Sitting of 8 November 1972

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ABERDEEN HARBOUR ORDER CONFIRMATION
  Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act, 1936, relating to Aberdeen Harbour: And the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 9]
  SCRABSTER HARBOUR (VEHICLE FERRY TERMINAL &C.) ORDER CONFIRMATION
  Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland), 1936, relating to Scrabster Harbour (Vehicle Ferry Terminal &c.): And the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 10.]
ORAL ANSWERS TO QUESTIONS
  POSTS AND TELECOMMUNICATIONS

    Telephone Facilities
    Mr. Pavittasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to seek to install amplified telephones, of the type recently installed at Gatwick at all airports, for the use of partially deaf persons.
    The Minister of Posts and Telecommunications (Sir John Eden): No, Sir. Ways of helping the hard-of-hearing are being examined by the Post Office, which will be writing to the hon. Member.
    Mr. Pavitt: Will the Minister not intervene a little in this matter? There are half a million hard-of-hearing people who are very distressed when they get to an airport and cannot communicate. A transistorised telephone is very easy to install. Therefore, in spite of the fact that I am being communicated with, will the hon. Gentleman add his pressure to mine to enable this to be done not only at airports but at railway terminals?
    Sir J. Eden: The hon. Gentleman's active interest in this important question is well appreciated by the Post Office, as well as by everyone else. It is developing a new type of plug-in system. The purpose of the Post Office's writing to the hon. Gentleman is to invite him to a demonstration. I hope that he will be satisfied with the outcome.
    Mr. Kinnockasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to improve telephone facilities for new industries in development areas.
    Sir J. Eden: No, Sir. This is a matter for the Post Office, which is well aware of the need to continue to give a high priority to development areas.
    Mr. Kinnock: Would the Minister mind if I disagreed with him? The business of providing adequate telephone services in regions which depend on new industries should be a part of the Government's general strategy in bringing new industries to the development areas.

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    Is the right hon. Gentleman aware that without telephones these industries are next to useless? Would he, therefore, seek means of bringing the consciousness of his Government to bear on the Post Office, because it is not providing enough telephones sufficiently quickly?
    Sir J. Eden: The hon. Member's reference to the Post Office is not justified. I know that it is very much alive to the needs of development areas, and it is doing its level best to meet those needs.
    Mr. Money: Will my right hon. Friend stress to the Post Office that it is not only in the development areas as such but also in other areas that the needs of new industries have to be met, and that a particular problem exists in East Anglia, with the need for provision of a Continental STD service for the area of the Haven ports?
    Sir J. Eden: I take what my hon. Friend has said. I shall have an opportunity to consider some of these matters during the course of the forthcoming legislation.
    Mr. Ewing: Will the right hon. Gentleman consider another aspect of this problem and approach his right hon. Friend the Secretary of State for Trade and Industry with a view to ensuring the maximum co-operation between that Department and the Post Office, so that industry moving into development areas makes its requirements known in good time? Is the right hon. Gentleman aware that in the case of North Sea oil there were serious difficulties because industries arriving in that area did not make their requirements known?
    Sir J. Eden: I am aware of the last point. Certainly in the light of these exchanges I will look again at this matter to see whether there is any way in which I can, in discussion with the Post Office, assist with what the hon. Member has in mind.

    Broadcasting (Inquiry)
    Mr. William Hamiltonasked the Minister of Posts and Telecommunications if he will now make a statement on the inquiry to be set up on the future of the British Broadcasting Corporation after 1976.
    Mr. Whiteheadasked the Minister of Posts and Telecommunications whether he will now announce a comprehensive inquiry into broadcasting, bearing in mind Recommendation 29 of the Select Committee on Nationalised Industries Report on the Independent Broadcasting Authority.
    Mr. Goldingasked the Minister of Posts and Telecommunications whether he will now establish an inquiry into the future of broadcasting.
    Sir G. de Freitasasked the Minister of Posts and Telecommunications whether, in considering the establishment of a committee on the British Broadcasting Corporation after 1976, he will have regard to Sir Hugh Carleton Greene's Granada Lecture, a copy of which is in his possession.
    Sir J. Eden: No decision has yet been taken about an inquiry. I am considering the recommendations of the Select Committee and the other views expressed on this subject.
    Mr. Hamilton: Will the Minister realise that there has been far too much delay in coming to a firm decision on this question? Will he accept that the principle is sound, and that the equivalent of a Royal Commission on this question is extremely important? If it is to be of that stature, the sooner it is appointed the better. In view of the eulogising, quite rightly, of the BBC on its jubilee by the Prime Minister, among others, will he not expedite this process and let us have a firm decision soon?
    Sir J. Eden: I take note of the hon. Gentleman's views. As he will recognise, there is a number of alternative ways in which one could proceed. These are still under consideration by the Government.
    Mr. Whitehead: In view of the tact not only that the Select Committee, after exhaustive analysis, has recommended an inquiry, but also that the directors-general of the two broadcasting authorities are now on public record as saying that they would accept and welcome it, what further information does the Minister want before he sets it up? If it is the Technical Advisory Committee report, will he not publish this forthwith and come to his decision?
    Sir J. Eden: I am, of course, grateful to the Select Committee for its work. I am studying its report with a good deal of interest. My reply to the report will be given in due course.
    Mr. Jessel: Is my hon. Friend aware that there is considerable public concern about the vulgarity contained in some television programmes? Will he take this public feeling into account when considering the future constitution of the BBC?
    Sir J. Eden: The views which my hon. Friend has expressed should properly be directed to the broadcasting authorities, since they are responsible for the content of programmes.
    Mr. Golding: Is the hon. Gentleman aware that the Select Committee stressed the importance of taking a decision as quickly as possible because of the time limits involved? Is he also aware that the experience of the Select Committee was that it is very important that any inquiry be such that those working in broadcasting have the fullest opportunity to put their point of view as to what the structure should be after 1976?
    Sir J. Eden: Of course, if there were a full-scale inquiry anyone interested in these matters would be able to put his point of view.
    Mr. Gregor Mackenzie: Will the Minister bear in mind that we on this side—now, we feel, joined by many hon. Members on the Government side—would still like this broadly-based full inquiry into broadcasting? He will also have noticed that there has recently been a canvassing of the idea that this inquiry should be set up after 1977, with a view to extending the BBC licence and the television franchises? Will he knock this idea on the head right away?
    Sir J. Eden: That last point is similar to the views put forward by Sir Hugh Carleton Greene recently, which relate to the progress which is likely to be achieved in technical developments. As the hon. Gentleman knows, I am awaiting a report from my technical advisory committee which will have some bearing on this matter.
    Mr. David Steelasked the Minister of Posts and Telecommunications what consultations he has had with the Inde-
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    pendent Broadcasting Association on the new code of advertising; and whether he will institute an inquiry into the working of the General Advisory Councils of the Independent Broadcasting Authority and the British Broadcasting Corporation prior to the forthcoming revision of broadcasting structure.
    Sir J. Eden: I was consulted prior to the publication by the Independent Broadcasting Authority of its new code. The idea of an inquiry into the working of the general advisory councils is part of the wider question of a possible inquiry to consider broadcasting after 1976; and I will consider the hon. Member's suggestion in that context.
    Mr. Steel: Will the Minister say whether in his consultations with the IBA he consulted the Secretary of State for Social Services before the IBA published a continuing ban on the advertising of contraception? Why was this allowed to be issued when the matter was still under discussion by the IBA Advisory Council?
    Sir J. Eden: My consultations were of a fairly general nature. Specific examples, to one of which the hon. Gentleman has referred, were largely a matter for interpretation by the IBA.
    Mr. Whitehead: In view of the Minister's first answer, should there be a long-range inquiry will he consider the very real reservations that members of the advisory councils of the IBA and also the BBC have about the limited powers open to them, in that they are either ignored or, if they are not prepared to be supine, they must make a gesture such as resignation to make their point?
    Sir J. Eden: Yes, but it is still a matter for the IBA collectively to determine the exact code of rules which should be observed.

    BBC (Chairman of Governors)
    Mr. William Priceasked the Minister of Posts and Telecommunications when he expects to announce the appointment of a new chairman of the governors of the British Broadcasting Corporation.
    Sir J. Eden: As soon as possible.
    Mr. Price: What is the problem?
    Sir J. Eden: We have not yet reached a decision as to whom to invite.
    Mr. Stratton Mills: Is my right hon. Friend aware that the present chairman's term of office has been extended twice already this year and will he confirm that it is intended to have a new chairman for 1st January, 1973?
    Sir J. Eden: The present chairman's tenure of office expires at the end of this year.

    Postal Codes
    Dr. Stuttafordasked the Minister of Posts and Telecommunications what is now the percentage coverage of the country for postal codes.
    Sir J. Eden: The Post Office tells me that codes have now been allocated to nearly 90 per cent. of all addresses in the country.
    Dr. Stuttaford: Is my right hon. Friend aware that, although we wish him well in the spread of his codal system, unpleasant though it may be, in the Norwich area there has been great resentment at the suggestion of one of his officials that letters will be deliberately held up if they are without a code? We were under the impression that the stamp was what determined how fast the post went through and not whether there was a code on the envelope.
    Sir J. Eden: I am grateful to my hon. Friend for wishing me well. He must, however, realise that the codal system is that of the Post Office and not the Department. The way in which this is operated and the speed with which it is being introduced is the responsibility of the Post Office.
    Mr. Charles R. Morris: Does not the Minister recall that one of the justifications for the postal coding system when it was introduced was that it would facilitate the automatic sorting of letters? Is the Minister aware that in the weeks ahead millions of people will be frantically searching for postal codes for their Christmas cards and that there are still only 13 sorting offices capable of sorting these letters automatically?
    Sir J. Eden: The hon. Gentleman is right in saying that the advanced machines capable of dealing with these postal codes have been installed at 13 offices. At least a further five offices will receive them within the next year. I
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    am assured by the Post Office that public acceptance of these codes is coming along nicely.
    Mr. Edward Taylor: Will my right hon. Friend say what percentage of people use post codes?
    Sir J. Eden: No, Sir.

    Local Radio (Newspaper Participation)
    Mr. Juddasked the Minister of Posts and Telecommunications whether he will make a statement on the number of local newspapers with a local monopoly in their circulation area which are now known to be involved in syndicates seeking control of local radio.
    Sir J. Eden: Applications for local radio contracts are made to the Independent Broadcasting Authority and not to me.
    Mr. Judd: Would the Minister be prepared to look at a specific instance in the Portsmouth area, where the Portsmouth and Sunderland Newspaper Group has a monopoly in local newspapers? The group is now known to be interested in getting a partial grip on Radio Portsmouth. Can this be in the interests of free communication, let alone competition in local radio, particularly when one takes account of the fact that this newspaper group, although having a very high standard of objective reporting, has an honest and straightforward political bias in its editorial policy?
    Sir J. Eden: No, Sir. Safeguards about newspaper participation are provided in the Act. I think that we must leave it to the IBA as to how this should he interpreted.

    Financial Targets
    Mr. Goldingasked the Minister of Posts and Telecommunications what financial target will be set for the postal and telecommunications businesses, respectively, in the coming year.
    Sir J. Eden: These targets have not yet been settled.
    Mr. Golding: Is the Minister aware that if the financial targets are retained tariffs will have to rise? Will he tell us quickly whether those targets are to be

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    retained at their present levels, or whether the charges are to be increased?
    Sir J. Eden: As the hon. Gentleman will recognise, we are coming towards the end of the five-year period for which these targets were initially set. I am, therefore, having to review all these before March, 1973, and I shall be taking account of the current anti-inflationary measures which have recently been announced.

    Giro
    Mr. Rostasked the Minister of Posts and Telecommunications whether he will make a statement on the latest financial position and the estimated profit and loss forecasts for the Giro.
    Sir J. Eden: The Post Office Report and Accounts for 1971–72 show that Giro lost £6·4 million in that year. Since then higher tariffs have been introduced, and new marketing plans implemented, and Giro is working towards its announced targets.
    Mr. Rost: Have the recommendations of the independent accountants' report, which the Minister has refused to publish, been fully implemented and, if so, why are the financial targets for Giro still behind the estimates?
    Sir J. Eden: It will take some time for Giro fully to come up to being able to meet the targets. As my hon. Friend knows, Giro tariffs were recently increased. In the past year Giro balances have grown by about £10 million, the weekly turnover by £34 million, and agents' deposit business by about 60 per cent. Certainly no one is complacent about this, but the House will agree that it indicates a movement in the right direction.
    Mr. Gregor Mackenzie: As a member of the Government, how does the Minister propose to assist Giro to expand its business?
    Sir J. Eden: The recent decisions of my predecessor to confirm the maintenance of Giro and the recent decisions affecting tariff charges have certainly assisted in encouraging those who operate the Giro system to continue to develop their business base.

    Television Licences
    Mr. Ashtonasked the Minister of Posts and Telecommunications what esti-
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    mate he has made of the number of pensioners in receipt of concessionary television licences.
    Mr. Leslie Huckfieldasked the Minister of Posts and Telecommunications whether he will now introduce legislation enabling all retirement pensioners to benefit from the 5p concessionary television licence.
    Mr. John D. Grantasked the Minister of Posts and Telecommunications if he will take action to enable pensioners to purchase television licences quarterly.
    Mr. Leslie Huckfieldasked the Minister of Posts and Telecommunications how many representations he has received from hon. Members about extending the concessionary television licence scheme; and what reply he has sent.
    Sir J. Eden: At 31st August last there were 163,450 retired people benefiting from the special television licence for old people's homes. I have received 34 representations from hon. Members asking for an extension of the categories of people eligible for the special licence. It has never been the policy of any Government to allow licence concessions for all retirement pensioners.
    Mr. Ashton: If the Government can give all pensioners £10 in January, why can they not give all pensioners a cheap television licence? Is the Minister aware that the present concession covers only 2 per cent. of pensioners and is totally unfair to the rest?
    Sir J. Eden: On the first part of the hon. Gentleman's question, it has generally been the purpose of Government—it is certainly that of the present Government—to improve the cash position of those who have retired so as to enable them independently to exercise their freedom of choice. On the second part of the question, as the hon. Gentleman well knows, this is an extremely difficult matter, which has been inherited from previous Governments. It is a matter which I have looked at very closely. Certainly one way out of the position would be to remove the anomaly altogether.
    Mr. Marten: What does the Minister mean by his last remark? What

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    anomaly could be removed altogether? Does he mean to scrap the licence altogether?
    Sir J. Eden: No, Sir, to take a closer look at the justification for continuing in being the special 5p concession.
    Mr. Leslie Huckfield: Does not the Minister realise how ridiculous the present boundary line entitlement is as the recent constituency case I put to him regarding Mrs. Storer shows? Does he not also realise that local authorities have only to extend their warden coverage to enable many old-age pensioners to gain the benefit of this concession? As this is now a ridiculous position, will he look again at the whole situation?
    Sir J. Eden: I assure the House that I am looking at the whole position extremely carefully. It is fraught with difficulty. We can all think of constituency examples where this could be open to all kinds of abuse. There are two clear-cut alternative ways out of this dilemma neither of which I particularly favour. But I am looking at the whole range of possibilities.
    Mr. Grant: We appreciate the difficulties, but will the Minister stop hiding behind the skirts of previous Administrations on this issue and treat it on its merits, which are considerable? Will he tell his civil servants to draw up a scheme for implementing this change, instead of giving a list of reasons why it cannot be done?
    Sir J. Eden: It is not a case of skirts or anything to do with that. It is the fact that this anomaly is now in existence and has existed for some time. It gives rise to a great deal of ill-will. There are a number of ways out of this dilemma, none of which, honestly, would commend itself to all quarters of opinion in the House.
    Mr. Sydney Chapman: I appreciate what my right hon. Friend has said, and that he is looking at the problem, and I appreciate the basic point of view of the present Government and the previous Government. Does my right hon. Friend agree that the fact that there is already a concessionary TV licence is causing irritation and bitterness among needy people in our community? As this concession already exists, it should naturally
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    be extended to those who really need it.
    Sir J. Eden: I very much recognise the force of the first part of my hon. Friend's question.
    Mr. Gregor Mackenzie: Reverting to an earlier answer that the Minister gave, may I ask him if he recognises that any plans to remove what he called "the anomalies" would not find favour on either side of the House? It is clear that on both sides of the House, although we appreciate the difficulties, there is a great desire to increase the scope of a concession like this, whether it be done by means of a free licence or by reexamining the financing of the BBC. I hope that the Minister will take this in hand urgently and give us an answer fairly soon on these points.
    Sir J. Eden: I cannot promise an early answer, but I need no encouragement to look at the matter closely and urgently.
    Mr. Farrasked the Minister of Posts and Telecommunications if he will take steps to introduce a quarterly and half-yearly television licence.
    Sir J. Eden: No. Short-term licences would call for more staff and add to the costs of the licensing system. The television savings card provides a way for people to save for a licence.
    Mr. Farr: I thank my right hon. Friend for that reply. Will he look at the way factors have changed in recent years, in that a colour television licence now costs £12, many people would prefer to concentrate on seasonal viewing, many visitors from overseas would like a quarterly or half-yearly licence only, and there are old-age pensioners who cannot afford to pay the full £12 for a colour licence or the lower fee for a black-and-white licence?
    Sir J. Eden: I have some sympathy with my hon. Friend's views but, in a way, my hon. Friend misunderstands the purpose for which the licence fee is paid. It is paid to operate a receiving set at the home. If it were to be changed so as to operate it on a different basis and to have it for different times of the year it would substantially increase the costs of administration and add disproportionately to the burden of administration.
    Mr. Skinner: May I help the Minister out of the terrible dilemma he is in in the whole argument about the licence? Will he encourage local authorities to take over an umbrella warden scheme for all public and private tenants? Then, during the rate support grant negotiations which are to take place shortly under the Counter-Inflation (Temporary Provisions) Bill, the Government should assist those local authorities to offset that amount of money and in that way the Post Office would not be embarrassed.
    Sir J. Eden: I am grateful to the hon. Gentleman for his offer of help. In some ways his supplementary question would have been more appropriately asked on the previous Question.
    Mr. Skinner: I could not get in then.

    Post Offices
    Mr. McNamaraasked the Minister of Posts and Telecommunications if he will give a direction to the Post Office Corporation not to close city centre post offices in busy shopping areas on Saturday afternoons.
    Mr. James Johnsonasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office not to close city-centre post offices on Saturday afternoons.
    Sir J. Eden: No, Sir. The nature and scale of counter services in any locality are management matters for the Post Office and a general direction would not be appropriate.
    Mr. McNamara: May I urge the right hon. Gentleman to change his mind and to issue this directive? Is he aware that in my constituency the post office that is to be closed is central to the constituency and right in the middle of the busiest shopping and business area, and that the other Crown office and sorting office has been closed, which can only cause a great deal of inconvenience to constituents of mine and of my hon. Friends in the city? Surely the Post Office Corporation must go back to the time when it thought about service to the public.
    Sir J. Eden: This must be a matter for the Post Office management itself, which has the responsibility of administering these matters.
    Mr. Johnson: Has the Minister no conscience about the steady erosion of facilities to women shopping on Saturdays? Is he aware that this is happening in all big cities, and that this magnificent public service is now copying the pernicious habits of commercial banks on Saturdays? Is the Minister satisfied with the Alice-in-Wonderland logic of the situation, whereby women have five shopping days in the week but may be faced with two Sundays at the end of the week?
    Sir J. Eden: I can only remind the hon. Gentleman that the Post Office Act 1969, which he no doubt supported, placed clearly upon the shoulders of the management of the Post Office the responsibility for conducting its affairs with efficiency and economy. It is for the Post Office management to determine how this should be done in the local and the general interest.
    Mr. Geoffrey Finsberg: Does my right hon. Friend agree that this is a matter that has been referred by the Post Office to the Post Office Users National Council, which issued a very full report which was unanimous, and that hon. Members opposite would do well to read what that document said?
    Sir J. Eden: I am grateful to my hon. Friend for reminding me of the existence of the extremely helpful report by the Post Office Users National Council.
    Mr. Marten: On a point of order, Mr. Speaker. As there is no ministerial responsibility for this Question, may we be told why it was allowed on the Order Paper?
    Mr. Speaker: I will consider the point.

    Telephone Kiosks (Vandalism)
    Mr. Edward Taylorasked the Minister of Posts and Telecommunications how many telephone kiosks were damaged by vandals in the most recent annual period for which figures are available; and what were the comparable figures in each of the previous three years.
    Sir J. Eden: The number of incidents of vandalism for the year ending 31st March, 1972 was 161,000.
    The comparable figures for 1969, 1970 and 1971 were 153,000, 171,000 and 152,000 respectively.
    Mr. Taylor: As during this period there has been a substantial reduction in the number of public telephone kiosks, are not these figures extremely serious? Is my right hon. Friend aware of how vital this question is for those who regard public telephone kiosks as their only link with emergency services? Has my right hon. Friend considered bringing in stiffer penalties for people who engage in vandalism in kiosks?
    Sir J. Eden: Penalties are a matter for other authorities than me. I agree with my hon. Friend that this is an extremely serious matter. It is wanton destruction of public property made available for the general use and convenience of the public. In 1971–72 the cost of repairing damaged kiosks caused by vandalism was £426,000. It is absurd that we have to spend money to put right destruction which has been caused so wantonly.
    Mr. Dalyell: Having asked five Questions last Session and been given five soothing answers by the Minister's predecessor, may I ask the right hon. Gentleman what consideration is being given to the suggestion of the Post Office Consultative Users Council in Scotland that kiosks should be placed inside cafés and other institutions where, perhaps, they could be protected? This is a fairly constructive suggestion.
    Sir J. Eden: The Post Office is itself giving every possible encouragement to owners of premises of the kind described by the hon. Gentleman to install and rent coin box equipment. I agree with the hon. Gentleman that this would be a considerable help in meeting this problem.

    Independent Broadcasting Authority (Advertisements)
    Mr. Fowlerasked the Minister of Posts and Telecommunications whether he will seek powers to amend the system of control of advertisements administered by the Independent Broadcasting Authority.
    Sir J. Eden: No, Sir.
    Mr. Fowler: May I draw my right hon. Friend's attention to the action of the Independent Broadcasting Authority in refusing to accept an advertisement from the News of the World advertising a valuable series on industrial action in
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    Britain? Can the right hon. Gentleman explain the logic of a system which prevents a newspaper advertising a series of articles of crucial national interest, which deserve a very wide audience?
    Sir J. Eden: As I am sure my hon. Friend fully recognises, it must be for the authority to interpret the provisions of the Television Act, 1964. In the view of the authority, the advertisement concerned would contravene Section 3(1)(e) of that Act. This must be a matter for the judgment of the authority.
    Mr. J. T. Price: Will the right hon. Gentleman do his utmost to discourage those hon. Members on his side of the House who go out of their way to foul industrial relations when many of us on this side are doing our best to improve them? Does he not agree that to bring this question to the House in the context of the present difficultes of this country is far from helpful? May I urge the right hon. Gentleman to use any influence that he may have to discourage those who cannot resist the temptation constantly to stir the pot and make these controversial issues even worse?
    Sir J. Eden: My hon. Friends need no encouragement in that respect from the hon. Gentleman. After all, it was my hon. Friends who assisted the present Government to place the Industrial Relations Act on the Statute Book.

    Independent Broadcasting Council
    Mr. Fowlerasked the Minister of Posts and Telecommunications whether he is now in a position to announce a decision on the introduction of an independent broadcasting council.
    Sir J. Eden: As I said in reply to my hon. Friend on 28th June, the idea might better be considered in the context of a general review.—[Vol. 839. c. 337.]
    Mr. Fowler: Would my right hon. Friend accept that the aim of a broadcasting council is to provide not some kind of back-door censorship but a court of appeal for the public? Surely the time has come when the public's interest in broadcasting should be firmly recognised by the Government?
    Sir J. Eden: I take note of what my hon. Friend has said, which I find

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    extremely helpful in defining what should be the purpose of a broadcasting council.
    Mr. Kaufman: Would not the right hon. Gentleman agree that a council of this kind is necessary to deal with the scandalous practices of tobacco companies, such as Benson and Hedges, which are getting round the ban on cigarette advertising by advertising cigars and other products with the same slogans as they use for advertising cigarettes? Is this not a scandal?
    Sir J. Eden: The hon. Gentleman's supplementary question relates to the last Question. We have moved on since then.
    Mr. Stratton Mills: In the light of the experience of the BBC's commission, which looks at a certain limited type of appeal, would my right hon. Friend engage in talks with the BBC to see whether, in the light of experience, the terms of reference could be extended?
    Sir J. Eden: I am afraid that I did not hear what my hon. Friend said.
    Mr. William Price: If the right hon. Gentleman sets up a broadcasting council, will he ensure that it is more useful than the Press Council?
    Sir J. Eden: Obviously one would wish to take advantage of experience gained in any other quarter.

    USSR (Non-delivery of Letters)
    Mr. Dykesasked the Minister of Posts and Telecommunications how many complaints he has received from the public concerning a possible breach of the Universal Postal Union regulations about non-delivery of letters addressed to recipients in the Union of Soviet Socialist Republics since 1st September, 1972.
    Sir J. Eden: Two, including one from my hon. Friend on behalf of a constituent. In both cases I have asked the Post Office to investigate.
    Mr. Dykes: Does my right hon. Friend not agree that the slogan "Someone somewhere needs a letter from you" has a somewhat hollow ring in the case of letters going to ordinary citizens in the Soviet Union? Will my right hon. Friend make particular inquiries about the latter case to which he referred, because my constituent and many others are con-
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    cerned about the repeated non-delivery of letters to the USSR?
    Sir J. Eden: I am grateful to my hon. Friend for writing to me on this matter. I have passed his letter to the Post Office and I am sure the Post Office will make what inquiries it can to help my hon. Friend's constituent.

  ENVIRONMENT

    Aycliffe Development Corporation
    Mr. David Reedasked the Secretary of State for the Environment when he expects to announce the names of the new board of the Aycliffe Development Corporation.
    The Under-Secretary of State for the Environment (Mr. Reginald Eyre): My right hon. Friend will announce the names of any new members after he has carried out the necessary consultations.
    Mr. Reed: Is the hon. Gentleman aware that we have been given that sort of answer in reply to letters and communications to the Department for almost a year now? Does he appreciate that although it is statutorily different, the development corporation is regarded as the local authority by my constituents in Newton Aycliffe? Is he aware that this decision is very important, and is needed now? Will he get his ministerial colleagues to get their fingers out and make the announcement soon?
    Mr. Eyre: I assure the hon. Gentleman that the consultations will take place very soon, and that they will be completed at the earliest possible date.
    Mr. Dormand: The hon. Gentleman will be aware that the board at Aycliffe is the same as that for Peterlee New Town, in my constituency. Is he aware that there is considerable concern and despair about the delay in appointing the new board, and that that concern is not allayed by the kind of unsatisfactory correspondence which he sent to me? Will he make the appointments soon, and also take into consideration the fact that there should be more local representation that there has been hitherto?
    Mr. Eyre: I understand the hon. Gentleman's feelings. I assure him that

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    my right hon. Friend is taking into account the desirability of some members of the board having local knowledge.

    Household Wastes (Disposal)
    Mr. Dalyellasked the Secretary of State for the Environment if he will make a study, in the light of Dr. David Train's lecture to the Pharmaceutical Society Conference at Keele on 4th September, a copy of which is in his possession, of the problem of the disposal down sinks and lavatories of man-made substances such as paint stripper and brush-cleaning fluids; and whether it is possible to take any useful action.
    Mr. Eyre: My right hon. Friend has directed the Department's informal working group on awkward household wastes to consider the problem of disposal of these substances after domestic use.
    Mr. Dalyell: When is this working group, which is considering a number of matters, going to report?
    Mr. Eyre: It is expected that this group, which is chaired by my Department and which includes representatives from professional bodies and other Government Departments, will have completed its task within the first half of 1973.

    Heavy Vehicles (Traffic Routes)
    Mr. Wallasked the Secretary of State for the Environment what action he is taking to provide traffic routes for heavy lorries from the Humber Bridge northwards to York and the Tyne and Tees.
    Mr. Eyre: By the time the bridge is opened in 1976, a new high-standard route using A63/M62 to Ferrybridge and A1 will be available for northbound traffic. Improvements are also planned on the existing routes north of Hull.
    Mr. Wall: Is my hon. Friend aware that the new motorways go east and west from the end of the bridge and that a new road is planned to go due north, but that it is a county road? At the present rate it will not be completed until the 1980s. The whole of the county area of Beverley will be gravely affected unless it is completed soon?
    Mr. Eyre: I am sure that my right hon. Friend the Secretary of Slate will take careful note of my hon. Friend's remarks.
    Mr. R. C. Mitchellasked the Secretary of State for the Environment what estimate he has made of the number of additional heavy goods vehicles which will use trunk roads leading to Southampton Docks when British Rail close their freight service to those docks.
    Mr. Eyre: No more than 50 lorries a day on average, if all the freight to be carried during 1972 by the services to be withdrawn were transferred to road.
    Mr. Mitchell: Although I believe that the Minister has seriously under-estimated the number of vehicles involved, is it not absolutely absurd that even more vehicles are being forced on to our already overcrowded roads? Surely the Minister's policy should be that more rather than less freight should be sent by rail?
    Mr. Eyre: As the hon. Member knows, the withdrawal of the freight service was entirely a matter of commercial judgment by British Rail. The roads to which he refers are carrying thousands of vehicles a day, and the amount of additional traffic will not be significant. Furthermore, there are proposals for a very substantial improvement to be made in the road system around Southampton in the next few years.
    Mr. James Hill: While agreeing with my hon. Friend, may I point out that I do not think that he can be aware that the M3 and the M27 are not finished. We have no roads to the Midlands. This has been a rather hasty decision, and possibly ahead of time.
    Mr. Eyre: I stress that the decision was made as a result of a commercial judgment by British Rail, for impelling reasons.
    Mr. Mulley: I accept that British Rail may have been forced to make the decision because there is no means of subsidising freight traffic, but will the hon. Gentleman and his right hon. Friend consider whether, in the national interest, services of this kind should be preserved and financial provision made to British Rail to sustain them? In view of what

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    we read in the newspapers about the possibility of heavier lorries coming from our docks as a result of our entry to the EEC, will the hon. Gentleman ask his right hon. Friend to make an early statement to the House about this matter? Will he also advise his right hon. Friend that many people regard the question of keeping the maximum axle weight at what it is now as a matter of vital national interest?
    Mr. Eyre: I understand the right hon. Gentleman's feelings, but in this case it is possible that a good proportion of the freight traffic will transfer to other rail freight services running from Southampton.

    Improvement Grants
    Mr. Stallardasked the Secretary of State for the Environment whether he has had an opportunity to study the recent report, a copy of which is in his possession, issued by Shelter in October, 1972, concerning abuses, etc., of improvement grants; and if he will make a statement.
    Mr. Eyre: My right hon. Friend has read the report with great interest and has arranged for it to be further studied.
    Mr. Stallard: Is the Secretary of State aware that there seems to be far too much secrecy about the relevant statistics relating to improvement grants, particularly in the inner London area, and that hon. Members like myself who are interested in those statistics are having difficulty in obtaining them? From the figures that have been published in some inner London boroughs it is clear that up to two-thirds of grants awarded have gone to speculators and landlords, and in at least one case up to 45 per cent. of the houses inspected for improvement grant were empty at the time of inspection. Will the Minister initiate a survey to find out where the tenants have gone?
    Mr. Eyre: The statistics are, of course, available to the hon. Member on the individual borough basis. [HON. MEMBERS: "They will not give them."] That information should certainly be obtainable from the individual boroughs, and I am surprised to hear the hon. Member complaining in that respect. He will know that a working party is studying in great
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    detail, jointly with the London boroughs, the social implications of the work of improvement grants.
    Mr. Crosland: Is the Parliamentary Secretary aware that we are all sorry not to see either the new Secretary of State or the new Minister for Housing and Construction with us this afternoon? I read recently in The Guardian that the new Secretary of State, when appointed Minister of Works, spent the first two days of his appointment watching cricket. He has no doubt flown off to Portugal today with Derby County instead of attending to his duties. [HON. MEMBERS: "Cheap."] I would have thought that it was a matter of common courtesy for a newly appointed Secretary of State to attend his first Question Time.
    The Parliamentary Secretary referred once again to further study and further inquiry. Will he agree that the evidence shows that at least in parts of inner London improvement grants are being grossly abused, with bad results for the housing situation? As specific proposals for action have been made in the Shelter report will he stop endless further study and inquiry and instead do something to end the abuse?
    Mr. Eyre: I emphasise to the right hon. Gentleman that the decision to house families in need must lie with local authorities. Thus, local authorities have discretion whether or not to make a grant.
    Mr. Fletcher-Cooke: There is still a great deal of ill feeling about discrepancies in the way in which that discretion is exercised, particularly between neighbouring authorities. The population simply does not understand how such wide differences can arise in the exercise of discretion. Is that a topic which will be embraced by the study?
    Mr. Eyre: My hon. and learned Friend is correct in saying that there are discrepancies in the way in which the various local authorities operate the schemes. That is the price which must be paid for giving a discretion to local authorities—a cause which is regularly championed in the House. There are also considerable differences between the various localities, and most of all between the various kinds of properties and the improvement work involved. It is a matter

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    which must therefore be left to local discretion.
    Mr. Thomas Coxasked the Secretary of State for the Environment if he will give the number of authorities who have complained to him regarding the abuse of the present housing improvement grant system.
    Mr. Eyre: It is not possible to record the precise number of representations made on any given subject. As regards improvement grants, however, it is up to local authorities to deal with possible abuses by exercising their discretion whether or not to make grants in particular cases.
    Mr. Cox: That reply is totally unsatisfactory to hon. Members who represent inner London seats. If the Parliamentary Secretary will read last Sunday's Observer he will be left in no doubt about the concern of many local authorities who are prepared to give the information, and he will then understand what we on these benches have been saying for months about the amount of money that is going to the private developer compared with the owner-occupier. We in inner London, and certainly in Wandsworth, are finding that tenants are being hounded out of homes in which they have lived for many years by private developers who are making use of the grants but could not care less what is happening to the tenants or their families. When will there be legislation to protect them?
    Mr. Eyre: The statistics must be seen in perspective, and I should therefore report on the allocation of grants during the first six months of this year. Fifty thousand grants went to local authorities for house improvement, 3,000 went to housing associations, 57,000 went to owner-occupiers and 31,000 went to landlords. There is a safeguard for tenants who occupy protected tenancies, and they have no need to fear. In London they are advised by the housing advisory centres about such matters. The penalties for harassment have been severely increased. In any cases that the hon. Member mentions which are open to abuse it is for the local authorities, with their local knowledge, to refuse a grant.
    Mr. Cockeram: Does my hon. Friend accept that house improvement grants are merely a contribution to the improvement
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    of houses, that many tenants cannot afford to find the balance of the money involved, and that therefore in this respect the property developer fulfils a useful function?
    Mr. Eyre: There is no doubt that many properties have been improved by people who are prepared to invest in work of this kind. But it must be admitted—and it is probably particularly important in London—that there are areas of special difficulty where the situation needs examining carefully. That is the purpose of the Working Party on Areas of Housing Stress in London.
    Mr. Frank Allaun: As a first step, will the Under-Secretary impose a three-years condition against the sale of properties if grants have been advanced? Is he aware that thousands of poor and not-so-poor tenants are so angry about the abuse which is taking place that they believe that the only effective solution to the problem is that the municipalities should take over and improve the houses themselves?
    Mr. Eyre: The hon. Gentleman will remember that it was the previous Administration, in 1969, which, after careful consideration, repealed the conditions which he now seeks to reimpose.

    Brent House
    Mr. Pavittasked the Secretary of State for the Environment if, in the light of the high rental now negotiated by the London Borough of Brent for the continued civic use of Brent House, he will reconsider his decision to approve the means whereby this property could be bought by the council and effect a saving of ratepayers' money.
    The Under-Secretary of State for the Environment (Mr. Keith Speed): No, Sir. I am sure it is a better use of resources that the very large sum required to buy this building should be applied to the carrying out of new construction works.
    Mr. Pavitt: Is it not a nonsense that because of the Government's fiscal arrangements the ratepayers of my constituency are unable to save, over a period, quite a considerable amount of cash? Does the hon. Gentleman realise the tremendous amount of rent the council has agreed to pay annually?
    Mr. Speed: We looked very carefully at this matter again following the meeting which my right hon. Friend had with hon. Members earlier in the year. However, the saving of ratepayers' money had to be weighed against the adverse effect on other London borough councils which have much inferior accommodation.

    Railways
    Mr. Walter Johnsonasked the Secretary of State for the Environment if he will undertake to make available to the House reports prepared by the Department of Transport Industries concerning the size of the railway network before these are published in the Press.
    The Minister for Transport Industries (Mr. John Peyton): I will report to Parliament as soon as the review of rail policy is completed.
    Mr. Johnson: Is the right hon. Gentleman aware that the recent "leak" to the Press about the future size of the railway network caused widespread alarm and despondency among railwaymen and the general public? In view of the Minister's obvious dislike for nationalised industries, which he has expressed in the House, it is essential for him to give a categorical assurance that there will be no reduction in the size of the railway network.
    Mr. Peyton: I cannot give any assurance of that kind at this stage. However, the hon. Gentleman must recall the facts. First, it was a working document which was published—very unfortunately, I think—and it caused quite unnecessary and avoidable anxiety. The map which was attached to it was totally without authority. I am sorry that this occurred. It simply caused, over a large part of the railway industry, anxiety which could have been avoided.
    As for the hon. Gentleman's statement that I dislike nationalised industries and all that they stand for, he must judge from the facts, which are that whereas the Administration of his party closed over 2,000 miles of railway route, 230 miles have been closed since I have been in office.
    Mr. Bradley: But does not the right hon. Gentleman recall his words on nationalisation generally in the House on 27th July? Will he stop fudging the issue? Will he take this opportunity of
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    assuring the House and the country that the study published by the Sunday Times will not become Government policy? Is it not essential to devote more money, not less, to investment in the railways?
    Mr. Peyton: The hon. Gentleman knows perfectly well that in asking the present Administration to devote more money to the railways he is pushing at an open door. By comparison with the record of his party when in office we have devoted enormous sums of money to the railways. The hon. Gentleman knows that £145 million have been applied to the support of the railways in the current year.
    I am absolutely clear about my intentions. When the current review has been completed the Government will wish to put it to Parliament. I hope that there will then be revealed a series of choices, so that the Government, Parliament and the country can consider the size of railway system that they want and the price they have to pay for it.

    Derelict Land
    Mr. Dormandasked the Secretary of State for the Environment whether he is satisfied with the present rate of clearance of derelict land; and if he will make a statement.
    Mr. Speed: The amount of derelict land reclaimed each year is increasing steadily. In 1971 in England 4,792 acres were cleared, compared with 3,645 acres in 1970—an increase of over 30 per cent. My right hon. Friend will continue to encourage vigorous local authority action.
    Mr. Dormand: Does the hon. Gentleman agree that in spite of the rosy picture for the clearance of dereliction which is always painted by the hon. Gentleman's Department, progress in the country is patchy rather than uniform? Does he further agree that local authorities should follow the example of Durham County Council, which is top of the league in the clearance of dereliction? Also, will he confirm that the present freeze will in no way restrict the grants paid for dereliction which are so important to parts of the country like the North-East?
    Mr. Speed: I accept what the hon. Gentleman said in the last part of his supplementary question. I also accept

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    that Durham has an extremely good record in this matter. Our aim is that all dereliction in the priority areas will be cleared by the end of this decade. Last year was a record year. I hope that this year we shall do even better.
    Mr. Brewis: Progress is very encouraging, but what action is being taken to prevent land from falling into dereliction at about a rate equal to that at which it is being cleared?
    Mr. Speed: That is one of the problems. My hon. Friend may know that, starting in the New Year, there is to be a survey into the question of disused railway land and colliery land which could fall into dereliction. While we are clearing the dereliction which was estimated in 1970, we must try to anticipate new dereliction. British Rail is very well aware of that.
    Mr. Blenkinsop: Does the hon. Gentleman agree that the present definition of dereliction is by no means generally accepted? Will those undertaking the survey examine this matter to see whether a more acceptable definition can be found?
    Mr. Speed: We are in discussion with the local authority associations, following which I hope there will be a survey in the New Year which will include an examination of this important point.

    Brentford Development Plan
    Mr. Barnesasked the Secretary of State for the Environment when he intends to make a decision on the amendment to the initial development plan for Brentford submitted to him by the Hounslow Borough Council.
    Mr. Speed: My right hon. and learned Friend hopes to issue his decision tomorrow.
    Mr. Barnes: Is the hon. Gentleman aware that this decision will be very welcome indeed, because for a long time Hounslow Council has been ready to start work on the new town centre of Brentford and has been wondering when the right hon. Gentleman would take the decision? It is a decision which has been expected for a long time, and will
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    he take it from me that if it is given tomorrow it will be most welcome?
    Mr. Speed: I assure the hon. Gentleman that the decision will be made known tomorrow. There was a problem about the future of Brentford Hospital and there are a number of matters on which a decision has been reached. A copy of the decision will go to the hon. Gentleman.

  CIVIL SERVICE

    European Economic Community
    Mr. Wingfield Digbyasked the Minister for the Civil Service how many British officials have so far been selected to serve on the staff of the European Economic Community Commission; and how many were previously civil servants.
    The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker): Apart from those in the Commission's existing linguistic services, no British staff have yet been appointed by the European Commission as a consequence of the enlargement of the Communities.
    Mr. Digby: Is it not about time that the Government stopped dragging their feet? We are within two months of entry into the Community. In any case, we can surely do without a few civil servants.
    Mr. Baker: I welcome the last comment; they were encouraging words from my hon. Friend. The Government are not dragging their feet. The process of selection is going ahead. It is the Commission which makes these appointments, not the British Government. In the course of the next year, as the House knows, there will be 600 to 700 posts to fill in Brussels, and we are very keen that many of those people will not be civil servants but will come from private industry, the nationalised industries, trade unions and a whole range of British life.
    Mr. Marten: But if, as appears to be the case, it is the Commission which is dragging its feet, would not this be a splendid opportunity to delay entry into the Common Market until it stops?
    Mr. Baker: My hon. Friend never gives up. Advertisements have already

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    appeared in the British Press—for example, for graduate entrants A.6 and A.7 grades for the Commission—and the European Investment Bank has advertised. A great deal of interviewing and selection is proceeding on these fronts.

    Pay
    Mr. John D. Grantasked the Minister for the Civil Service what effect the talks between the Government, the Trades Union Congress and the Confederation of British Industry will have on Civil Service pay, in particular in respect of fair comparisons and incremental increases.
    Mr. Kenneth Baker: The standstill announced by the Prime Minister on 6th November and outlined in the White Paper (Cmnd. 5125) will apply to Civil Service pay as to other pay.
    Mr. Grant: Does the Minister not recognise that civil servants are hit particularly hard by the freeze because they are always in the process of catching up, and are never the pace setters, because of the fair comparisons system? Does he not think that because this will justifiably cause special resentment among civil servants they should get some special treatment?
    Mr. Baker: I do not agree. The Government, like previous Governments, have endorsed the principle of fair comparisons for Civil Service pay, but we have made it clear, as have previous Governments, that pay research must be subject to any requirement of overriding national policy.
    Mr. Fell: What did my hon. Friend mean in his first reply? Did he mean that there is a freeze for 90 days or 110 days, or whatever it may be, and then perhaps for a further 60 days, and that as a result civil servants never will catch up?
    Mr. Baker: The fact-finding processes of pay research will go on, but the implementation of any decisions resulting from them will have to accord to national policy. The Civil Service will be subject to the standstill, as will all other people receiving remuneration.
    Mr. Sheldon: Is the Parliamentary Secretary aware that the worry of a number of civil servants is that they are likely to be singled out for tighter control because they are under the direct influence of the Government? Can the Parliamentary Secretary take this opportunity to assure civil servants that they will not be unfairly treated as a result of the new legislation?
    Mr. Baker: I should be pleased to do so. Both industrial and non-industrial civil servants will be treated in the same way as members of all other sectors of employment. There will be no dicrimination against them, or in their favour. They will be subject to the standstill.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY, 24th NOVEMBER
Members successful in the Ballot were:
Mr. Arthur Blenkinsop.
Mr. Albert Booth.
Mr. Patrick Wall.

ORDERS OF THE DAY

  COUNTER-INFLATION (TEMPORARY PROVISIONS) BILL
  Order for Second Reading read.
  3.31 p.m.
  The Chancellor of the Exchequer (Mr. Anthony Barber): I beg to move, That the Bill be now read a Second time.
  Before I come to the detailed provisions of the Bill, I think that it would be helpful if I gave the House a short account of the circumstances which led to the decision to legislate. I will not take up the time of the House by going over the course of the discussions between the TUC, the CBI and the Government, because that has already been done by my right hon. Friend the Prime Minister. But it is right that I should remind the House of the events which led to those discussions.
  As a result of a paper submitted to the National Economic Development Council by the TUC in July, 1971, the Council decided to set up the so-called "Group of Four" on which the CBI, the TUC, the Government and the National Economic Development Council were represented. That group and the Council itself discussed a number of topics which were later to figure in the tripartite talks—topics such as faster economic growth, threshold agreements and the improvement of the relative position of the lower paid.
  In July last year the CBI launched its voluntary price restraint scheme, a scheme which received overwhelming support from its largest members. The Government encouraged the major nationalised industries to match the price performance of the private sector, and they assisted them financially to make this possible. The halving of the rate of SET, which had been part of the Budget, came into effect early in July, and on 19th July I announced a substantial reduction of purchase tax rates and I also increased the allowances on new capital expenditure.
  From then on—that is to say, from the middle of 1971—considerable progress was made in reducing the rate of increase in prices. In July and August,
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  1971, just over a year after we took office, the retail price index was about 10 per cent. higher than it was a year earlier. In the following year—that is to say, by the summer of this year—the rise in prices had been brought down from the figure of 10 per cent. a year earlier to 5·8 per cent.
  This was a very considerable achievement which was achieved partly as a result of the degree of progress which we had made in bringing down the general level of pay settlements, but it was mainly the result of the Government's own tax reductions and also the effect of the CBI's price restraint scheme which the CBI extended from 12 to 15 months, namely, up to the end of October.
  The broad picture is that, up to this summer, we had used the means available to the Government directly to reduce the increase in prices. Voluntary cooperation in the struggle against inflation from the CBI was a great help, and this encouraged us to persevere in seeking a tripartite approach to the problem, as did the recent undertaking given by the retailers.
  My right hon. Friend the Prime Minister, in his speech on the debate on the Address, and also in his statement on Monday, has given a full account of the tripartite talks and of the failure to reach agreement. Naturally, the different parties have different views about the reasons for that failure, but we can all agree with Mr. Victor Feather's remark that it
  "…does not dispose of the problem or of the need for a joint solution…"
  I emphasise the word "joint" because all us in Government hope that we shall be able to resume discussions with the TUC and the CBI on the objectives and problems of economic management.
  But whatever views may be held about the responsibility for the breakdown, the fact was that last Thursday the TUC representatives concluded that the proposals which had been put forward on that day by my right hon. Friend the Prime Minister did not form the basis for negotiation. From that time onwards—and subject only to any change of view by the General Council of the TUC on Monday morning—it was imperative for the Government to take action. It is not without significance that the national newspapers, both of the Left and of the

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  Right, were not merely expecting the Government to legislate—
  Mrs. Renée Short: The right hon. Gentleman has left out the Morning Star.
  Mr. Barber: I know perfectly well that there is the exception of the Morning Star. But with that single exception, there is no doubt at all that the national newspapers were not merely expecting the Government to legislate; they were, almost with one voice, expressing the opinion that there was no alternative in the national interest.
  On Monday afternoon my right hon. Friend set out the Government's proposals. And so, today, I am moving the Second Reading of this Bill.
  The statutory control of pay and prices is, in the minds of everyone in this House, a far less satisfactory way of managing our affairs than would have been a voluntary agreement. But as my right hon. Friend explained on Monday, in the absence of a tripartite agreement the Government had come to the conclusion that they had no alternative but to bring in statutory measures to secure the broad objectives which were common ground among all three parties.
  This main legislation will take time to work out in detail and to implement. The purpose of the present interim Bill is to make it possible for there to be a short standstill on prices and incomes so that the agreed objectives will not be predudiced while the main legislation is being prepared and brough into operation.
  Dr. J. Dickson Mabon: Is the House to take it that the explanation which the right hon. Gentleman has just given matches up to the cry he made last night that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was telling a pack of lies in his version of these events? That does not square with what the Chancellor of the Exchequer has said. I do not want to revive last night's dying embers, but surely the right hon. Gentleman is obliged to say a little more about his charge that my hon. Friend was telling a pack of lies.
  Mr. Barber: The point I made last night—
  Hon. Members: Withdraw.
  Mr. Barber: —which I am now happy to repeat, is that some—
  Mr. Harold Wilson: Pack of lies?
  Mr. Barber: I was asked a question, and if the right hon. Gentleman the Leader of the Opposition wants an answer I will give him one. The point I was making last night was that what the hon. Member for Ebbw Vale (Mr. Michael Foot) said did not coincide with the truth.
  Mr. Wilson: The right hon. Gentleman said that it was a pack of lies.
  Mr. Barber: Yes, the hon. Gentleman was repeating a pack of lies, without any doubt whatever. Everybody sitting round that table knows perfectly well that what I am saying is true.
  Mr. Wilson: Na—the right hon. Gentleman is lying now.
  Mr. Barber: How would the objectives, on which we were all agreed in the tripartite talks, be prejudiced if this Bill were not passed? Let me remind the House of what the three objectives were. The first was the achievement of faster growth in national output. The second was an improvement in the relative position of the lower paid. The third was a moderation of the rate of cost and price inflation.
  On the first, there is widespread agreement that accelerating inflation would put at risk the faster rate of growth that we are now achieving. As to the second objective, the lower paid have as a rule—one might almost say "by definition"—less bargaining power than other sections of the community. In a situation of rapid inflation the strongest suffer least and the lower paid generally suffer most. As to the third objective—which is to moderate the rate of cost and price inflation—this Bill manifestly makes a contribution to that end.
  There are thus three general points to be borne in mind about the Bill. First, it is designed to provide the time and the opportunity to develop and bring in a longer-term policy which will be both fair and effective. Second, whatever criticisms may be made about the detailed provisions in the Bill, the nation certainly understands why it is far better to take this action than merely to stand

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  by and to allow inflation to rip. Third, over the past two years both wages and pensions have risen considerably faster than prices, and the whole aim of our policy of faster growth is to enable wages and pensions to go on rising in real terms.
  The greater the co-operation, the quicker we can replace this standstill by a fair and just longer-term policy designed to share the benefit of growing prosperity among all sections of the community.
  Mr. Neil McBride: The right hon. Gentleman has referred to pensions. Will not he agree that an increase in the old-age pension is needed now rather than next year and that an increase was called for? Does not he seriously think that this paltry bribe to the parents of the country is an affront to their dignity and that what is needed now is a pension increase?
  Mr. Barber: I disagree entirely with the hon. Gentleman. Let me repeat the facts that I gave yesterday in answer to an intervention. The simple fact is that in the past two years this Government have increased the old-age pension by more than the increase made during the full period of the Labour Government. I hope that the hon. Gentleman and his right hon. and hon. Friends will note that. Under this Government the pension has been rising far faster than the rise in prices. The hon. Gentleman knows it, and the pensioners know it. What is more, we told the TUC in the tripartite talks that if only we could reach agreement we were prepared to give the pensioners a better deal—in other words, a bigger increase in pension—than they would have got otherwise and that, meanwhile, as an earnest of our good faith, we were prepared to make a lump-sum payment.
  I agree that right hon and hon. Members in all parts of the House and certainly all the TUC representatives are agreed that the 8 million pensioners are a section of the community for whom we would like to do more. But in the light of that past history, I do not think that the pensioners will take the same view as the hon. Member for Swansea, East (Mr. McBride). For the first time, on top of the annual reviews, we have promised to provide for the pensioner a
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  £10 bonus and £20 for a married couple tax-free as soon as it is feasible to do so. I think that the pensioners will take a different view from that of the Opposition.
  I make one further point. I assure the House that our firm action to curb cost inflation will be matched by equally firm action to contain the money supply without curtailing economic growth.
  The general scheme of the Bill is that it gives Ministers powers to enforce the standstill described in the White Paper for 90 days from the passing of the Act, subject to possible extension for up to 60 further days beyond that. During the period of operation of the Bill, Ministers will be able by notice or order to require those concerned to reduce prices or pay levels to the levels at which they stood before the standstill on 6th November and to prevent increases in dividends and rents.
  That is the broad scheme of the Bill, and it may be for the convenience of the House if I explain some of the main provisions in rather more detail—
  Mr. Donald Stewart: As it was confirmed in a parliamentary answer to my hon. Friend the Member for South Ayrshire (Mr. Sillars) last week that the average weekly earnings of male manual workers in Scotland is more than £1 below the average for the United Kingdom, will the right hon. Gentleman suspend the standstill in Scotland until parity has been achieved?
  Mr. Barber: I do not think that that would be either practicable or desirable.
  Mr. Roy Jenkins: Will the right hon. Gentleman say whether his very rapid half-sentence about containing the money supply meant anything fresh?
  Mr. Barber: As I am sure the right hon. Gentleman will appreciate on reflection, it was in effect a summary of the very long remarks that I made yesterday about the money supply. In the context of a Bill which is designed to deal with inflation it seemed right to complete the picture by making that reference.
  Mr. John Biffen: So that we may put the final brush touches to the picture, will my right hon. Friend say, therefore, whether in the prospective

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  situation of a tightening money supply he expects interest rates to rise?
  Mr. Barber: I think that I must give the answer to my hon. Friend which would be given by any Chancellor of the Exchequer—and that is that my hon. Friend must wait and see.
  Perhaps I might now refer briefly to the principal Clauses in the Bill.
  Mr. J. T. Price: Will the right hon. Gentleman give way?
  Mr. Barber: No. I must get on. I have given way a great deal already.
  Clause 1 begins by limiting the operation of the Bill to 90 days from the date of Royal Assent. There is also a power to extend the 90 days by a further 60 days by means of an order requiring an affirmative Resolution of both Houses. Hon. Members will see that the combined effect of Clause 1(2) and (3) is that there can be no extension without prior affirmative Resolutions. Furthermore, an order extending the 90 days has to be made not less than 30 days before the end of the 90-day period. By subsection (3) the order lapses if affirmative Resolutions of both Houses have not been obtained within 28 days of the making of the order.
  Clause 2 is the heart of the Bill. As the sidenote says, it deals with prices, pay, dividends and rents. It provides that once the section has been applied to a price, a pay level, a dividend declaration or a rent, the level of the payment shall not exceed the level which applied before the standstill. In a moment I will explain the way in which Ministers will be able to give consents to vary this.
  The appropriate Minister can apply the section either by order or by notice, as can be seen from subsection (6). We intend that where the section is being applied to an individual or a single firm the procedure by a notice will normally be used. However where the section is to be applied to a class of cases, whether in prices, pay, dividends or rents, an order may be more appropriate.
  Paragraph 6 of the Schedule makes an order under the Bill subject to the negative Resolution procedure of either House of Parliament.
  Paragraph 7 of the Schedule enables regulations to be made dealing with the
  1012
  manner in which a notice is to be given and such regulations will be made by Statutory Instrument which will also be subject to parliamentary control by negative Resolution.
  Mr. J. T. Price: Will the right hon. Gentleman now give way? I am on the point I wished to raise earlier. Before the Chancellor begins to embark on a technical discourse spelling out the technical apparatus for enforcing a standstill, will he enlighten the House about how he will deal with the soaring and criminal increase in the price of property and land? Is any standstill to be placed on contracts that are in the pipeline, affecting public development and activity in housing and all other areas where the most exorbitant and criminal prices are being charged, such as, for example, land which the other day was sold at Altrincham, in the constituency of the Chancellor, at £56,000 an acre—[HON. MEMBERS: "Too long."] Will the right hon. Gentleman—
  Mr. Speaker: Order. I already have the names of over 40 right hon. and hon. Members who want to speak in the debate. Interventions must be very brief.
  Mr. Price: I will finish in a moment, Mr. Speaker. With great respect, it is impossible for the House to run away from the fact that the greatest single factor creating inflation, where the whole process starts, is the exploitation of land and property by completely unsocial elements in the community.
  Mr. Barber: I have dealt with this question in the House and outside and have expressed my views on it. I want to go through the terms of the Bill and to do it briefly, because there are many hon. Members who wish to speak.
  Clause 2(7) is important because it provides that there is no contravention of the Clause in relation to prices, pay or dividends if what is done is authorised by order or notice applying the Clause or is approved by a Minister in writing. The effect of this is that in making an order or notice, Ministers are not bound to require a price, a pay level or a dividend declaration to revert to the pre-standstill level if they are satisfied that there is good reason for exempting it from this requirement or for fixing it at some intermediate level.

  1013
  Clause 3 deals with certain special cases in pay matters which are, in the Government's view, of such importance that they ought to be included in the Bill rather than dealt with by order, although I should tell the House that under Clause 2 we have the power to handle them under the ordinary procedure. We thought they were sufficiently important to be included in the body of the Bill. The cases with which Clause 3 is concerned are referred to in paragraph 14 of the White Paper. In these cases there are agreements made before 6th November under which pay or some other condition of service is due to be increased from a date which will fall within the standstill period.
  We do not think it would be consistent with the objectives of the standstill, or fair to those who would normally be expected to negotiate an increase during the period of the standstill, to allow increases under staged agreements to proceed during this period. So, as on previous occasions—
  Mr. Christopher Brocklebank-Fowler (King's Lynn): While recognising the need for restraint and supporting generally the aims of the Bill, may I say—and I know that I speak on behalf of my hon. Friend the Member for Norfolk, North (Mr. Ralph Howell) and many other hon. Friends representing Norfolk and other counties in respect of the recent pay award made by the Agricultural Wages Board—that there is no more deserving case than agricultural workers who on average currently earn less than 69 per cent. of average industrial earnings. Will the Chancellor undertake that at the end of the standstill period agricultural workers will receive their award in full?
  Mr. Barber: Obviously I cannot without notice give an off-the-cuff answer on every pay settlement or claim throughout the country. I know the position of the agricultural workers because a number of my hon. Friends representing farming constituencies have seen my right hon. Friend the Minister of Agriculture and myself about it. The position with all wages council and wages board proposals is that where the last increase for the workers concerned took effect less than 12 months before 6th November, the implementation of the wages board's
  1014
  proposals—there are two boards, one for Scotland and one for England—will be deferred during the standstill. This is dealt with in paragraphs 15 and 17 of the White Paper. In answer to the specific point, the new rates, assuming that they will be confirmed by the boards, and I make that assumption, will come into operation in full from the date when the standstill ends.
  Mr. Eric S. Heffer: Shame.
  Mr. Barber: I was saying that we did not think it would be consistent with the objectives of the standstill or fair to those who would normally be expected to negotiate increases during the period of the standstill—
  Mr. Harold Wilson: We are not very clear about this. If the proposals are not to take effect until the end of the freeze, which may be for 150 days, will they be backdated to the original 1st January? Has the right hon. Gentleman studied the precedent of the doctors in 1967?
  Mr. Barber: I was just dealing with this very point. I made it clear in answer to my hon. Friend the Member for King's Lynn (Mr. Brocklebank-Fowler) that this will come into operation at the end of the standstill but will not be backdated. I was just going on to explain why.
  Mr. Norman Atkinson: Before the right hon. Gentleman does that—
  Mr. Barber: I must get on. I wish to answer the point put by the Leader of the Opposition, which is a perfectly proper one. We do not think that it would be consistent with the objectives of the standstill or fair to those who would normally be expected to negotiate increases during this period to allow increases under staged agreements to proceed during the period. Any right hon. or hon. Member on the Opposition side will remember the principles which were applied on a previous occasion when there was a standstill. Accordingly, as on previous occasions, we propose that the implementation of such agreements should be deferred until the end of the standstill. The first two subsections of Clause 3 give effect to this.

