Sitting of 5 February 1973

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

    Housing Construction
    Mr. McBrideasked the Secretary of State for Wales if he will appoint a task force to assist him in removing impediments to housing construction in Wales.
    The Minister of State, Welsh Office (Mr. David Gibson-Watt): No, Sir. A task force would not be appropriate to deal with the problems of house building.
    Mr. McBride: Is the Minister aware that it is necessary to secure immediate control of land and house prices in Wales since traditional terraced houses there are being put up for auction at inflationary prices which are a national disgrace? Does he appreciate that Welsh Office insistence
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    on local authority housing tenders being put out to advertisement is inhibiting construction of houses in Swansea? Is he further aware that this has happened with old folks' villas at Morriston, Swansea? Will he see that no restriction is placed upon the city of Swansea in constructing local authority housing?
    Mr. Gibson-Watt: A task force does not seem to be appropriate to deal with the problems of house building. I will be writing to the hon. Gentleman and his hon. Friend the Member for Swansea, West (Mr. Alan Williams) about their request for a discussion on certain housing problems in the two constituencies.
    Mr. George Thomas: Is the hon. Gentleman aware that if the task force can help him in providing jobs in the steel industry, he is equally in need of such help in housing because of the chaos to which he has reduced the building of houses to rent in Wales? Is he aware that he owes Wales a statement about what plans he has for improving the situation?
    Mr. Gibson-Watt: I do not consider that a task force is the right answer. I admit that the problems of the building industry in Wales, as elsewhere, are extremely complicated. They have been further complicated by the fact that there was a 12-week strike last year during July, August and September, which builders have always considered to be the best building months.

    Council Housing Completions
    Mr. Rowlandsasked the Secretary of State for Wales how many new council houses were completed in 1972.
    Mr. Gibson-Watt: There were 3,502 out of 4,135 public sector completions.
    Mr. Rowlands: Is the hon. Gentleman aware that that is one of the most shameful and disgraceful figures in housing? Will he confirm that it is the lowest figure for local authority housing since 1946? Instead of sitting in the safety of Hereford will he get up and say what he intends to do to build houses to rent? Does he realise that many hon. Members who serve Welsh constituencies know of the growing housing problems faced by their constituents?
    Mr. Gibson-Watt: We must deal with the housing problem as a whole. If we take the total of public and private sector housing and add to it those houses which have been modernised by improvement grants—[Laughter.] Hon. Gentlemen opposite did not laugh at improvement grants when they were helping their figures. If we add those houses which have been modernised by improvement grants in the public and private sector, the total in 1968 was 26,189 while in 1972 it was over 41,000.
    Mr. Cledwyn Hughes: Is the Minister aware that houses now being built in the private sector in Wales cost anything between £7,000 and £12,000 to buy? Can he tell us how a young married couple can expect to purchase such a house?
    Mr. Gibson-Watt: The number of houses in the private sector has gone up by leaps and bounds. The demand is obvious.

    Employment Task Force (Flintshire)
    Sir A. Meyerasked the Secretary of State for Wales what are the terms of reference of the task force which is to look into the employment position in Flintshire following on the proposal of the British Steel Corporation to phase out steelmaking at Shotton.
    The Secretary of State for Wales (Mr. Peter Thomas): It will report on the needs of the area in terms of new industry, the creation of new jobs and
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    improvements in the environment and infrastructure.
    Sir A. Meyer: Can my right hon. and learned Friend answer three questions? Can he say whether it will be within the terms of reference of the task force to recommend particular improvements to the infrastructure, such as better road communications? Secondly, will it be permitted to express an opinion as to whether the time is not overdue for Flint-shire as a whole to have development area status? Thirdly, will it be permitted to recommend that there should be a postponement of the beginning of the process of the rundown?
    Mr. Thomas: Certainly it will be within its terms of reference, which are wide and flexible, to look at infrastructure matters, particularly communications. Development area status will certainly be one of the factors that it will take into account. It will not be within its remit to appraise the British Steel Corporation's strategy, although it will obviously consider questions of timing.
    Mr. Barry Jones: Is the right hon. and learned Gentleman aware that the steel workers at Shotton still feel that the closure is unjust and will campaign against it? How does the Secretary of State propose that Members of Parliament and trade unionists should have contact with the task force?
    Mr. Thomas: The task force, and other task forces, will be conferring with all interested bodies, including trade unions, local authorities and CBI, and all people in the area who are interested.
    Mr. Ellis: Does the right hon. and learned Gentleman agree that, whatever may be the merits of the plans of the British Steel Corporation, the creation of the task force is clearly a stopgap which has to be undertaken because of the failure to consider the specific question of this important part of our economy—namely, steel—other than in a very narrow context? Will the right hon. and learned Gentleman urge upon his Government colleagues the need to reconsider these plans and to slow down their operation while the problems are considered in the broadest national economic context?
    Mr. Thomas: The whole British Steel Corporation strategy has been fully appraised. These task forces are not stopgaps but forces which are set up to deal with the problem which undoubtedly exists.
    Mr. Michael Foot: The right hon. and learned Gentleman says that the whole position has been appraised, but does he not agree that in Shotton, as elsewhere, the question of when it might be possible to introduce new industries has not been appraised and, therefore, it is the bounden duty of his Department to demand the lifting of any limitation on the reports of the task forces? The task forces surely must have power to report to the Government on the possibilities of the introduction of new industries.
    Mr. Thomas: The terms of reference are very wide and flexible. The task forces are going to these areas to assess the needs of the areas. They will look at the question of timing to consider whether the timing which has been announced will be sufficient to allow them to propose what they wish to propose, but they are not entitled to appraise the strategy of the British Steel Corporation which has already been appraised by the Government.

    Gas Supplies
    Mr. Abseasked the Secretary of State for Wales whether he will now initiate a study on the prospective needs of gas supplies to industry in Wales.
    Mr. Peter Thomas: I am already in touch with my right hon. Friend the Secretary of State for Trade and Industry on this question.
    Mr. Abse: Does the Secretary of State agree that it could be disastrous for my constituency, which has already suffered more than 2,000 redundancies during the period of office of the Conservative Government, to find itself—as indeed the whole of Monmouthshire—in difficulty as a result of failure to guarantee the availability of gas supplies to any incoming industry? Will he give an undertaking not only to see hon. Members representing Monmouthshire constituencies but also that as a result of discussions with Monmouthshire concerning the possibility of only a disproportionate
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    amount of gas being available in Wales he will see that gas is taken away from areas of full employment like South-East England and is made available in areas where it is urgently needed?
    Mr. Peter Thomas: I am very happy to meet any hon. Member to discuss any specific issue. The sale of industrial gas has risen massively in Wales, from 50 million therms in 1969–70 to an estimated 230 million therms in the current year. I know that there might be difficulty about one industry which has indicated that it wants a substantial amount of gas. I do not know of any other. But I shall be happy to have conversations with the hon. Gentleman or with any hon. Members on this matter.
    Mr. George Thomas: Is the right hon. and learned Gentleman aware that, whatever figures he gives us, there is deep anxiety in Monmouthshire about the revelation that a major industry might not be able to have the gas it needs? My hon. Friend and I will take up his invitation to discuss this matter with him because it can have serious social consequences for Wales.
    Mr. Peter Thomas: Yes, I am very happy to discuss this important matter with the right hon. Gentleman. I stress that there is widespread availability of alternative fuel. The industry to which I think the right hon. Gentleman was referring has said that a supply of gas is not essential to its product but that if gas is available it will use it.

    Government-Sponsored Advertising
    Mr. Roy Hughesasked the Secretary of State for Wales if he will now give further consideration to including the South Wales Argus in future Government-sponsored advertising campaigns.
    Mr. Peter Thomas: Full consideration will continue to be given to including the South Wales Argus in Government-sponsored advertising campaigns, whenever possible.
    Mr. Hughes: Does the right hon. and learned Gentleman appreciate that I have disagreed with this newspaper on matters ranging from the Common Market to "In place of strife" but that it has to be accepted that this newspaper has a large circulation in Monmouthshire? Bearing

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    in mind that many people do not read a national daily and that the campaign was not confined to the national dailies, will the Secretary of State look into this question again and see that this Monmouthshire newspaper gets a fair crack of the whip?
    Mr. Thomas: As I said in answer to the Question, consideration will be given to the claim of the South Wales Argus in the planning of future advertising campaigns.
    Mr. Michael Foot: Is not that answer a soporific? We want the smaller newspapers in Wales to be protected and encouraged. Why cannot the right hon. and learned Gentleman give a straight answer and say that he and his Department will do their level best to ensure that this newspaper, which has served Monmouthshire very well over many years, gets fair treatment along with the larger newspapers?
    Mr. Thomas: With respect to the hon. Gentleman, I think that this newspaper gets fair treatment. Welsh Office advertising regularly appears in the South Wales Argus. A large advertisement by the Department of the Environment about pollution appeared in it last Friday and will be repeated today. I explained to the hon. Gentleman in a recent letter the general principle on which the Central Office of Information acts.

    Airport (Severnside)
    Sir B. Rhys Williamsasked the Secretary of State for Wales what study he has made of the cost and practicability of building a national airport on Severn-side; and if he will make a statement.
    Mr. Peter Thomas: The Civil Aviation Authority is responsible for advising on future airport development and has announced its intention to study the desirable future airport structure in the regions.
    Sir B. Rhys Williams: Will any right hon. and learned Friend consider the importance of this project in the context of regional and employment policy for Britain as a whole? Will he also confirm that if the Maplin project goes ahead this important project for Wales will not be shelved through shortage of finance?
    Mr. Thomas: Certainly, one considers suggestions like this in terms of employment opportunities. The economic problems of South Wales at the moment take priority. Any major airport development on Severnside would inevitably be a very long-term project.
    Mr. Abse: Will the Secretary of State acknowledge that it is important to hon. Members who represent constituencies on Severnside that, apart from any inquiry that might be taking place, we do not want the Secretary of State or any other body to be manipulated by people who should be more interested in looking after the housing affairs of South Kensington? Whereas engineers and other people may benefit from certain schemes, an environmental disaster could hit the whole of Severnside. In any review of such a suggestion will the Secretary of State bear in mind that we have no desire to have dumped upon Severnside schemes which have already been rejected vigorously in other parts of the country?
    Mr. Thomas: I am fully aware that the matter raised by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) is a contentious one which arouses considerable controversy.
    Mr. Adley: Notwithstanding the outburst from the hon. Member for Pontypool (Mr. Abse), in terms of land use could not an airport on reclaimed land on the Welsh Grounds have valuable employment implications for South Wales on both sides of the Bristol Channel? Will my right hon. and learned Friend look at the possibility of this area in the light of Rhoose, Lulsgate and Staverton, three airports which might be able to close down if such an airport were provided on the Welsh Grounds?
    Mr. Thomas: I have no doubt that any study on future use for a further major airport outside the London area would wish to take full account of all the claims and potential of the Severnside area.
    Mr. Alec Jones: What discussions has the Minister had or does he propose to have with responsible bodies in Wales and in Glamorgan concerning the future of Rhoose airport since the Government's disastrous Local Government Act has put the situation of that airport in serious jeopardy—
    Mr. Speaker: Order. Next Question.

    Housing Needs
    Mr. Elystan Morganasked the Secretary of State for Wales if he will ask the Welsh Council to make a survey of housing needs in Wales.
    Mr. Gibson-Watt: The Welsh Council is already studying housing in Wales.
    Mr. Morgan: Does the hon. Gentleman accept that of all the functions exercised by the Welsh Office nothing is more crucial to the Welsh people than housing and that, unless the Government are willing to play a creative rôle by getting the necessary information, he is condemning the whole housing situation in Wales to all the crudities of the law of supply and demand? Will he consider this matter again?
    Mr. Gibson-Watt: The Welsh Council is already considering housing in Wales. The main subjects which the Welsh Council is at present investigating are second homes, housing for special needs, slum clearance and the overall supply of housing.
    Mr. John: Will the hon. Gentleman ask the Welsh Council to explain in its report how modernisation adds to the total housing stock in Wales?
    Mr. Gibson-Watt: I should be surprised if any member of the Welsh Council, or indeed any hon. Member of this House, was unaware of the fact that what we are after is a better total supply of good homes for the Welsh people.
    Mr. George Thomas: The Minister of State is too fond of trying to manipulate figures so that he hides rather than gives information. Is he aware that the total number of houses built for rent in Wales last year under the present Government was the lowest since the war?
    Mr. Gibson-Watt: That comes a little strangely from the right hon. Gentleman since I well remember him standing at the Dispatch Box on the Government side in 1970 explaining why public sector housing was going down. The reason he gave was that the demand had gone down.

    Rates
    Mr. Roderickasked the Secretary of State for Wales what plans he has
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    to ensure that local authorities in Wales will be able to freeze their rates in the coming year.
    Mr. Gibson-Watt: The responsibility for fixing rates must remain with the individual local authority. The Government are taking power in the Counter-Inflation Bill to enable increases in rates to be monitored. Where it appears that increases may be unnecessarily high, local authorities will be asked to reconsider them.
    Mr. Roderick: Will the Minister confirm that the Government have been begging local authorities to make sure that their rates do not rise during the next year? Will he also confirm that, with industrial rerating and the reduction in rates from industrial properties, if the local authorities keep up their public expenditure the domestic ratepayer will inevitably have to contribute more and the council house tenant will have to pay even more than the private house tenant? What are the Government prepared to do by way of assistance from central Government funds?
    Mr. Gibson-Watt: The hon. Gentleman will be aware that the grant for 1973–74 has been increased to a higher figure than ever before—to over £3,000 million. It will account for 60 per cent. of expenditure. The domestic element—the direct subsidy to domestic ratepayers—has been increased for 1973–74 by some 50 per cent.
    Mr. Nicholas Edwards: Since there are many widespread misconceptions about rate revision, will my hon. Friend take this opportunity to make it clear that the revision of rate assessments provides no excuse to local authorities to make general increases in rates? Will he confirm that it is wrong to take the view—a view taken by many people, including the elderly—that rates may go up by up to two and a half times? Will he now seek to dispel that belief?
    Mr. Gibson-Watt: I am glad to confirm what my hon. Friend says. A circular is about to be issued to local authorities explaining the proposed arrangements and the information we shall need. Where we consider that their expenditure proposals are too high, we shall ask them to reconsider those proposals. The powers

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    taken in the Act will facilitate reconsideration and, if necessary, the substitution of a lower rate.
    Mr. McBride: Is the hon. Gentleman aware that local treasurers face a natural increase in expenditure every year and, because of the Government's inflationary policy, will have to bear a much higher burden this year? In view of the Government's declared intention to monitor rates and since a local authority which seeks to maintain its services will require to impose an inordinately high poundage rate, will the Government give a subvention to those local authorities which face such a situation?
    Mr. Gibson-Watt: I have already given the figures and have told the House what they mean in terms of the increase in the domestic element of rate support grant, which should go a long way to satisfy the hon. Gentleman.
    Mr. Elystan Morgan: We know from a reply given by the Secretary of State last week that rate valuations in Wales are expected to increase by 138 per cent. Has the Secretary of State had discussions with local authorities to find out by what figure he expects general rates in Wales to increase, and did he convey that information to the Cabinet when it considered housing legislation?
    Mr. Gibson-Watt: There are continuing ing discussions between the local authorities and the Welsh Office. These are important matters in our various considerations.

    Government Offices (Dispersal)
    Mr. Johnasked the Secretary of State for Wales what steps he proposes to take to encourage the dispersal to Wales of Government offices.
    Mr. Peter Thomas: The needs of Wales are being fully considered in the context of the Government's current review of dispersal policy.
    Mr. John: No doubt the Secretary of State appreciates that with the imminent submission of the Hardman Report the day of decision is at hand. Does he realise that Welsh school leavers lack not only jobs but variety of job opportunities? Does he appreciate that one way in which he will be judged is in terms
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    of the number of office jobs he secures for Wales and that we shall expect him to pull his full weight in the Cabinet decision?
    Mr. Thomas: The dispersal review is going ahead speedily under the direction of Sir Henry Hardman, and I assure the hon. Gentleman that the claims of Wales are being strongly pressed. I hope that several thousand jobs will be established in Wales in the next few years.
    Sir A. Meyer: Is my right hon. and learned Friend aware that I have just led a delegation of clerks from the Flintshire area to see his colleague in the Civil Service Department to establish the peculiar needs and suitability of North Wales to cope with the dispersal of Government Departments?
    Mr. Thomas: I know of the need, and, I appreciate that my hon. Friend takes a close interest in these matters. I am also aware of the discussions he has had with my hon. Friend.
    Mr. Gwynoro Jones: Is the Secretary of State aware that the service sector of industry is the fastest growing employment sector in Wales and throughout the whole of Britain? Is he aware that the figures over the last two years show that the vast majority of new employment projects has gone to the South-East? Will the Government now recognise that they can create new service sector jobs in the Principality in the next few years possibly in the regional context of giving greater assistance to attract such jobs?
    Mr. Thomas: I recognise that many areas in Wales have claims on dispersal. However, we must have regard to availability of labour for Civil Service work and the need to expand where sensible and practical to do so on the existing base of Civil Service employment.

    Industrial Development
    Mr. Kinnockasked the Secretary of State for Wales what proposals he has for increasing the rate of industrial investment in Wales; and if he will make a statement.
    Mr. Peter Thomas: The Government's policy for industrial and regional development is designed to secure this. There

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    is already clear evidence of its success in Wales.
    Mr. Kinnock: One would need a microscope to discover that evidence. How does the Secretary of State square his answer with the fact that industrial investment in Wales has dropped by 7 per cent. in the last year and nationally by 10 per cent? Since that kind of figure gives no hope of industrial resurgence in Wales in terms of economic prosperity, how does he intend to encourage free enterprise concerns to invest when they have no confidence in him or his Government?
    Mr. Peter Thomas: The hon. Gentleman will be aware of the Industry Act recently passed by this House and also of the provisions contained in the last Budget. There has been an increase of over 60 per cent. both in the number of visits and in inquiries by industrialists interested in coming to Wales. In addition, the Department of Trade and Industry has received a substantial number of applications for selective assistance under the Industry Act.
    Mr. George Thomas: How does the Secretary of State reconcile his claim that things are all well and that Government policy is working out with the fact that unemployment in Wales continues to rise? Whatever be the figures for the United Kingdom, the Secretary of State knows that last month was a bad month for Wales. What measures do the Government propose to take to attract investment into the Principality?
    Mr. Peter Thomas: The right hon. Gentlemen must not put words into my mouth. I did not say that all was well. I was not being complacent. A lot more needs to be achieved. But the trend is encouraging. The whole of Wales receives some form of assistance under the Industry Act. Over the past few months unemployment in Wales has dropped from 5·3 per cent. to 4·9 per cent. In the special development areas it has dropped from 6·9 per cent. to 5·7 per cent.

