of payments and to the pound.
I had better crave the indulgence of the noble Lord, Lord Beswick, while I am still able to get it. I must apologise to him, to the noble and learned Lord the Lord Chancellor and to the noble Lord, Lord Shackleton, for I have for some time been committed to an engagement later this afternoon and will be unable to hear the winding-up speeches.
If I have to give offence to one party or another, I feel it right that the offence should be given to those who have the first claim in point of time. I had hoped that the noble Lord, Lord Beswick (who has just left us), would be constructive. Goodness knows! that is the attitude we need from the Opposition. But the noble Lord, like a garden roller, levelled everything in sight; private patients, professional parents, company chairmen, M. Pompidou, foreign motor cars and, of course, the Government! Having swept this clutter on to the scrapheap, it is hard to detect whether he left anything of value in its place. Happily, the wasteland left behind him was amply landscaped by the noble Earl the Lord Privy Seal. Noble Lords were left with a more hopeful view of the future than that outlined by the noble Lord, Lord Beswick.
If I may continue the analogy, I suggest that the noble Baroness, Lady Seear, in an otherwise very thoughtful speech, went wrong when she put her hand to the plough. I am not personally a large landowner, but I would remind the noble Baroness that most large estates are an integral part of the farming industry and as such should be able to borrow on the most favourable terms. I do not know one owner of a large estate who would not gladly lay down his responsibilities as a proprietor and change his staffless castle for a labour saving cottage.
One thought very much in my mind last winter, and doubtless in the minds of many noble Lords, was the helpless-

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ness of the Government in the face of concerted industrial action. If a whole section of the community refuses to abide by the law what can the Government do?—Call out the troops? Most of them are in Northern Ireland or abroad. I cannot visualise a situation in which the army would be used as an instrument of industrial relations policy. If a general strike occurred, should the Government look to the white-collar workers or the managers to take on at the workbench or at the coalface or on the footplate? They may not co-operate. There are not enough of them, anyway, and not all of them have the requisite skills. The industrial scene is very different from 1926 and a much higher degree of technology is needed to keep the wheels of industry turning, a degree of technology well beyond the capabilities of amateur volunteers. The consequences of pushing confrontation too far could be calamitous: at best, bankruptcy; at worse, civil strife. Small wonder that successive Governments time and again draw back from the brink. These considerations must influence policy and must loom large in Ministers' minds when considering the Options open to them in their present difficulties.
During the past year, relations between the Government and the T.U.C. have been unusually brittle. Industrial relations in both the public and private sectors were embittered by the miners' strike, the railwaymen's "go-slow" and the dockers' dispute. There were serious consequences. The Government's incomes policy, which seems to me to have been a policy not of confrontation but of persuasion, took a beating. This undermined confidence in sterling at a time when our reserves were still strong and caused the recent flight from the pound. With hindsight, the parity of 2.60 dollars was unrealistic and untenable and should not have been accepted even under pressure. Now it has been abandoned in favour of the floating pound. Here I agree with the noble Lord, Lord Robbins. I am not one of those who view with equanimity the decision to float or the continuing fall in the pound's exchange values. I believe the pound will remain weak until there is a workable agreement on prices and incomes or there is increased output or a freeze. Noble Lords must welcome the Prime Minister's initia-
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tive to conciliate the T.U.C. and brighten the climate.
My Lords, all parties to the negotiations should strive for their success. The T.U.C. have a duty to their country as well as to their membership. It really is high time that they laid aside their policy of non-co-operation with the Government and of political antagonism. Ideally, politics should be taken out of industrial relations so far as possible, but the interaction between the two is a fact of our national life and we have to learn to live with it, undesirable though it may be. Over the past year, the intransigence of labour and of its industrial and political representatives has known no bounds and has brought us at least once very near to a complete breakdown of our social fabric. I do not believe that the majority of the British people are deceived by these antics. The T.U.C. and their supporters among the Opposition will do immeasurable harm to themselves unless they respond to the new initiative with concessions and with constructive and reasonable proposals.
The T.U.C.'s policy of non-co-operation was at the heart of the failure of the Government to maintain the value of the pound and so an improvement in industrial relations is essential for safeguarding the value of money. Noble Lords opposite must not assume that by saying this I support the Motion of the noble Lord, Lord Beswick. The wording is, of course, plausible. It charges the Government with having failed to maintain the value of money; it refers to the consequences alleged to flow from that failure; to the effects on employment, on growth and on morale. But I hold no brief for the Motion—indeed I utterly reject it, because, as I have said, it follows upon a massive and sustained campaign by the right honourable friends of the noble Lord opposite, and many of their comrades, which has undermined the Government's efforts to keep inflationary pressures under control.
LORD SHACKLETON: My Lords. may I interrupt the noble Earl? If I may say so, I think it is contrary to the custom of this House for a noble Lord to make a speech such as the noble Earl is making and then not be present to hear the later speeches, even though

1407
he apologises for not being able to do so.
THE EARL or DUDLEY: My Lords, if it is contrary to the custom of the House, I will, of course, be here at whatever peril to my ease of mind.
LORD SHACKLETON: My Lords, the alternative is for the noble Earl to make less provocative remarks.
THE EARL OF DUDLEY: My Lords, I would prefer to think that they are appropriate rather than provocative. One thing I shall spare noble Lords opposite. I shall not take them to task for their past mismanagement; too much water has passed under the bridge. But in view of the Government's reluctance to legislate on prices and incomes, because of their patience under great provocation, it is illogical for noble Lords opposite to point the finger of scorn at the Government's economic policy. I understand that Ministers are still of a mind to find voluntary solutions for prices and incomes rather than to legislate. After their own experience, noble Lords opposite might also doubt the efficacy of a freeze. I admit that I am in two minds myself about whether the time has come for legislation.
I have made inquiries as to the success of the C.B.I. voluntary agreement on prices and I should like to enlarge on the remarks of the noble Viscount, Lord Amory. The facts seem to me to be of great significance and very little known. First, the agreement has been strictly adhered to by about 60 per cent. of industry and within that wide area increased costs have been largely absorbed by industry at considerable sacrifice and with great restraint and self-discipline, as is revealed by the C.B.I.'s monitoring arrangements. Secondly, the ripple effects have been felt throughout almost all of industry and is reflected in lower prices. The net effect has been to contribute well over 1 per cent., possibly nearer 2 per cent., of the reduction in the rise in the index of retail prices which has gone down over the past year as we have heard from just over 13 per cent. to under 7 per cent. In monetary terms this reduction could be of the order of £500 million.
My Lords, this restraint has been at the direct expense of the shareholding
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side of industry while the wage earning side has been exploiting its strength to gain as much as it can, aided and abetted by the friends and comrades of noble Lords opposite. It will be remarkable if, having already borne so much of the extra cost and in the absence of concessions from the T.U.C., the representatives of industry in the C.B.I. are able to see their way to renewing this agreement.
LORD SHACKLETON: Hear, hear!
THE EARL OF DUDLEY: In considering these voluntary arrangements, I listened with interest to the wise remarks of the noble Viscount, Lord Amory, and should like to remind him of his words when he spoke on Lord Beswick's Motion last year. His great experience in these matters led the noble Viscount to say:
"Not, my Lords, a wage freeze; I am not suggesting that. That is something very rigid which may be necessary in an emergency, but which really does not help you by itself along the road."—[OFFICIAL REPORT, 23/6/71; col. 909.]
The noble Viscount went himself rather further along the road to-day and, I think, received considerable support from your Lordships.
VISCOUNT AMORY: My Lords, if I may interrupt the noble Earl, what he said is perfectly correct, I have no doubt. But what I said to-day was that I did not myself believe in the value of a literal wage freeze; that is to say, an absolute freeze, unless for a very short period in order to work out the implementation of a policy already agreed on. Then I went on to envisage the necessity, perhaps, of other forms of control.
THE EARL OF DUDLEY: My Lords, I fully accept that the noble Viscount was putting the thought forward purely as a temporary expedient. I find myself somewhat in the position of a traveller in a railway train who, faced with a possible catastrophe or a fine of £25, wonders whether it is an emergency and whether to pull the communication cord. The C.B.I. are dead set against a statutory price freeze; the T.U.C. are bitterly opposed to a statutory wage freeze; the Government do not want to impose a prices and incomes freeze. But what else will convince the rest of the world that we mean business and are determined at all costs to reduce inflationary pressures? The Government will have

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to make substantial concessions to get a workable and credible agreement with the T.U.C. and may have to scrap parts of the Industrial Relations Act. Because of the need to improve industrial relations, a workable agreement would be worth the price, but the terms should be weighed very carefully against the alternative of a prices and incomes freeze, for a limited period only, to give time for more flexible long-term arrangements to be negotiated. If there is a freeze it must be across the board. Justice must be seen to be done and the sacrifices fairly shared.
Some noble Lords may say, "What about growth?" I have always understood that the aim of growth was to improve the real standard of living of the community. If growth can be achieved only at the expense of falling monetary values, then it seems to me that we must re-examine and re-assess the desirability of growth. I was rather surprised by the warm reception given in the Press and elsewhere to the Chancellor's order of priorities as between growth and stable exchange rates, because it seems to me that if you have an increase in the gross national product of the order of 5 per cent., which then becomes worth 7 per cent. less in terms of the raw materials or foodstuffs which the nation can buy with the addition to the G.N.P., this becomes rather a self-defeating exercise.
The Prime Minister has said that the stability of the pound, as of any currency, is threatened by large scale capital movements. I thought that the swap and other arrangements were designed to take care of this problem. But if its dimensions have outgrown the mechanics of dealing with it nationally, then surely this must provide a strong argument for accelerating the pace of a European monetary union. A European monetary unit and a strong integrated European monetary and economic system would constitute a more acceptable depository for the flow of international funds and a more powerful defence against their ebb. Not all noble Lords will relish this argument, nor the corollory that a more closely united and unified Europe would be helpful for industrial relations. Although trade unionism would be likely to Europeanise itself—because Europe will he multi-lingual and highly developed
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regionally—industrial relations would tend to be regarded as a practical rather than an emotional or emotive problem.
Take the heat out of industrial relations and you will go a long way towards restoring business confidence. It is this which, in the long run, governs the level of employment, which dictates the percentage utilisation of productive capacity and the additions to it. And it is with the effect on confidence in mind that I must finally—I do not like using the word, but I am going to use it—castigate the Government on one aspect of their most recent measures to float the pound. I refer to the exchange controls imposed upon the sterling area. This is one freeze that is not necessary. Social justice does not demand it, and if short-term expediency required that the floating pound be accompanied by reduced portfolio investments within the scheduled territories, then this could have been achieved, as before, by voluntary agreement, which worked successfully in the past. These sort of measures, imposed hastily and without any reasoned explanation for them, undoubtedly impair business confidence, especially among the banking community and financial institutions, who make such a massive contribution by way of invisible exports to our balance of payments.
I have seen it suggested that capital movements and portfolio investments within the sterling area are not compatible with entry into Europe. But for heaven's sake, why not? The European Economic Community is not a blockaded Napoleonic continental system. There is nothing incompatible with the Treaty of Rome, its regulations and directives, in the free movement of capital or portfolio investment in other countries outside the community. So what logic has led to this potentially damaging decision? I should like to know. I am sure noble Lords would like to know; but, as I shall not be here for the noble and learned Lord the Lord Chancellor's speech, I shall not be so impertinent as to suggest that the noble and learned Lord give the House some information.
Finally, may I say this to my noble friends. The argument whether wages put up prices or whether price rises encourage wage demands is rather like that about the chicken and the egg. But there

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are two sensitive areas which greatly influence the scale of wage demands—housing and food. These are very difficult problems. Market forces are distorted by Government policy. The availability of land for housing conflicts with environmental priorities, and food prices, now benefiting from reductions and from the 5 per cent. restraint exercised by food processors, are likely to rise again following entry into the European Community. The Government's incomes policy must be helpful about housing and food irrespective of costs. I look to Ministers to devise methods compatible with E.E.C. membership whereby help can be given not only to those in need but to the large body of wage earners generally. Satisfaction in these areas is one of the main criteria for the unified society to which the noble Lord referred in his Motion, and to which we on these Benches consider ourselves pledged.
6.4 p.m.
LORD BOOTHBY: My Lords, to my surprise, I agree with almost everything that the noble Earl, Lord Dudley, has said. I agree with him about the sterling area and in deploring the word, "confrontation". For the last few weeks and even months there has been all the time in the Press the use of the word "confrontation" in regard to the relations between the Government and the trade unions. That is most unfortunate, because it can only end in disaster. The trade unions have already proved that they are too powerful to be confronted. They must be co-operated with, and my plea on the long term is for co-operation and not confrontation.
But there is a deep, long-term problem here. Beneath the glittering apparatus of modern science and industry there remains a human problem as yet unsolved. Far too many of the workers in this country, in other industrial countries in Western Europe and in the United States (but less so, there), feel that they are powerless cogs in a gigantic machine which is growing all the time. The man who first saw this problem was Walther Rathenau, who was Foreign Minister of Germany in 1922, and who was assassinated. He saw the whole problem in two small but remarkable books, one called In Days to Come and the other The
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New Economy. He was a very remarkable man. Had he lived, there would have been no Second World War, but he was killed. He saw it all. He saw this human problem quite clearly in a way that only a German could do. He was a multi-millionaire tycoon, and yet he really saw the need for a classless society in which the workers had real responsibility.
In one of the most remarkable essays he ever wrote, the late John Strachey who was a great friend of mine, in his last book called The Strangled Cry, wrote a passage about Rathenau which deserves looking up. Indeed, Rathenau himself deserves looking up. He was the original exponent of rationalisation. He rationalised German industry after the First World War. He was a director of about 83 companies. He said:
"The modern State consists of a multiplicity of semi-autonomous States enjoying a considerable measure of independence, but individually and collectively stunted because they lack a foundation in the. soil of the people. The industrial plant has become a basic economic unit, but is not yet an integrated social institution, based either on property rights or on any established democratic system."
He also said:
"Workers must be given status, function and personal responsibility."
That has not yet been done. This is a long-term problem which will take a long time to solve. With all these disputes and arguments that are going on about wages, earnings and incomes, I feel that the workers still do not feel that they have a sense of personal responsibility in the industries in which they are concerned; that their own personal interests are not really involved in the prosperity of the industry in which they are engaged. This is a long-term problem which will have to be worked out before we get it right.
I am going to be very brief, because this is a long debate and there are many speakers, but there is one thing I want to say. When I was Rector of the University of St. Andrews in 1959, I delivered an address to the Conference of Management Relations which held its annual meeting there. I said that we ought then to set up a national economic council (not too large) comprising the Government, the C.B.I. and the Trades Union Congress, to give a purposeful, strategic

1413
direction to our economic policy. In other words, a national prices and incomes policy, subject to the ultimate control of Parliament, with statutory powers as necessary. It is an enormous pity that we not only failed to do that but dismantled—this Government dismantled—whatever national councils we had. That was an enormous mistake. It is a mistake that we have no council of industry in existence in this country consisting of the C.B.I., the Government and the Trades Union Congress which could meet constantly and make reports to Parliament, with statutory powers given to them as necessary, and devise a prices and incomes policy, always subject to ultimate Parliamentary control. I beg the Government to reconsider their decision to abolish all these "Neddies" and various committees that have been set up, and to reconstitute on a new basis, with adequate statutory powers, a true National Economic Council containing representatives of the Trades Union Congress, the C.B.I. and the Government.
Psychology enters into this subject to a certain extent. I cannot help feeling that this was an unfortunate moment to introduce the Boyle proposals for the increase of salaries and pensions for Members of Parliament and at the same time the heads of nationalised industries to what appear to the public to be astronomical heights. They are not astronomical, of course, because taxation makes nonsense of them; but the public think they are. The workers read the papers and see that Mr. So and So, Sir Somebody Else or Lord Somebody Else is getting £30,000 a year; and they think he is getting £30,000 a year, when he is probably only getting about £4,000. They do not realise this. Psychologically it is all wrong. It was not the moment to introduce these huge increases in salaries and pensions for Members of Parliament or anybody else. I have good reason to complain about this because I get no pension of any kind and this was not altered by the Boyle proposals.
There is a second point I want to make and it is this. The land and property racket in this country should be smashed.
LORD DAVIES or LEEK: Yes, smashed to smithereens.
LORD BOOTHBY: It is becoming absolutely outrageous. This will require legislation, and I was delighted that the Minister responsible hinted that legislation would be carried through if necessary. It is becoming an absolute outrage. The only thing to do is to pass legislation to stop this racket, and then to build more houses. Sir Oswald Mosley, of all people, described it the other day as
"an operation of war to build more houses for the people of this country".
Not for the first time in his life Sir Oswald Mosley was right. I am not suggesting that he should be recalled to the Government of this country, but I do say that sometimes he is quite sensible.
I come now to my last point. On March 12, 1969, I ventured to address an Unstarred Question to your Lordship's House, I suggested then that the price of gold should be doubled. I was brushed aside contemptuously by the noble Lord, Lord Beswick, who said that we wanted to get gold out of our system altogether; that it had no part to play in the future international currency system, and the less that we heard or saw of gold the better. I can tell the noble Lord that since then I have bought twelve gold sovereigns, and I have not regretted it. He said that the price of gold was going to fall, and I said that it was going to rise: in fact it has doubled. But who has gained from it?
SEVERAL NOBLE LORDS: You have.
LORD BOOTHBY: I have gained about £10. But the United States have gained absolutely nothing. If they had doubled the monetary price of gold then there would have been no world currency crisis and we should not have had a currency crisis in Europe: all our reserves would have been doubled overnight. The people who might have gained, I agree, would have been South Africa and the Soviet Union. Why not? If you bring greater prosperity to these two countries you will probably be bringing greater political alleviation and less political tyranny. I cannot, for the life of me, see why, with the gold reserves that they still hold, the monetary price of gold is not raised to the level of at least 70 and probably 80 dollars an ounce. The free price of gold has practically risen to that amount.
LORD DAVIES OF LEEK: My Lords, it is 60.
LORD BOOTHBY: It is over 60. It is no good pretending that gold is out of the picture. The public all over the world trust gold. It imposes some sort of discipline on the kind of inflation that we face to-day. If currencies are made convertible into gold at the right price, at a realistic level, then there is some kind of discipline. There is no discipline of any kind at the moment. What did we do last week? We devalued the pound effectively by about 7 per cent. by saying that we would float against nothing, and make it convertible against nothing. That, apart from destroying the sterling area, has done no good to us or anybody else; and has made our entry into the Common Market more difficult. I am well accustomed to this, my Lords, because I have been watching the Treasury (I know that the noble Lord, Lord Thorneycroft, is anxious to spring to his feet very soon to defend the Treasury) for nearly 50 years. I have seen them reel from one disaster to another. I have seen them make one crashing mistake after another, beginning with the return to the gold standard at the pre-war parity of exchange—which was the wrong parity of exchange—in 1925. That led to massive unemployment in this country, to a prolonged coal stoppage and, incidentally, the General Strike.
The Treasury can never be counted on to do the right thing. I derive a certain moral strength and courage from that fact, because I feel that if this country could survive the Treasury for the last 45 years, it must have the most tremendous underlying resilience of courage and strength. It has had to fight the Treasury for 45 years, and, my God! it has fought it. It has not completely won through, because nobody can win through against the Treasury; but it has survived. That, as I say, gives me a tremendous inner courage. I do not think I have anything to add to that remark, except that three days ago I had a letter from one of our leading merchant bankers saying:
"I see that you have attacked the Treasury again, and it reminds me of a speech you made about seven or eight years ago. How right you were then. Can I have a copy of it?"
I wrote back to say:
"I am very sorry but it is difficult to answer your letter, because I have been attacking the Treasury for 45 years without cessation. I
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must have made about 170 speeches on the subject, and I do not know the particular one to which you refer."
I feel that the Treasury must now, before the meeting of the International Monetary Fund in September, press upon the American Treasury the desirability of raising the monetary price of gold, which would relieve the pressure on all of us. I feel that they ought to push for that. I felt three years ago that it would be the right thing to do, and I feel more strongly than ever that it would be the right thing to do to-day.
LORD BESWICK: My Lords, since the noble Lord attacked me so bitterly, and said that I referred to his speech with contempt, I think I ought to call his attention to the fact that the most telling part of my speech was a quotation from a speech which the noble Lord made attacking our return to the gold standard.
LORD BOOTHBY: No, my Lords. I attacked our return to the gold standard in 1925 only because it was at the wrong parity of exchange. It was a ludicrous parity and did not make sense. I asked then, and I ask now, for a realistic price for gold. I say to my noble friend that he will never get away from gold, however hard he tries, and he had better go out and buy a few gold sovereigns as quickly as possible, because it is the best investment one can get to-day.
6.20 p.m.
LORD THORNEYCROFT: My Lords, it is always a pleasure to follow the noble Lord, Lord Boothby, and I think that his emphasis on the factor of co-operation is a sentiment which has attracted the good will of both sides of your Lordships' House. If I had to name one other factor that I would just at this moment and in the months ahead place higher in this country, it would be leadership. Leadership is perhaps necessary if we are to get the co-operation that is necessary.
LORD BOOTHBY: Hear, hear!
LORD THORNEYCROFT: It is customary on these occasions—and indeed polite—to thank the mover of the Motion for the opportunity of having a debate. This I certainly do. The noble Lord has chosen a difficult subject: the erosion of money values. We are all against the