  1015
  I should make it clear that we expect such agreements—I am speaking generally now about this type of agreement—to come into operation with effect from the end of the standstill. We are not proposing that the amount of such agreements should be affected, provided they were made before the standstill.
  Mr. Atkinson: Will the right hon. Gentleman give way?
  Mr. Barber: No. Paragraph 13 of the White Paper makes it clear that where an agreement was reached before the standstill and the operative date of the increase was on or before 6th November, the increase can be implemented. The principle is that increases which begin to take effect during the standstill should not proceed.
  Clause 3(3) provides for an exception to this. This exception relates to increments for age or length of service. Again, this exception is in line with the practice on previous occasions. We think that a distinction ought to be made between progress within a scale or range by the individual and an increase which lifts either a pay scale or a flat rate of pay for everyone. We have made it clear in paragraph 12 of the White Paper that where any existing pay takes the form of a range or scale, that range or scale should not be increased. But progress within the range or scale on the basis which applied before 6th November is permitted. In addition to increments on scales, this exception applies to the progress of apprentices to the adult rate and to long service payments.
  Clause 4 empowers the appropriate Minister to obtain the information that he needs to establish whether a price, pay level, dividend or rent has been unjustifiably increased.
  Mr. James Callaghan: As dividends will normally accumulate with profits and be reflected in share prices and eventually paid to shareholders, can the right hon. Gentleman explain the equity between that situation and refusing to back-date the pay of farm workers?
  Mr. Barber: What I am saying is that the treatment of dividends and of the pay of agricultural workers is confined to the period of the standstill. I have said
  1016
  nothing about dividends after the standstill. What I have said about agricultural and other workers to whom I have referred is that from the end of the standstill they will get their increases in full.
  Mr. Heffer Mr. Heffer rose—
  Mr. Barber: No. I must get on.
  Mr. Heffer: Will the right hon. Gentleman give way on this question of agricultural workers' wages?
  Mr. Barber: No. Clause 5 gathers together in one part of the Bill—
  Mr. Heffer: Will the right hon. Gentleman give way now?
  Mr. Barber: No. As I was saying, Clause 5 gathers together in one part of the Bill a series of provisions dealing with offences.
  Mr. Heffer: On this question of agricultural workers' wages—
  Mr. Barber: There are provisions for fines for contravening a notice—
  Mr. Atkinson: On a point of order, Mr. Speaker. As I understand it, Parliament has not become an exclusive club for Privy Councillors. Why is the Chancellor so agreeable to giving way to his colleagues in the Privy Council?
  Mr. Peter Rost: Because they have a lot more sense.
  Mr. Atkinson: That may be so, but there are others, Mr. Speaker, who assume that you are here to protect their rights and who would like to put one or two points of view on behalf of the most exploited section of working people in the country, those whom the Government are proceeding to hammer. The right hon. Gentleman ought to give way and then answer questions about the wages—
  Mr. Speaker: Order. This is not a matter for the Chair. It is entirely a matter for the discretion of the Minister.
  Mr. Barber: I accept that—
  Mr. Heffer: Will the right hon. Gentleman now give way?
  Mr. Barber: I fully accept that the hon. Gentleman, who is particularly concerned about these matters and has

  1017
  always taken a consistent line on them, and his hon. Friend the Member for Tottenham (Mr. Atkinson), have points of view to express, but you, Mr. Speaker, have said that there are 38 other right hon. and hon. Members who want to express their points of view.
  Mr. Atkinson: Why did the right hon. Gentleman give way to my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)? He is an employer of farm workers.
  Mr. Barber: I was referring to Clause 5 which deals with offences. There are provisions for fines for contravening a notice or order under Clause 2, and corresponding provisions for similar fines for anyone who tries to compel or influence someone by threat or otherwise to contravene Clause 2. There is provision for a smaller fine for wilful failure to produce information under Clause 4, or for producing false information or documents.
  In subsection (6) we provide that where an offence under the Bill is committed by a corporation and it can be proved that this has happened with the consent or connivance of a responsible officer of the corporation, that officer can be proceeded against as well as the corporation itself. In subsection (8) there is a reference to the Industrial Relations Act. The effect of this subsection is that there shall be no "double liability" for offences under the Act.
  Subsection (9) contains a safeguard which is self-explanatory, in that proceedings for an offence under the Bill will require the consent of the Attorney-General. I am sure it will be accepted by the whole House that failure to comply with the Act or a notice or order made under it would be a serious matter, punishable under the law.
  Clauses 6 and 7 make the necessary provision for the Bill to apply in Scotland and Northern Ireland in order to accord with the special legal provisions which apply there.
  I do not think that I need detain the House for long on the Schedule, but it may be helpful for future discussions if I say that a number of the provisions are technical. For example, paragraph 5 makes possible the variation or revocation of orders, and paragraph 8 deals with
  1018
  the special position of Crown servants, given that the Act will not bind the Crown. The Government, of course, intend to apply the principles of the standstill fully in the Government field, notwithstanding that the Bill will not bind the Crown.
  Mr. J. Enoch Powell: I am grateful to my right hon. Friend for giving way. As he is dealing with the Schedule, will he refer to paragraph 4 and tell the House whether that will cause this measure to override Community legislation, or whether Community legislation will have precedence over the Bill when it becomes an Act?
  Mr. Barber: The provision is quite clear. It is that this Act—in other words the Bill that we are now discussing—and any provision made under it shall have effect notwithstanding anything in any other Act or other statutory provision which was made or passed before this Act. In legislation of an emergency and temporary character to deal with a limited period of 90 days, which can be extended to 150 days, I should have thought that it was wholly reasonable in the circumstances and in the national interest that there should be a provision of this kind. It is true that the Bill gives very wide powers, but it does so for a strictly limited period, and I believe that for this period these wide powers are necessary in the national interest.
  Whatever may be the views of individual right hon. and hon. Members, there is no doubt that the nation as a whole expected, and approves of, the decision which the Government have taken, and therefore of the introduction of the Bill. If we had not acted as we have, inflation would not merely have continued at an unacceptable rate: it would have accelerated. As always, it would have been the powerful who would have gained, and it would have been the weak who would have lost, and it is not surprising that an opinion poll published in the evening papers today shows that three out of four people back the proposals which have been put forward by my right hon. Friend.
  I say this to the right hon. Gentleman the Leader of the Opposition, who is to follow me. After the results of the American election the Opposition must

  1019
  be wondering whether they are wise to oppose the Bill, because the immediate action that we are taking is not all that dissimilar from the action taken last year by President Nixon, action which undoubtedly has been approved by the American people.
  I say that because the British people, like the American people, hate inflation, and they hate rising prices. They know that rising prices harm the pensioner and hurt the housewife. They know that rising prices and rising costs create unemployment. They know that the upward spiral of pay and prices is the one thing that can damage and diminish our hopes of rising prosperity, and so I believe that the British people, like the American people, will have no patience with those who now attempt to undermine the action which the Government have taken.
  The Bill is essential in the national interest, and I ask for the support of my right hon. and hon. Friends in giving it a Second Reading.
  4.10 p.m.
  Mr. Harold Wilson: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House, believing that the present crisis results from the Government's mismanagement of the economy and its deliberate alienation of the trade unions, and regretting that the Government brought about the failure of the recent talks by refusing to modify its policies on food prices, rents, other key elements in the cost of living and on regressive taxation, declines to give a Second Reading to a Bill that cannot achieve a lasting reduction in the rate of inflation without further major changes in Government policy."
  In view of his last remarks, addressed to me, I must concede that the Chancellor of the Exchequer is getting a bit hard up for arguments if he relies on an Evening News public opinion poll and the results of the American election. Monday's announcement and the Bill are an indictment of the Government on two counts. First, they represent even more conclusive evidence of the cynical dishonouring of the firm pledges on which the Prime Minister was elected. We are glad that the right hon. Gentleman has condescended to arrive in the House to listen to the debate. Second, they are an utter condemnation of the Government's conduct on the whole range of
  1020
  economic and social policies during the two and a half years they have been in office.
  The Prime Minister was elected on one mandate, and one only, to deal with prices, to counter inflation. His promises on this were unequivocal. They were repeated every day of the election campaign. The events of the past few weeks condemn the right hon. Gentleman for having presided over the most devastating rate of inflation which this country has ever known in peacetime. He has not merely passively presided, not merely failed to act, but many of his policies have been deliberately designed to raise food prices and rents and to impose further burdens on the family standard of living.
  The Bill is equally a repudiation of the right hon. Gentleman's cynical campaign to win votes in the last General Election by his reiterated argument against a wage freeze and his statement at that time that a Labour Government would immediately introduce a wage freeze in June, 1970, saying that he totally rejected it. He described the imposition of a wage freeze as not only impracticable but unfair, undesirable and an unjustifiable infringement on the freedom of the individual. But he has now done it.
  Mr. J. Bruce-Gardyne: The right hon. Gentleman should read his 1966 manifesto.
  Mr. Wilson: We said that we would introduce statutory controls on prices and incomes, and it was in the Queen's Speech of 1965. Obviously, it is a waste of time to give way to the hon. Gentleman.
  Last week I quoted the Prime Minister's equally categorical pledges in the BBC Election Forum, 1970, which said:
  "We opposed the compulsory wage freeze all the way through and we have been proved right."
  The right hon. Gentleman referred to such a freeze as "playing into the hands of extremists." He said:
  "As a policy it has proved to be futile. What we want is a new approach."
  But the right hon. Gentleman's references to an incomes policy were not simply an assertion that he could not see a situation arising where a statutory freeze

  1021
  would be necessary. Opposition to any suggestion of a wages or prices freeze was an integral part of his campaign. It was included in his "At a stroke" statement two days before the General Election. He took the campaign to the country. Just as he had appealed to the housewives of Leicester, he appealed to the workers of the West Midlands, and with an equal degree of electoral honesty in what he promised them. He said in June, 1970:
  "It is now quite clear that if Labour were to be voted back to power they would impose another compulsory wage freeze. Nobody seriously denies it. And there would not be much point in denying it because if they did nobody would believe them."
  I hope that the right hon. Gentleman will stop reading his little bits of paper and listen to what is being said. I am attacking the right hon. Gentleman for misleading the country during the General Election campaign. If he has not got the guts to speak in this debate, I hope he will have the guts to get up and defend himself in a moment. The report of his speech says that he added insult to injury by saying that a Labour Government would attempt to hold back increases already negotiated but not yet paid. Did the right hon. Gentleman say that in Birmingham? Did he say that a Labour Government would attempt to hold back prices already negotiated but not yet paid? Did he say that?
  Before the Prime Minister arrived, the Chancellor of the Exchequer told the House that the Government are holding back the farm workers' increase, yet that is what the Prime Minister campaigned against in 1970. He went on to say:
  "We know very well …"—
  [Interruption.] Does he deny what I have just quoted? Will the right hon. Gentleman put his piece of paper down? He can read his comics afterwards. Does he confirm what I have quoted, and does he confirm that the Chancellor of the Exchequer has said that the agricultural workers' pay award will be deferred? Does he deny either of those statements?
  The Prime Minister (Mr. Edward Heath): I was just reading what the right hon. Gentleman said in March, 1966:
  "Any law prescribing wages would be repugnant to all parties in this country."
  Mr. Wilson: I said that, but I am quoting what the right hon. Gentleman said while campaigning in the country in 1970 against our wage freeze. Now he is introducing a freeze. The right hon. Gentleman said at Birmingham—[Interruption.] Of course, Government back benchers do not like this; they were elected on the right hon. Gentleman's promises. Most of them are here as dishonestly as he is because they were elected on his mandate on prices and on a wage freeze.
  Mr. Peter Tapsell Mr. Peter Tapsell (Horncastle) rose—
  Mr. Wilson: The right hon. Gentleman does not need protection. If he wanted to speak he would do so. The right hon. Gentleman said at Birmingham:
  "If you put a Labour Government back into office you will have your wages frozen by another lengthy period by Act of Parliament."
  Is not that what he is doing? He went on to say:
  "We are opposed to a compulsory wage freeze. We never had it when we were in power. We opposed it right through the last Parliament…".
  He then talked about the fines in the Labour Government's legislation. He referred to fines of £500. He did not say that there were no prosecutions. He did not say that the maximum fines were £100 on summary conviction and £500 on indictment—he referred to the fines in his election campaign—when the fines in the present Bill are £400 on summary conviction and an unspecified, unlimited fine on indictment. That is inflation under the Tories on fines.
  The second charge relates to a total breakdown of the Government's policy. The right hon. Gentleman's manifesto not only says:
  "We utterly reject the philosophy of wage control …"
  It also deals with inflation. The manifesto says:
  "We have become resigned to the value of the pound in our pockets or purse falling by at least a shilling a year."
  That means under a Labour Government. Food prices under the present Government have been rising at almost two shillings in the pound a year. Can I have the right hon. Gentleman's attention when he has quite finished? [Interruption.] I shall get on when I have the Prime Minister's attention. What the right hon. Gentleman has portrayed as our failure

  1023
  has become his target. He would be very pleased if he could keep down price increases to less than a shilling in the pound each year. The right hon. Gentleman will have his own estimate of the hope which he has of holding down price increases to 5 per cent. We were condemned for what he called our shilling in the pound. He has now made it his target and he knows he will not be able to achieve it. Prices, we were told when the new Parliament assembled, would be kept down by competition. Oil companies are not keeping them down; they have put up their prices together and in harmony.
  In September, 1970, the Chancellor made it clear to City journalists that prices were to be allowed to rise to restore profit margins. That was cost-inflationary and the impetus to higher wage claims. Fares, school meals, rates, food and rents were all pushed upwards by deliberate Government policy. On wages we were told that wages in the private sector would be left to workers and employers to settle and they were expected to be in tune with the Prime Minister's moralising tone of those days. The Prime Minister decided from the outset on a deliberate policy of positive discrimination between public employees and employees in the private sector. That was the policy in September, 1970.
  This Bill, the consummation of the Government's policy, is the result of this systematic alienation of the unions, and were the actions not sufficiently provocative to heighten conflict we could always rely on the Chancellor of the Exchequer to provide the necessary exacerbation—in railways, for example, this year, just as the unions were meeting to discuss the Minister's proposal for arbitration; and in the Downing Street talks, on the eve of the vitally important meeting on Monday of last week.
  Last night, in this new permissive society—this House—the Chancellor allowed himself to use the expression "pack of lies" about my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). He will know that Mr. Jack Jones, addressing the Parliamentary Press Gallery luncheon today, entirely confirmed what my hon. Friend said. Who is now responsible for the "pack of lies"?
  1024
  As though the Chancellor were unable to exacerbate the conflict there is a new sorcerer's apprentice now, the Vice-Chairman of the Conservative Party the hon. Member for Lewisham, West (Mr. Selwyn Gummer), appointed by the Prime Minister. [Interruption.] Hon. Members opposite cannot laugh him off. They can laugh most things off, but they cannot laugh him off because the Prime Minister appointed him. He is reported to have said last week,
  "The wages and prices talks were destroyed by Red wreckers."
  The report reads:
  "They failed because of red wreckers, a militant minority who were operating the unions' claimed Mr. John Selwyn Gummer, vice-chairman of the Conservative Party at Doncaster last night. 'The moderate leaders of the trade unions have been so terrified by the activities of the militants that they were in no position to deliver any agreement, let alone to agree to anything. It is the moderate majority of the unions who are the losers by their refusal to accept an offer to become part of the Government machine and join in making the decisions which are necessary for the whole of the community. … The moderate trade union leadership wanted the talks to succeed. But they failed because so many of the trade unions are now in the hands of extremists, and this is not because the extremists have a majority but because the moderates refuse to he militant.'"
  The Vice-Chairman of the Conservative Party is the appointee of the Prime Minister, and I ask the Prime Minister, who claims to be anxious for the talks to be resumed and to succeed, whether he endorses that assessment by his vice-chairman, his recent appointee, or whether he repudiates it. [HON. MEMBERS:
  "Answer."] I am asking the Prime Minister to get up. He was popping up and down like a right honourable jack-in-the-box yesterday. He will not answer that question.
  Mr. Geoffrey Finsberg: On a point of order. Is it in order, Mr. Speaker, for the right hon. Gentleman to keep wasting time when 40 other Members wish to participate?
  Mr. Speaker: That is not a point of order.
  Mr. Wilson: It would have saved time if the Prime Minister had the guts to get up and answer that question.
  The House knows that the talks broke down because the Government were the prisoners of their own doctrinaire policy.

  1025
  They expected the unions to support and police an agreement where they would be responsible for the whole spectrum of wages and at least some salaries. Against this there was an offer that the CBI would hold the prices of manufactured goods ex works within the 4 per cent. limit. The CBI has proved that it can do that, but, of course, it cannot police retail margins. I do not underrate any of this, either the achievement of the CBI over 15 months or the difficult task it was prepared to shoulder for a future period, but so many of its products account for only a relatively small proportion of the cost of living of the average household.
  I think the Prime Minister does not seem capable fully to realise that he was not dealing only or mainly with the trade union leaders on that side of the talks. Any workable agreement must be capable of winning the hearts and minds of trade union members and the wives of trade union members, and the Prime Minister cannot convince them of his good faith after his broken promises on prices, still less when he has so little to offer.
  Man does not live by bread alone, but still less is the average family's cost of living dictated by the ex works cost of machine tools or ball bearings, however important they may be for industrial efficiency and investment. For a very considerable proportion of the expenditure of families in this country the principal costs are housing, including rates and either rents or mortgage interest rates, and food, and so much of all that is outside the area of influence of the CBI, or indeed, for that matter, of this Bill. For very many families these two items, the cost of housing and the cost of food, add up to half the total family cost of living. For the very old, food is a disproportionately high part of household expenditure. For the very young, housing is. I have quoted the building society figures; for the 11,000 new borrowers from March to May this year, mortgage charges account for 23 per cent. of total incomes. And people have to feed themselves on top of that.
  When I listen to him in this House, and on television on these matters, I always get the idea that the right hon. Gentleman approaches these problems with a certain degree of formalistic logic mingled with the Messianic fervour of a newly qualified industrial consultant—he did so
  1026
  on television on Monday night—a kind of O. and M. Rees-Mogg. He ought to be approaching these matters with concern for the welfare of every family in this country because of the qualities he has got—
  The Prime Minister: As the right hon. Gentleman is dealing with these matters he ought to have pointed out that retailers prices were included, just as were nationalised industries' prices, for which the Government are responsible, including fares and fuel supplies, to be fixed in conjunction with the Government. If the right hon. Gentleman knows that all these were included he ought to have mentioned them as well as the CBI prices. What was of vital importance was that policing would be done by the TUC as well as by the CBI and the Government, and the TUC was offered what it has never been offered before: a full share in policing manufacturers' prices and retailers' prices.
  Mr. Wilson: That is very interesting. Indeed I referred to retail prices last time I addressed the House and the right hon. Gentleman may find some fairly generous compliments I could pay him, but in the main he is not dealing with family expenditure. As he will understand, it is not only a question of the CBI. In his present fairly mellow mood as long as it lasts, I would ask him to consider that while wages are properly an item in industrial costs, for him they are an abstraction but for a family, on a Thursday or a Friday night they are not an abstraction but affect the standard of living of the family. Deductions at source, when the housekeeping money is handed over, deductions for rent, rates, fares, school dinner, fuel, which are placed in the tin or on the mantel-shelf, are deductions from spendable income as surely as PAYE and stamps.
  I come to the point made by the right hon. Gentleman dealing with family expenditure on public sector prices—that fares, coal, gas and electricity, and postal charges would be kept within the permitted rate of increase. That means all subsidies. Some hon. Members might have felt, when they heard the Prime Minister last week, that this is not exactly what they were elected to support, especially with a bill of £280 million, but of course the Government were right in this.

  1027
  They recognise the problem here. It is a problem that I have frequently urged on them—the problem of predominantly labour-intensive public industries and services in which, if the workers are paid wages and salaries comparable to similar work in private industry, the direct effect on costs would mean high prices going right through the economy.
  That was the Prime Minister's intention, from what he said last week, and and he has confirmed it today, but did it come through in time in the talks with the two sides of industry? In our view—this happens also to be the view of the trade union representatives there, and they have made it public—the talks failed because the Prime Minister did not come through early enough or over a sufficiently wide area with a proposal for a real, Government-directed attack on the main components in the cost of living of the average family. I want to deal with some of these.
  First, on food prices and the prices of other essentials, I did not under-estimate the difficulty of dealing with them when we debated this matter last week. But of course Government policies are in all the wrong directions on food prices—food levies, the European entry terms, the complacency of the former Minister of Agriculture over beef prices last June and the Government almost falling over themselves to give the impression that they wanted to see British beef and cattle exported to Europe. One cannot combine an anti-inflationary policy with, at the same time, an obsequious determination to serve the interests of a protectionist, high-cost, high-priced European agricultural system.
  On rents, why could not the Prime Minister have said in his original statement on 26th September that, as an earnest of his intentions on inflation, he would freeze the 1st October increase—he had powers to do it in the existing Act—or at least limit them to 4 per cent., given an adequate response on other questions? Having passed that date, as he did, why did he not say in the talks that he would be willing to suspend the increases due on 1st April? I do not know whether he said that he was prepared to do that: it does not seem to
  1028
  have been the case. This could have been done without new legislation.
  Despite what the right hon. Gentleman said yesterday, when he kept getting up to challenge my right hon. Friend the Member for Leeds, East (Mr. Healey), as recently as Monday when answering my questions he was standing firm on the proposition that rents, like Europe and like the Industrial Relations Act, were the subject of legislation that he was not prepared to repeal.
  The Prime Minister The Prime Minister indicated assent.
  Mr. Wilson: The right hon. Gentleman confirms that: I am grateful to him. But, he said, he would be prepared to take into account the results of that legislation. I would hope so—whatever he meant by that.
  The Prime Minister said in reply to me:
  "Many of the other matters mentioned by the right hon. Gentleman"—
  they were rents and housing and so on—
  "—I must frankly say this to him—are political."—[OFFICIAL REPORT, 6th November, 1972; Vol. 845, c. 630.]
  He is right: of course they are. They are Tory politics. What he is saying to the House and the country and to his partners in the tripartite talks is this: "We have decided; and come inflation, come hell, come high water, we are not prepared to change our prejudices in the interests of the nation or those of the housewife."
  The Prime Minister: The right hon. Gentleman is quite wrong. We were never asked in the talks to do anything about the 1st October increase in rents, although the talks were going on from the middle of July, because this was accepted by those taking part in the discussions. As for the Housing Finance Act, of course, I said that we were net prepared to repeal it but would take account of the consequences of it. That was why I made the offer of increasing the rebate allowance for the lower-paid workers.
  This is a matter of policy which I was perfectly entitled to explain to those present, which I did—that we believe in the same policy that the right hon. Gentleman's Minister of Housing believed in, which was that those who are

  1029
  earning higher incomes and can afford to pay a fair rent should do so. We have pursued that policy and we have helped those—and I offered to make greater help available to them—in the lower income brackets.
  Mr. Wilson: I thank the right hon. Gentleman. He knows perfectly well that no proposal on the lines of the Government's Housing Finance Act ever came before Ministers under the Labour Government. He has said this many times and the Chancellor of the Exchequer has a nice chosen phrase to express that particular legend: he used it last night.
  Of course I understand what the right hon. Gentleman meant by this. He was being fair just now. He told us that he would take into account the results of that legislation. [An HON. MEMBER: "That he would do something about it."] Yes, that he would do something about it was what he meant. He told us last Thursday about rebates and the needs allowances and all the rest, but has he not got the faintest glimmering of the problem here?
  The Prime Minister is asking people on an average wage to accept a £2 limit on their wage increases. He knows that food prices are going up a great deal more than he has ever been prepared to tell the House. In addition, however, people who had a 50p increase, without rebates, last April are now due for another 50p increase, or something up to that figure, next April. Cannot the right hon. Gentleman see that if he had wanted a viable policy, he should have said "We will deal with that not only for the rebate groups but for the average workers to get this accepted"?
  This proves my point, that the right hon. Gentleman is living in a social abstraction as well as an economic abstraction and has not the faintest clue how the average family lives.
  The Prime Minister: Does not the right hon. Gentleman realise when he is making these accusations that the three groups in these talks agreed on their first objective as being to help the lower-paid worker? They all accepted, including the TUC, that this would mean that the higher-paid worker could not be helped proportionately. This was the
  1030
  whole basis of the talks, it is why we made the offer across the board and it is why all the proposals that I put forward were to help the lower-paid workers.
  Mr. Wilson: We notice the ingenuity with which the right hon. Gentleman, having made this point—some of us indeed applauded, as I did last week, his idea of a flat rate rather than a percentage increase—then cashed in on that and did nothing at all for anyone else.
  The Prime Minister The Prime Minister indicated dissent.
  Mr. Wilson: I have just shown this to him with rents. He tried to justify a fundamentally unjust situation by always saying "I am trying to help the lower-paid workers" and then failing to produce just proposals for the millions of other workers from whom he was asking for restraint when he could not guarantee, as he fairly said, any control over prices.
  If he was concerned with the lower, paid workers, the Chancellor would not have said this afternoon that the lowest-paid of all, the farm workers, are not getting the increase which was negotiated last week.
  The Prime Minister: Why does not the right hon. Gentleman refer to the threshold agreements which we inserted and which were there for discussion and were greatly discussed during the talks? They were, together, a complete safeguard of all workers, not only the lower-paid.
  Mr. Wilson: Certainly, and that is a pretty good indication that the right hon. Gentleman has no confidence in holding inflation down to the 5 per cent. that he talked about in his manifesto.
  I have asked the right hon. Gentleman—he has not answered although he has been up and down—why he did not deal with the basic guarantee, not the fallback insurance policy. I realise that he made some thresholds. We put the idea to him 18 months ago, and he went on ducking and dodging on the issue until he was forced to consider it on 26th September. But it does not deal with the basic problems—rents, school meals, pensions, VAT and food prices. Had there been a move on this a week ago,

  1031
  I believe that the House and the country would be facing a much less bleak situation.
  Now we have the freeze, which under the Bill will have a retroactive effect to 6th November. I have already said—it must be equally true of the freeze as it was of the Prime Minister's proposals—that it cannot be effective over a wide range of household expenditure. I should like to take the right hon. Gentleman through one or two of these.
  On food, I have referred to the promises of the former Minister of Agriculture about a reduction in the price of beef when the midsummer and early autumn killings began. It has not happened. Now, we are warned—it was in today's Press—by a leading French meat buyer that the beef prices in British shops will rise another 25 to 30 per cent. by the middle of next year. Other meat prices are up. Pork and bacon are up, and the freeze cannot hold them. The same will be true of many manufactured goods which are under the CBI's control but are of course affected by outside prices.
  The Grocer this week calculated that, in the two weeks ended 4th November, there were 517 listed price increases against a weekly average this year of 177. There has been a rapidly rising number of increases just before the freeze and there is clear evidence of anticipation of the freeze—and the Government cannot do anything about it. Those increases cover a very wide range of food. The trouble about this "temporary provisions" Bill is that it does not deal with provisions.
  The price of Canadian hard wheat is up by almost 50 per cent. It is now £46 per ton as against £31 in the summer. What, then, about bread prices? The Prime Minister may continue to shake his head, but he cannot do anything about it.
  The Prime Minister: The right hon. Gentleman can do nothing about it either.
  Mr. Wilson: As I told the right hon. Gentleman yesterday, in the 12 months after July, 1966, the cost of living index rose by 1·44 per cent. I should like him to say that he will achieve the same rate. We should not believe him, after 1970, but it would give us a little comfort for a short while.
  1032
  Next, fresh fruit. Housewives are asked to pay incredible prices for apples at present. The Government would no doubt like to allow rather more imports of apples and pears, but they cannot because they are deadlocked in negotiations with the Common Market about the quota system due on 1st February. Once again, the European obsession is dominating the cost of living.
  What about oil? The right hon. Gentleman will know that the new posted increases in the price of oil will involve the cost of central heating, petrol and many other products, industrial raw materials and industrial heating, and these rises are due to come into effect on 1st January. Will the right hon. and learned Gentleman, the new Minister for Trade and Consumer Affairs, whom we congratulate on his entry to the Cabinet, say whether the new posted oil price increases will be frozen or whether they will be allowed because oil is an overseas product imported in bulk?
  What about wool and wool products, and non-ferrous metals and fibres? It is no good the Chancellor of the Exchequer shaking his head; it has happened.
  Mr. Barber: I was only thinking how strange it was that the right hon. Gentleman the Leader of the Opposition should be talking about an increase in oil prices in that where in 1966 he imposed a standstill he accompanied it quite deliberately by Government action for increasing the price of petrol by raising the duty.
  Mr. Wilson: Yes, indeed, we did, and the right hon. Gentleman knows why we did it—because of the deficit on the balance of payments. He inherited a surplus and has thrown it away. I gave way to the Chancellor because I thought he knew what he was going to do. I thought he was going to tell us the position on oil and petrol prices. However, I hope that the right hon. and learned Gentleman the Minister for Trade and Consumer affairs will tell us tonight.
  I now ask another question of the right hon. and learned Gentleman. It is fair to give him notice of it. What about imported newsprint from countries where prices are rocketing and home-produced newsprint faced with a 10 per cent. increase in imported Scandinavian pulp

  1033
  prices? A £7 per ton, 8 per cent. increase on the home market has been announced. Will this be allowed? What will be the effect on newspaper prices?
  This is always a compassionate House for those in trouble. Even the most stony-hearted hon. Member cannot prevent a tear welling up into his eye as he contemplates the lot of the newspaper proprietors, because almost to a man they have led the campaign for firm action against inflation. The Prime Minister told us of this. Right, left and centre, they have thundered against the "robber barons" of the TUC. We have had leading articles and cartoons characterising union leaders as wreckers, muggers, saboteurs and men with coshes. These newspaper proprietors have demanded a freeze. They have said "Wages must be curbed. Employers and Government must be tough." I was very moved by this. [Interruption.] Not all newspaper proprietors did it; not Cecil King, anyway; the House may be assured of that.
  Last month the newspaper proprietors, who were pressing the Chancellor and the Prime Minister to cut the wages for lower-paid workers, decided to pay out increases of £10 to £12 a week to their journalists, back-dated to July. [AN HON. MEMBER: "Quite right."] It is all right saying "Quite right" now, but they cannot do it under the Bill. They face an 8 per cent. rise in the cost of their newsprint from 1st January. Experts in newspaper economics have said that newspapers will have to raise prices. Some of the dial-a-diddle hot lines to individual newspapers will be interesting if they raise their prices. New scales for higher advertising rates have been announced from 1st January, and contracts signed. I hope that the right hon. and learned Gentleman will do his best to tell us the status of all those matters, newspaper prices, newsprint prices and advertising rates, under the freeze.
  On the Bill I have one or two more questions. First, how rigid do the Government intend to be on wage negotiations? We have heard the Chancellor on the subject of agricultural workers. What about the electrical industry white collar workers, who normally
  1034
  follow almost within the hour negotiations for the power workers? What will their position be? What about ancillary workers in the National Health Service? What criterion will be adopted, and will there be any chance for ministerial discretion?
  On the question of enforcement, as the Government refuse to reintroduce a prices and incomes board and to restore the Consumer Council will they not recognise the shambles they have got into over investigation and enforcement under the freeze? It cannot be done by long-distance telephone calls to an over-pressed switchboard in London—even if the Prime Minister had known the answer to questions put to him on television on Monday and repeated in the House yesterday by the hon. Member for Gloucester (Mrs. Sally Oppenheim) about reversing the charges. The Government should immediately make arrangements for town halls, local authorities, to handle queries and complaints, certainly as regards shop prices and charges for local services. They have professional and experienced staff. It should not be difficult to reinforce them; indeed, to appeal for volunteers. Many local authorities, as the right hon. Gentleman must know, already have price investigating committees and authorities to look into what is going on, without the freeze.
  The Prime Minister is wrong in thinking of every housewife—he keeps saying this—particularly young housewives or very old housewives, rushing around the shops in his own abrasive way looking for supermarkets or village store confrontations. They just do not do it. We have seen some of them on television. Many of them would like to live in peace. Many would fear to he disproved if they thought that a price had been increased and accused a shopkeeper of raising prices. He might produce a list of last week's prices, whether or not it was correct. Many in scattered areas or neighbourhood communities, where it is not practical to shop around, would fear to lose the shopkeeper's good will. Why should not all these housewives take queries to the town hall, which could do a prima facie investigation, a screening process, before deciding to refer bad cases, or cases raising an issue of principle, to Whitehall?
  Mr. J. T. Price: My right hon. Friend has made a useful suggestion about conveying these complaints more efficiently than under the long-distance telephone system. But I hope he will remember that most of the town halls in England at present are completely submerged by the reorganisation of local government, which is another by-product of legislation initiated by the present Government.
  Mr. Wilson: I understand that. That point has already been put to me in discussions with a number of people. Also, those of them not tied up with that are tied up with the problems of the Housing Finance Act and pay negotiations in local government service. Having said all that, however, I am sure that there is a job they can do.
  Manufacturers, I think, will be told by the right hon. Gentleman that they are required to ask for the prior authority of the appropriate Ministry before raising prices, and will have to prove their case. Why should the Government not list the major shoppers' items and require shops seeking to increase their prices to report first to the town hall, again with the idea that major issues will be referred to Whitehall? If there is to be further, continuing legislation in any form, I would propose that local price regulation committees should be set up, serviced locally, and free to initiate inquiries, reporting to whatever national price vetting committee the Prime Minister can bring himself to set up. If there is continuing legislation I hope that there will be local price regulation committees. May we be told the position on loss leaders? Are they to be permitted to be reduced and then raised again?
  May we now have a clear answer on steel? Will steel be held by the Bill at 4 per cent. If it is held, does that not break the Government's commitment to Brussels? There is news in the Press from Brussels this morning of serious concern on the part of European steel producers. Are the Government applying for a waiver? Are we likely to be hauled before the European Court? The former Solicitor-General can speak with authority on this matter: he knows that we are due to be hauled there at some point if we hold the prices down here. Are we holding the prices down by Government policy or by a gentlemanly request? Will that request be effective?
  1036
  Can the right hon. and learned Gentleman tell us whether the basing point charges which involve big changes in prices for many consumers and which are due for 1st January—I gather that they are already printed but not published—are going ahead?
  I hope that we shall have answers to these questions and shall be told a little about the extension of the Bill. The Bill, if it goes through, will dictate the economic life of this country for 150 days from the Royal Assent. Even if it got through all its stages today in both Houses, which is inconceivable, that would take us to early April, certainly past 1st April.
  On 1st April we are due to get VAT—the taxation of children's clothes, over 1 million homes face compulsory rent increases of up to 50p, rate demands are due; and the European food prices begin to bite. Family budgets will be inflated by the introduction of the Government's doctrinaire insistence on another 15p charge per child every week for school meals. Nearly all of these are what I called deductions at source.
  Will the Government now announce that, whether the freeze is in force or not, depending on whether there is an order carried by both Houses, these increases will not take place either on 1st April if we are in a 90-day freeze or at the end of the freeze if we are in a 150-day freeze?
  The Prime Minister must recognise that these issues are fundamental, not only for a freeze period but for any continuing arrangement he may introduce by voluntary agreement, as we all hope, and as I think he hopes, or by later legislation.
  But that is not the only reason why we shall vote against the Bill. It is because a manifestly unfair and slanted programme is being inserted at the expense of millions of less-well-off families in a country which has become a byword for the development of speculation and get-rich-quick acquisitiveness by individuals who in their whole lives have done nothing to increase the wealth or welfare of the community.
  The Bill is introduced against the background of unprecedented land and property speculation, of a Stock Exchange reviving the famous description of it as a casino, of a feverish merger movement that staggers even the City—with new

  1037
  bids every day, developing with increasing disregard for the welfare of consumers or workers; takeover bids increasingly directed not to improving the efficiency of industry but to gathering an unearned harvest of profit by asset stripping, the sale of properties, including properties which make more money for the land they can sell, and the creation of unnecessary redundancies.
  That is the City over which the Chancellor of the Exchequer is presiding. We hear from the Prime Minister—it always moves me deeply—that the national interest must be heard; but when was the voice of the consumer heard in deals by both sides of industry? When in any beer merger when the pubs have been taken over was the consumer consulted? When have the workers been consulted on any deal in the City?
  Perhaps the right hon. Gentleman will look at these things in a rather broader way than his narrow mechanistic industrial consultant's approach which we have had for the last few weeks.
  It is as a condemnation of the inadequacy of the Government's anti-inflation policy and its unworkable character in terms of anything which is meaningful for the average family against the increasingly unjust society which the Prime Minister and his friends are creating that we shall vote against the Bill.
  4.54 p.m.
  Mr. Nicholas Ridley: We have listened to a speech of such monumental irrelevance from the Leader of the Opposition that it encourages me actually to vote for the Bill, which was doubtful in my mind. I do not believe that the right hon. Gentleman will ever achieve much by making such party points. The only thing that he proved conclusively in his speech was that we are suffering from inflation. He did not offer one word about how to deal with it, nor did he have any policy to offer or positive contribution to make to the debate.
  I am one who was sacrificed, if one likes, at the change of Government policy which finally led to the Bill. I was cast in the image of Adam Smith. Indeed, if that is to be the case I do not find it unattractive to wear the mantle. However,
  1038
  if some are to be sacrified when Government policy is changed it will be interesting to see who is the sacrificial lamb when this whole enterprise of prices and incomes policy proves to have failed to stem the tide of inflation.
  The whole House will remember Lord Butler's prediction that within 25 years we would double our standard of living. In fact, he was wrong. In the last 20 years we have doubled our standard of living, and we have, incidentally, precisely halved the value of our currency. Therefore, events have gone even faster than Lord Butler predicted.
  Within that massive change there have been two factors at work. One is the redistribution of incomes. The other is the debasement of the currency. It is important to consider the problem with those two factors in mind.
  The redistribution of incomes in inevitable and in many cases is the right thing to happen. As a capitalist—the trade unions and some of my hon. Friends are the only capitalists left now—I believe that market forces should change the relative distribution of income. I have no objection to certain groups of wage earners improving their position in society as a whole. What is unfortunate about it is that there are other groups of wage earners, there are pensioners, there are salary earners, and there are people who are not able to exact large increases for themselves who are the victims of inflation.
  This afternoon the Leader of the Opposition seemed to suggest that it was the people who are gaining from inflation who will be suffering as a result of the squeeze, whereas it is the people who are the victims of inflation—the poor, the low wage earners, those on fixed incomes, certain low salary earners—who are the casualties. It is wrong to believe that inflation helps them, because the reverse is true.
  It is interesting to consider the changes of incomes of various groups over the period of 20 years within this redistribution. Costs have doubled, or the value of money has halved. The pension has gone up by 4·5 times. Wages have gone up by 4 times. Other groups such as salaried workers have probably done slightly worse. So for all the turmoil that has come into the last 10 years there has

  1039
  been little relative change, although there has been a massive debasement of the currency.
  It is inflation which has been the method by which these wage increases have been granted, and the only defence which Governments have had against this pressure has been to increase the money supply. There can be no doubt that it is not the pressure of wages but the defence of Governments against this presure—that of increasing the money supply—which causes our currency to be debased.
  My right hon. Friend the Chancellor of the Exchequer yesterday more or less acknowledged that if we were to curtail or restrict the money supply it would cause serious social and unemployment problems. By the converse he must admit that if we do not curtail the money supply but allow it to rip, inflation is impossible to contain. Indeed, the logic seems to me to be that a statutory prices and incomes policy is aimed not at the destruction of inflation but at the alteration of the redistribution of income. Therefore, it seems to me that to have a prices and incomes policy and not to reduce the money supply is to make a direct attack upon the market forces whereby trade unionists wish to improve their relative positions.
  As a capitalist, that seems to me a wrong thing to do. The Government's policy, therefore, if it develops into a statutory prices and incomes policy, would seem to me to be a piece of economic canutism. Although we can legislate about prices and wages, the money that is being printed will find its way into the system somehow or other. There will be black markets in certain goods. People will be promoted in order to get disguised wage rises. This will lead to resentment and bitterness in other sections of the economy. Therefore, it seems to me essential that the Government, instead of pursuing the statutory goal which they have embarked upon, should look more carefully at their economic policy.
  I know that my right hon. Friend has done a lot in reducing the supply of money through monetary channels. I know also that he is right, through floating the pound, to bring under control the large influxes of hot money that have
  1040
  upset our currency and money supply in the past. These are two positive steps which he has taken to control the money supply. But the third main source of money in the economy is the fiscal source. He had a very high deficit in his Budget in the spring, since when he has added to it considerably by extra Government expenditure unmatched by taxation. Only yesterday we were told that pensioners would get £10 for Christmas. I welcome that, but I would point out that it seems to me to cost £80 million. Where is the taxation coming from to meet that—or will there be just an increase in the money supply through fiscal channels?
  These are the causes of inflation. Inflation, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said yesterday, is fed by expectations—expectations of future inflation. If this policy which has been announced and which was clearly spelt out were going to destroy those expectations of further inflation, we would have seen changes already. We would have seen land and house prices begin to tumble. People are only buying houses and land because they believe this is the best hedge that exists against 10 per cent. annual inflation. We would have seen the pound float up. We would have seen wage claims moderated because trade unionists would have been frightened that bankrupting the businesses in which they work would result in their own unemployment. But none of these signs of the destruction of expectation of inflation is evident, and it is essential to persuade people that the future will be different if one is ever going to persuade them not to come into head-on collision with the forces which would be unleashed by a reduction in money supply.
  Instead of talking in Downing Street about rents, about the exact nature of price control, about the snoopers' bodies which it has been suggested should be set up to receive complaints about prices in the high street, I wish that there had been talks in Downing Street explaining to the trade unions what would happen if the money supply were reduced. One can reduce the money supply. People can alter their behaviour so as not to suffer therefrom. It is possible for them to adjust their wage claims so that no unemployment results. It is possible to go on with the process of redistributing

  1041
  income while at the same time destroying the process of inflation. Under the policy which the Government are following I fear that we shall destroy the process of redistribution of income without destroying the bogey of inflation.
  There is one other aspect of this policy. We have almost joined the European Economic Community. On 1st January we shall be full members. My right hon. Friend the Prime Minister—and I agree with him wholeheartedly—has adjured us to think European, to dream European and to breathe European. He believes, as I do, that the whole future of this country depends upon solving together the problems and difficulties which we face individually, and which we find insurmountable, by means of collective European action.
  But it saddens me that we should already be planning major breaches of our obligation under the Treaty of Rome. First of all, take steel prices, which the right hon. Member for Huyton (Mr. Harold Wilson) mentioned a little while ago. How can we call it fair competition if we are subsidising our Steel Corporation which is competing with steel companies in Europe which are not subsidised? Why should the Europeans allow us to do this? What is the conceivable outcome of Britain renaging on its first commitment of this sort? It is a bad entry into the Community, to say the least. If steel and the products of other nationalised industries are going to be subsidised this will amount to a subsidy to all British industry. Indeed, if prices are going to be controlled throughout the whole economy this is not part of the Treaty of Rome. This is incompatible with what the Brussels Commission is seeking to do.
  But, more important, the Chancellor of the Exchequer went to the meeting in Luxembourg to discuss inflation and, as my right hon. Friend the Member for Wolverhampton, South-West said, he subscribed to the general principle that the reduction of the money supply was the way to reduce European inflation. If he can subscribe to it for other European countries, I find it had to see why he cannot subscribe to it for this country. But the Chancellor then put in a waiver saying that as our circumstances were
  1042
  different we would have to opt out of this particular Community ruling.
  The consequences of this seem to me to be very difficult indeed for the Government. If we are going to opt out of controlling our money supply to 4 per cent. a year, plus the change in the value of money, whatever it is, and at the same time fix our rate of parity, which we are obliged to do in the near future, it will put some very serious strains into the economic system. I honestly regret that the European Economic Community decided to have fixed parities between the member countries until such time as it can achieve a common currency floating against the dollar. I am prepared to accept a fixed parity as part of the price of joining Europe, but one cannot have differential rates of inflation as well.
  Mr. Barber: My hon. Friend has misunderstood to some extent the attitude of our partners in Europe to the money supply position. Although for reasons which I think are well understood, I could not be at the meeting at Luxembourg—my place was taken by my right hon. and learned Friend the then Chancellor of the Duchy of Lancaster—I have on many occasions, with the Finance Ministers of the Six, and, indeed, with the enlarged Community, discussed the position of the money supply in relation to inflation, and I can assure my hon. Friend when he talks about the waiver that my colleagues in the enlarged Community understand perfectly well and accept the position of the United Kingdom. I think it is right that I should say that.
  Mr. Ridley: I am grateful to the Chancellor of the Exchequer and I do not think anything he said was contrary to my remarks. If the waiver has been granted and gives the opportunity for us to have a different rate of money supply from that agreed for the other members, the consequences must be that the £ will come under strain when its new parity is fixed. If we inflate faster than other people, that will lead to all the old problems of hot money moving out, balance of payments crises and the other problems which have been temporarily solved by floating the £.
  It seems to me, therefore, that the alternatives are to control the money supply at the European level and fix the parity, or to go on floating, which

  1043
  we cannot do. It seems very strange to embark upon a prices and incomes policy when the policy of money supply with Europe is in accordance with economic logic and with what the people of this country would like to see. I would not be happy, therefore, to see the Government travel the road of statutory prices and incomes control. The 90-day freeze does not seem important because it is not a permanent policy. I would like to see the Government take 90 days to adjust the money supply, to get right their policy on supplementary benefit for strikers, to stiffen their attitude to the strong forces which will come upon it there and to educate trade union leaders into the facts of the reduction in money supply. If the 90 days is used for other purposes, such as drafting statutory Bills, I find it very difficult to support the Government.
  5.12 p.m.
  Mr. Roy Jenkins: It is a little time since I had the pleasure of hearing the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) from the back benches. I listened with interest to the critical remarks he made, which were to some extent a version of what the right hon. Member for Wolverhampton, South-West (Mr. Powell) said yesterday and on previous occasions, but were put in a more reflective and tentative form. As I wish to say a little about the right hon. Gentleman's views at a later stage, I shall also leave my comments on the hon. Gentleman's speech until then.
  What should be said at the outset of any speech dealing with the Government's general position in these matters is that there is nothing in the Prime Minister's record or in the record of any other principal Minister which begins to entitle him on a reciprocal basis to any good will in their present hour of difficulty. The Prime Minister's record of dogmatic opposition to what he is now proposing is well known. Because I wish to be brief I do not propose to weary the House by mentioning any of the numerous quotations with which the record is studded and restudded.
  In his pronouncements upon the aspect of economic policy with which we are dealing today and upon wider economic policy, the Prime Minister has
  1044
  a record of persistent and petty partisanship almost without a break. Throughout the period from devaluation at the end of 1967 to the decisive turn in the balance of payments, when, as I think the whole House recognises, in retrospect at any rate, there were very considerable national interests at stake, I cannot recollect a single occasion when the Prime Minister showed any regard for anything on any economic issue beyond his short-term party political interests. Throughout the whole of that period he was as barren of constructive vision as he was of magnanimity.
  The right hon. Gentleman appears from the reply he gave me on Monday to be trying to draw some sort of moral distinction between an incomes policy when demand management requires consumption be kept more or less steady and an incomes policy in the present circumstances when it can go ahead, and be encouraged to go ahead by the Government, because of the great slackness in the pressure on resources. I cannot recognise a distinction of that sort. There is a difference, of course, between the circumstances in which consumption can go ahead fast and those in which it must be held steady. One difference is that when it is able to go ahead fast, as at present, it should be much easier to get a voluntary policy. But I cannot begin to follow the logic of recognising a clear moral difference between the two.
  In 1968 and 1969 we had to pursue some fairly hard policies. The Prime Minister has been living on the benefits of those policies almost ever since. I do not share his obsessive and unconvincing belief in his own rightness on this issue. Mistakes were made in that period, but we at least met our central objective of putting right the balance of payments. I am not aware of any single major economic objective which the Prime Minister or the Government have yet begun to accomplish. If a more senior member of the Government were present I would be glad to hear what they believe falls into that category.
  Sir Robert Cary: We have paid off the debts.
  Mr. Jenkins: Paid off the debts? Is the hon. Member, for whom I have considerable respect and affection, seriously putting that forward as a triumph of the

  1045
  Government? I cannot believe that any fair-minded man with a reasonable respect for the facts of history could begin to put forward such a proposition. Everyone who looks at the matter with any approach to objectivity knows that the debt repayment was well in train when the Government took over and that the Government paid off the debts on the carry-through of the balance of payments position which they inherited and which they have since frittered away.
  Sir R. Cary: Surely the right hon. Gentleman would agree that for indebtedness of that magnitude to be paid off is an economic achievement in itself?
  Mr. Jenkins: It is an economic achievement to have paid off the debts. It was vital to get that turn-round. When the position began to turn round at the end of 1969 it represented an important change in the fortunes of the country. But anyone who can look at what happened, see half the debt paid off by the beginning of 1970 with an almost irresistible follow-through for the remainder, and regard that as a triumph of the Government, must be bankrupt in looking for the Government's triumphs.
  Mr. Ian Lloyd Mr. Ian Lloyd (Portsmouth, Langstone) rose—
  Mr. Jenkins: I very much doubt whether the hon. Gentleman will have anything to add to the argument which I thought was put as persuasively as it could be by the hon. Member for Manchester, Withington (Sir R. Cary).
  Also the Government have sought agreement for the recent talks only because they were defeated in a confrontation. Had they won the various battles which took place over the last year or so they would have gone on with the policies they have now been forced to discard. It is therefore a mixture of impertinence and hypocrisy for any Government spokesman to suggest that there is a national duty to support them in present circumstances. They have sacrificed any such claim by their behaviour in opposition and by the circumstances in which they have been driven to this policy.
  On Sunday the Chancellor of the Exchequer—I think this was on "The World this Weekend", though I read it in
  1046
  a newspaper report—said highly patronisingly to my right hon. Friend the Member for Leeds, East (Mr. Healey) and others who thought like him, "I hope that they will put the national interest first." That was intolerable talk from the right hon. Gentleman, who is scarred with the battle honours of that famous trade figures fiasco of the autumn 1969 when he was so busily engaged in putting the national interest first and with a number of other issues.
  Therefore, it is clear to me that the Government, because of their record in opposition and as a result of their behaviour over the past two years, are entitled to absolutely nothing from the Labour Party. However, I do not believe that we should determine our attitude in opposition by the standards of the Conservative Party. The Nemesis which has overtaken the Government in the past 2½ years and the discredit which has been brought to British party politics by the complete change-round from everything for which the Government stood at the last election is a lesson to which nobody should be indifferent.
  It is right to vote against the Government tonight; I shall have no hesitation in doing that. Their general handling of the position fully justifies it. But I am not coming out against a prices and incomes policy. I believed in one in government; I believe in one in opposition. I want it to be voluntary. I want it—and this is of crucial importance—to have a longer-term validity and to be something with which we can live for some time to come and not merely a stop-gap which will be discarded.
  It is therefore important that even at this stage we should begin to look beyond the 90 days or 150 days, whichever it may be. It is important that talks should, if possible, be resumed during this period to see whether it is possible to proceed by agreement after the standstill has come to an end. Like the majority, perhaps all, of hon. Members and the majority of the TUC, I wanted the Downing Street talks to succeed, for two primary reasons. First, there is great menace to the future of this country in anythng like the present rate of inflation. There is social menace and economic menace. It will cause a lot of suffering among people least able to protect themselves. It is no good pretending that we can live with 8, 9 or 10

  1047
  per cent. inflation and protect everybody who needs protecting against its effects.
  However, I should have liked the Downing Street talks to succeed, and wish to see success in the future, for another reason. I do not want Labour Governments to be returned to power in this country only with an impossible economic heritage. Therefore, I take no pleasure in the failures of the Government when they mean national failure and problems building up for the future.
  Mr. Ian Lloyd: May I test the right hon. Gentleman's objectivity, because he is casting a most interesting analysis in an extremely partisan light? The most significant feature of the four major charts at the end of the 1971 issue of the Department of Employment's analysis of prices and incomes and the charts from 1962 to 1972 is that the change in party government is almost indistinguishable between one period and another. The lesson which we must learn from this is that all Governments have successively failed to deal with this problem.
  Mr. Jenkins: I am surprised at the hon. Gentlemen's premise. I should have thought that there had been considerable fluctuations in the rate of inflation, not necessarily varying with what party was in power. That is the whole basis on which we are having this debate. However, there is no question that the recent period has been very bad, worse than anything we have experienced. If all that the hon. Gentleman is saying is that none of us can say that we solved the problem of inflation or that we have magic answer, I agree with him, as any sane person would. That does not mean that we should not consider the matter and see what we can do from now onwards.
  I regard it as crucially important to try to achieve an agreed solution, because the more I contemplate the alternative, particularly the alternative put forward by the right hon. Member for Wolverhampton, South-West, the more profoundly unattractive I find that method of approach. I am sorry that, rather exceptionally, the right hon. Gentleman is not present. I cannot complain about that because he is a remarkably good attender of our debates. He speaks with great conviction and even persuasiveness on this issue; but he is profoundly wrong
  1048
  both in theory and in practical matters. He is wrong in theory because, led on by the vividness of his own imagination, he attaches an absolute power to monetary policy which, in my experience, the most ardent professional monetarist—say, Professor Freedman—would not dream of attaching to it. He goes far beyond that and to a length which is unsustainable.
  The Government have been lax about monetary policy. I look back with a certain amusement to a little squall which blew up in the summer and autumn of 1970 when there was an attempt to pretend that the money supply had got out of control during the second quarter of that year. The Government abandoned that pretence fairly quickly when they began to get the figures for the third and fourth quarters and for 1971. But leave that aside. They have been lax, but monetary policy is not the weapon which can be used to do the whole job. It should be applied in such a way as not to frustrate other purposes.
  The right hon. Member for Wolverhampton, South-West is profoundly mistaken in his belief that it is impossible to deal with inflation once it has arisen without there being a substantial increase in unemployment and that, from this point of view, it is a matter of indifference what weapon one uses. There is no evidence in the facts to sustain that view. Let me take two examples from régimes of different sorts and countries.
  Since the measures of 15th August, 1971, the United States has undoubtedly had a substantial abatement in the rate of inflation. Unemployment there is high, but it has not increased in the period since then. It was high before. This abatement has been achieved without an increase in unemployment. Looking back at the history of this country, we see that the Cripps freeze was very successful in containing the rate of price increases and wage increases and was achieved with the highest and most complete employment position without any wavering from full employment as defined in the strictest sense.
  The right hon. Member for Wolverhampton, South-West not only is wrong in theory but his theories bear no relationship to the facts. No doubt he will be in our Lobby tonight. I do no welcome him there. His attitude on nearly

  1049
  every issue is as antipathetic to mine as almost anything I can imagine. His view in attacking the Government is that they should deal with these problems by a totally unacceptable and highly theoretical monetary approach which, if he were to have his way, would bring great suffering to the people of this country.
  The mind of the Government in the past few months has moved somewhat on the issue of inflation. It has moved under pressure, under defeat, because it has been impossible for them to sustain the positions on which they were elected and which they have so vainly tried to put into operation in the last two-and-a-half years. However, they still do not yet fully appreciate what is involved in the achievement of a successful voluntary incomes policy.
  There has been a good deal of loose talk by the Government about a fair society, but if a voluntary incomes policy is to be secured it is important that this loose talk should be given a good deal more concrete basis than it has yet been given. This necessarily will involve, on a long-term basis, a far greater degree of public scrutiny and public accountability about command over purchasing power of all sorts—not just wages, but of other forms of income and of capital. If there is to be an effective, long-term voluntary incomes policy, what must be faced is that the country at present needs a jerk towards equality. The pattern of material reward has got out of gear with our social system. It is that lack of gear which produces a good deal of the tension and at the same time some of the inefficiency in our economy. Unless that issue is faced, I do not believe that this or any Government will produce a successful policy.
  I see the right hon. Member for Barnet (Mr. Maudling) in his place today. I know that if he speaks a little later in the debate we shall all listen to him with interest. He is free of dogmatic attacks upon an incomes policy which have come from the mouths of most of those who are now putting the Bill before the House. When he and I the other day had a discussion I was struck by the fact that, while his basic approach was in many ways right, I did not think he appreciated the central issue that an incomes policy cannot be achieved without a far greater degree of public accountability for the pattern of incomes and purchasing power. This will have to be faced. I doubt
  1050
  whether this has yet been taken on board by the philosophy of the Government. It has certainly not yet begun to show itself in the budgetary and other policies brought forward by the Chancellor of the Exchequer.
  The Government cannot be supported—their record does not entitle them to this in any way—but at the same time I do not want a situation in which when the Government move in one direction the Opposition move in another—rather like one of those weather machines in which when one man comes out another goes in. I do not regard that as a healthy position. We all have a responsibility to face up to and we must find a solution to this problem which has bedevilled governments for a long time past and could wreck us in the future—a solution which none of us has yet fully found.
  5.33 p.m.
  Mr. J. Bruce-Gardyne: We have all listened to the right hon. Gentleman for Birmingham, Stechford (Mr. Roy Jenkins) with enjoyment and, so far as I am concerned, on many subjects with a considerable measure of agreement. I suspect that it is true of hon. Members on both sides of the House that when we listen to the right hon. Member for Leeds, East (Mr. Healey) we are sometmes inclined to mutter "Come back, Roy; all is forgiven".
  However, I must confess that this afternoon I did not find myself in agreement with many of the points made by the right hon. Member for Stechford. I entirely agreed with him when he said that inflation represented a great menace to our society, but whereas I believed the Labour Government were quite wrong and bound to fail when they attempted to impose a mechanistic system of control over wages and prices I believe the same to be true when my own Government try to turn the same trick. I shall deal in a moment with what the right hon. Gentleman said about money supply, because on that subject I found myself partly in agreement with him, though not wholly so.
  It has crossed my mind in the past week that Mr. Speaker was sometimes appearing in the guise of presiding over an ad hoc gathering of the serfs while the grand affairs of the nation were

  1051
  being settled down the road at Runnymede. My hon. Friend the Member for Oswestry (Mr. Biffen) referred last night to, the penultimate paragraph of the Gracious Speech, namely:
  "Other measures will be laid before you."
  I sometimes wonder whether we shall see that phrase in precisely that format again. I cannot help feeling that perhaps next year that paragraph will read
  "Other measures, having been debated and suitably amended by the CBI and TUC, will be laid before you."
  Mr. Arthur Lewis: And in Europe.
  Mr. Bruce-Gardyne: The hon. Member for West Ham, North (Mr. Arthur Lewis) mentions Europe. One thing that fascinates me about the anti-Europeans among us is that, although they fight most fiercely against any loss of sovereignty of this Parliament which our entry into the Community will involve, any diminution of the sovereignty of Parliament in favour of such external bodies as the CBI and TUC causes them no concern whatever.
  I do not want to delay the House for more than a few minutes, and do not wish to go into the intimate details of this poor little Bill. There are one or two points about it that cause one to speculate. I have a vision of Mr. Jimmy Reid calling out the workers of Govan Shipbuilders on strike in defiance of the standstill. They presumably will be sustained while on strike by supplementary benefits provided by the taxpayers, and when they return with a settlement that is in excess of anything permitted by the standstill, Lord Strathalmond and his fellow directors will be fined and my right hon. Friend the Minister for Industry will pay the fine on our behalf. If my right hon. Friends imagine that they will be able to maintain Mr. Jimmy Reid out of prison and in martyrdom, they may find that they are mistaken.
  But there is one aspect of this Bill on which we need a little more explanation—and this point was raised a little earlier in the debate by the right hon. Gentleman the Leader of the Opposition. I refer to the question of steel prices after 1st January. I take precisely the opposite view to that taken by my hon. Friend the
  1052
  Member for Glasgow, Cathcart (Mr. Edward Taylor). I was looking forward to the moment when the ability of Governments to interfere in the pricing policies of nationalised industries would be diminished. It is not enough to say that the BSC will be required to observe the standstill and, presumably, to delay the arrangement of basing-paint prices until after the standstill is over. What are we to do to prevent the whole resources of the Steel Corporation being diverted to exports next spring when our prices will be at least 15 per cent. lower than those prevailing in the rest of the Community? Are we also to impose export controls? We need to know that. Even more important, we need to have some idea of the sort of increase in prices which will be required to bring us into conformity with ECSC levels the day after the standstill ends. Will it be 15, 19 or 20 per cent.? I suggest that it will be of that order.
  I accept, of course, that the standstill may have some apparent effect in moderating the rate of increase in prices and wages in the next few months. Apart from anything else, after the settlements of the last few days it is not really a matter of saying that we have bolted the stable door after the horse has fled. We have gone down to the stable and given the horse a boot up the backside, and as the horse has disappeared over the horizon we have said that we are slamming the door. We can reasonably expect a moderate degree of peace in the stable hereafter. Therefore, this Bill is not of very much relevance in terms of the results that can likely to be achieved in the next four, five or six months.
  Nevertheless there are three important considerations that we should bear in mind when we come to decide how to vote tonight. The first is the reputation of the House of Commons. The Leader of the Opposition made great play with the statements of my right hon. Friend the Prime Minister and others on the subject of compulsory prices and incomes freezes at the last General Election. I attempted to intervene at that stage to point out that there was a precisely similar conflict between the right hon. Gentleman's conduct during the 1966 General Election and his conduct thereafter. I put this point to my right hon. Friend the Leader of the House. I

  1053
  wonder whether we are likely to enhance the reputation and standing of this Parliament as the country sees us marching backwards and forwards on the same old arguments on order after order in the months ahead, only in the opposite direction from that in which we were going six years ago.
  The second consideration that we should consider before voting tonight—and these are in mounting importance—is that the opposition that my right hon. and hon. Friends have always expressed to statutory prices and incomes controls was entirely sincere. I do not believe for a moment that they have any faith in this policy, and the omens are not very propitious for the prosecution of a policy in which those prosecuting it have no faith.
  The third and most serious point is that, as we have been reminded time and again both yesterday and today, this is only the beginning of the road. Much to the distaste of the Labour Party, my right hon. Friends have emphasised that in the discussions with the TUC and the CBI they were not prepared to hand over their legislation on a plate. Of course they were pleased to have Mr. Vic Feather's amendments, but they were not prepared to surrender the principle of Bills. That was the first time round. I wonder whether we shall be able to do the same the second time round.
  There are many like my right hon. Friend the Member for Barnet (Mr. Maudling), who I am delighted to see with us, who have suggested that in a modern industrial society we must accept that our economy can be operated only by a system of concordat between the great estates of the nation—the TUC, the CBI and the Government. I do not believe that this can possibly work, for the simple reason that if the leaders of the TUC agree to restrain the ability of their members to demand higher improvements in wages, inevitably those leaders will themselves be replaced by others who are less squeamish.
  Even if I believed it possible, it is not a road that I would wish to travel. We should recognise what that road is, and we should call it by its name. The hon. Members for Tottenham (Mr. Atkinson) and Liverpool, Walton (Mr. Heifer) made this point yesterday. The name at the end of this road is "the
  1054
  corporate State". I do not believe that we should have too many inhibitions about acknowledging that that is where we would be going.
  Having said all that, nevertheless I would go along with this legislation—[Interruption.]—wait for it—subject to one proviso. If I believed that the freeze was to be used as a device for rendering less painful the curbing of inflation at source—the curbing of inflation by curbing the Government's propensity to create inflation through the growth of the money supply and through its own deficit financing—I would support it.
  Again I agree with my right hon. Friend the Member for Barnet about one very important point in his recent article in the Sunday Express, that without statutory deterrents we could expect the most powerful of the trade unions to use their industrial muscle to obtain for their members a large proportion of a more restrained growth of the money stock and, consequently, that the transitional unemployment resulting from the curbing of inflation to which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) referred yesterday would be accentuated.
  I accept that. That is why I accept that a statutory freeze could somewhat diminish the amount of transitional unemployment likely to be created by curbing inflation. But that is utterly different from what my right hon. Friend the Member for Barnet said in his first article in The Times, that budgetary and monetary mechanisms were a nonsense. He and others of my right hon. Friends sometimes seem to me to fall into the error of which they frequently accuse my right hon. Friend the Member for Wolverhampton, South-West, that of suggesting that there is a painless cure for inflation. I do not think that there is.
  The crux of this was pinpointed by the Governor of the Bank of England in his speech at the Mansion House the other day. He said:
  "I accept, as most central bankers would, that control of the money supply is one of my principal, if not my most important, concerns and I have no wish to shirk it … But … there is no monetary policy which will simultaneously stimulate expansion and moderate inflation."
  I have been trying for many weeks to discover which is ours. Are we embarked on the moderation of inflation.