    Improvement Grants
    Mr. Alec Jonesasked the Secretary of State for Wales what recent representations have been made to him to extend the time limit of June 1974 for the payment of 75 per cent. home improvement
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    grants in Wales; and what replies he has sent.
    Mr. Gibson-Watt: I have had representations from several local authorities, from two local authority associations and from some hon. Gentlemen opposite. In reply I have generally noted the representations and referred to the Housing (Amendment) Bill now in another place.
    Mr. Jones: Does not the hon. Gentleman agree that the rigid date of June 1974 is having disastrous effects upon improvement grants in the valleys of South Wales? Is he aware that unless the time limit is removed many thousands of people will be called upon to repay larger sums for home improvements and that many more thousands of people will be denied the opportunity to carry out essential improvements?
    Mr. Gibson-Watt: I am pleased to hear that the hon. Gentleman thinks so well of the Government's policy in this direction. However, so long as the Bill is in another place it is not opportune to discuss yet another extension.

    Land Prices
    Mr. Probertasked the Secretary of State for Wales what further information he has received concerning land prices in Wales.
    Mr. Gibson-Watt: The most recent information is that given in the first issue of the Digest of Building Land Prices, sponsored jointly by the House Builders' Federation and the Estates Gazette. The digest showed that the price of land varied greatly from area to area.
    Mr. Probert: Is the hon. Gentleman aware that in 1972 one acre of land in Swansea cost £40,000 whereas that same acre of land in 1971 cost £15,000? Does the hon. Gentleman agree that, apart from the impossible burden which high prices place upon young people wishing to buy their own houses, this makes complete nonsense of the Government's insistence that trade unions must restrict their wage demands whereas nothing is done to restrict land prices?
    Mr. Gibson-Watt: I agree that the price of land is a matter of concern to everyone. However I have some good news for the hon. Gentleman. In two areas in South Wales, Llantrisant and

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    Cardiff, considerable acreages have lately become available for building—
    Mr. Probert: At what price?
    Mr. Gibson-Watt: One of the main ways of bringing down the price of land is to get more land available for building.
    Mr. Gower: Might not this matter be assisted if my hon. Friend pressed local authorities to ensure the release of land more quickly and, where land was released, the condition was imposed that the planning permission should be used and that the building should be erected within a prescribed time?
    Mr. Gibson-Watt: I shall have to look at the second part of my hon. Friend's suggestion. Certainly I agree with the first part of it, and 320 acres have lately been made available in the Cardiff area.
    Mr. Rowlands: Will the hon. Gentleman also assist by supporting the idea of urban land nationalisation, which would remove speculation in and exploitation of land in the interests of householders and of every other form of community development in Wales?
    Mr. Gibson-Watt: No, Sir.

    Steel Industry
    Mr. Colemanasked the Secretary of State for Wales what assessment his Department has made of the social and industrial consequences of the reorganisation of the steel industry in Wales; and if he will make a statement.
    Mr. Peter Thomas: These implications were taken fully into account when the Government considered the British Steel Corporation's proposals. The recently appointed task forces will report on the special needs of areas in Wales particularly hard hit by the reorganisation.
    Mr. Coleman: If these implications were taken fully into account, why is the Secretary of State unable to tell the people in the valleys of Monmouthshire about concrete proposals for bringing in new industry and so preventing an employment famine? Can the right hon. and learned Gentleman say whether, when he was considering the position of Shotton, consideration was given to the effect upon steel-using industries in the North West as a result of creating a steelmaking desert there? Will the right
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    hon. and learned Gentleman look again at this proposal in respect of Shotton?
    Mr. Peter Thomas: It is interesting that the hon. Member for Neath (Mr. Coleman) should be asking me about Monmouthshire and Shotton. I can assure him that the claims of that area and of Monmouthshire have been put forward effectively and fully in this House. The decision taken by the Government which was announced by my right hon. Friend the Secretary of State for Trade and Industry took into full account all the social consequences of the BSC's proposals.
    Mr. George Thomas: Is the right hon. and learned Gentleman aware that it is thanks to his failure to protect the steel industry in Wales that so many of my right hon. and hon. Friends have to manifest an interest in these areas? Is he further aware that the task force is doing the work that the Government could have done before agreeing to these proposals?
    Mr. Peter Thomas: Not for the first time the right hon. Gentleman is wholly wrong. The interests of Wales in steelmaking have been protected, and an investment of £900 million will be put into the steel industry over the next 10 years. In the Port Talbot area, which is near the constituency of the hon. Member for Neath, steelmaking capacity will be increased from its present 3 million tons to 6 million tons, providing 1,300 new jobs.
    Mr. Coleman: On a point of order, Mr. Speaker. In view of the thoroughly disgraceful answers given by the Secretary of State, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible moment.

    Queensferry Roundabout
    Mr. Barry Jonesasked the Secretary of State for Wales if he will institute a traffic census at the Queensferry roundabout.
    Mr. Peter Thomas: Yes: I have asked Flintshire County Council as my agent to carry out a feasibility study at this junction which will include a review of traffic flows.
    Mr. Jones: Will the Secretary of State accept that if 2,300 motorists have signed

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    a petition for a flyover at this roundabout the situation must be very grave? Has the right hon. and learned Gentleman caused his Department to make any estimate of the likely chaos in the summer months when commuter and holiday traffic combine? Does he agree that there is a grave danger of serious consequences locally if the flyover is not sanctioned immediately?
    Mr. Thomas: The hon. Gentleman came to see me the other day when he presented the petition to which he has referred. I listened to his submissions and I told him that the feasibility study will take place. As a result of it, I have no doubt that he will get the answers he seeks.

    Private Sector Housing
    Mr. Gowerasked the Secretary of State for Wales how many houses and flats were built for owner-occupation in Wales during 1972; how many were erected in Wales during 1972 through co-ownership schemes; and what were the comparable figures in each case during 1971.
    Mr. Gibson-Watt: Private sector completions rose from 9,174 in 1971 to 10,635 in 1972. Nearly all these dwellings were for owner-occupation. Co-ownership societies built 313 dwellings in 1972 as against 42 in 1971.
    Mr. Gower: Regarding one aspect of owner-occupation, can my hon. Friend indicate whether his Department is satisfield with the response to its appeal to local authorities to consider sales to council tenants in appropriate cases and subject to appropriate conditions?
    Mr. Gibson-Watt: Yes, Sir, Although the pattern is patchy, many local authorities are now coming round to our view that to sell houses to their tenants is the right policy.
    Mr. John: Will the hon. Gentleman confirm that the total of private and public housing is the lowest for a decade, and does he agree that if fewer council houses were built they could be sold to their tenants at a premium because they would have a considerable scarcity value?
    Mr. Gibson-Watt: I must go back to my reply to Question No. 2. The total in the public sector and the private sector
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    and of both the public and private sectors for improvement grants has risen since 1968 from 26,189 to 41,000 and over.

    Infrastructure Grants
    Mr. Cledwyn Hughesasked the Secretary of State for Wales how much of the extra capital of £14 million allocated to local authorities in Wales for infrastructure projects in July 1971 will have been taken up before the terminal date in March 1973.
    Mr. Peter Thomas: The original allocation of £14 million was increased to £30 million. My Department is responsible for just over £27 million, of which about £22 million should be spent by the end of this financial year.
    Mr. Hughes: The Secretary of State will recall that on 19th July 1971, when answering Questions about the extra capital allocation to be made in Wales, he said that it was
    "to improve the infrastructure, to create employment opportunities and to make development areas more attractive to incoming industry."—[OFFICIAL REPORT, 19th July 1971; Vol. 821, c. 1030.]
    As none of these objectives has been achieved and matters are much worse than they were, may I ask the right hon. and learned Gentleman to consider extending the period and transferring the balance over into next year so that jobs can be kept and the real objectives which we have in mind can be attained?
    Mr. Thomas: When I made that anouncement in July 1971 it was intended that there should be £14 million of extra accelerated infrastructure expenditure. That has been increased to £30 million, of which I said that £22 million will have been spent by March this year. Therefore, I do not see why the right hon. Gentleman should say that no improvement has taken place.

    Consultant Appointments (Aberystwyth)
    Mr. Hoosonasked the Secretary or State for Wales if he will insist on an ENT consultant and a consultant paediatrician being appointed in the fairly close future to Bronglais General Hospital, Aberystwyth.
    Mr. Gibson-Watt: No, Sir. The Welsh Hospital Board's plans are improving the consultancy services in these specialties for South, West and Mid-Wales and I see no reason to change them.
    Mr. Hooson: The Minister may change his mind when I give him details of two recent cases, which I hope he will investigate thoroughly, concerning the lack of availability of expert opinion at Aberystwyth. The first case is that of an eight-month old boy transferred by his father, who is a doctor, at his own expense by ambulance to Carmarthen, and the second a seven-year-old boy admitted with peritonitis who died at Wrexham some time after being transferred there by his parents and a GP. Will the hon. Gentleman investigate both cases regarding the lack of expert paediatrician and ENT advice at Aberystwyth? Will he then reconsider the whole question, because most of the money available for hospital services in Wales has been spent in areas other than Mid-Wales which has been badly neglected in this regard?
    Mr. Gibson-Watt: I am more than prepared to investigate both those cases carefully. I shall be glad if the hon. and learned Gentleman will get in touch with me. Regarding the general policy on paediatrics in South-West Wales, both he and I have very deep concern, but the Welsh Hospital Board's plans, which accord with the recommendation of the Chief Medical Officer, provide for two consultants in each of these specialties to be based at Carmarthen. This should enable proper cover to be given for inpatients at Carmarthen while enabling improved out-patient services to be carried out at Haverfordwest and Aberystwyth.
    Mr. Nicholas Edwards: Although my hon. Friend may be satisfied with the plan for West Wales, practically all local doctors are not. There is acute anxiety that deaths will occur among young children being taken from outlying parts to Carmarthen. Will he undertake to keep these plans under close review?
    Mr. Gibson-Watt: Yes, I certainly will.
    Mr. Elystan Morgan: Does the Minister of State agree that in view of the vast area of Mid-Wales, which he knows well, which is served by the Aberystwyth hos-
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    pital, it is gross irresponsibility on the part of the Welsh Office not to provide this vital speciality? Does he also agree that representations have been made by doctors at Aberystwyth Hospital over the years that tragedies are bound to occur unless drastic action is taken? Will he now reconsider Professor Gray's report to the Advisory Committee on Paediatric Services to the effect that it will be impossible to discharge this function unless a paediatrician is appointed at Aberystwyth Hospital?
    Mr. Gibson-Watt: As I said, I have for a long time been aware of this problem. However, it is one thing to be aware of it and another to be able to fill the posts which the Welsh Hospital Board has offered. There is one permanent and one locum consultant in ENT at Carmarthen and approval has been given for the appointment of a consultant who will replace the locum. There is one consultant paediatrician in post and a further consultant is about to be appointed, which I hope will case the position.
    Mr. Hooson: On a point of order, Mr. Speaker. In view of the highly unsatisfactory nature of the replies on this matter, I beg leave to give notice that I shall raise this matter on the Adjournment.

    Ebbw Vale Task Force
    Mr. Michael Footasked the Secretary of State for Wales when his proposed task force for dealing with areas threatened with special redundancies will be making its first report; and whether the terms of reference for it will comprise investigation of the dates for proposed closures.
    Mr. Peter Thomas: The task forces will complete their reports as quickly as possible. It is not part of their remit to reappraise the strategy agreed for the British Steel Corporation, but I have asked them to pay particular regard to the timing announced and to the impact that this will have on their work.
    Mr. Foot: The Secretary of State has had the advantage of knowing from people in Ebbw Vale what they think about this matter. Does he agree that everyone in Ebbw Vale who has looked at the matter agrees that the proposed dates for closure are intolerable and impossible, that we are prepared to look

    21
    at the BSC's proposals in a reasonable manner, although we are fundamentally opposed to them, and that we will examine why it has departed from the promises which were given to us? Does he agree that it is entirely reasonable for us to demand that his task force should give an urgent interim report to him, to the Government and to the British Steel Corporation on whether it agrees with us on dates? Therefore, will he ask the task force to inform him as soon as possible—perhaps before it reports on other matters—its view on these dates? Surely we are entitled to discuss these matters not under the threat of dictation or duress.
    Mr. Peter Thomas: I very much welcome the meeting that I had in Ebbw Vale last Friday. I thought that all the interests represented presented their case with great dignity and force. The purpose of the task force, as the hon. Gentleman knows, is to assess the needs of the area completely. It has a wide remit. Obviously in analysing the impact of the proposals the task force will need to take account of the timing. I have asked it to indicate whether, in its view, the problems can be dealt with within that time scale. If it comes to the conclusion that they cannot, it will be open to it to say whether a different time scale would be helpful.
    Mr. Foot: I thank the right hon. and learned Gentleman for that statement. May I ask further whether the report of the task force on the timing will be made available as soon as possible to the country, and particularly to the people in Ebbw Vale?
    Mr. Peter Thomas: No, Sir. The task force is composed of officials who will be reporting directly to me. Their report will obviously be one of the proposals on which the Government will have to make a decision. The report will not be made public.
    Mr. George Thomas: As Lord Melchett has indicated that the East Moors closure may occur within a three-year spell, may I ask whether the Secretary of State realises the extreme urgency of an early report from the task force? Is he aware that the people of Wales have a right to know what these task forces recommend?
    Mr. Peter Thomas: I agree that it is very important that these task forces should finish their work as quickly as possible. They will report to me within two or three months on Ebbw Vale. The question of timing exercises the minds of all concerned with these particular areas.

    Welsh Office Expenditure
    Mr. Gwynoro Jonesasked the Secretary of State for Wales what is the estimated amount to be spent by the Welsh Office in 1974–75 on functions for which it is responsible.
    Mr. Peter Thomas: Detailed Estimates for the Welsh Office for 1974–75 will be presented to Parliament in due course. Estimates of overall public expenditure in Wales within my field of responsibility will be found in the White Paper "Public Expenditure to 1976–77" (Cmnd. 5178).
    Mr. Jones: The short answer is roughly £430 million. In view of the growing importance of Welsh Office expenditure in the total public expenditure of Wales, may I ask the Secretary of State why he still refuses to instigate discussions to set up and establish a Committee of this House to scrutinise Welsh Office expenditure far more closely than hitherto?
    Mr. Thomas: The rôle of the Welsh Grand Committee or whichever body it may be in relation to the scrutiny of Welsh Office expenditure is another question. I am satisfied that the arrangement for the scrutiny of Welsh Office expenditure are already very thorough.

  TRADE AND INDUSTRY

    Coal Output
    Mr. Hardyasked the Secretary of State for Trade and Industry what is the current output per manshift obtained in the coal mining industry in the last four-week period for which figures are available; and what it was during the same period, two, four and six years earlier.
    The Minister for Industrial Development (Mr. Christopher Chataway): With permission, I will circulate the figures in the OFFICIAL REPORT. Because of the varying incidence of the Christmas and

    23
    New Year holidays care should be exercised in interpreting these statistics.
    Mr. Hardy: Does the right hon. Gentleman agree that the figures will show that the view recently expressed that there is little scope for increased productivity is ill founded? Does he agree too that the recent commendable and sizeable increases in productivity justify the demand that there should be more coal-fired generation of electricity?
    Mr. Chataway: I agree with the hon. Gentleman that the recent increases in productivity have been encouraging, and it is hoped that the improvement can be maintained.
    Mr. Ellis: Does the right hon. Gentleman agree that the recent improvements in productivity are even greater than appear at first sight since they do not take account of collieries which have closed or the fact that the performance figures for the last six to eight years include collieries which themselves had particularly low levels of productivity?
    Mr. Chataway: That is a factor which could cut both ways, depending on the time scale over which one is looking at the increases in productivity, but it is right to say that the recent improvements in productivity are in line with increases in productivity over recent years and are encouraging.
    Mr. Edward Taylor: Can my hon. Friend indicate to those who are anxious to know the full picture how much of the increase is due to the closure of uneconomic mines where it was not possible to get high output per manshift and how much is due to increased mechanisation? Is it possible to give a clear picture of how much of this improvement is due to increased co-operation and better methods or, on the other hand, to the closure of uneconomic mines?
    Mr. Chataway: I cannot without notice give figures which would purport to distribute improvement between those factors.
    Mr. Eadie: Surely the right hon. Gentleman should tell the House that despite the fact that there have been massive closures, either for economic reasons or because coal had run down, there has been a substantial improvement in production
    24
    and that credit is due to the miners because they have managed to achieve this.
    Mr. Chataway: Indeed. My hon. Friend the Minister for Industry has made this point on a number of occasions and said that the recent increases in productivity are very welcome.
    Following are the figures:

    Average output per manshift (cwt.)

    4 weeks ending 21st January 1967

    …

    36·90

    4 weeks ending 18th January 1969

    …

    42·97

    4 weeks ending 16th January 1971

    …

    43·10

    4 weeks ending 20th January 1973

    …

    47·18

    Aerospace
    Mr. Adleyasked the Secretary of State for Trade and Industry what discussions he proposes to have with other European Governments in order to safeguard the future of Europe's aerospace industry.
    The Under-Secretary of State for Trade and Industry (Mr. Cranky Onslow): We shall continue to take every opportunity to discuss with other European Governments the steps needed to ensure a strong European aerospace industry.
    Mr. Adley: I thank my hon. Friend for that reply. I wonder whether in future when European companies have to buy aerospace equipment from outside the EEC he would consider with our partners in the Common Market whether, rather than impose tariff arrangements, a percentage of the production of aerospace work for these purchases could be undertaken within the EEC area.
    Mr. Onslow: I shall see that my hon. Friend's suggestion is given due consideration. I agree that one means of achieving our aim is to try to make the maximum effective use of the purchasing power of the European area.
    Mr. Edelman: In order to ensure the future viability of Concorde with its central rôle in the European aerospace industry, will the hon. Gentleman consider enlarging the discussions to include the United States with a view to making a Concorde project a tripartite rather than a bilateral one?
    Mr. Onslow: The top priority is to ensure that the Concorde sales programme negotiations go ahead, and the

    25
    Government are giving the manufacturers the maximum support in this.
    Mr. Benn: Is the hon. Gentleman aware that to speak about the Government's support for the sales programme does not convey the sense of strength by the Government that is needed? Will he assure the House that in thinking of a European aircraft industry policy—whatever that could mean—he is not contemplating the possibility in respect of Concorde of a single assembly line at Toulouse?
    Mr. Onslow: The right hon. Gentleman will understand, and indeed he has expressed in these words, the importance in this situation of keeping one's nerve. I hope he is not doing anything to suggest that the Government are losing theirs.