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erosion of money values, just as we are all against sin; but most of us—and I except the Bench of Bishops—tend to practise sin while opposing it; and it is the same with money values.
I cast no reflection on the quality of the earlier speeches, but for me the debate really started with the speech of the noble Lord, Lord Robbins. I thought it was a remarkably telling and pertinent analysis of the problems confronting this country. I thought that he struck the note of gravity with which we ought to be approaching this subject at this time, and if I had to ask one thing above all others of the noble and learned Lord the Lord Chancellor when he replies to this debate, it is that he will reflect the Government's real and deep anxiety of the scene which confronts us at this moment. We have a floating pound: no doubt it was the right decision in the circumstances in which we were placed; but let no one under-estimate the perils which face not only us but our friends in a situation of uncertain currencies, with the pressures that are confronting us, and the obstacles which have been created for the policies which all of us are seeking to pursue.
I am no great lover of contemporary political biography. I always think that the life of one man—any man—is too slender a theme on which to hang the history of his times; and if one looks hack at the events of one's own life I think the most one can do is to choose events as a series of pegs upon which to hang a few random thoughts. I did once resign on the issue of the value of money.
SEVERAL NOBLE LORDS: Hear, hear!
LORD THORNEYCROFT: The reasons for which I did so are now quite irrelevant, and whether I was right or wrong is quite irrelevant. But what is relevant to-day is that the emotions, the passions, the jealousies, the stresses and the strains remain very much the same to-day as they were then, and so do the difficulties of facing these issues. Then, as now, a minority—and, my Lords, I still believe that perhaps it is a minority though I wish it were not—thinks that the erosion of money values matters. A minority—perhaps a powerful and, I hope, a growing minority—views, with something of the distaste which Lord Robbins expressed, the injury to the weakest sections of the community which
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flows from an inflation of this character. A minority—perhaps an influential ono—sees the real danger to the future of a great country if we allow the value of our money constantly to be eroded. But, my Lords, it is not a very great minority and it will require a tremendous effort before any Government can really convince the people of this country that the value of money is in fact the first priority in the policies which they are pursuing. I have been a Member of Governments and I think this will be the first Government which have ever really convinced the country that that was a first priority.
The noble Lord, Lord Beswick, moved his Motion and produced his arguments with that elegance and in the rational manner to which we are accustomed; but no one really comes to a debate of this kind with clean hands. It is difficult to think of any factor which promotes inflation which he or his Party have not at some time supported, or of any measure to dampen it which they have not generally opposed. That goes for wage settlements, for the rule of law in industrial relations, for most of the social reform policies which have been introduced. There was a moment under the Labour Government when I thought that the Labour Party were going to make a supreme effort to get control of this situation: and that was at the moment when Mr. Wilson with, let me say, immense political courage, and with Mrs. Castle at the Department of Employment, decided to go to the root of the trade union problem. Here at last, bravely and obviously, was a commanding height of the economy, and Mr. Wilson marched the Party up and then he marched them down. That was one of the saddest episodes in British political history in recent times. For my part, I had rather he had not marched them up than to have taken them there and then shown himself in full retreat.
I have many weaknesses, and one of them is a personal affection for people on the extreme Left in politics. I have known Mrs. Castle and Michael Foot, for example, all my life and have a great personal regard for them. But if ever there was a moment when a Minister should have resigned, that was it. She could have resigned then. She could, without attacking either her Leader or her Party or, for Heaven's sake! even

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supporting the Tory Party, have struck one blow for what was right in political life. It seems to me it was that failure at that moment of the Labour Party to do the one thing which the British public had always looked to the Labour Party to do—to be able to take control of a large section of the society with which they were in the closest possible contact—from which have stemmed, I think, many subsequent disasters.
What is wrong here and what confronts us now is not, I think, simply the level of wages, because wages are very high in many countries. It is a real doubt in the minds of those who are watching us as to where power really lies. It is a real doubt as to whether the Government—any Government—have sufficient control of the situation to be able to grapple it. It is a judgment: that is what this value of the currency really is. It is a judgment from outside of what inflation levels are going to be. There are many factors in it. There is the money supply which the noble Lord, Lord Robbins, spoke about—and I will not repeat what has been said—which has increased by 23 per cent. But, above all, there are two crushing defeats of the Government by two unions: those of the coal miners and the railwaymen. It is not the money that is paid; but it is very difficult for a Government to remain credible in this field if they suffer defeats of that character. It seems to me that the Government are now faced with some kind of moment of truth. They must either demonstrate an ability to negotiate (Heaven knows! I am not being critical here, because I do not think any other Ministry or Minister has succeeded in doing it), which does not seem to be very obviously present in the Ministry of Employment and Productivity, or they must have some kind of a wages policy.
One noble Lord after another in recent months has begged the Government not to go on saying that they will not have a wages and incomes policy. I would ask the noble and learned Lord the Lord Chancellor at least not to say again that they are not going to have a wages and incomes policy, because it is becoming so obvious to almost everyone outside the Government that we are going to have a wages and incomes policy,
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although for decency's sake we may call it something else. But it is going to happen and it is going to be forced upon us by the pressure of events outside this country, let alone anything that comes inside.
I do not speak for the Confederation of British Industry. I know that the C.B.I. will do its best. I know that industrialists will stagger on somehow with restraint. They will do virtually anything to help in this situation. But we cannot expect industrialists somehow to run a prices policy on their own for ever—it would be a wholly unreasonable and an impracticable course to take—any more than we can ask the T.U.C. to fix wages. It is not for lack of good will. Mr. Feather is one of the most patriotic and sensible and kindly men there are in this country, and he would do anything he could to help, but he has not the power to fix the wages of this country. And if you put the C.B.I. and the T.U.C. together, that is not a solution to our problem. What rather worries me sometimes is the thought that there is a kind of atmosphere that it is all going to be all right so long as you get the T.U.C. and the C.B.I. to talk together. My Lords, it is not all right. This is only a smokescreen—it may be a very respectable smokescreen, but it is only a smokescreen. And it would be a very dangerous one if behind that smokescreen the Government were to use the opportunity of pursuing a policy of inertia. So I would beg the noble and learned Lord the Lord Chancellor, when he replies, to look through the smoke and the haze, and to face the realities, of this situation.
That was done by the noble Lord, Lord Robbins, and, I observe, was done by the noble Lords, Lord Plowden and Lord Roberthall, who are not speaking in this debate. But both speak with great authority. Lord Roberthall was my own economic adviser when I was in the Treasury. Perhaps noble Lords will forgive me if I read just a short extract from a letter they wrote to The Times on June 27:
"It has become increasingly clear from 1947 onwards that we can only curb inflation and maintain high levels of employment if public opinion is in favour of this: and that public opinion in this area is powerless without a strong lead and resolute action from the Government itself. The essentials of a

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programme are what they have always been. First, a statement of what the Government wants, in the form of a norm for wage and price increases: second, some machinery for dealing with obvious hard cases, since public opinion will not for long support a policy which is thought to be clearly unfair: and third, a willingness to take resolute action, however inconvenient, against those who refuse to stick to the rules."
That sums up the case of those who stand for that kind of policy. Of course, there are dozens of different ways in which this issue can be approached. I am not going to bore the House—I have not the intellectual capacity—by outlining all the Hungarian solutions, and the rest. They are all bad solutions. Let us face it: they are all bad solutions, but they are better than having no solution and sitting there and doing nothing and hoping that somebody else might conceivably do it for us.
The Government have great things to their credit. The basic state of the economy is still sound. The balance of payments is in balance. The Industrial Relations Act is on the Statute Book, and will in the long run prove of great advantage. The average settlements are not as high as these great, sensational ones would lead one to suppose. Productivity is rising. We are moving into Europe. We have very substantial reserves. We have a fine record in taxation policy, and the rest. This is a country of which anyone could be proud, whose currency should be standing high to-day. But it will not stand high so long as men outside this country have no real faith in the capacity, or even, I am afraid, sometimes in the will, of the Government to tackle the principal problem that is within it. I know that in order to do that they may have to do (but they will not be the first Government to do it) some things which, on the whole, they have on previous occasions advised against. A public is very willing to forgive a Government for eating a few words. The public is not concerned with that. It is concerned with success and a willingness to tackle difficulties.
My Lords, I would say only this in conclusion. I realise that here in this country we are living in an age of great difficulty. We are moving from a low wage, low productivity, cheap food kind of world into a high wage, dear food and, I hope, high productivity kind of world, and change of that kind is immensely
1422
complicated for management and immensely painful to everybody including workers. I recognise that to win through you must show more than toughness; you must show a real understanding of the anxieties of men. I can understand the anxieties of dockers who see the whole basis of their industry being altered through technological changes, or of coal miners who, seeing the new forms of energy about them, are anxious to wring from their industry, or what is left of it, everything they can. These are not things one condemns; they are understandable. But in that moment of change within this country, outside the strong unions or even the great industries, there is an England that is really weary of double-talk; which is anxious to face the facts, and it has no other Government to turn to.
6.39 p.m.
BARONESS GAITSKELL: My Lords, it is a real pleasure to follow the noble Lord, Lord Thorneycroft, to-day because, although I do not agree with everything he has said, I agree with a surprising amount of it, and I found his speech absolutely stimulating. I intervene in support of the Motion of my noble friend Lord Beswick, who has made the usual outstanding speech we have come to expect from him—a summing-up of the Government's balance sheet on this, their second anniversary. I also listened carefully to the speech of the noble Earl, Lord Jellicoe, the Leader of the House, delivered with his customary grace. But I was saddened by the gulf in understanding between us.
I am not going to stray into the realm of what I always feel is science fiction—namely, international finance and monetary arrangements. It is difficult enough for me to find my way among the percentages and rates of increase; and here I must take issue with the noble Earl the Leader of the House about the rate of the rises in prices. It may be that the rate of the increase in prices was faster under the Labour Government in the last month of its office, but the prices were a good deal lower than they are to-day and therefore I take no comfort at all from the rates of increase which we have had.
The Government took office, dizzy with success after their victory in the Election, and immediately proceeded to divide the

1423
nation by wielding the big stick against the trade unions during the power strike, and then followed it up by introducing the Industrial Relations Bill. But the big stick is not a magic wand which waves away bitterness, and the trade unions got the message. The word "inflation" sounds like the beat of the tom-tom of the Tory Government, and all the effects of inflation on our economy have been put down to one cause, and one cause only—high wages. The Ministers have proclaimed this, and the Press have echoed it; it has reverberated round the country. But the really reprehensible statement about inflation was the follow-up statement that inflation hurts all of us and that no one gains from it. This of course is absolutely untrue and plain for all to see. Inflation hurts the lower income groups most, and the people with shares and property thrive on it. The only protection for workers against inflation is to demand higher wages. We watch powerless while speculators in housing are having a bonanza. This has been referred to time and again in this debate.
Mr. Peter Walker, the Secretary of State for the Environment has, rather smartly, drawn some of the fire from many of these speculators by underlining the scandal of empty Centre Point. As a matter of fact it was my noble friend Lady Phillips who started the ball rolling when she referred to Centre Point as "the most expensive dogs' home in Britain", and she deserves the credit. It is outrageous that Centre Point has remained empty for so long in a time of great housing shortage. It is inexplicable that no Government during the last six years has tried to deal with it by legislation. But there is something unsavoury about the way in which Mr. Harry Hyams has been made a scapegoat. He has done nothing illegal; in fact he has been operating according to the capitalist rules to which the Conservative Party are dedicated. There are many more friends of the Conservative Party who are behaving in a way which is socially harmful and undesirable.
As if rocketing food prices were not bad enough, the Government have followed the Industrial Relations Act with the Housing Finance Bill to increase the rents of council houses. The Bill is so
1424
biased that throughout it no mention is made of tax concessions for home owners. The more expensive the house, the greater the tax relief. The inequity of this is beginning to dawn on people. and the Press have taken it up. Patrick Hutber, in the Sunday Telegraph—a paper not notorious for its Socialist views—wrote last Sunday that the tax advantages of buying are so overwhelming that there is no choice at present. Patrick Hutber made a most constructive suggestion; that some part of rent payment should be allowed against tax and that fiscal incentives should be given to building for rent. In a time of acute housing shortage the Government's pressure on local authorities to sell council houses is a rather shabby discrimination against those who cannot afford to buy.
My Lords, there has been much talk and speculation in the Press about how we can cope with inflation. In the last few weeks this has crystallised, as many noble Lords have pointed out, in a kind of consensus that the Government must adopt a prices and incomes policy in the private sector—for the Government have of course, without baptising it, been operating an imperfect and unfair one in the public sector. The Government's fear of, and resistance to, public enterprise or intervention is rather old-fashioned. Where the Government have had a change of mind if not of heart, as in the case of Upper Clyde Shipbuilders and Rolls-Royce, they have earned our respect. Perhaps they will graduate so as to evaluate the social service aspect of the railways or the mines, and so not to regard subsidies as just charity. In his rather childish desire not to look like a Socialist the Prime Minister has scrapped any organisation established by or under the Labour Government. The Prices and Incomes Board under Mr. Aubrey Jones was thrown overboard. Of course it was not entirely successful, but it made a worthy beginning and would have been good to build upon. It had made a start at judging differentials. regarded as being at the root of our industrial problems.
Personally, my Lords, I believe that we need a shake-up, if not a revolution, in our judgment about differentials in employment, and some of our ideas about what doctors or dockers, sewerage men or surgeons, are worth may have to be

1425
changed in regard to the equity of these employments. But the Government go on exhorting and nagging workers to restrain their demands for large percentage wage increases. Yet, as has been pointed out several times this afternoon, the Boyle Committee have just come out with recommendations for enormous salary increases for judges, lawyers, chairmen of nationalised industries and top civil servants—increases of £2,500 and £2,000 a year for men already earning £20,000 and £25,000 a year. What sort of crazy world do we live in when we justify such increases because the percentage increase is lower for them than for railway men and miners? It is time for us to bring back Mr. Aubrey Jones, whose experience and knowledge of a prices and incomes policy we badly need.
In a short article in last Sunday's Observer Mr. Aubrey Jones suggested a troika, with management, unions and an independent conciliation body. Those who really understand industrial relations know that industrial peace can be achieved only by a continual dialogue between management and trade unions, and the responsibility is as heavy upon the trade unions as upon management. In their first two years in office the Government must have learned a great deal—in fact the first two years are usually a gruelling time for any Government. But it is high time the Government gave up electioneering. They have continued to electioneer for almost the whole of those two years, and it is now time they got down to the real problems of governing in the public interest.
LORD SHACKLETON: My Lords, before the noble Lord, Lord O'Neill starts, there has been only one Minister sitting on the Government Front Bench during my noble friend's speech, and he has not taken any notes. I had considered whether it might not be useful, as neither of the Ministers who are taking part in this debate are present—I realise the Lord Chancellor has to go and eat, but it is usual that one of the two Ministers who are winding up or speaking should be here—to move to report progress; but I know that Lord O'Neill of the Maine, like many others, has a plane to catch, so I will not delay except to say to the noble Lord, the Captain of the Yeoman of the Guard, that this is not really good
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enough from the point of view of either side of the House.
LORD DENHAM: My Lords, I know that everybody will appreciate what the noble Lord the Leader of the Opposition has said, and particularly that he understands that my noble and learned friend does need to retire. He was here until just a moment ago. I am afraid there has been a bit of an overlap, but it will not be a very long one.
LORD SHEPHERD: My Lords, there are a Minister of State and a Minister without Portfolio.
LORD DENHAM: Yes, my Lords, there will not be a very long gap.
LORD SHACKLETON: My Lords, let me make quite clear that there is absolutely no criticism of the noble and learned Lord the Lord Chancellor, quite apart from the fact that he has hay fever. He has been here very extensively, but there is the general matter of courtesy to the rest of the House. I am sure that the noble Lord, who has had enough trouble lately—and I will not add to it—has taken note of this point. It is usual, however, to have present a senior Minister during a major debate, and this is no reflection on the charm and intelligence of the present Front Bench occupant.
6.53 p.m.
LORD O'NEILL OF THE MAINE: My Lords, I am most grateful to my noble friend Lord Rhyl for informing me that he was not going to speak after all, and I am also most grateful to my noble friend, Lord Platt, for agreeing to allow me to replace him. To make up for this unexpected intrusion I will be very brief.
The words at the end of the Motion are the words which interest me: "the achievement of a unified society". Like many others I was greatly encouraged by the Prime Minister when, just after he had returned from the Palace and before he had gone through the front door at No. 10, he spoke about "one nation". And it is on this theme that I wish to say a few words tonight. May I add, in an aside, that I am encouraged to say what I had sketched out this morning after the excellent speeches of the noble Lords, Lord Robbins and Lord Thorneycroft.