  1055
  which must imply a willingness to see interest rates rise very sharply and a determination to diminish the net borrowing requirement very considerably? Or are we embarked on a policy of money supply to stimulate expansion, in which case it is nonsense to imagine that we shall restrain the growth of money supply by allowing interest rates to rise substantially? I am afraid that I have searched in vain for an answer to this conundrum.
  I listened with great care yesterday to what my right hon. Friend the Chancellor of the Exchequer said. I read his words with great care this morning. I heard what he said today about being determined that equally firm action would be taken to contain money supply without imperilling expansion. But I do not find any answer to the question in what we have been told to date. Therefore, one has to look to the rest of the evidence, which, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out earlier, is all in the direction of suggesting that it is not the Government's intention to curb inflation by the weapons in their hands.
  We have for example week by week huge increases in the size of the blank cheques written for the wage bills of the nationalised industries. We have a brand new regional policy for the European Community loaded on to the inflationary implications of the one which we have espoused for ourselves. Most significant of all, we have the attitude adopted by my right hon. and learned Friend on behalf of the Government at the Luxembourg meeting of Finance Ministers. This seems to be absolutely crucial. The Finance Ministers were not saying "We want to have a drastic, sudden and brutal curb of money supply". They were saying, in technical terms, that they wished to aim to bring it down to a neutral rate by the end not of 1972 or 1973 but of 1974. That, we were told, was too much for us.
  Above all, the whole reason, we are told, why this time this mechanistic wage and salary policy will work is that this time "There ain't gonna be no squeeze". I believe that a statutory freeze can serve some purpose, rather as a tranquilliser
  1056
  which could ease the pains of the withdrawal symptoms from the endless doses of inflation with which we have attempted to offset the bargaining power of the larger trade unions for 20 years or more. It cannot be a cure.
  I would not back a doctor who gave me aspirin for an appendix, and, therefore, I do not believe that I can bark this Bill in the Lobby tonight.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker (Miss Harvie Anderson): Before calling the next hon. Gentleman, I would like to draw the attention of the House to the fact that there appear to be more than 30 hon. Members who hope to speak during the debate. Even short speeches will allow only a very few to take part.
  5.53 p.m.
  Mr. Emlyn Hooson: I will not follow the hon. Member for South Angus (Mr. Bruce-Gardyne) in his remarks, save to say that he did not distinguish between a statutory freeze and a statutory prices and incomes policy.
  I was considerably struck, when I heard the Leader of the Opposition speaking today—and he was up like Box and Cox with the Prime Minister—by the resemblance to a trapese act in the circus. When the right hon. Gentleman and the Prime Minister get up these days we never know which one of them is on his head and which on his feet; we never know which one is in the air and which one has the swing. The truth is that they are both in absolutely untenable positions.
  The Labour Party was driven to introducing a Prices and Incomes Bill and it was attacked for all it was worth by the present Prime Minister. Now, the Prime Minister is forced to do exactly the same thing and the Leader of the Opposition attacks him in precisely the same way. That brings discredit on both of them.
  We are not today being asked to support a policy. We have been asked to support what is really a desperate and emergency expedient, one which has become necessary because of the total failure of the policies propounded by the Prime Minister and his colleagues at the last General Election.
  Their excessive partisanship, which has been matched only by that of the Labour

  1057
  Party and the Trades Union Congress since, made the present Government blind to the realities of their situation. They failed as completely as the Labour Government failed to put the interests of the country before those of their partisans. What we are witnessing is almost a deathbed repentance with the Prime Minister piously eating all the bold words which he uttered in the 1968–71 period.
  Although the emergency is largely of the Government's own creation we would be blinding ourselves if we did not realise that the crisis as opposed to the emergency affects the British people as a whole. It is no use allowing our dislike of the Government to prevent us from voting on a Measure which is now necessary in the interests of the country. We took exactly the same view as a Liberal Party over the Labour Government's Prices and Incomes Act in 1968, much as we disliked that Government. The will vote tonight for this Measure because we believe it is necessary to tackle inflation. There is no painless way of doing it. It is because the Prime Minister ran away with the pre-1906 ideas on the economy for so long—while the right hon. Member for Wolverhampton, South-West (Mr. Powell) and his colleagues run after pre-1870 ideas of the economy—that the Prime Minister failed to come to grips earlier with some of the underlying facts about our economy. The standstill will do one thing only: it will give an opportunity, in an atmosphere of rough justice, to do some of the things which the right hon. Gentleman almost criminally neglected to do when he came to power.
  Mr. Norman Buchan: What the hon. and learned Gentleman has to prove in defence of his party's position tonight—and I find his statement that he intends to vote for this Measure of all Measures staggering—is that this Measure is necessary and is the only effective way of dealing with the present inflationary situation.
  Mr. Hooson: I take the view, as do my colleagues, that as we supported the Government of which the hon. Gentleman was a member in 1968 when it did the same thing, so we will support the present Government tonight in the interests of the country. What should be done in the meantime? It is pointless voting for a freeze unless advantage is taken of that time.
  1058
  We believe in a statutory prices and incomes policy if we are to build up an atmosphere of good will and fairness in the country. Another part of the equation, however, must be considered, and that is the question of wealth.
  Here I entirely agree with the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). The Liberals recognise, and have always recognised, that one of the things gnawing away at the guts of the working man in this country is the disparity in wealth. It is not only prices and incomes which must be examined but also the question of how to prevent this ever-growing disparity of wealth. The source of wealth is only partially related to income. Property is much more important in many ways.
  Liberals also believe that there should be a statutory national minimum earnings guarantee because it is the lower-paid above all who suffer in a state of inflation. A 10 per cent. increase in the cost of living for a man earning £15 a week means that he is £1·50 down the drain. He is in no way compensated as others are by increases in value of property because he generally has none. The Trades Union Congress and some unions in particular have shown scant concern for those at the bottom of the earnings scale and, by insisting on differentials to the degree to which they are accustomed, have made their plight more difficult. When the Labour Party came into power the farm workers were at the bottom of the earnings scale. When the Labour Party left power farm workers were still in that position. When they weep tears over the farm workers today I think they are a lot of hypocrites. Farm workers are still at the bottom of the earnings scale. There should be a minimum earnings rate for the country, higher than the wages which have been recently awarded to the farm workers and which award is to be frozen. Minimum earnings should be introduced by Statute.
  Mr. Arthur Lewis: The hon. and learned Gentleman has quite rightly commented about farm workers being shabbily treated by all Governments. I accept that. He mentioned the encouragement of property speculators and then he spoke of hypocrites. Did he read in one of the newspapers recently of a prominent Liberal who had done very well through property speculation, as a result of free

  1059
  shares, which made him thousands of pounds overnight? Was that not rather hypocritical?
  Mr. Hooson: Not at all. If the Labour Government had done their job properly it would have been impossible for him to do so.
  Then there should be an expanded use of the credit income tax scheme which should be viewed not as the Government view it, as an administrative welfare measure, but as a potential social welfare measure. We see no reason why housing allowances to cover rent and rates, as well as existing tax allowances on mortgages, should not be allowed. The Government have been grossly unfair and partisan in their policy on housing. Every owner-occupier who pays interest on a mortgage and is granted income tax relief on that is thereby subsidised by the State. If he is prosperous, he buys a town house, a country house and a seaside house—and I know people who have all three—and he is entitled to income tax relief on the mortgage interest on all three properties. If he wants to improve them, he is entitled to grants for making up all three properties. All these are direct subsidies by the State. In addition, he benefits from inflation affecting the value of his properties.
  How can that be squared with the Government's completely unfair treatment of housing authorities and housing tenants? What equivalent benefit does the housing tenant obtain from the State? The answer is "none". That is why the Liberals would like to see housing allowances cover rent and rates, as well as seeing owner-occupiers feature under the credit income tax system.
  Mrs. Jill Knight: Is the hon. and learned Gentleman saying that in the unlikely event of a Liberal Government there would be some kind of regulation to forbid a person buying more than one house?
  Mr. Hooson: I did not say that. I said that people should not have the interest allowance and the subsidy on two or three homes, when some people do not have even one home.
  Mr. Jeremy Thorpe: The hon. Lady can quote that in Birmingham. It would go down well.
  Mr. Hooson: We want to see a comprehensive policy for prices, incomes, dividends, and productivity so that we can have co-operative effort between management and unions throughout industry, actively encouraged by the Government. Restrictive practices on both sides of industry should be scrapped. There is no sign of any constructive effort by the Government in their policies to bring about the right conditions to achieve co-operation in industry.
  It is also our view that the penal provisions should be not so much through the courts, by imposing fines, but by fiscal means. For example, prices, dividends and average earnings within a company should be limited to an agreed annual rate of increase. Any company which increased prices faster than that rate would be subject to a penal tax surcharge. Where average earnings, including fringe benefits, per person rose faster than the agreed annual rate, a penal tax surcharge would be levied either on the payroll, payable by both employer and employee, or in corporation tax. In this way we would ensure general fairness and ensure that a good percentage of profits was ploughed back into industry and business.
  The Liberals believe that we need a new social contract between people, industry and the Government. They believe that there should be co-responsibility in industry, brought about by a basic change in company laws. We should allow worker representatives on the boards of directors in the way that is done in our great rival country in the Common Market, Western Germany. There should be profit and asset sharing as a compulsory feature of all public companies.
  Pensions, social security benefits and other cash payments should all be linked directly with the cost of living, with periodic adjustments. It is the duty of the Government to ensure that low-income groups have a margin of safety in their income. They have none now. I do not know whether right hon. Gentlemen on the Government Front Bench realise that for the lower paid, for the lower earners, any rise in the cost of living is an extremely serious matter. A rise in prices of 2p or 3p per item, adding up to perhaps 50p over a month, as they

  1061
  have experienced, is terribly serious for them, because there is no margin in their incomes.
  It is our view that a commission should be set up to investigate house and land prices, with a view to containing them. In particular we think that such a commission should look at the question of site value rating and the effect of unrestricted income tax relief on mortgage interest payments on the prices of houses and land. Then there is the effect of death duty relief and other benefits which encourage financial interests to invest in agricultural land for a purpose wholly unconnected with the well-being of our agriculture.
  For my part—and here I do not know whether I take my colleagues with me—I warn the Government against the enormous escalation in food prices which is likely to occur when we join the Common Market on 1st January next. I believe in food subsidies. I do not know how any Government will contain prices at a level acceptable to the common people of this country without them, and I think that the Government should be looking into this matter urgently. One has only to look at the Farmers Weekly for this week and compare wholesale prices in the Common Market for agricultural produce, beef, lamb, and so on, with prices in this country to realise what will happen on 1st January unless some steps are taken in the matter.
  This country has been badly served by both Tory and Labour Governments on the question of inflation. Their respective approaches have been far too partisan. Some of their policies have been grossly unfair to the people of this country as a whole, particularly the lower paid, and here I must tell the House that I have no brief for the Labour Government. They sacrificed the lower paid to the pressures from their powerfully organised partisans.
  Inflation is like a cancerous growth in our body politic. It threatens our very heart. It must be contained, because it threatens the well-being of us all. It eats away at the value of our currency. It undermines confidence in our future. It makes the poor poorer. It also, unless something is done about it, makes the
  1062
  rich richer. It continually erodes the value of earnings while at the same time it enhances the value of all types of property and goods. It therefore leads inevitably to disparities of wealth which are becoming more and more unacceptable to the people. It causes great discontent and leads to the deep divisions which we see expressed in the House.
  It is the duty of the Government, whatever their political complexion, to deal firmly with this problem. To have the consent of the people for firm dealing, that dealing must also be fair. The next 90 days will show whether the Government have had a change of heart. Above all, we shall see whether they are prepared to deal with some of the basic, underlying structural problems of our industry and, for that matter, of our country. The Liberal Party will support measures to achieve this result, as it did when Labour was in power, but it will no more support partisan and unfair Tory policies than it would support partisan and unfair Labour policies.
  We have a Government and Opposition which, in my view, have ill served this country at its present juncture. The commonality of the people want to see inflation controlled, and they do not give a damn whether it is controlled by a Tory or by a Labour Government. So far every Government have failed to control it, and the trouble is that there has been such an excessively partisan feeling on both Front Benches during both crises that they have allowed partisanship to blind them to the interests of the country as a whole. One can only hope that the Prime Minister, in his deathbed repentance, has really repented at last.
  6.8 p.m.
  Mr. Reginald Maudling: I am sure that the hon. and learned Member for Montgomery (Mr. Hooson) will forgive me if I do not follow his line of argument. I wish briefly to explain why I strongly support the Bill.
  This subject of inflation, and particularly cost inflation, has been close to my thoughts for nearly all the time—and that is nearly a quarter of a century—that I have been a Member of the House. If what I say today is the same as I have said in the past, I apologise for the repetition but not for the consistency.

  1063
  The problem of inflation and cost inflation has faced successive Governments in this country since the war and it is facing Governments overseas too. In countries abroad one has seen varying and changing levels of success. At one time the Dutch had an answer, but that broke down. At another time Sweden had the answer. Now America is doing better than anyone else in tackling this problem of cost inflation in an industrial society. But no Government here or abroad has yet found the final answer. I am convinced that we must now get the answer right or as nearly right as is possible for human beings.
  If we do not get the answer right now, the prospects for this country are very serious. The fact is that over many years, under Governments of different parties, the relative economic strength of this country has been sadly declining. I saw some figures, which were produced a month or two ago at the time of the International Monetary Fund meeting, of the relative gross domestic product per head for the European countries. The figures gave me a considerable shock. I quote the GDP per head in a common unit of the following Western European countries: Sweden, 1,800; Norway, 1,300; France, 1,300; Germany, 1,500; Switzerland, 1,400; Iceland, 1,000; and the United Kingdom, 887. That is the solemn measure of the degree to which in recent years, under successive Governments, this country has fallen behind our Western European neighbours in our economic advance.
  Of course, there are a number of historical reasons. We probably came first in our industrialisation, in switching the agricultural labour force into industry. Therefore, we had less reserves available at a later stage when our competitors came along. There is the natural feeling in this country that there are many things which matter more in life than sheer economic expansion. However, sometimes we allow that feeling to kid ourselves a bit. We are inclined to say to our competitors that they are making the mistake of running too fast rather than that we are making the mistake of running too slowly. There is still the lingering effect among many of our people of the long, slow and painful retreat from Empire. It was absolutely right. It was one of the great abnegations of history
  1064
  but a movement which for many people was bound to have profound psychological effects. There was for many years the burden of the sterling area. That is happily much less of a burden than it was. However, for many years we had to carry that burden and we could not escape.
  Despite those reasons, the fact remains that we have been falling behind and we are continuing to do so. Of course one can argue—people no doubt do—"What does it matter? What really concerns people is the absolute level of prosperity, not the relative level." That is quite wrong. A nation that falls behind its neighbours senses this. A nation that loses its pride loses its heart. If we know and feel that we are not doing all that we can—we can do just as much and just as well as any country in Western Europe—we lose a great deal of our confidence and self-respect.
  The problem of relative efficiency in economic matters will become sharper as we join the Community. But even without that, it was of profound importance. It is not an accident that the phrase "The English disease" is used almost universally in Western Europe to describe a situation of inflation, dispute and industrial stagnation. I agree that the expression is often used with exaggeration, but it is used.
  What are the main reasons, apart from the historic reasons which I have described, which have led to our falling behind in the race? The fundamental reason has been a tendency in our country towards inflation to a greater degree than in competing countries. With respect to some of my right hon. and hon. Friends, there are surely two different kinds of inflation. First, there is demand-pull inflation and, secondly, cost-push inflation. Both can coexist and they often do. Both can interact and they often do. But both must not be confused because the cure for one is not the cure for the other.
  One can certainly stimulate demand inflation by gross expansion of the money supply. But one cannot deal with cost inflation by a gross contraction of the money supply. That is a fundamental fallacy. Possibly in a perfect world, with perfect freedom and perfect competition, the monetary theories would work. But that is a perfect world and not the real world. In the world in which we work

  1065
  the logic of economics is not purely the logic of mathematics. It is the logic of power and human feeling.
  The basic cause of cost-push inflation clearly is in present circumstances the monopoly power of many trade unions. [HON. MEMBERS: "Oh."] That is a simple fact. It is a matter not of criticism but of fact that many unions possess the power to bring the economy to a standstill. That power has grown in recent years for sheer technical reasons. As industry becomes more efficient and competitive, so it becomes more vulnerable. A small number of people can hold up a whole industry. Skilled people cannot be replaced by volunteers. An individual firm which is attacked by industrial dispute cannot afford to go out of business or to stop production while its competitors go ahead. As industry becomes more efficient and more competitive, so it becomes more vulnerable. While the power of the unions has grown, and grown naturally, so the understanding of their power by the rest of the country and the concern of the rest of the country at their natural developing power has grown.
  We are coming to a new and very changed dimension in these matters—the problem of the monopoly power of the unions. The monopoly power of capital can be dealt with through legislation. It has been. I remember so well that when we introduced legislation against the monopoly of capitalism in the 1950s, Sir Winston Churchill, who was then Prime Minister, explained very clearly that one could not proceed against the monopoly power of the unions in the same way as one could proceed against the monopoly power of capitalism. That is perfectly true. Nor can it be solved by conflict. If we try to solve the problem of the power of the unions by conflict, we will do great damage to this country. Above all, and I say this as solemnly as I can, when I hear people talking about a General Election fought on the basis of organised labour versus the rest, although I have little doubt what the result would be, the effect would be to leave the country deeply and bitterly divided within itself.
  We must all continue to search for an agreed system within which we can contain the bargaining power of the unions, the need for incentives and the whole interests of the country in expansion,
  1066
  in prosperity and in staple prices. I think we were making some progress towards this in 1963 to 1964, but possibly I am biased. I think we were making some progress towards that concept by discussions within the National Economic Development Council to get agreement on the broad scale of the total increase of incomes which the economy could afford. Under the National Incomes Commission we were developing a system whereby we could make provision for exceptions and ensure that they remained exceptions and did not break down the general norm. However, that collapsed in 1966 when the then Government introduced their compulsory policy.
  I accept that in 1966, speaking on behalf of the then Opposition, I opposed statutory control. I said then, and I now repeat, that I was against such control in principle. I believe it is wrong in principle. But I emphasised that I disliked statutory controls because they undermined the opportunities of voluntary agreement. We have tried now to reach voluntary agreement. I believe that my right hon. Friends have tried as hard as any Government could try to reach a voluntary agreement. In the absence of voluntary agreement there is no alternative to a temporary statutory pause.
  What might the choices be? We can go on as we have been going on, at a rate of inflation which, as the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) said, was socially unacceptable. That cannot be accepted. Another choice is to adopt the policies of the monetary enthusiasts. I do not share their enthusiasm. If we try to compress the monetary supply, to use a technical term—which means to stop people spending so much borrowed money—the net effect is simply that those who have powerful organisations behind them continue to get what they demand and the people without those organisations get less and are often unemployed, the economy stagnates and investment withers. That is totally unacceptable. There must be proper control of monetary supply to deal with the demand-pull inflation, but let us not try to deal with cost-push inflation, which is the real problem, by methods which will not work.

  1067
  Without a voluntary agreement, the only course left to the Government was statutory measures. I therefore warmly support the Bill. I believe that it gives us a period within which to think further and to act further—and, I hope, to act quickly. I hope we shall not spend too much of our time and our intellectual energy in arguing about details of the proposals for the short-term pause. We must concentrate on the long-term solution. If we do not find the long-term solution this time, the setback for everyone in this country will be grave indeed.
  I know one can argue that it is impossible, that one cannot control prices, that people will get round this that and the other and, when the short period of pause finishes, the dam will burst. I suppose one can prove, or very nearly prove, that virtually every course will not work. But we are here to find a course which will work. We must use the period provided by the Bill to work out a voluntary policy for incomes and prices, without which the future prospects of this country, which could be so rosy, will be disastrous.
  6.21 p.m.
  Mr. Stanley Orme: We listened with interest to what was said by the right hon. Member for Barnet (Mr. Maudling). His speech contained elements of the analysis which he set out in his memorandum to The Times, which many hon. Members found of great interest. His analysis of capitalism I thought most informative, and this evening he developed his argument about the trade unions and he sees them in our society. I do not see them in the same light, and I shall develop my argument in that respect.
  Coming back afresh, as it were, to the prices and incomes saga, I feel almost as though I were at the "Mat Hatter's teaparty". The quadrille is going on. People who took one view, previously, for different reasons, now take another view, and so on. But there are some in the middle of the whirlpool who stand consistent. I was consistently opposed to a prices and incomes policy as outlined by our Labour Government. I am still opposed to such a policy, and the more so to a statutory policy. I do not believe that it will work. The injustices and inequalities which will show them-
  1068
  selves as the weeks and months go by will create for the Tory Government the problems which it created for a Labour Government. I shed no tears about that, but to those hon. Members who will troop through the Lobby in support of the Government tonight I can only say, "Your troubles are only just beginning. You will have a lot to answer for to the electorate as the injustices and inequalities are felt".
  We have just had an example of one such injustice and inequality. The agricultural workers' wage award is to be stopped till after the freeze. Yet we know that other workers will have increases. Certain workers have already just negotiated an increase. Many people in our society do not have to go through a form of negotiation to secure redress. These inequalities and injustices are inherent in our society as it stands today, and in my opinion it is the nature of that society which makes it impossible to have a regulated policy of this kind.
  In the debate yesterday and again today there have been different analyses of the nature of our society—the mixed economy, the capitalist society, the market economy in which we live. We have had the Powellite explanation and answer, the over-simple answer that the money supply can solve the problem. Cut the money supply, it is said, and that will do it. At the same time, of course—the right hon. Member for Wolverhampton, South-West (Mr. Powell) admitted it—more unemployment will be created, but he sees the money supply as offering a magic panacea for our difficulties.
  We reject that answer out of hand. Those of us who speak about the forces at work within the market economy do not support a market economy, but we accept that that economy exists. We do not see it as a beautiful capitalist module which works in a marvellous way. I see it as a ramshakle, inefficient and in many ways discriminatory system which works against many sections of the community. Let us remember also that it was the system which created the trade union movement.
  The Government talk about freezing prices and dividends, but we all know that that is nonsense. What happened under a Labour Government? While one is chasing one price, a hundred prices

  1069
  go up. We know how the system operates in shops, businesses and elsewhere. Therefore, under the system as we have it, to single out incomes and subject them to rigid control while the other factors in the equation are allowed to go their own way is to impose a wage freeze which, in effect, means a reduction in incomes.
  That was what happened under a Labour Government. Those who introduced it under the Labour Government—I listened today to my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), and yesterday to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers)—did not introduce such a system to persecute certain sections of the community. They wanted it to operate justly and fairly. But it did not work in that way.
  The Labour Government's policy was first introduced as a voluntary scheme. My noble Friend Lord George-Brown, with his Letter of Intent and so on, said that it would help the lower-paid workers. I remember hearing the railwaymen's delegate at the Labour Party conference say that the car workers ought to stand back, the railway workers should have an increase and so on. But at the end of the day, after both the voluntary and the statutory policy, the gap between the higher-paid and the lower-paid had widened because of the operation of forces which are beyond our control.
  We must look at the present situation in the same light. In his thoughtful speech this afternoon, my right hon. Friend the Member for Stechford said that when a Labour Government again tackle this problem it must no tackle it without taking into account other forces, inequalities and inconsistencies which operate within our society. He did not spell them out. I put it to my right hon. Friend that if we were to have a Labour Government tomorrow and we left the structure of our society roughly as it is at the moment, with a vast amount still in the hands of private capital, any future policy would fail just as any previous policy has failed. There is no way round that.
  We have heard a good deal about the nature of our society. The right hon. Member for Barnet spoke about the dangers which he could see. The spokesman of the Liberal Party, the hon. and learned Member for Montgomery (Mr. Hooson),
  1070
  talked about grappling with inflation and so on. Everyone who has spoken, with the exception perhaps of those advancing the money supply argument, has advocated roughly the same sort of policy and the same sort of consultation and discussion as has gone on with the TUC. In my opinion, there is no chance of policies of that kind having any success if society is left with its present structure.
  Not only must we have a redistribution of wealth. We must have a redistribution of economic ownership and power. It is interesting to note that, when a Conservative Government get into difficulty and talk about strict price control, the only bodies they can turn to in those terms are the publicy-owner bodies.
  The talks which took place at Downing Street have served only to highlight the problems which exist. The Government do not try to hide the fact. There was no such thing as negotiation at Downing Street. There were 39½ hours of talks, and half an hour when the Prime Minister put forward his four points, which were forced out of him, and then the talks broke down. There is a gap between the TUC and the Government. Incidentally there is another myth, because I do not believe that those talks were on a three-sided base. From what I hear it was the CBI and the Government versus the TUC. Incidentally the CBI, without the public sector, represents about one-third of manufacturing industry. It includes Courtaulds and many other firms which violated the 5 per cent. freeze, but are these troubles the fault of those people? Oh, no. The fault is always the fault of the trade unions. It would have been extremely logical and fair that they should have asked for much more. The right hon. Member for Barnet talked about the power of the trade unions. If they have that sort of power, why are millions of workers on such low wages and living in such bad conditions?
  My right hon. and hon. Friends should take a lesson from the Labour Government of 1945–51. If we want co-operation with the trade unions we should start by creating a type of society which people welcome, in which they want to live and take part; we should create the health services, the houses at reasonable rents which people can afford, and full employment. If we were to do that and then go to the trade unions and talk

  1071
  about responsibility, we should get a co-operative reaction, but is that what the Government have done during two years? I was amazed to hear my right hon. Friend the Member for Stechford say how sorry he was that the talks had broken down after his brilliant denunciation of the present Government's policy. After that, how can the TUC resume talks on the basis of the Government's policies? Of course the TUC is quite prepared to talk to any Government—the trade union movement is always prepared to do that—but there will have to be a different basis from that which has existed previously.
  I remind my right hon. and hon. Friends of the torture we went through and the unpopularity we incurred when we entered the field of prices and incomes, and it was that issue which defeated the Labour Government. I say to hon. Members opposite that that was the final nail in our coffin. They may take some joy from that.
  In this situation we have to look to creating the sort of society and conditions in which people will be prepared to cooperate. As it is, we see some funny things in our society. I was watching the Money Programme on BBC2 a fortnight ago and I heard Lord Watkinson, Chairman of Cadbury-Schweppes, say that the workers were getting too much and that we needed an incomes policy. I turned over to Granada, when the advertisements came on, when the viewers were invited to purchase many of the products which his firm produced. That is an example of the contradictions in our society. We need to improve the standard of living and set our sights much higher. The people's sights are higher. They want the good things of life, which they themselves produce, and they want the money to buy them, but they are told they cannot have it. What is more, and this is what really hurts, they are told that some people can have it but that they cannot. That really bites. It is not the avariciousness of our working people. In my opinion, as Clive Jenkins has said on a number of occasions, their demands are not because they are bloody-minded; they are not bloody-minded enough.
  Wages alone will not resolve this problem. The TUC found when it was in the negotiations with the Government that
  1072
  there were political matters and Government policies, which have to be changed if there is to be co-operation, but the TUC was quickly told by the Prime Minister "Get off the grass. These are the prerogative of the elected Parliament." That is quite right, and I want to see the elected Parliament carry out the right policies, and I want to see adopted in this country policies which will be the basis for a free and just society, a society which removes the fear of poverty and the fear of unemployment and which gives security, not just from one week to another, as I used to live from one wage packet to another. I believe we can achieve it. We have the creativeness in our society, we have the ability, but we shall not do it by juggling around with the framework of our present structure with either a Conservative Government or, I say sadly, with a Labour Government—unless a Labour Government have Socialist policies and are prepared to transform our society into the one which so many of us want.
  We cannot go on tinkering. If there is a crisis in capitalism let us take democrotic Socialist steps and see that certain key industries, the banks and insurance, are brought under public control, to be publicly accountable, and let us have real worker participation. These issues the Government themselves are raising by their policies. While many hon. Members may feel horrified by what I am saying I can tell them that I am reflecting, perhaps not in an altogether adequate way, the aspirations of millions of ordinary men and women. They do not want a society in conflict. They want a decent society, but if they have injustice they will fight it.
  It must be remembered that we are not now dealing with nineteenth century Manchester School economics as expounded by the right hon. Member for Wolverhampton, South-West; nor are we dealing with the pre-war situation which was the legacy of the First World War—high unemployment and a weak trade union movement. We have a very sophisticated working-class movement in this country, sophisticated to the extent that it has proved that it can run industry—in the shipyards, by taking over factories, and by keeping production going. The workers will not accept the policy expounded by the present Government with all its inequalities and all the problems.

  1073
  It will be incumbent on the Labour Party and the Labour movement to produce an alternative policy. Then let us go to the electorate and say, "This is the choice before us. The choice is between the policies of a discredited Tory Government and the Labour Party with a real, Socialist alternative policy."
  6.38 p.m.
  Mr. Kenneth Lewis: I do not wish to follow the hon. Member for Salford, West (Mr. Orme) too closely, but I do not think anyone, least of all he, will contradict me when I say that we understand why he will not support this policy which my hon. Friends are proposing, any more than he supported the policy of his own party in 1966, especially as this policy goes even further than the policy of the last Labour Government. In 1966 I was in Committee upstairs voting on certain aspects of the Bill at that time.
  On a very large proportion of the Labour Party's Bill I abstained from voting. I was not wholly against it. I have always felt a prices and incomes policy to be vital and necessary at certain times and in certain situations. When my party was returned to power at the last General Election I requested my right hon. Friends to keep in the background a prices and incomes policy in case it should be necessary to bring it into operation at some time.
  In the last week there have been a considerable number of wage settlements, and my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) said of them that the horse had bolted and we had chased it out of the stable. Those settlements indicate to me that if a year ago we had had in the background a prices and incomes policy its mere threat might have prevented its implementation.
  We have come to the present situation because we failed to get a voluntary agreement. I and most of my hon. and right hon. Friends would have preferred a voluntary agreement, as would anyone with any common sense in these matters. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer have done their best to get such an agreement and are seen by the public to have done their best, and that is important. But, having failed to reach an agreement, it was inevitable that
  1074
  they should bring in some statutory provision.
  The question is: will that provision work? We have the short-term effect and then, presumably, we have, still in the shade, in the background, the longterm aspect. In the short term what is being done will work, notwithstanding its complications, if my right hon. Friends do not indulge too much in those complications, if they do not seek to implement the rules too frequently and to bring people to court unnecessarily. It must be recognised that what we have is still largely a policy of consent. A Bill like this, with all its detail, clearly will not work if it is not accepted as a consensus by the people—not only by the manufacturers but by the trade unions, too.
  An example of where consent already works lies in the Trade Descriptions Act. It would be very simple for Government Departments to bring multifarious actions under that Act. But, in practice, they have brought only a few. Those few have bitten. They have been highlighted and publicised, as a result of which people in industry generally have taken note. I know that this applies particularly to the travel and holiday industry: where action has been taken against one individual tour operator, many of the other operators have come into line. The Act, complicated as it could have been, has worked because its complications have not needed to be too frequently used.
  I say also to my right hon. Friends that if they—there were others in industry involved as well—had not been so precipitate in taking action under the Industrial Relations Act so soon they would probably have found it unnecessary now to start talking of amending it. So with this Bill I say "Pass it with all its complications, but do not over-activate it. The public will make it work. This Measure will work because people want it to work."
  But what about the long term? The Bill for dealing with counter-inflation—or under-the-counter inflation such as we have—will certainly not work by itself. Our economy will not be put right just by the Bill. I have some sympathy with what some of my hon.

  1075
  Friends have said; for example, about the money supply. I believe that if the money supply races ahead too fast it can run counter to what the Government are trying to do by this Bill. Indeed, it would be nonsense were the Government, while trying to restrain everyone else, to increase the money supply yet again and so put no restraint upon themselves. My right hon. Friends must keep that in mind.
  My right hon. Friend the Member for Barnet (Mr. Maudling) has just made a very valuable contribution to our debate. We are sorry that he is not on the Front Bench now, but we certainly enjoyed listening to him this afternoon. But I part company slightly with him because I thought that he was suggesting that peace in industry is something that we must have and that in some way Government can wave a magic wand and get it.
  Much has been said recently about Government confrontation of the trade unions, but confrontation has been two-way. There is no doubt that the unions, or some of them, have been confronting the Government, and we must recognise that they, or some of them, may continue to do so. The Government must therefore act against any who seek to confront them on this policy in the long term or in the short term. They must be prepared to stand up to confrontation. They must act in whatever way they need to act, not because we or the Government want it but because if confrontation is pursued it is confrontation against the country and the country will demand action.
  My right hon. Friends will need to have a permanent consumer pricing "watch": it cannot be left to the free enterprise Which? There is no need to introduce fines, but in the long term there must be some means by which the Government can get the anti-inflation message across and give the public the opportunity to make a public relations impact on those who increase prices when they should not be increased. There is therefore an important rôle to be played by the new Minister for Trade and Consumer Affairs.
  There is an even more important rôle to be played by my right hon. Friend the Secretary of State for Employment. I have a lot of sympathy with some of the comments made in the last two days by
  1076
  the hon. Member for Tottenham (Mr. Atkinson) and my hon. Friends the Members for Oswestry (Mr. Biffen) and for South Angus, when they said that the set-piece discussions that had taken place between the CBI, the TUC and the Government had almost got to the stage where the Government were trading votes in the Division Lobby here and the votes of the electorate in exchange for the card vote of the unions or the referenda of the CBI. The House of Commons should not accept such a position. With discussions on budgetary matters, or new Bills, or the amendment of Bills, there can be no justification for changing our system of democracy. We cannot go over to a syndicalist Government which discuss with outside bodies matters with which the House should be dealing. Although this was an exceptional situation, I hope that there will be no continuation of Government discussion on the basis of what changes can take place in policy which we have already decided and which only we have the right to amend.
  The Secretary of State for Employment has, however, a continuing rôle in discussions with the unions and the CBI. There can be no substitute for this. There is nothing to be gained from a setpiece discussion which is publicised every six months. There really is nothing better than continuous dialogue in which the Secretary of State gets to know the unions and vice versa. These discussions can educate both the Minister and the unions.
  Today we are dealing with a new law. Yesterday we were listening to the prophet. I am glad to know that my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) is in his place. We always enjoy his speeches, and he was at his most brilliant yesterday. For the first time, however, we heard from him where his proposals would lead. His proposals were to deal with this matter fiercely through the money supply.
  In col. 889 he was asked by an hon. Member opposite how much unemployment would be necessary to deal with inflation if his policy were implemented and we dealt with the problem of cutting back heavily on the money supply. My right hon. Friend admitted that it would cause an increase in unemployment. He went further and admitted that the

  1077
  increase would be an "additional" increase in unemployment.
  Mr. Powell: My hon. Friend has been very courteous and very kind. I am sorry that his understanding of my speech was not equal to his admiration. What I said, not once but over and over again, is that the unemployment caused by reducing inflation does not depend upon the method which is used to reduce inflation. It is a consequence of reducing inflation, however that is obtained. My hon. Friend may or may not agree with that, but that is what I said.
  Mr. Lewis: I have re-read the speech of my right hon. Friend this morning, as well as having listened to it yesterday, and I have no doubt that I understood it completely. My understanding of it is that he wants nothing to do with the present policies—that at least he will agree—and that the alternative which he proposes—it is the only alternative at which one can arrive—is that we go back to the pre-war system and have an arid, dismal cut-back, a deflation, a fierce restriction of the money supply, which would cause a good deal of works to be cut back by the Government quite apart from what industry would do, as well as a reduction in investment.
  I say to the Labour Party and to the unions—my right hon. Friend the Member for Barnet hinted at this today—that this is the alternative. They will vote against this Bill tonight despite the fact that they had their own prices and incomes policy. They are voting for an alternative which will creat a deflationary situation, which will increase unemployment beyond the present numbers; despite that they have already said, in this debate and yesterday, that unemployment is too high.
  Mr. Richard Body: Would my hon. Friend not agree that the prices and incomes policy introduced by President Nixon is causing an increase in unemployment among the less skilled in America, and that this scheme is rather similar to that?
  Mr. Lewis: The situation is that Mr. Nixon has just had the biggest majority that any President has ever had in the history of America. It follows upon the introduction of a measure of this kind. This country and countries in Western
  1078
  society generally have been under controlled inflation ever since the war. What we must guard against is uncontrolled inflation. I am in favour of inflation so long as it is controlled, and if it is controlled behind our competitors we are in a very happy situation.
  Even controlled inflation affects pensioners and the lower-paid. That is why Governments have to give them special assistance from time to time. The Labour Party opposite cannot complain —at least, if they do so, it is with their tongues in their cheeks—about what this Government have done for the pensioners and the lower-paid, since they have done more by far than the last Labour Government. That Government which had their prices and incomes policy, did not provide for the pensioners and the lower-paid anything like the benefits which this Government have provided.
  Despite what Mr. Jack Jones and Mr. Hugh Scanlon say, if hon. Members opposite examined the pensions schemes provided for their own trade union members they would find that these trade unions provide them with a pittance, and that they have hardly increased them at all in recent years.
  The Bill has come as a sense of relief to the people of this country. They long since came to the conclusion that action had to be taken. They will support that action. If the Government stick to their determination of purpose apart from the Bill, they will continue to get that support—not only for 90 days, but in the longer term.
  6.58 p.m.
  Mr. Austen Albu: It is impossible to exaggerate the seriousness, for our social and political life, of the problems with which the Bill is intended to deal. During the debate so far, only my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) and the right hon. Member for Barnet (Mr. Maudling) and to some extent—
  Mr. Arthur Lewis: On a point of order. Is it within your power, Mr. Speaker, to draw hon. Members' attention to the longstanding custom and practice that, after finishing his speech, a Member should wait to hear the next speaker? I have been here throughout last week's debate and this debate, and without exception

  1079
  every hon. Member on both sides has made his speech and then walked out. My hon. Friend the Member for Edmonton (Mr. Albu) is now referring to my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) and to the right hon. Member for Barnet (Mr. Maudling), neither of whom is here. It is much better for the tidiness of the debate if hon. Members stay for a while. You will agree, Mr. Speaker, that that has been the custom, even though it may not be a rule.
  Mr. Speaker: The hon. Gentleman is right—it is not a rule of order, but it certainly was the tradition of the House.
  Mr. Albu: I was saying that only my right hon. Friend the Member for Stechford, the right hon. Member for Barnet and to some extent my hon. Friend the Member for Salford, West (Mr. Orme) have dealt with the deep underlying social causes of our current situation. There is no need for me to rub in the extraordinary gymnastic exercise which has been performed by the Prime Minister and his Cabinet colleagues, in relation not only to this Bill but to industrial intervention in general.
  I have long held the view that the refusal of succesive British Governments over more than a century, imbued with Cobdenite views, to intervene in the economy has been responsible to a large extent for our slow but accelerating economic decline. I include in that the protracted opposition to tariff protection even for new industries, and policies which have allowed our agriculture to wither and have left us with the problem of paying for huge quantities of imports and very badly paid agricultural workers.
  I never expected to see the Tory Party, in this day and age, return to the Liberal shibboleths of the nineteenth century. It was incredible when the Tories came to power in 1970 that they should have done so. That the Prime Minister and his right hon. Friends could have done so underlines the fact that they have absolutely no understanding of the society they are trying to govern. This is a society of a completely new form, much newer in many ways than the authoritarian societies of Eastern Europe. When before in history have we had a society with universal franchise, universal second-
  1080
  dary education and a very large amount of further education, most of the time with full employment, the end of deferential attitudes and very largely the end of the puritan ethic?
  This is a new sort of society, and on most of these things my right hon. Friends and I have been fighting all our political lives. This is a society in which very large numbers, certainly more than half of the population, now enjoy the good things of life; but it is also a society in which there are still left vast inequalities and all the obscenities of, for instance, windfall profits out of land and development speculation. At the same time, we have done nothing to face up to the situation which has grown up in which very large numbers of workers now have jobs which provide no satisfaction. This is a matter of particular importance for the growing number of better educated youngsters coming out of our schools who, if they are able to find jobs at all, find themselves with jobs which provide no satisfaction. The result is that the only motive in work is to earn more money to spend, and the spending is titillated continuously by advertising, particularly on television.
  Behind these factors of our modern society are a good many of the causes of inflation. They are far more fundamental as causes of inflation than the monopoly power of the trade unions, to which hon. Members on the Government side of the House have continuously referred. A Government wishing to halt inflation should pay far more attention to these underlying causes. At the same time, they should at least try to unite rather than to divide the country. I shall say no more on that matter at present because largely I agree with my right hon. Friends, especially my right hon. Friend the Member for Stechford, who have said so much on this subject.
  Some of my hon. Friends may argue that there must never be a policy affecting wages and salaries—my hon. Friend the Member for Salford, West did so—except in some democratic but totally Socialist dreamland that has never yet existed. But even if one does not have that society, there never has been a society without an incomes policy. The idea of a society without an incomes policy is also a Utopian dream.

  1081
  There are three possibilities by which incomes are controlled. First, if incomes are allowed to rise at a faster rate than national output, prices will rise too and the rise will reduce the real increase of what the national production could make possible. But in this situation there are serious social and political dangers. Secondly, proposals have been put forward by some hon. Members, led by the right hon. Member for Wolverhampton, South-West (Mr. Powell) to restrict the money supply. In spite of his recent intervention in the speech of his hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), I do not think that the right hon. Gentleman has convinced the House that he believes such a policy would be possible without a very much higher level of unemployment. As I remember his speech, he said that there would be higher unemployment in the transitional period. My right hon. Friend the Member for Stechford said that recent evidence seemed to show that this was completely ineffective. But there must be some level at which it would be effective. It might be a level of 2½ million to 3 million in Britain.
  In the middle of the 1930s I had a very good job. I think I was earning £750 a year. I had a nice house, a car and many other amenities now very widely enjoyed but then enjoyed only by a very small minority of the population. I was able to enjoy them because for years during that period prices either fell or remained stable. That was because, during the whole of that period, there were between 2 million and 3 million unemployed. There is no doubt that at that time those 2 million to 3 million unemployed kept down wages and prices. I for one never want to return to that situation.
  The third possibility is some form of restraint, either voluntary or statutory, which must be introduced or, at any rate, must be led by the Government of the day. Some of my hon. Friends argue that inflation is not caused by excessive wage and salary increases, but surely this must be so, because if one adds to wages and salaries increases in Forces' pay, employers' contributions and social security payments—which after all follow increases in wages—they amount to over 80 per cent. of the total personal consumption.
  1082
  When some of my hon. Friends, as they have in the past, applaud the right hon. Member for Wolverhampton, South-West when he advocates no intervention whatsoever in free collective bargaining and the unrestricted scramble for incomes —as he always does—they should remember that were he ever to come to office it could be only because of the despair of the British people and a demand not for the laissez-faire policies he appears to advocate but for strong government. If his recipe of 2½ to 3 million unemployed —for that is what it is—failed or led to severe social unrest, can we doubt that he would become a fanatical authoritarian?
  I hope, therefore, that none of my hon. Friends—I am sorry that not many are present—will encourage large bodies of people to flout the law. That may be a fine tactic in a country needing and ripe for revolution, but for what is now a fairly long time I have seen no revolution of the Left take place in that situation since 1917, and the more likely outcome would be a return at a General Election of a much more authoritarian Government of the right, whoever led it. Personally, I remain a firm social democrat and a believer in the authority of Parliament.
  The problems we are facing, because of the fundamental causes I have tried to describe, are of the greatest difficulty. We tried when in office to deal with them, not very successfully though more successfully than most have given us credit for. Under different circumstances we might have done very well indeed. The Prime Minister implied on Monday, in reply to my right hon. Friend the Member for Stechford, that if we had inherited the economic strength which he did, we might have succeeded. That was the implication of the Prime Minister's reply to my right hon. Friend.
  So far the Labour Party, no more than those on the Government side, have found no new answer to these problems. Like my right hon. Friend, however, I have no wish to see us come to office again after inflation has forced Britain in to the sort of balance of payments situation we inherited in 1964. Moreover, I find myself in some slight agreement with the monetarists, but not for their

  1083
  reasons. Our public finances are now in a state of utter and complete shambles. I am not against clearly defined subsidies for specific economic purposes, and among them a prices and incomes policy might well be one. Such clearly defined and restricted policies of subsidies could and should be debated in the House.
  However, the present Government's policies are based not on forethought but on panic and involve open-ended subsidies to private and public industry alike. The Prime Minister gave the figures for the nationalised industries; I think they now approach £500 million, not voted by Parliament but coming out of the National Loans Fund.
  This is a recipe for the utter demoralisation of our economic and financial system which will plague future Governments for years to come. I warn all Members of the House, including members of my own party, that we shall find it difficult to restore any sense into the priorities of public expenditure as long as this is allowed to continue. We brought some sense into it while we were in office but the present Government of so-called businessmen, this Government of apparently orthodox economists, have done more to demoralise the finances of our economy than has been done by any Government I can remember.
  However, I remain convinced of the need for a prices and incomes policy. If I vote against the Government tonight, it is only on the assurance that, if we defeat them, we will immediately introduce a policy of our own, based not on class division but on social justice. I shall therefore listen with interest to my right hon. Friend the Member for Sowerby (Mr. Houghton), who is to wind up the debate for the Opposition.
  7.11 p.m.
  Mr. Timothy Raison: When I was walking across Waterloo Bridge this morning I happened to run into a friend of mine who is a neurologist. We talked for a while about his subject. After a little time I had the curious feeling that my brain was not in control of one of my feet. I walked on thinking that this must be auto-suggestion because I was talking to a neurologist and odd ideas were popping into my head. I was
  1084
  worried and thought "There is something there. Should I take the opportunity of seeking the medical advice of my neurological friend?" Then I noticed that one of my shoelaces was undone and that this was the explanation.
  This points to something which perhaps lies at the heart of what we are debating, which is the importance of trying to separate symptoms from causes. I support the Bill because it is a rational and sensible way of trying to attack a particular set of symptoms. When it comes to the longer-term issues, I am not yet persuaded that the kind of element of compulsion which is inherent in the Bill will still then be appropriate.
  I am not an economist, but I am not sure that that is a serious disadvantage in this matter. I have the feeling that purely economic answers are not enough and that what we are talking about is essentially a set of social phenomena.
  I want to consider particularly the question of wages inflation. I do not argue that all inflation is caused by wage increases. Clearly, that would be absurd. We know full well that house price increases and food price increases are caused by other factors. However, it must be accepted that wage inflation is a very important element in what is going on. It is probably fair to argue, as Professor Lipsey has argued recently, that a wage rise of £1 means a price rise of 56p. In other words, wage inflation is, overall, the biggest single factor that we have to face.
  The crucial thing about wage inflation is why it is happening. The analysis given by my right hon. Friend the Member for Barnet (Mr. Maudling) was of great importance and had a great measure of validity. The sudden increase in the power of certain unions, and more particularly their readiness to use this power, is a factor which has brought us to our present predicament. I will not analyse in detail the exact ways in which this power has grown up. My right hon. Friend did this. It looks to me like a mixture of factors. One important factor is the ability to protract strikes to an extent which was not generally true in the past. Another is the technological factor which my right hon. Friend mentioned—the concentration of things like

  1085
  electricity generation in a handful of stations as opposed to the widespread sources which existed in earlier times.
  A greater readiness to use intimidation to carry picketing beyond the traditional bounds of peaceful picketing to something more ferocious comes into it. I do not suggest that this is widespread within the trade union movement. It is not. Nevertheless, we learned from the dock strike, the building workers' strike, and the miners' strike that it exists.
  Equally, there is an attempt by some people in the trade union movement to destroy the whole framework of society.
  I am also prepared to face the fact that some of our more radical measures have helped to contribute to a climate in which the unions have been prepared to take a tougher approach than in the past.
  The upshot of this is to a great extent the intensive wage pressure that we have had over the past year or two. This represents also a serious challenge to our system of parliamentary democracy. I have no doubt from talking to people in the country that this is the thing above all about which they feel most deeply concerned and worried. We must face it.
  The question is what to do about it. Obviously we must be absolutely firm about intimidation. As the hon. Member for Edmonton (Mr. Albu) said, we must at all costs uphold the law and, above all, the law which governs things like this. I look to the Government, in so far as it is in their power—through the police, and so on—to ensure that over the next few months intimation is not permitted.
  Mr. Sydney Bidwell: The hon. Gentleman is making a serious contribution, as is his wont. Does he agree that the broad sweep of the Industrial Relations Act has encouraged the more irresponsible element on the fringes of the trade union movement to get up to the things that he has described? In view of the trade union movement's detestation of the Act, can he say whether the Act has helped or hindered that process?
  Mr. Raison: I acknowledge that the Industrial Relations Act has had sad effects. However, in almost every detail it was an entirely logical Act and for that reason I supported it, but I acknowledge that it has been used and exploited by people who are trying in some cases
  1086
  simply to gain wage increases and in other cases to go far beyond that and to damage society. I accept that to some extent the Act has, at the very least, been used as an excuse to cause considerable damage.
  I was about to say before that intervention that my right hon. Friend the Member for Barnet made a point which is just as important as, if not even more important than, the point I have just made about intimidation; namely, that we cannot expect to solve our present problems by conflict. We may in some circumstances have to face conflict, but we cannot plump for a policy of conflict and hope to achieve any reasonable solution.
  I have said that I believe that the Bill is right and that it is a sensible short-term Measure. I hope that it will get through the House. I shall support it. I have also indicated that I am not sure that in the longer term the kind of approach that the Bill may foreshadow—in other words, the compulsory approach —is the answer to our problems. I suppose there are circumstances in which there may be no alternative, but I am reluctant to believe that.
  I will list what I believe to be the main snags of the compulsory approach. First, it means a loss of freedom. This may be a corny point, but it is very true. Second, it will inevitably tend to be damaging to enterprise. This is, possibly, a straight capitalist point, but again I have no doubt that it is true. The sorts of system which will be set up under any kind of compulsory incomes policy will act to inhibit the dynamism that we badly need. Third, there is the possibility of some kind of "carve-up", of a happy agreement between the big boys which leaves the small boys out in the cold. It is sometimes argued that it is the other way round, that small people are able to get away with more whilst the bigs boys must obey the rules. I do not think that fundamentally that is correct. The trouble is that the great established companies do not mind too much if wages are restrained and they do not mind price controls because they are operating on prescribed lines. It is the small entrepreneurial companies which suffer. If we hurt that part of industry we shall not solve our regional problems.
  I also have a serious doubt whether it is possible to devise a compulsory policy

  1087
  which is capable of dealing with local factors—for example, the importance of plant, as opposed to national, bargaining. One may agree or disagree with the general tenor of the Donovan Report, but we must acknowledge that it is on the shop floor and in the plant that a great deal of power lies today, and it is an illusion to think that the big boys in the trade unions and the CBI can say "This is going to be enforced." It is local conditions which count for a great deal. It may be possible to operate a compulsory policy locally, but it seems to me inherently a very difficult exercise.
  To revert to a point which was raised, oddly enough, by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), I think there is a risk that in going for a compulsory policy one is creating friction where that friction is not necessary. This is a fundamental point. I need a lot of persuading that we should move on to some sort of statutory policy and that the answers to the many difficulties that we have to face do not lie in other sorts of action.
  There are, however, points which were discussed in the Downing Street negotiations with which I should like the Government to continue dealing. I should like to see more negotiations about those matters. The first was the commitment to growth. The hon. Member for Liverpool, Walton (Mr. Heffer) made a colourful speech when he said, I think, that he and his fellow workers dined on pheasant and port. More seriously, he told us that the workers today want more. I believe they do want more. This is part of the driving force behind what my right hon. Friend the Member for Barnet was analysing. So do the dependants, including the old-age pensioners, want more, and quite rightly so. There is only one way by which everybody will get more, and that is by economic growth. Therefore, the very clear commitment on the part of the Government to achieve growth is something which I welcome, and I hope we shall see development in that direction.
  I support also the emphasis on the desirability of raising low wages. I am not particularly worried by what might be described as the pure economic objections, that by raising wages we price
  1088
  people out of jobs. I admit that that sometimes happens, but it does not seem to me to be an overriding objection. I am worried by the proposal to keep selective benefits for those in the so-called poverty trap. One of the merits of the policy of raising low wages is that by so doing we get more and more people out of the area in which they are dependent on selective benefits and into a happier position where they can pay for the bulk of their own needs out of their own earnings. I hope my right hon. Friend will give some thought to the idea of perhaps an extra £1, or something of the sort, above the flat rate for low-wage earners, at the same time allowing them to come out of the selective benefit range instead of continuing selective benefits as was proposed last week.
  To sum up, it seems to me that we are doing the right thing now, but we must be extremely careful in what we do in the next period. We shall not get the sort of climate that we need unless we can get a fair society, a society in which people feel some sense of responsibility for each other. I have serious doubts whether a compulsory incomes policy is the way to bring this about.
  7.24 p.m.
  Mr. Arthur Lewis: This is the twenty-eighth consecutive year I have been in this House. During those 28 years I have seen dozens, possibly hundreds, of Ministers of either party come and go. I have heard of the problems and difficulties that have confronted the country during those 28 years. I have experienced every six months an economic crisis; either we have been approaching one or just leaving one. I have listened to Ministers, potential Ministers and former Ministers saying "If only we had done this, that or the other, all our problems would be over".
  Today is no exception. The right hon. Member for Barnet (Mr. Maudling), who has been conspicuous by his absence for weeks on end, came into the Chamber, made a speech and then walked out. He did not observe the custom of staying and listening to other speakers who followed him.
  Mr. Ridley Mr. Ridley rose—
  Mr. Lewis: I will not give way now. I am stating facts. The same applies to

  1089
  my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins). It is true also of other hon. Members. They say "If only we had done this, that or the other". But they are the people who were in a position to do what they say should have been done. My right hon. Friend the Member for Stechford referred to what his party will do when they get back into office. It was he who introduced charges for teeth and spectacles, and who attacked the National Health Service which we on these benches said should be a free service. That did not help the poor. The present Government have continued on the same lines.
  The right hon. Member for Barnet said that the trade unions are at fault. They may be, but I never heard him say—and this is fact—that there are certain company directors and former Ministers, on both sides of the House who as soon as they leave office rush around getting dozens of directorships, getting thousands of pounds for part-time work, and then have the audacity and hypocrisy to come into the House, make a speech in which they say "If only the workers would control their excessive wage demands; if only the trade unions would behave themselves" and then walk out of the Chamber.
  Not only do they have part-time jobs for hundreds of thousands of pounds but they become directors of companies receiving hundreds of thousands of pounds for expenses, and they do not know what is going on; at least, they say they do not. If they do not know, they ought to. If they are not in a position to know, they should not be directors of those companies. These are the people who point the finger at the £20 and £25 a week man and say "You are the ones who should tighten your belts; you are the people who are being cruel in asking for too much."
  I was told by one hon. Member—I do not know whether it is true—that the right hon. Member for Barnet was leaving in order to appear on television. That is an interesting point. I am not being party political. He may well have left in order to appear on television; so might my right hon Friend the Member for Stechford. But for a quarter of an hour on television they will probably pick up more money than the average worker
  1090
  gets in a week working at a machine or in the pit. Yet they come here and say "What we need is a prices and incomes policy."
  Mr. John Wells: On a point of Order, Mr. Deputy Speaker. I apologise because I do not entirely remember the rules for calling a count. However, I do not think it is the dinner hour yet, and there appears to be virtually no member of the Labour Party present, apart from the hon. Member for West Ham, North (Mr. Arthur Lewis), during this great debate.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I take the hon. Member's point. There is no such thing as a count nowadays.
  Mr. Lewis: The hon. Member may have made a point because it so happens that the Government benches are more full than usual—probably because hon. Members opposite want to listen to me; I do not know. However, he has a point which I will develop, namely that one can come to this House on occasions and find only a few Members here. Most of them are missing. I do not say that they are slacking. They may be doing other jobs but, if so, they are getting paid for them. How are we to control such extra payments under the Bill?
  We are about to enter Europe and so the question arises of payment for attendance. I understand that our delegates who go to Strasbourg get £25 a day tax-free allowances. No wonder they all queue up to go to Strasbourg. But they are the hon. Members who say that the worker earning £25 a week should pull in his belt. I am told that there will be a similar situation with the European Parliament. There is a hell of a battle going on on our side and my right hon. and hon. Friends are queueing up to get in on it. I am also told that they will be paid about £40 a day tax-free. It is hypocrisy of the highest order for any hon. Member to say that he favours a prices and incomes policy for the lower-paid worker when he knows that he and hundreds like him can avoid it.
  My hon. Friend the Member for Salford, West (Mr. Orme) remarked about Lord Watkinson who appeared on television. Just before the Government announced their pay freeze policy, they

  1091
  did two things. They introduced a measure to allow Members of the House of Lords to draw £8·50 a day tax-free on top of their salaries without the necessity to attend. They also awarded a £3,000 increase retrospective for one year to Lord Wigg. That, I believes, is his fifth increase and his salary has quadrupled in about four years. That shows that I am being impartial because Lord Watkinson with his £8·50 a day is a Tory and Lord Wigg is from the Labour side. I see that the former Solicitor-General, now Minister for Trade and Consumer Affairs, is present. He is a great legal luminary and he had a great deal to do with the Industrial Relations Bill. He knows as well as I do that the lawyers can pick up more in a day, indeed in half a day, than the miner earns in a week. Some of my constituents became famous as the dockers who were sent to prison earlier this year. Chobham Farm is in my constituency. I remember when those dockers went to court. The four lawyers who were involved did two days' work and picked up about £4,000. What is the point of trying to tell the dockers that on wages of £50 to £60 a week they are earning too much money when people in this position can get £1,000 like that?
  Will the acting Leader of the Liberal Party, the hon. and learned Member for Montgomery (Mr. Hooson), give a solemn pledge that every lawyer, including himself, will not draw extra fees but will earn only the fees they earned before the freeze? Of course he will not. They will earn the best fees possible.
  Mr. Hooson: The hon. Member has simply missed the point. The statutory prices and incomes policy is necessary because groups of people will not voluntarily agree to accept such a policy and, therefore, a prices and incomes policy must be imposed across the board.
  Mr. Lewis: I agree, and the hon. and learned Member has made the point. The policy will apply right across the board—at least for the lower-paid worker. But it will not affect the lawyers because they can manoeuvre and manipulate and earn whatever fees they like. There was a case recently which I must not describe in detail. A great man, a great parliamentarian, said that everyone could get justice who paid for it.
  Mr. Neil Kinnock: Who was that?
  Mr. Lewis: In a few days £10,000 was laid out.
  Mr. Kinnock: What did he look like?
  Mr. Lewis: I believe he looked rather effeminate, but I do not know. Nevertheless, there was £10,000 for a few day's work. It ill becomes hon. Members to try to fool the public when those hon. Members are drawing thousands of pounds a day in some instances, and at least many thousands of pounds a year, and will be able to continue unaffected by the legislation which will hit the ordinary worker.
  There is the question of enforcement, but what a farce that involves. Someone somewhere is waiting for a telephone call but the telephone will keep ringing. I have already tried making a call to the Department of Trade and Industry about prices. Do you know what happens, Mr. Speaker? The caller is told that the Department will make a note of the complaint and that it will be looked into. He is told that if he cares to write the Department will look further into the complaint and write back.
  There are already Acts on the Statute Book which require enforcement. One of them is the Companies Act which imposes certain statutory duties upon Ministers in the Department of Trade and Industry. The Act says that registered public companies must return their company accounts every so often. Hundreds of thousands of companies are not doing so. The Department has been told and it has refused to take action. I have asked the Prime Minister to instruct the Secretary of State to take action and the Prime Minister has refused to do so. Companies must have properly appointed auditors but many companies do not have them. Again, the Department has been asked to take action but has refused. Companies should have proper company meetings but these have not been held. The Department has been informed, but again no action has been taken. Companies should have properly elected directors but no directors have been appointed. And so the problem grows.
  Hundreds of companies are involved, so many that the Department of Trade

  1093
  has told me that the problem is so out of hand that it cannot deal with it. But such companies have been fleecing the public of millions of pounds. In one case the Department was asked for four years to take action but it did not and eventually the person concerned fled to Australia with £4 million of shareholders' money.
  That is the Department which must see whether a penny or 2p has been put on a pound of sausages and take appropriate action. The same Minister and the same Department are concerned. I see present my hon. Friend the Member for Birmingham, Northfield (Mr. Carter). On the V and G affair we asked for action for years. The John Broom affair was another example. I could go on for ever. Another company is Dollar Land Holdings. But nothing has been done. I was told that because the problem had become so widespread, because the Department had not done its job and things had got out of hand, it can now do nothing.
  I said to a Minister that this reminded me of going to the policeman on the beat and saying "See that chap there, whose name is Bill Sykes. He has a jemmy in one hand and an oxyacetylene cutter in the other, standing outside Barclays Bank. I heard him say that he is going to break in". The policeman says "It is all right, old boy. There is so much of that going on now that I cannot take any action". That is the Government's attitude.
  We have not had an answer about whether the people who telephone the Department will be able to reverse the charges. I do not see why they should not be able to do so. If the Government are genuine, let people be allowed to reverse the charges. Indeed, let them have free postage. Why not? Let every post office, public authority—[HON. MEMBERS: "Public house."]—and, indeed, every public house, have the telephone number. Let every Government Department have the telephone number. But, above all, let us have some action.
  Hon. Members on both sides of the House—and I am not being party political here—will bear me out when I say that whenever we write to virtually any Department on a simple issue, it takes
  1094
  two or three weeks before we get even a formal acknowledgement.
  Mr. McBride: A lot longer than that.
  Mr. Lewis: I always under-estimate. It might take another week to get an interim reply which says that the Department has not done and cannot do anything. It will then take another week for the Department to say that it has sent the inquiry on to somebody else. If the hon. Member is fortunate, after five or six weeks he will get an answer, which is usually a negative answer, but no action.
  What will happen when members of the public start writing letters to the Department? They will be simply washed away. But let us assume that miracles happen sometimes and that the Government take action. The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) said that he would not like legal action to be taken in these matters. But how long does it usually take for legal proceedings to come before a court? Again, I must not mention the name of the hon. Member who was recently concerned in a court case, but he was very unfortunate; I do not know why. He was able to have his appeal heard quickly. Normally it takes from 12 to 18 months for an appeal to be heard. Even if legal action in connection with the Bill were taken, the 90 days would have been well expired.
  What the Government propose is completely phoney. It is nothing more or less than an attack on people on the lowest standard of living. The well-to-do will be able to get round the legislation. The Government say "But look how generous we are being to the old-age pensioners. We are giving them £10 once and for all". But the old-age pensioners must wait until next January for it. Some of them will not be with us then. There is nothing to stop the Government issuing an instruction tomorrow that every old-age pension book should be stamped with £10 as and from a certain date so that that sum is paid to every old-age pensioner. If the Government wanted to do that, they could. They made the payment to my noble Friend Lord Wigg retrospective for 12 months. But the Government do not want to find a way. They shed crocodile tears but do not do anything about these matters.