    Steel Prices
    Mr. Edward Taylorasked the Secretary of State for Trade and Industry what assessment he has made of the percentage variation in steel prices which will be charged in different parts of the United Kingdom when the basing point system of pricing is introduced by the British Steel Corporation.
    Mr. Chataway: Of itself the move to the ECSC basing point system will mean little change in price for the majority of users and a reduction for some. There will also be some increases, but only in the exceptional cases of those most remote from basing points will these exceed 4 per cent. in the case of any particular product.
    Mr. Taylor: Is my right hon. Friend aware that 4 per cent. of steel costs can be a substantial amount? Is he aware that in Scotland we are looking forward to great industrial development on the North-East Coast where oil has been found? Can he give any indication whether steel consumers on the North-East Coast will have to pay considerably more than, say, those in the west of Scotland, and can any figure be put on this?
    Mr. Chataway: I emphasise that the 4 per cent. figure is applicable in only a very small proportion of the cases. I should need notice before being able to give figures about the relative effects on
    26
    the East and West Coasts. As my hon. Friend knows, the BSC paid special regard to Scottish customers in selecting basing points, and it has selected Glasgow for a wider variety of products than any other United Kingdom basing point.
    Mr. Shore: On the related aspect of steel prices, the right hon. Gentleman or his colleagues will have received over the weekend a letter from the European Commission pointing out that the Government's legislation in the Counter-Inflation (Temporary Provisions) Act 1972 puts them in breach of their treaty obligations under the ECSC, and in particular Article 88 of the ECSC Treaty. Can the right hon. Gentleman say whether it is his intention during the coming month to put himself as it were straight and right with the ECSC Treaty by repealing the provisions of that Act, or does he intend to sustain his counter-inflation policy and tell the European Commission that his first duty is to the people of this country and to keep prices down?
    Mr. Chataway: As the right hon. Gentleman will no doubt have noted, the Commission, in writing to the British Government, said that it welcomes in principle any action designed to contain inflation and has noted the declared intention of the British Government that in stage 2 of the programme for controlling inflation Treaty of Paris products will be exempt from control. The letter has been received from the President. It calls for an answer within 30 days, and it is being studied.

    Dunlop-Pirelli Capital Transfer
    Mr. Milneasked the Secretary of State for Trade and Industry if he will take steps to prevent redundancies arising from the recent payment of £46 million by Dunlop to Pirelli of Italy in respect of losses sustained by Pirelli; and if he will make a statement.
    Mr. Chataway: The effects of Dunlop's decision to write down its £42 million investment in Pirelli have been the subject of discussions between Her Majesty's Government and Dunlop. The agreement reached does not affect the jobs position in United Kingdom factories of Dunlop or Pirelli.
    Mr. Milne: Is the right hon. Gentleman aware that his answer is an historic

    27
    one because it marks the first support by the Government for lame ducks in the European Economic Community? How can he argue that the transfer of capital from Dunlop in the United Kingdom to Pirelli in Italy will not endanger jobs in the Northern Region and in Dunlop factories throughout the country?
    Mr. Chataway: I am sure the hon. Gentleman will be pleased at the information I have given him, which is that there will be no effect upon jobs in this country. Whether or not connected with the Dunlop-Pirelli arrangements, I know of no closure of plant under consideration at present.
    Mr. Greville Janner: Is the right hon. Gentleman aware of the redundancies already created by Dunlop through the closure of St. Mary's mills in my constituency? What steps is he taking with Dunlop to prevent further redundancies in the United Kingdom?
    Mr. Chataway: The hon. and learned Gentleman will know that those redundancies were completed in March of last year. I know of no further plans for plant closures.

    Prices
    Mr. Arthur Lewisasked the Secretary of State for Trade and Industry whether he will give a list of the actions taken by his Department during the year ended December 1972 to reduce prices coming within the control of his Department; and what were the results in each of these cases.
    Mr. Onslow: Action taken under the Counter-Inflation (Temporary Provisions) Act resulted in over 200 price increases being withdrawn by December 1972.
    Mr. Lewis: Will the Minister now answer the Question? What action has he taken to reduce prices? He will recollect that both he and the Prime Minister, and all concerned, said that they would cut prices at a stroke. We know that they cannot do that, but after two and a half years can the hon. Gentleman say what definite action the Government have taken to reduce prices and not something that might happen in the dim and distant future?
    Mr. Onslow: I am sorry that it has escaped the hon. Gentleman's notice that we have substantially reduced taxation.
    Mr. Biffen: Referring to the instances which my hon. Friend has just quoted, can he say how much of that action was the result of notices served under legislation or orders laid under legislation?
    Mr. Onslow: In the great majority of cases where infringements of the standstill have occurred, these have been established as being due to lack of understanding by the trader concerned of the provisions of the Act, and traders have readily agreed to comply when the position has been pointed out.
    Mr. Benn: May we assume from the hon. Gentleman's reply that no prices were reduced as a result of Government action following the Counter-Inflation (Temporary Provisions) Act?
    Mr. Onslow: Certainly not. The answer I have given directly contradicts that suggestion.

    QUESTIONS TO MINISTERS
    Sir Elwyn Jones: On a point of order. May I draw attention, Mr. Speaker, to the fact that once again Questions addressed to the Attorney-General have not been reached? These are questions that concern the liberty of the subject. This is a consistent pattern that is arising, through no fault of the right hon. and learned Gentleman. It is quite intolerable that this situation should prevail. I wonder, Mr. Speaker, whether any representations can be made to the Leader of the House for an early statement on this matter.
    Mr. Speaker: The matter about which the right hon. and learned Gentleman has spoken is very much in my mind. On all these things, the only reasonable answer is for hon. Members to discipline themselves over the length of their supplementary questions. It is very difficult for the Chair to do it. Today we had 19 Welsh Questions in 45 minutes. But, returning to the right hon. and learned Gentleman's point, I understand that next time the Questions to the Attorney-General will be taken at 20 minutes past three o'clock.
    Sir Elwyn Jones: I am most grateful to you, Mr. Speaker.

NORTHERN IRELAND
Mr. McMaster(by Private Notice) asked the Secretary of State for Northern Ireland if he will make a statement about the violence last weekend in Northern Ireland.
The Minister of State for Northern Ireland (Mr. David Howell): Since 7 a.m. on Friday morning, 12 persons have been killed and many injured in the city of Belfast. Six were killed during a major battle between the security forces and IRA gunmen in the New Lodge area on Saturday night. On this occasion a total of 189 rounds were fired at the security forces, who returned 168 rounds. There were no casualties among the security forces. Six men have been found murdered and there have been other attempted murders.
Throughout the weekend, there have been a number of shooting, bombing and stoning incidents. The House will wish to pay tribute to the courage and skill of the explosive experts of the security forces who, on Saturday, defused a bomb in a petrol tanker containing 4,000 gallons of petrol, which had been hijacked and left in the city centre.
The whole House will, I know, wish to extend its sympathy to the bereaved and injured, and to condemn utterly this senseless and savage violence.
Mr. McMaster: May I, first, join with my hon. Friend in expressing sympathy to the relatives of all those who have been killed.
Is my hon. Friend aware that the terrible death toll of the past weekend brings the total death roll to over 700 people, including 200 members of Her Majesty's forces, police and reserves in the past three years as a result of terrorist activity by the IRA, activity deliberately and openly pursued by the IRA? Is my hon. Friend also aware that all the concilliatory measures which have been taken by the Government, including the disarming of the police, the disbandment of the B-Specials and even the suspension of Stormont, have not brought these activities to an end?
30
The public in Northern Ireland are totally unable to understand why the IRA is not declared an illegal body throughout the United Kingdom, so that guidance may be given to the Press and television authorities, who feel it their duty to publish the propaganda of the IRA. Will my hon. Friend give first priority in these circumstances to restoring democratic institutions in Northern Ireland? Will he also take immediate steps to protect peaceful people of every religion, class and creed in Northern Ireland?
Mr. Howell: I understand my hon. Friend's worry and concern at the appalling level of deaths and of violence. Frankly, I do not think at this stage that charges and counter-charges about responsibility will help the situation very much. In fact, they may even make it worse.
As to the IRA being made illegal throughout the United Kingdom, that is a matter for my right hon. Friend the Home Secretary.
Mr. Merlyn Rees: Is the Minister aware that we on the Opposition side of the House believe firmly that the responsibility for Northern Ireland, in the security aspect which worries all of us on both sides of the House, rests firmly on this House and in the hands of the Government? Will the Minister assure the House that the Government will act firmly against all those, from whatever part of the community they come, who indulge in murder, whether sectarian or otherwise, whatever its source?
The Opposition believe still that it is vital to deal with the number of guns in Northern Ireland and that while there are so many guns around there is bound to be the sort of thing that happened last weekend. We wish to associate ourselves with the tribute to the bravery of the explosives experts who went to deal with the particular event last weekend and with the condolences to the relatives of those who died.
Finally, will the Minister assure the House that the Government, despite the happening of the weekend, will work to a political programme, including elections, as soon as legislation is through the House, as we still believe that there is no military solution to the problem of Northern Ireland and that political action

31
will have to be the way through which we work. As we hear that there is shortly to be an election in the South of Ireland, very quickly we hope that free elections to a new assembly, in which both communities will be able to work together, will be announced for the North of Ireland.
Mr. Howell: I am glad to give the hon. Gentleman the emphatic assurance, if it is needed again, that it is the Government's aim to be totally impartial in the pursuit of justice and in the application of the law to extremists on both sides, and in the hunting out of men of violence from wherever they come. Whatever may be said, I believe that that is demonstrated by the number of arrests. At the weekend there were 40 arrests by the security forces, of which 12 were known members of the IRA and six were known Protestant extremists. It is borne out by the heavy sentences and the number of convictions secured over the last months. This is the token of the impartiality which is the centrepiece of Government policy.
As for guns, my right hon. Friend said on Thursday last that he will look at this matter, providing that it is a common ground, as I think it is, that the special situation of shotguns and guns for self-protection of the security forces, and a few others, is accepted.
As for working towards our objective of reaching a situation where politics can be resumed, this remains the overriding and, indeed, the only possible objective.
Sir Gilbert Longden: Have the Government considered whether it would be wise to proclaim martial law or, at least, a curfew in those murder-ridden cities?
Mr. Howell: I do not think at this stage that such a proposal would be helpful or realistic. The main aim has been to create a situation in which we can move forward towards politics and away from the bullet and violence.
Mr. John Mendelson: As the hon. Gentleman knows, the Secretary of State has received the full support of the House in his actions against the IRA. Is it not now equally incumbent upon the Secretary of State to take action against all para-military organisations, particularly if he wants us to advance into the field of political action? Are not these
32
murders committed upon young teenagers designed to intimidate one part of the population so that they should not appear to claim their political rights after the publication of the White Paper? Does not this create a new situation in which all para-military organisations should be removed by the Government?
Mr. Howell: The Government have always made clear that they deplore utterly the growth of para-military organisations. But the question of taking action, which is easy to talk about in the House, has to be matched on the ground against the danger of provoking circumstances in which many more lives would be lost. The Government agree entirely that the growth of these paramilitary organisations is to be strongly deplored, but the question of taking action is a lot easier put into words than it is in practice on the ground.
Captain Orr: Is my hon. Friend aware that everybody in Ulster who values law and order and the rule of law will appreciate very much indeed the success that the security forces had over the weekend and will in particular endorse what has been said about the great gallantry of those who prevented the explosion of the petrol tanker?
Will my hon. Friend tell my right hon. Friend the Secretary of State that we shall support any measures that are taken, however irksome, that will help to bring the scale of violence, bloodshed and murder to an end, but will he also be careful not to be panicked into measures which might increase tension rather than reduce it, particularly in the light of his statement the other day that no legally held arms could be found to be connected with any outbreak of any kind?
Mr. Howell: I am grateful to my hon. and gallant Friend for what he said about the gallantry of the security forces. I take note of what he said about security measures. He is correct in saying that we must keep this matter in perspective and that, whatever else happens, we must not be panicked into measures which the whole House would later regret.
Mr. Russell Johnston: The Minister will be well aware that on both sides of the House it is felt to be absolutely essential that the security forces should behave with total impartiality between

33
the two extremes. Is the hon. Gentleman satisfied that the security forces, faced with this extra growth of sectarian violence, are adequate in the face of duress? Second, does he not agree that we are getting beyond the stage of saying, "We made exceptions about shotguns and exceptions about so-and-so" and that it is reaching the situation where all arms ought to be proscribed?
Mr. Howell: I am totally satisfied that the impartiality of the security forces is complete and that, to put it mildly, their difficulties from both sides are certainly equal, as anyone serving in the security forces must know all too well. As for guns, I repeat that my right hon. Friend said that he would consider this matter again. There are difficulties about shotguns. Surely the hon. Gentleman cannot be suggesting that shotguns should be removed from those in lonely country areas. There is also the question of pistols given to those in the security forces for personal protection. These are difficult issues which cannot be dealt with sweepingly.
Sir D. Walker-Smith: The Opposition Front Bench spokesman drew a contrast between military measures and long-term political measures. Is not the more immediate need to achieve an intermediate status for the enforcement of the rule of law and the protection of lives and liberties through civil machinery?
Will my hon. Friend reiterate the determination of the Government to assist in reaching that stage as soon as possible, but meanwhile will he accept that all thinking and moderate people in this country and, I am sure, elsewhere will support the Government and the security forces in their unenviable task of seeking to protect lives and liberty and maintaining order in Northern Ireland?
Mr. Howell: I am grateful to my right hon. and learned Friend for what I believe people will recognise to be wise counsel and I am grateful for the support he reiterates.

ORDERS OF THE DAY

  WATER BILL
  Order for Second Reading read.
  3.43 p.m.
  The Secretary of State for the Environment (Mr. Geoffrey Rippon): I beg to move, That the Bill be now read a Second time.
  The Bill provides for the reorganisation of the machinery for executing functions relating to water in England and Wales. These are water conservation, water supply, sewerage and sewage disposal, prevention of river pollution, fisheries, land drainage and recreation—matters which are sometimes wrapped up in the general term "water services".
  This is a radical reconstruction. I suggest that it is none the worse for that. It takes its place alongside the reorganisation of local government and of the health services in this Government's overhaul of the administration of the country to keep pace with the problems with which we shall have to deal through the remaining decades of this century and into the next.
  Reorganisation of this kind seldom evokes enthusiasm, because it looks far ahead and perhaps lacks the whiff of glamour that surrounds the pressing crises of the day. It is never universally popular, because it changes the accepted way of things and because no one person can be expected to find every last item of a reorganisation of this kind to his liking.
  However, I hope to persuade the House of the importance of the Bill, to demonstrate that the proposals in it are those best adapted to deal with our emerging water problems, and to convince the House that the Bill is urgently needed.
  My right hon. and learned Friend the Secretary of State for Wales and I, in conjunction with my right hon. Friend the Minister of Agriculture, Fisheries and Food, arranged for the simultaneous publication with the Bill of a document setting out the "Background to Water Reorganisation in England and Wales". I hope that hon. Members on both sides, and others outside, will have found that document helpful. It discusses the needs and sets out the six major objectives of Government policy.

  35
  These objectives are as follows: first, to secure an ample supply of water of appropriate quality to meet the growing demand of the people, industry and agriculture while at the same time ensuring that it is not wasted; secondly, to provide adequate sewerage and sewage disposal facilities to cope with the natural increase in water use and with new housing, industrial and agricultural development; thirdly, to ensure that the vital contribution of land drainage and flood protection to urban and agricultural areas alike is maintained and, where appropriate, expanded; fourthly, to achieve a massive clean-up of the country's rivers and estuaries by the early 1980s; fifthly, to make the widest use of water space for other purposes, including recreation and amenity and, where appropriate, the protection and development of salmon and fresh water fisheries and the provision of water need for navigation; finally, and not the least important, to protect the interests of those who may be affected by proposals for the development of water resources in any of these respects.
  We all have to accept that the rising demand for water will involve the transportation of water over long distances using river systems to a large extent for this purpose. Increased demand also means that there will be a greater re-use of water. Those two operations by themselves will need careful handling. The problem is accentuated by the growing complexity of industrial effluent. This demands increasingly sophisticated treatment and a careful watch over the potential hazards to public health.
  A large programme of investment is involved and must be carefully coordinated if it is to yield the maximum benefit.
  At present, the management of water services in England and Wales is divided between 29 river authorities, some 160 water undertakings and about 130 sewerage authorities.
  The House will recall that in September 1969 the Government of the day asked the Central Advisory Water Committee to consider how water services could best be organised in the light of the proposed reorganisation of local government. In its careful and very thorough report "The Future Manage-
  36
  ment of Water in England and Wales", which was published in April 1971, the Central Advisory Water Committee criticised the fragmentation of water authorities and recommended that these should be drastically reduced in number. The committee pointed to the need for reorganisation to secure overall planning of all aspects of water management and to provide an effective system for converting the plans into action and the programmes into actual works.
  Hon. Members who are interested in these matters will know that the committee had conflicting ideas about the precise system of organisation required. However, it is significant that the members of the committee were all agreed that water services were becoming increasingly multi-purpose and that the various activities must be co-ordinated throughout fairly extensive regions. The committee's members also all agreed that this co-ordination must be carried out by regional water authorities which should have extensive new powers and responsibilities. That is the foundation of the Bill.
  Against the background of the Central Advisory Water Committee's realistic appraisal of the situation, my right hon. Friend who is now Secretary of State for Trade and Industry, as hon. Members will recall, announced the Government's proposals to this House on 2nd December 1971 and issued a circular and memorandum on the same day. This was followed by a series of consultation papers which went into greater detail on many of the aspects of the proposals, and these papers were given wide circulation and publicity. We have also had discussions with many bodies, in particular the local authority associations. So I hope the House will be satisfied that the publicity for these proposals, the consultation documents and the consultations themselves have been particularly thorough.
  It is, of course, no surprise to many hon. Members that we received diametrically opposed views on many matters, but I believe that what we now propose in the Bill strikes a reasonable balance. I can assure the House that I for my part have certainly tried to take full account of the various representations which have been made to me. Two