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At the risk of wearying the House, may I say that I wrote a letter to The Times on February 22. I led with my sorrow that prices and incomes policy had been apparently abandoned, and I should like to read out the last two paragraphs of that letter, which admittedly were addressed not only to the Government but also to the Conservative Party. This is what I said on that occasion:
"It has been very fashionable in recent months to disparage the kind of consensus politics which Lord Butler adopted and which Mr. Gaitskell would have pursued had he survived to form a Government. But it has yet to be proved that the present system will succeed. Families watching television, from which source they must absorb most of their political knowledge, want to receive a message which they can understand. In the language of Madison Avenue, people want to be told that Conservatives care'. With few exceptions, however, Ministers have not been able to get this across to the public. Many people have been alienated by petty actions which have only saved comparatively small sums of money—for instance the abolition of some free school milk.
I do not believe that the Government can afford to lose the support of any further sections of the community. In my view it is time for the Government to reassess their attitude to the general public. Somehow or other people must be convinced that inflation really is a terrible danger for everyone, otherwise they will joyfully vote for it at the next Election. The politicians who appear to be concerned about ordinary people will get their votes. What we need to-day is Conservatism with a human face."
My Lords, it seems to me that two things follow from this train of thought. First, we must promote a policy which will unite rather than divide the British people. Secondly, having decided to pursue such a policy, we must be able to communicate with the public. No one can deny that to-day the country is in a serious position. Yet it is so easy, if we are playing Party politics, for some members of the Labour Party to rejoice at the Government's failures and for some members of the Conservative Party to rejoice at the obvious cracks which have appeared in the Labour Party. In my view, however, we must consider the nation first. A bright young City director said to me last week, "I fear that we may be approaching the same position as existed in Germany toward the end of the Weimar Republic." While I naturally hope that he is wrong—and I think he probably is—it is nevertheless true that if foreign nations were to lose confidence
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in our country and in our currency our situation might become desperate.
A few months ago one would have been an object of derision and scorn if, against a background of apparent economic strength, one had forecast that the pound would soon be forced to float. I trust that I may be allowed to say what is now no more than an idea passing through my mind. If the Government, for whatever reason, are unable to achieve the acceptance of policies which could put and keep our country on sound economic lines then the interests of the nation as a whole must come first. And if the country refuses to support such policies, which over the next few months may be forced on the Government, then serious consideration must be given to the formation of a National Government; for in the long run the well-being of the country and its people must come before any Party consideration.
I trust, of course, that things will never come to this pass. I should naturally like to see the Government triumph over all their difficulties, not only from a Party point of view but also because faith in the British political system would then be fully restored, and this is what I think that the director whom I quoted earlier had in mind when he said that we may be approaching the same end as the Weimar Republic: not talking about the post-First World War German inflation but about what happened when the Germans lost faith in democracy in 1931, 1932 and 1933. But it is always wise to look ahead, and I think I can see sufficient of possible trouble to adopt a somewhat sober tone to-day. As I said earlier, I was in two minds whether I should say what I have said, but after listening to Lord Robbins and Lord Thorneycroft I came to the conclusion that I would make a small contribution to the debate today, because I believe, like them, that we in a very serious situation, and I hope that we shall all put the nation before the Party.
7.0 p.m.
LORD PLATT: My Lords, I hope in the space of not more than ten minutes to develop a thesis which will apparently be new to you, and it develops from facts which have already been under discussion and which I shall only allude to as shortly

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as I possibly can. In 1970, as I think—and apparently here I am in agreement with the noble Baroness, Lady Seear—the Socialist Government were defeated by their own supporters. The rank and file of the Party and the country would not voluntarily accept the necessary discipline of long-term Socialist economic policy, because the irresponsible ones had found it all too easy to strike without notice if anything threatened their immediate security or their pay packet. Inflation continued unabated, and the tired and frightened electorate, calling for something tougher, elected a Tory Government. The present Government were of the opinion that all would be well if there were a return to something approaching the ancient rules of capitalism and the survival of the fittest. Competition would put Britain on its feet again.
The first move was to be a reduction in income tax to increase incentives to industry. The next was to abolish any sign of what is sometimes called "featherbedding". And, as in Victorian times, the poor would be looked after at the subsistence level by increased grants to those who in such a stark society might otherwise starve. I am bound to confess that the policy as a whole does not appeal to me, and that is why your Lordships may have noticed that more often than not I vote against the Government in these kind of matters. But I would point out that this does not deny my status as a Cross-Bencher, for a vote against the Government is not necessarily a vote of confidence in the Opposition.
The Government set up an Industrial Relations Court with power to inflict punitive fines and even imprisonment on those who opposed its findings. To those who, like me, are only onlookers, it seems that so far it has made only two major pronouncements, both of which have been promptly reversed. The income tax remission failed to have its stimulating influence. The Industrial Court failed to prevent strikes. Arbitration failed to reduce or prevent new wage claims, and the lame duck policy had to be abandoned. Inflation has continued.
Ethically, the final justification of the capitalist philosophy is that it works. By stimulating industry, eventually everyone benefits. Real values rise, unemploy-
1430
ment vanishes, inflation is conquered, the people have houses, everyone is better off. This Government may be seen at some future time to have performed a service to humanity in proving conclusively and finally that the pure doctrine of Tory economic policy has failed in almost everything it set out to do.
But in my view there are worse evidences of the failure of the system. I refer, of course, to the takeover of the speculators in housing and land values, and finally in the currency crisis, which is surely the final humiliation of Tory economics. We can no longer tolerate a system which leads to such injustices and absurdities. Certainly we can no longer look the miners and the dockers in the face if people who own land or build office blocks can make thousands, and in some cases millions, by the mere anti-social act of doing nothing at all.
What is the end product of capitalist economic policy? If the United States is taken to be the example, I hone that your Lordships will agree with me that we do not wish to emulate it. So I come to my question, a question I have asked myself many times in recent months: Are we in fact living in the final era of the capitalist system? And I am very surprised that nobody in this debate has yet asked the same question. If so, what is going to take its place? The people will not stand for injustice forever. Already there are protests everywhere against the Establishment. Either we shall realise it in time or there will be revolution, not now but at some future date, and the Communists will be only too ready to take over.
My Lords, wise men and women should get together now and face the facts. They must do this by questioning all the old premises. Why should railways make a profit? Why should buses make a profit? What are the services that the people need? What are the values which make for a better life? How can we prevent the speculators from making vast fortunes for which they have performed no useful service whatever? And, last but not least, how can we prevent the so-called workers of this country from demanding more and more, and, what is worse, from giving less and less, so that the standards of British manufacture are constantly debased?

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Could we as a start patch up our present system without regard to any doctrinaire premises from either side? Could we have a new look, first of all, at proportional representation and get away from the present divisive Party system, in which so many people have already lost faith? And if this leads to a little more security, should we not then examine not only Japan but also China, Yugoslavia and East Germany, with a cool receptive mind to try to see if there is anything to learn and whether there is some possible alternative to capitalism which could exist without the cruelty of concentration camps, secret police, dictatorships which have become associated with the Communist doctrine today? If so, would it benefit mankind, or would it lead only to a stifling of initiative? My Lords, I think these are the really big issues which must soon be considered before it is too late. I do not pretend to know any of the answers, but I have tried to formulate some of the questions.
7.8 p.m.
LORD HALE: My Lords, I put my name down for this debate with very considerable hesitation, partly because I was told there was a shortage of speakers, and, secondly, because I was a little disturbed at the remark of a right reverend Prelate that we were all responsible for inflation. My own personal conviction was that I had been a victim of inflation throughout the whole of my life, and perhaps a rather special victim. When I came to-day and saw the distinguished list of speakers, with ex-Chancellors of the Exchequer and so on, and realised my own inadequacy for piloting a boat on the economic seas, not even knowing the language, unable to speak of leads and lags, not very clear whether a dirty float is dirtier than a clean float but being assured that the dirty float is the cleaner method of the two, I was filled with apprehension, until suddenly the good fairy appeared on the scene in the person of the noble Lord, Lord Robbins.
I had wondered how far I dare develop my thesis, which is a fairly old and bitter thesis with me, that successive Governments have financed many of their operations by swindling the worker and the petty rentier out of his savings. Perhaps I put it more melodramatically than Lord
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Robbins, but this is precisely the thesis the noble Lord proceeded to develop, with all his ability and with all his profound knowledge of economics, and I may say that in doing so he restored to me a little of the confidence I had lost, and he really was a very powerful physician. In view of the time I will speak briefly, but it may be that he will encourage me to further oratory on a later occasion.
For the sake of speed may I therefore put the arguments in purely personal terms? I know that your Lordships do not want to have personal analogies and that most of us have had the same experience, but it was on April 6, 1926, that I took the one decision of my life that I have never regretted—or one of two—and built a house for £625. I borrowed most of the money from a building society at 5 per cent., and proceeded to plan to live very comfortably on £6 a week, with an allowance for holidays and so on. Under the combined influence of my father and the Church I had been imbued with the virtues of thrift, and I proceeded to take out life assurance for the benefit of my wife and the children who arrived. During our honeymoon the French franc was devalued for the first time—from 25 to 100—so we had a preliminary and, for us only, a rather fortunate experience of the effect of inflation. I returned at the end of that month to find the General Strike about to break out, to be followed by the long miners' lock-out, which I still recall as the most brutal thing in this century's industrial history. The miners fought for six months. I will return to the miners in a moment.
I should like to finish my preliminary thesis. I continued to pay the life assurance premiums—the policies were often in hock to the bank—in diminishing currency for 40-odd years until I drew the provision which I had made for my aged years in money which had now been devalued by 75 per cent. The actual interest on the sum that I had contemplated to live on would no longer, after the deduction of tax and surtax, pay my rates. That is one of the results of inflation. But of course the more wicked result is that, having drawn 5s. in the £ on all my savings, I then invested—because I am too poor to take any risks

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with equity shares—in Government securities, on the advice of the banks. I was told that as I was only trying to provide an income I might as well take long-dated securities, so this time I am on a double inflation. The words "3 per cent. Gas" will be found written on what is left of my heart. I bought that, after bank advice, at a price considerably above the price at which it now stands. I cannot dispose of that stock to re-invest because I should dispose of it at a 20 per cent. loss at least. I have had a very fortunate life and I have no complaints about anybody.
Let us consider what happens to the rentier. It was a Tory Chancellor of the Exchequer, who now occupies a very distinguished position in your Lordships' House and for whom I have a great personal regard, who said he would give an incentive to the managerial community, and made an immense rise in the rate of surtax. But I find that when I retire, and while I have carefully tried to compute the effects of retirement, I shall have to go on paying for another couple of years my surtax on income that has ceased. I find that I have to pay a much higher rate because the income derived from savings which have already borne tax is treated as unearned income and taxed at a substantially higher rate than the ordinary income, because of the surtax concessions. I can remember, throughout the war and throughout the years of the first Labour Government, when the bank rate stood at 2 per cent. and Consols, if I recall, were nearly back to 100. What are they now? Twenty-six or 27, in depreciated money. The depreciation has been doubled. Seventy-five per cent. of the value on the Stock Exchange has gone and another 50 per cent. at least has gone in the devaluation of the currency itself.
My Lords, these are very heavy burdens, but they are not comparable with the burdens of the old age pensioner. I would much rather put forward their problems. I discussed this particular issue with the late Nye Bevan, for whom I had an affection just this side of idolatry and whom I looked on as someone who could always produce a suggestion. He said that the Chancellor would have to put himself under a restraint, and the method to do this was by guaranteeing to repay savings, perhaps not a large
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proportion of the savings because we have now got £3,000 million of undated stocks to repay. Let us take Post Office savings as an example. This is an admirable example because it has never borne high interest on the value that is invested. In point of fact, the present Government have to their credit done something like this to old age pensions. Of course, old age pensions do not have the same effect because they are financed by a special levy, and there is not much doubt that levies will be increased from time to time as pensions are increased. At any rate, that has been our experience in the past. If the Chancellor was bound to preserve the value of money, even on a limited portion of the Budget, he would be bound to regard any tendency to excessive budgetary expenditure or to the normal concomitants of inflation as matters which would make his job increasingly difficult.
I listened to the noble Lord, Lord Thorneycroft, who resigned the post of Chancellor of the Exchequer on an issue of principle. Whether he was right or wrong in so doing, both Houses of Parliament will always regard him with great respect. I thought he made a speech which ranked with his best. All that I wanted to say on one heading was said by the noble Lord, Lord Robbins. The noble Lord, Lord Bowden, spoke of the regional issue and therefore I will mention that only briefly. I agree with the noble Lord. I will tie it up to another issue. I have never been a particularly virtuous man. I have never claimed to be a man of very high character. But I am really concerned about the progressive decline—I am not talking now in political terms—in general standards of integrity. The conduct of private limited companies now permitted is astounding. It is commonplace now to talk of a man who has made £50 million. These people toil not, neither do they spin. They produce nothing. They usually have tax havens abroad. Some may never breach the law or never even breach the normal codes of financial integrity; others have a succession of fraudulent companies, or unreliable companies, before they manage to hit something and take up into the financial stratosphere. What do they contribute? I am told that these are, after all, in the light of an enormous Budget, relatively unimportant matters. However, they are important from the

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point of view of the example they set of the corruption of financial morals. I have had experience of this. I remember what was called the "Marconi scandal". My father, whom I regarded as the most honest—almost masochistically honest—man I ever knew, and, taking an impartial view, one of the best men I knew, never had any question of doubt that there was no corruption in the Marconi scandal. He was quite content to say that these chaps should not be buying shares at all. In 1910 it was an article of faith that one should not take part in speculative ventures if one was a Minister of the Crown—and I doubt whether Gladstone ever did.
We have had some scandals. I defended the late John Belcher, a man who was persecuted over the acceptance of a few gifts. I do not use the word "persecute" in any criticism of the Tribunal. I object to that form of Tribunal, and I have said so. But that man was not dishonest. He was driven from public life and his wife into the asylum by the high conception of public integrity which Clem Attlee had. No one can deny him that. I was a member of the Select Committee on the Budget leakage, and I know that there was nothing more than a typical indiscretion of a man rather given to indiscretions, and that it did no harm. However, it brought to an end a distinguished career. Now the standards are slowly seeping away. Anyone who studies the history of the Third Republic, with its constant series of increasing financial scandals, may rather wonder to-day when the Place Pigalle has become transferred to Soho, and when M. Chaban Delmas has resigned to-day on an issue of financial probity. I think that there is a very real danger that the public image of Britain, which used to be an image of an Englishman's word being his bond, has been undermined by some of the developments of the last year or two.
I want to conclude by saying that personally I have very little criticism of Mr. Barber. I think that the Government suffered a terrible loss in the premature death of Iain Macleod. Mr. Barber, who had taken charge of the negotiations at Brussels—and I thought with considerable ability—was brought over to become Chancellor in circumstances that few
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would welcome. With the gift of hindsight, I think that the Smithsonian revaluation was wrong; but he was under very heavy financial pressure, particularly from America. I believe that that revaluation would have reacted to our detriment; in terms of the figures, the floating pound was the right and only solution. I agree that the decision was taken with promptitude and with discretion. I do not even think it fair to ask what consultations were had, because we know that in the circumstances the matter of consultation was impossible, and that every hour mattered.
However, it is now conceded by all sides that one of the main causes was the question of industrial disputes. Here I think that the Government's handling of matters like the miners' strike was so disastrous as to be almost incredible. The miners had a great record. They were in a contracting industry. They had had to face the economic consequences of post-war conditions, to their own detriment. They have always been clannish people. They were internationally minded in my day, when the cause of the Polish miners always attracted their sympathy, but no more patriotic body of men is to be found. They had not gone on strike for many years. Indeed, I think I am right in saying (though I speak subject to correction) that from the lockout of 1926 until the strike of this year there had never been any major disruption by industrial action in the coal industry. They were years during which the miners had seen themselves lose their preeminence in the wages field. They voted with some reluctance, by a narrow majority, to go on strike. They put forward, in the ordinary way, a demand which they never expected to get; yet the hostility of the Government—we must raise this; and it is not a matter of Party criticism—to the public sector, the determination of the Government to resist at all costs, resulted in a stimulation of unity among the miners. I used to say that I have always been on the side of the coal miners. I lived among them for years. I used to say, as a Left-Wing Socialist, that I hoped the day would come when the workers realised their power. I am not sure now that I am quite so pleased that they have been forced to realise their power so quickly and in so brief a period, and by such a

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clumsy exercise in public relations and an obstinacy which stirred them on to further contest.
My Lords, I regret to have to finish on a note of controversy, because I tried to speak uncontroversially; but this is a vital matter of public relations. I do not believe that Lord Boothby's scheme would be a particularly productive one, but I am certain that it can do no harm. I am perfectly certain, knowing Mr. Feather, that he had tried very hard to assist in the task of conciliation, and that his efforts were rejected by the Government without a word. It will not be easy to recover that confidence, but I am quite sure that the average coal miner is as great a patriot, and as used to sacrifice, as any Member of this House, and is as anxious to co-operate in the restoration of the prosperity of this country, once he is convinced that he is not being made the stool-pigeon for financiers and for crooks, and for people who make no contribution to the economy.
I am grateful for the attention I have had. I think that the House to-day—at any rate until my speech—has done itself great honour by demonstrating, in a debate in which Back-Benchers are allowed to take part, that there is a standard of dignity, a lack of controversy, and a wealth of constructive thought of which this House can give a conspicuous example.
7.30 p.m.
LORD FRASER OF LONSDALE: My Lords, I offer a sincere and warm-hearted apology to my noble and learned friend the Lord Chancellor, because I cannot stay to hear his winding-up speech. I explained this to the Whips, but I did not bother the Lord Chancellor because he will not worry, anyway. However, I do apologise. I shall not say anything which can be considered politically controversial—except for this one sentence—so perhaps I may be excused. I am one of those who does not think, when the ship of State or any ship is in stormy waters, that it is a very good thing to shoot the man at the wheel. I suspect that Mr. Heath will be at the wheel for another two years and I therefore wish him the best of good luck. I want to observe that there is a thing called the cost of living, which is measured by formulae; but there is also something
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called the standard of living which is constantly rising, and the people for whom I shall say a word are concerned with both the cost of living and the standard of living.
I have no democratic qualification to speak for old age pensioners. I do not represent them in any way, nor do I now represent the ex-Service community, though I used to do so for a very long time. But I still have a great interest in the disabled ex-Service men, along with all pensioners and all disabled persons. To this category of persons I would add those who live on a fixed income which they themselves can do nothing to augment. In order to try to simplify my brief argument, I should like to divide the people of Britain into two categories: those who can augment their income by their own activities—the strong ones who work; and those who are not so strong and who cannot work for one reason or another. The latter category includes children. the old and the disabled, whether disabled for health reasons or from war. The strong—that is to say, the trade unions, the employers and the professional people—have their own ways of representing their case to Government, and indeed they are called in to consult with Government from time to time. The other category, except for the Royal British Legion, have no organisation to speak for them and I am therefore venturing to say a word on their behalf.
This Government have, as a matter of definite policy, aimed their help towards those in greatest need. I think that is wise and sensible, because help itself is not so abundant that you can give it to all. Therefore it is better to give it to those who are in need, and one can thus give more to those who are in need. This Government have told us that they will review pensions, war pensions and payments made to the needy once each year, and that is a considerable improvement on what has happened in the last 50 years. They will take into account the cost of living. Of course they will do that at the end of the year and not at the beginning; but, even so, it is a very valuable concession for which I thank the Government. They have not said that they will take into account rises in standards of living, but I hope, nevertheless, that they still may. I should like to spend one sentence on thanking the Government

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and the Minislers concerned, and particularly Mr. Paul Dean, the Junior Minister concerned, for what they do for the disabled people.
Let us bear in mind, however, that even though it is the intention of Government to review annually the payments made to the dependent categories of people whom I have mentioned, the payments which they will receive will never really make up for inflation; certainly not for galloping inflation, and probably not for the rise in the standard of living which will be enjoyed by most of the strong who can earn a living and can press their claim upon employers or upon Government. My brief speech is in the nature not of an attack upon anybody, not of criticism of anybody, but of the strongest possible appeal to the strong—and by the "strong" I mean the trade unions—to consider in the next few weeks and months how best they can help the less strong in the categories I have mentioned, by trying to help the Government, whether they like the Government or not, to cure the inflation. I will ask your Lordships to bear with me for two minutes while I tell one small true story which is a warning.
In 1922—that is, 50 years ago—I became the Chairman of St. Dunstan's, which I still have the honour to be, and I went to Berlin and consulted with the authorities about the care of blinded soldiers, sailors and airmen, and exchanged views. In particular, I met a German blinded soldier of modest rank who gave me much information and much help about his situation, his work and so on. I was grateful to him and, at the end, I said, "I should like to do something so that we may remember this occasion. Is there something I can give you?" He was a man with his pride, and he did not want money, but he said that he would like a present for his family for Christmas. On inquiry, I discovered that the appropriate present was a goose, so I bought him a goose and paid hundreds of thousands of marks for it. It meant nothing to me, only a few pounds out of my pocket, such was the rate of exchange. I took the trouble to value that goose in his terms, and discovered that its cost was a little more than one month's war pension for that unfortunate man.
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I tell this true story, which I have checked though it was in my memory, because it is the gravest possible warning that Britain could be on the way towards galloping inflation. Although there are trade unionists, employers and men in the City who might keep up with it, there are some millions who could not possibly keep up with it, and it seems to me that their voice ought also to be heard in this House. When motoring with my wife from Dublin to Cork long ago, I remember sticking my head out of the window and asking a wayfarer, "Is this the way to Cork?", to which the wayfarer replied, "Yes, 40 miles straight on". So we drove on for 30 miles, and I again put my head out of the window and asked another wayfarer. "Is this the way to Cork?" He replied, "Yes, 40 miles". So I turned to my wife and said, "Thank God, at least we are keeping up with it".
I have only two other extremely brief themes to mention at this late hour. We have floated the pound. For ten years my poor and undistinguished voice has been calling for the floating of the pound. How much better would it have been had it been floated in the time of Sir Stafford Cripps or in Mr. Callaghan's Budget or in Mr. Barber's last Budget! If this had been done, we should not have had the rise to 2·60 dollars and we should not therefore have had the fall. I still believe that floating is the wisest and best way of handling international currencies and I advocate, not that we give it up after a short interval, but, on the contrary, that we maintain it for ever as a better system than the one that has let us down three times in my lifetime.
I want to give the briefest possible reasons for this view. My merchant banker friends have told me that it creates unreliability and difficulties in the banking system and for merchants; my merchant friends say the same thing. I have been a merchant myself and I know very well that one can buy forward and sell forward. I know also that, even if we float, the Government still have a considerable control over the currency. They can control it by the operation of bank rate, the printing of money and the withholding of export or import licences. There are all sorts of ways in which a Government can control the value of their currency, even if it is floating. I do not believe that a floating currency, once we