  1095
  I have a clear conscience in this respect. I fought and voted against the Labour Party's proposals on these matters because they could not work. The present Government's proposals will not work. I shall be pleased to table as many Amendments as possible to the Bill. The Conservative Party fought all the elections in which I have participated since 1945 with the slogan "Tory freedom works". It says "Let everyone grab what he can. Let the speculator have what he can get and let the land profiteer get what he can get"—and they have got it. But when trade unionists, who joined their unions for the specific purpose of obtaining the best possible working conditions and wages, try to get a bigger share of the cake, it is said that they are traitors. But they are merely responding to the free enterprised beliefs of the Tory Party. Right hon. and hon. Members opposite will not support a free-for-all approach by the trade unionists, but they will support such an approach by the speculators and big vested interests.
  "The Tory Party is the party of great vested interests, banded together in a formidable confederation, corruption at home, aggression to cover it abroad, the trickery of tariff juggles, the tyranny of a well fed party machine, sentiment by the bucketful, patriotism and imperialism by the imperial pint, the party of the rich against the poor."
  Those words were uttered by the greatest Tory leader ever—the late Sir Winston Churchill. I subscribe to them.
  7.46 p.m.
  Mr. A. G. F. Hall-Davis (Morecambe and Lansdale): I cannot profess to be as knowledgeable about the remuneration of individuals and groups as the hon. Member for West Ham, North (Mr. Arthur Lewis). Therefore, I shall not comment on his remarks in that respect. However, he said that the Government's proposals would not work because they were unfair. I shall say something about that in the course of what I hope will be a short speech to balance the length and interest of the hon. Gentleman's speech. But it was not unfairness which led to the reaction against the policy of his party's Government; it was frustration over a number of years when people's standards of living advanced hardly at all.
  My hon. Friend the Member for Aylesbury (Mr. Raison) said that it was "corny" to say that he deplored the
  1096
  loss of freedom involved in the Government's proposals. I start by saying—and all my remarks hereafter will be made against this background—that I regard with extreme distaste the control of wages and prices by law. I shall say later why I have come to the conclusion that we should support the Bill. I have reached my decision reluctantly because what is involved is the complete withdrawal, albeit temporarily, of one of the fundamental liberties of the subject. The right of a man to negotiate his terms and conditions of employment is one of the things which distinguish a free society from an authoritarian society. I should not be true to my views and feelings if I did not say that.
  The present situation has arisen because twice in recent months the view of the minority has prevailed over the view, wishes and interests of the majority. Wage bargaining in a free society, with an industrial structure sophisticated and interdependent as the structure of this country industrially is now, can operate without damage being done to the community only if those engaged in it accept that certain limits to their demands and actions are imposed by considerations of common sense, moderation and fairness.
  Every negotiation that takes place finishes because at some point those engaged in it realise that a fair solution has been reached and they do not press the matter to the ultimate. We are much more likely to get a negotiated settlement, in which responsibility, fairness and the general interest are recognised when such a settlement is on a company or plant basis rather than covering a whole industry or group of industries on a national basis.
  In the last 12 months the majority of people engaged in wage negotiations have made reasonable settlements. Those settlements have been responsible because they have been as low as could be expected against the rise in the cost of living compared with the previous year. As the cost of living gradually reduced month after month there was clear evidence that many negotiators and many people in industry were prepared to accept a gradually lower level of settlement. But what has happened is that a minority, in wishing to extract the maximum settlement, have not been prepared

  1097
  to follow a course of moderation and fairness taking into account the general interest of the community as well as their own interest. By using their bargaining strength to the full, they have made it impossible for the majority to hold to a course of moderation and social responsibility when seeking settlements.
  In the last few weeks the view of the minority has again prevailed over the view of the majority. There is no doubt that there was a substantial majority in the country in favour of the Government's package announced in September—
  Mr. Arthur Lewis: And against the Common Market.
  Mr. Hall-Davis: I shall be happy to debate the Common Market on an appropriate occasion, but at the moment I am debating the Second Reading of the Bill.
  Mr. Arthur Lewis: It is relevant to the point.
  Mr. Hall-Davis: The majority of the public were in favour of taking action on the lines of the Government package announced in September. It was simple and workable and would have helped the low-paid and the pensioner. The rejection of that package was a clear rejection of the majority wish of the people.
  Mr. McBride: The hon. Gentleman speaks of an irresponsible minority, but he is careful not to name them. I suggest that he should name those whom he thinks have been irresponsible.
  Mr. Hall-Davis: The hon. Member for Swansea, East (Mr. McBride) should look at the recorded negotiations and settlements over the past few weeks.
  Mr. Arthur Lewis: Give us the names of the hundreds of company directors who have doubled their salaries.
  Mr. Hall-Davis: The hon. Member for West Ham, North (Mr. Arthur Lewis) knows very well that in the last six months industrial attitudes have been pursued in complete defiance of the national interest, and the general public recognise this as well as everybody in the House.
  Mr. Arthur Lewis: Ask Gerald Nabarro —he knows.
  Mr. Hall-Davis: The problem we have to face is how to recognise the interests and wishes of the majority without curtailing the freedom of individuals.
  I turn to the specific question of the action which must be taken in the next few months. I hope that the Government will announce their medium-term intentions as soon as possible. There have been discussions about what should follow the Bill. After the difficulties which both parties have experienced in working out a solution to this problem, I believe that we shall not get a long-term answer within 90 or 150 days. We shall not get a long-term answer until the course of inflation has been moderated sufficiently so that people may consider matters in a cooler atmosphere without the pressure of inflation bearing so strongly upon them.
  I hope that well within the 90 days the Government will say that they intend to proceed on the basis of the package which they put to the country in September. It has general support, a consensus exists on the package, and I believe that if it were adopted it would save the frustration and confrontation which arose in the longer period of freeze under the Labour Government.
  I should like to see some simplification of the package. The next stage should be an extension of existing wage settlements for a period beyond the date at which they would normally run out, with wage rates and structures being left exactly as they are now. I should like to see the addition of a flat-rate plus payment with a limit set to it on top of the existing wage calculations and rates. I was not present at the discussions in Downing Street but it was reported that there was some realisation among trade union leaders that a flat-rate figure of, say, £2·50 would be of more help to the lower-paid than an increase on the base rate of £2. It is those with sophisticated wage structures who benefit most from premium rates, and they are the people who are to be found in highly-paid jobs. Many of the low-paid are in that category because they have few premium payments. Staff in general who are not among the more highly paid have few premium payments and many have no premium or overtime payments at all.
  I turn to one element in the Government package that I find the least attract-

  1099
  tive, and this is the fact that during the tripartite discussions the target for containing inflation was 5 per cent. If we look at the record of the last 20 years—and we must remember this whenever we get depressed—we see that only three times in that period has the consumer price index risen by more than 5 per cent. I refer to the three years 1969, 1970 and 1971. In 13 out of 24 years—and these, I hasten to tell Labour Members, were not "all the 13 Tory years—the cost of living index rose by less than 3½ per cent. As it has been necessary to move to a fully-managed economy and to take full control of wages and prices, I should like to see the nation gaining some real benefits from this step. Let us as our target seek to get price rises down, certainly below 4 per cent., and keep it within that figure for at least two years. We should then have a good prospect of returning smoothly to free wage bargaining. We shall not return to a situation of free wage bargaining until we get down the pace of inflation and hold it down for a reasonable period. If we have sacrificed the freedom to negotiate and to let the market economy operate, let us as a compensating factor see that we eliminate the evil of inflation and at the same time continue the present trend of reducing unemployment and increasing the growth of the economy.
  8.0 p.m.
  Mr. Norman Buchan: The contribution of the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) has not helped the situation very much. I do not know what he means, nor does anyone else, when he refers to a minority controlling the majority. The nearest approach that we have to representing the majority view of ordinary people in effective wage bargaining and everything else remains the trade unions. It is the trade unions which have been making the decisions that the hon. Gentleman regards as minority decisions, and if the hon. Gentleman wishes to see how reflective they are of ordinary working class opinion he need only consider one test. His right hon. and hon. Friends dared to test it in the case of the railway-men. The Government's policy was rejected overwhelmingly, and the policy
  1100
  of the union was accepted overwhelmingly.
  There is no case for saying that this is a problem which has been created by the minority of trade unionists. The problem has been imposed upon the majority of working class people by a small minority, the abrasive centre core of the Tory Party and right hon. and hon. Gentlemen on the Treasury Bench.
  When we are trying to look at a grave crisis seriously, the kind of talk that we heard from the hon. Member for More-cambe and Lonsdale does not help very much.
  Mr. Hall-Davis: Does the hon. Gentleman consider that when two opinion polls —with all their variations they are one way of testing opinion—say that 80 per cent. and 75 per cent. of the public are in favour of the package that the TUC rejected the majority opinion has carried the day?
  Mr. Buchan: There is an obvious explanation. It is the same one as that which the hon. Gentleman would use. There is a tendency for people to say "This is a good idea. Keep down other people's wages but do not keep down mine". That is why a prices and incomes policy foundered under a Labour Government, and it will founder under this Government. If the lower-paid workers in the breweries were to get a £5 or a £10 increase but the chairmen and managing directors of breweries were restricted, the hon. Member for Morecambe and Lonsdale would not find the policy so popular. I have been reading about the hon. Gentleman in The Times "Guide to the House of Commons". I know all about his brewery interests.
  The second reason why it will be rejected is that a vast confidence trick has been played upon the people, and they are beginning to understand. When people are asked whether they want to hold back inflation, they say "Yes, we are against sin." The confidence trick has been to go through with these discussions at No. 10. Today, look at events, I believe that the whole affair was arranged. It was a form of high-level political theatre. It seemed to run as long as "The Mousetrap". But there was one difference. In "The Mousetrap" they did not try to blame the crime on

  1101
  the victim, which is what this Government have tried to do. The discussions have been conducted at such a level that when the parties emerged from them the blame could be put on the working class people. However, it is not the working class who have not been in effective control of the country for the last 2½ years but the Government. All the actions that the hon. Member for Morecambe and Lonsdale has criticised have been reactions to the abrasive attacks on them by the Government.
  We saw the second echelon of the Tory Party move into action the moment the talks ended. The Vice-Chairman of the Tory Party attacked the so-called "red wreckers". That is what these talks were about, and once this measure begins to operate I do not think that the people will continue to be taken in by it.
  Another reason that I put forward is what happened to the Labour Government. It was not only the abyss that we went through during the "In Place of Strife" discussion. It was that we had already lost contact with our own people. They accepted a prices and incomes policy as being fair and just for the country, but they found in practice that as long as we were not making basic inroads into capitalism we could not emerge with a fair policy.
  The British people have an intense sense of fairness. They will accept a lot if they regard it as fair. But they will not regard this measure as fair for the kind of reasons advanced by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis).
  In this document we see that a sharp difference is made between those whose wages are negotiated openly and can be seen and checked and those whose wages are incomes derived in another way. If the hon. Member for Morecambe and Lonsdale is still involved with his brewery, I do not imagine that he will suffer as a result of dividends being held back for six months. Share values can still increase. Capital assets can still increase. The hon. Gentleman's dividends can still be collected at the end of six months. The same cannot be said of the wages of his workers.
  Mr. Ronald Brown: What has been decided by the Government is that if a dividend was
  1102
  agreed on 24th October to be paid on 1st January, it can be paid. However, the Furniture, Timber and Allied Trades Union, with which I am connected, reached an agreement on 24th October for an increase to be paid on 1st January, but that has been refused.
  Mr. Buchan: My hon. Friend makes the case dramatically and directly. I did not know about the case to which he has referred. It requires more publicity. I am sure that publicity will also be given to the case of the farm workers. We have been told that this policy is designed to serve the best interests of low paid workers. Did anyone ever hear such nonsense? The farm workers are among the lowest-paid people in the country. Food prices have been blamed on wage increases, but agriculture from which food prices stem is the lowest-paid industry, and in that case the wage increase is to be held up. I could not believe it when I heard it. My innocent interpretation on first reading the White Paper was that the farm workers' wage increase had to go through. It was not very acceptable to them as it was. But even that is to be blocked. Like the union with which my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) is associated, the farm workers are in the forefront of this crisis, and they are to be held back. The British people will not accept that.
  Furthermore, the people will reject this policy because they recognise that, quite apart from profits, dividends, shareholders and the managing directors of breweries, there is a group of people in this country whose incomes are derived in a different way. There are many lawyers in this House. If a lawyer has a brief, he is paid. If he has no brief, he is not paid. But there is nothing in the White Paper to say that lawyers shall be restricted to 5, 10 or 15 briefs over the next six months. The more work that they do, the more they will be paid—
  Mr. Hall-Davies: So will a worker on overtime.
  Mr. Buchan: But a man on a 40-hour week does not get this kind of income, and let no one tell me that the extra work that he does by way of overtime is paid at rates comparable to the earnings received by highly-paid lawyers, consultants and others in the group of people

  1103
  to whom I refer. They really believe that their own world is inviolate and should not be harmed. They are trying to create injustice. That is the purpose of the exercise. It is to lay the blame for our economic ills upon the workers, and the White Paper is extracting the pound of flesh for the crime that the Government attribute to them.
  The other reason why this policy will not be accepted is twofold. First, it is not a prices and incomes policy. I happen to believe in a prices and incomes policy. I have been disappointed in the past by the fact we used a prices and incomes policy to deal with an economic crisis but not to rectify injustice. We used it in 1966 because of our balance of payments problem. As a result, we devalued the whole concept of a prices and incomes policy. Once again, before we get the right kind of Socialist thinking into a prices and incomes policy, and that means intelligent thinking, it is brought in today to be devalued. It is not a prices and incomes policy; it is a standstill, a freeze, basically for one section of the community.
  To return to my point about fairness, the argument is that dividends, incomes and prices are to be held. I have dealt with dividends. We know what will happen with wages. But on the prices front —we could drive a horse and cart through it. It is the kind of thing in the White Paper which says:
  "Wholesalers and retailers are expected to do everything possible to avoid any increases in prices."
  I do not see anything written here that says that Jack Jones and Hugh Scanlon are "expected" to do everything possible to hold back increases in wages. They have it imposed upon them. Enterprises will be required to absorb cost increases to the "maximum possible". Who will be determining the "possible"? The Government should not try to kid the British people, because they do not believe it.
  It is said that:
  "Certain prices—especially those for fresh food such as fruit, vegetables, meat and fish and for imported raw materials—are subject to fluctuations arising from external or seasonal causes."
  My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said he did not
  1104
  know that people ate anything else but fruit, vegetables, meat and fish. The White Paper goes on to say that where such prices rise because of seasonal or external causes the increase is to be allowed. But this is always the reason for a rise in food—seasonal increases and external causes.
  The reason why beef soared under our unfortunate friend "Mr. 20 per cent. Prior" over the last few months was not the wages situation or additional costs but a whole number of external factors in relation to, among other things, the Common Market. I challenge the Government to tell me that the price of bread will not rises over the next five months. The millers have said that it will. I challenge the Government to say that the price of beef will not rise. We are to enter the Common Market on 1st January, and we are told that British entry will coincide with the early stages of a world meat shortage. This was said by Mr. Michael Higgins, purchasing director of a large French meat import and export firm at a Harrogate conference. Let the Government deny that if they like but I prefer to get an answer rather than a grin from the Financial Secretary. We do no want our Minister to be sitting laughing at a 25 per cent. to 30 per cent. increase in meat prices.
  The Financial Secretary to the Treasury (Mr. Terence Higgins)The Financial Secretary to the Treasury (Mr. Terence Higgins) rose—
  Mr. Buchan: I hope that the hon. Gentleman will let me finish my sentence. The question I put to him is: will he give us a guarantee that beef and bread prices will not increase during the standstill?
  Mr. Higgins: I would like to make this point, in deference to the House. I was not grinning at all. I merely said, when the hon. Member referred to someone with the same name as myself, namely Higgins, that it was no relation. I was mereley making that point. As to the point of substance, my hon. Friend will take note of what the hon. Member said.
  Mr. Buchan: I suppose that that is an acceptance of the fact that bread and beef prices will rise.
  Mr. Arthur Lewis: I want my hon. Friend to make it clear that at the Harrogate conference to which he has referred,

  1105
  which was a Government-sponsored livestock conference, when speaking of this meat shortage, it was quite clearly stated that a 25 per cent. to 35 per cent. increase in the price of beef will take place between now and next spring and the Government will not do anything about it. This is the point my hon. Friend should emphasise.
  Mr. Buchan: I am glad my hon. Friend is telling me what I should be saying. He is right. We have thrown away our tools the means by which we can control things. If the price of food increases because of external factors the only way to prevent prices rising in the shops is through some form of subsidy. We are casting this aside and indeed imposing additional price increases by accepting the import levy system. During this period we shall put a tax upon food and also increase its price. The whole thing is a confidence trick, and I do not believe that the British people are so stupid as the hon. Member for Morecambe and Lonsdale suggests.
  There is also the question of rents. The Government are getting themselves into a peculiar position here. They are calling for a standstill. They say that rents are included in separate legislation and are not, therefore, dealt with in the White Paper or the Bill. The British people are not conecrned about whether a certain measure is included within a particular Bill. Rents are prices, and it is that with which they are concerned.
  The ludicrous position into which the Government are getting themselves is that after the announcement of this policy the only councils in Britain which are in line with the Government's policy are those which are refusing to implement the Housing Finance Act. Therefore, the Government are likely to find themselves in the position of taking such councillors, including my wife, to court for refusing to implement this Act. I know what my wife will do if she is brought to court because of this bunch opposite because she is trying to help her community in refusing to increase the rents. The moment she is in court the first witness she will call will be the Prime Minister, who says that there is a standstill on prices. That is the kind of difficulty into
  1106
  which the Government have got themselves.
  Mr. Cecil Parkinson: Would the hon. Gentleman care to read paragraph 21 of the White Paper in which the matter about which he is talking is clearly spelled out. Perhaps he could read this to his wife and send her to sleep tonight. The White Paper says:
  "As these rent increases were due to take place before the standstill they are not affected by it and any authorities who have not so far discharged this statutory obligation will not be relieved of it by the standstill."
  In that way the hon. Gentleman's wife will be in no doubt about the position.
  Mr. Buchan: I do not intend to spend my time in bed tonight or any other night telling my wife that her statutory obligations which she may or may not have discharged will not be relieved by the standstill. She is entitled to protect her people in the same way as others are entitled, if their consciences tell them, to break the law and accept the consequences. I believe the British people will back us on this.
  There are areas of the country which will suffer as a result of the standstill, and fairness enters also into this aspect. My area in Scotland suffers from unemployment and low wages. This policy will operate in the regions in such a way as to freeze any attempt to improve wages. Therefore, I want a third guarantee from the Government, in addition to those concerning bread and beef prices. I want a guarantee that there will not be an increase in unemployment during, and as a result of, the standstill. If the Government can give us all pledges, then they may find their predictions to be accurate.
  8.18 p.m.
  Mr. David Knox: I hope that the hon. Member for Renfrew, West (Mr. Buchan) will not mind if I do not follow him in the points he has made. I have given an assurance that I will speak only for a short time. I approach this subject as someone who shares the views of my right lion. Friend the Member for Barnet (Mr. Maudling). I approve of and support the change of attitude of the Government in the last six months towards the general problem which we are discussing. I believe it was right to hold the tripartite talks and very much regret their failure.

  1107
  I welcome the Government's assurance that they are still willing to follow up and to have further talks with the TUC and the CBI. I welcome this approach because I do not believe in confrontations such as we have had in recent years and also because I believe that it is necessary to have a prices and incomes policy in a modern society. A voluntary prices and incomes policy is preferable to a compulsory one. Every modern advanced country has found, or is finding, a prices and incomes policy necessary and the consequence of not having one eventually leads to social disruption, whether it comes from excessive inflation or from excessive deflation imposed to try to avoid inflation.
  Most hon. Members on both sides of the House—though there are exceptions on both sides—regret the breakdown of the talks. I certainly do. I should have preferred them to have succeeded, because I prefer a voluntary incomes policy to a statutory one. But the talks having failed on this occasion, and a voluntary policy therefore being impossible, there is no alternative to the Bill which my right hon. Friends have presented to the House. I regret to some extent that the Government have not been able to give statutory effect to the package which they offered the CBI and the TUC, because that clearly would be preferable to the freeze, but I accept that that is not possible in the short term and so the Bill is acceptable to me.
  I should like to spent a short time considering the nature of our inflationary problem. This was dealt with this afternoon by my right hon. Friend the Member for Barnet. It is important to recognise exactly what our inflationary problem is, because there is still a great deal of misunderstanding in our midst about it, particularly among those who think that the cure can be effected only by controlling the money supply.
  Apart from the fact that it is naïve to think, as the money supply purists do, that something as complicated as a modern industrial economy can be controlled and regulated merely by controlling the supply of money, it seems that there are two fundamental errors which the money supply school make. First, they assume that because inflation involves the depreciation of the value of
  1108
  money, its causes must be entirely to do with money. Secondly, because they fail to distinguish between demand and cost inflation they fail to realise that cost inflation can take place without there necessarily being demand inflation and they fail to realise that the policies which are rightly used to cure demand inflation will cure cost inflation only at enormous expense in terms of unemployment, lack of company profitability and social chaos, and even then I am not convinced that they would work.
  What are the differences between the two types of inflation? My right hon. Friend attempted to define them this afternoon, and perhaps I may do so as well. Demand inflation is the situation where total effective demand in the economy as a whole exceeds supply potential. Something has to give, and it is the price level of the supply. Prices therefore rise. The way that the Government deal with demand inflation is well known to the House—credit squeezes, tax increases, and so on, the purpose being to reduce demand to bring it into equation with the supply potential.
  Cost inflation, on the other hand, is the situation where costs rise and force up prices. It can be the cost of imports, it can be other costs and it can be the cost of labour. Some people would argue that the price of labour—that is, wages and salaries—can rise only in a demand inflationary situation, but I would argue that because of the sluggishness of the labour market and because of the presence of monopolies in the labour market, such as trade unions and professional bodies, that is not the case.
  One can therefore get, and in my view we are getting it now, labour cost inflation—I am referring as much to salaries as to wages—without there being demand inflation and without there being any shortage of resources in the labour market. In other words one can, and one does get cost inflation even when there is substantial unemployment. This seems to be the theoretical reason why today we have substantial unemployment and cost inflation. It may be that there is a level of unemployment at which there would be no labour cost inflation, but it would be much too high to be politically acceptable.
  The question we have to ask ourselves is what sort of inflation we have in

  1109
  Britain today—demand or cost inflation. It seems obvious that it is cost inflation. From November, 1964, until July of last year the British economy was subjected to a series of powerful deflationary measures, massive increases in taxation, credit squeezes, tight control on public expenditure, reductions in planned expenditure and so on. The result of all that was that by the summer of last year there was substantial slack in the economy, there was high unemployment and there was considerable under-employment of both labour and plant.
  It is obvious in such circumstances that total effective demand is, and has been for a long time, substantially below supply potential, and there is not therefore, and there has not been for a long time, demand inflation in Britain. Nor is there likely to be in the near future. At the same time it is obvious that wages and salaries, despite high unemployment and under-employment, have risen much more than output. There is, therefore, a clear-cut case of cost inflation, nothing more and nothing less.
  The Government's package presented to the CBI and the TUC seemed to provide a reasonable and fair means of attacking the problem of cost inflation which, as I hope I have proved, is our problem. It seemed that this was the right way to go about dealing with the problem of cost inflation but, the talks having broken down, the freeze was inevitable.
  A few moments ago I said that perhaps there was a level of unemployment at which there would be no labour cost inflation but that this would be much too high to be politically acceptable. In fact, I do not believe that to be so at the present time, and I shall say why. In the 'fifties and early 'sixties the British people came to expect real increases in living standards every year. Following the 1961 deflationary package they lost confidence in the then Tory Government's ability to produce such increases. That seems to be the main reason why the Labour Party won the 1964 election. The electorate then voted in a Labour Government, believing that they would give them the additional increase in living standards each year which the British people demanded. By 1970, because the Labour Government had failed to do that the electorate dispensed
  1110
  with their services in the belief that an incoming Tory Government could provide the goods.
  It seems to me no mere coincidence that during the middle and latter years of the 1960s, when living standards in Britain were hardly rising at all, we saw the emergence of more militant trade union leaders of both wage and salary earners. It also seems to be no coincidence that during this period we should generate the fastest wage and salary cost inflation as people tried to improve their real living standards by obtaining higher money wages, only to be frustrated in their desires by the depression of output by the Government and the consequent rise in prices.
  If all that is true, as I believe it is, it follows that the deflation of demand by controlling the money supply or by any other means would, if it worked, result in living standards being stabilised at their present level or even reduced, which in turn would aggravate the cost inflationary spiral rather than cure it.
  Our current inflationary problem is therefore, as much social as it is economic. It is a fallacy to believe that deflation will cure it. In the long term, it will be improved only by ensuring that over the years living standards rise in Britain to meet the expectations of the people. Adlai Stevenson was talking about under-developed countries when he spoke about the revolution of rising expectations. But we deceive ourselves if we pretend that there is not a revolution of rising expectations in Britain today. That was a point which the hon. Member for Liverpool, Walton (Mr. Heffer) made yesterday in that moving passage about pheasants and port wine. It is a fair and legitimate point, and any British Government which fail to recognise its importance will inevitably land up in trouble.
  The logic of my argument has been that that growth is essential if we are to reduce cost inflation to tolerable limits, that growth is an absolute pre-requisite if we are to do it and, since growth is not possible with the depression of demand that strict control of the supply of money would bring about, in such circumstances we need an incomes policy. Since we cannot have voluntary agreement on such a policy for the present, the Bill is needed as a temporary measure to see us over the

  1111
  next 90 days or perhaps a little longer, until such time as a voluntary policy can be brought about with the general agreement of the CBI, the TUC and the Government. For those reasons, I support the Bill.
  8.31 p.m.
  Mr. Neil Kinnock: If the hon. Member for Leek (Mr. Knox) will forgive me, I shall not take up at great length what he said. He regrets that the talks at Downing Street between the TUC, the CBI and the Government should break down. I do not. The Prime Minister offered a poisoned carrot. It is only because the TUC now occupies the position of a fourth estate and has a certain social status in our country that obliges the Government to go through the charade that was designed from the first further to reduce the public's confidence in the trade unions for a political end. If the hon. Gentleman is not wise to that already, then he is in the wrong business.
  Secondly, I gathered from what the hon. Gentleman said that he believed a rising demand to meet the supply potential is one of the ways of getting out of our present inflationary difficulties. That is essentially what I and other of my hon. Friends have been arguing for at every unemployment demonstration—increasingly frequent unemployment demonstrations—over the last two and a half years. We felt that there were idle hands and idle capital, a great demand both for material goods and for services in our country, and that those hands and capital should not be idle. I see that the hon. Gentleman nods assent. I cannot see how either a 90-day freeze or a further rationalisation of incomes increases can bring about the increase in demand which the hon. Gentleman requires. The effect of an incomes freeze and an incomes rationalisation policy, whatever comes after the freeze and however long the freeze is, will lead to reduced demand because people's incomes, whether inflationary or not, will not be going up.
  We have the situation where everybody recognises what would be a good thing. Everybody recognises that it would be a grand way out of unemployment and that it is one of the ways of overcoming inflation. But, by the same
  1112
  token, in this very Bill one of the major means of increasing the demand which is necessary to overcome our inflation, according to the analysis put forward by the hon. Member for Leek, is denied because we have got an incomes freeze, which, as we on this side have said repeatedly, could be effective, has positive sanctions, has legal sanctions, and lays down specific offences, contrasting sharply with the flimsy meaningless sanctions proposed in the prices side of the Bill.
  It was said in the debate yesterday, and it has been said to a lesser extent today, that the difference between the prices and incomes policy of the last Labour Government—which I opposed, though outside the House and not inside, for obvious reasons—and the present Government's policy is to be seen in one basic fact, that the measures of 1966 and 1967 were introduced in an atmosphere of deflation, and the present measures are introduced in an atmosphere of expansion.
  For the reasons I gave earlier, it seems to me a peculiar logic which describes a situation in which there are ¾ million unemployed, in which there are bellies to be filled, in which there are inadequate social services, a slum Welfare State and a disastrous housing situation, as one in which we can contemplate or seem currently to be enjoying an expansionary economy.
  A prices and incomes policy depends upon the relationship between prices, incomes, productivity and profits. Given a situation in which wages and productivity are rising at about the same rate and prices are controlled, one has rising real wages and economic expansion. On the other hand, given a situation in which there is rising productivity, wages are controlled but prices are uncontrolled, there is a real and dramatic fall in the general standard of living.
  Mr. Richard Kelley Mr. Richard Kelley (Don Valley) rose—
  Mr. Kinnock: Will my hon. Friend forgive me? I have only a short time, and I know that many hon. Members wish to speak.
  There is that similarity between the story in 1966, 1967 and 1968 and the story today. There are other similarities. We have a general expansionary policy

  1113
  which is running directly into collision with a deflationary policy based essentially on wages control, not on incomes control but on wages control, restricted to only one sector of incomes, which, though large, covers only certain kinds of wages at that.
  The only excuse which I could offer on behalf of my own Government was that, at least, the attempt was made in order to bring economic solvency to this country. It was made out of what I believe to have been an over-emphasised and distorted sense of social and economic priorities which led that Government to believe that the balance of payments was the most important objective which they had. It was a terrible mistake. This Government, however, do not even have that laudable end. Their sole purpose in going through the pantomime of the last two months, with talks, a false crisis and the dramatic introduction of a short sharp incomes freeze in the certain knowledge that not a price will be frozen and that there will be a conflict over the next 90 or 150 days—however long it may be—between every section of wage bargainers and the Government, is that the conflict should be seen as a challenge by the trade unions for sovereignty in this country.
  I believe that that is the essence of the Prime Minister's present policy, but I believe, also, that if he chooses that kind of confrontation he will be the loser. He has a Chancellor of the Exchequer who, apparently, takes a degree of comfort from the results of the election of a near-Fascist President in the United States— [HON. MEMBERS: "Oh."]—who has a set of social priorities which would have been anathema in this country in the 1930s. Yet the Chancellor of the Exchequer applauds it. He takes comfort, also, from the fact that there are opinion polls which show a general declaration in favour of an incomes freeze. The attitude of most people towards inflation is like their attitude towards sin. No one likes it. I hope that the Conservative Political Centre will sponsor another opinion poll of the same people in 90 days and ask what their attitude to a wages freeze is then. It will give an important political lesson, a lesson which should have been rammed home in this country a long time ago.
  1114
  It is all very well to say that we live in a classless society in which individual aspiration should be the motive force and impetus behind our development. In fact, at the end of the day, those who work for their living, who have only their labour by hand or by brain to gain the means of livelihood, have a common class interest. I think that in these 90 days we are going to learn that we have a Government prepared to engineer a crisis and an Act of Parliament directed solely to affecting their interests, and that the Government will do it in the name of a spurious freedom, freedom for gazumpers, freedom for asset strippers, freedom for speculators and all the other nasty interests which have agglomerated around this Government. They are the ones who have a real vested interest in Toryism. I exclude those misguided people who believe that Conservatism can bring about an improvement in their standard of living.
  If we really mean to make an attack on price inflation we require to take in this Parliament control on a wartime basis of prices. The Chancellor of the Exchequer has been known to scoff at the idea that we can have wartime controls in peacetime, but it is a measure of any Government's earnest, when continually preaching about the necessity to control price inflation, of how far they are prepared to go. How far are the Government prepared to go in order to substantiate their claim that they are genuinely the enemy of price inflation? I would suggest a system—it is becoming increasingly fashionable and I suggested it 18 months ago—of a national prices board comprised of manufacturing interests, retailing interests, trade unions—including a few people from the shop floor for a change, and very unusual—and the Government interest. There ought to be responsibility through a Minister to Parliament, and the Minister ought to employ a prices inspectorate which would act on the same basis as the factory inspectorate, with the threat of sanctions. If there were a declared list of prices drawn up by the national prices board and if a retailing outlet for a manufacturer were found to exceed a recommended price, prosecution and a heavy fine would follow.
  I think it is necessary to have that kind of machine, not as an academic

  1115
  exercise or to give more work to bureaucrats, but for this very simple reason that if we are to control inflation, and if there is widespread acceptance of the idea that we need to rationalise incomes for a more just society, it seems to me that we must have a very specific, measureable and obvious prices control policy. Can we otherwise have the effrontery as a Government, as a Parliament, as a society, to say to one section of society, the wage earners, "We expect you to submit to what we define as the national interest"? Unless we can prove that the Government are willing to act directly on prices, and enforce legally counter-inflationary measures, we are not going to command the support required for an amicable prices policy.
  What I am pressing for is a massive extension of public accountability by the privote sector. We have that accountability in the public sector already, with price restrictions on the nationalised industries, so that we shall have under-investment in nationalised industries, which may suit the book of some people when they go into Europe. We have to challenge the presumptions of private interest, we have to make a direct offensive against financial orthodoxy and control prices in the private sector before we can go to the wage earners, whether inside the trade unions or outside them, and ask for their support for a rationalised incomes policy.
  8.44 p.m.
  Mrs. Jill Knight: We are debating the Bill because of the collapse of the Downing Street talks. The general public have noted and understood completely why they collapsed, and the general public completely accept the view that the trade unions leaders' Sticking point—that a prices freeze should be imposed but no wage freeze contemplated—is not only irrational and unjust but would have totally failed to correct our economic ills. My right hon. Friend the Chancellor of the Exchequer this afternoon claimed to have widespread good will for this Measure, and I am solutely certain he is right. The public are very well aware of how necessary it is, and they entirely support this Measure.
  Mr. Alec Jones: How does the hon. Lady know?
  Mrs. Knight: They support it at the moment.
  I will explain precisely why it is extremely difficult for some of us who believe to the very core in freedom to support a Measure of compulsory restriction such as this. We believe in freedom. The Leader of the Opposition, with his customary paucity of charm, this afternoon spoke bitterly about the way in which our party is now forced to do something which is against its very basic nature. It is very strange that the Labour Party, which apparently believes all the way along in compulsory controls of this kind, does not support the Bill.
  Our only reason for putting forward the Bill now is that the country desperately needs to have inflation checked. It is nothing to be ashamed of that we should have believed for so long that it could not be possible that people were so stupid as to fail on voluntary restraint, but the result is that we have now reached a point where something such as we now propose must be done for the sake of the country. But the Labour Party cannot do it—oh, dear me, no! Never mind the country, never mind that Labour was always in favour of it before, the Opposition cannot do it tonight.
  In spite of the failure of the Downing Street talks it is important to note that many trade union leaders are far too moderate and sensible to satisfy a section of the men they lead, and a section which bitterly attacks trade union negotiators. For instance, the power union negotiators were recently attacked for settling at around 7¾ per cent. The people in this section engage in detailed and long-term planning for subversion. Names have been asked for and I am happy to supply them. There is a gentleman called George Wake, who leads the Communist-controlled power workers. There is Wally Preston, who is something called an International Socialist. I gather that an International Socialist is to the left even of the Communist Party and the Labour Party in this country. He has a perfect right to follow his own bent in his political convictions, but as an AUEW shop steward he uses his political affiliations very much to the country's detriment. [Interruption.]
  We talk about trade union leaders and the tiny section in the unions who are

  1117
  very far out to the left—[Interruption.] Far too many in that section are shop stewards. The ordinary trade unionist is a perfectly decent and reasonable chap [Interruption.]
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. If those hon. Members who still wish to speak are to be able to speak, it would be best if we allowed the Member having the Floor to carry on speaking.
  Mrs. Knight: Neither the trade union leaders nor the section of whom I have been speaking can get anywhere without the support of the main, moderately-minded body of trade union members. I therefore suggest that one very important step which private enterprise company chiefs could take, which might prove a vital check on the activities of the troublemakers in our factories—
  Mr. Buchan: Shoot them.
  Mrs. Knight: As I was saying, the ordinary trade unionist is a decent and reasonable chap but he suffers too often from the general delusion, which management often helps to perpetuate, that he is not getting his fair share of the profits made by the company he works for. Most trade unionists recognise that there are people outside their orbit who have no connection with them at all. We might just as well talk about the money earned by pop signers as that earned by members of the Bar, to whom the hon. Member for West Ham, North (Mr. Arthur Lewis) referred.
  But our ordinary chap knows that what matters to him is the company for which he works. He thinks that he is not getting a fair share of the profits made by that company because, in almost every case, the company does not say what the profits are. An American management consultant, a Mr. John Jennings, has not only done a good deal of statistical work which proves that point: he has followed the concept of telling all in two companies in America and the result has been dramatic.
  The polls show that ordinary Americans believe that workers get only 25 per cent. of the income divided between gross wages and net profit. In fact, employees receive 90·7 per cent. of the income divided between them and
  1118
  net profit and 94·6 per cent. of the income divided between them and dividends.
  No such poll has taken place here, but I have found two very interesting sets of statistics from the International Labour Office which show—I will not refer to them other than briefly, because of the time—that of 20 major countries in 1958, the United Kingdom was top of the league as regards the participation of wages and salaries in the national income, with 73 per cent. paid. More recent figures show that we pay out more of our profits than almost any other country.
  Why is this such a secret? There should be much more publicity now on profit margins. Possibly it may frighten investors, but publicising these facts might ensure fewer strikes. The ordinary trade unionist is not a fool. He knows that if there is one cake, there is a limit to the amount of cake he can have; and if it goes on increasing and eating into profits, the baker dies and the firm goes out of business, as has happened many times in the last six or seven years in my city of Birmingham. While the investor may be initially frightened off, if the number of strikes were to decline this would encourage him to invest.
  The Bill will be judged not only on its success in holding back prices but also on the availability of goods and services at the end of the period and on the trend of production and employment. Too much has been said about prices alone. More than simply prices is at stake here. I wish my right hon. Friend the success he deserves with the Bill. He has had a difficult task in putting it through and bringing it before the House, but for all our sakes he must succeed.
  8.55 p.m.
  Mr. Ray Carter: If I sound partisan and prejudiced in my few introductory remarks I shall have achieved my object. In March, 1968, I fought a by-election. On that day in March, 1968, there were three other Labour candidates fighting by-elections, in Acton, Meriden and Dudley. During our campaign and the period running up to those elections we were subjected, as candidates, as my party was similarly subjected, to vilification and

  1119
  abuse of a kind which has been completely absent concerning the present Government when introducing legislation similar to that introduced by a Labour Government and for which they were criticised so bitterly and unmercifully by almost everyone now on the Government side of the House, in particular the Prime Minister, and including the hon. Member for Birmingham, Edgbaston (Mrs. Knight).
  Mr. William Price: Where is the hon. Lady?
  Mrs. Knight: Here.
  Mr. Carter: I want briefly to expose the double standards of not only the majority of Conservative hon. Members but the Press, the experts and the commentators. It was very popular baiting in the days of a Labour Government to attack the then Prime Minister and Cabinet Ministers, the whole party, on almost every issue. As an incomes policy became more and more unpopular, so it was criticised on that count, too. There was a gradual move of support towards the then Tory Opposition's claim to be able to solve the problems of inflation without an incomes policy. I am glad that the hon. Member for Edgbaston is still present. I can remind her before she leaves the Chamber that it was in our fair city of Birmingham on 5th June in the election campaign of 1970, that the Leader of the Tory Party, now Prime Minister, repeated what he had said four years earlier about his attitude in particular and the Tory Party's attitude in general towards the question of a freeze. He said then:
  "We believe that compulsion is wrong and we want to move along the path of voluntary action, of consultation, of encouragement for the individual"—
  Mrs. Knight: Hear, hear.
  Mr. Carter: The right hon. Gentleman continued:
  "to do his best and to get the rewards for doing it."
  What is more, in the election manifesto, the front page of which was signed by the right hon. Gentleman, it was said that Labour's compulsory wage control was a failure.
  Mrs. Knight: Quite right.
  Mr. Carter: The manifesto also said:
  "We shall not repeat it."
  Anyone who has listened to the Prime Minister in his interjections today, who has watched him as I watched him from the Opposition back benches, he sitting and smirking on the Government Front Bench, gaining the support, as he has, of his hon. Friends on the Government back benches, cannot but be thoroughly disturbed, for a variety of reasons.
  It is no good day for politics or democracy when a Prime Minister who was responsible for saying in Birmingham what I have just repeated and for making that statement in the election manifesto can continue to evade both what he said and the intent that lay behind it, and now suggest that the policy he is introducing is in strict conformity with all of his past utterances. But he is not alone in all this. All the experts I have mentioned, the commentators and people in the City, people in the background, have similarly performed all kinds of gymnastics in support of the Prime Minister and the Tory Party.
  It is no surprise to me that with that kind of political action going on there is so much cynicism and disquiet outside about politics and the role of Government in general. Is it not possible any more in political life for the Prime Minister of the day, when taking a monumental decision like this, to admit that he was wrong? On all the evidence we have before us such as what the Prime Minister said in the past, that is precisely what the Prime Minister should do today. He would probably get much more support in the House and outside if he did so, because it is time that politicians of both parties, the House and Governments started to be honest with the electorate. Many of our problems stem from the fact that the parties, the House and Governments have not been anything like honest enough.
  I take my political life back to the days of Suez, when the country was put from that moment onwards on a completely different and changed course. The country was never made aware of what the new course was. We were asked from 1956 onwards to change our economy from one based on a world-wide cheap market to one moving closer and closer towards the highly industrialised modern

  1121
  markets of Europe. We have had to change all our economic life and all our social customs and habits in the space of 15 years. Both political parties have been wedded to the single doctrine of changing Britain's rôle in the world.
  My Chief Whip is now asking me to conclude, so I will truncate my speech.
  It is high time for at any rate my generation, because perhaps it is too late for the Prime Minister's generation, to be absolutely honest and square with the British public and to tell the public that times are difficult but times may yet get even more difficult. That is probably the biggest danger about the Bill. The implication is that after 90 days inflation will probably have gone away and after 150 days it will certainly have gone away. I do not believe that. I believe that we are in for a far worse time when we are in the Common Market, when we are paying high prices for imported goods, when we are importing expensively, and when we have lost all those cheap raw materials and cheap foods. Then we shall start to pay the price of a change in economic direction.
  It is misleading and dangerous for us to pretend that the Bill is a short cut to success. I have no qualms about the Tory Party suffering from it. My one big fear is that it will not be just the Tory Party that will suffer. It will be the House and the whole party political system that we have built up over the last 70 years.
  Finally, taking my inspiration from the right hon. Member for Barnet (Mr. Maudling) and my hon. Friend the Member for Salford, West (Mr. Orme), I believe that in 1972 and for the rest of the decade what we must do in Britain and probably in the whole of Western Europe is to work out a new form of social contract, a new form of relationship with people outside Government and with the institutions that have been build up over the past 50 or 60 years.
  Until that is done there will be no chance of success for any form of incomes policy, voluntary or statutory. It would not have mattered one jot if at the tripartite talks last week success had been achieved around the table, because things have changed so much in society that the words of trade union leaders, the CBI and the Government do not mean as
  1122
  much now as they did 25 years ago. I know, I think that the House knows, and I think that the Government know that people outside are not prepared to give up the standard of living that they have won over the past 25 years and that they would by themselves have fought to maintain it. Therefore, any agreement that might have been arrived at would not have been worth the paper it was written on.
  I hope that the Government learn during the course of the next 150 days that the kind of agreement which they tried to force on the trade unions was not worth the discussions that went on. What we must do in the remaining years of this Government is to work out some new form of social contract which will make an incomes policy realisable, viable and attractive to the country.
  9.5 p.m.
  Mr. Douglas Houghton: I am obliged to my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) for his courtesy in giving way to me. I apologise also for the sepulchral tone of my voice. I will, however, do my best.
  This is really the end of a three-day debate on the Bill. It has been under discussion ever since the Prime Minister's statement on Monday. I think that the Government have had no better time than they expected to have in the course of this debate. The full implications of the present predicament of the Government will not be lost upon them when they come to see what road they have trodden since they were elected in 1970. This Bill is a symbol of political failure. I doubt whether there is any real disagreement about that in any quarter of the House. It deals with the collapse of the Government's policies.
  Monday was a day of humiliation for the Government, and not a very proud day for Britain either. Two years ago the Conservatives came to office full of confidence. They were riding high. They had made the most of Labour's mistakes and difficulties and had persuaded the people that the Tory way would be the better way. There was to be a new style of government. Things were going to be different—no somersaulting, no standing on one's head, no sword-swallowing.

  1123
  It was going to be resolution, determination, no deviation, straight on to the end of the road. That was the style of government that was promised in 1970. Now, after two years, the Bill marks an attempt to meet lamentable failure.
  What has brought this about? Is there one thing more than another, or perhaps more than all others, that accounts for the Government having suffered such a great fall? I think there is. It is the alienation of the workers and their families throughout the land. That really is the root of their failure. In my long life in politics I have never known a Government so disliked and even hated by large sections of the community as the present Government. One has only to move in Labour circles throughout the constituencies, and in the unions, to feel the full impact of this strong feeling of indignation and anger about this Government—a Government who were going to unite the nation. But much has divided it. There is little common ground in politics today. The consensus has been destroyed.
  The Government started off in what I would describe as Conservative Party jackboots. The trade unions were to be put in their place. That was the beginning. Then the social benefits, rents and school meals were to be drenched with a lot of means tests, and the Government's philosophy on the social services was to be put into operation very speedily after they came into office, without counting the cost in the morale and attitude of the people.
  Two nations have emerged. We are now paying a very high price for the arrogant blunders of the first 18 months of Tory rule. They learned nothing from Labour's troubled involvements in industrial relations. Those involvements should have been a lesson to them if nothing, else was. But no, the Tories knew better. They knew better than Donovan and they knew it all. I recall the legend over the entrance to the headquarters gymnasium at Aldershot which is relevant to the present situation. It says:
  "Be not wise in your own conceit there is more hope of a fool."
  The Government should take note of that legend.
  I shall not dwell on what has happened since. What is relevant to the Second Reading of the Bill is that the Govern-
  1124
  ment by their policies over a wide front of social affairs hacked away at the very foundations of successful economic management. They thought that they could rule without consent of the people or the workers and their families. Within two years the Government needed to curry the co-operation of the TUC and had to ask for it in the middle of the chaos produced by the Industrial Relations Act.
  No one can blame the TUC for the breakdown of the talks after 40 hours. Large numbers of people in the trade union movement and in the Labour Party felt that the TUC should never have supped with the devil, however long the spoon. The talks broke down because the Government had so fouled the field of negotiation with objectionable policies and legislation that, failing the reversal of much of what the Government had done, the TUC would have been repudiated by many of its members if it had reached agreement with the Government on restraint in pay increases. That is why the Government's final proposals fell short of what the TUC was willing to present to its members.
  The Trades Union Congress went a long way in the negotiations if what we heard was true. It appears to have been willing at one stage to proceed with the talks on the basis that the Government intended to have either a voluntary system supported by statutory sanctions or a statutory policy right across the board. Although the TUC did not make a direct choice between the two, I understand that it proceeded with the negotiations on the basis that those propositions were before it. It was an earnest of the TUC's desire to explore the possibilities of agreement fully that it went as far as it did.
  It appears, however, that some of the main planks in the TUC case were not negotiable. They were negotiable only in dealing with their effects. They were not negotiable in dealing with them as such and that is why the TUC found itself in an impossible position. Such things as the upward movement of rents, taxation reliefs for the better-off and pension increases across the board were the things to which the TUC attached great importance.
  The next Labour Government will have a good deal of cleaning-up to do.

  1125
  We have given a pledge to the TUC that we shall sweep away the obstacles to co-operation put there by the Tory Government. When we have done that I am sure we can get a sensible and lasting accord with the trade unions, which is what the Government lack because they deliberately chose to attack them. We in the Labour Party must work to formulate our policies in line with the aims and hopes of the trade unions for their members, for other workers and for society as a whole. The right hon. Member for Barnet (Mr. Maudling) said that the Government must get the answer right this time. To get the answer right they must start right, and that is what he next Labour Government will do. If we can achieve that, we shall ensure the sustained confidence and support of the trade unions, and that is the best kind of prices and incomes policy of all. It is the one which we are now working hard to get.
  But, by contrast, the Government, like a mule in blinkers, have landed in the ditch and now they are asking Parliament to bale them out. They have no one to blame but themselves. The management of the economy is the Government's business. In a free enterprise system they must reckon with market forces and the impetus towards the maximisation of profits, gains and rewards. This is where we come very near to the basic weakness of the Government's case. My hon. Friends the Members for Salford, West (Mr. Orme) and Edmonton (Mr. Albu) referred to the mainspring of all capitalist activity and its consequences if there were not considerable disciplines and changes in the structure of society to civilise the capitalist system. Left to itself and to regulate itself, free enterprise can play havoc with social justice and contentment as well as with economic advance.
  We all surely know our industrial and economic history by now: unbridled capitalism has no place in a civilised society today, and hon. Members opposite must accept that. It needs Governments to make it work. It needs guidance, regulation, control, monetary policy, taxation policy and social policy. One of my constant remarks during the period of the Labour Government was that no Government of any political complexion previously had paid so much money to make British capitalism work. Controls are essential, but the indispensable condi-
  1126
  tion of a well-managed economy is cooperation not only of the people at large but with other centres of economic and industrial power.
  The Government were indifferent to cooperation in the early part of their rule. They did not care about it until they needed it badly, and then they became almost suppliants at Congress House to seek the willingness of the TUC to discuss inflation. The Government failed in some of the elementary lessons of their own philosophy, and hence the Bill.
  We on these benches cannot let the Bill go unchallenged. To acquiesce would be to accept the Government's explanation of the breakdown of the talks, which places a responsibility on the TUC which it does not deserve and which is against the evidence of facts and circumstances of what happened last week. Moreover, the discussions could have been started much earlier without any atmosphere of crisis. They were not started earlier because the Government, by their action towards the unions, had made it impossible to get their co-operation earlier and they had to leave it until some of the anger and indignation of the trade union movement at the Industrial Relations Act began to simmer down. They made it impossible to get the co-operation of the trade unions when much earlier meetings with them would have been more fruitful.
  As it was, the talks took place in an atmosphere of crisis. They were dramatised. News bulletins were broken into to give a news flash that the talks were still going on. One would have thought that it was a matter of peace and war. Why was it necessary for the Government and the two other parties to sit up half the night to discuss inflation which everybody had seen coming for the prevous two years? This is a condemnation of the Government's approach to this matter.
  Because the Government estranged the unions when they needed them most, they made a belated start on trying to find the remedy, and we cannot support a Measure conceived in folly and born in desperation, because the truth is that the Government do not know what else to do. The Government are desperate and the Bill is a sign of desperation. Nor can we form with the Tory Government a coalition of failure—[Laughter.] Of course we cannot join in a coalition of failure. No self-respecting political party would

  1127
  be seen in coalition with the present Government on anything at present, because their failures stretch far beyond their economic management.
  We have heard some comments in this debate about what the Bill seeks to do. What is certain is that it will stop the agricultural workers in their tracks; badly needed increases of pay will be postponed. The lower-paid workers, who were said to lie heavily on the conscience of the Government throughout the talks, and for whom special and novel proposals were made, are now to be denied these increases for another 90 days. Those increases are not now to be paid. Apparently, the lower-paid workers were only to be relieved of their poverty if the TUC could agree to a voluntary package deal of wage restraint. Failure to reach agreement with the TUC on that matter is to be followed by deprivation of the very people whom the talks were intended primarily to help. This is a disgraceful consequence of the talks which broke down last week.
  I wonder how many millions in wages will be lost to how many millions of workers during this period of freeze. Large amounts of wages will have gone for ever, and wages council awards will be suspended for the remainder of the freeze. How many grievances, comparative injustices and anomalies will have to fester throughout the whole body politic, not only terms of wages, until the time is up and something else takes it place or the explosion follows?
  It can be seen from the remarks of Mr. Jack Jones at a luncheon today, which was "on the record". that the trade unions
  "… will campaign against the injustices of the Bill. They will multiply as people examine the full consequences of what will happen to them."
  Mr Jones also said,
  "The trade unions will press the claims of the pensioners and for a thaw for the lower paid workers."
  All this has come to the Government as a result of the Bill.
  What administrative nightmares this will create! The Bill's provisions will be littered with loopholes and riddled with petty evasion and avoidance of one kind or another. Moreover, who will reap the harvest in the appreciation of assets and
  1128
  bonus shares which will follow? My hon. Friend the Member for Renfrew, West (Mr. Buchan) referred to this matter, and the truth is that there is no fairness in this Bill and that most of it is rough and ready injustice.
  We must face a few fundamental truths about the British economy. [HON. MEMBERS: "Hear, hear."] I am glad to hear that response, because I hope that what I am about to say will be equally warmly received. How can the incomes problem be solved here or anywhere else without a radical change in industrial ownership? It is not work but ownership that pays off in a modern industrial state.
  Mr. Hooson: I agree with the hon. Gentleman, but can he say why the Labour Government did not do this?
  Mr. Houghton: When a Labour Government have been as long in office as Tory Governments they will do a great many more things [Interruption.] It is all very well for right hon. and hon. Gentlemen opposite to scoff, but they know the limitations of the parliamentary process, whatever Government are in office. We know that all Governments have positive queues of changes that they wish to make for which there is not time or opportunity or where circumstances are not available to enable them to carry out all of their programmes. After all, why are the Tories at present engaged in reversing some of the things that they said they would do?
  What is very much more important is what is to happen in phase 2. That is really what the Government have to tell us very soon. If there is to be a resumption of talks with the TUC—I am not sure that that will prove possible in the near future—and it comes to a further package deal, it seems plain that the trade unions will not be able to negotiate on wages and prices in isolation. They will want to bring in, as they did before, the whole range of social and fiscal policies, and that will take everyone back to No. 10 Downing Street.
  When the talks were broken off, time began to run against the Government, and time is already running out. The Government should have worked out their long-term programme before now.