  37
  things have been pretty generally agreed: first, that changes must be made; and, secondly, that regional water authorities are needed to plan and to co-ordinate.
  The real division of views has been on whether or not the best way to achieve our objective is through either basically a one-tier or a two-tier structure. The Government are satisfied that the main objective of the reorganisation, which is to provide integrated management of water, can only be fully achieved by a unitary structure. It is important to remember that the CAWC report specifically made the point that water services are becoming increasingly multipurpose. We take the view, therefore, that the regional water authorities should be sufficiently responsible for all water services, that they should own all the assets and that they should be solely responsible for finance. But it would still be possible for other bodies to act, in effect, as their agents in appropriate circumstances. That, in essence, is the structure proposed in the Bill.
  The alternative structure, which was favoured in one form or another by, for example, the local authority associations, is basically a two-tier system. That would have the river water authorities, presumably of about the same size as the Bill proposes—although, clearly, that is the sort of thing about which there is always room for argument—but with simple planning and co-ordinating responsibilities. Below them would be bodies like the present water undertakers, sewerage and sewage disposal authorities and river authorities.
  However, I think that that proposal suffers from a fatal defect. That proposal and others like it rest on the supposition that there would be some system of control by the regional water authorities over the second-tier authorities. It seems to me that this would be either so loose as to be ineffective or so tight as to be inappropriate in dealing with elected bodies.
  There is, in my view, a clear distinction to be drawn between the tight control which the regional water authorities would exercise over water companies, where they will, in effect, have full operational control over the companies' sources and bulk supplies, and what is fitting for bodies of elected members. Therefore, I
  38
  am convinced, as I hope the House will be, that the provisions in the Bill governing the constitution of the regional water authorities provide a far better way of associating the democratic element in local government with the administration of water services in the new system.
  It will be noted that the Bill as now presented proposes that in all the regional water authorities the local authority members will have a majority over the chairman and the other appointed members. That is an important change in the proposals as they were originally canvassed, and I hope it will be seen as a real attempt to meet some of the objections that local government would not be sufficiently associated with services which are of great concern to local people
  Of course, as the House will recognise, the regional structure that we propose is not just an adaptation of the structure set up by the Water Resources Act 1963. It is radically different, and, therefore, the central structure needs to be changed accordingly. In the new situation, therefore, with effective regional water authorities it seems right to replace the Water Resources Board by the creation of a National Water Council, but I am sure the House would wish me to pay tribute to all that has been done by the Water Resources Board and its staff. They have rightly been held in high regard for what they have done.
  There will now be only 10 large and strong regional water authorities. This, I believe, will make it possible to devolve power to the regional level and so avoid the heavy centralisation that other proposals would involve. I do not believe there is room for a three-tier executive structure.
  In effect, the proposals in the Bill rest on maximum devolution from the centre and a clear line of command between the Secretary of State and the regional water authorities. There is, however, a need for a body at the centre to provide a forum for the discussion and examination of matters of common concern to all regional water authorities and to procure and provide common services like training and the testing and approval of water fittings. Beyond that, it does not seem necessary for the National Water Council to have executive functions which would interpose between the Secretary of State and the regional water authorities,

  39
  although obviously there will be matters which Ministers would wish to discuss with the National Water Council since it provides the most convenient way of consulting regional water authorities collectively.
  It is also right that there should be a good planning organisation at the national level, and we believe that our proposals for a central water planning unit, whose tasks would be set by a steering committee composed partly of representatives of the Departments concerned and partly of the National Water Council, which would be given complete independence to publish its reports, provide the most effective answer.
  Before dealing with the detailed provisions in the Bill, I should like to refer briefly to some other differences between the Government's original proposals and the Bill itself. First, I have decided that, while it could be argued that the integration of the British Waterways Board with the new regional water authorities might have many advantages, such a change is not necessary to achieve our present purposes. The Bill does not, therefore, cover the British Waterways Board, and consequently the board and the Inland Waterways Amenity Advisory Council will remain in being with their present responsibilities.
  The new regional water authorities will have a duty to promote and foster recreation, and here is a field in which the British Waterways Board has played a great part. I expect it to work closely with the regional water authorities in discharging this function. I am sure that in practice it will work out perfectly well. I think the British Waterways Board has done a good job. A Conservative Government set it up and a Labour Government expanded some of its responsibilities, so we all have an interest in it.
  Secondly, the House will note that the Bill does not contain the proposed provisions for the more effective control of water pollution following the recommendations of the Royal Commission on Environmental Pollution and the Report of the Committee on Sewage Disposal—the Jeger Report. That will be a matter of some disappointment to many, but it does not mean that we do not regard them as very important. Indeed, they
  40
  are so important that we need to take a little more time to ensure that they are fully comprehensive.
  Those provisions will be covered, together with other aspects of environmental pollution, such as waste disposal, following the recommendation of the Committees on Solid Toxic Wastes and or Refuse—the Key and Summer Reports—and noise abatement, in legislation which we would wish to introduce during the lifetime of this Parliament.
  The relevance of the Bill to these matters is that with the Local Government Act 1972 it creates an administrative framework within which new and larger authorities will be able to move more effectively into matters of environmental protection. Another change is that, in view of the proposal to give local authorities the majority representation on the regional water authorities, the proposed regional consultative councils are no longer necessary and are not provided for in the Bill. The new local authorities are the people with whom consultation should take place on these matters.
  The Bill is commendably short—at least, I hope that the House will regard it as such—amounting to 36 clauses. Since it is concerned with reorganisation, naturally there are a great many provisions dealing with detailed machinery. These are contained in the schedules. I do not propose to go through the Bill clause by clause but it would probably be helpful if I mentioned some of the major provisions.
  Clause 1 sets out duties of the Minister regarding national policy for water. Land drainage and fisheries remain the responsibility of the Minister of Agriculture, Fisheries and Food. A Minister from that Department will be present during the debate to take note of what hon. Members may say on matters affecting that Ministry. I am glad to see that the Parliamentary Secretary is here.
  Clauses 2 and 3 deal with the establishment, areas and constitution of the nine regional water authorities for England and the Welsh National Water Development Authority. The English aspects are more particularly set out in Schedules 1 and 2. Clause 4 deals with the establishment and constitution of the National Water Council. Clause 3(1), as well as providing for the appointment of the

  41
  majority of the members of the regional water authorities from the local authorities, provides for the appointment of the chairman by the Secretary of State, of two or three members by the Minister of Agriculture, and of the remaining members by the Secretary of State. The size of the regional water authorities will determine whether the Minister of Agriculture will appoint two or three members. In these clauses there are special provisions for Wales, and my hon. Friend the Minister of State at the Welsh Office is here to deal with any matters connected with Wales.
  Mr. George Thomas: Is the Minister saying that the Secretary of State for Wales is to remain silent on a subject of major importance in the Principality? Is he not to speak today?
  Mr. Rippon: The Minister of State will intervene. Everyone realises the importance of these matters to Wales. Much as we should all like to speak, it is not always easy to arrange this.
  Mr. J. R. Kinsey: Will the Secretary of State tell us whether the Welsh authorities will be having any of the Birmingham representatives on them, because Wales is one of the most important sources of supply for Birmingham?
  Mr. Rippon: These matters are best left to the Secretary of State for Wales——
  Mr. George Thomas: But he is not going to speak.
  Mr. Rippon: —whose views can easily be represented through my hon. Friend the Minister of State. We are careful in these matters to make clear that Wales has a great deal of autonomy in these affairs. Obviously, in certain respects we in England have an interest in what happens to the water in Wales.
  Part II provides for the transfer of functions from the existing authorities to the regional water authorities, for consequent adaptations to the powers relating to these functions, and for certain special arrangements. The first of these special arrangements governs the relationship of statutory water companies to the
  42
  regional authorities. The Government believed, after careful consideration, that there was no good reason to extend the scope of the public sector by abolishing the water companies and transferring their assets to the regional water authorities. At the same time we recognised that to secure integrated management the regional water authorities have to exercise a considerable degree of control over the water companies, and that is achieved by Clause 11.
  Mr. Julius Silverman: Will the Minister explain the different method of treatment of the private water companies and the public authorities?
  Mr. Rippon: I explained when we were considering the question of one-tier or two-tier authorities that there was a distinction in the relationship which can be established with an elected body and the relationship which can be established with a statutory company where the degree of control that a regional water authority exercises is very great indeed. I have carefully read the debate which took place in this House on 2nd August last year when the Under-Secretary of State for the Environment gave at column 725 in much more detail the reasons for the Government's decision. Private statutory water companies do a good job, and they are prepared to act more or less as agents of the regional water authorities. There would be little point in paying compensation to them in these circumstances for doing what they are prepared to do in any event.
  The second special arrangement concerns sewerage. Clause 15 requires the regional water authorities to arrange for their sewerage functions to be discharged on their behalf by the new authorities and, where appropriate, by the new town corporations. The arrangement is that the local authorities, subject to general policy direction by the regional water authorities, will be able to initiate proposals for new sewerage works, which the regional water authorities will pay for but which will be carried out by the local authorities. This arrangement, which has been reached after friendly and useful discussions with the local authority associations, is an important element in associating local government with the work of the regional authorities.

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  I turn now to fisheries and land drainage. Fisheries are dealt with in Clause 17 and land drainage is dealt with in Clause 18 and Schedule 4. The terms of reference of the Central Advisory Water Committee excluded fisheries and land drainage. Nevertheless, as the announcement by my right hon. Friend the Minister of Agriculture last August made clear, decisions about the treatment of land drainage and fisheries functions have to be made in the new context. They are both important and integral parts of river management, which is currently the responsibility of the river authorities. It follows naturally that these two functions should be transferred to the regional water authorities.
  The provisions of Clause 17 on fisheries in effect embody what was foreshadowed in the Minister's announcement. The clause provides that the new authorities will be under a statutory duty to maintain and improve the well-being of the salmon and freshwater fisheries stocks. The regional water authorities will consult salmon and freshwater fisheries interests in their areas through a system of advisory committees to ensure that the voice of the interests is heard. No major change is proposed in the financing by the new authorities of their salmon and freshwater fisheries function. They will continue to obtain the greater part of their revenue for this purpose from rod and net licence fees. It is, however, proposed that the deficit will be made up from the water charge instead of from the precept as at present. We believe that in their general concept these arrangements command the widespread support of those concerned with these valuable resources.
  Likewise the proposals for land drainage have the general support of the many interests concerned, whether they are urban or agricultural. Apart from a few points of detail and the special arrangements for London, they are the same as those announced last August by the then Minister of Agriculture. They recognise the basic characteristic of land drainage; that, because of its interconnection with agriculture and because of its immediate importance to low-lying areas at risk from flooding, land drainage calls for local involvement. The essential ingredients are local initiative, local decisions and local action. One of the members to be appointed to the regional
  44
  water authorities by the Minister of Agriculture will also be appointed by him to be the Chairman of the statutory Regional Land Drainage Committee through which the authority will be required by Clause 18 and Schedule 4 to carry out its land drainage functions. A bare majority of the committee's members will be appointed by local authorities, and the remainder by the regional water authority and my right hon. Friend the Minister of Agriculture, Fisheries and Food.
  The regional committee will be required to submit, through the regional water authority, schemes for the establishment of local committees. These schemes, which we expect will usually be based on the present river authority areas, will require the approval of my right hon. Friend.
  There are three other important features about the land drainage provisions to which I should draw the attention of the House. First, under Clause 22 the new water authorities will be placed under a statutory duty to survey the need for land drainage works and to draw up and put into effect programmes for carrying them out. Those programmes will require the approval of my right hon. Friend.
  Secondly, the intention is to continue the present system of financing land drainage mainly by means of precepts on local authorities and internal drainage boards, and by charges on agricultural land. But Clause 18 provides for the possibility of switching to the water charge after 1978.
  Thirdly, the special arrangements for land drainage in London are set out in Part IV of Schedule 4. Essentially they preserve the Greater London Council's responsibilities for land drainage in what is called the London Excluded Area. These arrangements take full account of the need for the GLC to press on with the important task of building the Thames barrier, for which parliamentary approval was given last year.
  I turn next to recreation. The Government attach great importance to the implications of their proposals for recreation—what is called the "fourth dimention" of our water policy. Consequently, Clause 19 places on regional water authorities the express duty of putting to the best use for recreation such rights in

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  the use of water and associated land as may vest in each authority.
  My hon. Friend the Under-Secretary of State has taken a great interest in these matters, and I have no doubt that he will be able to say something more about that aspect, which is important, if he catches the eye of the Chair at the end of the debate.
  Problems will no doubt arise common to all the water authorities, in fulfilling their duty on recreation. In order to advise Ministers, the National Water Council and the regional water authorities in carrying out their respective functions in this sphere, the Bill provides in Clause 21 for the formation of a Water Space Amenity Commission.
  Part III deals with finance. The financial aspects of the reorganisation are vital, and we have embarked on a thoroughgoing study of financial and economic objectives for the water services as a preliminary to consultations with the new authorities.
  I do not propose to attempt to prejudge the outcome. But something needs to be said about the initial effects of the Bill on charges. The Bill provides for the net cost of all water services, except land drainage, to be met by way of charges. The net cost of land drainage will continue to be met, as hitherto, by precepts on local authorities and internal drainage boards and charges on agricultural land.
  As the Financial Memorandum says, reorganisation is not expected to lead to significant changes in total expenditure on water services in the short term. In the longer term, we look for useful, if at present unquantifiable, economies.
  The grants specifically payable in respect of these services are relatively small in amount and are to continue, at any rate for the time being. But expenditure on some of the services, notably sewerage and sewage disposal, has been borne on the rates in the past and now will be collected separately as a charge.
  Charges for water supply and other services will look higher unless account is taken of what should be a corresponding reduction in the rates.
  Mr. John Farr: Why has the appeals machinery been abolished in Clauses 26 and 27?
  Mr. Rippon: I am completely stumped by that question. I shall ask my hon. Friend to reply to it at the end of the debate.
  I return to safer ground, the changes in grant. It will be well understood by the House that many changes will be taking place at the same time as water reorganisation as a result of the local government reorganisation, and obviously these matters will have to be considered in greater detail when we have regard to changes in the system of both rates and grants.
  Clause 28 deals with the installation of meters. There has been a lot of misunderstanding of what our consultation paper said about metering, and I welcome the opportunity to clear it up.
  We did not say, never have said and do not say now, that metering should be introduced straight away. Indeed, we used the high estimated cost—about £500 million if every house were to be metered —to make the point that universal metering is unlikely to be achieved for a considerable period of years. All that the Bill does is to empower regional water authorities to charge by metering, and to introduce this for different consumers at different times.
  The fact that we have now provided for majority representation by local authorities on the regional water authorities represents an additional safeguard. But we should bear in mind that many small consumers might well welcome metering.
  Mr. Nigel Spearing: Can the right hon. and learned Gentleman comment on the following most important sentence in his background paper, which in referring to regional water authorities on page 31, states:
  "In all probability they will, like the nationalised industries, require target rates of return on capital employed."
  Does he agree that that means that the municipal water undertakings will become much more like private undertakings, in that hitherto they have not required a profit and now the Secretary of State expects them to make one?
  Mr. Rippon: I think it is reasonable that those criteria should be applied. The important thing to bear in mind is that there will be a majority of local authority representatives on the regional water

  47
  authority, and, therefore, there is no reason to suppose that there will be any dramatic change in the manner in which these undertakings are run. Even the charges that the private companies are allowed to impose are very much controlled.
  Mr. Ted Rowlands: The Secretary of State has repeatedly spoken of the safeguards that the English authorities will have in that the majority on the regional water authorities will be from local authorities. There is no guarantee that the Welsh National Water Development Authority will be similarly constituted.
  Mr. Rippon: My hon. Friend the Minister of State will deal with that point. We need to make special provision for Wales. The Welsh tend to get what they want in the way that they want.
  Part IV contains a number of miscellaneous provisions. I should like to draw attention in particular to Clause 30, which provides for the establishment of the Water Services Staff Commission, covering England and Wales. Its task will be to handle the arrangements for the recruitment and transfer of staff to the new authorities and to safeguard the interests of the staff affected, advising the Secretaries of State on any steps they should take for this purpose.
  My right hon. and learned Friend the Secretary of State for Wales and I have already taken the step of setting up a Water Services Staff Advisory Committee. We think that is essential to give the staff concerned the necessary reassurance that their interests are already being cared for.
  The Chairman is Sir Patrick McCall, former Clerk of the Lancashire County Council. The committee's first meeting will take place this week.
  It was a distinguished Member of this House who said in 1849:
  "Sewers are in, and not before time."
  He was speaking in the early stages of the great public health movement of the nineteenth century, a movement of which Britain was a pioneer. The present environmental movement is sometimes regarded as uniquely modern. In fact, the crusading spirit underlying what we are all trying to do has much in common with
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  what the great propagandists, administrators and engineers of the nineteenth century were doing.
  We might say today that water services are in. I believe that in introducing and considering the Bill we are inheritors of a great tradition, and are making an effective advance on what has been done by our predecessors.
  Taken in conjunction with the proposals which we have on hand for further action on pollution, we are building a second great wave of preparation for dealing with the health and prosperity of our people. Of course, there are differences between us which cross party boundaries. In fact, they are found in various organisations. They are the sort of differences that are bound to arise on anything that is worth discussing. However, on the essential aim and purpose of the Bill we are sufficiently at one for me to be able quite confidently to commend the Bill as a whole to the House.
  Mr. Speaker: There are about 20 hon. Members who wish to speak and to put forward local and other points of view. They all seem to me to have an equal right to speak. I shall get them all in only if hon. Members are brief when making their speeches.
  4.21 p.m.
  Mr. Denis Howell: We used to have a Ministry of Housing and Local Government. In those days the Ministry ensured that houses were built and that local government was based on the principles of local democracy. We now have the Department of the Environment. It builds fewer houses and is busily engaged in the desecration of local government and local democracy.
  The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): Nonsense.
  Mr. Howell: The Under-Secretary is not speaking in this debate, but I hope that during the Committee stage we shall have the opportunity to hear what he has to say in support of the Bill.
  The Bill fits into a familiar pattern. It follows last year's Local Government Act. In that Act we saw the break-up of our local government system. The