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get used to it, and particularly if we can persuade all the nations of the world to float their currencies, as they did until that chap came down from Cambridge and taught us to fix them—what was his name?
A NOBLE LORD: Keynes.
LORD FRASER OE LONSDALE: Until Maynard Keynes was invented we did not have fixed currencies and we did very well for 100 years or more. The bankers are wrong, although I will admit that it looks as if the floating of the pound ten days ago has produced awkward situations. It has produced representations from M. Pompidou and from the Chancellor of Germany. It has produced difficulties in the United States. It has brought forth criticisms from bankers. But let us remember that it has not been the floating that has caused the upset in the world; it is the fact that our currency was over-valued. That was the underlying cause. The reason why it became over-valued was that under American pressure we had a fixed pound instead of it being subject to a float. If it floats it can go up a point or down a point; that is a warning and undesirable speculating can be stopped.
I must therefore seriously advocate that Mr. Heath, Mr. Barber and the noble and learned Lord the Lord Chancellor do not continue to talk about a temporary float as if they believed that was the right thing. I doubt very much that it is. Let me repeat one thing that I have said. If only the floating had taken place five or ten years ago, or even at the time of the last Budget, much of the trouble we are in now would have been avoided. For ten years I have been advocating a rise in the price of gold.
LORD BOOTHBY: Hear, hear!
LORD FRASER OF LONSDALE: The rich and powerful voice of the noble Lord, Lord Boothby, and my own were the only ones that were heard in the land ten years ago. I remember the noble Lord, Lord Beswick, talking us down at Question Time—in the most polite manner of course. If the price of gold had been recognised as being unrealistic, again if Maynard Keynes had not been invented, we should not have had all this trouble. I beg the Government not to
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repeat that gold is finished as a world talisman. It is a talisman in which people believe. They do not believe in man-made devices.
Politicians cannot be trusted not to lie at a time when their currencies come under pressure. What else can they do? What could Sir Stafford Cripps, a man of the highest integrity, have done? What could Mr. Callaghan, a man of equal integrity, have done? What could Mr. Barber do? When asked by someone in another place, "Are you going to devalue?" do they say, "No comment"? If they do, they are obviously going to devalue. If they say nothing, they are suspected. So they must lie. It is a bad thing to rely upon politicians who often lie and in this case must lie. It is better to rely on the market. The market will set the right price for currencies and, once we begin to get used to it, we shall be able to rely on it.
7.47 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, first let me apologise if I am not here at the end of the debate. I was suffering from a fever last night and perhaps I should not be here at all. But the importance of this discussion is so great that I felt under an obligation to attend. It is a melancholy fact that the purchasing power of the pound sterling to-day is about one-sixth of what is was in 1914. I mention that date because from the beginning of the reign of Queen Victoria until then the purchasing power of money had remained more or less stable. It had certainly not fallen in the way it has fallen since. By 1949, obviously as the result of the war and the way in which it was financed, the purchasing power of our currency had fallen drastically and in recognition of that fact it was officially devalued.
One might have hoped that after that an era of some stability would have followed. But the purchasing power of the pound is now about one-third of what it was in 1949. Over that short period there has been this terrific depreciation, and what is most alarming is that it appears to be continuing at an accelerated rate. From 1955 to 1960 prices rose at the rate of 21½ per cent. per year. In the next five years they rose at the rate of 3·2 per cent. per year. From 1965 to 1970 they rose at the rate of 4·6 per cent. Per

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year, which was almost double the rate of 10 years previously. During the last two years it seems that the acceleration in the rise of prices, which is, after all, merely a measure of the depreciation of the value of money, is continuing. This is ruinous for our economy; it produces the greatest troubles and disasters. My noble friend Lord Hale illustrated how the ordinary man, encouraged by bankers, Governments and other people to invest his money in gilt-edged securities, suffers a double depreciation because the market price falls and the value of that price falls still more. Consequently, all rational economic calculation is interfered with; the distribution of resources for investment is made more uncertain and arbitrary; and it probably leads to a wasteful use of required resources. Those who have fixed incomes of course suffer most severely. Those who happen to be in a position in which they can counter inflation by speculative investment possibly come out richer.
My Lords, these considerations make it absolutely imperative that we should stem this evil. I know that there are some people who say that it is advantageous to the economy, that it leads to economic progress, to have a slow, steady rate of inflation. But there never is such a thing to start with; it always varies, it always leads to uncertainties. May I quote the very wise words of the Deputy Governor of the Bank of England to the International Savings Bank Congress last April. He said:
"… in the real world, inflation can never he correctly anticipated by everybody; and the prices of goods, labour and capital are not correctly adjusted for the changing value of money. Thus, inflation is not in practice a stable state. Differences in expectations set up tensions, and adjustments, which may further affect expectations in a spiralling fashion—a fundamentally destabilising process, and an all-pervasive one. Inflation once begun is not likely to die down of its own accord, its repercussions may readily become wider and wider."
This is what we are experiencing now, and we must be perfectly clear that it is an economic problem which can be solved only by economic means; and it is absolutely certain that the major influence in causing inflation is the action of the Government in increasing the note circulation. I know very well, my Lords, that exchanges are conducted by means of bank credits and credit instruments of
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all kinds, but the size of the note circulation is undoubtedly a decisive factor. Now what are the facts'? In September, 1949, the currency circulation was £1,260 million. In March, 1972, it was £3,517 million—about two-and-three-quarter times as much. In fact, in that period, corresponding very closely, the purchasing power of the pound diminished to about one-third of its 1949 value.
I took the trouble the other day to look at the last Treasury Minute dated June 2; at least, I believe it is the last, but these things follow in such rapid succession that one can never be sure, because I see that they recited that they had read their Minute of May 26, only one week previously, at which time they had increased the note issue to £3,975 million. Only seven days after that, this is what happens, according to the Treasury Minute:
"The Chancellor of the Exchequer informs the Board that the Governor and Company of the Bank of England have represented to him that it is expedient that the fiduciary note issue should be increased from £3,975 million to £4,000 million. My Lords agree with the representations of the Bank of England, and in the exercise of the power conferred upon them by the Currency and Bank Notes Act 1954 hereby direct that on and after the 2nd June until the expiration of a period of six months beginning at that date the fiduciary note issue shall be £4,000 million".
What I ask myself on reading this is: what discussion took place at this momentous meeting of the Treasury Board? What consideration did they give to the effect of the constant increase in the note issue? How did they think that this was going to affect the economy of this country? All this is hidden in complete darkness. Or did they not consider it at all? A few years ago I wrote to the then Secretary to the Treasury and asked him if he would explain to me the principles upon which the monetary policy of this country was conducted. I received no answer to that letter, and I do not think that I am altogether surprised, because I have an uncomfortable feeling that it is not conducted upon any principle whatever.
It is now fashionable to say that inflation is all the consequence of extravagant wage demands. I am not going to deny for a moment that there can be extravagant wage settlements which are not justified at all by the economic cir-

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cumstances, and I dare say one could point to some. But, in the natural course of events, what happens when workmen price their labour too high, just as when other people price their commodities too high, is that the demand diminishes and a number of workmen become unemployed. Here is where we get to the political crux of this matter. No Government, of whatever Party, are willing to see the number of unemployed increase if they can possibly avoid it. So, what happens? The Governor and Company of the Bank of England represent to the Treasury that the note issue should be increased, the Chancellor of the Exchequer so directs, and consequently the effect of an excessive wage settlement is mopped up in an increase in prices—and so we proceed year after year.
Government must have the courage to deal with the matter. I am not suggesting for a moment that it is at all easy, because it involves very difficult political decisions and it also demands an understanding of the fundamental economic situation. I cannot detect in any statements made by Chancellors of the Exchequer or Prime Ministers (and I am not confining this to members of one Party or another) any attempt to explain to the general public the real cause of the trouble and the necessity of diminishing the amount of notes put into circulation in order to keep prices at least more or less on a level. Indeed, if we had a currency which did not increase constantly, the natural result of economic progress in enabling manufacturers to produce goods at cheaper prices would mean that prices, instead of rising, would fall and economic progress would spill over to the poorest sections of the community living upon fixed incomes who, under the present conditions of constantly-rising prices, are being exploited for the benefit of those who happen to have economic power and are able to impose their wishes upon the general public. This is the situation with which we are confronted, and unless it is dealt with we are going to go on and on in this "Rake's Progress", with very disastrous consequences.
8.2 p.m.
LORD HANKEY: My Lords, there seems to be one general firm conclusion from our debate; that is, it is essential to
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control inflation. From my experience of O.E.E.C. and O.E.C.D., I have not the smallest hesitation in confirming that judgment. Once inflation really gets under way, as is now beginning to be the case in this country, only the most drastic measures can stop it. Among the member countries of O.E.E.C. and O.E.C.D. there have been many cases where action a good deal more drastic than ours has had to be taken. I sincerely hope that we shall take action before we get to that stage in this country.
There have been various systems for ensuring that the rise of wages—and they tend to rise every year—shall be linked to the rise of productivity. I should like to say a word about the Swedish system which has been remarkably successful. The per capita income of Sweden is now nearly twice that of our own country; it is far more than that of Canada and seven-eighths that of the United States. How on earth have the Swedes done it? I should like to describe this very briefly. The Confederation of Employers and the Trades Union Confederation negotiate every year to fix a general norm of increase of wages which is based on the expectation of the rise of productivity in the following year. The Swedish Government economists are not, I believe, actually concerned in these negotiations; but they follow them extremely closely and advise both parties on the situation, as they are able to see it. The two confederations reach an agreement every December. This is usually after a great deal of hard negotiation; but the point is that they do reach agreement and the norm which they set is then adopted as the basis for negotiations between employers and trade unions for applying that norm in each industry. The agreements when made are registered at the Ministry of Labour, and I think it is right to say that they then receive the force of law.
There is a third point which I believe is of great importance. The trade unions co-operate in moving manpower out of declining industries into more productive ones. For this purpose there is a tremendous system of re-training in Sweden. Expenditure there on re-training is at about same level as our own, although we have over seven times their population. The Swedes also have their inflationary trends, and on account of those

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(because you cannot have good industrial relations while you have even some inflation) they have even had a few strikes. But, on the whole, the system is remarkably successful. If they have had strikes, these have not in any year represented more than a minute fraction of our own in terms of days lost per thousand workers.
I believe that some system like that could be a long-term objective for the United Kingdom; but it could not be done now because neither the Confederation of British Industry nor the T.U.C. have authority over their members, nor can many unions effectively control their members. One has only to look at the conditions on Merseyside and the affair at Chobham Farm to see that that is so. Personally, I still think that the effect of the Industrial Relations Act will be to strengthen the unions and to give them more power over their members—with probably the same effect on the Confederation of British Industry. I think it is essential that we should not scrap the Industrial Relations Act even though, obviously, we should in due course review its effects. The chaos, and that is the only term for it, in our industrial relations has been a major weakness of the British economy and has produced effects which have gone right through our industrial structure. But I should like warmly to welcome the contacts which the Prime Minister recently has made with the T.U.C., and I very much hope that something will come of them.
My Lords, if we cannot hold out much hope for adopting something like the Swedish system in the short run, what other hope is there? I think that the time is coming when perhaps a good look ought to be had at the so-called "Hungarian solution" which has been mentioned a good many times in this debate. This "solution", in effect the taxing of wage increases, is a terribly drastic one; but I do not know that there is really any other effective means of doing the job. I believe that the restraint of wages by injunction or exhortation, like the increase of exports or the increase of industrial investment by exhortation, has shown itself to be totally ineffective. Much more effective methods are needed, and probably some fiscal measure of the kind I have referred to is the only means likely to be effective. I do not like it;
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but perhaps it is better than charging down the slope of inflation and then having to take far more drastic measures to clamber back again. Of course if the Hungarian solution were to be applied, it could not be applied only to wages: it is clear that it would have to be applied both to incomes and to prices.
It seems to me, my Lords, that the inflation problem involves a great many complex factors. To say that it is entirely cost inflation that we are suffering from seems to me to be very superficial. For instance, there is the question of industrial investment, which is much too low. According to the latest O.E.C.D. statistics the United Kingdom comes 18th out of 21 nations, with a figure of 17·6 per cent. of the gross national product applied to gross fixed asset formation. Japan is first, with 35 per cent.; Sweden has 22 per cent. and Germany 26 per cent.—compared to our own 17·6 per cent. One can only welcome the Government measures taken to encourage national investment; but I think that probably much more will be needed to support the wage rises which our people expect. Because if we do not have industrial investment, and if we do not increase the productivity of the industries with new machines and processes, and if the people are given the sort of wage increases they will insist on taking, we are bound to be landed with inflation and there will be no way out. We have to regard this as a prime necessity.
On the other hand, I do not believe it is possible to get higher industrial investment while industrial relations remain so bad. People are not going to invest in new machines, new factories, and processes while the workers are so reluctant to adopt new methods and while they resist all change. Nor can we get away with it while the trade unions insist on overstaffing, as they did in the case of Chobham Farm. Every time we have started a period of growth. balance-ofpayments trouble has set in. The Government have placed a stop on our economy, and more unemployment has, naturally, discouraged the trade unions from cooperating in measures which involve reductions of labour. Somehow we have to find a way to break out of this vicious spiral—because that is what it is: a spiral which goes down and down, and we have to bust it.

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Then there are financial factors which come into the account so much and about which a great deal has been said to-day. I also was struck by the enormous expansion of the credit base in the first quarter of this year, and indeed in the last eight months. Admittedly the Chancellor told us in his Budget speech to expect an increase, but I wonder whether it has not gone too far. It must be remembered that when the expansion set in in a major way we were also at the end of a tremendous inflow of funds from abroad; many hundreds of millions of pounds came in. The internal effect of such inflow is a very complex and technical subject, on which Continental economic policy makers and central bankers have not always agreed, either with each other or with our own, and I hesitate to express a view about it. But I suggest that the increase of money supply needs a new and hard look, especially now that foreign funds are going out again. Even if we believe, as I hesitate to do, that we have succeeded largely in isolating our economy from the internal effects of large flows of funds in and out, it seems to me that the situation must become more delicate as we enter the Common Market and relax our controls so far as Europe is concerned. So I am sure that we ought to have another good hard look at this aspect of current inflationary trends.
Of course, we have met the present strain by floating the pound, and I agree with what one noble Lord said: that if anyone had said, even three months ago, in view of the incredibly healthy state of the balance of payments, that at the end of June we should have to float the pound, he would have been thought stark, staring crazy—which just shows how delicate the situation is becoming. I do not believe that floating the pound is a permanent solution. I think that it will bring problems. As regards the movement of foreign funds, it seems to me that floating might bring with it a naturally destabilising factor; and as import prices tend to rise, there will be a tendency for them to start another round of wage demands. So I do not think it is a permanent solution.
My Lords, I think it time we recognised the real difficulty. If all the footloose funds in the world, plus the leads and lags of ordinary international trade,
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move at once, the experience of Great Britain and America has shown that there is really no country in the world, and probably no existing system, which could be sure to remain stable. Such huge flows of funds as this are just as embarrassing to the surplus countries as to the deficit countries. They cause great problems in places like Germany and Switzerland who have to ban foreign accounts and even to place negative rates of interest on the foreign accounts which are there.
The world economy is rather like an old truck going along the road and carrying on it a huge tank of liquid. The road is full of potholes and the driver is only partially sober, or shall I say that he does not know quite what he is doing. The truck swings to and fro; the liquid slops and swings about and there is considerable danger of the liquid upsetting the truck. We do not want to go without the liquid. The object of the truck is to carry the liquid. So what do we do? Obviously, the solution is to put a baffle plate down the middle of the truck, and then the liquid can move around but it cannot all move around at once. Now, how do you apply this to movement of funds between countries? It is extremely difficult to do this. Many different methods may be used. One is to recycle the funds, as the central bankers have been doing. There are many other things that you might do—you might even float the currency. But I think that we need to take another look at this problem, to seek a method by which to prevent all these funds moving about at once. I am among those who think that the relatively free movement of funds is essential for the development of the world; and the ability of central bankers and the I.M.F. and the O.E.C.D. to enable these enormous funds to move as freely as they do has reflected enormous credit on those concerned and has been of great benefit to everybody. We need to find a way to avoid getting quite so much of the rough along with the smooth. I really think another look should be taken at this matter.
So, my Lords, I come to my conclusions; namely, that all sections of the community are equally concerned in inflation. It is of no benefit to the trade unions to have wage increases eroded by rises in prices. It is of no benefit,

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either to the unions or the employers, to have the constant friction in industrial relations which is bound to go along with an inflationary rise in prices. You cannot have one without the other. It is of no benefit to the bankers, to the old age pensioners or people on fixed incomes, or to the Chancellor of the Exchequer to see the value of money eroded. I refuse to believe that it would not be possible to explain the real significance of these issues on TV if we could find somebody with real genius to do it. I think that a great deal of the economics of this problem could be explained on television if somebody could be found with the necessary genius and humour; and I do not believe the public would always turn off the machine.
The common interest of every section of the community in controlling inflation is so great that we ought to try to avoid this becoming a hot Party matter. I am very glad that this has not occurred in our debate to-day, and I would hope that we could avoid it in the future. All Parties ought to combine in this matter even if they do not combine in others, in order to secure co-operation in our economy. That involves the C.B.I., the T.U.C., the bankers and the City, and especially the Government. It is no good the City saying that they do not like Government interference, or the T.U.C. saying that they do not like something which Parliament has done. We are all in this together and I believe the situation is too serious for us to neglect the necessity for bringing all sections of our community together. And in conclusion, I agree with what the noble Lord, Lord Thorneycroft, said. I believe that if this problem is explained to our people they will willingly answer to a firm lead given by the Government.
8.22 p.m.
LORD DAVIES OF LEEK: My Lords, it has been a pleasure to be in this Chamber since the beginning of this debate. I left only for about ten minutes. Unfortunately, I invited a guest to dinner. I do not know what will happen to the dinner, but I think it is more important to listen to the speeches. To Leaders on both sides of the House I would say that I was brought up in the other House for about 26 years and I believe that if one makes a speech it is a courtesy to stay in