  1129
  We on these benches hate inflation just as much as anyone else. It is the poor, the lower-paid and those unable to defend themselves who are the victims of inflation. There are many right hon. and hon. Members opposite who have their own hedge against inflation. There are a lot of people who have a hedge against inflation. But there are millions who have no hedge against inflation, and it is they whom we must protect.
  We want inflation halted. But the Government have chosen their way of tackling the problem and, therefore, it is their responsibility. Although we dissociate ourselves from what they have done and the consequences of their culpable failure, we are not dividing the House on the pressing need to combat inflation by more effective and fairer means. However, we must decline to give existing Government policies our endorsement, so we shall vote against the Bill. The counter-inflationaries opposite have forfeited the confidence of the House and the nation. It is on that that we shall divide the House.
  9.27 p.m.
  The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): As the right hon. Member for Sowerby (Mr. Houghton) pointed out, the debate has ranged widely beyond the provisions of the Bill. It has been a continuation of the debate that the House concluded yesterday, and various hon. Members on both sides have attempted to discuss and to probe the causes of the present situation.
  To hear the right hon. Member for Sowerby discussing it with the bland innocence that he always brings to these occasions makes one almost forget the extent to which he was a member of a Government which grappled with this kind of problem and failed at the end of the day to secure the agreement which he now enjoins the present Government to secure. It also makes one almost inclined to forget the circumstances in which the Labour Government left office and their responsibility for the inflationary conditions which then afflicted the British economy.
  Understandably a number of my hon. Friends, including my hon. Friends the Members for South Angus (Mr. BruceGardyne) and for Aylesbury (Mr. Raison),
  1130
  have discussed the longer future and that which is to come in the second phase of this exercise. However, it is important that the House should put in perspective the exact limits of the important undertaking upon which we are engaged. Those limits are set first by the objectives which have been agreed as the foundation of the talks which have been taking place over the last three or four months. These are objectives of faster growth in national output and real incomes, an improvement in the relative position of the lower-paid and moderation in the rate of cost and price inflation.
  Those are objectives which everyone is determined to pursue. They were pursued in the talks, and to the deep regret of my right hon. Friend the Prime Minister, as he expressed it on Monday, and many others the talks broke down. In those circumstances there can be no doubt that it is for the Government to take the action needed to secure the objectives upon which agreement had been reached. To ensure that the fulfilment of those objectives is not prejudiced in the meantime, the Bill is designed to secure an immediate standstill, with a limited number of exceptions across the board, in prices, rents, dividends and pay. It is designed to provide a breathing space for the definition of a rational approach to the problem of inflation, which we are all agreed must be tackled. No one has criticised these objectives at which we are now aiming.
  The discussion has tended to go beyond the limits of the Bill, dealing with how, in the long term, we must hope to achieve these objectives. There has been no dissent from the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), the hon. Member for Edmonton (Mr. Albu) or the hon. and learned Member for Montgomery (Mr. Hooson) about the absolute necessity to introduce policies which will combat inflation in the interests of the nation as a whole. Some of my hon. Friends, including my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) have been privileged to speak from a position in which they have been consistent in their pursuit of that objective.
  The whole House, if I may say so, has been privileged to hear the speech of my right hon. Friend the Member for

  1131
  Barnet (Mr. Maudling). He has lived longer and more closely with this problem than most of us. His speech was as lucid and as distinguished as it was characteristic, and he pointed out the extent to which we often fail to appreciate the degree to which the living standards of our people, in the European context or a wider context, have under successive Governments been falling behind. He pointed out, and of this there can be no doubt, that this time we must get it right. He had something to say too—
  Mr. Arthur Lewis: Where has he been all night?
  Sir G. Howe: —on the argument dealt with by a number of hon. Members, namely the extent to which monetary policy can or should be regarded as playing a rôle in the longer term. My right hon. Friend the Chancellor of the Exchequer dealt with that in the course of what he had to say yesterday and returned to the subject again today.
  One thing which my right hon. Friend the Chancellor emphasised yesterday and on which a number of my hon. Friends laid stress today was this:
  "There are those who seem to argue that a more restrictive monetary policy should be the principal means of controlling inflation. It is all a matter of degree. Monetary policy has a major rôle to play in the battle against inflation. Sometimes people talk as though it should be the principal means of controlling inflation, and I ask them whether they are prepared to accept the consequences—the consequences in terms of demand that would be cut back, the consequences of terms of output that would be forgone, the consequences in terms of lower living standards, the consequences in terms of the men and women who would be out of work; because these in fact would be the results."
  Those were the points pressed by my right hon. Friend—
  Mr. Arthur Lewis: Where is he?
  Sir G. Howe: —when he said quite clearly that we cannot set about dealing with cost inflation by a contraction of the money supply. It is some comfort to find the same view expounded in the closing pages of the book by Professor Hayek "A Tiger by the Tail." There is a wide degree of opinion which makes the same point. Against that background my right hon. Friend made his position
  1132
  clear yesterday and today when he referred to the progress that had already been made in restraining the growth of money supply and said:
  "I shall not hesitate to take further action if and when the position requires it."—[OFFICIAL REPORT, 7th November. 1972; Vol. 845, c. 848–50.]
  Again for the benefit of those who were not in the House at the beginning of today's debate, my right hon. Friend the Chancellor of the Exchequer came back to the same point when he said "I can assure the House that the firm action that we have taken to curb cost inflation will be matched by equally firm action to contain the money supply without curtailing economic growth."
  Bearing in mind the limited, specific, temporary purpose of the Bill, its provisions are well designed for their purpose. They are tough, certainly, but in the context of these temporary measures the need for such an approach is well understood; and they are not only tough, but they are fair, and as fair as they can be made.
  Perhaps I may begin by dealing with prices. The way in which the standstill on prices will be handled—
  Mr. Neil Marten: I am grateful to my right hon. and learned Friend for giving way. As he knows, many of us in the House attach the highest importance to honouring election pledges. Would he, therefore, give an assurance that if the Government get the Bill, after Stage 1 they will honour their election pledge about utterly rejecting compulsory wage control?
  Sir G. Howe: My right hon. Friend the Prime Minister made the position clear on that on Monday. He said then:
  "We have come to the conclusion that we have no alternative but to bring in statutory measures to secure the agreed objectives of economic management in the light of the proposals discussed in the tripartite talks."
  He also said:
  "I therefore hope that this set-back will not be allowed to stand in the way of our resuming discussions between the three parties in due course on the objectives and problems of economic management."
  He made it plain that that was the objective of the second phase, after the first phase had been put into effect as quickly as possible.
  Mr. Harold Wilson: In his broadcast on Monday night the Prime Minister—wherever he may be now—referred to further legislation. Is it the Government's firm intention to follow this standstill Measure, as the right hon. Gentleman called it, by further legislation, or is the Prime Minister still hoping for a voluntary agreement which would obviate the necessity for further legislation when the Bill comes to an end, if it is passed by the House?
  Sir G. Howe: I repeat what I said to my hon. Friend the Member for Banbury (Mr. Marten). The Prime Minister made it perfectly clear that he was anxious and willing to renew and continue the discussions between the three parties in due course, but he also said
  "The responsibility for action now rests with the Government. We have come to the conclusion that we have no alternative but to bring in statutory measures to secure the agreed objectives of economic management in the light of the proposals discussed in the tripartite talks."
  My hon. Friend went on to say:
  "The measures will take time to work out in detail and to implement. In order that the fulfilment of the objectives should not be prejudiced in the meantime, the Government propose to introduce tomorrow an interim Bill."
  The answer to the right hon. Gentleman's question is as I have read it. If the right hon. Gentleman has not understood it after I have read it out, I am sorry.
  Mr. Harold Wilson: I am grateful to the right hon. Gentleman for giving way. I was interrupted six times by the Prime Minister, who does not even attend this debate. At the end of this period will there be legislation in any case or will the Prime Minister be prepared to have a voluntary agreement if such an agreement can be reached? The quotation did not answer my question. Will the Prime Minister accept a voluntary agreement if he can get one, or must it be legislation?
  Sir G. Howe: I repeat what I have said. My right hon. Friend the Prime Minister made it perfectly clear that he was anxious to resume discussions between the three parties. But in the context of the passage which I have just read, and I read it again—[Interruption.] Almost everybody else has had no difficulty in understanding it but I will read it again:
  1134
  "We have come to the conclusion that we have no alternative but to bring in statutory measures …".—[OFFICIAL REPORT, 6th November, 1972; Vol. 845, c. 626–7.]
  It is in the context of that statement that the Prime Minister went on to explain in the next paragraph the need for the introduction of an interim Bill. The right hon. Gentleman has heard the Prime Minister say it and he has heard me re-expound it. I have nothing to add to that perfectly clear statement.
  Sir Harmar Nicholls Sir Harmar Nicholls (Peterborough) rose—
  Sir G. Howe: As regards prices—[HON. MEMBERS: "Give way."] My hon. Friend knows that I am normally courteous in giving way both to him and to other hon. Members, but I must get on.
  The general principle is that prices are to he held at their pre-6th November level. Retailers are expected to do everything they possibly can to avoid any increases in prices. In particular, retailers should not increase their cash margin in money terms on the item in question. Enterprises which are confronted with either rising import costs or rises in domestic costs will need to obtain consent or run the risk of having price increases reversed by notice or order under the legislation. Any proposals or applications which are made will be strictly scrutinised. Agreement will not normally be given except where increased costs cannot be absorbed by increased productivity or a temporary reduction in profit margin.
  Mr. Heffer Mr. Heffer rose—
  Mr. Buchan Mr. Buchan rose—
  Sir G. Howe: The choice overwhelms me. Of course the enterprises which have already subjected themselves to 15 months of price restraint have problems. Manufacturers likewise will be expected to do everything they possibly can to absorb cost increases. If price rises occur which cannot be justified, manufacturers may be required by notice or order to reduce prices.
  Mr. Heffer Mr. Heffer rose—
  Sir G. Howe: Retailers may similarly be required to reduce their prices if they increase their cash margins.
  Mr. Heffer: As the right hon. and learned Gentleman explained earlier, the agricultural workers will be caught by the freeze. Can the Government give an assurance that during the freeze the prices of British farm products—I am not talking about products coming in—will remain stable and not increase, since the agricultural workers' wages are not going up during this period?
  Sir G. Howe: The hon. Gentleman knows perfectly well that products which are subject to market variations in prices under these proposals, and in exactly the same way as the proposals produced in 1966, have to be dealt with differently. Products which do not require to be processed—
  Mr. Buchan Mr. Buchan rose—
  Sir G. Howe: The position is precisely the same in relation to prices of that kind. The prices for fresh food, fruit and vegetables are subject to fluctuations arising from external or seasonal causes. They are dealt with in the White Paper in exactly the same way as they were dealt with in paragraph 4 of the 1966 White Paper, which expressly made plain that commodities, where price changes arose from changes in supply for seasonal or other reasons, had to be dealt with differently. The only difference between the last Government's White Paper and our own is that theirs had to make an additional qualification and say that they could not guarantee the consumer against price increases
  "which are due to action by the Government such as increased taxation"
  There is no question of any necessity for that kind of provision in the context of our proposals.
  Mr. Thorpe: The right hon. and learned Gentleman knows our position on the present Bill and the position which we took in relation to the Labour Government's policy. Since he has compared the two White Papers, could he give a little more indication of the Government's thinking? Did they Tory Opposition oppose the Labour Government's policies because they did not like the detail, or on principle; and have the Government delayed in taking this action for two and a half years because they could not work out the detail or because they did not like the principle, or both?
  Sir G. Howe: No, the right hon. Gentleman has not made quite so penetrating a point as he often makes. It has been made perfectly plain by my right hon. Friends both in the last Parliament and in this that voluntary agreement is far to be preferred as a way of approaching this kind of problem. It is for precisely that reason that the whole country has supported and hoped for success in the long discussions which my right hon. Friends have undertaken over the past three and a half months. Plainly that is the way in which, if it were at all possible, the Government would have preferred to solve the problem. It is only in the circumstances which arose, which were described by my right hon. Friend, that we have taken action, presenting this Bill and the temporary provisions. [Interruption.] I shall not be drawn into dealing yet again with the question raised by the Leader of the Opposition because he has had his answer a great many times already. However, the right hon. Gentleman put certain other questions and I turn to them now.
  The Leader of the Opposition asked about the prices of certain commodities—oil prices, wood pulp prices and the prices of certain other imported products. The OPEC countries have agreed to increase prices of crude oil, and it is true that some of the oil is refined in the United Kingdom. The standstill applies to oil refineries as it does to other manufacturing processes. The oil companies also, as set out in paragraph 5 of the White Paper, would have to make out a case for a price increase in the same way as other manufacturers would, and they would be subject to precisely the same rigorous scrutiny. The same position arises in relation to the price of imported wood pulp. The same requirements would be imposed upon paper-makers as upon other manufacturers to absorb increases of costs to the limit possible, since it must be clear that the standstill applies to price increases in the terms defined in paragraph 5 and it applies even if price increases were announced before 6th November.
  The policy on these matters will be strictly enforced, and the discretion set out in paragraph 5 will be exercised only in accordance with the strict terms there defined.

  1137
  I was asked also about iron and steel prices. The Leader of the Opposition referred to price changes which are due to follow on our moving to the ECSC basing point system. The standstill applies to iron and steel prices, and the British Steel Corporation is aware of this. Obviously we shall be ready to discuss with the Community any difficulties arising from the standstill policy, but the Community countries are themselves faced with the problem of inflation and, as the House knows, they have recently taken certain decisions of an anti-inflationary nature and there is no reason to suppose that partners will not show understanding of our situation.
  Mr. Powell: At this point, perhaps my right hon. and learned Friend could make clear whether the paragraph 4 of the Schedule means that the Bill overrides the provision in the European Communities Bill. Does this for the time being neutralise EEC law as part of the law of this country or not?
  Sir G. Howe: I know that my right hon. Friend put that question to the Chancellor of the Exchequer. The question cannot be posed in such simple terms —[Laughter.]—because, in fact, the answer depends upon a much wider range of facts than the facts to which the question is being applied and than can be embraced in answer to a question put in that form. [Interruption.] I have explained that the question cannot be answered in that way; it depends on the way in which the question would arise.
  I turn to deal with the problem of food prices, about which a number of hon. Members have asked questions. So far as food prices are concerned, as in North America, raw agricultural products were excluded, and are excluded. I have already explained that manufactured foodstuffs will be dealt with in the same way as other manufactured goods. Manufacturers, in other words, are expected to absorb cost increases wherever possible, and prices can be raised only after consultation with the Ministry of Agriculture, Fisheries and Food. Unprocessed agricultural and seafood products give rise to different questions of definition, and the Minister of Agriculture will be prepared
  1138
  to discuss those questions with the trade organisations concerned.
  The right hon. Gentleman the Leader of the Opposition made some suggestion that rises in food prices in recent months and prospectively have been due to the Government's support for agriculture, or to import levies. He also suggested that there was a threat of food price increases because of our accession to the Common Market and the introduction of CAP on 1st January. The fact of the matter is that levy schemes are having virtually no effect on prices level at the present time. High prices of beef are the result of a world beef shortage. No levies have ever been charged on beef and veal. The prospects of levies on cereals are nil. The recent high prices for imported grains reflect particularly the shortages caused by the large purchase by eastern bloc countries. The International Wheat Council has estimated that at the end of this season world stocks will be the lowest for 20 years.
  Of course, the effect and success of the policy will depend upon the extent to which it is supported by voluntary co-operation and by understanding, and it is important to notice the extent to which agreement has already been arrived at between the main trade associations covering manufacturing and distribution of food products, and the trades represented at the meeting with the Minister of Agriculture on the 6th of this month expressed their willingness to co-operate fully in that aspect of the matter. On the same day representatives of the Retail Consortium gave an assurance to my Department that they would urge their members to co-operate fully with the policy in the recognition that it is necessary to secure its objective.
  As the House will know, the prices unit which has been established in the Department of Trade and Industry has been operating effectively since yesterday morning, and it has dealt already, in the two days it has been working, with 800 inquiries yesterday and, with an enlarged office, the same kind of number of inquiries today. Regional offices of the Department of Trade and Industry have also been handling inquiries. It is important to understand that the main purpose

  1139
  of the unit is to provide a service to industry, particularly to small firms and retailers, by explaining how the standstill will affect them. Firms seeking to apply price increases are told what to do, and they are told quite plainly that if the increases are above the pre-6th November level they risk the requirement to reduce them when the Bill comes into force. The prices unit is also assisting the general public by explaining the implications of the Bill and by giving information about the way in which price changes are intended to operate, if at all.
  Again, the Department of my right hon. Friend the Minister of Agriculture, Fisheries and Food has enlarged its food price unit in order to deal with inquiries from consumers, and has been dealing with a steady flow of inquirers seeking clarification of the Government's proposals and with applications for special promotions or particular commodities.
  The right hon. Gentleman asked about the relationship between dividends and deferred dividends in the context of wages of agricultural workers, a subject raised by a number of hon. Members, and of other groups of low-paid workers. It is perfectly plain from what my right hon. Friend the Chancellor of the Exchequer said that the agricultural workers will have the implementation of their agreement deferred to the end of the standstill period. [HON. MEMBERS: "Back dated?"] My right hon. Friend made it equally plain that the award comes into effect at the expiry of the transitional period.
  As the right hon. Gentleman should know better than anyone else, whenever one introduces a change or a standstill of this kind there are bound to be hard cases wherever the standstill starts, and since most groups of workers have links with other groups of workers some links are bound to be temporarily broken. Various examples of this, too, have been given in the debate.
  This is no more than a 90-day standstill, and if there is to be a standstill at all, and that is the intention of the House, we have to defer some increases. The right hon. Gentleman the Member
  1140
  for Sowerby asked by how much wages had been deferred as a result, but it is relevant also to ask by how much more wages would be depreciated and lost and cast away if our prosperity were to continue to decline, and if inflation were to be allowed to roar ahead unchecked.
  The right hon. Gentleman asked how this was to be reconciled with the commitment to look after lower-paid workers in the general strategy. It is to be reconciled because the two operations are distinct from each other. The first is the imposition of a standstill period so as not to lose the opportunity of securing all the longer-term benefits. The longer-term benefits will remain exactly the same, and assistance for the lower-paid workers and, indeed, for the pensioners, remains one of the overriding objectives of the longer-term exercise.
  The application of this stage of the policy will be greatly helped by the recognition by public opinion as a whole, and by the almost overwhelming support of public opinion and of the Press. We are far better able to command that support than was the right hon. Gentleman's Government because the operation is being undertaken in a totally different climate. Instead of being undertaken in an atmosphere of stagnation and rising taxation, it is being undertaken at a time when all the indicators for progress in the economy point in the right direction. [Interruption.] All the recent indicators confirm that we are on target for a 5 per cent. growth rate for the first half of next year.
  My right hon. Friend pointed out the continuing growth of consumer expenditure. Surveys undertaken by the CBI show a high and rising degree of business optimism. Output is rising, and there are new orders. A most encouraging feature is the strong rise in industrial production and its effect on the labour market. We must hope in the end to be able to produce a long-term solution in accordance with long-term objectives. The whole nation knows that we cannot afford to delay such an application of the short-term standstill which is contained in this Bill, and which is essential to the health of the nation.
  Question put, That the Amendment be made:—
  The House divided: Ayes 271, Noes 309.

  Division No. 5.]

  AYES

  [10.0 p.m.

  Abse, Leo

  Evans, Fred

  Mabon, Dr. J. Dickson

  Albu, Austen

  Ewing, Harry

  McBride, Neil

  Allaun, Frank (Salford, E.)

  Faulds, Andrew

  McCartney, Hugh

  Allen, Scholefield

  Fernyhough, Rt. Hn. E.

  McElhone, Frank

  Archer, Peter (Rowley Regis)

  Fisher,Mrs.Doris(B'ham,Ladywood)

  McGuire, Michael

  Ashley, Jack

  Fitch. Alan (Wigan)

  Mackenzie, Gregor

  Ashton, Joe

  Fletcher, Raymond (Ilkeston)

  Mackle, John

  Atkinson, Norman

  Fletcher, Ted (Darlington)

  Mackintosh, John P.

  Bagier Gordon A T.

  Foley, Maurice

  Maclennan, Robert

  Barnes, Michael

  Foot, Michael

  McMillan, Tom (Glasgow, C.)

  Barnett, Guy (Greenwich)

  Ford, Ben

  McNamara, J. Kevin

  Barnett, Joel (Heywood and Royton)

  Forrester, John

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

  Baxter William

  Fraser, John (Norwood)

  Marks, Kenneth

  Beaney, Alan

  Freeson, Reginald

  Marsden, F.

  Benn, Rt. Hn. Anthony Wedgwood

  Galpern, Sir Myer

  Marshall, Dr. Edmund

  Bennett, James (Glasgow, Bridgeton)

  Garrett, W. E.

  Mason, Rt. Hn. Roy

  Bidwell, Sydney

  Gilbert, Dr. John

  Mayhew, Christopher

  Bishop E S

  Ginsburg, David (Dewsbury)

  Meacher, Michael

  Blenkinsop Arthur

  Golding, John

  Mellish, Rt. Hn. Robert

  Boardman, H. (Leigh)

  Gourlay, Harry

  Mendelson, John

  Booth Albert

  Grant, George (Morpeth)

  Mikardo, Ian

  Bottomley Rt Hn Arthur

  Grant, John D. (Islington, E.)

  Millan, Bruce

  Boyden, James (Bishop Auckland)

  Griffiths, Eddie (Brightside)

  Miller, Dr, M. S.

  Bradley, Tom

  Griffiths, will (Exchange)

  Milne, Edward

  Broughton Sir Alfred

  Hamilton, William (Fife, W.)

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

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

  Hamling, William

  Morgan, Elystan (Cardiganshire)

  Brown, Hugh D. (G'gow Proven)

  Hannan, William (G'gow, Maryhill)

  Morris, Alfred (Wythenshawe)

  Brown, Ronald (shoreditch & F'bury)

  Hardy, Peter

  Morris, Charles R. (Openshaw)

  Buchan, Norman

  Harrison, Walter (Wakefield)

  Morris, Rt. Hn. John (Aberavon)

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

  Hart, Rt. Hn. Judith

  Moyle, Roland

  Hattersley, Roy

  Mulley, Rt. Hn. Frederick

  Callaghan, Rt. Hn. James

  Healey, Rt. Hn. Denis

  Murray, Ronald King

  Campbell, I. (Dunbartonshire, W.)

  Heffer, Eric S.

  Oakes, Gordon

  Cant, R. B.

  Hilton, W. S.

  Ogden, Eric

  Carmichael, Neil

  Horam, John

  O'Halloran, Michael

  Carter, Ray (Birmingh'm, Northfield)

  Houghton, Rt. Hn. Douglas

  O'Malley, Brian

  Carter-Jones, Lewis (Eccles)

  Huckfield, Leslie

  Oram Bert

  Castle, Rt. Hn. Barbara

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Orbach, Maurice

  Clark, David (Colne Valley)

  Hughes, Mark (Durham)

  Orme, Stanley

  Cocks, Michael (Bristol, S.)

  Hughes, Robert (Aberdeen, N.)

  Oswald, Thomas

  Cohen, Stanley

  Hughes, Roy (Newport)

  Owen, Dr. David (Plymouth, Sutton)

  Coleman, Donald

  Hunter, Adam

  Padley, Walter

  Concannon, J. D.

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

  Paget R. T.

  Conlan, Bernard

  Janner, Greville

  Palmer, Arthur

  Corbet, Mrs. Freda

  Jay, Rt. Hn. Douglas

  Pannell, Rt. Hn. Charles

  Cox, Thomas (Wandsworth, C.)

  Jeger, Mrs. Lena

  Parker, John (Dagenham)

  Crawshaw, Richard

  Jenkins, Hugh (Putney)

  Parry, Robert (Liverpool, Exchange)

  Cronin, John

  Jenkins, Rt. Hn. Roy (Stechford)

  Pavitt, Laurie

  Crosland, Rt. Hn. Anthony

  John, Brynmor

  Peart, Rt. Hn. Fred

  Crossman, Rt. Hn. Richard

  Johnson, Carol (Lewisham, S.)

  Pendry, Tom

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

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

  Perry, Ernest G.

  Cunningham, Dr. J. A. (Whitehaven)

  Johnson, Walter (Derby, S.)

  Prentice, Rt. Hn. Reg.

  Dalyell, Tam

  Jones, Barry (Flint, E.)

  Prescott, John

  Darling, Rt. Hn. George

  Jones, Dan (Burnley)

  Price, J. T. (Westhoughton)

  Davidson, Arthur

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

  price, William (Rugby)

  Davies, Denzil (Llanelly)

  Jones, Gwynoro (Carmarthen)

  Probert, Arthur

  Davies, G. Elfed (Rhondda, E.)

  Jones, T. Alec (Rhondda, W.)

  Reed, D. (Sedgefield)

  Davies, Ifor (Gower)

  Kaufman, Gerald

  Rees, Merlyn (Leeds, S.)

  Davis, Clinton (Hackney, C.)

  Kelley, Richard

  Rhodes, Geoffrey

  Davis, Terry (Bromsgrove)

  Kerr, Russell

  Richard, Ivor

  Deakins, Eric

  Kinnock, Neil

  Roberts, Albert (Normanton)

  do Freltas, Rt. Hn. Sir Geoffrey

  Lambie, David

  Roberts, Rt. Hn. Goronwy(Caernarvon)

  Delargy, Hugh

  Lamborn, Harry

  Robertson, John (Paisley)

  Dell, Rt. Hn. Edmund

  Lamond, James

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

  Dempsey, James

  Latham, Arthur

  Rodgers, William (Stockton-on-Tees)

  Doig, Peter

  Lawson, George

  Rose, Paul B.

  Dormand, J. D.

  Leadbitter, Ted

  Ross, Rt. Hn. William (Kilmarnock)

  Douglas, Dick (Stirlingshire, E.)

  Lee, Rt. Hn. Frederick

  Rowlands, Ted

  Douglas-Mann, Bruce

  Leonard, Dick

  Sandelson, Neville

  Duffy, A. E. P.

  Lestor, Miss Joan

  Sheldon, Robert (Ashton-under-Lyne)

  Dunn, James A.

  Lever, Rt. Hn. Harold

  Shore, Rt. Hn. Peter (Stepney)

  Dunnett, Jack

  Lewis, Arthur (W. Ham, N.)

  Short, Mrs. Renée (W'hampton, N.E.)

  Eadie, Alex

  Lewis, Ron (Carlisle)

  Silkin, Rt. Hn. John (Deptford)

  Edelman, Maurice

  Lipton, Marcus

  Silkin, Hn. S. C. (Dulwich)

  Edwards, Robert (Bilston)

  Lomas, Kenneth

  Sillars, James

  Edwards, William (Merioneth)

  Loughlin, Charles

  Silverman, Julius

  Ellis, Tom

  Lyon, Alexander W. (York)

  Skinner, Dennis

  English, Michael

  Lyons, Edward (Bradford, E.)

  Smith, John (Lanarkshire, N.

  Spearing, Nigel

  Tinn, James

  Whitehead, Philip

  Spriggs, Leslie

  Torney, Tom

  Whitlock, William

  Stallard, A. W.

  Tuck, Raphael

  Willey, Rt. Hn. Frederick

  Stewart, Donald (Western Isles)

  Urwin, T. W.

  Williams, Alan (Swansea, W.)

  Stewart, Rt. Hn. Michael (Fulham)

  Varley, Eric G.

  Williams, Mrs. Shirley (Hitchin)

  Stoddart, David (Swindon)

  Wainwright, Edwin

  Williams, W. T. (Warrington)

  Stonehouse, Rt. Hn. John

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

  Wilson, Alexander (Hamilton)

  Strang, Gavin

  Walker, Harold (Doncaster)

  Wilson, Rt. Hn. Harold (Huyton)

  Strauss, Rt. Hn. G. R.

  Wallace, George

  Wilson, William (Coventry, S.)

  Summerskill, Hn. Dr. Shirley

  Watkins, David

  Woof, Robert

  Swain, Thomas

  Weitzman, David

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

  Wellbeloved, James

  TELLERS FOR THE AYES

  Thomas, Jeffrey (Abertillery)

  Wells, William (Walsall, N.)

  Mr Joseph Harper and

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

  White, James (Glasgow, Pollok)

  Mr. James Hamilton.

  NOES

  Adley, Robert

  Dixon, Piers

  Howe, Rt. Hn. Sir Geoffrey

  Alison, Michael (Barkston Ash)

  Dodds-Parker, Douglas

  Howell, David (Guildford)

  Allason, James (Hemel Hempstead)

  Douglas-Home, Rt. Hn. Sir Alec

  Howell, Ralph (Norfolk, N.)

  Amery, Rt. Hn. Julian

  Drayson, G. B.

  Hunt, John

  Archer, Jeffrey (Louth)

  du Cann, Rt. Hn. Edward

  Hutchison, Michael Clark

  Astor, John

  Dykes, Hugh

  Iremonger, T. L.

  Atkins, Humphrey

  Eden, Rt. Hn. Sir John

  Irvine, Bryant Godman (Rye)

  Awdry, Daniel

  Edwards, Nicholas (Pembroke)

  James, David

  Baker, Kenneth (St. Marylebone)

  Elliot, Capt. Walter (Carshalton)

  Jenkin, Patrick (Woodford)

  Baker W. H. K. (Banff)

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

  Jennings, J. C. (Burton)

  Balniel, Rt. Hn. Lord

  Emery, Peter

  Jessel, Toby

  Barber, Rt. Hn. Anthony

  Eyre, Reginald

  Johnson Smith, G. (E. Grinstead)

  Batsford, Brian

  Farr, John

  Johnston, Russell (Inverness)

  Beamish, Col. Sir Tufton

  Fell, Anthony

  Jones, Arthur (Northants, s.)

  Bell, Ronald

  Fenner, Mrs. Peggy

  Jopling, Michael

  Bennett, Sir Frederic (Torquay)

  Finsberg, Geoffrey (Hampstead)

  Josepn, Rt. Hn. sir Keith

  Bennett, Dr. Reginald (Gosport)

  Fisher, Nigel (Surbiton)

  Kaberry, sir Donald

  Benyon, W.

  Fletcher-Cooke, Charles

  Kellett-Bowman, Mrs. Elaine

  Berry, Hn. Anthony

  Fookes, Miss Janet

  Kershaw, James

  Biggs-Davison, John

  Fortescue, Tim

  Kilfedder, James

  Blaker, Peter

  Foster, Sir John

  Kimball, Marcus

  Boardman, Tom (Leicester, S.W.)

  Fowler, Norman

  King, Evelyn (Dorset, S.)

  Body, Richard

  Fox, Marcus

  King, Tom (Bridgwater)

  Boscawen, Hn. Robert

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

  Kinsey, J. R.

  Bossom, Sir Clive

  Fry, Peter

  Kirk, Peter

  Bowden Andrew

  Galbraith, Hn. T. G. D.

  Kitson, Timothy

  Braine, Sir Bernard

  Gardner, Edward

  Knight, Mrs. Jill

  Bray, Ronald

  Gibson-Watt, David

  Knox, David

  Brewis, John

  Gilmour, Ian (Norfolk, C.)

  Lambton, Lord

  Brinton, Sir Tatton

  Gilmour, Sir John (Fife, E.)

  Lamont, Norman

  Brocklebank-Fowler, Christopher

  Glyn, Dr. Alan

  Lane, David

  Brown, Sir Edward (Bath)

  Godber, Rt. Hn. J. B.

  Langford-Holt, Sir John

  Bryan Sir Paul

  Goodhart, Philip

  Le Marchant, Spencer

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

  Goodhew, Victor

  Lewis, Kenneth (Rutland)

  Buck Antony

  Gorst, John

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

  Bullus, Sir Eric

  Gower, Raymond

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

  Burden F. A.

  Grant, Anthony (Harrow, C.)

  Longden, Sir Gilbert

  Gray, Hamish

  Loveridge, John

  Butler, Adam (Bosworth)

  Green, Alan

  Luce, R. N.

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

  Griffiths, Eldon (Bury St. Edmunds)

  McAdden, Sir Stephen

  Carlisle, Mark

  Grimond, Rt. Hn. J.

  MacArthur, Ian

  Carr, Rt. Hn. Robert

  Grylls, Michael

  McCrindle, R. A.

  Cary, Sir Robert

  Gummer, J. Selwyn

  McLaren, Martin

  Channon, Paul

  Gurden, Harold

  Maclean, Sir Fitzroy

  Chapman, Sydney

  Hall Miss Joan (Keighley)

  McMaster, Stanley

  Chataway, Rt. Hn. Christopher

  Hall John (Wycombe)

  Macmillan, Rt. Hn. Maurice(Farnham)

  Chichester-Clark, R.

  Hall-Davis, A. G. F.

  McNair-Wilson, Michael

  Churchill, w. s.

  Hamilton, Michael (Salisbury)

  McNair-Wilson, Patrick (NewForest)

  Clark, William (Surrey, E)

  Hannam, John (Exeter)

  Maddan, Martin

  Clarke, Kenneth (Rushcliffe)

  Harrison, Brian (Maldon)

  Madel, David

  Cockeram, Eric

  Harrison, Col. Sir Harwood (Eye)

  Maginnis, John E.

  Cooke, Robert

  Haselhurst, Alan

  Marples, Rt. Hn. Ernest

  Coombs, Derek

  Hastings, Stephen

  Marten, Neil

  Cooper, A. E.

  Havers, Sir Michael

  Mather, Carol

  Cordle, John

  Hawkins, Paul

  Maude, Angus

  Corfield, Rt. Hn. Sir Frederick

  Hay, John

  Maudling, Rt. Hn. Reginald

  Cormack, Patrick

  Hayhoe, Barney

  Mawby, Ray

  Costain, A. P.

  Heath, Rt. Hn. Edward

  Maxwell-Hyslop, R. J.

  Crouch, David

  Hicks, Robert

  Mills, Peter (Torrington)

  Crowder, F. P.

  Higgins, Terence L.

  Mills, Stratton (Belfast, N.)

  Dalkeith, Earl of

  Hiley, Joseph

  Miscampbell, Norman

  Davies, Rt. Hn. John (Knutsford)

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

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

  d'Avigdor-Goldsmld, Sir Henry

  Hill, James (Southampton, Test)

  Mitchell, David (Basingstoke)

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

  Holland, Philip

  Moate, Roger

  Dean, Paul

  Hooson, Emlyn

  Molyneaux, James

  Deedes, Rt. Hn. W. F.

  Hornby, Richard

  Money, Ernie

  Digby, Simon Wingfield

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Monks, Mrs. Connie

  1144

  1145

  Monro, Hector

  Rees, Peter (Dover)

  Temple, John M.

  Montgomery, Fergus

  Rees-Davies, W. R.

  Thatcher, Rt. Hn. Mrs. Margaret

  More, Jasper

  Renton, Rt. Hn. Sir David

  Thomas, John Stradling (Monmouth)

  Morgan, Geraint (Denbigh)

  Ridley, Hn. Nicholas

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

  Morgan-Giles, Rear-Adm.

  Ridsdale, Julian

  Thompson, Sir Richard (Croydon, S.)

  Morrison, Charles

  Rippon, Rt. Hn. Geoffrey

  Thorpe, Rt. Hn. Jeremy

  Mudd, David

  Roberts, Michael (Cardiff, N.)

  Tilney, John

  Murton, Oscar

  Roberts, Wyn (Conway)

  Trafford, Dr. Anthony

  Nabarro, Sir Gerald

  Rossi, Hugh (Hornsey)

  Trew, Peter

  Neave, Airey

  Rost, Peter

  Tugendhat, Christopher

  Nicholls, Sir Harmar

  Russell, Sir Ronald

  Turton, Rt. Hn. Sir Robin

  Noble, Rt. Hn. Michael

  St. John-Stevas, Norman

  van Straubenzee, W. R.

  Normanton, Tom

  Scott, Nicholas

  Vaughan, Dr. Gerard

  Nott, John

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

  Vickers, Dame Joan

  Onslow, Cranley

  Shelton, William (Clapham)

  Walder David (Clitheroe)

  Oppenheim Mrs. Sally

  Simeons, Charles

  Walker, Rt. Hn. Peter (Worcester)

  Orr Capt. L. P. S.

  Sinclair, Sir George

  Walker-Smith, Rt. Hn. Sir Derek

  Osborn, John

  Skeet, T. H. H.

  Wall, Patrick

  Owen, Idris (Stockport, N.)

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

  Walters, Dennis

  Page, Rt. Hn. Graham (Crosby)

  Soref, Harold

  Ward, Dame Irene

  Page, John (Harrow, W.)

  Speed, Keith

  Warren, Kenneth

  Parkinson, Cecil

  Spence, John

  Wells, John (Maidstone)

  Peel, John

  Sproat, Ian

  White, Roger (Gravesend)

  Percival, Ian

  Stainton, Keith

  Whitelaw, Rt. Hn. William

  Peyton, Rt. Hn. John

  Stanbrook, Ivor

  Wiggin, Jerry

  Pike, Miss Mervyn

  Steel, David

  Wilkinson John

  Pink, R. Bonner

  Stewart-Smith, Geoffrey (Belper)

  Winterton, Nicholas

  Pounder, Rafton

  Stodart, Anthony (Edinburgh, W.)

  Wolrige-Gordon, Patrick

  Price, David (Eastleigh)

  Stoddart-Scott, Col. Sir M.

  Woodhouse, Hn. Christopher

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

  Stokes, John

  Woodnutt, Mark

  Proudfoot, Wilfred

  Stuttaford, Dr. Tom

  Worsley, Marcus

  Pym, Rt. Hn. Francis

  Sutcliffe, John

  Wylie Rt Hn N. R.

  Quennell, Miss J. M.

  Tapsell, Peter

  Younger, Hn. George

  Raison, Timothy

  Taylor, Sir Charles (Eastbourne)

  Ramsden, Rt. Hn. James

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

  Rawlinson, Rt. Hn. Sir Peter

  Taylor, Frank (Moss Side)

  TELLERS FOR THE NOES:

  Redmond, Robert

  Taylor, Robert (Croydon, N.W.)

  Mr. Bernard Weatherill and

  Reed, Laurance (Bolton, E.)

  Tebbit, Norman

  Mr. Walter Clegg.

  Question accordingly negatived.
  Main Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 307, Noes 272.

  Division No. 6.]

  AYES

  [10.12 p.m.

  Adley, Robert

  Burden, F. A.

  Eden, Rt. Hn. Sir John

  Alison, Michael (Barkston Ash)

  Butler, Adam (Bosworth)

  Edwards, Nicholas (Pembroke)

  Allason, James (Hemel Hempstead)

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

  Elliot, Capt. Walter (Carshalton)

  Amery, Rt. Hn. Julian

  Carlisle, Mark

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

  Archer, Jeffrey (Louth)

  Carr, Rt. Hn. Robert

  Emery, Peter

  Astor, John

  Cary, Sir Robert

  Eyre, Reginald

  Atkins, Humphrey

  Channon, Paul

  Fan, John

  Awdry, Daniel

  Chapman, Sydney

  Fenner, Mrs. Peggy

  Baker, Kenneth (St. Marylebone)

  Chataway, Rt. Hn. Christopher

  Finsberg, Geoffrey (Hampstead)

  Baker, W. H. K. (Banff)

  Chichester-Clark, R.

  Fisher, Nigel (Surbiton)

  Balniel, Rt. Hn. Lord

  Churchill, W. S.

  Fletcher-Cooke, Charles

  Barber, Rt. Hn. Anthony

  Clark, William (Surrey, E.)

  Fookes, Miss Janet

  Batsford, Brian

  Clarke, Kenneth (Rushcliffe)

  Fortescue, Tim

  Beamish, Col. Sir Tufton

  Cockeram, Eric

  Foster, Sir John

  Bell, Ronald

  Cooke, Robert

  Fowler, Norman

  Bennett, Sir Frederic (Torquay)

  Coombs, Derek

  Fox, Marcus

  Bennett, Dr. Reginald (Gosport)

  Cooper, A. E.

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

  Benyon, W.

  Cordle, John

  Fry, Peter

  Berry, Hn. Anthony

  Corfield, Rt. Hn. Sir Frederick

  Galbraith, Hn. T. G. D.

  Biggs-Davison, John

  Cormack, Patrick

  Gardner, Edward

  Blaker, Peter

  Costain, A. P.

  Gibson-Watt, David

  Boardman, Tom (Leicester, S.W.)

  Crouch David

  Gilmour, Ian (Norfolk, C.)

  Body, Richard

  Crowder, F. P.

  Gilmour Sir John (Fife, E.)

  Glyn, Dr. Alan

  Boscawen, Hn. Robert

  Dalkeith, Earl of

  Godber, Rt. Hn. J. B.

  Bossom, Sir Clive

  Davies, Rt. Hn. John (Knutsford)

  Goodhart Philip

  Bowden, Andrew

  d'Avigdor-Goldsmid, Sir Henry

  Goodhew, Victor

  Braine, Sir Bernard

  d'Avigdor-Goldsmld, Maj.-Gen.Jack

  Gorst, John

  Bray, Ronald

  Dean, Paul

  Gower, Raymond

  Brewis, John

  Deedes, Rt. Hn. W. F.

  Grant, Anthony (Harrow, C.)

  Brinton, Sir Tatton

  Digby, Simon Wingfield

  Gray, Hamish

  Brocklebank-Fowler, Christopher

  Dixon, Piers

  Green, Alan

  Brown, Sir Edward (Bath)

  Dodds-Parker, Douglas

  Griffiths, Eldon (Bury St. Edmunds)

  Bryan, Sir Paul

  Douglas-Home, Rt. Hn. Sir Alec

  Grimond, Rt. Hn. J.

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

  Drayson. G. B.

  Gryils, Michael

  Buck, Antony

  du Cann, Rt. Hn. Edward

  Gummer, J. Selwyn

  Bullus, Sir Eric

  Dykes, Hugh

  Gurden, Harold

  Hall, Miss Joan (Keighley)

  Macmillan,Rt.Hn.Maurice(Farnham)

  Rossi, Hugh (Hornsey)

  Hall, John (Wycombe)

  McNair-Wilson, Michael

  Rost, Peter

  Hall-Davis, A. G. F.

  McNair-Wilson, Patrick (New Forest)

  Russell, Sir Ronald

  Hamilton, Michael (Salisbury)

  Maddan, Martin

  St. John-Stevas, Norman

  Hannam, John (Exeter)

  Madel, David

  Scott, Nicholas

  Harrison, Brian (Maldon)

  Maginnis, John E.

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

  Harrison, Col. Sir Harwood (Eye)

  Marples, Rt. Hn. Ernest

  Shelton, William (Clapham)

  Haselhurst, Alan

  Mather, Carol

  Simeons, Charles

  Hastings, Stephen

  Maude, Angus

  Sinclair, Sir George

  Havers, Sir Michael

  Maudling, Rt. Hn. Reginald

  Skeet, T. H. H.

  Hawkins, Paul

  Mawby, Ray

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

  Hay, John

  Maxwell-Hyslop, R. J.

  Soref, Harold

  Hayhoe, Barney

  Mills, peter (Torrington)

  Speed, Keith

  Heath, Rt. Hn. Edward

  Mills, Stratton (Belfast, N.)

  Spence, John

  Hicks, Robert

  Miscampbell, Norman

  Sproat, Iain

  Higgins, Terence L.

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

  Stainton, Keith

  Hiley, Joseph

  Mitchell, David (Basingstoke)

  Stanbrook, Ivor

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

  Moate, Roger

  Steel, David

  Hill, James (Southampton, Test)

  Molyneaux, James

  Stewart-Smith, Geoffrey (Beiper)

  Holland, Philip

  Money, Ernie

  Stoddart, David (Swindon)

  Hooson, Emlyn

  Monks, Mrs. Connie

  Stoddart-Scott, Col. Sir M.

  Hornby, Richard

  Monro, Hector

  Stokes, John

  Hornsby-Smith,Rt.Hn.Dame Patricls

  Montgomery, Fergus

  Stuttaford, Dr. Tom

  Howe, Rt. Hn. Sir Geoffrey

  More, Jasper

  Sutcliffe, John

  Howell, David (Guildford)

  Morgan, Geraint (Denbigh)

  Tapsell, Peter

  Howell Ralph (Norfolk, N.)

  Morgan-Giles, Rear-Adm.

  Taylor, Sir Charles (Eastbourne)

  Hunt, John

  Morrison, Charles

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

  Hutchison, Michael Clark

  Mudd, David

  Taylor, Frank (Moss Side)

  Iremonger, T. L.

  Murton, Oscar

  Taylor, Robert (Croydon, N.W.)

  Irvine, Bryant Godman (Rye)

  Nabarro, Sir Gerald

  Tebbit, Norman

  James, David

  Neave, Airey

  Temple, John M.

  Jenkin, Patrick (Woodford)

  Nicholls, Sir Harmar

  Thatcher, Rt. Hn. Mrs. Margaret

  Jenings, J. C. (Burton)

  Noble, Rt. Hn. Michael

  Thomas, John Stradling (Monmouth)

  Jessel, Toby

  Johnson Smith, G. (E. Grinstead)

  Normanton, Tom

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

  Johnston, Russell (Inverness)

  Nott, John

  Thompson, Sir Richard (Croydon, S.)

  Jones Arthur (Northants, S.)

  Onslow, Cranley

  Tnorpe, Rt. Hn. Jeremy

  Jopling, Michael

  Oppenheim, Mrs. Sally

  Tilney, John

  Joseph,' Rt. Hn. Sir Keith

  Orr, Capt. L. p. s.

  Trafford, Dr. Anthony

  Kaberry, Sir Donald

  Osborn, John

  Trew, Peter

  Kellett-Bowmen, Mrs. Elaine

  Owen, Idris (Stockport, N.)

  Tugendhat, Christopher

  Kershaw, Anthony

  Page, Rt. Hn. Graham (Crosby)

  Turton, Rt. Hn. Sir Robin

  Kilfedder, James

  Page, John (Harrow, W.)

  van Straubenzee, W. R.

  Kimball, Marcus

  Parkinson, Cecil

  Vaughan, Dr. Gerard

  King, Evelyn (Dorset, S.)

  Peel, John

  Vickers, Dame Joan

  King, Tom (Bridgwater)

  Percival, Ian

  Walder, David (Clitheroe)

  Kinsey J. R.

  Peyton, Rt. Hn. John

  Walker, Rt. Hn. Peter (Worcester)

  Kirk, Peter

  Pike, Miss Mervyn

  Walker-Smith, Rt. Hn. Derek

  Kitson, Timothy

  Pink, R. Bonner

  Wall, Patrick

  Knight, Mrs. Jill

  Pounder, Rafton

  Walters, Dennis

  Knox, David

  Price, David (Eastleigh)

  Ward, Dame Irene

  Lambton, Lord

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

  Warren, Kenneth

  Lamont, Norman

  Proudfoot, Wilfred

  Wells, John (Maidstone)

  Lane, David

  Pym, Rt. Kn. Francis

  White, Roger (Gravesend)

  Langford-Holt, Sir John

  Quennell, Miss J. M.

  Whitelaw, Rt. Hn. William

  Le Marchant, Spencer

  Raison, Timothy

  Wiggin, Jerry

  Lewis, Kenneth (Rutland)

  Ramsden, Rt. Hn. James

  Wilkinson, John

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

  Rawlinson, Rt. Hn. Sir Peter

  Winterton, Nicholas

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

  Redmond, Robert

  Wolrige-Gordon, Patrick

  Longden, Sir Gilbert

  Reed, Laurance (Bolton, E.)

  Woodhouse, Hn. Christopher

  Loveridge, John

  Rees, Peter (Dover)

  Woodnutt, Mark

  Luce, R. N.

  Rees-Davies, W. R.

  Worsley, Marcus

  McAdden, Sir Stephen

  Renton, Rt. Hn. Sir David

  Wylie, Rt. Hn. N. R.

  MacArthur, Ian

  Ridley, Hn. Nicholas

  Younger, Hn. George

  McCrindle, R. A.

  Ridsdale, Julian

  McLaren, Martin

  Rippon, Rt. Hn. Geoffrey

  TELLERS FOR THE AYES:

  Maclean, Sir Fitzroy

  Roberts, Michael (Cardiff, N.)

  Mr. Bernard Weatherill and

  McMaster. Stanley

  Roberts, Wyn (Conway)

  Mr. Walter Clegg.

  NOES

  Abse, Leo

  Benn, Rt. Hn. Anthony Wedgwood

  Buchan, Norman

  Albu, Austen

  Bennett, James (Glasgow, Bridgeton)

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

  Allaun, Frank (Salford, E.)

  Bidwell, Sydney

  Callaghan, Rt. Hn. James

  Allen, Scholefield

  Bishop, E. S.

  Campbell, I. (Dunbartonshire, W.)

  Archer, Peter (Rowley Regis)

  Blenkinsop, Arthur

  Cant, R. B.

  Ashley, Jack

  Boardman, H. (Leigh)

  Carmichael, Neil

  Ashton, Joe

  Booth, Albert

  Carter, Ray (Birmingh'm, Northfield)

  Atkinson, Norman

  Bottomley, Rt. Hn. Arthur

  Carter-Jones, Lewis (Eccles)

  Bagier, Gordon A. T.

  Boyden, James (Bishop Auckland)

  Castle, Rt. Hn. Barbara

  Barnes, Michael

  Bradley, Tom

  Clark, David (Coine Valley)

  Barnett, Guy (Greenwich)

  Broughton, Sir Alfred

  Cocks, Michael (Bristol, S.)

  Barnett, Joel (Heywood and Royton)

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

  Cohen, Stanley

  Baxter, William

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

  Coleman, Donald

  Beaney, Alan

  Brown, Ronald (Shoreditch & F'bury)

  Concannon, J. D.

  1148

  1149

  Conlan, Bernard

  Janner, Greville

  Pannell, Rt. Hn. Charles

  Corbet, Mrs. Freda

  Jay, Rt. Hn. Douglas

  Parker, John (Dagenham)

  Cox, Thomas (Wandsworlh, C.)

  Jeger, Mrs. Lena

  Parry, Robert (Liverpool. Exchange)

  Crawshaw, Richard

  Jenkins, Hugh (Putney)

  Pavitt, Laurie

  Cronin, John

  Jenkins, Rt. Hn. Roy (Stechford)

  Peart, Rt. Hn. Fred

  Crosland, Rt. Hn. Anthony

  John, Brynmor

  Pendry, Tom

  Crossman, Rt. Hn. Richard

  Johnson, Carol (Lewisham, S.)

  Perry, Ernest G.

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

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

  Powell, Rt. Hn. . Enoch

  Cunningham, Dr. J. A. (Whitehaven)

  Johnson, Walter (Derby, S.)

  Prentice, Rt. Hn. Reg.

  Dalyell, Tam

  Jones, Barry (Flint, E.)

  Prescott, John

  Darling, Rt. Hn. George

  Jones, Dan (Burnley)

  Price, J. T. (Westhoughton)

  Davidson, Arthur

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

  Price, William (Rugby)

  Davies, Denzil (Llanelly)

  Jones, Gwynoro (Carmarthen)

  Probert, Arthur

  Davies, G. Elfed (Rhondda, E.)

  Jones T. Alec (Rhondda, W.)

  Reed, D. (Sedgefield)

  Davies, Ifor (Gower)

  Kaufman, Gerald

  Rees, Merlyn (Leeds, S.)

  Davis, Clinton (Hackney, C.)

  Kelley, Richard

  Rhodes, Geoffrey

  Davis, Terry (Bromsgrove)

  Kerr, Russell

  Richard, Ivor

  Deakins, Erie

  Kinnock, Neil

  Roberts, Albert (Normanton)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lamble, David

  Roberts,Rt.Hn Goronwy(Caernarvon)

  Delargy, Hugh

  Lamborn, Harry

  Robertson, John (Paisley)

  Dell, Rt. Hn. Edmund

  Lamond, James

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

  Dempsey, James

  Latham, Arthur

  Rodgers, William (Stockton-on-Tees)

  Doig. Peter

  Lawson, George

  Rose, Paul B.

  Dormand, J. D.

  Leadbitter, Ted

  Ross, Rt. Hn. William (Kilmarnock)

  Douglas, Dick (Stirlingshire, E.)

  Lee, Rt. Hn. Frederick

  Rowlands, Ted

  Douglas-Mann, Bruce

  Leonard, Dick

  Sandelson, Neville

  Duffy, A. E. P.

  Lestor, Miss Joan

  Sheldon, Robert (Ashton-under-Lyne)

  Dunn, James A.

  Lever, Rt. Hn. Harold

  Shore, Rt. Hn. Peter (stepney)

  Dunnett, Jack

  Lewis, Arthur (W. Ham, N.)

  Short, Mrs. Renée (W'hampton, N.E.)

  Eadie, Alex

  Lewis, Ron (Carlisle)

  Silkin, Rt. Hn. John (Deptford)

  Edelman, Maurice

  Lipton, Marcus

  Silkin, Hn. S. C. (Dulwich)

  Edwards, Robert (Bilston)

  Lomas, Kenneth

  Sillars, James

  Edwards, William (Merioneth)

  Loughlin, Charles

  Silverman, Julius

  Ellis, Tom

  Lyon, Alexander W. (York)

  Skinner, Dennis

  English, Michael

  Lyons, Edward (Bradford. E.)

  Smith, John (Lanarkshire, N.)

  Evans, Fred

  Mabon, Dr. J. Dickson

  Spearing, Nigel

  Ewing, Harry

  McBride, Neil

  Springs, Leslie

  Faulds, Andrew

  McCartney, Hugh

  Stallard, A. W.

  Fernyhough, Rt. Hn. E.

  McElhone, Frank

  Stewart, Donald (Western Isles)

  Fisher, Mrs. Doris(B"ham,Ladywood)

  McGuire, Michael

  Stewart, Rt. Hn. Michael (Fulham)

  Fitch, Alan (Wigan)

  Mackenzie, Gregor

  Stoddart, David (Swindon)

  Fletcher, Raymond (Ilkeston)

  Mackie, John

  Stonehouse, Rt. Hn. John

  Fletcher, Ted (Darlington)

  Mackintosh, John P.

  Strang, Gavin

  Foley, Maurice

  Maclennan, Robert

  Strauss, Rt. Hn. G. R.

  Foot, Michael

  McMillan, Tom (Glasgow, C.)

  Summerskill, Hn. Dr. Shirley

  Ford, Ben

  McNamara, J. Kevin

  Swain, Thomas

  Forrester, John

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

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

  Fraser John (Norwood)

  Marks, Kenneth

  Thomas, Jeffrey (Abertillery)

  Freeson, Reginald

  Marsden, F.

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

  Galpern, Sir Myer

  Marshall, Dr. Edmund

  Tinn, James

  Garrett, W. E.

  Mason, Rt. Hn. Roy

  Torney, Tom

  Mayhew, Christopher

  Tuck, Raphael

  Gilbert, Dr. John

  Meacher, Michael

  Urwin, T. W.

  Ginsburg, David (Dewsbury)

  Mellish, Rt. Hn. Robert

  Varley, Eric G.

  Golding, John

  Gourlay, Harry

  Mendelson, John

  Wainwright, Edwin

  Grant, George (Morpeth)

  Mikardo, Ian

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

  Grant, George (Morpeth)

  Millan, Bruce

  Walker, Harold (Doncaster)

  Grant, John D. (Islington, E.)

  Miller, Dr. M. s.

  Wallace, George

  Griffiths, Eddie (Brightside)

  Milne, (Edward)

  Watkins, David

  Griffiths, Will (Exchange)

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

  weitzman, David

  Hamilton, William (Fife, W.)

  Morgan, Elystan (Cardiganshire)

  Wellbeloved, James

  Hamling, William

  Morris, Alfred (Wythenshawe)

  wells, William (Walsall, N.)

  Hannan William (G gow, Maryhill)

  Morris, Charles R. (Openshaw)

  white, James (Glasgow, Pollok)

  Hardy, Peter

  Morris, Rt. Hn. John (Aberavon)

  Whitehead, Phillip

  Harrison, Walter (Wakefield)

  Moyle, Roland

  Whitlock, William

  Hart, Rt. Hn Judith

  Mulley, Rt. Hn. Frederick

  willey, Rt. Hn. Frederick

  Hattersley, Roy

  Murray, Ronald King

  Williams, Alan (Swansea, W.)

  Healey, Rt. Hn. Denis

  Oakes, Gordon

  Williams, Mrs. Shirley (Hitchin)

  Heffer, Eric S.

  Ogden, Eric

  Williams, W. T. (Warrington)

  Hilton, W. S.