  49
  Opposition thought it was their duty at that time, week after week and month after month, to draw attention to the growth of regional bureaucracy. We highlighted that matter when the Bill returned to the Floor of the House. It is our case, certainly in the sphere of local government, that the real and vital decisions will be taken increasingly by the regional arm of Ministries and not by elected local authorities.
  Since the Local Government Act we have seen further proposals which take us down the same road. Local Government is to lose much of its responsibility. Appointed boards are to replace elected councillors. As a result of this Bill every local authority in the land will lose its water undertaking. Appointed regional authorities will replace those undertakings. At the same time as that is happening, privately-owned water companies are to be left in private hands.
  There is evidence of the growing concern about these movements and trends in local government. There are doubts which are shared by local authorities of all political persuasions. I received a letter during the weekend—and perhaps other hon. Members received a copy—from the Greater London Council. It is signed by the leader of the GLC and the leader of the Opposition. They are concerned about the loss of local authority services from their control. They have estimated that as a result of the Local Government Act, this Bill, proposals for the health services and other relevant proposals, the GLC will lose 25 per cent. of its functions and staff. That is the measure which they are able to make of these incursions into democratic local government.
  At the core of the Bill is the fact that more and more power, if it does not go through to the regional arms of Ministries, will go directly to Ministries and Ministers. Under these proposals not only will the man from the Ministry know best but he will be the only man who will know anything. That will happen because so often the information which we and local representatives should have, as a basis upon which democratic discussion and argument about the development of public services can be sustained and maintained, will in many cases not be available to the people who need it.
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  Our first objection to the Bill is fundamental. We consider that it is another step towards the destruction of local government as we know it, where elected councillors are known and answerable to the people they represent. Furthermore, the Bill denies the principle of public ownership of water supplies. Water resources are our national and natural heritage. They belong to the people. We are entitled, as a society, to harness these resources for the use of the nation without private exploitation.
  Associated with the principles of public ownership on control of water is another principle which is just as important—namely, the plentiful supply of water as of right for our people. That supply should readily be available. For the first time the Bill proposes to metering of water. The ability to pay for water, whether it is in the short or long term, is to supersede the right to have a ready supply according to the need of the domestic user. We cannot support that proposition. It is no wonder, therefore, that every local authority, controlled by majorities of differing political complexions, has rejected the Bill either directly or through its local authority association.
  I agree with the right hon. and learned Gentleman about the improvements that the Government have in mind. There is no disagreement in that respect. There is likely to be a chronic shortage of water and there needs to be reorganisation based on the hydrological cycle. We need to adjust our machinery to ensure that that is brought about. The Opposition agree that the geography of the river basin and the water supply does not fit in tidily with our units of political control and our system of government. Therefore, it is probably the one service which the system of government has to be tailored to meet.
  Sir Frederick Corfield: Does the hon. Gentleman not agree that that argument applies equally well to the rather artificial division between England and Wales in hydrological terms?
  Mr. Howell: The right hon. and learned Gentleman has a point which should be pursued. Indeed, I know that it will be pursued by my right hon. Friend

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  the Member for Cardiff, West (Mr. George Thomas). In fact, the proposals for England and Scotland make the rest of the proposals in the Bill almost a nonsense as they are completely contradictory. I take into account the point which the right hon. and learned Gentleman is making. When we are dealing with water resources the only common sense thing to do is to take Great Britain as a whole, to look at the amount of water available for the country as a whole and to look at the needs of the country as a whole. Any other approach to the problem would seem to be superficial.
  There is no shortage of water. It has been estimated that there are 41,000 million gallons a day in an average year. That is far in excess of the requirements of the country. The problem is the collection of water and its transportation from areas of plenty to areas of need. It makes sense—we agree about this—that the authority that deals with the supply and transportation of water should also deal with the treatment and disposal of sewage and waste at the end of the day.
  I pay tribute particularly to the working party on sewage disposal, chaired by my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) which issued the report, "Taken for Granted". It did an outstanding job in concentrating our attention on the deficiencies in this aspect of the service, Rereading it over the weekend, I was interested to find that a number of authorities are still discharging undiluted sewage into the sea, or certainly only partially-treated sewage, and are still putting into our river system disposals at far higher levels of impurity than any of us would think right and proper in this day and age.
  I confirm at once that anything the Government or the new organisation can do to insist upon proper levels of purity in the waste disposed of either in our rivers or in the sea will be supported by the Opposition. In the interests not only of hygiene but also of the normal recreational seaside pursuits of the nation it is time that our people, when they visit our beaches, should be free to do so without having to suffer the uncertainties and unpleasantness of so much pollution of the sea around our coasts.
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  We support the view that water supply and distribution is a growth industry. I understand that it is estimated that each man, woman and child in the country uses about 31 gallons of water a day. This is increasing as more and more washing machines and so on become available and more and more cars have to be washed. More and more water is being required for the civilised purposes of life. The amount of water being used by industry is also expanding at a very considerable rate. For example, 160 tons is required for the manufacture of one ton of paper, and a tremendous amount of water is used by the electricity industry for cooling towers, and so on.
  We are not quite sure, since it has not yet been spelt out to us, what the arrangements will be between England and Wales on the one hand and Scotland on the other, but the only thing which makes sense in the modern context of water supply is the establishment of some sort of national grid system, and that is what the Opposition want to bring about.
  The right hon. and learned Gentleman has made two concessions which we welcome—one major and one minor. The minor concession is that each regional authority is now to have a bare majority of local authority representatives. The right hon. and learned Gentleman himself used the phrase "bare majority". At any rate, that is what most local authorities believe.
  Mr. Rippon: They will have an absolute majority on the regional water authorities, and on the larger ones a considerably higher proportion of the members.
  Mr. Howell: There is certainly one case at least where the majority will be only one and I believe that there are other such cases. I do not believe that the right hon. and learned Gentleman's concession, such as it is, is very meaningful, in the first place, some of the regional water authorities will be far too large for any sensible democratic means of control, and we object to the continual use of appointed representatives to such bodies. We all know that under this Government kissing goes by favour. We can all see what is going to happen when we look at the new structure. We have

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  seen similar examples in other appointments by the Government. If ever there were an opportunity for packing these bodies with blue-eyed boys representing the political and philosophical ideology of the Government of the day, it is present in this Bill.
  Mr. Rippon: I resent that suggestion. Successive Governments have been particularly careful to ensure that there is proper representation on bodies of this kind of all political parties. I have been criticised recently for my predecessor's action in having appointed to a board five Labour and one Conservative member, so the hon. Gentleman will see that it does not work out exactly as he suggests.
  Mr. Howell: This matter is undergoing continual research on this side of the House. When we look at the appointments to new town corporations, rent scrutiny committees, hospital boards and the like, we see that increasingly they are being packed with Conservative supporters of one sort or another. Time and again, Labour supporters are being removed—the Post Office is an infamous example. I hope that when the next Labour Government come to office they will undertake an immediate review of the political backgrounds of all those people being appointed on the nomination of the Government.
  Why does the right hon. and learned Gentleman find it necessary to have to appoint the chairmen of these regional water authorities? They are very important people. Each one of them will find his or her way on to the national water authority. This means that the Secretary of State, by his power to appoint the chairmen of the regional authorities, is giving himself the absolute power to appoint the national water authority. If the principles of local government are not to be denied, as they should not be, the regional water authorities should at least be allowed to elect their own chairmen. They know their own people best. We shall try to bring that situation about in Committee.
  The major concession is the scrapping of the proposal to break up the British Waterways Board. The canal system is now to be kept as an entity. I pay tribute to the right hon. and learned Gentleman for that decision. I do not
  54
  expect him to comment, but I do not believe that we should have had that decision had his predecessor still been in his office. We welcome the right hon. and learned Gentleman's decision.
  There is a very good lobby of inland waterway users now, and we are glad to see it. They have risen up in their wrath and the Government have reacted. It is perhaps a reflection on our system of local government, and certainly on the public relations of the local authority associations, that although they were equally vehement and unanimous in their objections, no similar head of steam could be got up on their behalf in protest against the undermining of local democracy in the Bill.
  I hope not to be accused of too much contradiction when I say that the right hon. and learned Gentleman has moved in this respect from one extreme, not to the other extreme but to the position where the canal system is not to be broken up but to be maintained. Indeed, the system is not mentioned in the Bill at all. How the Government can approach the organisation of our water resources without saying in the Bill exactly how the canal system will fit in, particularly in respect of land drainage and recreational possibilities, is almost beyond belief, but we can return to the point later in the passage of the Bill through the House.
  I said that the omission of public ownership of water resources was a serious deficiency. We can harness the water resources of the country properly only upon that basis. In so far as the Secretary of State dealt with it at all, he seemed to make that point. I became even more concerned than I was before he spoke. He twice told us that the regional water authorities will now, for all practical purposes, have complete control of pricing policy and the sources of supply of the private water companies.
  If this is to be the case, if there is to be this rigid control over the private water companies by the regional water authorities, why on earth have the private water companies been left out of these proposals? There can be only one answer—profitability. If we associate that with the proposals in the Bill for metering then we can begin to see why the Government, for absolutely doctrinaire reasons, have taken that point of view.

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  Another phrase which has been brought to my attention this weekend, which has emerged from two separate sources and is becoming part of the common jargon, is that of a "State within a State". It is referred to when dealing with the power to concentrate the machinery within the Ministry. The whole of the planning function, particularly land drainage and the formulation of national water policy, is to be conducted by bureaucrats within the Department of the Environment.
  This raises a matter of considerable importance. There can be a national water policy only if there is some body at the centre planning resources, transportation, reservoir building and so on. This must conflict with the quasi-judicial functions which the right hon. and learned Gentleman has to fulfil. How can there be a Ministry responsible for planning and building reservoirs, and all the other things which cause concern, which is at the same time exercising a quasi-judicial function over the approval of the building of such reservoirs? There is seemingly a great contradiction.
  Mr. T. W. Urwin: The Minister has just used those powers.
  Mr. Howell: As my hon. Friend says the Secretary of State has just used the powers I am illustrating. We shall require an explanation of this apparent contradiction.
  There has been much concern about the fact that we are to be left with 31 private water undertakings. When the right hon. and learned Gentleman's predecessor issued his proposals and was consulting people, one or two reactionary Conservative authorities set about disposing of their public assets to private water undertakings. This is a shameful and disgraceful business.
  I have particularly in mind the example of Brighton which has disposed of its assets for about £2 million to the Mid-Sussex Water Company. We shall certainly try in Committee to stop that sort of thing from happening. I am not sure whether it would be in order to make that retrospective to the date of the Secretary of State's first proposal. I make it clear that the next Labour Government will reserve absolutely their rights in this matter, certainly to bring
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  these undertakings into public ownership and to have regard to the chicanery by which some public authorities are being handed over to private undertakings.
  I come now to the National Water Council which is mentioned in Clause 4. I cannot believe—I am not sure whether this is the right adjective to use in terms of this industry—that any more anemic national body has ever been set up. If we look at the powers and functions we see that a chairman has to be appointed by the Secretary of State. The Chairmen of the regional water authorities are also to be appointed by the Secretary of State. There are to be 10 other members, eight to be appointed by the Secretary of State and two by the Minister of Agriculture. What are the powers of this great national authority? There are four. The first is to advise upon matters of common interest. There is no executive responsibility. The second is to promote and assist the efficient performance of water authorities. There is no authority and no power to deal with any water authority that does not accept its advice.
  Thirdly it has to establish a scheme for testing and approval of water fittings. The fourth power is to prepare a scheme for training and education within the industry. If that adds up to a job of work for about 20-odd people of considerable eminence then I must be a Dutchman and so must a great many other people.
  Mr. Norman Tebbit: A good European sentiment.
  Mr. Howell: I come now to the regions. Here again there is cause for concern about the establishment of the regional authorities. At present I am more concerned about the size and the remoteness of these authorities as defined in the Bill. The one I know best, since it includes Birmingham, is the Severn-Trent authority. Birmingham has built up a magnificent water service with the aid and cooperation of our Welsh colleagues. It is a service which has served not only Birmingham but almost all stopping points along the pipeline. Now, not only is Birmingham to lose its public water undertaking, but it is to be allotted only two members on the new authority.
  Just look at the size of the authority. It stretches from Wales on one side right across to the North Sea on the other.

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  How can an authority of that size, even if we have to base our proposals on the hydrological pattern and on the geological basin, be justified in terms of local government? I am not surprised to hear that some criticisms are coming from the Greater London Council.
  There is a proposal to set up a regional authority stretching from the Cotswolds to Canvey Island. This again is regarded with some contempt. Our London colleagues are right to draw attention to the fact that if we are to have a regional water authority at all then the Greater London Council is a regional authority. That was its purpose when it was created by the previous Conservative Government, in face of our opposition. That being the case, and since it is not disturbed by the new round of local government functions, it ought to be given immediate power to act as the regional water authority for its area. We shall certainly try to bring this about in Committee.
  To come back to the position of the Greater London Council, how can an elected local council responsible for the whole of London not be responsible for the River Thames? It is an absudity that the River Thames is now to be removed from the control and influence of the GLC.
  Mr. Rippon: The Thames is a long river which has never resided within the confines of the GLC. This was faced years ago on the reorganisation of Greater London. Even now the GLC is not responsible for the Metropolitan Water Board, the Thames Conservancy or the Port of London Authority.
  Mr. Howell: But now is the appropriate moment for changes. Changes in this direction would have been welcomed by all the bodies to which the right hon. and learned Gentleman has referred.
  Much more serious is the removal of direct responsibility from elected local councils. What is so special about the water industry that it is to be removed from immediate local government control? This cannot have been done on the basis of past performance, as the Under-Secretary of State has made clear in a letter of 15th August 1972 to the President of the BWA:
  "The case does not rest upon allegations of past failures. Indeed, the Government con-
  58
  sider that in general the present responsible bodies have served the country well. In particular I am fully conscious of the achievements of the water supply industry in this country and the considerable change which it has undergone in recent years in pursuit of the policy set out in the 1945 White Paper."
  What is the thinking—
  Mr. Rippon: An excellent letter, impeccable sentiments.
  Mr. Howell: I could not have written it better myself. The great difference is that I should not be idiotic enough to write those words about the past performance of local authority undertakings and then proceed to abolish them all without a logical explanation why those authorities which have done so magnificently in the past cannot be expected to rise to the occasion in the future. In his speech today the Secretary of State got nowhere near trying to justify that proposition. We wait with bated breath for the more intellectual endeavours of the Under-Secretary of State when he comes to address us on this subject.
  The Opposition have the strongest objection to the imposition of charges based on metering supplies of water to domestic consumers. There is obviously a case for charging a man who uses a hose pipe for cleaning his car or in his garden, but traditionally water has always been readily available at modest cost. The water industry is probably our most efficient industry and has served us well It does not matter whether the metering is to be introduced immediately or in the long term. The Secretary of State has embraced the philosophy that a charge based on metering is right and proper and should be introduced gradually. We totally reject that proposition. It is against the public interest. It will operate against the interest of large families, who should be encouraged to use water. This is classic Conservative doctrinaire policy. The Minister who thought this up must regret that it has not been found practicable to bottle and sell the air we breathe. No doubt had it been possible that proposal would have been included in the Bill.
  Mr. Charles Simeons: Do I understand from the hon. Gentleman's reference to large families that he has found a method of making small boys wash?
  Mr. Howell: I am glad to say that in my household they do. I cannot answer for anybody else's household. If small boys do not wash, their mothers have to wash them, and they also have to wash their clothes.
  Mr. Eldon Griffiths: So that I am in possession of all his thinking to enable me to reply, is the hon. Gentleman saying that the Labour Party is against all forms of metering?
  Mr. Howell: We are against the metering of water for domestic purposes.
  I deal now with the policy which we in Opposition would have welcomed and which we in government will seek to enact. We believe in the public ownership of all the water resources of the country. That is the linchpin upon which we base our policy. We should place those water resources under the authority and executive control of a strong national water board with responsibilities for research, supply, transportation—possibly by means of a grid system—pollution, disposal and overall responsibility for recreation. We rule out any proposal for charges based on metering to the domestic user. We also want the national water board to have responsibility for maintaining the canal system as a national entity.
  Mr. Rippon: Would the hon. Gentleman allow a majority of local authority representation on that strong centralised body? How would it give greater control to local authorities?
  Mr. Howell: I was about to say that the national water board would be composed of the chairmen of all the elected regional authorities. The board would be one step removed from direct local authority representation, but it would be composed almost entirely of local authority representatives.
  If we accept the hydrological pattern, we must accept the establishment of regional water authorities. We should like them to act mainly as wholesalers for the supply of water to all the local authorities. The local authorities would contract with the regional authorities for the supply of water they require for their districts and would be responsible to the regional authorities for purification of the effluent and disposal under conditions
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  of purity approved by the regional water authority.
  We go along with the Government's regional proposals in thinking that the regional water authority should have special responsibilities for recreation, angling and boating, which can best develop on the basis of public ownership of water. Our regions would be much smaller than those proposed in the Bill. In Committee we shall seek to create a greater number of smaller regions which are not so remote from the people. The basis of our policy is that there should be a direct relationship between consumer and local authority. We see no reason why the local authority should not continue to be responsible for the supply use and disposal of water for all people, including industry. There should be direct accountability between the water consumer and his local authority and we shall seek to bring this about.
  The Bill acknowledges the crisis that will face us unless we act to mobilise the whole of our water resources. The Government acknowledge that there is no case against the local authorities on their past performance as water undertakers. There is more reason to be sceptical about the way in which some authorities have performed drainage and sewerage functions, particularly in coastal areas, but these matters can and should be dealt with by a strong national policy in which national standards are laid down and imaginatively and energetically pursued.
  Almost every single responsible authority is against the Bill. The Minister and his colleagues have no friends anywhere. The County Councils Association, the Association of Municipal Corporations, the urban district councils and rural district councils and also the British Waterworks Association have all rejected the concept of bureaucratic control embodied in the Government policy. There has never been more public attention to this question than there is today, and public concern can express itself properly only when there is the fullest access to those responsible for the service and, in the last resort, the right to change those who are in charge and to do so by the democratic process of the ballot box. This is what local government and local democracy are all about. It is because these principles are denied in this Bill that we shall divide the House against it.
  5.12 p.m.
  Sir David Renton: The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) has treated the House to a torrent of mainly unconstructive criticism. I listened avidly to ascertain what were his main alternative proposals. He did not use the word "nationalisation", for that is too dangerous a word for the Labour Party. But he kept on saying that the principal thing they would do would be to bring into public ownership statutory water companies which will remain functioning as they are under the Bill.
  If that is an indirect method of nationalisation, and if it means the gathering of everything else that will come under the Bill by way of water supply into the kind of organisation which nationalisation generally implies, I would remind the hon. Gentleman of the late Nye Bevan's famous dictum that nationalisation of water supplies would not produce a drop more water.
  I am sure that the whole House regrets the absence of my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) owing to illness. He has always taken such an interest in our debates on water. Indeed one cannot represent constituencies such as the Isle of Ely and Huntingdonshire for as long as we have both done without becoming fascinated by water and everything to do with it. In fact, there are people who say that we have developed web feet. In Huntingdonshire we have 25 miles of the River Great Ouse, 10 miles of the River Nene, about 60 miles of contributory rivers, thousands of acres of rich fenland and at Graffham Water we have the largest artificial lake in England, which the Under-Secretary of State recently was good enough to visit. He was, I know, impressed by what he saw, because there we have perhaps the most notable example in the world of a publicly-owned reservoir in which the advantages of water conservation, nature conservation and a wide range of recreational activities, especially for young people, are all combined under one authority.
  When the Bill was published, I read it eagerly but with some fear because I did not like the Government's original proposals in 1971. Some welcome improvements have been made by the
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  Secretary of State, and I wish to give a general welcome to the Bill. However, I am still unhappy about some important features of it. I can appreciate the administrative convenience of having these multi-purpose authorities, each having eight functions, which makes each of them into an octopus. In East Anglia the regional water authority would stretch from the Thames Estuary right up to the Humber and would embrace no fewer than five existing river authorities. That will make it into a giant octopus and I believe that it is too large. There may be a reason for this which may have something to do with the proposals for the Wash barrage. Whatever the reasons for inflicting such an enormous multipurpose authority on the greater part of the east of England, we should be told the reasons and I trust that they will be valid.
  I regret the abolition of the Water Resources Board. What is more, I suspect the reason for doing so, and it is one which must also spring to the mind of my hon. Friend the Under-Secretary of State because when we were in opposition he and I were among those on both sides of the House who fought a long hard battle against Whitehall to get the old Ministry of Housing and Local Government to change its mind about flooding more farmland to build reservoirs instead of getting on with the feasibility study for the Wash barrage. He and I spoke in a debate on the subject late one night.
  Mr. Eldon Griffiths: So did our hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke).
  Sir D. Renton: Yes, we were aided by our hon. Friend. It was not until the Water Resources Board recommended an immediate feasibility study—which did not come immediately but only after further pressure—that we made progress. It was only then that Whitehall was over-ruled. It seems clear to me, and I believe that it must also be clear to the Under-Secretary of State, that the proposed Central Water Planning Unit within the Government service set out on page 30 of the Blue Paper will mean that the completely independent advice of the Water Resources Board will be replaced by less independent advice from Marsham Street, and it would take a lot to convince me that I am wrong. No