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the House afterwards to listen to the Leader's reply. I hope that in future, when both sides are getting together to look at debates, they will take that matter into consideration when they are arranging the system of debates. It is a deterioration in the courtesy of this noble House for noble Lords continually to say, "I am sorry, but I shall not be here for the reply". If a Member cannot be here for the reply he should not make a speech.
EARL JELLICOE: My Lords, I apologise for interrupting the noble Lord, Lord Davies of Leek, but I do so only to say that I find myself in very considerable measure of agreement with what he has just said.
LORD DAVIES OF LEEK: To be fair to noble Lords who have important engagements, may I say that it might have been worth while to make this a two-day debate. Having sat up till about three o'clock in the morning and made beautiful diagrams in all kinds of colours on my notes, I am going to cut out 90 per cent. of my speech and try to finish by half-past eight. I should like some of the people who have been making speeches to-night to read Samuel Brittan's book The Treasury Under the Tories, because we had the Treasury under the Tories from 1951 to 1964; that is 13 years. Chapter 10 points out the power of the Treasury over weak Ministers. For years, this House has been dominated, not by ignorant or wicked civil servants but by very capable personalities who have been in the Treasury, because Ministers have offered them no alterative. We have to realise that when the Treasury take power—to be fair to Treasuries—they take it because there are few ideas in the hands of the Ministers who should have the responsibility of telling the Treasury what to do. For a short time I had the privilege of being a Minister, and on one or two occasions I told people what I believed. I may not be a genius but at least I stuck to my point and stopped them from taking pensions off men who had been in prison and who had been wounded. This had never been done before. I was told that the Treasury would be upset by it. I replied, "I have got only one boss and that is the Prime Minister."
I believe that some of the weakness in the past has been that Ministers have

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been dominated by powerful personalities in the Ministry. I was grateful for the beautiful lecture by the noble Baroness, Lady Seear—a lecture it was. Moving pieces of paper and messing about with a differential calculus is not dealing with the realities of the life we are living. I listened in absolute amazement to the speech of the noble Lord, Lord Hankey, who pointed out how well Sweden has done. But Sweden has had a Socialist Government for 35 years.
I was delighted with the speech of the noble Lord, Lord Robbins. I have read his books and enjoyed his wonderful knowledge, but I want to tease him a little because he praised poor fellows like myself who pour money into Premium Bonds and National Savings Certificates. I am delighted to say that I won £50 the other day, so one does get a bit now and then. Because I am so patriotic (but it is never recognised) I pour my money into Premium Bonds and National Savings Certificates. I shall have to buy a second-hand squalid house and shove somebody in at a rack rent to get my money back.
Earlier in his speech the noble Lord spoke about speculation and of the derogatory terms that are spoken about speculators. I have here a copy of the Radcliffe Report as reprinted from the Banker. Who could have more authority than that? It was Mr. Keswick, Governor of the Bank of England, who said, "Switch more into American bonds and equities." Again, it is anti-British and derogatory to sterling; but, on balance, if one is free to do so it makes sense to me. That was W. J. Keswick advising his own Hong Kong affiliates. In other words, while all speculators are not speculating to undermine the country there are the majority of Johnny-cum- Latelies whose money is young. It does not take much brains to play the exchanges. Anybody who can bet on a horse and work out the odds can do it better than half of them. Those people are acting unpatriotically and are partly responsible for the position in which we find ourselves to-day.
I want also to deal with the phraseology of economics and the vogue words of every generation. I should like to say to the noble Lord, Lord Boothby, that I was in Germany when the banks collapsed in 1931. As a member of the
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old German youth hostel movement I saw the sadness of all this. I saw the sadness of my people in South Wales when I got a scholarship to university and there were no jobs in the house because they were miners. It is no good telling people like us the meaning of inflation or economic crises. These are good people they do not ask much. I am tired of hearing speech after speech denigrating and saying, "You must do something about the strong trade unions." What about doing something immediately about strong speculators? What about having the courage to tackle the land problem?
I would not mind if somebody were to start reading dear old Henry George on Land Taxation and Land Values. I can see one economist rubbing his head and smiling, but it is worth reading. I could make an argument but the night is short and my guest has been waiting for a long time. It was the Liberals who used to sing, "The land is full of people." It would seem that, after listening to the Leader of the Liberals to-day, they have forgotten that. Nixon himself, after the Smithsonian agreement last December, said, I should like to tell the noble Lord, Lord Boothby:
"It should be chiselled on gold. This is the most significant monetary agreement in the history of the world."
How pathetic! Here is a nation blowing to hell Cambodia, Vietnam, which I know well, and Laos. Goodness knows why! About six times as much firing power has been dropped on that peninsula as was dropped on Europe in the whole of the war. America has had to devalue the dollar—a mighty nation that has got itself into a mess. Eighty billion Eurodollars, swinging around Europe, which the speculators use at exhorbitant rates of interest. I wish I had the time to go into this subject in depth, but every Member of this House understands it.
Some of the speeches have made terrific assumptions to-night. For instance, the speech that tells us to copy Sweden assumes that we do not know Sweden's Socialists. I would point out that one of the most wild tigers in finance loose in the world to-day is the Eurodollar, and also the Special Drawing Rights. The Special Drawing Rights are affecting the pound. Then we get that daft expression, "the snake in the tunnel"—I wish I had a cardboard tube with a little bit

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of elastic so that I could drag the snake through the tunnel and explain it, allowing the circulation of 4·5. We have economists writing articles on this, thinking that it explains the monetary problem. It is like the doctors using a Latin word for "belly-ache" and thinking that they have explained how to cure it. It is time we got down to the basic facts, and one of the basic facts is that no single country in this shrinking world to-day can solve its monetary problems alone. The dollar is the rogue elephant in world affairs to-day. This is not a Party speech; it is a factual speech. I cannot help it if the facts are on the. Socialist side.
Having "swanned around" the Far East a bit in my day (and I hope to do so again, if I can keep my strength after sitting here as long as I have sat to-day), I am convinced that we must accept what has been said in all parts of the House; that is to say, more honesty in dealing with the public and creating public opinion. As the Radcliffe Report said in its official comment:
"In addition to compiling and publishing regular statistics the authorities ought to comment and interpret."
This is the point that the noble Lord, Lord Hankey, made when he talked about explaining the problems on television. The Radcliffe Report said:
"This function might well be served by transforming the annual reports of the Bank of England, the meagreness of which has become a byword."
In fact, it is not a byword: rather is it an insult to Governments, to Members of Parliament, to lecturers and economists and those trying to understand the monetary system.
LORD ROBBINS: My Lords, may I interrupt the noble Lord to draw his attention to the fact that the Bank of England quarterly reports are one of the statistical glories of this country?
LORD DAVIES OF LEEK: I was just coming to that. This is the point. They are now, because the decision of last Sunday gave the Treasury and the Bank of England a shake-up. That is why I would still argue that there should be amateur directors of the Bank of England as well—people who deal with industry; and I would have a few people who cut coal occasionally, or a farmer who can plough a field or milk a cow, helping
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sometimes by being part-time directors of the so-called nationalised Bank of England. I am only making the case, as the noble Lord knows quite well, that we had to plead for years, and as a result of this Report that was one first-class constructive suggestion. I hope it will be made more public. I should like to follow Lord Hankey's point that more of that should be explained instead of some of the cracking speeches that I have heard on the television explaining the monetary system and our economic difficulties.
It is a pity that I have to cut this speech short, because it is doing the House a power of good. I have dealt with Eurodollars, and I have dealt with the speculators. Let me now have a go at the technocrats. Anthony Harris, in his financial column in the Guardian, said:
"The really disturbing fact is that the balance of payments, our old bugbear, now seems the least of our problems. For when we come to low, unimaginative investment, high inflation and the unresponsiveness of the economy to known methods of management, we are facing problems to which no technical solution is known."
Therefore I approach this problem with humility. I am not going to stand here believing that I know all the answers to this question, but what I think is now necessary is that the Western world and the Communist world, especially in view of President Nixon's visit to China and the Soviet Union, should now, like old Ramsey MacDonald did when we had the Balfour Committee's Report in 1924—then we had the world conference in Geneva on the world monetary system in 1927—
LORD BOOTHBY: My Lords, that was no bloody good.
LORD DAVIES OF LEEK: Of course it was no good. We will not worry about the noble Lord's ruddy adjective. From his point of view it did not do to gold what he would have liked it to do. But I sincerely believe now that it is essential that we cut out this foolishness of continuing the cold war, and cut out the foolishness of deficit spending, on which the noble Lord, Lord Douglas of Barloch, made a first-class constructive analysis when he was analysing the fiduciary issue. Because what is deficit spending but Government spending over and above normal

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Government income through taxation, of money lent from savings and capital owners, also money created by issuing bank notes over and above the established wants of circulation? The Encyclopœdia Britannica will tell you that banks create money out of nothing. Of course they do. That is the meaning of the word "fiduciary". We are reaching a point when faith has reached such a pitch that it is not commensurate with the men governing the country. So I sincerely hope that this Government will take a lead and put out feelers, because I believe that the time has now come for the world in its tininess—a world in which you can move from side to side in hours, and you can throw your voice to the edge of the universe in seconds—to break down certain conceptions of monetary sovereignty.
My last point is a slap at the Common Market. I do not understand this belly dive that Ted Heath wants to take into the puddle you call the Common Market, because at this juncture it is the wrong time. For God's sake take us in when we are strong, if we are going to be taken in at all, not when the rags of our behinds are almost beating our brains out! What is wrong with this country? Why Socialists support it at the present juncture is beyond my wildest dreams. President Pompidou has told us, and EMU—they have wonderful names, acronyms; it is not a bird on two legs at all; it is the European Monetary Union. They make the decision when the pound shall be devalued. Why "kid" this House from the Front Bench opposite or elsewhere that we can make decisions on the value of the pound? The "snake in the tunnel" concept which evolved from the Smithsonian concept, and which evolved in Europe, is that the value of the currencies of the Six and the other currencies shall be decided by the Common Market people. We ought to know what we are doing if we are going to jump into this Common Market. We have reached the marvellous point where we have destroyed the sterling area which stood by us. There was no need to do it. We could still have gone into Europe. I am a European but not a Common Marketeer. The Common Marketeers are Little Englanders from a shopkeeper's paradise. It is a Punjabi's concept for buying cheap and selling dear—and then the Liberals talk about "free-
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ing". There is nothing free about the Common Market. They have built the biggest tariffs that can be imagined. We have "Portugalised" Britain as the result of a couple of years of Tory rule. This is the result.
My Lords, I said I should not be long and I have kept my word—well, it did not seem long anyway. Now, if I may deal with what the noble Viscount, Lord Eccles, said—shall we listen to the faint hearts, shall we abandon greatness and spend our time in confiscating and distributing everything that our fathers accumulated, or shall we go forward with the Conservative Party, make new fortunes and add new splendours to British industry? Because, by God! we have done it for the brewers. We have had all these mergers. All my collier pals know about this: do not think that they do not know what these things are. They know more about economics and mergers than you would think, because they analyse the position.
I am sorry that I have had to make that little crack, but I think that the Government at the moment deserve it. The paradox is that, despite what I have said, the mass of the people in the West and in the Communist world—I have just come back from Czechoslovakia—are better clothed, are eating better and have better housing than ever. That is true even of England. There are those of us who remember the "Hungry 'thirties". All that is true all over the world to-day. And yet the strain of living increases daily as the world grows smaller. Marx is still right: relatively, the richer nations are growing richer and the poorer nations are growing poorer. There is a need for all of us in the world to get together, and that is what I should like to see happen. I should like to see the Government organise a world conference to discuss the problems to which I should not have the audacity to think that I know all the answers.
8.47 p.m.
LORD BALFOUR OF INCHRYE: My Lords, in a democracy, to fight a war needs more than material weapons. Psychological reactions march alongside weapons; and leadership and public relations in the broadest sense must be part of the armoury. To-day we have had some remarkable speeches. I would par-

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ticularly pick out the speech made by my noble friend, Lord Robbins and that of Lord Thorneycroft. It has been shown that the Government now face the hour of truth. Lord Thorneycroft postulated the question: can the Government control the position without adopting measures which, even if temporary, they have hitherto rejected? I believe that the noble Lord, Lord Thorneycroft, started off by saying that the Government have much to their credit. They have shown strength and determination in their efforts to limit wage settlements in accordance with the needs of the economic position. It would be just too easy to avoid industrial conflict by conceding in the public sector instant settlements by instant surrender—and that way lies disaster. The Government also had the courage to amend economic policies which have not worked out as they expected, for who in your Lordships' House would have expected to see the "lame ducks" of 1970 transformed into a collection of carefully-nurtured pets, well fed upon the taxpayers' money? That is all to the Government's credit; but it is, I think, in the field of psychology and the display of leadership to ordinary folk that the Government seem to me to have been short in merit and expectations.
The noble Lord, Lord Beswick, in opening the debate, touched upon the unfortunate display of large increases in the top salary brackets, when we are trying to hold down increases at modest income levels. In our efforts to hold down levels we have seen strikes and go-slows concerning electricity supply, the post, dustmen, miners and railwaymen. It is a formidable list, and probably not a complete one. The arguments in the disputes that I have mentioned have mainly been concerned with whether £20 a week should be immediately introduced or whether it should come later on. The general argument has been concerned with something between £2 and £3 a week and, quite rightly, this has been argued about—because when you have millions, or at least hundreds of thousands, of men in industry, it is vital for the national economy that the wage level for those masses of workers is kept down. Yet at the same time as those proposals are made large increases are suggested for
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what I would call those with top salaries—increases far bigger than the total of a railwayman's annual pay. Those increases are proposed for various top job holders, according to the recommendations of the Boyle Committee. I will not go through them, but we find a £2,500 increase for the head of British Rail and a salary of £27,500 for the Chairman of the Iron and Steel Board. We find rises for senior Ministers, as we discussed on Friday, when I was severely taken to task by the noble Earl, the Leader of the House, who I regret to say is not here, for widening the debate. I have no repentance for having done that, because these matters are all interwoven. Indeed, I replied to the noble Earl that I accepted his rebuke: I only trusted that he would convey an equal rebuke to his own Ministers when they themselves often widen a discussion in answer to questions. I have not yet had a reply.
The usual arguments were deployed on Friday, and no doubt they will be repeated to-night if the noble and learned Lord the Lord Chancellor is good enough to take notes of my comparatively humble points, because the Government have sheltered and entrenched themselves safely behind the Boyle Committee. The first argument is, of course, that there have been no recent reviews. Higher civil servants' salaries have not been reviewed since 1969; senior appointments in the Armed Forces have not been reviewed since 1970, and of course the argument is that top pay must be prevented from falling behind comparable pay at outside levels. Indeed, the Prime Minister himself said this:
" What is required in this country, as much as anything, is an improvement in management, and if management is going to be encouraged, instead of going abroad to take up posts, then it has got to be encouraged in this way."
That is all very well, my Lords, but I think the main point is that these increases are within the Government's norm: that will be the Government's argument. But I do not think they should deal in percentage increase talk right through the range of income, expressed in cash terms, because when expressed in cash terms it shows up social anomalies; and I believe that these social anomalies are out of keeping with the I Government's efforts to hold down to a

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reasonable level the increases of miners, railwaymen, nurses, and other settlements. The weekly wage-earner cannot be expected to stomach these increases yet, in his own far lesser income bracket, be expected to agree to a limit of, say, 10 per cent, on £25. He says, "The bosses are getting away with it. Why not me?" One cannot blame him for saying that. I say that it is politically inept of the Government, whom I support fully in major ways, to let these increases go forward in this form at the present time. The noble Lord, Lord Shackleton, the Leader of the Opposition, in supporting the proposals last Friday, spoke of the view that "it is never the right time." That is quite a good argument for giving increases now, but I believe that an even better statement is, "It may never be the right time, but certainly it is the wrong time now."
I do not argue that these rises are not justified: I think they are. But in a time of crisis—and, goodness' knows! we have heard enough about the crisis to-day; and rightly so—example, and some personal sacrifice, can be expected from those at the top. Why not let the Government accept the Boyle Commission recommendations now, but agree to suspend their implementation until the immediate economic dangers are past? That would not be an unreasonable thing to ask of Her Majesty's Government, because by doing this they would have a better chance of convincing workers on the railway, on the bench or in the mines, of the need for those men themselves to play their part in this economic crisis. That is my argument as to why I say this Government, successful in so many ways, have been weak in their psychological approach to these problems.
Finally, in the direction of public relations in their widest sense, I would say to the Government: "Please do something to bring home to the nation in a much more forcible way than you have been doing hitherto the dangers we face." The noble Lord, Lord Thorneycroft, rightly said that a great number of people—perhaps half the people—do not appreciate the dangers which face the country, and they are part of the country. I regret that our Prime Minister has not felt able to go on to television himself as the Leader of Her Majesty's
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Government, the leader of the country, and in a ministerial broadcast tell the people, in simple, direct terms, man to man, the realities of what we face, and give a personal lead and exhortation which may carry us towards the safety which we all seek and which we have been debating with some effect this afternoon.
8.54 p.m.
LORD ARDWICK: My Lords, I am very tempted to follow the argument of the noble Lord, Lord Balfour of Inchrye. I myself have always been rather worried about the principle of comparability for the highest posts in the State. I have been worried about it because in my own profession of journalism, which makes no particular claim to nobility, a number of newspapers have been able to carry on in the past—I am thinking of papers such as the Guardian, The Times and the Daily Herald—only because a number of men felt that the psychic rewards, the joys of serving newspapers of that kind, were so great that they were willing to accept a salary far below the commercial rates. I could be tempted to go on about that. But of course we are now dealing with a very complicated situation. We are dealing with men at the heads of nationalised industries and so forth in an age of terrible inflation, in an age of penal taxation, and in an age when pensions are still not "dynamised" completely to cope with the inflation that these people have to face in their later years. So it is very difficult to make judgments; but certainly from the point of view of presentation of the Government at the present time what has happened in the past week or two is regrettable.
When I first read the terms of my noble friend's Motion, I thought that for once in a lifetime we on this side of the House were perhaps not being wholly fair to the Government because the message of the Motion is not only true for to-day; it is true for all time—stable money, expansion, work for all, and an undivided society. Of course, no Government in history has ever got near this Utopian mixture, and no Government is likely to, at least not on this side of the Pearly Gates. Yet the Motion is useful and necessary, just as the General Confession at church on Sunday mornings is: as a measure of the distance between