  O'Halloran, Michael

  Wilson, Alexander (Hamilton)

  Horam, John

  O'Malley, Brian

  Wilson, Rt. Hn. Harold (Huyton)

  Houghton, Rt. Hn. Douglas

  Oram, Bert

  Wilson, William (Coventry, S.)

  Huckfield, Leslie

  Orbach, Maurice

  Woof, Robert

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Orme, Stanley

  Hughes, Mark (Durham)

  Oswald, Thomas

  TELLERS FOR THE NOES:

  Hughes, Robert (Aberdeen, N.)

  Owen, Dr. David (Plymouth, Sutton)

  Hughes, Roy (Newport)

  Padley, Walter

  Mr. Joseph Harper and

  Irvine,Rt.Hn.SirArthur(Edge Hill)

  Paimer, Arthur

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Kenneth Clarke.]
  Committee tomorrow.

COUNTER-INFLATION (TEMPORARY PROVISIONS) [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to authorise measures to counter inflation it is expedient to authorise the payment out of money provided by Parliament of any administrative expenses incurred by a government department in consequence of the provisions of the Act.—[Mr. Patrick Jenkin.]
ADJOURNMENT
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Clarke.]

ROAD TRAFFIC (SOUTH BEDFORDSHIRE)
10.29 p.m.
Mr. David Madel: I very much welcome the opportunity of this short debate on traffic conditions in my constituency of South Bedfordshire. Most of the national traffic problems are very much concentrated on South Bedfordshire, and with all the trunk roads and motorways which pass through our area we have a considerable number of difficulties.
Any hon. Member from Bedfordshire obviously has the problem of the M1 very much in mind. The crash season, if I may so call it, the season of winter fogs and difficult road conditions, is very much with us. Tied in with it is the question of computer-controlled hazard warning lights and overhead gantry lights. It is important to distinguish between the two. The gantry lights are the yellow lights which light up the M4 to Heathrow and which since they were installed have cut accidents by half. Then there are the computer-controlled hazard warning lights which flash police orders about the speed at which cars should travel.
We do not yet have gantry lights on the South Bedfordshire section of the M1, though they are promised, nor do we have operating computer-controlled hazard warning lights, though they too are promised. In answer to a Question which I tabled recently on this subject, I was told by my right hon. Friend the Minister for Local Government and Development that he expected hazard warning lights on the Hertfordshire section of the M1 to be operating by the end of the year but he could not give a date for the Bedfordshire section.
We are most concerned about this matter and hope that we shall soon have gantry lights and computer-controlled hazard warning lights on our section of the motorway. We hope that in this way
1154
we shall avoid the accidents which took place last year.
If we have spectacular pile-ups, people in my constituency are asking whether there is a master plan for diverting traffic off the M1 if it should be blocked by a series of appalling accidents. We sincerely hope that the Government have plans to avoid the appalling traffic conditions in a town such as Dunstable, which is in my constituency, if traffic has to be diverted off the M1.
It will be appreciated that the town of Dunstable turns out many trucks and lorries and that as a town it is extremely traffic-conscious. There are, however, three major worries in the town. The first is the problem of the A505 relief road from Luton to Dunstable. A statement has been made that this will follow the route of the railway line between Luton and Dunstable. Local people are asking whether there will be a public inquiry, whether the decision to use the railway line is final, whether special powers will be needed to take over the railway line if it is to be used for a relief road and, if the public inquiry goes through, when work will be expected to begin.
A second major worry is the question of the A5 north-south bypass round Dunstable. The existing A5 has been with us since Roman times. It is not badly constructed, it is fairly straight, but Dunstable has moved a long way since the Romans. Its population has leapt, its industry has been extended and there is a major question now being asked in the town: when will construction work begin on the A5 north-south bypass? We are told that work is in preparation, but we should like to know which route it will take. Will it be up to the Department of the Environment to decide the route, and when will work begin?
The third major worry is the inner ring road, which is sometimes referred to as the spur road. Many in Dunstable say that if the A505 relief road and the A5 north-south bypass round Dunstable are built, that will be enough. Surely, it is thought, this would alleviate traffic congestion in the town. But there is mounting anxiety about, and indeed opposition to, an inner ring road or spur road. Will there be an experiment with these first two plans, or is it intended to have some form of inner ring road?

1155
The second largest town in my constituency is Leighton Buzzard. There are three major plans of action which a lot of people in the town would like to see come to fruition in order to relieve traffic congestion in the town.
First, there is a desire by many people in Leighton Buzzard for an early start to be made on the second stage of the inner relief road. This would enable heavy traffic especially to avoid an awkward junction at Market Square. I am told that this has been programmed by the Bedfordshire County Council for its 1973–74 programme.
Then there is a desire in Leighton Buzzard for an early start on the southern access road along the disused railway line from Leighton Buzzard to Dunstable. At present heavy traffic from the industrial area of Grovebury Road tends to clog up the town. If the southern access road were built, heavy traffic from the industrial area would be able to avoid the town centre altogether. The Bedfordshire County Council is being urged to get this plan into its programme as soon as possible.
The third major desire in Leighton Buzzard is for improvements to begin quickly on the A418 ring road which carries a large amount of heavy east-west traffic. One of the improvements that will be needed is the reconstruction of the railway bridge. At present large goods vehicles cannot get through it and their only alternative route takes them through residential areas in Leighton Linslade. As hon. Members will appreciate, heavy lorries are not welcome in residential areas.
Those are three major projects for Leighton Buzzard. Obviously Government grants, action and help will be needed, and I hope that my hon. Friend the Under-Secretary is in a position to give some hints about when we may expect action and starts on them.
South Bedfordshire is very much a traffic sandwich. We are sandwiched between trunk roads and motorways. There are two villages which suffer particularly from this sandwich effect. The first is the village of Barton, on the A6 between Luton and Bedford. Traffic uses Barton to get from the A1 to the M1, and that means a large number of heavy vehicles on the Sharpenhoe Road. In addition
1156
a great many commuters drive from Bedford to Luton along the A6 to their places of work, and big hold-ups result. Therefore, the desire of many people in the Barton area is for a new feeder road from the A1 to the M1 and for there to be road widening and a bypass of the A6 round Barton.
The second village which suffers from the sandwich problem is Toddington. At present a great many heavy goods vehicles use the A5120 as a link between the M1 and the A5. Conditions are particularly difficult in the winding section known as Station Road. There is strong feeling in the village that large vehicles should be restricted to more suitable and safer roads.
I know that my constituents will welcome what my right hon. Friend the Minister for Transport Industries said to the Europeans in Brussels about the weight and size of lorry that we were prepared to tolerate in this country. What is extremely interesting is that Toddington Parish Council moved a resolution at the County Parish Councils Association meeting last September that heavy and large vehicles should be restricted to more suitable and safer routes rather than be permitted to thunder through Toddington on the A5120, causing difficulties in the village.
As one would expect in a constituency which is part village and part town, there is a mounting demand for 30 m.p.h. speed limits to be imposed in villages. First there is the village of Totternhoe, where the roads are winding and quite unsuitable for speeds much in excess of 30 m.p.h. Totternhoe has the additional problem of heavy lorries en route to a lorry testing station at Stanbridge.
Then there is the village of Heath and Reach, which has a 30 m.p.h. limit but would like it extended towards Leighton Buzzard in order to make traffic slow down earlier when approaching the village.
Then there is Hockliffe, which is on a straight section of the A5, and there is a deadly temptation for drivers to see just how fast their cars will go. There is a 40 m.p.h. speed limit now but the villagers say that it is not enough and that they would like a 30 m.p.h. limit, properly enforced. I have received a large number of complaints from constituents and there is an overwhelming and

1157
mounting desire for this 40 m.p.h. limit in Hockliffe to be reduced to 30 m.p.h.
Then there is the village of Slip End. For more than 10 years the villagers have battled for a 30 m.p.h. speed limit. This village is sandwiched between Dunstable and Luton and many people use it to get to work in Luton or Dunstable. There is no speed limit and it is amazing that this should be so. Cars can race through quite legally at speeds up to 70 m.p.h. When we consider the places where there are speed limits it is staggering that there is no such limit in Slip End. There is an overwhelming desire that one should be imposed.
The small yet growing hamlet of East Hyde in my constituency would like a speed limit of 30 m.p.h. It is fairly close to the large Vauxhall works in Luton and inevitably large numbers of people drive through it to get to Vauxhall's. In addition commuters go through East Hyde en route to workplaces in Hertfordshire. As the traffic grows, the anxiety of the villagers increases and their desire for a speed limit grows. We have a growing population with more houses and schools. A great deal has been asked of South Bedfordshire since the war in terms of industrial expansion, housing and school expansion. We now feel that no effort or money should be spared on safety, particularly on those points I have mentioned. I have mentioned too the need for gantry lights and computer-controlled hazard warning lights.
I do not think it is too much of an effort to slow down to 30 m.p.h. in a village, particularly when the roads were not designed to take cars going faster than that speed. Surely safety should come first in a village. I would like to see a 30 m.p.h. speed limit imposed in every village in my constituency and especially in those I have mentioned.
There is an obvious limit to the amount of road building that can be done in South Bedfordshire. I hope that the Government will always give the environment priority over the bulldozer. There is a particularly important passage in the Gracious Speech which I know my constituents were glad to see. It said:
"My Government will take further positive action on the protection and improvement of the environment."
We want traffic conditions in our villages in South Bedfordshire to be improved.
1158
We earn money from producing vehicles, and we are not anti-car or anti-lorry, but we want the balance to be tilted more towards safety and we want the greatest care to be shown by the local authorities and by the Government in preserving the environment. A good deal can be done by both Government and local authorities to see that the intent in the Gracious Speech is carried out and the environment is improved and protected.
10.43 p.m.
The Under-Secretary of State for the Environment (Mr. Keith Speed): I should like to thank my hon. Friend the Member for Bedfordshire, South (Mr. Madel) and to congratulate him on raising this important subject of the traffic conditions in his constituency. I would also like to thank him for the courtesy he showed in letting me know in advance one or two of the points he intended to raise.
The area in question is well known to me as well as to my hon. Friend. My sister went to school in Leighton Buzzard for many years and so I understand from personal knowledge the problems to which my hon. Friend has referred. There is no doubt that motorways are the safest roads we have. Their grade-separated junctions, their dual carriageways and their high design standards, with no sharp bends or gradients and with good visibility, all ensure this. This is not to say that they cannot be made even safer. My hon. Friend has referred to the terrible pile-ups we have had, particularly in foggy conditions. There were examples in his constituency and we cannot shrug these off as isolated incidents.
My Department is tackling this problem on many fronts. The overall 70 m.p.h. speed limit reduces differential speeds. We have developed advice for drivers—announced recently by my right hon. Friend the Minister for Transport Industries—on how to behave when there is fog on the motorway. We are implementing an urgent programme to provide crash barriers on all major motorways. We are also introducing a computerised warning system and providing overhead lighting where it can be really useful.
My hon. Friend referred to the last two of those things. My Department has developed a system of warning signs for motorways which can display advisory

1159
speed limits and lane closure information. We intend to erect these signs at about 2-mile intervals and at intersections. They will be operated from control centres by the police and they are a considerable advance on the warning systems used up to now. Their use in fog or when there has been an accident or when road works are in progress should be evident. The introduction of this system to the length of motorway in my hon. Friend's constituency is now at the forward programme stage, but I cannot yet give a firm date for completion, just as my right hon. Friend was unable to do so a few weeks ago. I do, however, promise to write to my hon. Friend as soon as I am in a position to give him more specific information about this. We are aware of the urgency of it.
As regards motorway lighting, we intend during the next 12 months to install lights on the whole of the 38-mile stretch of the M1 from the Scratchwood service area to Newport Pagnell. There may in some places be problems in bringing electric power to the motorway, but we shall be starting on the length north of Scratchwood in the spring and I hope that the motorway will be lit throughout South Bedfordshire by next winter. The lighting will incorporate a switching system enabling it to be turned on in the daytime by the police if conditions require it.
My hon. Friend was not only concerned with safety on the motorway. He mentioned cases in his constituency where there is unhappiness with existing speed limits. The difficulty here is that all of us who are drivers have a schizophrenic approach to the problem. When we are driving we take one view of limits, often regarding them as tiresome and unreasonable, but when we are pedestrians we take another view, sometimes regarding them as a panacea for all road safety ills. The truth is that speed limits are one component, and one only, in a whole complex of safety measures, and if speed limits are to work they must succeed in restricting to controllable levels the speeds at which motorists travel. Therefore, they must be enforceable.
This makes it important to have a national policy—a reasonable and realistic policy—using a series of consistent national criteria. In other words, what
1160
we have to do is to look at the characteristics of the road and its environment. We must consider whether the particular road is more, or less, dangerous than other roads of a similar kind, which means that we must examine the accident records and see whether it has more, or fewer, accidents than the average for roads of that kind. We also take into account the volume of traffic and the speed at which the 85 percentile proportion of the traffic travels. All these factors go into the determination of an effective limit—that is, a limit which will be regarded by the majority of drivers as reasonable and realistic and which is, therefore, enforceable.
I cannot stress too much that all that happens if one tries to impose limits which do not meet the established national criteria is that they are ignored and the policy itself is devalued. This means that speed limits will no longer make a proper contribution to the safety situation.
That is by way of general comment, and I now propose to refer to the specific cases mentioned by my hon. Friend. At Totternhoe and Heath and Reach, the national criteria support the limits at present in force, though I can tell my hon. Friend that at Heath and Reach the 30 m.p.h. limit is to be extended slightly towards Leighton Buzzard to improve the visibility of the signs.
My hon. Friend has written to the Department about Hockliffe on the A5 and I understand that the county surveyor is to discuss matters with the parish council next week. We are obtaining up-to-date information and, of course, if it justifies any change in the limit there we shall certainly consider it. I give my hon. Friend that assurance.
At Slip End I am afraid that the criteria do not justify any speed limit. My hon. Friend said that cars could drive through at 70 m.p.h. quite legally. That may be true in certain circumstances, but in other circumstances it would be highly illegal. In bad visibility it would be illegal to drive at anything like that speed, even in an unrestricted area. At Slip End the criteria for a speed limit are not met. This is a matter for the county council. I think that if one tried to impose limits where the criteria are not met, and apparently are unjustified, this would undermine the whole policy.

1161
My Department has not been notified of any proposals for a limit for East Hyde but no doubt if the local authority or my hon. Friend wishes to put them forward we can examine them and see how they meet the criteria.
My hon. Friend mentioned a number of road schemes, including Dunstable, Leighton Buzzard and the surrounding towns and villages in his constituency. The problems at Dunstable are to a large extent tied in with those of Luton. My hon. Friend will know that work is now being done on the Luton-Dunstable and Houghton Regis Transportation Study to test different transport solutions and road networks for the area. The study is expected to finish its work later next year. Until the study is completed and until its conclusions are known it would be foolish to make firm decisions about major road schemes, including the schemes in Dunstable mentioned by my hon. Friend.
No proposal about the inner relief road has been put to my Department but I take note of what my hon. Friend has said about that tonight and the views of his constituents which he has represented forcibly. I can tell him that I have decided, subject to a final decision by my right hon. Friend the Secretary of State in the light of the statutory procedures, to accept the railway route for the A505 Luton-Dunstable relief road as recommended by the Luton and Dunstable Borough Councils and Bedfordshire County Council. That route is more satisfactory as it is already a line where a development and environmental barrier exists, so that a road on this alignment would be less detrimental than the Dallow Road route which would sever a residential area. It would also involve much less acquisition of property than the Dallow route. The timing of a public inquiry or the holding of a public inquiry will be a matter for the local authority. However, there is still a lot of work to be done, and many procedures have to be gone through, as my hon. Friend will appreciate, concerning this road.
My hon. Friend mentioned three schemes in Leighton Buzzard. I confirm that stage 2 of the inner relief road is included in my regional controller's list of schemes for the next financial year 1973–74. The A418 scheme mentioned
1162
by my hon. Friend has not yet been found a space in our regional programme. As he will appreciate, our resources are limited and there are many schemes all over the Home Counties and East Anglia which are competing for them. No scheme for a southern access road, which was mentioned by my hon. Friend, has yet been submitted to us by the county council. The A418 scheme and the southern access road could he affected by proposals which we are considering for a new system of transportation grants under which Government aid for local authority transportation expenditure would be related to a comprehensive programme of expenditure rather than individual schemes. Thus the responsibility would be much more with the local authorities to determine their priorities. They will be receiving more of a block transportation grant for this purpose than in the past when individual schemes have had to be evaluated by my Department.
A Toddington bypass was included in the list of principal road schemes on which preparation work was authorised by my right hon. Friend the Minister for Local Government and Development in March of this year. It is now up to the Bedfordshire County Council to develop a scheme and submit a detailed report so that it can be considered for inclusion in the Department's firm programme. I have no doubt that the county is doing just that.
Finally, my hon. Friend mentioned Barton-in-the-Clay. A bypass for this village was one of more than 50 small schemes included in the trunk road preparation pool in July. Preparation is now in hand but it takes a little time to investigate possible lines and develop proposals. I can promise my hon. Friend that draft proposals will be published as soon as possible. I know about the very real difficulties that this village is suffering. I hope we can press ahead with the scheme as quickly as possible.
I thank my hon. Friend for raising these issues concerning roads in his constituency. Perhaps the main point that will emerge from this brief debate is the extent to which the local authority plays a large part in so many of these matters, even where the Government are responsible for the overall policy and for considerable sums of money. Obviously, it

1163
is right that as far as possible these essentially local matters should be for local decision. The establishment of new local authorities under the Local Government Act from April, 1974, will provide a framework within which this can be carried further forward and I hope that our transportation proposals will enable them to have more rather than fewer powers, and certainly less interference from the central Government.
I can respond to the inquiry which my hon. Friend made about the environment and say that one of the reasons for setting up the Department of the Environment was to protect and improve the environment. I give my hon. Friend a firm pledge that not only as regards his area but in all our road-building and other activities one of our principal aims,
1164
apart from the economic necessities in having roads and apart from the needs of industry, since roads are often an extension of the factory production line, will be to take and use every opportunity to protect and improve the environment in so many of our towns and villages. I give a firm pledge that my Department will do just that.
I thank my hon. Friend for raising these important matters tonight and I hope that our short debate will go some way towards putting him and his constituents into the picture of what we are trying to do, with the local authorities, in dealing with their problems in South Bedfordshire.
Question put and agreed to.
Adjourned accordingly at four minutes to Eleven o'clock.

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

THE LORD BISHOP OF ELY
Edward James Keymer, Lord Bishop Bishop of Ely—Was (in the usual manner) introduced.
THE LORD BISHOP OF LIVERPOOL
Stuart Yarworth, Lord Bishop of Liverpool—Was (in the usual manner) introduced.

ASIAN TRADE FAIR IN INDIA
2.47 p.m.
LORD BROCKWAY: 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 how it is that the United Kingdom is not participating in the Asian Trade Fair in New Delhi, accompanying the 25th anniversary of Indian independence in which fifty nations are joining.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, there is no collective British participation by Her Majesty's Government at the Asian Trade Fair in New Delhi, which is being held from November 3 to December 17, 1972, because there has been no call for such support from British exporters. However, many firms established in India and having British connections are taking part.
LORD BROCKWAY: My Lords, is the Minister aware of the deep disappointment in India, to put it mildly, that Britain is not represented in this fair, which is both a national and an international occasion? Is it not part of the
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25th anniversary of Indian Independence, and is it not the largest international event that has ever been staged in India? Will not our failure to participate prejudice the good will which we achieved by our understanding of India and Bangladesh?
LORD DRUMALBYN: My Lords, I believe that the Trade Fair has now become part of the celebration of the 25th anniversary, although when India first decided to hold the Fair it was not envisaged that it necessarily would be. So far as the second part of the question is concerned, it is not very much good having a British pavilion at a trade fair unless British firms, in their own commercial judgment, think it worth while to participate—indeed, it might be counter-productive. There was no enthusiasm among British exporters for participating.
LORD SHEPHERD: My Lords, did Her Majesty's Government seek to encourage British manufacturers to take part in this exhibition? Would the noble Lord agree that we lost out very heavily in South America as a consequence of the attitude adopted by British industry to the Asian Fair? We have lost a lot of trade; the Germans, the Italians and the French are all there, but the British are failing. Does the noble Lord think that it would have been right from the point of view of the trade gains—apart from the political gains—for us to be present?
LORD DRUMALBYN: My Lords, this is a question of judgment, of course, but after all industrial fairs and trade fairs are essentially matters for trade at which you sell your goods; they are not political occasions. The fact is that we have exhibited at the two previous Asian Fairs and we found by experience there that, in terms of sales resulting, it was difficult to justify participation. In addition, one has to remember that it is not only a question of selling in the Indian market but also of getting import licensing, which is not very easy?
LORD SHEPHERD: My Lords, setting aside the political considerations, would not the noble Lord agree that there may have been difficulties in the past about business arising as a consequence of shortage of funds available in India but one needs to look at the long-term interests of industry; that these exhibitions are a

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shop window not of the present manufacturers only but also of the future; and is it not wrong to prejudice them?
LORD DRUMALBYN: My Lords, this is a question of judgment which was carefully considered at the time when a decision had to be taken some 18 months ago. I can only repeat that inquiries were made as to whether there would be support for our exhibiting at the fair and it was found, on the basis of previous experience, and also because of its exceptional length, that there was very little support for participating.
LORD BESWICK: My Lords, can the noble Lord say whether there was any question of British Government financial support as a contribution to this Fair?
LORD DRUMALBYN: My Lords, had it been decided to participate there would have been the usual support that is made available to trade fairs; there would have been a British pavilion, with all the usual support that is given to those who exhibit in the pavilion.
LORD BYERS: My Lords, may I ask the noble Lord what would be the minimum number of British firms required to participate to justify Government assistance and help?
LORD DRUMALBYN: My Lords, I should need notice of that question. I should have thought that this would depend on the circumstances in each case.
LORD BROCKWAY: My Lords, is it not the case that the United Kingdom, the United States and China are the only large nations which are abstaining; that 48 nations, including France, West Germany, Sweden, the Soviet Union and Canada, are all participating? Is it not very short-sighted for our industries not to be represented there when, despite immediate foreign exchange difficulties, the longer programme means Indian industrialisation which will involve the supply of much equipment from this country?
LORD DRUMALBYN: My Lords, the arguments the noble Lord advances were carefully considered at the time, but one has to bear in mind that if you have a shop window the presumption is that the goods are going to be immediately available for sale, as of course they would
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be, but there is the difficulty of selling in the market at the present time. Exporters have to judge where their interests lie, and so of course have the British Government in giving support, within a limited budget, to trade fairs.
LORD SHEPHERD: My Lords, would not the noble Lord agree from his commercial experience, let alone his political experience, that once you have lost a market it is almost impossible to get it back?
LORD DRUMALBYN: My Lords, I would not say that it is impossible. It is always expensive to get a market back. But this is not the possibility that we are envisaging since there is no reason to suppose that we shall lose the market because we have not participated in this Fair. Had we thought so, we should have participated.
LORD FERRIER: My Lords, would not the Minister agree that the position of Britain with regard to India is quite different from that of any other country? Secondly, would he not agree that sniping of this nature may well detract from the value of the part taken by existing British trade interests in the Fair?
LORD DRUMALBYN: My Lords, it is the case, as my noble friend indicates, and as I have already said, that British firms in India are participating in the Fair and this in itself should help to maintain the reputation of British goods and British interests there.
LORD POPPLEWELL: My Lords, is not this lukewarm approach indicative of the reasons why we have not kept pace with other industrial nations in increasing our share of world trade? Is it not up to the Government to do everything possible to encourage our industrialists to take every possible advantage in this regard because it is so important to us as a nation? Instead of a diminution of our part in world trade, should we not increase it?
LORD DRUMALBYN: My Lords, the purpose of participating in an international fair of this kind is to sell goods now.
LORD BROWN: My Lords, I understand some of the difficulties of the Department of Trade and Industry in this matter but I think the noble Lord would

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help to calm the feelings of the House if he could positively answer this question. Was the failure to provide a pavilion for this international Fair (it is not only an Indian Fair) clue to a lack of intention by British exporters to take part in it?
LORD DRUMALBYN: My Lords, that is my information: they were consulted and given the opportunity of saying whether they thought we should participate in the Fair, and there was insufficient support from them to justify our participating.
LORD BOOTHBY: My Lords, may I ask the noble Lord a last, very simple question? Can he explain why it is that Her Majesty's Government have refused to participate in this Fair, which is obviously of the greatest importance to this country?
LORD DRUMALBYN: My Lords, I had thought that I had answered this question several times already—
NOBLE LORDS: Hear, hear!
LORD DRUMALBYN:—and I do not think I ought to go over the reasons again.

UNITED NATIONS AND TERRORIST REPRESENTATIVES
2.57 p.m.
LORD BARNBY: 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 further action they contemplate to indicate their dissent from United Nations policy of seating, at United Nations Committees, representative members of recorded terrorist organisations.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, Her Majesty's Government will continue to oppose the participation as observers of representatives of liberation movements in the proceedings of United Nations' bodies.
LORD BARNBY: But, my Lords, may I ask the Minister whether it does not
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seem regrettable and imprudent that terrorists, whether in Ulster or in Israel, in South America or Southern Africa, should be given this type of recognition by an international body such as the United Nations? Further, is the noble Baroness aware that the Foreign Minister of an important country at the United Nations described this situation as disturbing, deplorable and wrong in law, as it gives those concerned a standing which is unjustified?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I would agree with the noble Lord in what he has said, and the United Kingdom voted against such a proposal.
LORD JANNER: My Lords, would the noble Baroness take further steps to ensure that Governments realise the terrible significance of the fact that these terrorists are allowed to go to the United Nations, and also perhaps consider the question that those who support them, assist them and harbour them among the members of the United Nations might be asked whether they are prepared to withdraw when any question relating to terrorism comes before the United Nations itself?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, we feel that the long-established practice in the United Nations, that individuals can address United Nations' committees as long as they do so in their personal capacity or as petitioners, should remain; but, as I said earlier, we have voted against their coming as observers to take part in the proceedings, but we were out-voted.
LORD BARNBY: My Lords, would not the Minister agree that it must puzzle many people that Britain's influence at the United Nations is so insufficient that it is not possible to achieve something along the lines recommended by the noble Lord, Lord Janner?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, we cannot get over the fact that if there are other nations represented which take different views from ours we may be out-voted. We do what we can by persuasion and by speaking.

RHODESIA: GOVERNMENT AND RHODESIAN BONDS
3.0 p.m.
LORD NAPIER AND ETTRICK: 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 are the only lawful Government of Rhodesia; if they are not, and if the lawful Government of Rhodesia is a separate entity (as the Rhodesia Section of the Commonwealth Relations Division of the Foreign Office has advised persons claiming interest on the Rhodesian stocks), what and where is the separate entity; and whether, in fact, it exists.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, there is no lawful Government of Southern Rhodesia. Her Majesty's Government have not assumed the government of Southern Rhodesia. However, the Southern Rhodesia Constitution Order 1965 provides that certain executive powers under Rhodesian law may be exercised by the Secretary of State and that Her Majesty in Council may make laws for Southern Rhodesia.
LORD NAPIER AND ETTRICK: My Lords, I am grateful to my noble friend for that intriguing reply. Is she aware that in a recent test case the judge ruled that a United Kingdom stockholder of Rhodesian bonds was entitled to present a petition of right under the Colonial Stocks Act 1887 to claim payment of dividends which have been defaulted upon since the unilateral declaration of independence, and can she say whether it is the intention of the Attorney General to appeal against this decision?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am aware of the case in question. The petition of right has not yet been put forward and therefore the Attorney General is not in a position to decide what to do—whether or not to issue a fiat—but I think it is unlikely that he would refuse to do so.
LORD BARNBY: My Lords, if I correctly understood the Minister, she said
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that Her Majesty's Government has powers to issue by order regulations and other Government practices. Could she indicate ill what way they have the power to enforce it?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think the most important powers came under Section 2 of the Southern Rhodesia Act 1965, the Southern Rhodesia Constitution Order and the Southern Rhodesia (United Nations Sanctions) Order. But my noble friend is perfectly correct, in that Her Majesty's Government have not assumed all the functions of government of Southern Rhodesia and, as I think is well known in this House, cannot effectively enforce them within the territory.
LORD CLIFFORD OF CHUDLEIGH: My Lords, may we draw any conclusions from what happened in regard to the previous illegal régime, the 13 American colonies?
BARONESS TWEEDSMUIR OF BELHELVIE: I should not wish to draw a conclusion at this moment, my Lords.

PENSIONS: ADDITIONAL CON- TRIBUTIONS AND INCREMENTS
LORD HALE: 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 is the total amount of flat rate additional contributions payable by a self-employed insured person who attained the age of 65 on January 1, 1968 (when his uninsured wife was over 60 years of age) and who retires on January 1, 1973; and what is the amount of the increment payable to him each week in respect of these additional contributions and of the 260 weeks pension which he has forfeited.
BARONESS YOUNG: My Lords, a self-employed man who worked continuously from January 1, 1968, until he reached the age of 70 on January 1, 1973, would have paid 029·84 in National Insurance contributions, including the National Health Service contribution, and would have earned increments of £1·53 a week for himself and 77p for his wife.
LORD HALE: My Lords, is it not the fact that this unfortunate man who goes on working to increase production, pays tax and surtax on it and is wholly deprived of a sum of over £2,500 for which he has qualified by age and contributions; that he is then called upon to pay the additional sum of £300, in order to qualify for increments based on a reduced expectation of life which do not amount to interest on the money, and is charged income tax and surtax on that?
BARONESS YOUNG: My Lords, my understanding of the position is that it has not been the practice of any Government since the beginning of the National Insurance scheme in 1948 to base the extra increments payable to a man who retires after the age of 65 on any actuarial calculation, and the decision was reached that there should be a small extra increase for the contributions paid. This has been the practice of all Governments since that time.
LORD HALE: My Lords, what about the £2,500 to which the man was entitled and of which he is deprived? Would not the noble Baroness agree that if he had spent a holiday in the ever blooming Mezzogiorno and fallen into the hands of the Mafia they would have taken only the money he had and would not have deprived him of his expectations?
BARONESS YOUNG: My Lords, I think I can only present the facts as they are. I cannot speculate on what might have happened in that particular case.

FUTURE BUSINESS
EARL FERRERS: My Lords, it has been agreed through the usual channels that because of an introduction to-morrow and a very long list of speakers on Rhodesia we should meet at 2.45 p.m. instead of at 3 o'clock.

COSTS IN CRIMINAL CASES BILL [H.L.]
THE LORD CHANCELLOR (LORD HAILSIIAM OF SAINT MARYLEBONE): My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to costs in criminal cases. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
3.6 p.m.
Debate further resumed on the Motion moved on Tuesday, October 31, by Lord Blake—namely, That an humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
and on an Amendment moved by Lord Beswick: to add to the proposed Address:
"but, noting the continuing rise in the cost of living and the present massive unemployment, humbly regret that the mistaken policies of Your Majesty's Government, particluarly in the fields of prices, housing, taxation and industrial relations, have added to the difficulties of evolving a national policy to deal with inflation and have greatly weakened the country's economic prospects."
LORD DIAMOND: My Lords, it may be the case that not all of your Lordships were present last night to hear the enjoyable speech delivered by the noble Lord, Lord Polwarth, from the Government Front Bench. Therefore, for those who were not as privileged as I was, I want to say how much I enjoyed that speech: I enjoyed the manner of its delivery, and I cannot pay the noble Lord a better compliment than by saying that I looked at our new monitoring device and saw the figure of "29" on it and I did not believe that it could have been anything like so long. Those of us who have suffered the other way round will know what a genuine compliment that is.
The noble Lord said many things which pleased us. In particular I was grateful to him, and indeed to other noble

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Lords, for welcoming back my noble friend Lord Beswick. On his behalf I should like to thank all noble Lords for that courtesy. I was particularly glad—indeed my heart leapt—when the noble Lord. Lord Polwarth, said that at long last he was presenting the Government's end of term report. I am waiting; I hope the announcement will come very shortly indeed.
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD POLWARTH): My Lords, what I said was that I was presenting the half-term report last night.
LORD DIAMOND: My Lords, I misunderstood the noble Lord. It shows how one's anticipation runs ahead of the facts.
Many interesting speeches have been made, and perhaps it would be more convenient and would save time if I were to refer to them as their contents emerge in relation to the facts which I am going to put before your Lordships' House. The Amendment to which we are addressing our remarks at the present time starts by noting the continuing rise in the cost of living and the present massive unemployment. Nobody can suggest that Her Majesty's Government have been unaware of this position. Indeed each of the last three gracious Speeches have referred to it. They have referred to curbing inflation and promoting full employment. So this is a matter which engages the attention of all sides of your Lordships' House. In July, 1970 it appeared in the gracious Speech as "my Government's first concern"; in November, 1971 it appeared as "my Government's first care"; in October of this year it appeared as "my Government's overriding concern". Well, there is consistency for you!
Now may I give your Lordships a short reminder of what the achievement has been in relation to those statements of "overriding concern"? With regard to unemployment, I must say to noble Lords opposite that I do not think they sufficiently appreciate the seriousness of it; I do not think they appreciate sufficiently the seriousness of the loss to the nation's production which is caused by such massive continuing unemployment. I would not allege that they do not appreciate the seriousness on the human side—
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that is something that I am sure we all share—but I doubt very much whether the Government are giving sufficient attention in their policies to this continuing under-employment, to this lack of creation of resources which, once missed can never be recovered. We are concentrating all the time on inflation. This is a very serious problem indeed, but I am bound to draw your Lordships' attention to the fact that under-employment means resources not created for all the purposes for which they are required.
Yesterday, the noble Earl, Lord Perth, spoke of urgent need for resources to go to Scotland. All could have been provided out of the additional production if unemployment had been kept to its previous figure. In fact, it has continued at massive levels. If one includes only a small allowance for those who are unregistered unemployed—and work on this subject indicates that they are many—one is bound to recognise that at the present time there must be well over 1 million who are willing to work but who cannot find jobs. Even the number of registered unemployed is some 37½ per cent. above the figure when the Conservative Party came to office, and the number of vacancies is four to one overall. In other words, four registered unemployed men are looking for each job. However, in the Northern Region there are 10 looking for each job and in Scotland—the noble Lord, Lord Polwarth, will be aware of this—there are 13 looking for each job. That is the position in regard to vacancies and that is the result of three gracious Speeches assuring the country that the question of unemployment was of overriding concern.
Let us now consider the question of the cost of living, which is linked in this gracious Speech, as in others, to unemployment. Since June, 1970, it has risen by 18·9 per cent., which is a figure of approximately 8 per cent. per annum. This compares with a figure of approximately one-half, 4½ per cent. per annum, throughout the period of the Labour Government. I am bound to refer to an extremely serious aspect of this because the noble Earl the Leader of the House yesterday treated this whole matter as if everything was going to be fine—that the balance of payments would be in surplus and that all the indications were that this and that would be fine. Indeed, if one

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believed the few things which the noble Earl selected to discuss with us one would be in some doubt as to why on earth the Government were seeking to introduce a statutory freeze.
We realise of course that the indications are very serious indeed. It is not only that the cost of living has started to turn bad—is going the wrong way again—but also that the wholesale price index has risen recently much higher than normal. Between June and September it rose by 8·6 per cent. per annum, which is an alarming rate, and the economy has not yet had to deal with the effective 10 per cent. devaluation which has occurred since the pound was floated in June and which will have its effect quite shortly on prices. Thus, the Government have not told us—although they must be aware of the anxieties of many of those who are concerned with the situation—that inflation is getting worse than the figures indicate, and the figures are bad enough. That is no doubt the reason why the Government have thought fit to introduce the freeze.
Against that background, I draw attention to the fact that the latest figure—for August, 1972—for the weekly increase in average earnings was 10·9 per cent. as against an 8 per cent. increase in prices, so it was 2·9 per cent. ahead of prices. In other words, it was a 2·9 per cent. real increase in wages less than the Government say has been the current rate of increased productivity. I must be fair to the Government and say that in the last few months and weeks they have not continued with the completely unjustified allegation that wages have been a major cause of inflation and that wage increases have been a major cause of unemployment. I hope they will no longer continue with either of those allegations.
I have put the facts to your Lordships. We now see a totally different situation, with the Government making the biggest U-turn they have yet effected, in terms of the Bill which is shortly to be before us and their statutory freeze. I am one of those who has previously said from this Box that it is much more difficult for a Government to change their mind than to stick to what is in their mind. Inasmuch as all these changes—and they are many—are changes in the direction in which we wish the Government to go, I can do no more than tell them that we
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are grateful that at long last they have been good enough to change course, and we must recognise that this is a complete change of course. When we table, as we do, a critical Amendment criticising the Government for their past policies, we do not need to offer arguments to justify our criticisms. There is no more authoritative argument than the Government's own action. They are saying, "What we have done we now see we must stop Going and we must do something else. Our policies have not been justified or fulfilled. We were wrong."
SEVERAL NOBLE LORDS: Totally mistaken.
LORD DIAMOND: My noble friends are right. The country was mistaken, too, and the government were wrong. I therefore do not need to be condemnatory. I welcome the change of heart but I must point out that these changes of policy, which the noble Lord, Lord Polwarth, was good enough to confirm and accept last night, are the most authoritative criticisms to which our Amendment refers.
We refer in our Amendment to housing, taxation, industrial relations and prices. Having dealt with prices, I must now trouble your Lordships with the reasons why we think the Government have followed mistaken policies in the context of what we are about to discuss. I understand that there is a likelihood that your Lordships may wish to consider housing in greater detail on a separate occasion, and therefore I will not go into that matter in too great detail. I must however point out the position after five years of the Housing (Finance) Act, and I will give the House the subsidies which are being paid for the different categories of occupier. For the council tenant, the subsidy amounts to £33 a year; for the private tenant it is more, £54 a year; while for the owner-occupier it is more still, £68 a year or more than double what is being paid out of State funds to the council tenant. I am giving the figures in that order because we recognise that, by and large, the least well-to-do live in council houses, that those with probably more income live as private tenants and that those who are better off live in owner-occupied houses.
I am bound to comment on the fact that this Government thought it wise, while the tripartite negotiations were

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going on, to insist that the increase in the rents provided under the Housing Finance Act should be effected—while the very discussions were going on and while attempts were being made by the Government to get agreement to sacrifices on behalf of all parties in the interests of allaying inflation. By the terms of the proposed Bill those increases in rents are specifically and precisely excluded from the effects of the freeze, so that the increased rents will have to be paid whether or not the councils in question have given effect to the increase. So much for housing.
We then come to taxation, and your Lordships will appreciate that I am limiting my remarks to those aspects which indicate the general surrounding circumstances and attitudes affecting agreement or consent to sacrifices, which is at the heart of what the Government are proposing. Whenever we mention taxation we are told of the Government's generous provisions under the family income supplement (F.I.S.) and, of course, that was mentioned again only last night by the noble Lord, Lord Polwarth. I must say that I was somewhat surprised that somebody with a similar capacity to mine to bear magnitudes in mind should wish to refer to the family income supplement, which this year is expected to cost the enormous sum of £8 million! That is a fleabite if ever there was one, and one that is totally incapable of having any measurable effect on poverty or on fairness or justice. The Government have increasingly subjected numbers of working families to the means test. They have trebled the number of working families who are now to be subjected to means tests. They now have 47 different varieties of means tests—and will get up to the Heinz target at any moment—with the result that a £2 increase across the board which is supposed to help the poorest families may help the poorest families least of all, because all these means-tested benefits are reduced, or extinguished, as income is increased.
It is easy to give examples. In the range of £19 to £21 a week the £2 increase will leave not a small amount in the pocket of the recipient, not a "nil" amount, but will leave him even worse off. That is what we mean by the "poverty trap". The Government, as a
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result of the fantastic extension of means-testing. have got themselves into a position where the deterrent, the disincentive to earning more, is far greater for all these low paid families in relation to a proportion of their income, than the highest surtax payer has to suffer on his income—and how many times have we heard the argument of what a great deterrent the surtax is, and how many more times will we hear it as we come nearer to the next Finance Bill! That is the way in which the Government have sought to spread fairness. The real fact is (and this figure has been given but it bears repetition) that the total effect of the Government's economic measures since they came into power has been to give the average worker—that is to say, the category of workers earning between £20 and £40 a week, between £1,000 and £2,000 a year, and who are by far the most numerous, being something over 50 per cent. of individual taxpayers—a cash benefit of £37 a head. So far as the man earning over £100 a week is concerned, that is the £5,000 plus a year category, the benefit is £1,890 a head: £37 to the working man and £1,890 to those earning over £5,000 a year, a figure some 50 times greater per person per year.
That is the background; that is the sum total. Noble Lords opposite will not make any impression at all by referring to the £8 million worth of F.I.S. or any other of these very minor reliefs. If we include all of them and all the tax provisions of the Budgets, the sum total is the figure I have given. We are complaining, therefore, that the taxation policies, the housing policies, and the prices policies of the Government have made matters more difficult.
The last item in the list is industrial relations, which I can deal with very shortly. The figures have been given before. Last year was the worst year for strikes since the General Strike of 1926. That was the achievement of the Government partly, though not entirely, as a result of the Industrial Relations Act. Not content with having broken that record, they are breaking it again and this year the number of strikes is running at a rate twice as high as that of last year. Last year saw the greatest number of strikes since 1926, and this year it is twice as high as that. That, then, is the picture so far as industrial

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relations are concerned. So, my Lords, that is the reason why we think it right to join in criticising the past actions of the Government.
We now come on to their present intention, which is the freeze. We all know that a freeze, by itself, solves nothing; it provides a breathing space. But what all of us who are concerned with the welfare of our country and everyone in it want to know is that, so far as may be possible, the best use of the breathing space will be made by providing a long-term solution to these difficulties, which are very great and which we all recognise. They are especially great in the sense that I suppose none of us has ever before experienced the situation where you have such massive unemployment and such a massive rate of inflation going on side by side. It is not easy to know the answer to this. I am sure that the Government are right, that the trade unions are right, and that the C.B.I. is right in their attitude that they must keep on talking and that the talks should continue in the hope of evolving some long-term policies. Everything that has been said in the debate so far indicates agreement on all sides of the House that these long-term policies must be based on a sense of fairness and justice in relation to all sections of the community, especially (making the point much more simple) as between rich and poor. I have already given the figure for the total effect of the Government's economic measures as being fifty times as much to the rich as to the average worker. If that does not give a fair indication, then I hope the Government will give us whatever figure they think is a fair indication. I hope in particular they will give us, if they have worked it out, as they no doubt have done internally, the Gini coefficient, how that has been affected since the Government came to office. No doubt the figure exists but I have not heard it disclosed, and I imagine the reason is that it does nothing but confirm the impression given by the figures I have mentioned.
The Government have in mind a £2 flat-rate increase throughout. May I remind the Government that one of the things which has been felt to be grossly unfair and has no doubt embittered many of the talks that have been going on has been the vast increases in remunera-
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tion at much higher levels? I want to ask the Government a naïve question, but I think it is appropriate. If it is right to give £2 across the board for all wage earners, is it not right to continue to have that thought in mind with regard to salary earners at all levels? What is wrong with giving a man who is earning £100 a week an extra £2? It is not a large percentage. It is a different thought. The justification hitherto has always been that salary earners have had to be given large increases, increases far beyond the total remuneration of most of the workers whose wage increases have been refused, because they are based on a percentage on the previous figure. What fairness or justice is there in that? Who needs the extra £2 more—the man earning £20 a week or the man earning £200 a week? The answer is, of course, the man earning £20 a week. So I hope the Government will bear in mind the damage which has been caused by the vast salary increases and will continue to think in terms of £2 a week across the board.
My Lords, I have painted a dreary picture so far as unemployment and increases in prices are concerned. I now want to turn to the brighter side, to the question of liquidity. This is a matter which has been touched on by many noble Lords, but I am going to refer to a different aspect of it. I am delighted to remind your Lordships of the figures of alcohol clearances during the first seven months of this year. This is against a background of vastly increasing prices, against food prices being at an all-time high, against a reduction in the total consumption of food in the country. The figures of alcohol releases, clearances—that is to say, in volume, not in value—are wines 16 per cent. up, brandy 28 per cent. up, and champagne over the year 34 per cent. up. So all is not lost, my Lords. We know that there has been a reduction in the consumption of food. We know how the old-age pensioners' cost of living index has mounted, far in excess of the reliefs given. We know that if the old-age pensioners had been given increases at the same rate as they were previously given, at the same point in the devaluation of their pensions, the revisions would have been moved not from 2-year to 1-year intervals, but from 2-year to six monthly intervals, in order to keep pace with the

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falling value of the monetary pensions. It is against that background that we are delighted to see how this aspect of liquidity has been dealt with.
I come to the most serious point of all, and that is the question of wealth, as to which the White Paper and the Bill say nothing. Against the background that the Government's economic measures have distributed fifty times as much benefit to the richest section of the community as to the average worker, your Lordships will, I know, agree with me when I say that over the last 18 months the capital values of British-managed companies quoted on the Stock Exchange have gone up by £28,000 million. That is the increase in wealth for the shareholders of those companies. It is against that background that wage earners judge the fairness of the situation. And it is against the background also of the speculative increase in the values of buildings and land to which so many of your Lordships referred in your speeches yesterday. The noble Viscount, Lord Amory, was concerned about these matters.
BARONESS EMMET OF AMBERLEY: My Lords, would the noble Lord allow me? Could he tell us whether the trade unions' investments have gone up equally?
LORD DIAMOND: My Lords, I am quite sure that those who look after the investments of trade union pension funds have as much skill as those who look after the investments of other pension funds. I am sure they have enough sense to be equally well advised, and I am certain that those pension trustees figure among the shareholders. I did not mean that the whole of the £28,000 million had gone into the pockets of the noble Baroness; I wish it had. I give it as a figure which has to be taken seriously, because it is totally omitted from the scope of the thinking of the Government, either in its White Paper or in its Bill, and it is the background to these discussions. It is one matter which inflames feelings. It is not right to say that it merely gives a sense of injustice; it inflames feelings, that those who are earning modest salaries and modest wages are asked to see to it that their sole source
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of spending is limited or frozen, whereas there is a large section of the community whose major source of spending is untouched.
One must not have any delusions about the capacity of share owners to sell their shares and spend the money. It is a source of spending as readily available as the weekly wage packet or anything else. What the Government are doing at the moment is to separate out those who have and those who have not, and to say to those who have not wealth but only earn, "You shall have your spending power limited or frozen", and to those who have, "To him that hath shall be given fifty times as much as to the wage earner". It is no use trying to balk these facts. This is what has happened and is happening under the Government's measures and the Government's proposals. When I asked, as I did time and time again yesterday, that there should be some comment, I received no reply. It was not the first thing (I hope that the noble Lord, Lord Polwarth, will not mind my putting it this way) that was on the noble Lord's mind. In fact, to be quite fair, he was not briefed about it at all. Those who were briefing him on behalf of the Government had not thought at all that this was a matter which might interest the people of this country.
Noble Lords behind had of course thought about mergers and takeover bids, and many of them had referred to these in very worried terms. I have no doubt that again they were thinking about these in terms of speculation. One noble Lord referred to them as "strippers", as opposed to taking over a business from the point of view of running it more efficiently. These are matters which are giving great concern, too. Then there is the question of the price of houses and the price of land. The price of houses is making it impossible for young people coming into the housing market for the first time to find a home. As a result, education authorities in the South and the South-East find it impossible to get staff, because people come along and apply for jobs, see the price of the house, and then go back again. We all know about this kind of experience.
There was the example which the noble Lord, Lord Hawke, so helpfully and so valuably gave to us: of agricultural land being sold at 100 times its agricultural

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value, so that it could be used for development purposes for building land, yet nothing proposed in the Bill, or in the gracious Speech, to limit, or share with the rest of the population, these benefits. As the noble Lord, Lord Hawke, pointed out, when a man sells his agricultural land for these purposes and makes this profit of 100 times the original agricultural value, all he has to do is to buy another farm and he escapes tax completely. He has merely transferred money, multiplied 100 times, from one piece of land into a much bigger piece of land, and no tax has to be paid on his gains. It is against that background that we are discussing whether or not there is fairness surrounding the discussions which are at the moment taking place.
My Lords, I will finish by saying two things only. We are agreed that these discussions should continue. We hope that they will continue, so far as possible, with a real sense of justice and fairness. The Government have gone a long way, but they have a lot further to go before they will convince those round the table that there is a real sense of justice in their minds. They can answer the question by searching their own hearts as to whether this is what they require. There are two simple questions. First, the Government must ask themselves are they approaching the T.U.C. and the C.B.I. as real partners. There is no doubt about their relationship with the C.B.I. Are they approaching the T.U.C. as a real partner, and have they departed from their desire, as expressed so clearly in your Lordships' House by so many speakers on the occasion of the Industrial Relations Bill, to control, curb and reduce the powers and responsibilities of the unions. Are they looking at them as partners.
The second, and much more difficult, question is: do those round the table want to see an increase in the comparative standard and share of the working man? We on this side take the view that the working man has had a raw deal for centuries, decades, and in recent years, and that he is entitled to have a greater share for his efforts than those who have not worked for their benefits but who have succeeded to them. We want to be very frank about this. We want to be sure that the Government recognise that all who work in this way are entitled to an increase in their share of the nation's pro-
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duction and the nation's wealth. If that feeling is engendered, and if that feeling is really held, then these talks will succeed. But if the Government continue on their present basis of keeping down the share of the worker, of keeping down the power and the responsibilities of the unions, they will not. It is our hope that they will look the other way, and that their exercise may result in success.
3.46 p.m.
LORD BYERS: My Lords, as one Member of your Lordships' House who heartily supported the installation of the clock system, I must admit that I am beginning to lose confidence in it. I think that 39 minutes is quite a long stint; but the noble Lord, Lord Diamond, as usual made an interesting speech. He gave us some very interesting statistics on alcohol releases which have been made in the last few months. I do not quite know what conclusion we were meant to draw from these figures. Whether the country has taken to the bottle—as obviously it has—in celebration or in solace I would not know. But when I contemplate what is happening in society to-day, I become tremendously depressed. When one sees the real opportunities which are open to us as a nation, it is inconceivable the number of occasions when we go out of our way to avoid taking them. It is as though there were a sort of suicide wish on society at the present time.
One of the troubles is that our root problems go very deep. Inflation or deflation, growth or stagnation, are surely the outward signs of something much more fundamental. I am not depressed that the tripartite talks have temporarily broken down, or that we have had to substitute a statutory for a voluntary system. What does depress me is that Parliament has been wrestling with this problem of growth in a free society for so many years with no apparent success at all. I think we have really to try to identify the reasons for this continual failure, not in order to be critical or to attribute blame, but to see whether we cannot make some sort of a breakthrough in what appears to be an intractable situation.
I think my first point would be to deplore the constant role of the Government and of the Opposition, whichever

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Party is in power. Ever since the days of Selwyn Lloyd's attempts at some form of control, it has been taken for granted that it is the duty of the Opposition to oppose, whatever their policy was in power. I believe this to be a weakness. I believe that there are some matters which ought to transcend Party politics. War is one of them; the environment is another; and I believe that this, the future of the country, is in the same category. I believe that on a matter as grave as this, it is vital that there should be the closest possible rapport among the political Parties as well as among the Government, the C.B.I., and the T.U.C. It is for that reason that I think, if I may say so in an uncritical way, that the Opposition Amendment to-day is mistimed because it must be seen in the context, and against the background, of the failure of the Downing Street talks.
I appreciate that it is a perfectly natural, and indeed traditional Amendment for any Opposition to put down to the loyal Address. It is not difficult for any Opposition to make a list of the shortcomings of any Government, and I do not dissent from many of the terms of the Amendment. But I believe that this debate is so closely connected with the White Paper proposals and the draft Bill that I cannot recommend my noble friends to vote for the Amendment to-night.
LORD SHACKLETON: My Lords, I wonder whether I might interrupt the noble Lord. As a matter of fact, this Amendment was very carefully worded in such a way as not to interfere with the talks. I hoped that the noble Lord would appreciate that.
LORD BYERS: My Lords, I am grateful to the noble Lord. I am not suggesting that it interferes with the talks, but it puts us in the position that if we voted for the Amendment it might be thought that we were not giving full support to the freeze and the Bill which is coming forward, and we believe it is right that these measures should be taken at this particular time.
Having said that, may I apologise to the House for not being able to be present at the Vote to-night—at least, I do not think I shall; it depends when the Vote
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is taken. This may be some consolation to the Opposition, but I have an engagement in Rome at the European Foundation where I have to take the chair at one of the sessions. But the point which I want to make to the noble Lord, Lord Shackleton, is that I think we ought to be looking at this problem with as little Party prejudice as we can, and that is not an easy thing to do. I do not believe that there is any choice to-day between a voluntary agreement and a statutory system. What we are trying to do is not to agree on a statutory solution but, as so many noble Lords have said, to buy time, because none of us has yet hit on a proper solution to the problem that is facing the nation.
I say this with no sense of elation, but I think the Government must be supported on the temporary freeze until we have had time to find an agreed solution to what has been a most elusive problem over more than a decade. Our eyes and minds must now concentrate on what we can achieve during the freeze which will carry confidence after the freeze. I think we have to consider very carefully the transition phase after the freeze comes off, because we have to avoid the normal pressure cooker effect, after deciding to get rid of the freeze, of getting the biggest explosion that you have ever seen. I believe that, as a nation, we have to give careful thought to how this policy is phased out in favour of whatever solution we come to agree.
In detail, I would offer the following comments with some humility. It is a brave man who offers infallible recipes to a problem of this sort. But I would say that any agreed solution, if it is to work in practice, must be seen against a background of genuine social justice. For the Government, this means that a halt must be called to the policy of reducing taxation for the higher income groups while there is so much to be spent on social priorities. I think the level of taxation had become too high, but this is just as much a psychological matter as a fiscal one and it is a matter of social confidence. For business and industry, I think it means that effective systems of fair pricing must be seen to exist, quite apart from the measures of statutory control, and it must be seen that there is no cheating and no "smart Alec" tactics in

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dealing with prices in this country over the coming months.
For the trade unions, I think there must be recognition of the fact that social justice and fair play cannot be achieved if the big and powerful union is constantly sharpening its knife and taking large slices of the national cake, while the weaker unions are left with the crumbs and a perforated spoon to pick them up with. The T.U.C. must surely take responsibility for sorting out the priorities in what has become a frightening jungle, in which we know that the weaker unions are getting a raw deal. If they do not do this, then somebody else will have to. I think there must be agreement among all responsible leaders in all walks of life that, at all costs, we must preserve the rule of law. By all means change the law or change the Government, but our whole system will be lost if existing law is contantly defied.
I was horrified to read yesterday the remarks of a trade union leader for whom I have the greatest respect, who said, "I do not doubt that every trade union, including my own, will pay no attention to this, which has nothing to do with our deep structural problems of power and property". I hope that this view will not prevail. If that attitude had been adopted by an industrialist, the unions would have made mincemeat of him, and rightly so. I would appeal to the Labour Party to use their political influence on the trade union movement so that we preserve the rule of law and so that whatever is decided in Parliament is supported until Parliament changes, whatever the law may be.
I think also that it is about time we had some agreement on the assumptions we make in trying to discover the root causes of our inflation. It is claimed in some quarters that substantial wage increases have very little effect in increasing prices and on inflation. Personally, I just do not believe that, but I am willing to be convinced. We are told that the major factor in inflation is the Government's policy of putting more and more money into circulation—printing it. I believe that this is a very big factor, but I am willing to be dissuaded. I should like to know. I should like to know, too, what were the assumptions on which the economic model which was used as a basis for the tripartite talks
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was founded. What were the assumptions made on investment and consumption? What factors, in combination, resulted in the conclusion that the nation could afford an across-the-board increase of £2 or £2·60 a week? And, what is more important, were these mathematics agreed by all the people at the talks, or were there some reservations? And if there were, can we know what they were?
I believe it is essential that the public opinion formers, at least, should be taken into the confidence of the Government and told exactly what are the issues and what are the assumptions and bases upon which the discussions and arguments are taking place. If all this were appreciated and known it would form a basis for the deliberations of the type of tripartite national council to which my noble friend Lady Seear referred yesterday. But until we know how far the constituent bodies of the recent talks will go on agreeing the mathematics and, even more important, whether, having come to some conclusion on them, the C.B.I. and the T.U.C. can deliver the goods, we shall indeed be in real danger of having bought this precious time at the cost of very rough justice, of tension, of social frustrations and a political and economic cul-de-sac at the end. As so many noble Lords have said, we have solved nothing at the moment. We have bought this precious time. We must use it to find a solution with which the whole nation can live, and this, I believe, is the responsibility of all political Parties and organisations in this country.
3.58 p.m.
LORD DRUMALBYN: My Lords, we are in some difficulty in this debate because, as the noble Lord, Lord Byers, has pointed out, we have devoted most of our time in the course of the discussion over the past two days to the question of the Chequers talks, and very little to the Amendment on the Order Paper. Indeed, I think it is true to say that it was not until the noble Lord, Lord Beswick, spoke yesterday and the noble Lord, Lord Diamond, spoke to-day, that the debate has had very close relevance to the exact terms of the Amendment on the Order Paper. This places me in some difficulty in replying to the speeches that have been made, which have gone into great detail,

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and I hone that I shall be able to contain my remarks to a reasonable time. I hope, also, that I shall be able to say something about both the Amendment and the question of the Chequers talks and the position on the standstill in which we now find ourselves.
It is reasonable to say that on taking office in June, 1970, the Government inherited an economy suffering from an unprecedented rate of wage and price inflation. Throughout the last two years it has been the prime objective of the Government to reduce this unacceptable rate of inflation. The noble Lord, Lord Diamond, quite rightly pointed out that this objective has been reiterated in successive gracious Speeches. The Government have acted on many fronts against the rate of price increases. Public sector prices have been held down over a broad front. In July, 1971, the Government made massive cuts in S.E.T. and purchase tax, and thereby reinforced the C.B.I.'s initiative on prices. The C.B.I. scheme for price restraint, which ended on October 31, 1972, made a major contribution towards containing manufacturing prices. Taken together, the C.B.I. scheme and the unprecedented reduction in indirect action have played an important part in bringing down the rate of price increases over the last 15 months. The rate of increase in the six months from July, 1971, to January, 1972, was reduced to under 5 per cent., compared with 10·9 per cent. in the six months prior to July, 1971; and despite the troubles in the early part of the year the increase in prices in the 12 months to August was 6½ per cent., as compared with 10¼ per cent. in the previous 12 months.
This dramatic de-escalation in the rate of price increases was not accompanied by a similar de-escalation on the wage front. The full impact of the actions taken by the Government and the C.B.I. on the prices front was thereby considerably eroded, and continuing wage pressure has begun to work through into prices more recently. That is why the Government decided to reinforce their policies to contain inflation by engaging in tripartite talks over the last three months. Throughout these talks, all three parties have been conscious of the need to break the infla-
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tionary spiral which is damaging to the competitive power of British industry and bears most heavily on the weaker members of the community. In the tripartite talks, we reached agreement on three objectives: faster growth in national output and real incomes; an improvement in the relative position of the low-paid groups; and moderation in the rate of cost and price inflation. These were, I think, common objectives; and we obtained firm undertakings from manufacturers and retailers to restrain prices. Unfortunately, we were unable to agree on positive joint measures, and the Government have therefore decided to act unilaterally to establish a new programme for controlling inflation.
My right honourable friend the Prime Minister outlined in another place on Monday the first stage of this programme. The immediate standstill on all increases in prices, rents, dividends and pay provides us all with a breathing space to join together in working out a more rational approach to the problem of inflation along the lines of the proposals discussed in the tripartite talks. Meanwhile, the Government have accompanied the standstill with action to alleviate the pressure on those members of society who suffer most from inflation. Within the Department of Trade and Industry a special Prices Unit has been set up to assist manufacturers, retailers and members of the public to understand the implications of the standstill and to note complaints. The unit has been gathering information on prices raised since midnight on November 6, and they will be examining the evidence offered in each case to see whether, when the Counter-Inflation (Temporary Provisions) Bill receives the Royal Assent, these increases should be rescinded.
The establishment of a Prices Unit reflects the importance that the Government attach to the control of manufacturing and retail prices. The standstill applies to all increases in all prices after November 6. The intention is that there should be as few exceptions to this rule as possible. Enterprises will be required to absorb cost increases to the maximum extent possible. Cost reduction should be fully reflected in prices. Wholesalers and retailers should not increase their cash margins during the standstill; and, as an additional measure to assist retailers