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  doubt this central water planning unit or CWPU will become known as "coopu" and will be barely distinguishable from a coypu and just as unpopular. It will have to advise water authorities presumably as well as advising the Minister on the advantages of conservation schemes. It will also have to advise on the objections to such schemes, and it will thereby have a conflict of interests.
  I believe that we ought to have second thoughts about the total abolition of the Water Resources Board. I am not sure that the Bill gives any clear indication of who is to be mainly responsible for doing the research which is so important. I had hoped that some kind of independent people would be made at least partly responsible for research since in my view it should not be entirely within the Government service.
  I welcome the decision to leave land drainage in the hands of the Ministry of Agriculture, Fisheries and Food. In the Fens, land drainage is of vital importance to us. We have an elaborate, well-tried and efficient form of administration in which farmers and landowners take part. It is a three-tier system. We do not want it changed. We do not want the giant octopus to interrupt the good work being done by the Great Ouse River Authority, the North and Middle Level Boards and the many internal drainage boards. As I read the Bill and as I listened to my right hon. and learned Friend, I gained the impression that all would be well and that farmers would continue to have their say by means of these internal drainage boards. I should not like to see the regional land drainage committees consist entirely of local government members who might not know the bottom side of a fen dyke from the top side. I hope that we shall continue to have this participation in this part of the work by people who know about it.
  As for the powers of the Secretary of State with regard to drainage charges and water charges for spray irrigation, I am sorry to see that the system of appeals is no longer to continue. I hope that there will be second thoughts about it. It is highly desirable and it may be desirable to get a reasonable degree of uniformity of principle with regard to charges all over the country.
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  I am sorry to see that angling interests seem to be losing out when it comes to their being represented on the regional water authorities. On each of the five river authorities which will make up this colossal East Anglia Regional Water Authority there are at the moment two fisheries representatives, making 10 altogether. Under the Bill there will be only one at best, if there is one at all. I can assure my right hon. and learned Friend that many thousands of voting anglers will not be happy about this. I am not making an unreasonable request. I merely ask my right hon. and learned Friend to ensure that there are at least two. That is merely doubling the possible maximum at present, which is one. However I am told that if on each regional water authority there are two fisheries representatives, in addition to the fisheries advisory committee, it is just possible that honour may be satisfied.
  I pay tribute to the work which the hon. Member for Small Heath did, work which has been carried several stages further by my hon. Friend the Under-Secretary of State, in seeing to it that recreational interests are given the fullest consideration.
  There is a serious conflict of different recreational interests. To take the most obvious one, water ski-ing, which I think is a splendid sport, is quite incompatible with angling, a sport which I also support but in which I do not much indulge. Then we find that bird-watching, which can be said to have wider conservation interest, can be incompatible with angling during the nesting season. I mention those as simple examples of the conflicts which arise.
  We now have the sports councils which under their present aegis are trying to deal with this matter. In relation to the River Great Ouse, 25 miles of which runs through my constituency, the Eastern Sports Council said:
  "The attractiveness of the area has already created problems of congestion."
  We have to face the fact that in the past 20 years our country has become more and more overpopulated and more affluent with the result that the pressures on the relatively limited places for water recreation as they exist at the moment are tremendous. Graffham Water itself is becoming a place where the pressures

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  are enormous at summer weekends. The sports council made one very good suggestion and I hope that it is one which, even if not written into the Bill, will at least be considered by my hon. Friend and everyone concerned. It said:
  "Serious thought should be given to the unsatisfied demands of water ski-ing, speed boating, and sub-aqua. These should be catered for in selected pits which are not to be river-linked, with the noisiest sports away from the built-up areas."
  Water ski-ing is about the noisiest sport of all. I do not want to get into detailed argument about this difficult matter at this stage, but we should be thankful that we have Ministers in charge of the Bill who are aware of the importance of getting the recreational priorities right.
  I wish them well in this very big new venture. But I say to them in all candour that if they want this venture to succeed they will have to make quite a number of improvements to the Bill in its remaining stages.
  5.18 p.m.
  Mr. Cledwyn Hughes: The right hon. and learned Member for Huntingdonshire (Sir D. Renton) was critical of the speech of my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell). The right hon. and learned Gentleman went on, very agreeably, to concur in most of my hon. Friend's criticisms. However, that is what we expect from the right hon. and learned Gentleman.
  Superficially the Bill appears to have many attractions. We all agree with the major objectives which the Secretary of State outlined. For the first time in our history we have a Bill which brings under overall management the complete hydrological cycle—water conservation, distribution and reclamation. When we debated the Water Resources Bill 10 years ago many of us regretted that we did not then take more comprehensive steps to cover the whole range of services. That Act was the first piece of major water legislation ever to come before this House. On the whole it has worked well, and a warm tribute is due to the river authorities and to the Water Resources Board—to Sir William Goode and his colleagues —for their work over the decade. I hope that the staff at Reading and elsewhere and the expertise that they have accumulated over the last 10 years will he re-
  66
  tained under the new set-up. Perhaps the Under-Secretary of State will give us that assurance when he winds up.
  On closer analysis, however, the Bill is disappointing and is open to severe criticism on several counts. I should have liked to deal in detail with a number of matters—the implications for agriculture, land drainage, sewerage and sewage disposal, and so on—but I will obey Mr. Speaker's exhortation and be brief, as so many hon. Members wish to speak.
  The first major weakness is the proposed structure of the water authorities set out in Clauses 2 and 3. I thought that the Secretary of State's justification for the new structure was weak and unconvincing.
  It is proposed to create, not democratically based authorities, as public opinion would wish, but further nominated bodies to add to those which already proliferate. Schedule 1 defines the nine very large authorities which will not only be responsible for the overall planning and control of services, but for detailed day-to-day administration. A large body may be appropriate for planning, but when it comes to running the services, which are important to people locally and impinge on their day-to-day lives—I am thinking particularly of the housewife—those authorities appear to be far too large and remote. For example, the Severn-Trent Water Authority would be an enormous geographical spread with a huge population. The consumer, who, after all, is the most important element that this House must always consider, will be far removed from the large machine which the Bill Bill proposes to create.
  This is a deplorable trend and goes contrary to what the Government have promised—namely, to secure the interests of the consumer in society. The Bill proposes to set up administrative leviathans which can ride roughshod over the individual. We have seen this mania for centralisation in the interests of efficiency in the electricity and gas industries. If the householder has a complaint and is fortunate enough to have a telephone, he has to ring a remote office and speak to a clerk who passes the complaint on to another clerk. The household has to suffer frustration and delays in the processes of getting a small fault rectified. This is happening all the time in other

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  industries and it is likely to take place in the new set-up to be created under the Bill.
  The Secretary of State has argued that local authorities will have a majority of all appointees in the new bodies. In most cases it will be a very small majority, but this is not the same as placing the responsibility in the hands of directly elected councils, people whom the consumer knows and can approach personally with a grievance. Our unique experience in my constituency proves that a county council can run this service efficiently and economically. About 30 years ago our water service on the island was deplorable. The Anglesey County Council promoted its own Water Act—the first county council to do so—and went on to build two reservoirs. Today almost every household in Anglesey has a piped water supply and a reasonable water rate. The County Water Committee is directly answerable to the electorate. It seems an exemplary arrangement, but the Bill will destroy this efficient, democratic authority and allow private water companies to remain in being.
  I submit that this is the more reprehensible against the background of local government reorganisation. We are to have new, larger and, we hope, more efficient local authorities. The Government have said that they wish to see these authorities with stronger powers and functions. Yet in this Bill, a few months later, they proceed to reduce the direct responsibilities of these local authorities. I hope that from now until Third Reading they will think again and accept amendments to correct these grave deficiencies.
  The financial provisions in Part III, which the Secretary of State explained, are quite inadequate. They are vague and need clarification. The charges scheme empowered in Clause 27 can be made by these remote authorities seemingly without reference to anybody.
  Even more sinister and objectionable is the power in Clause 28 to install domestic meters. The levying of the water rate by an elected authority is a reasonable and fair way of raising revenue. The Secretary of State tried to fob us off with anodyne words on this question of meters. However, the fact
  68
  remains that for the first time in our history water meters are proposed to be put into homes. The housewife with children, the working man in a dirty job, the disabled and the older members of the community will have to watch the meter. This is an indirect method of rationing the one commodity which this country has in plenty. Anybody who objects to this proposal had better watch out. The clause empowers the appointment of officers who will have power to enter houses and to install meters, and if the householder refuses to open his door he can be hauled before the magistrates and fined £50.
  Mr. Charles Morrison: Will the right hon. Gentleman explain to me the difference in principle between an electricity and a water meter?
  Mr. Hughes: The hon. Gentleman should know the distinction. This is the much-vaunted Conservative freedom that the hon. Gentleman was preaching about at the General Election. This proposal will be regarded with contempt in Wales. I wonder whether the Government have thought of installing meters in the reservoirs in Wales. If they did, mid-Wales would be almost as wealthy as some of the sheikdoms of the Middle East. I hope that Clause 28 will be thrown out bell, book and candle, because it is a most objectional provision.
  This brings me to a body with a very grand title—the Welsh National Water Development Authority. Translating it into Welsh it sounds even grander—Awdurdod Cenedlaethol Datblygu Dwr Cymru. When I read that first I thought we were getting the authority to end all authorities. When I got down to the "nitty gritty" of the Bill I found that it was just another regional authority with a big slab of Wales carved out and given to the Severn-Trent Water Authority. Edward I and Henry VIII could not have done any better.
  I then searched for the name of the Secretary of State for Wales. After all, he has quite substantial powers at present. I found his name as one of the promoters of the Bill, but thereafter his name is not to be found. The Welsh National Water Development Authority advises the Minister, and he appears to be the Secretary of State for the Environment.
  The Secretary of State for Wales (Mr. Peter Thomas): I am surprised at the right hon. Gentleman who, after all, held the office of Secretary of State. He will know that the words "Secretary of State" in the Bill describe both the Secretary of State for the Environment and myself in the context of the Bill and in respect of our particular responsibilities.
  Mr. Denis Howell: Two into one will not go.
  Mr. Hughes: I am even more surprised at the right hon. and learned Gentleman. He knows that if he is to be a responsible Minister with powers under the Bill this should be made clear in the definition clauses. There is no mention in the Bill of the right hon. and learned Gentleman. If he is one of the responsible Ministers under the Bill, that should be written in. No doubt the omission will be put right in Committee.
  Mr. Peter Thomas: The right hon. Gentleman knows the contents of the Local Government Act. He knows the Ministers responsible under that measure. My responsibilities come under the generic title of Secretary of State. The right hon. Gentleman should know that the Secretary of State has responsibilities which are shared with other Secretaries of State.
  Mr. Hughes: The right hon. and learned Gentleman should look at Clause 1, which refers to the Minister of Agriculture and the Secretary of State for the Environment. It is proper in Bills where Ministers are referred to for their portfolios to be specified. That has not been done in this instance.
  The House will realise that we in Wales are going through a particularly bleak period. Our natural resources have been run down, with serious results for our economy. Coal, slate and tinplate are a shadow of what they were in terms of employment, rationalisation of steel has dealt a savage blow in recent weeks, but the one thing that we have in plenty is water. It is our most valuable natural resource. The Bill deals with its future conservation and distribution and yet, as we read the Bill, the Secretary of State for Wales plays no part in it. I say to the House that my right hon. Friend the Member for Cardiff, West (Mr. George
  70
  Thomas) and I would not have borne this humiliation.
  Mr. Peter Thomas: The right hon. Gentleman is always courteous, and I am obliged to him for giving way. I assure him that he is making a bad point. The reference to the Secretary of State means the Secretary of State for Wales when it comes to dealing with the Welsh National Water Development Authority. Does the right hon. Gentleman support what the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) said was the Opposition's policy? If he does, I must tell him that if that policy were adopted Wales would not be in control of her water resources.
  Mr. Hughes: The right hon. and learned Gentleman did not listen to my hon. Friend's speech. If he reads it in HANSARD tomorrow he will realise that he misheard my hon. Friend. If the right hon. and learned Gentleman is saying that he is specifically included as the Minister for the purpose of the Bill——
  Mr. Peter Thomas: Secretary of State.
  Mr. Hughes: If the right hon. and learned Gentleman is saying that he is the Secretary of State for the purpose of the Bill when it comes to dealing with the Welsh authority and that it will be answerable to him and advise him specifically about the conservation and distribution of water in Wales, that goes some way towards satisfying me that the position is not as bad as might have been thought.
  Mr. George Thomas: Is it not inexplicable that, despite these powers being given to the Secretary of State for Wales, the right hon. and learned Gentleman should run away from the debate and have no intention of contributing to it?
  Mr. Hughes: My right hon. Friend is making a perfectly proper point. The Secretary of State for Wales knows that no subject arouses greater concern or interest in the Principality than the one being debated today. It is therefore deplorable that he has not seen fit to intervene in the debate but has foisted upon the Minister of State this difficult task.
  Mr. Peter Thomas: I am again obliged to the right hon. Gentleman for giving

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  way. I agree that the House is extremely interested in this subject, and in particular in the views of the right hon. Gentleman who is very much respected in Wales. I was very disturbed to hear the policy unfolded by his hon. Friend. Does the right hon. Gentleman agree with that policy? If he does, and if it were implemented, all the water resources in Wales would be under the control of a United Kingdom authority. That is different from the proposals in the Bill, which puts these resources under the control of the Welsh National Water Development Authority.
  Mr. Hughes: The right hon. and learned Gentleman is walking a dangerous path. He knows the Labour Party's policy on this issue. It was made clear during the Committee stage of the Local Government Bill. The right hon. and learned Gentleman knows that we believe that the conservation and distribution of water should be one of the functions of an elected Welsh council. The right hon. and learned Gentleman gave an undertaking that this function would not be disposed of in advance of the report of the Commission on the Constitution. Under the Bill the Government are disposing of this function contrary to their undertaking.
  Mr. Emlyn Hooson: The right hon. Gentleman is dealing with a vital matter which affects the whole of Wales. I recollect that when he was Secretary of State for Wales he gave an undertaking that no community should be submerged without his having a right of veto. To the eternal credit of the present Secretary of State for Wales he vetoed the proposal to submerge the Dulas Valley. The point that is worrying the whole of Wales is who is to have the right of veto not only in regard to the area under the control of the Welsh National Water Development Authority, but also over the vital areas of Montgomeryshire and Radnorshire where the water resources are to be under the control of the Severn-Trent Water Authority.
  Mr. Hughes: I am sure that the Minister of State will reply to these points which are of considerable substance.
  I have detained the House for longer than I had intended. That is mainly
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  because of interventions. The Government, with their lack of sensitivity, have succeeded in making what should be a broadly uncontroversial measure into a highly-charged Bill and one with the gravest deficiencies. I shall be glad to vote against it in the Lobby tonight.
  5.37 p.m.
  Mr. John M. Temple: It is always a pleasure to follow the right hon. Member for Anglesey (Mr. Cledwyn Hughes) and I shall pick up one point in relation to Wales as I move through what I hope will be a short speech on this important Bill.
  As hon. Members' interests are so much in the limelight it is right that I should declare certain interests which I have. I am Vice-President of the Association of River Authorities and the Salmon and Trout Association, president of the National Council of Salmon Nets-men of England and Wales, Vice-President of the Association of Municipal Corporations and Rural District Councils Association, and a member of the National Farmers' Union and Country Landowners' Association. I hope that that is a sufficient spread to render me reasonably neutral in my approach to what, apparently, is developing into rather an emotive subject.
  I should like to pay a real and heartfelt tribute to all those who work in the water industry. When I turned on the tap this morning, and subsequently when I pulled the plug, I thought of all those unsung heroes down the line who were working on sewerage operations all over the country. I often feel that the water industry is the Cinderella of all our public undertakings, but it deserves a special tribute for the splendid work that it does year in and year out.
  May I pay a special tribute to my right hon. and learned Friend the Secretary of State for the Environment for a practical approach to an extremly difficult and pretty intractable problem? I give him a high mark because he is trying, not to destroy but to merge all the existing organisations, and that very merging is a difficulty.
  I shall not cover all the points previously covered. Suffice it to say that I welcome the fact that the British Waterways Board has been retained and that