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our wayward path and the road to sanctity. The distance between the Government to-day and the requirements of the nation is terrifyingly wide. We are not indicting the Government for failing to reach perfection, but for being so very far away from it.
The devaluation we have suffered may have been foreseen by a few Jeremiahs and Cassandras; indeed, their prophecy may have contributed to its fulfilment. But for the rest of us it came as a terrible shock. The state of the pound seemed to me to be rather like the state of man described by Shakespeare's Wolsey:
"… to-day … the tender leaves of hopes; to-morrow blossoms,"
and just when we are all full of hope,
" a killing frost."
And then it falls. Only a week or two ago we were still rejoicing, the words were still on our lips, about that record balance-of-payments surplus that we achieved in 1971. We were rejoicing that the debts had been paid off. Although the trade account was not good, it seemed possible that the coal strike was still affecting the figures. Even so, we were still apparently in balance. Even if we finished the year with a modest deficit, there were ample reserves to see us through. And then, suddenly, the frost.
Whether the pound really was overvalued was anybody's guess. The Chancellor of the Exchequer says it was not. The Leader of the Opposition in the other place is inclined to agree. But not Mr. Jenkins. The evidence for either point of view seems to me to be rather thin. But one thing is certain. The Government did not believe that the time had come voluntarily to change the parity. They were knocked off it. They did not believe that the day had come when its true value was unrealistic and when, as Mr. Barber had promised, there was no point in striving to maintain it. The people who thought that it was at an unrealistic level were (I am going to use a neutral term) the holders of money and the holders of sterling. They saw that our expansion, which the Chancellor had quite rightly promised not to check, was putting an increasing strain on the balance of payments. They saw industrial troubles, including a dock strike, looming ahead. They saw the possibilities of industrial disruption ending perhaps in inflationary
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settlements. And so they moved out of sterling. Yet the evidence on which they acted, the evidence that devaluation was an imminent necessity, must have been inadequate and may well have been wrong.
The lesson is a sharp one. A Government determined on expansion, as this Government appear to be, must not only be able to finance the expansion; they must also seek and get assurances that reasonable courses are going to be followed in the industrial field. People have to recognise that though full employment in itself is not inflationary, the road to full employment does generate some inflation, and so additional inflation must be kept at bay. But even this is not enough. Holders of sterling may be convinced that the parity cannot be held, long before the Government feel that a change is necessary for sound trading reasons. So some way must be found of discouraging or containing or controlling short term capital movements. It is a difficult undertaking, especially for a country such as Britain. But surely it is not an impossible one.
I will not go on to castigate the Government for their past errors, for their slowness to reflate, for their abrasive policy towards the unions, for their foolish use of the Industrial Relations Act—even in the past few weeks—or for their belief that in the late 20th century we could recreate some of the practices of the golden age of capitalism. It was all a romantic folly. The age of Disraeli, of untrammelled private greed masquerading as social virtue and yet trying to save its soul by acts of Christian charity, is a dead age. Democracy must mean consensus. Nobady on the Left or on the Right can govern by conflict and still maintain democracy. If one refrains from dwelling on the Government's past errors it is because the strategy they are now pursuing is broadly right. Unfortunately, it is difficult to convince people throughout the country who are not so quick to react to change as we may be. There is a terrible backlog which the Government have to overcome at a result of their actions in the first 18 months of government.
It is right for the Government to go out for expansion. It is right to pour money into the regions. It is right to prop up—at least in the short term—the

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labour-intensive industries which are in danger of falling by the wayside. It is also right to appeal to the trade unions for their co-operation. As the Prime Minister has implied, we cannot go on trying to expand unless we can cope with avoidable inflation. Of course the unions can legitimately score points against the Industrial Relations Act. Of course the Government might be wise to think again about the necessity to put up rents for millions of people, and of putting millions more on a means test in order to avoid those increases. Those things have considerable importance, but they are only a part of the main scene. I think the trade unions have got to recognise in the end that a prices and incomes policy is as much in their interest as it is in the interests of everybody, and it would be tragic if the drive that is now being undertaken for full employment were to be wrecked by a mixture, on the side of the Government and of the unions, of pride and prejudice around an Industrial Relations Act that is largely irrelevant to the central issue, and largely unworkable. The unions of course are asking the impossible when they demand the repeal of the Act; but a Government with its eye on reality would let that Act lapse—if I may use a Churchillian phrase—into "innocuous desuetude".
Now the difficulty is, as the noble Lord, Lord Robbins, has said, that inflation makes all of us mad, cunning and selfish in the hope of surviving the wreck and preserving our personal position. The question before us is, can we return to sanity and together seek a social solution? Can we, as a nation, see that even enlightened self-interest—our own long term interest—demands that we should do so? If we do not do that, if we cannot deal with our current madness, then I am afraid we may have to go back to the old legal strait-jacket, to the old legal freeze of prices and incomes—not a nice thing; an evil, perhaps, but an evil less than the developing inflation in which we are now caught.
9.6 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, the only part of the Motion with which I find some sympathy is the last part; indeed, I think several other Members of this side of the House have also found sympathy with it. I refer to "a unified society". But one
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cannot really blame the present Government for not having a unified society. It is a difficult thing to achieve. Certainly after the last War we appeared to have a more unified society than we have to-day, perhaps because it is a more mixed society to-day. I think a unified society would be the key to our salvation.
I cannot agree with the noble Lord, Lord Beswick, in the blame that he puts upon the Government for not maintaining the value of money. In fact no Government since the First World War have maintained the value of money. The only period in our history when the value of money was maintained was for about 100 years covering the Victorian period, when the value of the pound changed hardly at all. The pound was then supreme. In my view the present Government have done more than almost any other Government since the last war to try to preserve the value of the pound. After all they have given tremendous incentives to investors. They have cut taxation by £3,000 million; we have a low bank rate; and the Government, through the Industrial Relations Act—which has had a lot of mud thrown at it to-day—have tried to induce the unions to honour their agreements, voluntarily arrived at, and to cure unofficial strikes. One cannot really blame the Government.
But, my Lords, without a doubt what has gone wrong is the apparent refusal of organised labour to co-operate with a democratically elected Government. I know of no other country where this situation would be tolerated; it is a definite defiance of the law. As I say, a lot of mud has been thrown at the Industrial Relations Act by some noble Lords to-day. But I would remind noble Lords that since the Industrial Relations Act became law last February 1,600 disputes, I understand, have come before the Industrial Relations Court, 600 of which have been settled satisfactorily. They are not disputes that get into the newspapers, but the Court has certainly done some good work. Moreover, I understand from the newspapers that the Prime Minister is prepared to discuss with the unions any sections in the Industrial Relations Act which they do not like and which may hurt their interests. Presumably they are prepared to come to some compromise. But I often wonder whether the unions really

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understand what is damaging to their own interests. As we have heard, this Act is only an Act to bring the unions within the law, as they are in every other country. It is only asking the unions to adhere to the law of contract that every other citizen of this country has to adhere to. That cannot be called a dastardly plot to destroy the unions. The propaganda that one hears against the Industrial Relations Act is completely absurd.
But, my Lords—and I come back to this point—to blame the Government for failing to maintain the value of money is very unfair, because if wage claims are made and persisted in, completely unrelated to productivity and prices—and, after all, this is done by industrial blackmail, which I know is a strong word—the Government are in a very difficult position. I understand from the papers to-day that Mr. Feather said that if the unions do not want to do something they are not going to do it. My Lords, that is just like the attitude of a spoilt child; it is complete and utter defiance of the wishes of a democracy. I sincerely hope that the unions will change their views on this, because if this madness persists we know what will happen: presumably it is bound to end in confrontation; and nobody wants that. It might mean the breakdown of society, anarchy, privation and great distress. I have had something to do with shop stewards with whom I always got on very well. I know the British working man and get on well with him, but I am quite sure that there are throughout industry a great many people—professional agitators—who would be only too pleased if the whole of society broke down. That is just what they want.
When the last Government tried a wages and incomes policy I was all for it. I did say at the time, however, that I much doubted whether, in a full democracy such as ours, one can really get voluntary restraint and that where there is a mass of industrial workers they do appear, probably through no fault of their own, to be abysmally unaware of the basic elements of economics. It is very difficult, therefore, for such a policy to work. It is sad to think that we are so immature, or that we are not mature enough, to have a policy of voluntary wage restraint, but we do not appear to be able to. I beg the Government to do
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everything in their power—and I have often harped on this over the years—to explain to the people what the Government are trying to do, because there is a great fund of good will in this country among ordinary people, but they do not really understand. I often talk to work-men about this, and I know of work-men who cannot understand why they cannot be paid £100 a week or even £200 a week. They say, "Why can't the Government print more money?" Then I explain that if you did that a box of matches would cost £3 or £4. They still do not appear to grasp the situation. If only we could get this point over!
I have always thought that in public utility companies like the nationalised industries, which after all are monopoly industries, where a worker has all the advantages at the taxpayers' expense, it is socially unacceptable that he should strike. If only it could be explained and be brought home that in a monopoly industry, a nationalised industry, it is socially unacceptable to strike, and that by striking you will inconvenience the public who pay for those industries, and, while you are on strike, also pay for the National Assistance to keep you in idleness—if we could get over to people that to strike is socially unacceptable, that it is rather like running off with your host's wife—I feel we might get somewhere. Of course, people have a right to strike; but I am talking of the nationalised industries, which are different from private industry. If we can make it socially unacceptable, I think we shall get somewhere, because the average person does not like being socially unacceptable.
In these debates to speak near the end is awfully difficult, and I am trying to say something constructive. There is something I should like to propose, but probably I should be thought mad. I have always thought it would be far healthier if, as far as possible, we could keep finance and money out of Party politics. I think perhaps we should then have more hope of a unified society. I cannot understand why all Party funds cannot come from the Exchequer, by direct grant from the Exchequer, based on how many votes each Party received in the last General Election, and each Party would receive the appropriate

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funds. That would be a very small charge on the Exchequer; it would amount to only a few cigarettes per elector. It would take finance away from the field of Party politics, and take away the feeling that politicians have to bow down to big business or to the trade unions. I would not think of criticising Members of another place, but then perhaps we might get even better Members of another place, people who would perhaps be completely uncommitted and would think first and foremost and only of their country.
We have to think of our country. I am afraid there are quite a lot of "smart Alecs" around to-day; we have them in my Party and they are also in the Party of the noble Lords opposite. I am all against "smart Alecs". There was a rather unsavoury article in the newspapers to-day, from which it appeared that M.P.s of both Parties were paid large sums of money for doing God-knows-what. It is far healthier to keep money out of politics. I agree with what my noble friend Lord Balfour of Inchrye said. No doubt the chairmen of nationalised industries and senior civil servants and judges deserve these extra salaries. Admittedly most of the extra salary will go in tax, but I do think this is rather a bad time to implement the increases. Perhaps events have rather overtaken Her Majesty's Government. I understand the difficulty; things have happened rather quickly.
The only good thing I can say about the floating pound is that it may make the average person who goes abroad understand what happens if he gets wage increases above productivity and running ahead of prices. I must confess that apart from that I do not like the floating pound. Perhaps this action had to be taken, but I hope we are not required to endure it for long. It is a rather sad situation for the sterling area.
It is all very well if a voluntary agreement can be reached where wage increases are tied to price increases, but this will not solve the problem of unofficial strikes. I do not know where we are going if the unions are not made responsible for unofficial strikes. I thought that under the Industrial Relations Act the unions were responsible for the action of their shop stewards, but apparently that is not so. The matter
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I understand, has to go to appeal. I know one way to cut down on strikes, but it would be very unpopular. It should certainly apply in the nationalised industries. National Assistance ought not to be given to the families of strikers unless there is real hardship. Without doubt such action would stop a lot of strikes. We must make the majority of people feel that they are united and are actually getting to the target, in that they are engaged, with the Government, in building a prosperous country which will give a higher standard of living for all. If we do not get that feeling I do not think we have much hope, because eventually we are bound to have a confrontation and then we might end up with a dictatorship, either of the Right or the Left. Nobody wants that; certainly I do not.
I should like to end by saying that if this economic disarray continues—other noble Lords have mentioned this aspect—it will be very difficult for us to go into the Common Market. We shall find our opportunities in the Common Market fading like the snow in spring. I do not know what would happen then. We have very few natural resources in this country. I know that noble Lords opposite are always harping about labour. We now require less and less unskilled labour; it is the brains of this country which are our real wealth. We do not want them to emigrate. If that happens we shall then have a controlled economy under a sterile and unimaginative bureaucracy, and presumably we shall end up as the poor man of Europe. I cannot believe that will happen, because we have the resilience and intelligence to avoid it.
9.24 p.m.
THE EARL OF LYTTON: My Lords, I have enjoyed listening to the noble Viscount, Lord Masereene and Ferrard. He makes us laugh. I appreciated his point that it is difficult to make people understand the elements of economics. For four years in the 1930s I was an instructor on this dismal science to the senior division in Sandhurst. I corrected all my own papers, and I suppose I must have taught 2,000. They were intelligent lads, from public and grammar schools, well-educated boys, but I can confirm that it was difficult to interest some of them and to make them understand. I could quite understand after quite a long, hot summer, cadets being confused between,

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shall we say, the balance of payments and balancing the Budget, which is something quite different. I think a great many people in this country are in precisely the same situation. They do not know the elements of the value of money and its purchasing power, and it takes a great deal to inform them.
Having said that in response to the noble Viscount, I want to say that it is a pleasure, coming at the end of this long debate, to scrap my own notes and to gather in some of the gems which have been let fall in some great speeches. Before calling attention to three of these, I should like to try to assess an element of agreement. Is it agreed that inflation has been going on a very long time? For myself, I traced the rise of prices from the 13th century, but I do not think that anybody wants me, at this time of night, to give illustration from the Peasants' Revolt of 1381, or anything else. I hope it is agreed that inflation of some sort has been going on for centuries, and that maintaining impeccably the value of money is something that will for ever be beyond our likely competence. Secondly, I think that the noble Lord, Lord Robbins, in a speech which many have described as most striking, and which I felt was like a bucket of common sense, mentioned that the inflation we are undergoing now is of a dangerous kind; and that view was echoed by the noble Lord, Lord Thorneycroft. I think there is also agreement that there is a greater degree of inflation in this country than in many of our neighbours, and that that is the principal danger to our balance of payments.
At least three noble Lords mentioned (and I think there were others whom I may not have heard) that the Motion before us to-day should have been levelled equally at the previous Government; in other words, that it is a kind of "pot and kettle" assault on the Government. The noble Lord, Lord Walston, from the Labour Benches, made that particular point. I hope that, at the end of the evening, the noble Lord, Lord Beswick, having stimulated a most exciting debate, will withdraw his Motion, if only on the ground that his indictment applies equally to his own Party. We are anxious about the failures of the Labour Party, and at the lack of success so far of the Conserva-
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tive Party. That both should come to failure is an utterly unthinkable disaster, and that is something we must hope to avoid.
The priority in the course of the debate was mainly inflation, but the noble Lord, Lord Beswick, followed by certain other speakers, put the achievement of a just society and an egalitarian society (or something of that kind) as being necessary first. With respect, I think that is crying for the moon. It is possibly wrong that anybody should have a Rolls-Royce here, but if you carry that argument to other parts of the world—and I have been living with nomadic tribes in Africa—it may be wrong to have a bicycle there. It is the disparity of wealth which excites envy, and it does so in certain places over a bicycle with just as much certainty as it does elsewhere over a Rolls-Royce. I think that that is a separate subject of debate, and I am sorry it was introduced into this debate because we are really talking about inflation and not about an egalitarian society.
I listened with interest to, and was suitably impressed by, the noble Lord, Lord Boothby, who I think is the only one of us who speaks in Churchillian tones. He referred to an episode which concerned me very much when I was instructing in this subject—the return to the gold standard in 1925. He may have been airing a prejudice when he attacked the Treasury alone, because my recollection is that Winston Churchill was at the Treasury at the time when we returned to the gold standard and, for whatever reasons, the decision was proved to be wrong. Sterling was over-valued in relation to the dollar, with all the strain that placed upon our balance of payments, and it is unfortunate to blame the Treasury, which the noble Lord did in no uncertain way, for something which Churchill did. You might just as well blame the Admiralty for Gallipolli, instead of Churchill. Churchill was not a man to do things for which he did not take the fullest responsibility.
That has a bearing on our entry into the Common Market, because in 1925 we returned to the gold standard with our pound over-valued, but in 1928 the French, with customary subtlety, returned to the gold standard with their currency under-valued. Those two factors placed an enormous pressure upon us.

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They were not the only ones, but they placed an enormous pressure upon us. The point of relevance at the present time is that when we go into the Common Market, when we fix our parity—as I suppose we are certain to do—it would be a most lamentable mistake if we either over-valued or under-valued again. That is the difficult point at which we all must aim. The noble Lord, Lord Boothby, rightly pointed to what Keynes called "the economic consequences of Mr. Churchill". The over-valuation of sterling and the return to the gold standard in 1925 was the beginning of an era which ended in such lamentable unemployment that a pacifist trade union lady, with whom I sat on the Central Advisory Council for Education, said to me one day, "Mass unemployment is a more evil thing than war"; and I think that is true.
In his admirable speech, the noble Lord, Lord Robbins, intimated that we must not check inflation instantly or we shall precipate unemployment. That is what puzzled me about the terms of this Motion; that inflation is the cause of unemployment. In the classical theories it has always seemed to me that it is the process of checking and arresting inflation that presents the difficulties of preserving employment. The noble Lord, Lord Robbins, spoke about the need to go slowly and suggested that we need a period of breathing space, during which we might have a prices and incomes policy, legally enacted, in conjunction with other things. I was wondering what other things. I suppose that if the Industrial Relations Act, to which I take no exception, is to be held in suspense for a time, that will be done in order to secure good relations with the trade unions, which of course are essential. That is because the trade unions have absolute power in these matters—a negative power to destroy themselves and the whole of society. We cannot regulate them by force.
Very well, what other things can be done? Is it possible to associate the prices and incomes proposition with the Industrial Relations Act? What about industrial action? What about a moratorium on "Go-slow" and on strikes? Surely that would be advantageous to us all and would give us the breathing space
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for which we all hope. I share the view of all economists that the prices and incomes policy is only a breathing space and that, in so far as it keeps things below the natural market level, they go up more rapidly when we take the lid off than they would if we had no lid at all. It is something that must come home to roost. I merely suggest that these things should be considered.
The noble Lord, Lord Thorneycroft, made another thumping great speech. It was persuasive to a degree. He asked for co-operation. If the noble Lord asked me for co-operation I do not think that I should be capable of refusing because I find his persuasiveness, his arguments and his eloquence so great. He raised a point which brought to light the reversal of the approach of the Labour Party to the control of the trade unions. I shared its hopes ardently. I wrote to a newspaper defending Mr. Harold Wilson against some critic in the Sunday Telegraph. I do not mean that Mr. Harold Wilson needs letters from me in his defence. I merely mention that as an expression of my feelings.
I noted with great regret the packing up of the Industrial Relations Act by Mrs. Castle. I did not share Lord Thorneycroft's view, but I admired him when he resigned and I wrote an article about it. I do not think it was necessary for Mrs. Castle to resign, but I regret that she went so much into reverse and criticised with such passion the attempts of the other Party to do very much the same thing as she had tried to do. That was very regrettable. I hope that the Labour Party will respond to the noble Lord, Lord Thorneycroft. Co-operation is surely the key. The noble Lord, Lord Walston, used a phrase which might also be considered to be the key to this debate. He acknowledged that his Party had achieved no more than the other Party. He said he hoped that the other Party will do the things that his Party tried to do and failed and that it will succeed. The impression we get, not in this House but in another place, is that in no circumstances would the Party in Opposition welcome on any terms any success by the other Party on the fronts where it had failed. I hope that this trend will be reversed and that the noble Lord, Lord Beswick, will not press his Motion to a