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to keep prices down in the transitional period from purchase tax to V.A.T., the Chancellor announced yesterday that purchase tax already paid on goods in retailers' stocks on April 1, 1973, will be rebated against the retailers' initial V.A.T. liability. My Lords, where it is impracticable for costs to be absorbed, firms will need to submit details of proposed price increases to the relevant Government Department and obtain its consent, or run the risk of having price increases reversed by notice or order. Exceptions to the standstill will generally be confined to cases where raw materials or raw agricultural produce account for a high proportion of total costs.
Wholesalers and retailers will not be required to apply to Departments before changing prices for goods for which they have had to pay more, but they will be expected not to raise prices unjustifiably. Enforcement will to a large extent be dependent on the co-operation of manufacturers and retailers, given the multiplicity of outlines and variety of products. The D.T.I. has already obtained agreement to such co-operation from the C.B.I. and the Retail Consortium, who represent over 90 per cent. of retailers in the United Kingdom; and both the retailers and the manufacturers recognise the importance of restraining prices in the new climate created following the proposals made by the Prime Minister on September 26.
The public will expect retailers and manufacturers to contain prices, and they will be backed by the powers conferred on Ministers by the Counter-Inflation (Temporary Provisions) Bill. The programme for controlling inflation offers the country a new opportunity to join together in overcoming inflation. The acceptance by the C.B.I. and the T.U.C. of the Government's invitation to join in discussions on the objectives and methods of national economic management marked a major change in the execution of economic policy in this country. It is the Government's hope that these discussions should be renewed to lay the foundations for the longer-term policy to ensure the agreed tripartite objectives.
My Lords, I entirely understand and sympathise with what the noble Lord, Lord Byers, has said about the necessity for planning carefully in advance the transition from a standstill to whatever
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may be decided should be the future arrangements. But until we decide what the future arrangements are, it is rather difficult to say what the transition to them should be and therefore I am afraid I cannot follow him in that.
LORD BYERS: My Lords, if the noble Lord will allow me to say so, I was not putting it as a question: I was putting it as a warning.
LORD DRUMALBYN: My Lords, we always take note of the warnings given by the noble Lord, Lord Byers. It is not that I want to attribute to him a Cassandra-like role, but we carefully take on board what he says.
My Lords, I turn from prices to unemployment; and, of course, I would not for a moment deny that unemployment is at a quite unacceptable level. Nevertheless, we can take some comfort from the fact that the total number of registered unemployed in October was 80,000 lower than in October, 1971. The figure included 23,000 school-leavers and 2,600 adult students seeking work in their vacation, so that the seasonally adjusted percentage of unemployed was 3·4 per cent. Here again, this trend has not come by chance. Over the last two years the Government have taken a whole series of measures designed to set the economy back on the road to expansion and prosperity after the period of stagnation and decline that followed devaluation in 1966. The Amendment criticises Government policy on taxation, but the massive reductions in personal allowances and taxation have left people with more of their own money to spend, so that consumer expenditure last quarter was at a level nearly 6 per cent. higher than a year ago. This, in turn, affected industrial output, and in June, July and August manufacturing production was running at an annual rate of 8 per cent. above that of the previous three months. The signs are that the economy is on target to achieve the 5 per cent. growth rate set in the 1972 Budget.
As the noble Lord, Lord Balogh, observed yesterday, it was possible to achieve this measure of growth without increasing investment because capacity was under-used. But productivity has been increasing faster in Britain during the past year than in most other countries, including Germany and the U.S.A.,

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and there is now good hope that the level of investment will rise in 1973. The one thing that has been standing in the way of the necessary restoration of confidence is that our export prices have been rising much faster than those of our competitors abroad. That is one of the main reasons why it is so essential that we should moderate wage increases, which have been pushing up our prices and standing in the way of the expansion which we need to increase employment.
My Lords, I was asked yesterday to say something about training opportunities. In launching the Training Opportunities Scheme, known familiarly as TOPS, the Government intend that it should complement, and not supplement, industry's responsibilities, particularly with regard to the initial training of young people entering employment. This is why TOPS requires a minimum interval of three years away from full-time education before making training facilities available. However, in order that these rules do not operate harshly against certain classes who suffer disadvantages, special arrangements outside TOPS have been made for unskilled young people, redundant apprentices and young people who are unemployed and without reasonable prospects of employment. The throughput for Tons this year is 30,000 and we aim at a figure of 100,000 as soon as possible. In 1971–72, nearly 4,000 redundant apprentices took up training places under award schemes operated by industrial training boards. In 1972–73 a further 4,000 awards are offered. Well over 900 unemployed young people were given limited skill courses in engineering construction and nearly 500 are currently in training. The raising of the school-leaving age will reduce by over a quarter million the number of young people leaving school to enter employment next year, but this does not affect the problem of providing job opportunities for school-leavers in the longer term, and the National Youth Employment Council has set up a working party to investigate this problem. It is expected to report about the middle of next year.
A good deal of concern and criticism has been expressed during the debate on what one could describe as land speculation. Probably it is not widely enough appreciated how heavily, and rightly so,
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profits from property speculation are taxed. Profits from any deals where property was acquired solely or mainly in order to realise a gain on disposal are taxed as profits from trade and not merely as capital gains. A company pays corporation tax at 40 per cent. on such profits and shareholders pay income tax and surtax in the normal way on any dividend. The personal tax rates of shareholders can be as high as 75 per cent. In August, the Governor of the Bank of England asked the banks to restrict their lending to property companies and for purely financial transactions. The latest figures show that this request has met with success in restraining lending for speculative transactions in land.
The new legislation does not imply another concession to the well-off business man. It provides a simple method for a company to give its employees incentive rewards related to its own performance—and here I am talking about share option schemes. But the conditions and limitations on benefits under approved share option and incentive schemes will ensure at the same time that the schemes provide genuine incentives and are not simply used for tax avoidance. This is the reason for their restriction.
LORD BESWICK: My Lords, if what the noble Lord says about the taxation of profits from land speculation is held to be an answer to what has been said, can he confirm that the rate of taxation is higher on profits earned by such activities than on profits earned in more constructive business?
LORD DRUMALBYN: My Lords, the tax on profits is, of course, on general lines, not discriminatory in that particular sense, and I was not suggesting that it was. All that I would say is that transactions of this kind are subject to the normal rules and that if carried out by an individual will be treated as personal income and taxed accordingly.
The noble Lord referred to house prices; and I come to that. There is no doubt that housing prices have recently risen very steeply. In the second quarter of 1972, prices of new houses mortgaged with building societies were 23 per cent. higher than in the second quarter of 1971. The origins of this problem lay in the situation we found when we took office in

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1970. The demand for owner occupation did not then reflect the increase in incomes that had taken place and there was little confidence in the future. We took immediate steps to restore confidence. Pent-up demand for owner occupation was released. The industry responded by increasing their output of new houses, but new homes cannot be produced instantaneously in response to demand, and meanwhile prices have inevitably risen.
We must put the increase in house prices in perspective. Despite these increases, Government policies for the private housing market have meant a continuing rise in the number of people who can afford to become owner occupiers. The young and the less well off have not been losing ground in relation to borrowers generally. As between the first half of 1970 and the first half of 1972 32 per cent. more mortgages have been issued by building societies to first-time purchasers; 30 per cent. more to borrowers under the age of 25; and 40 per cent. more to borrowers with incomes up to the average industrial manual worker's earnings. During the same period all mortgages issued have gone up 39 per cent. in number. These are national figures and the picture regionally is much the same. In other words, the prospect of home ownership in recent years has widened and not narrowed. But prices must be stabilised. The way to do this is to increase the supply of new houses. So far the signs are good. There were 43 per cent. more new houses started in the first six months of 1972 in comparison with the first six months of 1970. In the first three quarters of 1972, 14 per cent. more new private houses were started than in the first three quarters of 1971. These are encouraging figures, but we cannot be satisfied until the supply of new houses comes into balance with the rising demand. The problem is one of local markets rather than a national shortage. We are determined that enough land should be released for home building in the right places to meet the needs of the private market into the forseeable future.
LORD ROBBINS: My Lords, does the noble Lord ask us to believe that any conceivable increase in the supply of houses will keep pace with the demand
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for them unless the inflation is very substantially moderated?
LORD DRUMALBYN: My Lords, obviously the theme of what I am saving is that it is the Government's intention to do just that: to moderate inflation. I would agree that if inflation continues at the present rate and if the demand for houses goes on at the present rate, it will be hard for the supply of houses to keep pace and we shall be found to have almost a special inflation so far as the housing market is concerned.
I understand the natural anxiety over housing land price increases; but the facts are that the average price for a house plot has risen by an annual average rate of 35 per cent. between the first half of 1970 and the first half of this year. The prime cause of the increase is the excess of demand for land; and rather than stifle the demand for land, we believe that the most efficient and equitable solution is to increase the supply. This we have been able to do. It might be helpful if I mentioned some of the measures that have been taken. For instance, we have just issued a circular, Land Availability for Housing—17 October, which, as well as giving details of a special borrowing allocation of £80 million to finance the acquisition of land by local authorities, asks local authorities to make publicly known the details of sites on which residential development can be started within the next five years. Already some £34 million of the fund has been provisionally allocated. We have also been pressing nationalised industries and Government Departments to release more land and to set up working groups in the regions where local authorities, builders and the Department of the Environment officials have been able to thresh out common problems; and have announced that we are hoping to give loan sanction for sewerage works even in advance of need. It is also hoped to release some 5,000 acres of land for private housing in the New Towns in the South East. Clearly we must press on with these policies. Meanwhile, progress has been most encouraging. For instance, planning approvals for private houses by local authorities in the South East in the first six months of 1972 are up by about half compared with the same period in 1970.

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My Lords, to control house prices is quite impracticable. No Government have tried it. The last Government did not do it during the 1966 standstill. The then Minister of Housing, Mr. Crossman, said on August 2, 1966, that "it would clearly be difficult to establish a basis for statutory control" of house prices. This is because houses and building sites are very individual things with widely differing values. In the second-hand market no clear price level exists for many houses which may not have been sold for many years. Any attempt to control house prices would freeze the market and dry up the supply of new houses. But the Government expect the building industry to keep down the prices of new houses during the standstill and, in particular, not to increase advertised prices for new houses before contracts are exchanged. There is no question of the Government overlooking the other many aspects of the housing problem apart from owner occupation. The cornerstone of present policy is the reform of housing finance. This, together with progress on improvement and slum clearance, ought to enable the main objective of a decent home, within their means, for every householder to be realised within a reasonable time.
My Lords, I turn from the question of housing to that of industrial relations. The noble Lord, Lord Diamond, referred in particular to the days lost in strikes. No one, certainly no one on this side of the House, may be complacent about the present level of strikes and other forms of industrial action and the loss of production that these entail. Nevertheless, the last two years have seen a dramatic fall in the number of strikes. In the first nine months of this year there were 1,795, and the figure for 1971 was much the same. But compare that with the 3,248 in the first nine months of 1970, or the 2,248 in the same period in 1969. I am not in any way underrating the seriousness of the very high number of working days lost this year. No one may be proud of the fact that so far this year we have lost 22 million working days from strikes. But nearly two-thirds of that total is due to two strikes—in coal-mining and building. The larger the number of people involved the greater the responsibility of those who call strikes. But let no one use these two incidents
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to disguise the fact that over industry as a whole the number of strikes has dropped remarkably.
I would be absurd, even perverse, to attribute the number of working days lost to the Industrial Relations Act. These two strikes were about pay. Apart from the need to get a proper and up-to-date framework for industrial relations, the main emphasis of the Act is upon conciliation. There has been no decline in the willingness of trade unions to seek the help of the Department of Employment and I should like to take this opportunity also to say that while it is a pity that the services of the Commission have yet to be invoked, as intended by the Act, the report of its inquiry on the disclosure of information has been published, and organisations have been consulted. The proposed revision of the Code will be issued in draft as a consultative document, with a view to submitting it to Parliament after further consultation and with the advice of the Commission.
A good deal has been said in the debate about fairness and my noble friend Lord Colville of Culross, in a notable contribution, made it clear that the keynote of the gracious Speech is fairness. He left to me the task of showing how this applies in the sphere of the Department of Trade and Industry. First, the gracious Speech referred to areas of special social need. We intend to use the powers in the Industry Act to spread prosperity more fairly, in the sense of more evenly, throughout the country. Second, there is the reference to legislation to promote fair trading and competition, and in this connection I would mention also the Supply of Goods (Implied Terms) Bill shortly to be discussed by your Lordships. It will provide that any exclusion clauses in contracts of sale to consumers will be void and so will give better protection to consumers. The Insurance Bill is also designed to improve the protection given to consumers; that is, to policy holders.
My noble friend Lady Elliot of Harwood and the noble Baroness, Lady Phillips, referred earlier in the debate to the promise in the gracious Speech of legislation on fair trading and competition. Over the last year we have been giving careful thought to means of

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strengthening the machinery to prevent the abuse of market power and to protect the consumer. We have been concerned to identify the real problems of the consumer and to find practical ways of assisting or protecting him or, more usually, her. This will be one of the primary aims of legislation shortly to be introduced. My right honourable friend the Prime Minister has already described this in another place as the toughest and most important range of measures on the subject ever proposed in Britain. He has underlined the importance the Government attach to this matter by appointing my right honourable and learned friend Sir Geoffrey Howe to be Minister for Trade and Consumer Affairs. It is the first time in our history, I believe, that a Cabinet Minister has had the protection of the consumer as a specific and principal field of responsibility. But not all measures taken in the consumer's interest need have a statutory hacking. As the noble Baroness, Lady Burton of Coventry, continually reminds us, we should give high priority to the provision of better information to enable consumers to make a proper choice from what the market offers and, when things go wrong, to the provision of advice which is more accessible, and that means local. When the time comes to publish the details of our proposals I am confident that your Lordships will not find them wanting in these respects.
The noble Lord, Lord Diamond, spoke of takeovers. As was foreshadowed in the gracious Speech. the Secretary of State for Trade and Industry hopes shortly to introduce new competition in legislation; and under the existing legislation—the Monopolies and Mergers Act 1965—each merger involving the acquisition of gross assets of£5 million or more which involves the creation or intensification of a monopoly—one-third or more of the United Kingdom supply of goods or services in question—is considered for possible reference to the Monopolies Commission. It is our policy, as it was that of the previous Administration, to look at each case on its merits and to refer to the Commission any merger proposal which in our view raises public interest questions which require closer examination. In this connection one of our main concerns is, of course, the extent to which competition is diminished,
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but we have full regard also to the wider factors of the public interest.
Certain major bids have recently attracted a great deal of attention in the Press and Parliament, notably the bids by Trafalgar House Investments for Bowaters and by the British-American Tobacco Company for International Stores. These bids are under consideration by the Department and decisions on whether or not they are to be referred to the Monopolies Commission will he announced in due course. We seek in all cases to reach a decision as soon as is reasonably practicable. None the less, some mergers of this sort have to be considered in detail and with care before a decision is reached. The general question of takeover bids by a conglomerate is one which is much in people's minds at the moment. The Monopolies Commission expressed some general views on this in their Reports in 1969 on the proposed mergers between Unilever and Allied Breweries and Rank and de la Rue. We have very much in mind the need to keep an eye on conglomerates but each case must of course be looked at on its merits. There have been five merger references to the Monopolies Commission since July 1, 1970. There were six references in the roughly similar period from July 1, 1968, to June 30, 1970, under the previous Administration.
There can be no doubt that inflation more than almost anything else produces unfairness. It is the purpose of Her Majesty's Government, and has been all along, to reverse the trend towards inflation and unemployment which we inherited, and to that end we have been working out policies which will achieve that purpose. For that purpose we need faster and sustained growth. That is why we have committed ourselves to going for a rate of growth of about 5 per cent. a year over the next two years. We cannot achieve that unless we maintain a satisfactory balance of payments. That means that we must not price ourselves out of the markets of the world by paying ourselves too much. There can be no doubt that the country as a whole now realises this and is fully prepared to accept the need for a standstill in wage and price increases while a longer-term policy is being worked out. I am gratified to find that it is the general

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feeling of the House that they are prepared to accept this lead. We certainly could not afford to continue to talk indefinitely before we took action. But now there is no reason why the talks should not start again.
My Lords, we certainly should have preferred a voluntary system. But a voluntary system depends upon a common concept of what is fair. Everyone has his own idea of what is fair in his own particular case, and in the end there must either be agreement or someone must decide. Some very revealing things have been said in this debate. The noble Lord, Lord Brown, said last night at the end of an interesting speech:
"I do not believe that a voluntary agreement on prices and incomes will work, because I do not believe that trade union leaders, with the best will in the world, can maintain the necessary control over their own members."—[OFFICIAL REPORT, 7/11/72; col. 311.]
The noble Lord, Lord Balogh, said that it dawned on him in 1943 that free collective bargaining and full employment were incompatible. We remain optimistic, and we shall do all we can, despite opposition, to devise a voluntary system acceptable to the vast majority: and one can rarely, if ever, achieve unanimity in a free society.
Meantime, I sense that the House as a whole accepts the standstill, which, after all, is not very different from the previous standstill, except that it is taking place in an atmosphere of expansion and hope and not one of deflation and disillusionment. Until the legislation becomes law, the standstill will depend on the good will and public spirit of everybody. True, the monitoring system for prices has already been established, and those who do not play the game are likely to be obliged eventually to come into line. But I believe that the force of public opinion and the general will to take this opportunity of breaking the vicious circle of inflation and unemployment will prevail.
LORD DIAMOND: My Lords, before the noble Lord sits down, may I ask him to deal with a matter of which I gave him notice last night, and to which his noble friend promised he would reply? He has said a word or two about houses and land. He says that the Government propose to do nothing about spending
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from capital gains of that kind. What do the Government propose to do about spending from capital gains of other kinds?
LORD DRUMALBYN: My Lords, I do not recall the noble Lord having put that question to me. If he had, I should have endeavoured to answer it. I cannot answer him now, but I should like to look into it.
4.33 p.m.
BARONESS GAITSKELL: My Lords, I have long regarded this noble House at its best as an excellent institution for further education, and the quality of this debate, on such an intractable subject as inflation, has reinforced my views on that. I am afraid that my own contribution will be more thoughtful than instructive. I do not quarrel with the Prime Minister's change of policies, because I guessed from the beginning that the Conservative Party's Election Manifesto had paved the way for continuing strife between the trade unions and the Government, and that there would have to be changes. On "Panorama" the other day the Prime Minister stoutly denied that he had alienated the trade unions. But perhaps he was joking, and had decided on a standstill when the kissing had to stop! Imagine the difference in climate during the tripartite talks if the Industrial Relations Act and the Housing Finance Act had not been the curtain raisers to these talks? I believe that we might now have had not a statutory freeze on prices and wages, but the beginning of a prices and incomes policy. Anyone who watched "The Money Programme" on B.B.C.2 recently, in which the noble Lord, Lord George-Brown, certain members of the T.U.C. and the C.B.I. and shop stewards took part, would have been horrified at the bitterness of the trade unionists towards the Government and dismayed by the complete absence of trust. This should make us think.
My Lords, the word "confidence" is one that has been appropriated by management and employers. A lack of confidence is used to justify any shortcomings, like a disinclination for industrial investment. But if trade unionists do not have confidence in the Government of the day, of whichever Party, there can be no safeguard against industrial

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anarchy, for the exercise of power by any particular section of the community is not sacrosanct.
So now this Government have imitated the Americans and have likewise performed an economic somersault, introducing a freeze with the more benign name of "standstill". Not all economists and politicians are sanguine about the long-term effects of a freeze. The very words are revealing. They speak of the "cost push" or "demand pull" inflation, followed up by an "over-heating" of the economy. The fairness of a freeze can be accepted only if the freeze on wages is matched by a reduction in prices and is not merely a reduction in living standards for certain groups in the country. It would be surprising if trade unionists had forgotten the very large increases in salaries awarded to top civil servants and heads of nationalised industries, among others. Perhaps it would have helped them to forget this if the White Paper had contained any suggestion for dealing with property speculators and capital gains of various kinds, not to speak of rent increases.
No one underrates the difficulty of controlling food prices in the circumstances of our going into the Common Market. But when the Prime Minister said that there was to be a price freeze on food prices, except for meat, fish, fresh fruit and vegetables and dairy produce—because of seasonal fluctuation—I hope we all realise that these particular foods are essential for the health of the nation, and need special protection and monitoring.
Many politicians and economists have written about the phenomenon of inflation, a disease of democratic countries not of dictatorship countries. The coverage in the national Press has been an education in itself, and The Times has included articles from men of the Left, Right and Centre. Mr. Maudling has conceded that there must be changes in the capitalist system itself. Whenever I have heard Mr. Campbell Adamson of the C.B.I. I have detected a greater understanding of the realities of power and understanding of the trade union position. But it was an article in reply to Mr. Maudling by a man who was Deputy Prime Minister in Czechoslovakia when
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Mr. Dubcek was the Party Leader that I found most stimulating and illuminating on this subject. This article, by an "excommunicated" Communist, Dr. Ota Sik, now teaching in Switzerland, brought out the whole truth about the fact that wage earners have no direct interest in the growth of capital, profits or investment, and that until the social and economic causes of inflation are removed there is little chance of a successful prices and incomes policy, voluntary or statutory. Dr. Ota Sik made a great plea for the education of trade unionists about the need of a prices and incomes policy.
Here, my Lords, is a task for the mass media. I think that both management and the T.U.C. have shown no imagination about this need. The T.U.C. seem to me to behave as if they have nothing to lose from inflation. It requires not only experts but men of vision on both sides of industry and politics—men not hemmed in by their Party ideologies—to tackle the corrosion of inflation. Few people were as clear-sighted as my noble friend Lord George-Brown about these matters, though his efforts were bedevilled by a balance-of-payments problem which the Conservative Party—and I wish to stress this—did not inherit. There have been no orchids from the Conservative Party in this debate for the whacking balance-of-payments surplus which they received from the Labour Government.
I support the Amendment of my noble Leader Lord Shackleton, so ably introduced by my noble friend Lord Beswick. I support it on various counts. I dislike the way in which the Tories always speak as if they had the public in their pocket and are the only people in the country who have the national interest at heart. It is not an edifying package that is presented to us in the White Paper. I have long shared the view of many people in the Labour Movement that at this time there has to be a great surge towards more equality of opportunity in our society—what my noble friend Lord Brown spoke of as a "shift in the distribution of the gross national product". His speech yesterday was a remarkably original one, and I learned a good deal from it. In this standstill the Government have gone some way towards changing their minds, but I detect little change of heart.
4.43 p.m.
LORD THORNEYCROFT: My Lords, I intervene for a few moments in this rather complicated and controversial matter, and I propose to restrict my remarks rather narrowly to the issue of inflation and the present package that we are debating. The noble Baroness, Lady Gaitskell, was, if I may say so, both informative and thoughtful, and I appreciated the tenor of her speech. Indeed, I do not want to quarrel much with what has been said in the debate. I think the whole House shares the view of the noble Lord, Lord Diamond, about unemployment, and the whole tenor of what I want to say is that we have to devise measures to deal with our problems without giving a damaging blow to our policies on employment.
With regard to eroding the powers of trade unions, I can assure him of this: I do not think anybody, certainly anybody I have met in recent times, has wanted to erode the power of the trade unions. There has been some lamentation as to the lack of power of the trade unions and some wish to build up that power, but no wish to weaken what constitutes a really critical part of the fabric of the State. I agree with the noble Lord, Lord Byers, that here we have to go to the heart of the matter. We are either for this package or we are against it. It is no good talking round and round it, and I think at the end of the debate we had better make up our minds where we stand and then be prepared to stand up and be counted.
As to the contribution made by the noble Lord, Lord Drumalbyn, I suppose that all I have to do is to thank him, because in a sense he has accepted a suggestion that a number of us have been putting forward for quite a long time. The noble Lords, Lord Robbins, Lord Plowden, and Lord Roberthall, and I myself in a modest way, have all said that some form of statutory incomes policy appeared to us to be increasingly necessary. We have all asked the Government not to go on saying that such a policy is impossible, because an increasing body of opinion in the country felt that it was really bound to come. I therefore think the Government are right to take the initial steps that they have taken and are taking at the present time. I think it is a matter of total irrelevance that they have
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reversed their policies. Indeed, very often the best thing that a Government can do is to reverse its policies. The job of a Government, like that of a Prime Minister, is not to take a package of proposals at the beginning of a Parliament and stick rigidly to it. The job of Governments is to govern the country in changing and difficult seas and to try to steer the ship as best they can amidst the various storms that arise on the way. I think the Government are absolutely right to adjust themselves to this new posture.
I believe there are certain pluses even in the way it has been done. In having these talks, they have managed to get, through them, a very large measure of public support, and anybody who was prepared—and I notice the Front Bench opposite are rather careful not to do so—to go out and attack what they are doing would in fact lose a good deal of public support. I think the public have been waiting for some sign of government in this direction and that at this moment they would be behind the Government. They have some measure of trade union support: let there be no doubt about that. One gathers it very quickly from talking to trade unionists, not in the whole of their policies but in the general line they have taken here and in the patience with which they have pursued their objectives. The parties to the talks broke without any bitterness and I think that is a great credit to the Government. It is also a great credit to Mr. Vic Feather, who has conducted himself in an extraordinarily difficult situation with immense dignity and loyalty to the movement which he serves.
Time has been given for moderate opinion to assert itself, and that is something always worth doing, because opinions are changing all the time and new approaches are being taken. There is a great force of moderate opinion, not only in the country but also, in particular, in the trade union movement. This should be given a chance to exercise itself. Time has also been given for a number of rather quick settlements which were reached just before the freeze was announced; and if some of them were perhaps a little too quick or a bit over the odds, I have the feeling that they have saved us a very great deal of trouble in the cold winter months that lie ahead. So, in a way, the decks have been cleared

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for a new approach and some new thoughts.
I suppose, as a minus, one must admit that we have paid and will pay a very big price for the delay which we have had to accept in tackling more fully the growth of inflation in this country. I believe that what we need to do now is to learn the lessons of what has happened and to set the objectives. I speak with hesitation—I do not claim any absolute wisdom or knowledge in these matters—but I myself do not believe that a voluntary effort had much chance of success. I am bound to say that. In a way, it was a non-event. There simply are not the volunteers available. Power does not rest with the C.B.I. in that kind of way, and still less, perhaps, does it lie with the T.U.C. The T.U.C. is not a wage-fixing body; no individual trade union would ever concede that right to the T.U.C. So, in a sense, the Government have been talking not with principals, or even with accredited agents, in the matters they were dealing with. Therefore I think a measure of consensus is possible and perhaps immensely valuable; but the idea that you could somehow achieve voluntarily a policy which really bit is very much more doubtful.
I hope the Government will go on meeting the T.U.C. and the C.B.I. I am all for co-operation and consultation on these matters; let them discuss the Industrial Relations Act—it probably needs discussing. I hope that they will discuss with others the Industrial Relations Act. If I may follow something my noble friend Lord Molson touched upon, we have many people outside the C.B.I. and the T.U.C. who have strong views on, for example, picketing laws. I remember during the passage of the Industrial Relations Bill putting down an Amendment which proposed that picketing should be limited to those people normally employed upon the site. I withdrew it at the request of the Government because I must admit that we were sitting late at night, and there was some reason for not pressing Amendments which would not be accepted. But I would certainly put it down again. I believe, whether in this House or outside, that it would have a good deal of support. There are many matters, but in the last resort we are governed not by
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meetings between the Government, the T.U.C. and the C.B.I.; we are governed by Parliament. It is in these Houses of Parliament, Parliament itself, that the final decisions and the responsibilities for what is done about inflation must eventually be taken.
Now they have acted and we have a freeze which, in my judgment, will do no harm to anyone for a few months. But at the end of the freeze some decisions will have to be taken, and I think it is fair to ask my noble and learned friend the Lord Chancellor, who is to reply to this debate: where do we go from here? What are we going to do next? This is not a final solution to our problems. We ought to begin to think about where we are going and to begin to talk about the various options that are open to us. None of them is ideal, and I doubt whether any are passionately advocated by any political Party in the House. But we had better talk about them and see what they are.
I suppose that the object of the freeze. or of any thaw which follows it, must be this: it must be to put a gradual brake—and I emphasise the word "gradual"—upon the money supply in order that we can deal with the inflation without causing savage unemployment. I suppose that is the object that most of us on all sides of the House would have in mind. What would be rather foolish would be to imagine that three months from now we can go back into what I conceive to be the rather dream world in which we have been living up to now: a world in which we suddenly could have a voluntary wages policy, or settle it all by a few talks. I wish we could do that, but I do not believe it. I did not believe it a year ago, and nothing that has happened now persuades me to believe it at this moment.
Therefore I think it would be wrong for the Government not to take a very close look at the realities of the scene. Where do we go? What steps could reasonably be taken? As a first step, I imagine we will try to get wages moving up again because wages have to move up. In point of fact, this is a rather underpaid, unproductive country. As wages in Europe move up it is quite right that ours should move up. The managers in my businesses are underpaid compared with their counterparts on the Continent

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of Europe. I do not say that they work less for that purpose, but as we go into the Common Market it is reasonable for them to assume that they will be getting rewards which are roughly the same. I talk of managers because I happen to deal closely with managers.
But the same story can be told about workers in many industries. So we have to get to a stage where wages can move up, and prices can be adjusted, but within the limits and conditions that the Government lay down. I do not think they can let it go to a free-for-all. My guess is that they will have to lay down limits and conditions, and they will have to have machinery for monitoring those limits and conditions. It takes time, thought and determination to set up machinery of that kind. I admit that all this is very far from the market mechanisms which adhere to the hearts of many of us on the Conservative Benches. It must be very far from anything that the Labour Party want since they are voting against this thing this evening. I think it is pretty far from the Liberal economies which—
LORD SHACKLETON: My Lords, may I interrupt the noble Lord? What does he mean about the Labour Party voting against this "thing" this evening? I do not understand what he means. This Amendment was put down long before this "thing"—whatever it was—came about.
LORD THORNEYCROFT: My Lords, I think the rebuke is justified. I apologise to the House for a remarkably loose phrase. I was trying to blur the enormity of the noble Lord's conduct. What I meant was that he has put up a superb smoke screen which concealed the fact he was casting a vote against the package which really mattered; which, as the noble Lord, Lord Byers, said, went to the root and heart of the matter. This was, as I said earlier, something on which men ought to have the courage to get up and be counted. That is what I really meant.
LORD SHACKLETON: My Lords, the noble Lord is blurring it so much that he has blurred his own mind. We are not voting against any package to-night; we are making a criticism in this Amendment of the Government's past policy. Suitably, the package has come into the
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debate, and a number of noble Lords are making very interesting speeches. I think if the noble Lord just moves on a little it will help.
LORD THORNEYCROFT: My Lords, if I have been unjust to the noble Lord, who is always so fair in these matters, I apologise. He is voting about something else; but the rest of us are going to vote about this package.
What are the alternatives? One alternative is a quick use, in a robust form, of monetary policy. Monetary policy has a role: but anybody who urges the harsh use of monetary policy immediately applied to-day is asking for a deal of trouble in this country. If we did that the 5 per cent. growth rate would go out of the window straight away. All the hopes that the noble Lord, Lord Diamond, was expressing about unemployment would be lost. All these things would cause a savage upturn in the levels of unemployment. If that is the alternative, I would beg noble Lords—and I know there are many people, and many people in the Conservative Party, who urge these things—to think twice about it. I speak as one who is an advocate of monetary policy, one who has used monetary policy. I know a little—not much—of what I am talking about in the field of monetary policy. I urge a certain caution.
Another alternative is a free-for-all. I have already dealt with that. I do not think we are anywhere near the world when we can go back to the situation which has persisted over recent months. A country would be remarkably unforgiving of a Government who attempted to do anything of the kind. Another alternative urged sometimes by Labour Members and sometimes by trade unionists is rigid price control unaccompanied by wage control. I want to spend a few minutes talking about price control. I know that we all have to pay lip service to price control. I know that in public places, for political purposes, and in the newspapers, we all have to say that it matters frightfully; but I do not see why I should say it here. I have got too old to bother about anything except saying what I think about these things.
Price control is largely irrelevant to the problem that we are talking about. Over the years profits have sharply fallen

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as a percentage of the national product. Trading profits, net of stock appreciation, were running at 10 or 12 per cent. of the gross national product in 1964; they were down to 7 per cent. in 1970. They may have risen a little since then. Those were gross profits. But the net return on capital, after allowing for inflation in this country, is at a dangerously low level. I honestly think that only a visionary could say that this inflation was a profit-push inflation. While I admit that we must do something about prices, and I am not at all opposed to it, those of us who fix prices are not going to be in a much different position to-morrow than we were in yesterday. Our prices are fixed by competition. That goes for the vast majority of prices in this country. The idea that managers or boards of directors walk gaily into the office and say, "Let's put them all up by 5 per cent." is one of the biggest myths that ever happened. It is not like that in the business world. We are closely held and closely fixed by a great deal of competition from home, and of course increasingly in the year ahead it will be competition from Europe as well. This has some relevance to the measures which are to be adopted in the future.
Therefore I would, in conclusion, say this. I would ask the noble and learned Lord the Lord Chancellor to give us, if he can—I do not want to press him too much—some reflections on where we might go after this package is over. What kind of a set-up are we looking for? Obviously it must be an arrangement which allows wages to go up in some measure. It must have more flexibility, but it must fall short of a free-for-all, which would indeed be disastrous. Prices, in the political scene in which we live, must be subject to some measure of control. But let the control, I would urge, be concentrated on monopoly prices or strongly price-led prices, because these at least are fairly ascertainable and definable and could be the subject of strict monitoring. The rest, quite honestly, can look after themselves and will be determined by competition. We shall then move into a world which is not completely free, which is not the market mechanism, which is imperfect in some respects and unfair; but it will be a great deal better than what has gone before and a good deal better than most other people are trying to do at
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the present time. It could help the poor as well as the rich by putting a check on the inflation which has damaged both—and I wish it well.
5.3 p.m.
LORD GEORGE-BROWN: My Lords, I hope the noble Lord, Lord Thorneycroft, will forgive me if I say that that was really a very peculiar speech. He obviously got the thing wrong. He proceeded to say that wages should go up—that was his opening point—and then spent a long time making it quite clear to us that in fact the only thing he thought should be kept down was wages. At the end he was in favour of prices being under some degree of control, but he spent a long time in the middle of his speech showing why they could not be. And his other alternatives which he advanced to the noble and learned Lord the Lord Chancellor he knocked down one by one. I was not clear where he was at the beginning in the middle or at the end of his speech except that he seemed to think that this package deal—this freeze, or standstill, or whatever it is—is somehow a new policy, or the beginning of a new policy. It is to that point that I want to address most of what I have to say because, with respect, I think he is completely wrong about it.
The noble Lord said one thing that amused me very much, with my perhaps distorted sense of humour. He said, "Of course, there is nothing wrong with Governments' changing their mind, even if they go on changing mind as often as this Government do." My Lords, that depends on how often they get it wrong. I agree with him that if they get it wrong all the damn' time there is a lot to be said for changing their mind all the damn' time. But the last time I was in Government, may I just tell him, I would have given anything for a Government that had just stuck to the mind they had made up and did not change it quite so much. It makes life awfully complicated if your colleagues keep changing around you.
Yesterday I listened to the opening by the noble Earl, Lord Jellicoe (he is not here; no doubt quite properly so), and after him the noble Viscount, Lord Amory, giving us, in the case of the noble Earl, a somewhat pained lecture upon

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what decent chaps ought to do in a situation such as this. He said he had little doubt that a few loud voices would be raised over here, on this side of the House, on political issues, but he thought—or hoped—that there would not be too many of them. The noble Viscount, Lord Amory, went a little further and said he had no doubt that some of us would engage in vituperation. He thought that that could be just tossed off and that noble Lords did not have to bother about anybody who engaged in vituperation. Both noble Lords made interesting comments in a debate upon a prices and incomes policy, in a debate upon whether we should have a freeze or not, because I could not but recall the notable restraint on vituperation and personal abuse that they conducted when I was trying to do exactly the same thing from 1964 to 1966.
I could not but recall Mr. Heath's sneer at the ex-officials of the D.E.A., most of them now leading luminaries and advisers to this Government—which of course may be why this Government are changing their mind. I could not but remember the Prime Minister's sneer because they had held a reunion of all those officials who were in the D.E.A. in a certain inn not far from where the office of the D.E.A. used to be. He thought that was a suitable subject for a sneer. I think that getting advice from them about how we should conduct ourselves in this situation is not in itself the best of taste. I hope that we shall not engage in vituperation; I hope that we shall be responsible, and I hope that we shall deal with this matter in the atmosphere in which it has been caused to come about. But it does not lie with them, who not only abused us up hill and down dale for trying, and in terms of scurrilous personal abuse, but also went out and deliberately incited employers and trade unionists not to comply with what we were doing. I simply say, without making too much of a meal of it, that I do not abuse them for changing their mind—in many respects I welcome it, if indeed they have changed it—but I think they owe a greater humility to this House and to some of us for their past behaviour.
I start with the proposition, which I did not think the noble Lord, Lord Thorney-
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croft, held, that a freeze or a standstill is not a policy. It may have a part, a role, to play in the working out of a policy in the stages by which you get to it, but it is not itself a policy; and one simply cannot welcome it. Even if it did not have other defects I am going to try to explain in a moment, one simply cannot welcome it as though it itself is in any sense whatever a policy action. If I felt that the Government had a productivity, prices and incomes policy then I could view the standstill as a move towards its ultimate working out. But, as the noble Lord said, quite properly (I know it to be his view and I suspect it to be the Government's view, but they do not say it as openly as he does), they do not believe that a productivity, prices and incomes policy can be worked out in agreement and can be operated by agreement. If they do not believe that, then a freeze is in fact a step to nowhere; it is indeed a step back to where we were before.
When the noble Lord said, with a certain charming humour, that he rather hoped the three parties would go on talking and he was rather pleased that the talks had broken off without too much bitterness, he did not have the advantage, as I did, of having looked on the tape just as he got up to speak, where I read that the T.U.C. had unanimously decided in just about the bitterest statement I have ever heard come out of that place, not to resume talks. You do not get a unanimous decision without them all taking part, and therefore it is not all due to Mr. Jones and Mr. Scanlon. It is because they have managed to persuade everybody in the trade union movement that they do not have a policy that the Government, by this freeze, are rapidly getting us nowhere but only back to where we were.
I do not think either that they have a clue as to how one would get back to a productivity, prices and incomes policy, even assuming that they wanted to. Even if we assume that I am doing them an injustice in thinking that they do not want to, I do not think they have a clue as to how to go about it. I listened to a number of speeches yesterday and I read every one that I was not able to hear, and they brought home to me—and with respect to the noble Lord, Lord

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Drumalbyn, he did so again to-day—the fact that even though I have my own personal rows with certain of the trade union leaders, and even though I believe some of them think that it would be better to pull the temple in and start again, which is not a thought I myself share, nevertheless, they have managed to convince me that the unions were probably right in thinking that in those talks the Government were not discussing with them a policy, a way for running this country, in which the relation of prices and incomes to productivity would apply; that all that the Government were really asking the unions to do was voluntarily to impose upon their members a wage restraint. I feel that they probably were not badly wrong in thinking that, because this is how the Government must have persuaded them.
Of course the noble Lord is absolutely right: there is no way by which the T.U.C., or certain members of its General Council, can impose a wage restraint upon its members. He says that they are not set up to do it even if it were proper for them to try. So if you want an incomes restraint because you think that is the beginning of something better, then I agree entirely that it is better to do it by way of an ordered freeze, because then those trade union leaders who might be tempted to co-operate in a voluntary scheme but would be taken advantage of by certain of their colleagues, get a certain measure of cover out of an ordered freeze. If that is what the Government were after from the beginning—I suspect it was, and I suspect that even the moderate (so-called) trade union leaders now believe it was—then frankly the way to do that is to impose it. But if you impose it, you must make it effective. The noble Lord said in passing that so many have got through in the first three days, over the week-end, and have even managed to keep it dark. The employers promised not to tell their chaps and the unions promised not to tell their chaps, and presumably somebody promised not to tell the Government. Agreements are made on Friday and are ratified on Monday, but payments have already been made under them as from Friday.
The point is that the way in which the Government have imposed this freeze is, frankly, as inept and ill-thought-out as was their approach to the talks in the
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first place, and as appears to be still their approach to the idea of a policy. I saw a fellow on a television broadcast over the week-end who, when asked about this policy, said it was a "great lash-up". I was not quite clear what a "lash-up" meant, but I gather from my more trendy children that it is a phrase similar to one that we used to use but which began with a different letter. I think that is really what it is, and if "lash-up" is the trendy term, so be it. The Government are quite inept. I will say this, and will take a chance on it, having been once involved in one freeze (but I will say in a minute why I think that differs from this one). They have in fact let so much through in the interval between deciding to do it and announcing it and making it operative that they have busted it already. I reckon this is a "busted" freeze from the very beginning. So much has gone through that we cannot expect other fellows who for some reason or another could not get in last week, to say to their members, "Sorry, old boy, you pay me to be your general secretary, but their general secretary was quicker off the mark than I was and I cannot do anything for you now". Others will find their way through. Therefore I think it is an inept freeze, even if a freeze was in fact the right means to adopt.
Equally, with respect to noble Lords opposite—the noble Earl did this yesterday and the noble Lord, Lord Drumalbyn, did it a little to-day—I think it is silly to go on moaning about the hope that at some stage we shall all get together again and all be decent chaps. It is not decency which is at stake, nor is decency an issue. This is a real world, and union leaders and industrial managers have to live in a real world. We cannot live in the Government's Cloud Cuckoo-land. Having created such an absolute all-time sense of frustration, of irritation, of annoyance, of distrust in industry, as we now to a large extent have, we must face the fact that even managements and unions that have got along exceedingly well for years are now being pushed into conflict. If you allow that to happen—or if you, as I think, deliberately create it; but let us say allow it to happen—as a result of 2½years of choosing confrontation, of thinking that the public wants it—the noble Lord, Lord Thorneycroft, has just said that public opinion wants you to stand up, wants you to take people

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on, without having thought on about what, and in what way and for what purpose—then you create the sort of situation in which fellows cannot act normally.
We keep talking as though wages going up, incomes going up, salaries going up is because trade unions insist that they do. I also mix quite a bit with managers now, although not quite at the same exalted level as the noble Lord who preceded me, and I realise that it takes two to make an unreasonable wage settlement. There is the chap who asks for it and the fellow who agrees to pay it. Managements are being forced into making unreasonable settlements (if you like to call them that) because they cannot afford the cost of resisting them. They are as hamstrung by the Government's policies, and as confused and bewildered by them, as are the unions. So we get connivance. That is why you get secret agreements on the Friday which are not made known until the Monday. It was not just the trade unionists (wicked chaps!) who connived at it; the other fellows connived at it because they did not want to be forced into a confrontation. Any one of us who mixes with management knows that week after week someone says, "but really you ought to stand up to them".
When one uses the phrase "stand up and be counted" it means little in this House, but it means a hell-of-a-lot for the general manager of a weaving shed, or something like that, with£15 million of capital invested in it. When he is told, "You should now stand up and be counted", he replies, "That is all very well, but it means £15 million-worth of machinery standing idle and that, considering the cost of money nowadays and the results of all the other economic policies which the Government have hung round my neck, including the imports of textiles from all over the world, I cannot afford". That is why these things happen, and the Government are pushing managements as well as the unions into a position in which things that should not be done are being done. It is no good just reading a lecture to trade union officials, even those whom one thinks one does not like or one regards as too extremist. The lecture must go back to the beginning, and in this instance it all began on the Treasury Bench.
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If the country lacks a credible social policy—I will not belabour the point on this occasion; the issue was made abundantly clear yesterday by my noble friend Lord Beswick and to-day by my noble friend Lord Diamond—or a credible economic policy, the situation in which we find ourselves is bound to be produced. I therefore try to follow the noble Lord's example and ask where we go from here—what do we do when what I regard as all this stupidity and futility has come to an end in 90 or 150 days or when it has been blown up, as I think it will be, in less than half that time? What are Ministers to do? If I were one of them I would want to get the social policy right again. I hope that this does not sound old hat: and noble Lords will be aware that I do not these days go in for a lot of what is, strictly speaking, Party politicking.
The Government must recognise that there are clear evils happening in society to-day. We know what they are, and they have been enumerated in the House. There are, however, things happening which are not quite as evil in their total effect but which are psychologically so important that they, too, must be stopped if we want to get the social policy looking right as well as being right. Noble Lords know what they are. Take, for example, land exploitation. Some noble Lords are standing on their heads trying to prove that one cannot deal with something which we all know is irritating people throughout society, and not just extremist trade unionists. It is irritating even Lord Amory, and it takes a lot to get him steamed up. It is felt by people throughout society that unseemly land exploitation is going on and the Government must be seen to be making some effort to stop it. If they do not wholly succeed, no matter. We do many things in which we do not wholly succeed. We are asking the unions to do something about wages, but we know full well that we shall not wholly succeed. Some of us are willing to support a freeze being imposed, knowing that it will not wholly succeed. Let us be seen to be making an effort in the land exploitation sphere even though we know we shall not wholly succeed.
I am reminded of the merger mania. Some mergers are proper. Partly because

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I was involved with the I.R.C. I would certainly not say that I was against all mergers. Nevertheless, they are not all right or done for the right purpose. When people read of someone boasting about sitting on a£15 million profit because he has bought a big stake in this or that company, and they do not know whether Bovis is buying P. and 0. or Inchcape or what or for what purpose, or why Trafalgar House wants to run the Savoy—one may have a good suspicion of the reason but one cannot be sure—and when people read that somebody is buying up other people's companies with paper rather than with money, they are bound to feel anxious. The city editor of one of the evening newspapers advised Lord Inchcape, whom I do not think I have the pleasure of knowing, to "Put his bankers' money where his mouth is." The elegance of the writing in our financial columns does not seem to improve with the passage of time, but that is how the writer put it, meaning not that Inchcape should buy P. and O. but that Inchcape should borrow a lot of money from somebody which would enable them to appear to buy P. and O. whose tills they could then rifle or assets sell off in order to repay the bankers. They would thereby have bought P. and O. with P. and O.'s own money. It does not look to me as though it would be any different in the case of Bovis, either. In the course of all this, some gentleman would come out with a vast cash profit when all he started with was a piece of money. This is no laughing matter. People are saying that it is wrong and that if we want to create a climate in which we can talk seriously to workers and managers, be they white or blue collared, we must be seen to be dealing with this matter because it is bothering them very much indeed.
We hear much about capital gains and how taxation is taking care of them. I do not know whom noble Lords on the Treasury Bench think they are kidding. I assure them that they are kidding nobody on these Benches or outside this House because we all know what is going on and the people are being told about it. Every day they are reading about it in the newspapers. The Government must reverse the tax advantages that were given in the Budget. They were ridiculous. I am a good deal better off than most of the
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people about whom we are speaking, particularly in terms of the freeze and having a wages and incomes policy. On the other hand, I am not nearly as wealthy as many others. In any event, why did I have to be given a gratuitous tax rebate in the last Budget? There was no point in picking me out for that benefit. There would have been a lot in the Government saying at the time, "If we cannot do it for all the others, because so many people are poor, we will not do it at all." This is the problem which the trade unions have been fighting for years. If only God had not made so many poor people it would have been easy for us to take care of the troubles of the poor. But the Government should not have selected the minority who need it least. All that could be stopped right away by the Government reversing the tax arrangements they made in the last Budget. I urge them to change their mind on this matter.
Equally, the Government should stop finding every meticulously detailed logical reason for not intervening in these matters. It all sounds so beautiful if one is not involved and I appreciate that I may be told that it is easy to say these things when sitting on these red Benches. Nevertheless, if it is right to resist matters on the sort of legalistic logic-chopping in which the Government are indulging, then it cannot be right to tell the trade unions that they had better stop logic-chopping, which is what some of them are doing. At least let us drop it if we want them to drop it, and then perhaps we can start talking again in a reasonable situation.
I have explained that first we must get the social policy right and reverse some of the decisions which the Government have taken and which clearly do not fit. They may have fitted the lame duck philosophy of the former Secretary of State for Trade and Industry. Those policies have been changed but the Government have forgotten to change the social policies which went with them. Then we must get a proper productivity, prices and incomes policy—and we must for once remember that it must be a productivity, prices and incomes policy. First, of course, we must have a plan. I know how ludicrous the National Plan was made to sound and what fun it was in

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all sorts of circles to decry it. Nevertheless, we must have a plan stating our aims and how they are to be achieved. We must state what resources will be given to this, that and the other. Having done that. we can then set about trying to decide how prices should behave and how much incomes might be allowed to move in such a situation. I would urge that we get back to that.
At the risk of it being said, "Oh, he has got set in a groove and cannot think afresh", frankly, having thought about it and talked about it a great deal, I would urge you to go back to 1964. After all, what we started in 1964 was a continuation of a long process which, as one noble Lord I listened to yesterday said, did not begin with the Labour Government in 1964. Just as Maudling grew out of Selwyn Lloyd, so did 1964 grow out of Maudling. It was another stage in the continuing process of trying to find where we could get to. We must recognise where the Labour Government went wrong. I think I know, but others may have different ideas. We certainly went wrong because we did not realise that if there is an economic plan many other things have to fit it, and one of them is monetary management. The idea that monetary management can be left free of an economic plan is nonsense, with respect. I do not like using that word, as in my view it does not fit, but you have to fit your monetary management policy, your taxation policies, your overseas payments policies, the prestigious projects into which you are willing to pour a thousand million pounds (if you do not want to offend your ally across the water) into the economy and make them subordinate to it. So if we have the basis of a socially fair approach to what is done with what is in the national kitty and how we shall distribute it, and we have a basically justifiable economic policy about how we make the kitty grow, and how to make a pint into a quart, then you can talk seriously to trade unionists or anybody else about how much more they can expect to get out of it. It is only when you do it that way round that you can use phrases like, "wages must go up". You are trying to kid people. Wages cannot go up, incomes cannot go up in total unless what has gone into the kitty has gone up. You then have the argument about
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who gets most out of the kitty and who stands still. That is what a prices and incomes policy should be all about.
I vote that we start listing the failures. I am happy to stop chiding the Government for having changed their mind; I only wish I thought they had. Do not go abusing those who tried and failed. I remember those vast hoardings (how could I not?) outside the Labour Party conference hall at Brighton, paid for by the equivalent of Mr. Maurice Stans' fund which is also quite successful. On those hoardings it said—and it was thought to be very clever—"Don't say Brown, say Hopeless". All we need to do now is to put up "that blasted Heath" and we shall match it absolutely straight. But I hope we do not approach it in that way. People have tried and failed, but let us see why there are the failures. What part of the policy was right? We have to go back to a productivity prices and incomes policy. The freeze has relevance—and for reasons which I have tried to give I do not think it will have very much relevance—only if it were just a halt while we found out how to restart. It needs so many changes of policy by the Government that I do not have much belief in (nor would I have were I a so-called moderate trade union leader) the willingness, let alone the ability of the Government to do it. If they are to do it, may I suggest one last thing: while they are about it why not reactivate, or recreate, the instruments we left behind which they so wilfully and, as I said in an earlier debate, so stupidly got rid of. You need a Prices and Incomes Board. If you do not want an ex-Conservative Minister as the chairman, that is all right, have an ex-Socialist Minister; but you do need that monitoring body, so bring back the I.R.C.
You are wasting untold hundreds of millions at the moment, doling it out in order to recover from Mr. John Davies's "Dame Luck" philosophy—lame duck philosophy—it is all right either way, as a matter of fact. I know that you did not destroy the regional economic councils, but reactivate them and put them back into action; and even—dare I say it?—you might go the whole hog and bring back the D.E.A. May I say to the Lord Chancellor that it would be very nice to think that the Prime Minister, were he to do these things, so eminently

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reasonable, so clearly logical and moderate, could be the joint guest of honour at the next D.E.A. reunion which would be held at the hostelry appropriately named, "The Two Chairmen".
5.36 p.m.
LORD HEWLETT: My Lords, I crave the indulgence of your Lordships in this my maiden speech. Five months ago to the day I was introduced to your Lordships' House, and since then I have, whenever possible, sat and listened to your Lordships' views. This is not the place (though I sometimes wonder why) nor, I am told, the time for exaggeration, so I will not claim that my quiet apprenticeship has always, on every occasion, been in a state of rapt attention to everything that has been said. But I have come to realise that my earlier high respect of the background experience of speakers in this House has been still further enhanced by attendance at your debates. I am indeed grateful, and I thank your Lordships.
I have been adjured not to be controversial, no matter how seriously provoked, in this debate, nor to speak on any controversial issue. Alas! I am the sort of person who invariably manages, without intent, to sound controversial, even when discussing the weather. But it may be thought that the subjects of economic and industrial affairs which are to be covered to-day in the debate in reply to the gracious Speech from the Throne must mean for me "instant transgression". My Lords, in all seriousness, is it not regrettable that such an impression occurs almost as a reflex action? Is it not an indictment of our time and of our society that the "us" and "them" syndrome applies most of all to industrial relations, or to human relations in industry, as I prefer to refer to them.
I should like to speak to a much narrower aspect of industrial relations and to the practical aspects of them within one company and one industry. Since I left the Corps of Her Majesty's Royal Marines in 1946 and then the University of Cambridge in 1948, where I read economics and politics, I have spent all my business life in a small to medium-sized independent company in the chemical industry. It was founded by my grandfather 80 years ago, and I have not forgotten the Lancashire phrase
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"of clogs to clogs in three generations". But we do continue to develop, to diversify and to expand, more recently by building ourselves a successful plant in Northern Italy. How was I to know that four years later your Lordships' House would accede so readily to the wishes of the other place that we should join the Economic Community of Europe? In regard to our own business, let me just tell you that we have a turnover of about £8 million; we have 450 employees, and the company went public in 1938. It is what is known as independent. What I think may interest this House is the fact that in our 80 years' experience we have as a company not had a single strike, lock-out, or serious dispute of any kind. Only in times of national emergency or as a result of enemy action have we been stopped. More recently there have been some very tough wage negotiations, but with good will on both sides these have been fairly and happily resolved, and without any stoppage at all.
How has all this come about? There should really be nothing remarkable in a record of 80 years of continuous harmony—probably there is not. But the media of communications, sense of values, which perhaps reflects those of the readers, listeners and viewers, find it unsensational, and so it is not news; only trouble is news. Forgive me, my Lords: I think that, regrettably, it is news to have such a record; and more perhaps for the causes than for the sake of the record itself. For I maintain that many hundreds of other medium and small-sized companies have the capability to maintain industrial harmony and in many cases have done so—not of course, in many instances for 80 years; but at least for long periods of time they have had that degree of success. My noble friend Lord Harvey of Prestbury has just retired from the chairmanship of the chemical company, literally across the road from us in Manchester, which had a marvellous record of success in industrial relations. For how long, I cannot say exactly, but I know that for a quarter of a century it had no trouble whatever; and probably for a great deal longer than that.
There are many successful relationships but masochistically, this country seems to want to hear only of trouble

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and strike. I attribute our own success to a condition of mutual confidence and respect. There is a reasonableness in negotiation, and I express the view that the country is sick and tired of those, whoever they may be or claim to represent, who are unreasonable, be they from management, from the trade unions or from neither, and that is perhaps the sector from which the greatest trouble is going to come, from those who do not recognise what are the proper functions in running a company.
In our own company we do not consider, and still less treat, labour as a commodity; nor do the shop floor treat management as a door mat to wipe their feet on. All employees are individuals, and I reckon to know almost every one as a person; and so do all my colleagues. I try to make time to go round the plants and offices frequently. Since the company was founded in 1892 we have, in so far as Governments have allowed, annually reviewed salaries and wages individually for all employees. More recently the trade union has preferred bloc type negotiation, which of course tends to reduce greatly individual assessment of industry, hard work, responsibility and merit. For 50 years, at least, all employees have been invited to attend an annual review of the company's results, and in so far as good security permits, to hear the plans for the future of the group. The chairman of the company has almost always made the report, and at that meeting the whole board has been present to amplify in detail or to make special reports.
This, my Lords, is not co-partnership, but it is co-operation and exceedingly good sense. Thirty-five years ago, in 1937, the company started, and still maintains, a profit-sharing scheme for all employees, staff and shop floor alike. Thirty years ago my forebears gave a large block of shares in trust to the employees, who receive the dividends outright and individually. Not from them comes complaint of increased profits or improved dividend payments. Their disappointment if the profit share bonus is not up to expectation is real and genuine. Particularly in the last ten years we have tried to destroy old barriers existing between works and staff employees. Management is not only expected to help
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but does help the employee with problems of almost any description in his private or his company life; he or she has only to ask for assistance and it is, wherever possible, readily given. I am talking about the sort of problems with Government Departments or local authorities, over education, or whatever it may be, where people with less advantage of sustained education, and perhaps less opportunity in life, are, to say the least, perplexed, if not terrified, by some of the circumstances in which, comparatively easily, they can fall prey to great difficulty.
All this sounds very idealistic, maybe even paternalistic, indeed old-fashioned, if not old hat. I do not mind what it is called so long as it renders real help; and if it assists in bringing freedom from possible dispute, all well and good. Such is not the purpose of trying to give help, but I think it is a genuine responsibility of industry and management within industry to try to do so. It is, I suggest, the genuineness of the attempt to help which may have a useful spin-off benefit to the enterprise in the preservation of harmony and goodwill. Never, of course, should one interfere, or, worse still, work for the wrong motive. We all understand that and no-one is every patronising. But if one analyses the position I have tried to describe to your Lordships, I think that the key concepts of 80 years of harmony are two. The first is identification of the individual with the enterprise—and I mean every individual, not just directors, not just managers; I mean that every single person within the company should be made to feel part of the company and should enjoy working with the company. The second is a proper and frequent communication within the company in every direction, to and from the shop floor, to and from the board room, whichever way you like to describe it, and, of course, close collaboration with the union. A sense of responsibility on all sides is indispensable to success, and of course it is the duty of Government to create the conditions in which industry can prosper.
I recognise that our problems in a small, or comparatively small, company are nowhere near so difficult of solution as those in the giant units of industry or the even larger nationalised concerns.