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  separate functions for land drainage are envisaged under the Bill.
  I should also like to say how glad I am that the statutory water undertakers are being permitted to carry on. Having been the Member of Parliament for Chester for 16 years now, I think that our statutory water undertaking is the only organisation in our area concerning which I have never had a single complaint in 16 years. That is a fairly good tribute to the way that that particular water company has carried on. That is not in the least unique in this field of statutory water companies.
  I shall now make only three quick points. First, on administration, the success or failure of the Bill will be judged as to whether the administration works. Secondly, I join with my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) in saying how sorry I am about the probable demise of the Water Resources Board, for very much the same reasons as my right hon. and learned Friend gave, and which were also given by the Opposition Front Bench. Thirdly, I have a serious comment to make on the finance of these water authorities, because I believe that on finance the Bill is a little on the weak side.
  With regard to the administration—this is terribly important—what will emerge is a tripartite function between river management, sewerage and sewage disposal and water supply. As I understand it, a transitional period is envisaged of some three or four years. I do not believe that that is a sufficiently long period, judging by the time it took to merge the river boards and river authorities. We have only just got over those mergers, and it is 10 years since the Water Resources Act 1963. In the jargon of the river management people today, we are to have provisional management units, which I shall refer to henceforth as PMUs. All these existing organisations, which are operating in areas which are by no means co-terminous—by that I mean that a river authority, water undertaking and enlarged sewerage authority, water undertaking and enlarged sewerage authority will have different boundaries—as PMUs will have to operate for three or four years. We cannot stop water or sewage flowing. But
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  at one and the same time the PMUs will be losing staff to the new regional authority.
  There is only a limited number of super experts on water supply and water organisation. There will be a movement of staff from the existing authorities to the new ones. This transitional period will be longer, and we should look most carefully at the staff position and make it clear to those staffs of the existing water undertakings, whether sewerage, water supply or whatever, that their jobs are secure and that there is a future for them. This will not be easy to do, but the success of this whole scheme will rest on the success of reorganisation in the transitional period.
  Top management is most important and must be looked after, because there will be a tremendous weight of responsibility on top management in the sheer reorganisation alone, without thinking up new schemes for the future plus current management.
  I welcome very much the fact that local authority representatives will be on water authorities. From a practical point of view, they never vote en bloc, so it does not matter whether they have a bare majority, or whatever kind of majority. I see the local authority representatives as representatives of the consumers. That is terribly important. I also see them there also in a consultative capacity.
  My experience tells me that this blend of appointed representatives and local authority representatives works extraordinarily smoothly when dealing with water, which is one of those unique spheres in our public life where politics plays practically no part.
  One special interest—on what is really a Welsh point—is with regard to the Welsh National Water Development Authority—and I must get the title right. The city of Chester is to be taken into Wales for this purpose. We have no objections to that. We are used to working with Wales and are very happy to do so. I make one plea to the Secretary of State, through the Minister of State, namely that the headquarters of this authority should not be placed in Cardiff. If I were to be puckish, I would suggest that it might be put in Chester; but if I were to be realistic, I would hope that it would be put in mid-Wales. It is

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  extraordinarily difficult to move from north to south in Wales. Communications are not good. My second plea is that when the Secretary of State for Wales, presumably, is introducing the order constituting this special authority, he should always nominate at least one representative from that part of England, indeed Cheshire, which will be within the Welsh water authority.
  I pass now to a much more serious point, namely the decision to abolish the Water Resources Board. This is rather a tragedy. My right hon. and learned Friend the Member for Huntingdonshire has expressed extremely good reasons for that, as has the hon. Member for Birmingham, Small Heath (Mr. Denis Howell). Unfortunately, the major planning for water is going within the Ministry. I should have thought it very much more satisfactory for the Minister to have a "buffer state", whether it is a report from an independent commission or from the Water Resources Board. Ministers can then judge the thing independently in their quasi-judicial capacity. That aspect needs to be thought through again, and I believe it would be helpful to Ministers in the future.
  Here I want to make a couple of points about fisheries. With regard to the National Water Council, which is not a beloved organisation of mine, apparently two members are to be appointed by the Minister of Agriculture. Naturally it springs to mind that these representatives will be concerned with agriculture and land drainage. It may well be that the fisheries representative will be crowded out. It is essential because fisheries are important in all their aspects, which are very many, and I therefore trust that consideration will be given to a third representative who would have specific knowledge of fisheries. The same thing applies to the appointment of the fisheries representative to the water authorities. I have a little more to say about the National Water Council, in that it appears that all the central research work with regard to fisheries is now to be done in the Ministry. It used to be done by the Water Resources Board. It is quite unrealistic that at regional level the research is to be done by regional water authorities but at central level it is to be done by the Ministry. This is a retrograde
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  step. I hope that a fresh approach will be made there.
  Now I tackle the much more intractable and gritty subject of the finance of these water authorities. I believe that it is quite right to envisage metering for domestic supplies. It will not come in my lifetime. Nevertheless, it is realistic to pay for a commodity as one uses it. That is the whole object of this provision. But I am alarmed by two things I have read. One is in the excellent blue book issued by the Ministry, at paragraph 121, in which it gives the clear warning that
  "costs will rise in real terms."
  The Association of Municipal Corporations has given me a very interesting memorandum. The Association's comment is
  "The financial provisions are vague and imprecise."
  I agree entirely with the AMC about the vagueness and imprecision of the financial provisions. I know also that costs in real terms will rise. Therefore, the central question is from where will the money come?
  I was responsible for the Rivers (Prevention of Pollution) Act 1961. When putting that measure through the House, I went down the main sewers of Manchester. I saw the enormous storm water overflows and I knew of the differences between "separate" sewerage and combined sewerage. I do not think that in the foreseeable future we shall see what is called separate sewerage in our country, just because of the gigantic cost.
  What concerns me, first—I have two points here—is that in our old industrial areas where there is a serious pollution problem, on the north-east coast and some areas of Lancashire and the Midlands, where there are fantastic pollution problems, costs will be very great. Under the present system of financing sewerage, there is a big element of rate support grant which is attributable to sewerage alone.
  It is incontrovertible that through the rate support grant £50 million a year goes to local authorities to help them pay for their sewerage functions. My right hon. and learned Friend the Secretary of State was hazy about the financial organisation he envisages under the Bill. There is no doubt that there is power for the Secretary of State to make grants. If, as I

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  gather, it is intended that all the money should come through charges, what will happen to the £50 million which at the moment goes to sewerage authorities?
  Secondly on finance, some regional authorities will have very much heavier costs, especially with regard to sewerage, than others. Whereas under the Bill there are equalisation schemes for costs within an authority, there is no government equalisation scheme for charges between authorities. Therefore, there may be disparate charges as between the various authorities when they are functioning. There should be some provision for a central equalisation scheme for charges. The outlook on charges for consumers is bleak. It has been reliably estimated that casts will rise, if the existing grants are not forthcoming, by 35 per cent. to domestic consumers and 40 per cent. for trade users. This is extraordinarily serious.
  I plead for sensible economy in the use of water. There was no reason why this morning I should have used possibly half a gallon of water to wash my teeth when I could very well have washed them with half a tumblerful of water. I had the tap running, I put my brush under it and did not bother about turning the tap off because the supply is not metered. People are prepared to leave a tap running but they would not dream of going out of a house with the lights switched on. There are great opportunities for economy in the use of water.
  I am most anxious about the effect of the financial provisions. I shall support the Bill, but I must express the hope that we shall receive reassurances about the rate support grant or its successor which is so important to cushion the effect on consumers.
  5.54 p.m.
  Mr. Emlyn Hooson: I add to the plea uttered by the hon. Member for the City of Chester (Mr. Temple) about the headquarters of the new Welsh National Water Development Authority, that it would be conveniently placed in mid-Wales somewhere between Chester and Cardiff, possibly in Newtown in my constituency.
  It is easy to over-simplify the question of water. One hon. Member asked what the difference was hydrologically between England and Wales. There is none.
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  Hydrologically, there is no difference between England and Scotland or England and the rest of Europe. Since the days of Strongbow Englishmen have argued, "Politically, socially and economically why should not Ireland be part of the United Kingdom?" It is the same kind of argument as is advanced about water. It is oversimplification.
  I represent a part of the country which is probably the greatest natural reservoir for future inland water supplies in Wales or England. The Upper Severn basin in Montgomeryshire is an area where people have been prospecting for water for a long time. Yet this area is the one part of Wales which is taken out of the Welsh National Water Development Authority and put under the Severn-Trent Water Authority. This is a very important matter for the people of Wales.
  When the subject of water is mentioned in Wales, highly emotional feelings are stirred up. The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) congratulated himself and the city of Birmingham on that city's cheap water supplies. My part of the country has often struggled for social and economic improvement, yet we supply Birmingham with cheap water.
  Water is our greatest natural resource, yet people in Birmingham get it for practically nothing. The hon. Gentleman can congratulate the city of Birmingham on having this cheap water supply, but what benefit do people living in my area get from it?
  This underlies the fact that the question of water is not a simple one. It is not only a highly emotional but also an economic problem and therefore should not be viewed as a simple matter.
  Mr. Denis Howell: I was careful to say that these arrangements have been brought about with the co-operation of Welsh colleagues. It may be that we should pay a little more for our water. The city of Birmingham is the biggest ratepayer in the hon. and learned Gentleman's area and considerable advantages have accrued to the hon. and learned Gentleman's authority, Cardiganshire, and other authorities as a result of Birmingham's activities there. Put the other way round, if the city of Birmingham were not a big ratepayer in the hon. and learned Gentleman's area because of its

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  water activities there, things in the hon. and learned Gentleman's constituency, bad as they are now, would be much worse.
  Mr. Hooson: I will not follow this point to its extreme. It will be a very important matter in the future. What benefits does the area from which the water is derived gain from the development of its greatest natural resource?
  It is obviously sensible to have a national policy for developing our water resources. Whether one lives in Wales, in England or in Scotland, one must agree that there must be a national strategy. In my political capacity and also in my legal capacity, as I represented the objectors in the Dulas Valley inquiry, I have come to blows from time to time with the Water Resources Board. Yet over the years I have had considerable respect for the board's work.
  The Government are making a great mistake in abolishing the board. The board has acquired great expertise. I have no brief for it, because I have come in conflict with it more than any other hon. Member, possibly, yet when I was invited to an open day in Reading last year I was greatly impressed to realise what a great deal of expertise there was and how the lessons of the Dulas Valley inquiry, and so on, had been absorbed.
  If we are to have a body to recommend national strategy, to conduct and co-ordinate research, and to co-ordinate the work which is needed to be done nationally, I am all for having a water resources board for England, a water resources board for Wales, and a water resources board for Scotland, with the separate boards meeting together from time to time to decide national strategy. That, it seems to me, is a sensible approach.
  The second matter with which ordinary people are concerned is that when the strategy is decided and one is considering the question of one's immediate water supply, the disposal of sewage and so on, clearly these functions should be co-ordinated. But also their control should not be remote. It is very important that we should not have these very large authorities virtually self-contained, very remote from the people. I have no doubt that when it comes to the question of nomi-
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  nation to such boards, in the Tory Party it will be found on this, as on every other issue, that blood is thicker than water. I am sure it would be the same with the Labour Party if they were nominating to these bodies. [An HON. MEMBER: "And the Liberals."] No, we in the Liberal Party appreciate water.
  I think that there is a danger of creating authorities which are far too large. The whole tactical concept of the Government is wrong. There should be national decisions on strategy. There should be a water resources board to decide national strategy, with separate ones for England, Wales and Scotland. Thereafter I think the authorities to carry out the strategy should be much smaller than are proposed and much more subject to local authority control. There ought to be a means of conveying complaints directly to the elected representatives. I shall therefore certainly vote against the Bill tonight, for a number of reasons.
  Lastly, I want to come to the point that most affects the people of Wales, and particularly people who live in my constituency. The right hon. Member for Anglesey (Mr. Cledwyn Hughes) raised a very interesting point. It is very difficult in reading this Bill to decide who is "the appropriate Minister". That term is used both in the definition clause and in Clause I. Who, for example, is the appropriate Minister when it comes to the Upper Severn Basin which is within the Severn and Trent authority and does not come within the Welsh National authority?
  Let us face reality. Take, for example, the prospecting by the Water Resources Board in the upper part of Montgomeryshire to ascertain whether there was a suitable valley as a reserve for a proposed scheme in Radnorshire. Suppose it had been decided to ask for a public inquiry and that such an inquiry was held. Who would decide? Would it be the Minister, the Secretary of State for the Environment, or the Secretary of State for Wales? This is a vitally important problem for Wales. It is the area of the upper Severn with which the people of Wales are most concerned. This Bill does not make clear who is to decide.
  I always understood when the right hon. Member for Anglesey was Secretary of State for Wales that he would retain

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  a power of veto over any plans put forward for the submergence of any valley in Wales. One has to consider not only the economic questions but the social and cultural life of Wales as well. This is why it is such a difficult matter. I understood that the right hon. Member for Cardiff, West (Mr. George Thomas), when he was Secretary of State for Wales, followed exactly the same principle and reiterated it. I understand that the present Secretary of State for Wales has also followed the same principle, and in the Dulas Valley inquiry he rightly decided that social and cultural considerations far outweighed the case made by the Water Resources Board. Who is going to be the real watchdog of Welsh interests in this matter in the future? Who is going to have the right of veto? Will that right be with the Secretary of State for Wales or the Secretary of State for the Environment, or will it be a joint decision?
  The Minister of State, Welsh Office (Mr. David Gibson-Watt): I am obliged to the hon. and learned Gentleman for allowing me to answer him straightaway. The final decision will remain, in the area which he was discussing as well as in the rest of Wales, with the Secretary of State for Wales.
  Mr. Hooson: I am glad to hear that. But will this be written into the Bill? It is very important. As the Minister of State knows, from time to time undertakings have been given in this House which years later have been ignored. Of course, I would accept from the Minister of State what he says about his intention and the intention of the Government, but unless it is written into the Bill, what will bind a future Government? This is of vital importance to Wales. I do not think that any Welsh Member could possibly support the Bill in its present form without absolute safeguards being written into it.
  It is my belief that the Upper Severn Basin should be included under the Welsh National Water Development Authority, and there should be a liaison committee formed with the Severn and Trent Authority to liaise on that area. Once the strategy is decided, the matter of administration could be arranged under the Welsh Authority. I appreciate that when a river rises, as the Severn does, in
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  Wales and flows through into England and back into Wales, it is not easy to administer it piecemeal, but I am certain that, in view of the importance of this matter in Wales, the present arrangements are not sufficient. They provide no satisfaction to the Welsh people, and the Government will have to think again very deeply on this and other aspects of the Bill.
  6.7 p.m.
  Mr. Charles Morrison: I could not help thinking that any foreigner who had been listening to the interesting speech made by the hon. and learned Member for Montgomery (Mr. Hooson) would have been absolutely staggered to hear that in any place in the United Kingdom water raised highly emotional feelings. Yet I am the last person to deny that that may be so, particularly in Wales. One did not have to listen to the hon. and learned Gentleman's speech to be aware of that, in the light of what one has heard and read on many previous occasions.
  The hon. and learned Gentleman, like the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), expressed his concern about the regional authorities and their size in particular, and the hon. Member for Small Heath expressed his concern about the great regional bureaucracies, although later he said that it was the Labour Party's policy—not that the Labour Party will ever have the chance—to establish regional water authorities. There seemed to be some contradiction in what he said.
  It seems to me that if England and Wales could be divided neatly into regions which were as relevant to local government as they were to economic planning, or to the health service, or to sport, or to the provision of gas and electricity, or indeed water, or any other public service, there is no doubt that we could have elected regional councils which would be responsible for all these matters and which at the same time would satisfy everyone's democratic instincts. But, on the whole, it simply is not possible to regionalise England and Wales into all-purpose regional authorities in a manner which makes sense economically, socially and geographically.
  Yet so often, on the other hand, in the light of modern considerations, it seems

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  to be wise and sensible to run many public services on a regional basis. Therefore, in the light of this consideration we are faced with the need for ad hoc bodies, and in their establishment and in the face of a greater or lesser conflict between the interests of democracy and efficiency there is bound to be controversy. It is absolutely inescapable, but that seems to me to be no reason for baulking that issue, and I am very glad that the Government have faced up to this issue of the re-organisation of water.
  For the reasons which have been propounded by my right hon. and learned Friend I believe that the Government are not only right to have regionalised water but are right in the comprehensive powers they have proposed for the Authority. In one respect those powers are not comprehensive enough. The British Waterways Board's responsibilities as a navigation authority on certain parts of certain rivers, such as the Lee or the Severn as far as Stourport and the Trent, should be transferred to regional water authorities. The new authorities are to be responsible for land drainage and flood prevention and to keep these responsibilities separate from the responsibilities of the navigation authorities in regard to dredging and maintenance would seem to be potentially wasteful and to duplicate work.
  Clearly the Government cannot be accused of lack of consultation with all interests or of not making concessions as a result. But I believe, in contradiction to what has been said by hon. Members earlier, that it is a pity that local government should have persuaded the Government to change the composition of the regional water authorities and to increase local government representation. I say that not because I am against the interest and influence of local government—very much the opposite. I am concerned with the need to provide a structure which will be efficient and which will ensure that there is reasonable opportunity for democratic pressure. If instead of doing what they have done the Government had continued to think of the new authorities as regional executive boards, had strengthened the consumer councils that they had proposed, had possibly given those councils still greater powers than was suggested in the original circular,
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  and had strengthened the local authority representation on those councils, they would have produced a better structure for the organisation of water than is now before us. In persuading the Government to move in the way that it has local government might have done itself a disservice.
  There are two extra points to which I hope my hon. Friend will refer when he sums up. One is about the appointment of chairman. I have some sympathy with the point raised by the hon. Member for Birmingham, Small Heath. I cannot understand why it is necessary for the Secretary of State to be responsible for the appointment of chairman.
  My second point relates to fisheries. The Minister of Agriculture's powers to appoint a member with experience in fisheries management is much too restrictive. That should embrace experience in fisheries and fishing. Like everyone who has spoken so far, I regret the proposal to abolish the Water Resources Board. The National Water Council is an extremely emasculated edition of the Board. The Board's greatest merit was that it was independent both of Government and of the river authorities, as it could have been in the future of the regional water authorities.
  The degree to which the new council is likely to be a puppet of the Secretary of State is emphasised by Clause 4(9) and (10). They provide him with the right to give powers or to take them away, it seems at almost any time and according to his whim. But it is perhaps most regrettable of all that research should have been taken away from a central body and should now be divided between the authorities and the Central Planning Unit.
  I welcome the provision in Clause 17 that the regional water authorities shall be given duties with regard to fisheries. But I hope that the advisory committees which it is proposed should be set up will not be thought of necessarily as the only fisheries committees. I hope that usually a fisheries committee will be established under Clause 6. For example, in the Severn and Trent Regional Water Authority there might be an advisory committee which would cover the Severn which was largely concerned with game fishing. There might be another advisory