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Division. It is on a matter which reflects no success of any substantial nature by either of our two leading Parties. If we have failure from both, the calamities will be beyond belief.
9.40 p.m.
LORD SELSDON: My Lords, I would feel myself a total hypocrite if I did not admit to sharing to a very large extent the views expressed by the noble Lord, Lord Beswick, in the very careful phrasing of his Motion to-day. As an optimist I should like to believe that we are near to the threshold of the greatest period of economic growth, and sustained economic growth and international expansion, that this country has enjoyed for many a decade. Western Europe, whether we like it or not, is now the focal point of the world's attention; and we, whether we like it or not, are the focal point of Western Europe. We live, without any shadow of doubt, in the freest country in the world, and our quality of life is admired and respected above all others. Why are we so utterly incompetent that we cannot put our own economic house in order? Why must we endure continually the spasmodic buckets of cold water that are poured over us by our rivals, our allies and even our own kinsmen?
As a nation, we have seen the world torn apart and rebuilt. And yet, apart from an enlightened few, we ourselves have sat back secure in the feeling that if we are British everything will be all right in the end. In a funny way, I believe that because we are British everything will be all right in the end; but during the past ten years, whether it has been through selfishness, laziness, utter incompetence, lack of forethought or narrow-mindedness, we have created a situation of such economic and industrial disunity that only strong leadership and a firm hand can push us along the path to economic growth. My Lords, this is, and always has been, the responsibility of Government, and Governments must be judged by what they have achieved and not by what they set out to achieve. But the final judgment can only be made at the end of their period of office, and not at the end of the first two years.
Personally, I believe that as far as our economy is concerned the Government
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set out on the right track and are still on the right track. But, somehow, during the last months—and I think it has been only in the last three months—in the eyes of the country they have moved from being positive and active to being somewhat negative and passive. We have had something of a hiccup in confidence, a hiccup in sterling and a hiccup in the economy. This hiccup has been caused not so much by the general economic policies of the Government, which I believe are sound and good, but rather (the subject which we are debating to-day) by inflation, which in my own view has been due almost entirely to inflationary wage settlements. Although the ultimate responsibility for this must rest upon the shoulders of the Government, it would be dangerous and misleading not to apportion some of the blame to the management of nationalised and private industries, to the unions and to the employees themselves. Wage inflation will continue, and will create further economic and monetary problems unless a firm stand is taken. There must be, as has been pointed out again and again to-day, a closer relationship and understanding between Government, management, the unions and labour.
It seems to me that, somehow in this country of ours, we have lost our way. I have no great respect for French industry, and yet the French have a certain form of paternalism in that, as a Frenchman put it to me the other day, "A good French company is one which balances income with expenditure and provides a good way of life for the people which it employs". Not so many years ago it seemed to me from what I had heard that people were proud to work in nationalised industries, proud to work on the railways, proud to work for a man in private industry whom they liked and respected. An employer used to claim with pride, "I employ 5.000 people". Now he says, "My key ratio is this", or, "My net assets are these", or, "My profit before tax is this". Somehow along the line the human element has gone out of our life. In my humble way, I like to feel that I have always worked for people and not for organisations. But, my Lords, at the moment we have people who remember the war years; we have people who talk quietly about the yen inflation, about the deutsch-

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mark inflation, about the day when you were in a German hotel and one morning you thought you could pay your bill with your deutschmark and the next day it was only enough to tip the porter.
Now what can the Government do? We can, of course, opt for a wages or prices and incomes policy. I do not like that. I never have; and others have pointed out that it just will not work. It is totally alien to the British character. It is psychologically unacceptable, in my view. But the alternative (and I believe the Government are right) is going for increased productivity and growth. I believe that in a way we had begun to "lick" the unemployment problem. I believe that industry was re-investing. I believe that the great industrial shakeout, as it has been called, is over. This has been demonstrated by group company results in certain sectors, increased turnover, increased productivity, people looking for more employees.
But let us not forget the past totally. This long overdue shake-out of industry was the dramatic and major contribution to unemployment. It left its mark in no uncertain manner, a mark that will remain for many years. Its impact was made greater through the selective employment tax; not the tax itself, but because it caused management to realise that in many cases it had an excessive labour force. It was made greater through industrial relations problems which made management and investors wary of labour-intensive industries; and it was made greater through a lack of confidence from abroad, as Lord Thorneycroft mentioned. This confidence went away; there was no further confidence in the reliability of British labour, and international investment went to the countries of the Continent which offered more reliable labour conditions. And let us not forget the point made by the noble Lord, Lord Beswick, about asset stripping, of mergers and acquisitions. Whether we like it or not, in a move to make industry more productive, more profitable, people become pawns in the game. This is a sad situation, but I believe that that is over, and I believe that we have reached the point when the effects of the shake-out are totally over, when we have the ingredients of a stable and expanding economy.
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Things looked good and then came this mad bout of inflationary wage settlements, and an intolerable rate of inflation which hurts the most under-privileged and which favours the rich, favours those who have their houses and favours those who have invested their money in things. I believe that it was this concern over inflationary wage settlements and not the dock strike, as Mr. Victor Feather would have us believe, which created the fears of devaluation. It was these fears which I believe were set on fire by totally irresponsible remarks by those who should realise how much the strength of sterling depends on international confidence. Shake that confidence, even slightly, and a serious problem becomes a crisis overnight, harming ourselves, our friends and our allies in the sterling area and those who hold sterling.
The Government were right to float the pound, but wrong in that they failed to recognise the impact that wage settlements would have on national and international confidence. Their early warning system was at fault. Now they must repair the damage; and even though the damage was caused largely by others, the responsibility is theirs: they must restore confidence. This they must do firmly and quickly. I believe that they have the greatest possible opportunity to do so in this week. To-day we have seen such chaos in the Foreign Exchange market. Lord Boothby was not wrong when he said, "Let us go back to gold". Nobody knows which currency to go into. The pound is now on the way up. Is that because the economy is stable or because people are afraid of the dollar? I think people are afraid of dollars. The Americans would like Europe to float; the deutschmark may float to-morrow—or the franc. To-day, at sixteen minutes past one o'clock, the French Government resigned. Europe is in total disarray. Now is a fantastic opportunity for the Government to take the bull by the horns and give confidence and leadership to Europe. I believe we could seize it now, and deserve it. We need some magic thing to demonstrate that we are back in control. Although I dislike saying this, because it sounds like a strong Right-wing attitude, we must control inflationary wage settlements, even if it means some form of confrontation. Then confidence will he restored and sterling will settle at a higher rate—and at a much higher

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rate than people feel to-day. I should hate to take a punt on it, but I believe that it will be 2·50-plus—particularly in view of the current situation. Of course, the Government have injected money into the economy. They must now reduce the money supply. But there is one area, an emotional area, a minor area to some, but one which I should like to take up. This is the area of supplementary benefit. I think it is right to pay tribute to the progress that this Government and the last Government have made in the field of sickness and unemployment benefit. Things were done which were good.
To illustrate this I take one example—I would call it the average family, though I dislike the word "average": a married couple with two children under 11 years of age. Between 1960 and 1971 their average net weekly income in work rose from £13·94 to £25·85, an increase of around 85 per cent. The average net weekly income of those off sick or unemployed over the same period rose from £5·50 to £20·5., an increase of some 265 per cent. This narrowing of the gap between net incomes in work and out of work is commendable, provided that it does not lead to abuse, and provided that it is not used for the wrong means. In 1960, this typical family's net income when out of work was 39 per cent. of what it earned in work. In 1971 the proportion was 77·6 per cent. The question I ask the Government—without wishing to put any cat among the pigeons in any way—is this. Is it fair on the taxpayer, and, equally important, on those actively seeking employment, that a man, if he refuses to work in some way, using average earnings as a base, can take home 77·6 per cent. of what he would receive if at work? I ask this because I think that this has some bearing on industrial disputes in some way which I should hate to suggest. This last bout of industrial disputes can do irreparable damage to the employment situation if the Government, unions, managements and labour itself, cannot ensure confidence in United Kingdom and in British labour.
My Lords, I am worried—and I think that the noble Baroness, Lady Seear, also made this point. As a country we may move further and further away from labour-intensive industries towards
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capital-intensive and service industries. Service industries will grow in Western Europe, there is no doubt; and the British are well positioned to take their opportunities and make the best of this. I am worried that the spirit and the skill of the British worker may fade away and die. I believe that a good many people have forgotten that this country, which has not a particularly great amount of natural resources, has one major asset. It is the skill, the initiative and the drive of the British people, which, if harnessed, can achieve very great things. Let us not forget that if the unions refuse to cooperate with the Government and the members refuse to co-operate with the unions, a future for full employment in this country is non-existent.
That leads me to a second area of concern; and I should like to make this as an early warning point; it is one that in my job concerns me specifically at the moment. I refer to international investment within the enlarged E.E.C. As the weeks roll by towards the date of our entry, British companies, of all shapes and sizes, are roaming the Continent looking for acquisitions; looking for investment opportunities; looking at the advantages of setting up abroad. Many of them are fed up to the back teeth with the labour situation in this country. They are not bad employers; often they have a good, honest and reliable labour force, and they have a good relationship with their labour force. But they are fed up about other situations in other sectors of industry. This international expansionist attitude is healthy and must be encouraged. But we must have corresponding inward investment, and I do not believe that will come unless we can restore confidence in the reliability of British labour. "La maladie des Anglais" as it is called, is so serious, in my view, that only a firm line by Government, in co-operation with the unions, can restore confidence; and it would be wrong to be totally insular at this point in our history.
My Lords, I end on a simple note. I am not, and never have been, a pessimist. In the heart of every man and woman in this country there is at least one ounce of common sense. Let the Government recognise that. Let them recognise, too, that they were put in power to lead and to govern. If they actively demonstrate that what they are doing at this point

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of time is good, then, no matter how controversial their policies may be, they will have the support of the British people. They will have the support of national and international industry and, ultimately, the support even of those whose inflationary wage claims they reject, as indeed they must.
9.55 p.m.
LORD SHACKLETON: My Lords, in winding up this debate for the Opposition I should first like to say very sincerely that it is a great pleasure to follow the noble Lord, Lord Selsdon. I have little doubt that if he is unwise enough to take his politics seriously he will be an ornament of one Front Bench or another. Quite where he will end, I am not sure. But his speech was of a quality which was very acceptable to your Lordships, and I must say that I had expected it from him.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SHACKLETON: My noble friend Lord Davies of Leek referred in the course of the debate (and the Leader of the House agreed) to the absence of noble Lords who had spoken earlier. It is worth reminding them—though unfortunately they are not here to hear this—that the Companion is very clear that it is an act of discourtesy for a Peer not to be here throughout the debate, even if he apologises.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SHACKLETON: We know that sometimes it is unavoidable. My noble friend Lord Douglas of Barloch, who I know is not well, complained that he had to go because he had a fever. I have a fever at the moment—I hope that other people have not caught my cold. I know that the noble and learned Lord the Lord Chancellor, who sits on the Woolsack, is suffering from hay fever and has been assiduous in his attendance.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SHACKLETON: It was perhaps a little unfortunate (let me put this mildly) that attempts to arrange for this debate to continue for a shorter period on Thursday came to naught, through reasons which I can only describe as failures of communication. I do not wish to attach blame to anyone on this. It is always exceedingly difficult when
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one does not know how many speakers are going to take part, but since a number of noble Lords have suggested that it was madness to cram so much into one day, I must exonerate the Leader of the House, who I know attempted, not quite successfully, to see if we could run over to another day.
Despite that, I agree with my noble friend Lord Hale—who made a notable speech, and one that was itself extremely acceptable to your Lordships—that the House has done itself honour by the quality of the speeches we have had to-day. It is perhaps a little difficult to pick on particular speeches but I will mention my noble friends Lord Walston, Lady Gaitskell, Lord Davies of Leek (who gave us a splended seven-minute speech which in fact last 21 minutes; he delighted the House by his great range of language and depth of spirit and feeling) and Lord Ardwick.
There have been outstanding speeches. Everyone has paid great tribute to the noble Lord, Lord Robbins, who has sat faithfully in the House. We had a good knockabout speech (he is not here now, so I will not answer him) from the noble Earl, Lord Dudley; and there was the speech of the noble Lord, Lord Thorneycroft. I will not attempt to deal with all of these beyond saying that no one can dispute that the Government have failed in the matters to which we are referring. Nor could I dispute that the previous Government themselves were not very successful in dealing with them. In this House we can afford a measure of frankness about this matter.
My noble friend Lord Beswick very much sought to take a constructive line, a line that we have consistently pursued in your Lordships' House: that whatever solutions there are going to be to the problems of this country, there can be no hope of solving them without a much clearer demonstration to the country, and an acceptance by the country, that we really are out to achieve social justice to the community.
Noble Lords opposite talked about the Conservatives showing a human face. We know that noble Lords have great humanity, but none the less the impression that has been felt in the country—and I shall go further into this; this is not just Labour Party propaganda; I ask noble Lords to accept that—is that

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the philosophies of the Government and the policies they have followed, far from leading to a consensus in favour of an orderly and co-operative approach—for instance, inflation has in fact been calculated to have the reverse effect—the conflict in our society has been sharpened by certain particular actions. I shall seek to describe some of these, because I should hope at least to attempt to end on a constructive note, conscious as I am, and as the noble Earl, Lord Lytton, made clear, that all Governments in the Western world have not been very successful and particularly in this country we have been less successful than most.
We are not helped by the inevitable—and, goodness knows! we had it sometimes when we were on that side—apparent complacency of the Government in these matters. I did not feel that the noble Earl, Lord Jellicoe, was particularly happy with his speech. He did the best he could, but I am bound to say without personal offence—and the same could be said about the speech a year ago of the noble Lord, Lord Aberdare—that there was a certain complacency about it. I could give a whole host of quotations from the Government before and since the Election, but I will not waste your Lordships' time. It is a dismal story. We had not expected our cases to be demonstrated quite so dramatically when we put this Motion down as has been shown by the decision to devalue the pound. And let there be no misunderstanding that it is a devaluation of the pound. While we accept that the Government acted promptly and correctly in the matter, none the less it has been a very disturbing consequence.
The noble Earl, Lord Jellicoe, even trotted out that they had reduced S.E.T. by 50 per cent.; I think we had that in last year's debate. We heard something about the hard-won achievements of the last two years. I should be jolly interested to find where those hard won achievements are, and whether devaluation is one of them. What they would have said to us if we had had a devaluation I do not know. We probably should have devalued sooner than we did. I suppose this was a matter of pride although the noble Lord, Lord Robbins, said that explanations and extenuations of the devaluation seem to be absolute
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nonsense—and I hope I have quoted the noble Lord correctly on that.
When we look at the figures the noble Earl gave us, these pathetically little trends, if I may say so, which suggest that prices are not going up as fast as they were last year, I can only say that the price of houses in the first quarter of this year has increased by 32 per cent. in comparison with the figure for the first quarter of last year. I find this a pretty record figure. As for the figures of short-term trends, I know that the Government have to give such figures but I regret to say that they are not encouraging. There is little doubt that the decline in the increase in food prices from 10 per cent. over one period to 6 per cent. more recently will quite soon be followed by a more rapid increase. The noble Earl is quite right not to attempt a forecast of what food prices will be in November. Devaluation alone will put them up; and the figures which have appeared in the papers—and I am sure that the noble Earl reads the Financial Times and other papers—show that we are in for some pretty severe increases in food prices.
There has been one very good thing about the Government: although they have never eaten their words, they have in fact proceeded to reverse their actions and their previous doctrinal approaches in a number of respects. We know that they have "nationalised" a couple of industries but without paying compensation to the shareholders—they let them go bankrupt, and I suppose that was good Conservative philosophy. We heard yesterday (or was it the day before?) that they were going to pour £14 million in one year into I.C.L. I am all for it, but I should like to know how it is going to be controlled.
So we see quite an interesting reversal in Government policy. The only thing is that they are running out of new names for Labour policies which they are adopting. None the less, even if the Government do not publicly confess their sins, we are glad to see the fruits of repentance. Although they have reversed the favourable balance of payments which they inherited from us—I know that this is old stuff—more quickly than we had expected them to be able to do it, they are pursuing a measure of expansion.

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right at the beginning, Mr. Feather's proposal for some form of basic wage However, certain aspects still remain very divisive indeed. We warned the Government that the Industrial Relations Act could be no substitute for co-operation and conciliation. We do not claim—I grant this again to noble Lords—that we were particularly successful in dealing with the problem, though I am bound to repeat what was said by my noble friend Lord Diamond on occasions (some noble Lords may have thought them so numerous that they would rather not remember them); namely, that this Act is infinitely different from that which the Labour Government tried to pass. It does not matter whether it is an ideal Act or not: the fact is that it is not going to work. It is no use the Government thinking that it is enough to produce an Act—to introduce, as they say, the rule of law—and then, to find that the rule of law is not generally acceptable in this sort of area. The British trade unions have paid their fines; they have not ignored the orders of the Court, as has happened in some other countries. I am making no criticism of the judge, but we have seen some of the decisions of the Court reversed and some of the fines remitted by the Appeal Court; we have seen a threatened dock strike averted and the Government and the country saved by the Official Solicitor, of whom very few people had heard—a wonderful rescuing angel who appeared on the scene. If he had appeared a bit sooner we might even have avoided devaluation. But these were the direct consequences of this Act. It is a heavy price we are paying. How much better it would
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have been if the Chancellor of the Exchequer had not rejected, as he did increase linked to movements in the cost of living; how much better that he should not have poured scorn on that proposal as he did at that time, but seized the opportunity, as indeed he was urged to do by many responsible commentators! And now they are trying to do this. My Lords, I could give many figures—but I will not at this late hour—to show how unsuccessfully the Government have intervened in regard to the cost of living.
This brings me to one other example that I want to give of the divisive nature of Government policy. That is the Housing Finance Bill. Here, again, I always go to my noble friend Lord Diamond, who is a former Chief Secretary to the Treasury and an accountant; and we know that accountants, according to my noble friend Lord Bowden in a very interesting speech, now hire more graduates than anybody else in the country. Lord Diamond has pointed out that this Bill proposes to double the rent of council house tenants—some 5½ million of them. It proposes to subject some 3 million (it may not be as many as 3 million) of those families to a means test in order to save the taxpayer some £300 million in the years ahead. For all the things the Government have done—and I acknowledge things they have done—they have destroyed any possibility of a co-operative approach to preventing inflation by legislation of this kind, based on theories worked out but not relevant to the realities of the situation as they face us to-day.