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I am worried about the problem of size. I agree so warmly that merger for itself is quite frequently for its own particular purpose, whatever that may be, and, unfortunately, is frequently the bringer not of great success to the constituent elements, not of great harmony, but of great disappointment to the individuals participating in the company, whether they be employees or shareholders. Alas, I have no experience to offer those larger undertakings that I have just described. But there are so many less large units of production and distribution who in aggregate contribute enormously to the gross national product, and to them I say that until one has found a more successful formula I for one will not favour any change from a proven way of success. I personally do not feel that silly generalisations help, like the one reported in the Press last week, of a well-known and successful business man, or for that matter, a trade union leader who might say something indiscreet; in this case the business man was making criticism such as that the managers and directors are drunken and slothful. And how many times have I heard the fatuous comment that, of course, the shop floor employees are all layabouts. These comments help no one in the slightest degree, least of all this country at this time. The only people who gain anything are the utterers of such comments, and they gain only notoriety.
Frankly, if one is prepared to work—if, as the "boss", the "gaffer" (however one describes the chief executive) one is seen to work—the effects of example, I find, are powerful. I start at the company well before eight o'clock in the morning, and often before seven, in order among other reasons these days to make time to be here, and I have no doubt many of your Lordships sacrifice much to exercise the same privilege of attending in this Chamber. Most things worth the doing mean a sacrifice to the individual. This is one factor, I think almost a prerequisite, of true responsibility.
So, my Lords, may I conclude by expressing my fundamental confidence, based on experience, in much of what I find in management and labour too—not only in my company, but in the industry we serve. I appeal to both constituent
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elements in industry to act responsibly, for the sake of their own future as well as for that of their country. Our national inventive genius, great skill and good sense must be allowed to prevail, and may the extremists of any and every hue receive the very little attention their comments deserve! May I add that I think that the Press, radio, and television have an important role to play here in helping the country to gain some perspective of how industry is in fad run and how business is conducted, for surely the issue of human relations in industry is truly vital. It is one of the keys to our successful prosecution of membership of the European Economic Community, and surely one of the greatest challenges—and, as I believe, one of the greatest opportunities—in the whole of our peacetime history. I thank your Lordships for so kindly listening to my contribution to this debate.
5.52 p.m.
BARONESS BURTON OF COVENTRY: My Lords, it is my good fortune to follow the noble Lord, Lord Hewlett, and to have the pleasure of telling him, on behalf of the House, how much we have enjoyed his speech. I was about to say that it was a breath of fresh air; perhaps I should say a breeze of fresh air. If he thinks that I am being unduly complimentary, may I say that as it comes from a native of the white rose county to one of the red rose county he will realise that we do not pay compliments one to the other in either of those. We have enjoyed the noble Lord's speech. and we hope that we shall not have to wait another five months before he speaks again. We shall look forward to some lively controversy if we have a debate on the weather.
My Lords, it seems to me that it would be entirely wrong for this debate on the gracious Speech not to include some contribution on consumer affairs I hope that your Lordships will bear with me on this, but this subject was mentioned in the gracious Speech and there are one or two things that I should like to say. I experienced problems that we all understand in trying to make notes on what I wished to say before I knew what was the Government's intention. However last week, before the Government changes were announced, I put my name on the list of speakers. Apart altogether from

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the Amendment in the name of my noble friend Lord Shackleton, I thought that the House would agree that consumer matters had a place in any debate on economic and industrial affairs.
The Press has been stating categorically for some time now that a new deal for consumers was to be announced by Mr. John Davies, the Secretary of State for Trade and Industry, in the debate on the Queen's Speech. As we all realise, neither the former Secretary nor the new one spoke on this aspect during the several days of debate in another place, although Sir Geoffrey Howe is speaking to-day. The additional day of debate in this House has meant that we have had the pleasure of hearing the noble Lord, Lord Drumalbyn, although he did not add a great deal to what is already known on this particular matter. I hoped that he would go a little further. The Speech itself told us that:
"Legislation will be introduced to promote fair trading and competition",
and that,
"Other measures to protect the consumer will be proposed."
I realise that much play could be made on this further evidence of conversion by this Government, but I am not concerned with that to-day. The real point would seem to be: what have we all learned from mistakes of the past in this area of consumer affairs.
My Lords, I welcome the First Reading of the Supply of Goods (Implied Terms) Bill in our House on November 1 last. It is a well known saying that a week, or even a day, is a long time in politics. Ten years is longer still. On November 14, 1962, I had the privilege of introducing in this House a debate on the findings of the Molony Committee: the first debate in either House on that Report. Quite honestly, fundamentally my thoughts have not changed. Whether that is because they were particularly good ones, or because I am particularly obstinate, is not for me to say. But concerning those opinions I should like to say how pleased I am that in the not-too-distant future it will be safe to fill in the guarantees we get with goods. I say that particularly because, in the debate some 10 years ago, at columns 621 and 622, I stressed that I found the relevant
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recommendations (Nos. 90 and 91 to be exact)—
"well-wishing of the worst quality, and worth exactly nothing."
These referred to the inadvisibility of doing' anything about guarantees. It was a most retrograde statement, and I am glad that the Government have decided to deal with the matter.
This year, on March 1, we had an excellent debate in this House. It was based on the necessity for a reappraisal of consumer affairs and education consequent upon the withdrawal of grant to the Consumer Council. The debate was excellent because Party points were not made. I think every speaker tried to analyse the then present position and what might be done to improve it. Out of this debate, agreed by everyone, emerged the gap. In other words, the removal of the Consumer Council (although I had long thought it should be changed) had left a vacuum at the centre. I thought the outstanding need was to fill this vacuum, and suggested the establishment, by Royal Charter, of an Institute of Consumer Affairs. I felt then, and feel now, that we need something much wider, of much greater stature than ever before. We need it at home and we shall need it in Europe. Such an institute could be the central link we lack. It could fill this gap. Since then I have been trying to add flesh to the bones of an institute. Mr. John Davies himself said that a future set-up must be the best and most widely respected representative and guide for consumers. In my view, as Molony said, it must be a co-ordinating agency and have the supreme position in consumer affairs.
I found myself with three fundamentals. This central organisation should not be within Government. It should be financed not from industry but from Government, and possibly some foundation or trust. All movement, or most of it, should be from the circumference to the centre. May I just try to explain this last point. I have drawn on this piece of paper two circles. The inner one is my Institute of Consumer Affairs; the outer one is, obviously, the periphery. Movement is from this periphery to the centre. On the periphery, and the list is not intended to be complete, I have placed, for example, industries and the trade associations. It seemed to me that we should

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aim at trade associations drawing up codes of practice which would be accepted by their members; and then subsequently be accepted as fair trading practice by the central Institute of Consumer Affairs. Many instances come to mind, but perhaps I may cite two—the Retail Trading-Standards Association and the Association of Mail Order Publishers (in which I declare an interest).
Then I have placed the Citizens' Advice Bureaux as dealing with the complaints aspect of consumer affairs; also, the information and advice centres now being set up by the Consumers' Association in conjunction with the local authorities. I can think of no better way to give advice to people. These centres should be established throughout the country. My plan here would have taken care of complaints and advice in general, for most people. Also listed, of course, are other consumer organisations and the National Trading Standards Service—formerly the weights and measures organisation.
Then—and I must not take up too much time on this—I have the Advertising Standards Authority and the advertising bodies; with a two-way flow from the circumference to the centre and from the centre to the circumference. There must be the research organisations and those occupied mainly with testing. I do not believe that we need to set up new organisations here. It seems to me that we have enough, of repute, to cover the needs and requests, both from my periphery and from my central body. Then there is the question of the consultative councils. I think they must be drawn in. If I may take the example of POUNC—which is the Post Office Users' National Council—where my noble friend Lord Peddie has done such an excellent job of work, what is done and decided by POUNC must be conveyed to my central body, so that they know, officially, what is being done in that field. And so on, right through the orbit of consumer affairs. It would be disastrous if people were simply told what to do; I want them to co-operate. And I have left a wide section of my periphery, which the House will be glad I do not intend to pursue, for the European aspects of consumer affairs as these affect this country and as we affect Europe.
Now, my Lords, what have we got?—and I am saying this before any Minister
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has told us, but after the Government changes have been made. I regret that this matter has been placed within Government, and I also regret that this would seem to be within the Department of Trade and Industry. However, I did not want a Ministry for the consumer. As those interested in consumer affairs will know, the Labour Party has proposed the establishment of a National Consumer Authority. This proposal envisaged the Authority as an independent body financed by Government and run by an independent board. It would have much larger resources than the Consumer Council and a correspondingly greater function. Although neither I nor the Labour Party wanted this within Government, I must say that I welcome the important fact, which the noble Lord, Lord Drumalbyn, mentioned, that the Minister responsible is to have Cabinet rank. What has been wrong here for many years is that consumer matters have not ranked nearly as high as they should. They have been classed as something for housewives or shoppers, or as a section not as important—and I put the word "important" in quotes—as other far more important affairs, and this has been infuriating as well as wrong.
I do not know whether any of your Lordships saw a discussion on television last night, where one of the usual reporters had some people in the studio to discuss the Government's White Paper. The reporter did not really know the White Paper. I am not quarrelling with that, but he had it there and he was endeavouring to take a discussion on it. He had four women there as housewives, and also a couple of men. His first aim with the housewives was to get them to say that they did not think housewives should be expected to help the Government on the policing of prices, and his second aim was that they should say that they did not understand the White Paper. Everything else was subsidiary. The one woman who understood the White Paper, and said so, was dismissed very quickly. When the one man who very obviously knew the business thoroughly was asked about the White Paper and proceeded to speak about it, he was told that it was a general matter and it was left. Then the whole matter was written off by talking about "the ladies". Now if there is one thing which

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is infuriating to all of us—although we hope that we are ladies—it is to be described as such by that type of interviewer, and I hope that the media will find out who it was (I will not mention him) and will run the programme through again and take it to heart. Quite seriously, consumer affairs are as important an aspect of trade, of industry, of economics and of social justice as any other area of modern society. I really think that is true.
One thing which gives me much pleasure is the designation of Sir Geoffrey Howe as the Minister for Consumer Affairs. The whole House knows for how long I have been trying on this point to wean public opinion, and that of Government and of your Lordships, away from what is usually known as "consumer protection" to consumer affairs. While I do not flatter myself that the designation given by the Government is due to me, I feel that it is a significant starting point. In my view, the phrase "consumer protection" is not only an out-of-date term but reflects an attitude of confrontation, of "we and them", of those in favour of protection and those against. This is something else which has been wrong within the area of consumer matters for a long time. I believe that industry wishes to co-operate, and that our whole attitude for the future should be one of co-operation.
We have no further information. I should have liked to know more about the future set-up before speaking but, as stated earlier, I do not think that consumer affairs should be omitted from this debate. We have had various prognostications by various papers. They may be right; they may be wrong. But it seems to me that the Minister for Consumer Affairs must set up some organisation, some separate body, to work with him in this area which has now been given a higher status—Cabinet status. I hope that this will not be a departmental committee within the Department of Trade and Industry. What I have been trying to say to-day is that I believe we need a central organisation, be this my Institute or a creation of the new Minister. Let us call it a centre. This centre would have two functions of overriding importance. The first would be to co-operate,
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to co-ordinate. I want information, advice, requests feeding into this centre from all the organisations on the periphery—what they are doing, what they think needs doing, what help or assistance they would welcome either by way of research, of testing or of public action from the centre. Such a process would enable the centre to know what was taking place in the whole area of consumer affairs. This has been fragmented for far too long, which is why progress has been so slow. Then, and only then, would the centre be in a position to decide what action was essential on various aspects, bearing in mind the whole general background.
The second function of overriding importance would be the taking of action obviously entailing the proviso that the centre had the power, the status, the authority to take what action seemed necessary—a power of decision which I feel very strongly ought not to be limited by Government approval, by any Government. Can the Minister for Consumer Affairs bring about such a development? Whether or not he can, whether or not he thinks such a development the right one, I hope that at long last we shall find ourselves with a co-ordinating agency having the supreme position in consumer affairs here at home, and with the resultant status in Europe.
6.10 p.m.
VISCOUNT CALDECOTE: My Lords, I should like to add my congratulations to the noble Lord, Lord Hewlett, on his splendid maiden speech. It was vigorous, constructive and encouraging: and I hope we shall often hear him in your Lordships' House.
I listened with great interest, as I always do, to the speech of the noble Lord, Lord Diamond, but I must admit that on this occasion I found him much less convincing than usual. He seemed to be badly informed when he said that increases in pay were not a major cause of inflation. He seemed to be contradictory when he then supported the continuation of the Downing Street talks, with their objectives of restraining inflation through moderating increases in incomes. He was disappointing in that he made no mention of increasing the wealth of the nation, but only of sharing it out. His speech seemed to me to be mainly non-constructive criticism of the Government.

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My Lords, at times like this, when the welfare of everyone in the country and, indeed, the whole future of our free democratic society are in jeopardy, it is more than ever important that we should speak carefully and with responsibility. I think we have one particular duty: as always, to give our views sincerely, but now particularly without bias and without political dogma. I regret very greatly the attitude that the Opposition have adopted. They seem obsessed by the dogma to which the noble Lord, Lord Byers, referred, that it is the duty of the Opposition to oppose. It would be easy, and it is very tempting for me, to pursue that theme much further, but I want to make only one point in this connection. I totally reject the criticism of this Government and of the Prime Minister for changing their policy in the new circumstances which have arisen; and I am glad that the noble Lord, Lord Diamond, the noble Lord, Lord George-Brown, and others agree with me on that. But others have not agreed. Others in the Party opposite have made strong criticism and have mocked the Prime Minister and his colleagues for changing their policy in these present grave circumstances. It is especially absurd, it seems to me, that this criticism should come from the Party opposite, who first introduced their policy In Place of Strife, which was never mentioned in their Election Manifesto, and then changed their minds and retreated from it because they had no courage to oppose the opinions of those who paid the piper. It is quite another matter to change your policy in the national interest and to have the courage to stick to that new policy through thick and thin, as this Government are doing.
My Lords, the really important question is: are we now going in the right direction? The Downing Street talks came very close indeed to agreement. If that agreement had been achieved, a period of voluntary restraint would have followed. I believe that that would have been effective. It would not have been totally effective, because in a free democratic society no policy of this kind can possibility be totally effective, but it could and would have been effective only if it had had the massive support of public opinion and if those who went far outside that policy came into the glare
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of full publicity. In my view, the fact that the very distinguished group of people who met at Downing Street failed to agree should not be the determining factor in future policy. The vital achievement of those talks, I believe we all agree, was to rally the opinion of the vast majority of the public behind the policy and objective of restraining inflation.
In my view, therefore—and I know this is a minority view—it has been a mistake to impose statutory restraints; not because of fear, but because, on balance, I believe that better results would have flowed from a voluntary policy of restraint of prices and pay. It would have worked, as I have said, only if it had been strongly backed by public opinion, as it would have been if there had been agreement at Downing Street. The trouble with the statutory policy is that it will involve a great bureaucracy, a great machinery of approvals in Government Departments. It will prevent our rewarding good work in industry; it will stultify negotiation, which inevitably involves compromise; it will produce frustration and inequity between different groups and between different people, which will generate bad personal relationships—relationships on which so much depends in industry, as your Lordships well know; and, finally, it will, in my view, divert too much effort to the symptoms rather than to the causes of inflation.
My Lords, one can broadly divide people into two categories. There are those who want a society based on law and order and reasonable prosperity in which to live and bring up their families; and there are those others who want anarchy and chaos to destroy the free democratic society in which we live. The former are in the vast and tremendous majority in this country, thank God! They will support any reasonable policies put before them. They want to be protected against the anarchists or the extremists, whatever you like to call them—those who want chaos. But whatever policy is adopted, whether it is voluntary or statutory, the extremists or anarchists will attempt to destroy it, and they must be fought. In that sense, confrontation is inevitable and desirable, but not, I believe, in other senses. Confrontation with those people must be accepted and they must be fought. We must concentrate

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on winning that battle, because if we fail, whether we are poor or wealthy, young or old, we shall all go down the drain together.
So, my Lords, the question is: how do we fight that battle? In my view, we must make it less easy for extremists to persuade others to strike in support of unreasonable demands. We must take action to redress the balance of power through over-generous handouts to strikers. We must take action to prevent the intimidation of people of good will who want to work—and there have been many examples of that over the last few months. We must take action to stop violent picketing and rigged meetings, where so-called unanimous votes for continuing strikes are taken. In my view, the Government have taken far too long to tackle those problems. Whenever we have asked them what they are doing about them, they have said, "They are under active and vigorous consideration". My Lords, the time has long passed for consideration: the time has come for action. I know I am repeating what other noble Lords have said, both to-day and yesterday, but I think it will do no harm to repeat it.
We must also take action to stop abuses of freedom in the financial field which contribute nothing to national wealth and merely cause dissatisfaction among large numbers of people. We must take action on asset-stripping operations, where human considerations very much take second place to money and quick profits; and let us not be deluded by those who claim excessive advantages for those operations. We must take action on the ludicrous price of land sold for desperately needed housing, and on the gigantic profits that accrue from it to individuals. We must take action on vast mergers which contribute nothing to national wealth and give no advantage to prosperity or to the quality of life, and very often the reverse. My Lords, I could go on with a much longer list, but noble Lords more experienced than I have already mentioned other matters. Surely it is better to concentrate political effort and the time of legal experts and civil servants on those problems, rather than on setting up great machineries and bureaucracies to
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carry out and administer a statutory policy on prices and incomes.
My Lords, I know that this is a minority view and against the view of many much more experienced noble Lords than I who have spoken. In passing I must say that the speech of the noble Lord, Lord Thorneycroft, with all his great experience, seemed to me to imply that we must have a statutory policy for keeps. From his argument I could not see any way out of it. But I appreciate that the die is cast. The Government have decided that they are going to have a statutory policy, and we shall have to make that statutory policy work as best we can. But I hope that in the preoccupation with making it work we shall not forget to give attention to the very important and serious problem that I have already mentioned. We shall have plenty of time when we come to consider the Counter-Inflation (Temporary Provisions) Bill to talk about those details; to-day is not the time to discuss them.
Finally, I would say that I support fully the Government's intention to continue the talks between the T.U.C. and the C.B.I. There is a strong desire in men of goodwill in the T.U.C., in the trade union movement as a whole, in the C.B.I. and throughout industry, to restrain inflation. We know that this is vital for every one of us. I suggest that it is industry and the unions who know best how to negotiate; I do not believe that Governments and the Civil Service are very good at it. They have not had the experience possessed by the people in industry and the trade unions in working and negotiating together in that way. Would it not be better if the C.B.I. and the T.U.C. were left for a while to get on with it, to get agreement towards an objective which they all want to see achieved: to restrain inflation? Might it not be better for those two bodies to get together and to thresh out an agreement that they could then put to the Government as something on which they both agree, and that they should then do their best to persuade the Government that that was the policy which should be followed? I believe that that would have a better chance of success than the tripartite discussions that have been going on in the past—although no one has greater admiration than I for the way in which

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the Prime Minister has handled them. I believe that we all owe a tremendous debt of gratitude to the Prime Minister and to his colleagues in Government for what they have tried to do over the past month. That they have failed is sad, but it should not be taken as a great criticism. For that reason I shall certainly vote against the Amendment to-night.
My Lords, I have spoken frankly as I see the situation. I know that there is room for widely different views in this House and throughout the country, in industry, in the unions, outside industry and everywhere; but whatever course is ultimately decided upon when we pass the legislation which the Government are bringing before us in a few days' time, I would add my appeal that we should all support it loyally, wholeheartedly and effectively in the interests both of our children and of the maintenance of our free democratic society.
6.24 p.m.
LORD SHACKLETON: My Lords, I should first like very sincerely to congratulate the noble Lord, Lord Hewlett, on his maiden speech. If I may, I would say to him that if all of industry had managers and bosses with his enthusiasm, directness and human feeling we should not be in our present trouble. He did make very clear—as did my noble friend Lord Brown who, similarly, has been a very successful industrialist and a wise leader—the extent to which we still have to go in our society. The noble Lord said that he might be thought to be old-fashioned. I do not agree. I think his attitude is not old-fashioned but highly contemporary; and his contribution to this debate was equally contemporary and relevant. We shall look forward to hearing more from him. We in this House like people with direct experience about which they can talk as forcefully as did the noble Lord but in a way that gives no offence.
In rising now at the end of this four days of debate on the humble Address, I should like to remind your Lordships of the Amendment which is actually before us. It is customary in the debate on the humble Address for noble Lords to take their opportunities to speak, and while I am glad there have been a number of speeches to-day which did not bear directly on the Amendment I want to
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draw attention to it partly because of the speech of the noble Lord, Lord Thorneycroft, who said either that he was not going to vote for "the thing" or that he was going to vote for "the thing". I am not sure whether "the thing" is the new Government package or whether it is our Amendment.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, I assume that the noble Lord means the Government's new package.
LORD SHACKLETON: My Lords, I am not even sure what is the Government's new package; there have been more serious developments since we began this debate. But I should like to remind noble Lords of the purpose of the Amendment. I would ask noble Lords to treat it seriously. I do not think it does much credit to us if we assume that noble Lords on both sides of the House are merely indulging in some kind of political ritual, gambit or trick. I was a little surprised that the noble Viscount, Lord Amory, who is the kindest and wisest of men, should have tended to dismiss this Amendment as a piece of ritual. This rather disturbs me—and I say so to him without bitterness. The fact remains that there are very clear differences of view (representing different political philosophies) between the two sides of the House; and that where these differences of opinion exist we have our democratic system, our Parliamentary system, by which to thresh them out within the rules of the game. We do criticise; and in this House we criticise, I think, with moderation.
My noble friend Lord Beswick made a very moderate and wise speech, and I hope therefore that noble Lords opposite will not treat this Amendment as a mere gimmick. Admittedly, they used to do this sort of thing to us. I always thought they meant what they said. I believe they did; but perhaps they did not and therefore assume that we do not mean what we say. I do not believe that to be so. I prefer the attitude of the noble Lord, Lord Polwarth, who last night said:
"I do not pretend that I agree with all, or, indeed, with a great deal of what he"—
my noble friend Lord Beswick—
"said on the subject, although I sense that he, along with other noble Lords opposite, had

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the interests of the country greatly at heart"—[OFFICIAL REPORT, 7/11/72; col. 324.]
I appreciate that this is so and I think that we shall get on better if we assume it to be so. Obviously, we shall all of us at times say things which will violently irritate the other side; but I slightly object to being lectured by the noble Lord, Lord Byers. I know he has gone to Rome and I applaud his going there. I am not being personal about this, but he said that somehow we all ought to unite in the interests of the country. We all want to unite in the interests of the country; but if we disagree, and we do disagree fundamentally, it is our duty to point out the basis of this disagreement.
My Lords, we have had during this debate a number of notable speeches particularly from my noble friends on this side. To-day, we had very interesting and expert speeches from my noble friends Lady Burton and Lady Gaitskell. Yesterday, we had the speech of my noble friend Lord Brown and that of my noble friend Lord Davies of Leek who. as always, charmed us with his style and fervour. To-day, the noble Lords, Lord George-Brown and Lord Thorneycroft, were, so to speak the "heavyweights" of the debate. They came in at the moment that the Conservative Party emerged from their private brainwashing exercise in time for the main bout. Even if the noble Lord, Lord Thorneycroft, was not quite sure what "the thing" was, none the less his debate was interesting and also caused the Government to think. No one more than the noble Lord, Lord Thorneycroft, has shown in public life a personal devotion to good principles in government—as Chancellor the noble Lord felt so strongly that he resigned—and now there is his acceptance of the Government's curious and miraculous conversion (I do not wish to echo that happy metaphor employed by Mr. Michael Foot in another place), this acceptance of something which we, from these Benches, have been urging on the Government for the last two years. I regret that there is a certain repetitive quality about the debate and indeed about the criticism of the Amendment, but this is an issue on which we have been consistent. We have been pressing the Government. The Government have been extraordinarily consistent in resist-
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ing it until, suddenly, this important change of policy has come about.
In a very interesting speech my noble friend Lord Balogh described the Government as being, instead of "a row of extinct volcanoes", a "row of hencoops filled with the rotting corpses of the chickens that have come home to roost". I thought my noble friend described the Government very accurately. I thought it a good remark, but I am not sure that every noble Lord quite understood it when he said it, and I thought it worth while repeating. Like many of us, and longer than most of us, he has been a strong supporter of a system of prices and incomes.
As my noble friend, Lord Beswick, made clear, we try, within human limits, to be fair in your Lordships' House, and so although I shall have some criticisms to make I am bound to say that it is a fact that the Prime Minister has shown both courage and resolution over the total reverse of Conservative policies. Although there are fatal handicaps in the record of his efforts in the past two years, I am sure that the right honourable gentleman has tried, with all the energy and resolution for which he is famous, to bring about a satisfactory solution. But in some areas it is just not possible for this Government to put back the clock, and in certain areas they have shown that they are still unwilling to try to do so. I do not propose to-night to start to discuss the new package, or indeed the Bill which in due course will come before us, but it was obvious that what has now happened was going to happen. It has been obvious to many of us for many months. For once, I should like even to quote myself, because in July I said that I suspected that too many sad prophesies had come true, and that unless there were successful talks and the Government were prepared to make concessions, particularly on the Industrial Relations Act, they would be driven to a wage freeze in the same way that they had been driven to devaluation, however much they had stated their opposition to it.
While, therefore, we should acknowledge that the Government have tried to reach a tripartite agreement with the trade unions and the C.B.I.—bearing in mind, of course, that the C.B.I. can speak only in relation to a proportion of prices—I am amazed that the Government have

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been so blinkered as to the consequences of the actions they have taken during these last two years that they have thought that, desperate though at times they suggest the need is, they could get an agreement without reversing other aspects of their policy and undoing some of the damage of the last few years. The noble Viscount, Lord Caldecote, said, in effect, that it did not lie in the mouths of members of the Opposition to criticise the Government for changing their policy. It is a fact that whenever we changed our policy we were told we had broken a promise. Apparently when this Government do it, it is an act of wisdom and courage and a matter for self-congratulation.
I think we are entitled to congratulate the Government on their conversion, but I am not sure how far noble Lords opposite are entitled to do so, when they are supporting a policy which the Government have now adopted and which is in flat contradiction, not only of what the noble Lords said in this House but also of what was in the Government's Election Manifesto. I am not particularly given to quoting from Election Manifestos of any kind—after a while they get a bit boring—but, my goodness! the number of times we have had ours quoted at us and the number of times the word "honour" has been used about my right honourable friend, Mr. Wilson! I do not propose to fling that sort of insult at the Prime Minister, but it is worth while saying, as Mr. Enoch Powell pointed out—and not just in Parliament—that the Conservative policy statement was, "We utterly reject the philosophy of compulsory wage control." And in a more complete part they said, "We shall not repeat it." Well, I do not know whether one could call that a broken promise or whether it is just a sign of the fruits of repentance, even though the Government are reluctant to admit it.
The noble Lord, Lord Drumalbyn, who knows what respect we have for him, went pretty fast to-day. I believe he reckoned that he had to get through that lot of rather comfortable phrases. It is striking that there is still an echo of some of the many anodyne statements that we have had in the past. I remember the noble Earl, Lord Jellicoe, saying as far back as November, 1970, "We are determined to rein in the wild horses
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of inflation. "I am sure that that was not written by one of the officials in the noble Earl's Department. I am not even sure that he wrote it—it may have come from the Conservative political centre. The noble Earl also said that those who seek to spell out a case for an incomes policy carry much less conviction. In March, 1971, the noble Lord, Lord Drumalbyn, told us that the situation had been stabilised. In June, 1971—I looked these references up myself—the noble Lord, Lord Aberdare, told us, "The country is on the right course." Those tired old phrases came tumbling out, yesterday and to-day. I know that the Government are in a difficult situation. They do not like to admit that their policies have been mistaken, as is described in the Amendment, but the fact is that we know that they have been, and the Government have demonstrated it themselves. We do not need to argue the case, because it is apparent in the policies that they have adopted.
My Lords, we are getting tired of the "U-turns". All right. Your Lordships might say either that this is an obstinate Government or one that can be pushed around more easily than anyone. But we know that some action has been taken. John Davies has been banished to Europe and I genuinely hope that he will do well there. I think that probably he will. They have created new instruments, a Ministry for Industry and a Minister for Trade and Consumer Affairs. The noble Lord, Lord Drumalbyn, said, in glowing terms, that it was the first time that there had been a Minister responsible for the welfare of the consumer. Well, l do not know what the noble Lord, Lord Drumalbyn, was doing when he was a Minister at the Board of Trade and I do not know what other Ministers were doing.
LORD DRUMALBYN: My Lords, I did say a Minister in the Cabinet; I was not in the Cabinet.
LORD SHACKLETON: But, my Lords, there were in the Cabinet Ministers who were responsible. Why did the Government have to do it this way? Of course they have had all those fatal decisions to make which were pointed out by my noble friend Lord George-Brown. There was the decision to abolish the N.I.R.C. and the National Board for

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Prices and Incomes. Now they have to go back to the same policy. But they have got to make it look different, and in making it look different they have produced something which is not as good as the original instrument. It has brought Government more directly into matters which properly they ought to hive off to other people. Ministers are busy enough, anyway, without being directly involved in this connection. This is a criticism not just from the Labour side: it comes from the City and from industry, as well. The Government may now be bringing forth fruits of repentance, but none of their speeches to-day suggest that they are repentant sinners.
My Lords, we shall shortly be receiving the Government's emergency Prices and Incomes Bill, and we shall deal with this, I hope, efficiently. We never seek to filibuster in your Lordships' House, but we shall certainly want to debate the Bill because I have a feeling that at last we are beginning to educate the Government a little. We have two Members of the Cabinet here. The noble and learned Lord on the Woolsack I regard as perpetually youthful, and therefore perpetually educable; and I think the noble Earl.Lord Jellicoe, sometimes listens to us, too. However inevitable it was that the Government should adopt this course, I repeat with all the seriousness at my command that to many people it appears to be fundamentally unfair to the greater part of the working population. It is no use noble Lords assuming that because we think this it is some sort of original sin on our part. A large number of the public think it also.
The speeches from this side, and some from the Liberal Benches—we had a notable speech from the noble Viscount, Lord Simon; and I still do not quite understand how, in the light of that speech, the Liberals can vote for the Government to-night—have indicated that there are a number of aspects of the Government's policies which seem to be unfair. I think the case was fully made. It was made by my noble friends Lord Beswick and Lord Diamond, and also by some noble Lords opposite. The fact remains that wages will be frozen if the Government succeed; restraint over prices will in some degree limit profits; but
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profits will go on, and share values will be protected. I should not like now to forecast the movement of equities, but I suspect that gradually they will rise, at least in proportion to the amount of inflation, which, even if it is reduced, will still continue.
As we know, there are still areas which will not be affected, and with which the Government's White Paper and their Bill do not attempt to deal. The standstill does not apply to the Housing Finance Act; but obviously tenants will have their wages frozen, and some of them will have to bear the large price increases. Where there is an increase for the lower paid, then as my noble friend Lord Diamond made clear, once they are caught in the so-called poverty trap, even if they get an increase of £2, or whatever may be allowed, they will be worse off, because certain of the means-tested benefits will not be available. The figures are there, and I have not heard anyone satisfactorily answer this.
Furthermore, we know that council rents are only part of the problem. The real national disgrace, which has been mentioned in speech after speech from all sides of the House, is the rise in land prices, which has reached a level which can only be described as offensive. My noble friend Lord Beswick gave some examples, and we all know of others. The noble Lords, Lord Caldecote, Lord Hawke, Lord Vernon, and many other noble Lords have said that this really is wrong: and I doubt whether any noble Lord in this House thinks that this situation is right. I was mentioning this to a friend only a day ago, and he told me that he had bought a house for £5,000 in 1955, and that he had recently been offered £250,000 for it. Near my home in Dorset there is some land which was originally worth £200,000, and now the owner expects to get £26 million for it.
When we asked the noble Lord what the Government were doing about this situation, in effect he said that this is liable to the same taxation as any other profit. But these are not the profits of industry. We do not criticise the making of profits in industry; we recognise that they are necessary, particularly for investment—though it is notable that investment prospects and investment intentions are extremely bad at the moment. This

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is something which can only be described as a national scandal. It is one of the reasons that has led to the startling increase in the price of houses. Prices went up in the days of the Labour Government, but they went up at a reasonable and controlled rate, and nothing like the fantastic figure of 40 per cent. in 1972.
My Lords, the Government know that this situation is unsatisfactory. They have no policy for dealing with it. They point out that it is a difficult problem with which to deal, and I accept that. But it is unfortunate that history shows that the Conservative Panty have always been opposed to attempts to deal with this problem. First, we had the efforts made by the Liberal Party over many years which they opposed. Subsequently, when Lord Silkin's Act was brought in, the Conservatives repealed it. They got rid of the special levy that we introduced on certain types of land transactions. Then they abolished the Land Commission—which I admit that we as a Government had not fully developed, but which did offer a possible means of providing the land, which is still in short supply. We know that the Government have the matter under active consideration. We know that they say they are taking action. But all their action consists of asking other people to do something about it—land in the possession of local authorities, Government or the nationalised industries.
One could go on at length about this record. Other noble Lords have dealt with the Industrial Relations Act. We warned the Government of the consequences of it, and I regret to say that those prophecies have proved to be true. And we know that the effect of the counter-redistribution of income again is regarded as unfair. As one commentator asked: how can the trade unions make a pact with what has easily been the unfairest Government of modern times? I do not believe that noble Lords opposite wish to be unfair in this way. But we put down an Amendment in order to focus their minds on what exactly has happened. I believe that the careful wording of the Amendment represents legitimate criticism of the Government. There is a fundamental difference when it comes to decision-making between the two sides. I know that most noble Lords
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opposite would also like to see—at least I hope they would—a spread of a peaceful social revolution. But they have turned back the clock; they have provided the encouragement for the extremists, the Trotskyites and others. I believe, since they have moved so far, that they could still make a further conversion of their views. If they would follow the advice of my noble friend Lord George-Brown, I am sure that he would, if necessary, be willing to tell the Minister for the Civil Service how to recreate the Department of Economic Affairs. I suggest that this is a policy which they should follow. They should seek to turn the clock back and adopt the policies which were being pursued by the previous Government.
6.50 p.m.
THE LORD CHANCELLOR: My Lords, after two days of debate, I obviously suffer from an excess of material, and even if I submit myself to the sternest discipline it is clear that I must try the patience of your Lordships more than I wish to do. But I shall submit myself to the sternest discipline, and I begin by addressing myself, in accordance with the invitation just issued by the noble Lord the Leader of the Opposition, to the Amendment, which I am glad to note was carefully worded. That means that I must pass by, either wholly or largely without comment, a number of the most constructive and interesting speeches which have been made because, as the noble Lord the Leader of the Opposition said, many of them, although they were constructive and interesting—perhaps precisely because of that—did not bear directly on the Amendment. It would, I think, be invidious to mention them all. We heard the noble Baroness, Lady Burton of Coventry, this afternoon on consumer affairs: we heard the noble Baroness, Lady Seear, yesterday, and also my noble friends Lord Molson and Lord Hawke. I could in fact list a large number of speeches which I cannot in detail comment upon, for the reason that I have given. I will ask my advisers to see that they are studied. Their suggestions will be carefully noted, and if it is felt that there is something about which I should write to them, I shall seek to do that.
Equally, my Lords, I must decline to be led astray into the question of capital

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values, notwithstanding the reiterated emphasis by the noble Lord the Leader of the Opposition in the last part of his speech. Whether one deals with the level of equity share prices or the site value problem, which was a feature of the speech made by the noble Viscount, Lord Simon, and that of the noble Lord, Lord Diamond, earlier to-day, it is, I think, notable that although they have emphasised it, it had no separate or distinct mention in their carefully worded Amendment. It did not—and I think rightly—feature in the tripartite talks as a separate issue; and it is also noticeable that, at any rate in the opening speech of the noble Lord, Lord Beswick, reference to it took a passing paragraph, which was largely concerned with the value of a suppositious art treasure. I would only refer the noble Lord, Lord Shackleton, to what I thought was an unanswerable, and was certainly an unanswered, intervention during our debate in July by the noble Lord, Lord Robbins, who pointed out that the excessive value which has come to be placed on material objects (of which land is perhaps the most notable example but equity shares can be said to be another) is in fact a reflection of the very subject that we are discussing—the flight from currency as an object to be prized. If we could in fact curb inflation, which is the subject we are discussing, that problem would be likely to disappear. I am certainly not encouraged, despite the reference to it by the noble Lord, Lord Shackleton, by the previous efforts of dealing with it through taxation, and still less by some device of law reform, if inflation is not to be curbed at its source.
Before I turn to the Amendment itself, perhaps I may be allowed in parenthesis to join with those noble Lords who congratulated my noble friend Lord Hewlett on his maiden speech. He is, if he will allow me to say so, an old friend of mine and I hope he will enjoy his presence in the House as much as we shall enjoy hearing him on many subsequent occasions. I should also like to join with those who have welcomed back the noble Lord, Lord Beswick. He and I have crossed swords politically over the last 43 years, I think, in a number of different fora; and although we have seldom agreed I hope he will believe me when
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I say that I have never had anything for him but sincere affection and regard. I hope he may be spared to be with us for many years in perfect health, to give vent to his sincerely-held and deeply patriotic, but otherwise utterly detestable, political views.
The noble Lord, Lord Beswick, began by uttering what he described as a good resolution. He said that he was going out of his way to give credit where credit was due; and he proceeded to give us credit in the fields of Northern Irish affairs and those of the Uganda Asians. I must say that I thought, with my noble friend Lord Amory, that he would have been more persuasive had he approached the subject with a little more candour as to the extent of the failure of the Government of which he was himself an ornament in the very field we are discussing to-day. In particular, he seemed to me to be breaking totally new constitutional ground in attributing the failure of the declaration of intent of the noble Lord, Lord George-Brown, to murder by the Treasury. He appeared to forget that, as a Minister himself, he was as much responsible for the policy of the Treasury as he was for the policy of the noble Lord, Lord George-Brown. I also thought, with my noble friends' Lord Orr-Ewing, Lord Balfour of Inchrye and Lord Harvey of Prestbury, that the noble Lord, Lord Beswick, would have been carrying out the spirit of his good resolution if, instead of confining his praise of our policies to the Uganda Asians and Northern Ireland, he had given more credit where credit was due to us in the economic fields, which are the subject of this debate, and particularly in the fields of taxation, housing and social services. I will explore this point a little later in my speech.
However, what I thought was the principal weakness of the speech of the noble Lord, Lord Beswick, was his failure—and this failure was repeated in all the speeches in support of the Amendment—to offer any coherent or constructive policy as an addition to the Government's present measures. I do not believe that his Party will form a credible alternative Government until it provides such an alternative policy. The noble Lord sought to explain his failure to provide a coherent alternative by the oft-repeated story of the Irishman at Maam Cross who, on being asked the way

425
to Monaghan, said, "Well, if I were going to Monaghan I would not be starting from Maam Cross".
My Lords, the point is that we are starting from here, whether we like it or not. The Labour Party is starting from here, no less than the Conservative Party, and the trade unions no less than the C.B.I. If we are to criticise the present set of proposals I think we are under an obligation to offer a constructive alternative. In stating that he would not be starting from here, the noble Lord, Lord Beswick, did not remind us exactly where we did start from. I think it is worth while—not for the purpose of recrimination, because I agree with my noble friend Lord Amory that this is undesirable—and important to remind the House exactly where we did start from and what we have tried to achieve.
It is sometimes easier to say some rather serious things in a slightly apparently jocular form. I think I am indebted to Mr. Harold Macmillan for the analogy of describing the economic policies of successive Governments since the war, of different political colours, to the efforts of a juggler trying to keep four balls continuously in the air. The names of the four halls are: growth, full employment, the balance of payments and the value of money. It is fair to say, as the noble Lord, Lord Byers, pointed out, that no Government have so far succeeded in keeping all four balls airborne for any considerable period of time. He was also right, despite the rebuke administered in his absence by the noble Lord the Leader of the Opposition, in saying that every time one of the balls has fallen to the ground the Opposition of the day, of whatever colour, has danced up and down with glee to the accompaniment of gleeful if rather childish cries of "butter-fingers".
It is a mistake to underestimate the extent of one's own failures in criticising the failures of the other side. The point is—and the noble Lord, Lord Byers, made this point—that the analogy of the juggler breaks down in two vital and important respects. The four aims of policy which I have enumerated have proved to be, at any rate in part, incompatible with one another. Economic policy, like other objects of policy, is basically an attempt to reconcile or compromise the incompatible requirements of
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divergent principles. If you wish to concentrate on growth and full employment, it is manifestly obvious that you may put in jeopardy the balance of payments and the value of money. If you concentrate on the balance of payments and the value of money, you may jeopardise both growth and full employment. This is what our debates have been about over a period of years. It may require a rather unskilful operator to lose all four balls simultaneously; but to keep them all continuously in the air is something which has so far defied the united genius of this nation.
There is another point at which the analogy breaks down, and this is also very close to what we are talking about. Whereas the remedies for lack of growth and unemployment are often popular and often pleasant to the taste, the remedies for weakness in the balance of payments, and a decline in the value of money, are sometimes unpleasant and unpopular, with the result that from time to time the first have been taken in excessive quantities and too soon, and the latter in insufficient quantities and too late.
LORD BALOGH: My Lords, will the noble and learned Lord on the Woolsack explain how it is that he is so severe on the previous Government, when the previous Government's rate of inflation is exactly represented by the present Government's target? That is the first point.The second point is: how does he reconcile his very learned words with the fact that unemployment during the previous Government was about half of what it is now, and that the balance of payments were on the way—
SEVERAL NOBLE LORDS: Order, Order!
THE LORD CHANCELLOR: My Lords, as the noble Lord sees my argument develop he will probably acquit me of missing the more obvious points. I will therefore tell him that I was not seeking to be severe, either on him or anybody else, but perhaps I was philosophising—I hope not too prosily.
LORD BALOGH: My Lords—
THE LORD CHANCELLOR: If the noble Lord will contain himself with patience I will seek to satisfy him within the bounds of my logical conception. I was about to say that nevertheless, and in

427
spite of the relative unpleasantness of the remedies for the two evils that we have been discussing for most of the day, the evils which result from a failure in the balance of payments, and a failure to maintain the value of money, are so vitally corrupting to the society which fails to correct them, and ultimately so catastrophic, that all Governments have ultimately felt it necessary to take measures to correct them.
If I may now return for a moment to my original metaphor, in the summer of 1970 when we took office, partly from good luck and partly from policy, for which I give him credit, the then Chancellor of the Exchequer had managed to raise one of the four balls into the air: namely, the balance of payments, and there it has remained ever since. It had been on the ground pretty continuously since 1964. By June, 1970, it was in the air, and the figures given by my noble friend Lord Jellicoe established that point yesterday.
LORD BESWICK: My Lords, would the noble and learned Lord refresh our memories? What is the current balance of payments, and how does it compare with the balance of payments that the Government inherited?
THE LORD CHANCELLOR: My noble friend gave those figures yesterday. I can only refer the noble Lord to what my noble friend said.
LORD SHEPHERD: My Lords, will the noble and learned Lord say what the balance of payments was in 1964 when the Labour Government succeeded in office?
THE LORD CHANCELLOR: My Lords, I am not giving particular figures; I am giving the Labour Government credit for having achieved a favourable balance of payments as a result of the Chancellorship of Mr. Jenkins by June, 1970—though I pointed out that it had taken them rather a long time to do it. What I was about to say was that they had achieved it at a very high cost indeed in human suffering which I think they gravely underestimated in the debate yesterday and to-day.
LORD BESWICK: My Lords, can the noble and learned Lord be more precise in his figures? Would he remind us that in 1964 we inherited a deficit of £800 million, whereas at one time the surplus which the present Government enjoyed was plus £1,000 million on the balance of payments? Would he also say what the comparative unemployment figures were when we left office and what they are now?
THE LORD CHANCELLOR: My Lords, I am under a promise to the noble Lord the Leader of the Opposition to confine my remarks within a limited space. I have already said on a number of occasions—for reasons which I had then explained and which on some other occasion I will explain again—that I have regarded the £800 million alleged deficit as a myth, and I shall continue to say that.
I now propose to say what I was about to say about unemployment. The fact was that the balance of payments had been put in credit by the summer of 1970 by continuous surplus budgeting at a rate of about £1,000 million a year for three years, by cruelly high interest rates and by savage restrictions on credit that had produced a state of unemployment which was rapidly rising, and which has been escalating ever since, and an almost total stagnation of growth. Therefore these two other objects of policy were firmly on the ground. What was more serious from the point of view of to-day's debate, as my noble friend Lord Harvey of Prestbury pointed out, was that from the summer of 1969 onwards the then Prime Minister, the Leader of the Labour Party, had allowed wage settlements to rise to an extent to which they have escalated ever since and created, to my mind, an unacceptable rise in the cost of living and fall in the value of money. So three out of the four objects of policy were left firmly on the ground. Despite all that the noble Lord, Lord Diamond. said, I think he underestimated his own responsibility for the escalating situation which he then left behind.
I have always taken the view, as your Lordships will remember, that any serious economic policy may take as much as two years to work its way through the economy. My noble friend Lord Jellicoe pointed out yesterday that at least on the

429
three fronts of rate of growth, employment and investment, there were definitely hopeful signs that we were on the road to a distinct recovery. If so, it was not fortuitous; it was due to the distinct and deliberate purposes which the Government have sought to carry though in the period of their term of office. It was due to the reduction by £3,000 million of the burden of taxation; it was due to the short-term projects of £1,700 million; it was due to the raising of social security benefits and various other projects to help the regions and to assist industry which were referred to yesterday by my noble friend Lord Polwarth and my noble friends Lord Balfour of Inchrye and Lord Orr-Ewing.
I am not concerned at this stage to rehearse them all, but what I am concerned to deal with is the charge that these policies were unfair. May I deal first with the remissions in taxation? Of those remissions £655 million went into remissions of indirect tax; of the remissions of direct tax nearly three million people at the lower end of the tax-paying band were removed from taxation altogether; about £960 million was expended on giving flat-rate increases in the single and wife's allowances. If we come to the approaching simplification of direct tax next April, surely a policy which was long overdue for some Government with the courage to undertake it to carry out, £200 million out of the £300 million spent on this worthwhile project will go to those whose incomes are less than £5,000 a year—a band whose needs and requirements I will revert to in a moment—and 11 per cent. to those who have already retired.
That brings me to the social services, another field in which, at any rate in my submission to the House, our policy has been completely misrepresented in the course of this debate. I begin by pointing out, as did my noble friend Lord Orr-Ewing yesterday, that the standard rates of pension and social security have been put up by between 32 and 35 per cent. It is easy to say that that is not enough. It is easy to say that it has been eroded by the increase in prices. But it is enough to reply that it has been more than the increase in prices and more than has ever been given before. And it must be added, since it is material to the subject of this debate, that it is the pen-
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sioner who suffers most from inflation and the pensioner who stands to gain most by containing it, and our lump sum offer was designed as a sign of our continuing concern with this section of the community.
It is the fact that from the first to the last we have designed our social policy precisely to help the lowest paid. This was the direct purpose of the family income supplement. Those who criticise our social policy on school meals and milk and on rents fail to understand that these do not represent net reductions in the total of Government expenditure, which has been going up all the time. Every penny has been redeployed, usually within the service concerned and either to improve the quality of the service or to extend the rebates and exemptions to more people than have ever enjoyed them before. So, far from being, as T submit, wanting in fairness and compassion, we have been pointing out from the start that the developments of the last 25 years have left unprotected certain ascertainable classes in the community—for instance, the tenants of private landlords or the parents of large families or the permanently handicapped—who could not be helped adequately by increasing standard rates of benefit and who have not the economic power to stand up for themselves like, for instance, the semi-skilled factory worker, the miner or the railway-man.
May I say in passing that although I listened to the elaborate series of figures which were deployed by the noble Lord, Lord Diamond, earlier this afternoon to give the impression of the opposite conclusion, I myself have seen in the debate this week in the other place a set of figures deployed by one of my colleagues there, Mr. Patrick Jenkin, demonstrating that over the ten years of Labour Government from 1964 onwards the real income of the average wage earner—
NOBLE LORDS: Ten years?
THE LORD CHANCELLOR: I beg your Lordships' pardon—eight years.
NOBLE LORDS: Six years.
THE LORD CHANCELLOR: The average income, during the whole of the period of Labour Government, of the

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average wage earner rose by only 31 per cent., whereas in the last two and a half years of Conservative Government it has risen by a real figure of 10 per cent.; and I am quite prepared to give the noble Lord, Lord Diamond, the calculation upon which this is based.
That brings me to the field in which we have admittedly not yet succeeded and to the emergency measures to hold inflation. It is fair to say that until July, 1971, we maintained, more or less unaltered, the purely voluntary policy we had announced at the Election. I do not myself repent of having tried that policy, or of having reversed the policy of the previous Government which, as my noble friend Lord Amory pointed out, had wholly failed. But in July, 1971, as a result of discussion, there came the C.B.I. initiative in voluntary restraint, and it succeeded. By July, 1972, it was clear, on our side, that the growth rate we were aiming at of 5 per cent. was going to be achieved. As a result of the C.B.I. initiative in voluntary restraint in prices, prices had by that time risen by only 5¾ per cent. But the question was: Could it be continued? We had hoped that the voluntary restraint in prices would be met or balanced by a voluntary restraint in wage demands. At that time, whereas prices had risen by some-where about 6 per cent., wage demands were rising very rapidly and in fact were rising, in comparison with the 12 months previously, by something like 12 per cent. a year; in September I think the figure was 17 per cent. It was obvious, therefore, by July of this year that the C.B.I. initiative on voluntary price restraint could not succeed unless there were tripartite talks. I agreed with the noble Viscount, Lord Simon, when he asked us: "Why not earlier?" I think it would have been highly desirable; but it was a very good thing, in my opinion at any rate, that those talks took place in July. And they took place precisely in the context of a continuation of the policy for a further year.
I will not, with several noble Lords on the Labour side of the House, analyse the question as to how far inflationary wage settlements have been the cause of inflation in the past 25 years. I have argued this point many times before. I agree with my noble friend Lord
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Caldecote that they have been in fact a substantial cause of inflation. But whether this be so or not, what is beyond question is that during the last 12 months wages have risen in comparison with prices at a rate which makes inflation inevitable and which made the unilateral components of the C.B.I. initiative impossible. Hence the talks.
At the beginning of those talks the Government put forward what have been called the Chequers proposals and at the outset I thought they were warmly welcomed (since I heard him on the radio) by Mr. Victor Feather. At the end they were rejected by the T.U.C. as being not even a basis for discussion. I will not rehearse them all at length at this stage. They were based on a careful calculation of the minimum stops necessary to achieve certain agreed objectives, to contain prices within 5 per cent. on the basis of a 5 per cent. growth rate. These objectives were agreed and themselves involved a 5 per cent. inflationary model so there was not much room for manceuvre. What I point out is that 2 per cent. across the board represented a 13 per cent. or more increase for those earning £20 or less a week, and that for anybody earning £40 or less the proposal provided a distinct and absolute advantage over the status quo. I cannot believe that this lacks the "trace element", as the noble Lord, Lord Beswick, called it, of fairness or justice. On the contrary, it seems to me to be well within the agreed purposes and it was based on a calculation of what was necessary to achieve it. Obviously in a sense everything which was brought before the tripartite discussions was capable of being altered but there were two parameters which were limited in the capacity for manœuvre.
As my noble friend Lord Jellicoe pointed out yesterday, it is no good producing an alternative package which would demonstrably have yielded a result different from the agreed objective, and for that reason it is no good demanding a figure much bigger than £2, unless the arithmetic can be shown to be wrong, nor was it much good counting double and adding to the £2 a number of fringe benefits which would have destroyed the anti-inflationary character of the package as a whole. In other words, what we were

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dealing with was not a conventional wage negotiation between the employers and employed. What we were discussing was the means whereby to achieve an agreed objective. Both the demands which were made of us did in fact infringe those two parameters. For instance, if you ask for a suspension of the housing finance policy, you overlook the fact that the £2 wage increase (13 per cent. for those earning £20 or below) already took account of the rent increases—and more than took account of the rent increases under the Housing Finance Act with the rent rebates which were proposed—and the increased rebates proposed took account of them again, and the threshold agreements which were proposed as part of the package took account of them over the entire field.
It is no good talking about a long-term policy until we recognise that an improvement in the standard of living of the people has to be contained within the rate of growth of productivity. I do not mean that it ought to be; I do not mean that it is desirable. I do not even mean that it is desirable to be done compulsorily. What I mean is that it is only possible to do it this way. The leading article in The Times the other day quoted from a long-forgotten paper by the late Lord Keynes. He said:
"For this reason a demand…for an Increase in money rates of wages to compensate for every increase in the cost of living is futile, and greatly to the disadvantage of the working class…They lose the substance in grasping at the shadow. It is true that the better-organised sections might benefit at the expense of other consumers. But except as an effort at group selfishness, as a means of hustling someone else out of the queue, it is a mug's game to play. In their mind and hearts the leaders of the trades unions know this as well as anyone else. They do not want what they ask. But they dare not abate their demands until they know what alternative policy is offered. This is legitimate."
And that is in fact what we sought to do in the talks. But to quote from the same article in The Times:
"People can only improve their combined standard of living by the equivalent of 2½ to 5 per cent. per annum compound, whatever monetary arrangements they make for paying
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themselves. Wage demands above the level that economic growth can support are an attempt at ' hustling someone else out of the queue '."
If it is desired to say that the package we offered at Chequers was not worth even discussing, some element of mistake must be shown in the calculation, because it was based on a careful calculation of what was required in order to achieve agreed objectives. No one can regret more than the Government that we received an uncompromising "No" to that. In the meantime, we have the standstill. No one this evening and no one yesterday, with the possible exception, although I did not quite understand him to say it definitely, of the noble Lord, Lord George-Brown, thought that the standstill was not necessary. Of course it was. There were only two policies between which we could choose: the one was to go back to a totally voluntary policy in the absence of discussions of any kind, and I think that that would have lacked the essential ingredient of credibility. The second was to go for a long-term policy which would have taken, we thought, at least 90 days, but it may be longer, to work out. But if we did that without an interim measure we should, I think, have left the door wide open to the wildest kind of speculation, both in prices and in wage settlements. That is the genesis of the standstill for 90 days.
With my noble friend Lord Thorneycroft I believe that in proposing that standstill we shall be supported by public opinion. I believe the nation will realise that there is more at stake than simply the "pound in the pocket". I believe profoundly that what is at stake in the last resort is the future and effectiveness of Parliamentary democracy in this, its home. And in this spirit I ask the House to reject this Amendment.
7.30 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents 68, Not-Contents 134.

CONTENTS

Addison, V.

Fiske, L.

Morris of Kenwood, L.

Archibald, L.

Gaitskell, B.

Nunburnholme, L.

Ardwick, L.

Garnsworthy, L.

Pargiter, L.

Arwyn, L.

Geddes of Epsom, L.

Peddie, L.

Bacon, B.

George-Brown, L.

Phillips, B.

Balogh, L.

Gifford, L.

Platt, L.

Bernstein, L.

Greenwood of Rossendale, L.

Popplewell, L.

Beswick, L.

Hale, L.

Royle, L.

Blackett, L.

Henderson, L.

Sainsbury, L.

Blyton, L.

Hoy, L.

Serota, B.

Bowden, L.

Hughes, L.

Shackleton, L.

Brockway, L.

Jacques, L.

Shepherd, L.

Burntwood, L.

Kennet, L.

Shinwell, L.

Burton of Coventry, B.

Leatherland, L.

Slater, L.

Caradon, L.

Lee of Asheridge, B.

Stocks, B.

Champion, L.

Llewelyn-Davies, L.

Strabolgi, L. [Teller.]

Crook, L.

Llewelyn-Davies of Hastoe, B [Teller.]

Summerskill, B.

Davies of Leek, L.

Taylor of Mansfield, L.

Diamond, L.

Lloyd of Hampstead, L.

Walston, L.

Donaldson of Kingsbridge, L.

Longford, E.

Watkins, L.

Douglas of Barloch, L.

McLeavy, L.

Wells-Pestell, L.

Douglass of Cleveland, L.

Maelor, L.

White, B.

Evans of Hungershall, L.

Milner of Leeds, L.

Williamson, L.

NOT-CONTENTS

Aberdare, L.

Dulverton, L.

Monk Bretton, L.

Ailwyn, L.

Dundonald, E.

Mottistone, L.

Aldington, L.

Eccles, V.

Mountevans, L.

Alport, L.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Amherst of Hackney, L.

Emmet of Amberley, B.

Nairne, B.

Amory, V.

Ferrers, E.

Nelson of Stafford, L.

Amulree, L.

Ferrier, L.

Newall, L.

Ashbourne, L.

Fortescue, E.

Northchurch, B.

Atholl, D.

Fraser of Lonsdale, L.

Nugent of Guildford, L.

Auckand, L.

Gage, V.

Orr-Ewing, L.

Balerno, L.

Gainford, L.

Pender, L.

Balfour of Inchrye, L.

Garner, L.

Poltimore, L.

Barnby, L.

Goschen, V.

Polwarth, L.

Barrington, V.

Gowrie, E.

Rankeillour, L.

Belstead, L.

Grenfell, L.

Reay, L.

Berkeley, B.

Grimston of Westbury, L.

Rhyl, L.

Bessborough, E.

Hailes, L.

Rothermere, V.

Birdwood, L.

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

Ruthven of Freeland, Ly.

Blake, L.

St Aldwyn, E. [Teller.]

Bolton, L.

Harvey of Prestbury, L.

St. Just, L.

Boyle of Handsworth, L.

Harvey of Tasburgh, L.

Saint Oswald, L.

Bradford, E.

Hawke, L.

Sandford, L.

Brentford, V.

Henley, L.

Savile, L.

Brougham and Vaux, L.

Hereford, Bp.

Seear, B.

Caccia, L.

Hewlett, L.

Selkirk, E.

Caldecote, V.

Hylton, L.

Sempill, Ly.

Carnock, L.

Inglewood, L.

Somers, L.

Carrington, L.

Jellicoe, E. (L. Privy Seal.)

Stamp, L.

Coleraine, L.

Killearn, L.

Stonehaven, V.

Conesford, L.

Kilmany, L.

Strang, L.

Cork and Orrery, E.

Kinloss, Ly.

Strathcarron, L.

Cottesloe, L.

Lauderdale, E.

Strathclyde, L.

Courtown, E.

Limerick, E.

Sudeley, L.

Craigavon, V.

Lothian, M.

Suffield, L.

Craigmyle, L.

Loudoun, C.

Terrington, L.

Cranbrook, E.

Lucas of Chilworth, L.

Thorneycroft, L.

Crathorne, L.

Lyell, L.

Trefgarne, L.

Crawshaw, L.

Lytton, E.

Tweedsmuir, L.

Cromartie, E

Macleod of Borve, B.

Tweedsmuir of Belhelvie, B.

Daventry, V.

Margadale, L.

Vernon, L.

De L'Isle, V.

Masham of Ilton, B.

Vivian, L.

Denham, L. [Teller.]

Merrivale, L.

Wakefield of Kendal, L.

Derwent, L.

Milverton, L.

Wolverton, L.

Drumalbyn, L.

Molson, L.

Yarborough, E.

Dudley, E.

Monck, V.

Young, B.

Resolved in the negative,and Amendment disagreed to accordingly.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

GAS BOARDS (RATEABLE VALUES) ORDER 1972
7.38 p.m.
LORD MOWBRAY AND STOURTON: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Gas Boards (Rateable Values) Order 1972, laid before the House on October 19, be approved.—(Lord Mowbray and Stourton.)
On Question, Motion agreed to.

ELECTRICITY BOARDS (RATEABLE VALUES) ORDER 1972
LORD MOWBRAY AND STOURTON: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Electricity Boards (Rateable Values) Order 1972, laid before the House on October 19, be approved.—(Lord Mowbray and Stourton.)
On Question, Motion agreed to.
House adjourned at twenty minutes before eight o'clock.