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My Lords, even worse—and here I take up a point made by my noble friend Lord Davies of Leek—the actions of the Government have made our entry into Europe more painful and more costly. Those of us who, like myself, believed in the Grand Design of Europe, and still do, must say that the failures of this country or this Government, whichever way we like to put it, will add in the short run to our difficulties, rather than the reverse. I have never believed that entry into Europe was going to solve any of our economic problems in the short run. I was much more concerned with the general political arguments. I shall not go into them, but there is little doubt that it is going to be a more costly experience as a result of this devaluation and with our loss of standing in the world as a result of it. We know that the Conservative Party has always believed a lot in the standing of this country, as we do, too, on this side; and we have suffered a real blow.
The fact is that in the present situation, where the share going to wages and salaries still remains approximately the same as it has been over the last ten or twenty years, the trade unions and the workers are having inevitably to fight hard, competitively indeed against their fellow workers. Anyone who wishes to see a co-operative or Socialist type society such as exists in Sweden, to which the noble Lord, Lord Hankey, referred, will know that the present situation is a very unhappy one. This is linked with the level of unemployment—and again I accept that the Government wish to deal with this problem, but the level is still appalling. We who live in the South of England have, I think, little appreciation of the real measure of unemployment in Scotland and the North, where, particularly for the unskilled, there are numbers of up to 50 or 80 men going for a single vacancy.
I do not expect that we shall get an answer to-day, but I suggest to the Government that there are certain steps they should now take. I agree with noble Lords that at some point we shall achieve a system, if not wholly like that of the Swedes—and certainly I am not at all sure that I am in favour of the Hungarian solution, to which so many
1488
references have been made to-day—at any rate an orderly system for fixing wages and prices. I think we are all agreed (and nobody has pressed this point more often than my noble friend Lord Beswick) that ultimately we shall have to achieve something along these lines. The Government have been slow to accept this. I suspect—and too many sad prophecies have come true—that unless there are successful talks and the Government are prepared to make concessions on the Industrial Relations Act they will be driven to a wage freeze in the same way that they have been driven to devaluation, even though they have stated their opposition to it.
I want to end by quoting from one rather prophetic statement which appeared in the Guardian:
"Government policy is calculated to make inflation worse in three main ways. First, many of its domestic policies compel ordinary workers to claim large wage increases in self defence; second, the insane expansion of credit now being encouraged is leading to the inflation of land and stock market values, with results that are both inflationary. and, even when the cost of living is not directly influenced, provocative to the militants. In its direct dealings with the trade unions, the Government seem unable to see the difference between confrontation and provocation, and there is a severe risk of damage to the balance of payments, a situation that will be met, it seems, by a devaluation which could both inflame and perpetuate the present inflation."
My Lords, that was written three months ago, and now we are in this situation.
The noble Lord, Lord Platt, asked whether we were seeing the end of the capitalist system. It will not break the hearts of those of us who sit on this side of the House if this is the beginning of the end of the capitalist system. We have believed that because we need to live in a world in which we hope living standards will rise, it would not be "jam to-morrow", as has been the experience of those who have undergone revolution. None the less, we had thought it would be possible so to modify our system by using our brains, by being willing to intervene—as the Government now show they are willing to intervene—that we should be able to solve the problems of this country, in which there is still gross social injustice. I am not just blaming the Government for this—we share the blame, too, for this matter—but the recent

1489
reports to which my noble friend referred, and the gross inequality of opportunity to the children of the less well-off families, show that we are still a divided and unequal nation.
Therefore I hope that, at least in regard to these matters, the Government will think carefully again about the arguments that have been advanced. I fear we cannot expect any Government to admit their failure and we shall certainly have to divide the House, but the quality of this debate has been such that I hope that the Government will have learned something. Like every Government they have a lot to learn, and I hope they will put it to good use.
10.20 p.m.
THE LORD CHANCELLOR (LORD) HAILSHAM OF SAINT MARYLEBONE): My Lords, I thought I knew when I entered this Chamber at half past two this afternoon exactly what I was going to say at the end of this debate, and here it is, beautifully typed out and vetted, and sound stuff from beginning to end. It is now 10.20 p.m. and I feel quite certain that if I were to reply along these lines it would be an infliction on the House which I think wishes now to come to a conclusion on the Motion of the noble Lord, Lord Beswick. Therefore I will adopt a slightly different line of approach and try, keeping my eye upon the clock, to say what it has occurred to me to say as the debate went on, during most of which I have been an interested audience.
My Lords, I suppose it was inevitable that the Opposition (any Opposition, and this Opposition, too) would try to latch on to the events which have taken place in the last fortnight in order to give substance to the criticisms of Government policy which they have been making over the last two years. But it seemed to me, and it seems to me now, that this attempt must necessarily fail. I feel that the noble Baroness, Lady Seear, whose speech I thought was a constructive contribution, really demonstrated that beyond question.
LORD SHACKLETON: My Lords, if I may interrupt the noble and learned
1490
Lord, I found the same handicap, that the noble Baroness, Lady Seear, who opened for the Liberals apparently also wound up for the Liberals and has not been seen since.
THE LORD CHANCELLOR: Well, my Lords, I can adopt her argument—as we say at the Bar—without ceasing to regret her absence. It seemed to me that she demonstrated once and for all that they were two quite different subjects, and I shall return, if I may, to that thesis as I go along.
First, may I come to what seemed to me to be one of the central speeches of the debate. My noble friend Lord Thorneycroft appealed to me to give some indication of the seriousness with which the Government viewed the situation. All through this Government in this House I have been accused of being unduly gloomy. I have been accused on both sides of the House of being unduly gloomy, so I do not think I am likely to incur the displeasure of my noble friend by regarding the situation with either complacency or frivolity. But I do think that I am perhaps entitled to say that we must take hold of ourselves and remind ourselves of one or two basic facts about the present situation and about the last two years and the future.
We started with a very large surplus of reserves. We still have 5½ billion—American billion—dollars of reserves, much more than we started with. We started with a favourable balance of payments, and although for reasons which I shall seek to develop we have a smaller favourable balance of payments currently, our total balance remains favourable. Thirdly, we aimed at a 5 per cent. growth target by the early months of 1973, and although I am not playing in the league which enables me to predict with confidence, I have no reason to doubt what my right honourable friend the Chancellor of the Exchequer said when he said "We are on course for that," another favourable factor. During that period of time, although prices have risen, wages in real terms have risen more, and therefore the average standard of life is higher than when we started.
We began by inheriting—and I make no Party point about this—a budgetary

1491
system dependant upon enormous budgetary surpluses: I think in the last three years of the last Administration something like £1,000 million a year. They have been diminished. We have reduced taxation, both direct and indirect, by something of the order of £3,000 million a year. We inherited a system of savage credit restrictions, and we have reversed that tendency. Until about two weeks ago, in spite of these steps to reverse the policies of our predecessors, the pound had hardly showed a flicker. We had reversed them deliberately, rightly or wrongly (and the House must consider which), in order to achieve the very objects which the noble Lord, Lord Beswick, has specified in the second part of his Motion. We reversed them in order to reduce unemployment we reversed them in order to create expansion to the tune of 5 per cent., as I have indicated; we reversed them in order to achieve a more unified society. And the pound had hardly showed a flicker during that period of time.
A very few days ago it seems, certainly a matter of weeks, there suddenly occurred a series of events which led to an enormous and dramatic outflow of currency across the exchanges. and this led to the floating of the pound. The noble Lord, Lord Robbins, in an extremely profound analysis of the problem, to which again I hope to refer a little later, said frankly that that decision to float the pound was right. The question which the House has to face at the outset of its consideration of these matters must surely be what led to the outflow of currency which caused that result. If it was that we had reflated in order to reduce unemployment, well, I suppose we must plead guilty. The only thing is that we were not encouraged not to reflate by the noble Lord, Lord Beswick, or the Party he represents; nor has he called upon us to reverse that tendency today. And I must say I thought by the time the noble Baroness, Lady Seear, and my noble friend Lord Thorneycroft had done with him there was precious little left of Lord Beswick's indictment, because he had not encouraged us at the time to reverse these policies.

But I do not believe, nor do I believe the world thinks for a moment, that the
1492
movement across the exchanges in the past two or three weeks was caused by the reflationary measures which we had taken over the last two years. On the contrary, we are led to believe—here again I am seeking not to make a Party point but to reflect what I understand to be the consensus of opinion—that what led the world to doubt their confidence in the pound was a series of inflationary wage settlements, beginning with the miners' dispute, going on with the railway dispute and possibly slightly, but I think not decisively, influenced by what was going on (and now, I hope, happily settled) in the docks.
Was that due to Government policy? Was that due to the Industrial Relations Act? The miners' dispute took place before the relevant provisions of the Industrial Relations Act came into effect on February 28, so that had nothing to do with it. As to the railway dispute, the worst that can be said is that the Industrial Relations Act failed to reduce the amount of the settlement. What it marginally did was to relieve the hardship to the commuter during the dispute. But it did not affect the movement of currency across the exchanges. What, in my judgment at any rate, affected the movement of currency across the exchanges was the doubt which was aroused in the minds of foreigners and perhaps of our own people as to whether the Government could control inflationary wage settlements.
It is all very well for the noble Lord, Lord Beswick, to put down a Motion of Censure on the Government and expect a vote on it, but what was the attitude of the Labour Party during those disputes? Is not my noble friend Lord Thorneycroft correct when he says there was scarcely a measure, when in power or in Opposition, which would have increased the inflationary tendency which they did not support? Is there a single factor which would have reduced it that they did not oppose? They are the people who are asking us to vote against the Government at the end of this debate to-night. Is that reasonable?
My Lords, I remember, speaking from the Front Bench in the last Government but one, having this very dispute with the then Labour Opposition, with the late Lord Pethick-Lawrence playing the part

1493
which was played this afternoon by the noble Lord, Lord Beswick. I said to him then, and I say to the House now, that if in fact one finds a situation in which wages push up prices one will find inflation and one will find a pressure on our currency. One will find that that is happening by a simple index. If wages are going up faster than prices—and they have been going up faster than prices since 1969—one will find that that is the fundamental cause of one's inflation.
It is not a bit of good complaining about the Government of the day. After all, my Lords, during the Election of 1970 we said that that was the way the situation was going. Like the noble Lord, Lord Hale, I had a good deal of sympathy with the miners during the miners' strike, but we said that this might be the consequence of what they were then doing. We said during the railway dispute that this was the way in which things might be going. What did the Opposition do? For many years it used to be the tradition of this House and of another place that during industrial disputes we did not actively seek to intervene. "But what did they do during the Great War, Daddy?" We at least tried to warn the public; they hurried the thing on. I can remember the reaction of the noble Lord, Lord Shepherd, to the announcement of the railway dispute. The only comment he made of relevance to the present debate was that we could have had that settlement six weeks before—the inference being that we ought to have had it. Is that discouraging inflationary settlements? I do not want to say too much upon this particular theme except this—
SEVERAL NOBLE LORDS: Hear, hear!
THE LORD CHANCELLOR: My Lords, I think it is good for some noble Lords to hear what I have said. I do not want to say too much upon this particular theme except this one thing. If noble Lords think, on either side of the House, that the inflation about which I, at any rate, have been speaking in this House for over ten years, can be contained by simply repeating the old Party war cries, they have another think coming. My right honourable friend has issued an invitation to the unions to co-operate in discussions with the C.B.I. and the Government.
A NOBLE LORD: After bashing them all the time.
BARONESS GAITSKELL: My Lords, may I interrupt the noble and learned Lord?
THE LORD CHANCELLOR: When I have finished my sentence the noble Baroness may. I was saying that we have issued an invitation to those two important parties to industrial policy to enter into talks—I do not want to say anything that would vitiate those talks—but if noble Lords think that any Government are going to succeed if the two great partners of industry will not take the country along with them, then I think they are making a great mistake.
BARONESS GAITSKELL: My Lords, I interrupt the noble and learned Lord the Lord Chancellor with the greatest diffidence and respect, but he has put the whole of the blame for inflation upon the miners' strike and the railway strike. He has suggested that the international community have taken this as a sign of weakness and therefore we have had to float the pound. But would not the noble and learned Lord agree that perhaps the international community has seen that our employers have been very slow, very sluggish to invest; in fact that there has been an investors' strike, they have taken note of that, and that is why the pound has been floated?
THE LORD CHANCELLOR: My Lords, I was not seeking to attribute blame; I was trying to seek out causes. I only say to the noble Baroness that I have sought to establish—and I believe I had established—that for two years of reflation, or reversing the Jenkins' policy of surplus budgeting, savage taxation and credit restriction, there was not a flicker; following those two settlements, there was. I was seeking to establish causes, and nothing that the noble Baroness has said has shaken me in the conviction that I have succeeded in doing so.
That brings me to the Motion, and to three things that I want to say about the Motion, and Lord Beswick's speech. I do not want to detain the House a moment longer than is necessary. The Motion is almost breathtaking in its lack of modesty. It talks of anxiety about the

1495
failure of this Government to maintain the value of money. Well, look who is talking! There have been three Labour Governments in my time and three Prime Ministers: Ramsay MacDonald, Attlee, and Harold Wilson. All no doubt great and good men. Two years after the assumption of power by each there has been a crisis leading to a devaluation of the pound far greater than the present float would lead us to expect that the pound will float at the moment, taken after desperate efforts resulting in the destruction of our entire reserves. And they are now seeking to censure us. Look who is talking! But they have done it. After having succeeded in devaluing the pound, they reached a situation where they left us with—
LORD DAVIES OF LEEK: A marvellous balance of payments.
THE LORD CHANCELLOR: Yes, with a marvellous balance of payments, won at the expense of successive surplus budgeting to the extent of £1,000 million, savagely penal taxation and extreme stagnation in growth. And it is they who are now seeking to censure us, because we have reversed those policies!
At the end of their time, as one noble Lord reminded us, after these policies of stagnation and deflation, they started a period of inflation by reneging on their own policy of industrial relations which we, at least, have sought to repair. I did not agree with the noble Lord, Lord Shackleton, when he said that there were more differences than resemblances between In Place of Strife and the Industrial Relations Act. They had the cooling-off period, they had the ballot. They ran away from both. The only differences of which I am aware, which in the light of history are likely to prove significant, are: first, that they introduced the criminal law as the primary sanction, in distinction from the civil law; and, secondly, that they gave the authority to the Minister and not to any court of law. These are no doubt arguable points, but they hardly justify the kind of censure which is contained in the Motion we are now discussing.
Now, my Lords, I want, if I may, to conclude—because I have very little
1496
time at my disposal—with the form of the policy which noble Lords have sought fit to condemn and I hope, at least, to convince them that their indictment is unfair. Ever since 1964, we have been pointing out that the system of universal benefits of equal level, which both Parties had been developing since 1945, had led to our leaving behind certain identifiable vulnerable classes at the bottom of the social scale, for whom special provision must be devised if we are to try to create the unified society which the Opposition claim to be their objective. We also pointed out that the development of full employment, as an ideal to which we all must work, had created pockets of abuse within our social service system, in which the vulnerable classes to which I have referred have ever since been made, directly or indirectly, to subsidise the better-off.
Ever since 1970, we have been endeavouring to correct these injustices in a variety of different ways, not by reducing social benefits, because, as my noble friend the Leader of the House reminded us earlier this afternoon, we have increased them to an all-time high—I think, by 32½ per cent, by October, which will increase still further—but by identifying the weaker groups, and by bringing in special measures to assist the weaker groups. I refer to the aid to the special areas, now possibly on a bigger scale than ever before. I refer to the family incomes supplement now benefiting 80,000 homes, but not, as my noble friend reminded us earlier this afternoon, the last word in that direction. I refer again to the removal from direct taxation of 2¾ million people at the bottom end of the scale of taxation in the recent Budget. I refer to the extension of rent rebates to the private sector, never attempted before. I refer to the neglected 40 per cent, of local authority tenants covered in the Housing Finance Bill which has been attacked by the two Front Bench spokesmen opposite and which the Opposition would now have us abandon, although every penny of the £350 million, if that is the right figure, which we would save would be spent upon these rebates, upon deficiencies and upon slum clearance schemes. I refer to the expansion of the long neglected provision for the elderly and the mentally handicapped, a part of the increase of £2,000 million

1497
in our five-year programme. I refer to the hospital building programme and the priority given to the old primary schools which, I may say in parenthesis, is the answer to one of the criticisms in the speech of the noble Lord, Lord Beswick. I refer to the concentration of housing subsidies on people and areas in need.
I do not for a moment dissent from the analysis of the evils of inflation to which the noble Lord, Lord Robbins, referred in his impressive speech. I can only endorse what he said, although I do not pretend to play in the same league as he does. I thought that he was entirely right to emphasise the corrupting effects of inflation upon the nature of our social fabric; he gave moving and particular examples. But I do not believe that it is beyond the capacity of the people of this country, led by their Government, to realise those corrupting effects.
The strength or weakness of a currency—and I think that this is consistent with what the noble Lord, Lord Robbins, was saying—can be measured by the will of the nation to survive as a responsible and free community and to support their Government in the measures necessary for survival. Our standard of living is now higher than ever before and our policy is to make it higher still. If the public will not support this Government in the measures necessary to restrain excessive wage demands at a time when all the world knows that these are the cause of an international lowering of confidence, we shall at least have tried. I believe that we shall succeed, but at least, if we fail, we shall carry with us the epitaph, I hope and believe, of a courageous and honest Administration. But what
what will be written upon the tombstone of the Labour Party?—because, should we not succeed, they will not survive any more than we shall. Will it be that in power they were a national disaster and in opposition they did not achieve anything better than being a public nuisance?
10.49 p.m.
LORD BESWICK: My Lords, the noble and learned Lord, the Lord Chancellor, said that he expected an Opposition to "latch on", as he so delicately put it, to the events of the past fortnight. I fear that the noble and learned Lord was as inadequately informed about this as he was about most of his other facts. The Motion was on the Order Paper on June 21, before the Government found that they were compelled to break agreements and devalue the pound. This is not, and was not intended to be a Vote of Censure. It was intended to be an opportunity for this House to express its anxieties. Those anxieties have been expressed from all quarters. They have not been allayed by the speech to which we have just listened. If the Government are unable to accept this Motion, then I would invite all those who have expressed anxieties to join together, not so much as a criticism but as an earnest of their intention to stimulate the Government to do rather more than they have done so far.
10.50 p.m.
On Question, Whether the said Motion shall he agreed to?
Their Lordships divided: Contents, 51; Not-Contents, 69.

CONTENTS

Addison, V.

Champion, L.

Kennet, L.

Archibald, L.

Crook, L.

Llewelyn-Davies of Hastoe, Bs. [Teller]

Ardwick, L.

Davies of Leek, L.

Arwyn, L.

Diamond, L.

Longford, E.

Bacon, Bs.

Donaldson of Kingsbridge, L.

Milner of Leeds, L.

Beswick, L.

Evans of Hungershall, L.

Morris of Kenwood, L.

Blackett, L.

Gaitskell, Bs.

Nunburnholme, L.

Blyton, L.

Garnsworthy, L.

Pargiter, L.

Bowden, L.

Greenwood of Rossendale, L.

Phillips, Bs.

Burntwood, L.

Hacking, L.

Platt, L.

Burton of Coventry, Bs.

Hale, L.

Popplewell, L.

Campbell of Eskan, L.

Hall, V.

Rathcreedan, L.

Caradon, L.

Henderson, L.

Samuel, V.

Chalfont, L.

Hoy, L.

Shackleton, L.

Shepherd, L.

Strabolgi, L. [Teller]

Walston, L.

Simon, V.

Summerskill, Bs.

White, B.

Slater, L.

Taylor of Mansfield, L.

Wynne-Jones, L.

Stocks, Bs.

NON-CONTENTS

Aberdare, L.

Denham, L. [Teller]

Macleod of Borve, Bs.

Allerton, L.

Derwent, L.

Mansfield, E.

Amherst of Hackney, L.

Drumalbyn, L.

Margadale, L.

Amory, V.

Dundonald, E.

Massereene and Ferrard, V.

Auckland, L.

Eccles, V.

Mountevans, L.

Balerno, L.

Elles, Bs.

Mowbray and Stourton, L. [Teller]

Balfour, E.

Elliot of Harwood, Bs.

Balfour of Inchrye, L.

Ferrers, E.

Northchurch, Bs.

Belhaven and Stenton, L.

Fisher, L.

Ruthven of Freeland, Ly.

Belstead, L.

Fortescue, E.

Saint Oswald, L.

Berkeley, Bs.

Gainford, L.

Sandford, L.

Bourne, L.

Gisborough, L.

Sandys, L.

Brabazon of Tara, L.

Goschen, V.

Savile, L.

Brooke of Cumnor, L.

Gowrie, E.

Selkirk, E.

Brooke of Ystradfellte, Bs.

Hailsham of Saint Marylebone, L. (L. Chancellor)

Selsdon, L.

Brougham and VEIUX, L.

Strathclyde, L.

Carrington, L.

Harvey of Prestbury, L.

Teviot, L.

Colville of Culross, V.

Inglewood, L.

Thorneycroft, L.

Courtown, E.

Jellicoe, E. (L. Privy Seal)

Tweedsmuir, L.

Cowley, E.

Killearn, L.

Tweedsmuir of Belhelvie, Bs.

Craigavon, V.

Kinnoull, E.

Vivian, L.

Craigmyle, L.

Latymer, L.

Wakefield of Kendal, L.

Crathorne, L.

Lauderdale, E.

Young, Bs.

Croft, L.

Lytton, E.

Resolved in the negative, and Motion disagreed to accordingly.

GAS BILL
Brought from the Commons; read la, and to be printed.
BRITISH RAILWAYS BILL
Reported with Amendments.

NATIONAL DEBT BILL [H.L.]
Reported from the Joint Committee on Consolidation Bills without amend-
1500
ment, and recommitted to a Committee of the Whole House.

POISONS BILL [H.L.]
Reported from the Joint Committee on Consolidation Bills without amendment, and recommitted to a Committee of the Whole House.
RAILWAY CLEARING SYSTEM SUPERANNUATION FUND BILL [H.L.]
Returned from the Commons agreed to, with Amendments; the said Amendments considered and agreed to.
  FOODSTUFFS: PRODUCTION AND EXPORTS
  FOODSTUFFS: PRODUCTION AND EXPORTS
  NORTHERN IRELAND: SPECIAL POWERS ACT
  NORTHERN IRELAND: SPECIAL POWERS ACT