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  committee which would cover the Trent which is largely concerned with coarse fishing. On the other hand, however, there should be one main fisheries committee to co-ordinate fisheries matters. The main committee should be established under the provisions of Clause 6.
  I welcome the provision to establish a land drainage committee to which my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) referred. Like him I believe the greatest possible credit for this provision should be given to my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) who I regret is not able to be here today to take part in the debate. The land drainage committees should work perfectly satisfactorily on the analogy of a local education authority within a county council.
  Finally, I cannot see how the Water Space Amenity Commission will fit in with the work already undertaken by the Sports Council. It would seem at first sight that the new commission might to some extent derogate from the powers of the Sports Council and I wonder, in view of the existence of the Sports Council, whether the new commission is necessary. Apart from those points and, no doubt, a number of other small ones, the Bill is sensible in its objectives and in the manner in which it sets out to achieve them. Undoubtedly some changes are needed but it will be possible to amend the Bill to take account of those changes during its passage through the House.
  6.18 p.m.
  Mr. Ernest Armstrong: We are here dealing with a vital matter. Water is something that everyone demands and that everyone needs. I was disturbed therefore by what I regarded as the complacent speech from the Secretary of State. I spent many hours upstairs on the Standing Committee which considered the Local Government Bill. I concede that the House is concerned about the future of local government but the Bill seems to strike another blow at the powers and functions hitherto exercised by local government. The reorganisation of local government will have a profound effect upon the country and I am not sure that it will be advantageous to the nation. I am deeply worried about the future of local government.
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  We talk a great deal about participation, local democracy and so on. The Government have said a great deal about taking power from Whitehall and giving it to the regions and the localities, but here we have one more ad hoc body which takes away from local government, those who choose to serve and, worse still, those at the receiving end, one more opportunity to participate in the administration of the service. I shall come to the consumer element a little later in what I promise will be a very brief speech.
  Water is essential to planning and housing. We are considering housing when we consider the recreation of our people and the protection of the environment. All the services that are naturally administered at local level are interested in an adequate supply of water.
  I welcome the concession concerning local government representatives on the regional authorities, but the Minister has not gone anything like far enough. I am terrified by the ultimate intentions behind the noises he made today, and the support he received from his back benchers, about the powers in the Bill.
  I want to concentrate on my own area, the Northumbria authority, where there will be 10 local authority representatives and nine representatives appointed by the Minister. That is not much of a concession to local government and local administration. The district councils will be very large. In my constituency we are to have one that will cover in area half of the new Durham county. That district council may well have no representative on the new Northumbria water authority.
  As it stands, the Bill will abolish any consumer interest. If people are to be able to make complaints, they must be able to do so to a body that is seen to have responsibility. In large areas of the new regions there will be district councils with no representatives, which makes nonsense of consumer participation.
  The hon. Member for City of Chester (Mr. Temple) said that he had never had a complaint about water and the supply of water, though I have. However, some of the provisions of the Bill will cause complaints.
  My right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) reminded us of the power given to officers to enter premises. Under Clause 27, even when

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  the householder is temporarily absent, an officer has power to obtain a warrant and enter premises. I thought at first that perhaps that power had been carried forward from other legislation, and that there was no intention to enforce it.
  I am terrified by the opinions expressed from the Government benches. Government Members have talked about water as if it were a commodity, like an article that can be bought across the counter. To meter water to domestic users would be an attack on hygiene and health. It is not the sort of commodity that can be rationed according to the purse. Is it now to be said to a youngster who is a member of a large family that if he evades washing he will be helping the housekeeping money? It would be a serious matter to tell those who need water most, the large family, that they must use only what they are prepared to pay for, as registered on a meter. I should like the metering powers to be removed from the Bill.
  I am concerned by the abolition of the Water Resources Board and the Minister's decision. Under the Bill we are to have a body with no executive power. How shall we get people to serve on it? There will be an argument between the Department of the Environment, the Welsh Office, the nine regional water authorities and so on.
  The Minister is to take powers which give us great cause for concern in the light of what has been happening in the North East. Water is very important to the North of England. The Northern Region has suffered greatly from being dependent on heavy industry. It is gradually transforming itself. We are embracing the new industries and going ahead to serve the nation economically once again. The demand for water is bound to grow. The Secretary of State was very unwise to say blandly in an interview the other day that there would be no water shortage in the North in the next three or four years. Anyone who has seen the increase in consumption knows that it is very unwise to forecast the future supply position in the region because of the demands of incoming industry—the new steel complex and so on.
  It was proposed that we should have the largest single water conservation
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  scheme yet undertaken in Britain at Kielder. The Government have paid tributes today to the board's independence, expertise and ability to make a judgment without being subject to the pressures to which the Minister or local authorities might be subject. The board recommended the scheme in its study of the North, saying that it would provide water sufficient to meet all our needs in the northern area until the turn of the century.
  We had a public inquiry which lasted six weeks and cost over £100,000. Everybody was allowed to have his say. The objectors were given full scope. In his report, which is now available, the inspector recommended that Kielder should be allowed to proceed. Everybody thought that that was that, that we could now get on with the job, which had been held up for 12 months for the public inquiry to take place.
  I mention that because I am concerned about the proposal to abolish the board and to put the Minister in a special position with regard to such decisions. In the northern area public authorities of various political colours, trade unions, river authorities, water boards and other bodies are all in favour of the scheme. Now the Minister has said that he wants to reconsider the matter. In an interview with the Newcastle Journal, he said that another public inquiry would probably be necessary. That decision is regarded as scandalous. The sooner the Minister has another look at the question and gives authority for the scheme, which has the support of representative opinion throughout the North, the sooner we shall be satisfied.
  The provision of water is a social service, not a technical exercise. It should be referred at all levels to the electorate and their direct representatives. It is not the technologist or the planner who should decide for the electorate. When we consider the provision of water and the establishment of a new reservoir, we must balance all kinds of opinions. No one is more concerned than I am to preserve and enhance the environment. The amenities at some of the reservoirs we have provided in the North are very welcome.
  Nevertheless, there are opposing views. Controversy is aroused, and naturally so.

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  It seems that that controversy can be resolved satisfactorily only when there is a strong regional authority with power to make the decision, and those who make the decision must be directly responsible to the electorate so that they feel they are involved in the decision-making. The provisions in the Bill go quite counter to that point of view. Although it has been said tonight that water resources do not fall within the normal regional authority, if one reads the minority report of the Redcliffe-Maud Report, Mr. Senior's comment and suggestions for regional authorities could be harnessed to meet the problem which we are discussing.
  I want to see regional or provincial government with directly elected representatives. I believe that the regions need legal and financial power, but that power must be used responsibly. Such power is used responsibly when representatives are responsible to the electorate. However, there must be a wide enough area of control and there must be maintained a balance between various interests. I think that there has been an arbitrary decision against the real interests of the northern region. I am very concerned about some of the proposals and I shall vote against the Bill tonight.
  6.33 p.m.
  Mr. R. W. Elliott: I first declare an interest. I am a director of the Newcastle and Gateshead Water Company. Secondly, I have the honour this year of being President of the Water Companies Association.
  I am pleased to follow the hon. Member for Durham, North-West (Mr. Armstrong). We come from the same part of the country. I share with him the concern which he has rightly expressed about the water supply in the northern region in the years ahead. I wish only to refer to the Kielder water proposal, which he discussed at some length, by saying that I hope my right hon. and learned Friend can come to as speedy a decision as possible about the timing of any alternative scheme. It is true, as the hon. Gentleman said, that my right hon. Friend's somewhat surprising decision has caused considerable concern throughout the North of England. I agree with the hon. Gentleman that water is essential.
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  We should not, as we are inclined to do, take it for granted at any time.
  A great deal has been said about metering. I do not wish to say much more about it than to point out that we must get clearly into our heads that if we do not pay for water by using a metering system it must be paid for through our rates. Several hon. Members have spoken about the considerable waste of water in this country, and that argues for metering at some stage. The North of England, as the hon. Gentleman said, is conscious of a water shortage. At a time like this metering is a much more feasible if much more expensive proposition than at any other time. I agree with the hon. Gentleman that the consumer's interest should always be paramount.
  I refer in his absence to the speech of the right hon. Member for Anglesey (Mr. Cledwyn Hughes). I used to listen to the right hon. Gentleman with great interest when he was Secretary of State for Wales. I did not think that I would ever hear him utter such pleasing phrases to Conservative ears as he did tonight. He talked about the interest of the consumer in society. He talked, rather pointedly, about the undesirability of any authorities—such as the electricity and gas undertakings—riding roughshod over consumers. I very much agree with the right hon. Gentleman and the hon. Member for Durham, North-West in that regard.
  There are certain proposals in the Bill which are desired by both sides of the House and all parties. Both sides of the House recognise a responsibility for public health, and water is extremely important in this regard. Investment on a large scale is needed not only in the North of England, where it is needed to provide more water in the right places, but to achieve a massive clean-up of the rivers and estuaries throughout the country.
  I agree with the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) that there is general agreement on the long-term improvements envisaged in the Bill. However, I do not quite agree that local authorities are to lose all their power when the Bill becomes an Act. I welcome very much the fact that regional water authorities are to have a local authority majority in their representation. However, it must be common sense and extremely desirable that the Minister should have power to appoint to

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  these all-important bodies those persons who have a specialist knowledge, be it of agriculture, industry or water. I should have thought that with a local government majority and with specialists the regional water authorities could work extremely well. Generally, I welcome the Bill.
  The history of the supply of water in this country is fascinating. Legislation over the years has been progressive and successful. It is worth recalling that we have the best water supply in the world. Ninety-nine per cent. of the population of England and Wales now has piped water. That compares with 60 per cent. in the United States and 40 per cent. in France. However, we must never be complacent about the supply of water. We must recognise the need for more and more water with each succeeding year.
  Desalination is years away. The most recent estimate is that in five years' time it will cost two to three times as much as water drawn from present sources. We naturally think about desalination because we read about it in letters and statements and it comes up in the natural process of thought. It is often raised in discussion. Desalination is raised over and over again, and that is quite understandable. Somebody said to me the other day that if we can put a man on the moon, we can, surely to goodness, take the salt out of sea water. The answer should be stated clearly that from an economic point of view we are quite a long way from doing so.
  The proposals in the Bill represent a realistic approach to an increasing need. The Government are to be congratulated on preserving the best elements of existing services in the proposed integrated structure. I welcome the retention of the statutory companies. I am sure that the companies will be efficient agents of the regional water authorities. A great deal has been said about the departure of the local authority undertakings.
  Personally I should have been happy with sensible amalgamations. There have been sensible amalgamations both in the statutory company sphere and in the local authority sphere during a number of years. I should have been happy if the local authority undertakings were also to become agents of the regional water authorities.
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  The number of water undertakings has been considerably and sensibly reduced since the end of the war. We now have 160 undertakings, and it is worthy of note that of the 18 largest nine are companies, and that although the number of statutory companies has been reduced from 85 to 30 the percentage of the population served by them is still 20 per cent. Amalgamations have been sensible, and it is satisfactory to realise that in reorganising the industry the Government have recognised that to build on that which is most efficient in any industry is sensible, for it is my contention that the statutory companies have been efficient, are efficient and are giving a very good service to the community and should certainly be retained.
  The right hon. Member for Anglesey talked of consumer interests. It is so true that those consumers served by the water companies very much appreciate the service they receive. It is also true—and one should bear it in mind—that the water industry in this country started with the establishment of the companies. The company with which I am associated had its 174th annual meeting last summer. For 174 years, I am pleased to realise, it has given good and efficient service to the community.
  I stress that these are statutory companies, brought into being by private Acts of Parliament. They are wrongly described often enough as "private" companies. It is wholly incorrect, inaccurate and absolutely unfair to suggest that they are motivated by a profit motive only, as the hon. Member for Small Heath did.
  The situation is not so. Their profits, their charges, their dividends and their reserve funds are controlled by statute. They give an excellent service to the community, but, in that they are statutory companies as against local authority undertakings, they are able to recruit from industry and various other walks of life in addition to those experts from the water companies they benefit from—men who have given and continue to give sensible advice and make, by their guidance, these companies efficient water undertakers.
  The heart of the matter is that the average return on money invested in the statutory undertakings is 6·8 per cent.

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  If anyone suggests that there is profiteering in that sort of return on capital, I am afraid that they just do not understand the money market. The average price of water dispensed by the statutory companies amounts to 3·5p per head per week, and if that is not a reasonable charge for water, I do not know what is.
  I would very much fear nationalisation. I agree with my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) that the word has not been mentioned by hon. Members opposite, but that we should mention it because that is exactly what the taking over of the statutory companies would have meant—nationalisation of the water industry. I would very much fear the effects on charges and on the consumer of the nationalisation of the statutory companies. It is, therefore, on this point that I wish to make my contribution to the debate. The companies are managed as efficient undertakings. Their activities may be controlled but they retain the flexibility and the initiative of private enterprise.
  6.45 p.m.
  Mrs. Lena Jeger: There have been one or two generous references to the work of the Working Party on Sewage Disposal, of which I had the honour to be chairman. I want to refer to some of its recommendations. When I was invited by my noble Friend, Lord Greenwood of Rossendale, to take the chairmanship I must confess that I was filled with dismay. But it proved to be an educational process and I would not have missed it for anything. We spent a great deal of time thinking about what we should call our report. In selecting the title, "Taken for Granted", we had two reasons for so doing.
  The first reason, borne in on us through our months of work, was that the public takes so much for granted clean water and sewage disposal—so much so that if anything goes wrong it creates a terrible sense of disaster. The second reason was that we became very much aware of how the people who work in the water and sewage industries are also taken for granted. This applies from the people at the top at executive and scientific level in the Water Resources Board—and I add my plea that this body should be maintained—right down to the under-
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  paid, under-appreciated staffs who carry on the day-to-day, mainly unlovely work which is absolute essential. We made 38 proposals, but I hasten to put your mind at rest, Mr. Speaker, in that I do not intend to go through them all now. But there are one or two to which I must refer.
  We decided that the function of sewage disposal had to be considered as part of the whole water cycle, together with water conservation and the control of the quality and quantity of the flow in our waterways. We established that there must be this total integration of the whole water cycle. Having discovered that sewage consists of 99.9 per cent. water and that the re-use of treated effluent is really our main source of water supplies, this conclusion seemed inescapable. But I recognise the Secretary of State's difficulties because we had a minority report, signed by two gentlemen—one Labour and one Conservative—rejecting this total watershed approach in favour of maintaining a local authority approach, rather on traditional lines. I think that we must try to have some meeting of minds about this dilemma.
  This does not only apply to water. It is one of the basic problems of our modern society. There are so many sectors of life in which we are having to have larger and larger units for the sake of efficiency and economy which yet make the person at the receiving end of the goods or services feel that he is smaller and smaller and farther and farther away. Therefore, I accept that we have not found the total answer to the question of how the public can feel some sensitive response to complaints and to ideas.
  I say at once that the ordinary man does not always find it at the town hall. Many local authorities whose work we encountered during our visits throughout the country really had such a disgraceful record in sewage control that they seemed to me to be having a deathbed love affair with their sewage farms only when they felt that there might be some ending to their authority. But that does not mean to say that I am satisfied that even the improved arrangements which the Secretary of State has put into the Bill meet the anxieties of ordinary people. There is a feeling on the part of many people that there is some chap "up there". I can only leave this problem

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  with the House, because if we can solve it when it comes to the question of water consumption and use, we will really have a breakthrough on many other fronts.
  I associate myself with the total opposition—it is official Labour Party policy—to the proposals about meters. I add only one or two other reasons to those already given. First, the use of manpower in any non-productive form is a most wasteful and inflationary element in any country's economy. I regard as totally wrong the idea that we should add to the number of people going back knocking on doors, finding the occupiers out and going back again, to the number of accounts sent out, and to the number of bills which have to be paid.
  What is more, such a proposal reveals an ideological approach to the use of natural resources which I cannot share. The idea of metering puts the use of one of this country's most plentiful natural resources on to a totally commercial basis, which I cannot accept.
  I cannot agree with the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) that there is a danger of water shortage in this country. The daily wastage of residual run-off is 41,000 million gallons. That is three times the amount of water we use every day, just running away. I ask hon. Members to compare that with the quantities of water which we use in our homes. With a rising standard of living, the use of water for household purposes will increase, and at present we use about 31 gallons per head per day. That may sound a lot, but it is minimal compared with the quantities used for industry.
  One ton of aluminium drinks 300,000 gallons of water. It takes 160 tons of water to make one ton of paper, and 400 tons to produce one ton of synthetic rubber. I should like to see more work being done on the saving of water by its re-use in industry. For example, I found that, on average, it takes 37 tons of water to make one ton of steel, but in certain cases, as a result of research which has been going on, it has been possible to reduce that 37 tons to four tons to produce one ton of steel.
  I ask hon. Members to bear those figures in mind when considering how the harassed housewife is supposed to bully
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  her children into not pulling the chain every time, or not having a bath every night. It is those figures which show where the great scope for change and economy lies, and we should concentrate our attention to that end.
  I should like to have heard something more exciting about the possibilities of future research. Water-borne sewerage is older than the Romans. Why do we still do it that way? In Sweden—I should not recommend to the House anything of which I did not have personal knowledge—I found an excellent system of vacuum toilet disposal in which air is used instead of water for the carriage of the effluent. Instead of using 16 pints of water every time the flush is operated, this system uses only two pints. As a practical housewife, perhaps I should explain that that is the amount of water needed to clean the bowl, the actual carriage of the effluent being done by the vacuum disposal system.
  That system was used in the Munich Olympic village, and I heard of no complaints. Also, it is being used extensively in the Swedish navy. Let us remember that the discharge of untreated sewage from ships and pleasure craft is one part of this problem which calls for a great deal of thought. It is one of the biggest pollutants nowadays, and we all know how it can spoil the pleasure of boating and sailing for many people.
  If we put the possibilities of research of that kind into proper perspective, we can set about doing something far more creative than spending time talking about putting meters into people's homes.
  I come now to one point arising specifically out of our Working Party Report. We were most anxious that the new authorities should have control over effluents right to the mouths of rivers and three miles out to sea. On 2nd December 1971, the Minister told the House that the new authorities
  "will be responsible for the sewage disposal arrangements throughout the whole of their area, including coastal areas".—[OFFICIAL REPORT, 2nd December, 1971; Vol. 827, c. 688.]
  I have not been able to ascertain how far out their control would go, though I find a reference in Schedule 2 to the
  "Seaward boundaries of water authority areas for general purposes"
  and at the top of page 40 there is what I take to be the proposal that, subject to

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  certain exceptions, the seaward boundary would be the low-water mark on the coast of the area. In my view, that is not far enough out. It will not deal with the problem of dirty beaches and the pollution of the coast which has been causing so much anxiety to so many people.
  We wanted control to extend at least three miles out to sea. I understand that following the Stockholm conference, there were discussions about pollution of the sea. We ought to start by ensuring that our immediate inshore waters are under some sort of control from that point of view.
  As I say, it ought to be possible for the appropriate authorities to deal with the problem of sewage discharged from boats. We made a categorical recommendation in our report that such discharge should be forbidden, but, apart from some efforts made under byelaws on the Norfolk Broads, there has been a great deal of complaint but very little action.
  I hope that the Minister will make clear that the new authorities will be eligible to receive grants under the Countryside Act for the purpose of expanding recreational facilities under Clause 19.
  I am sorry to have to enter stern opposition to the hon. Member for Newcastle-upon-Tyne, North on the question of private water companies. These companies, which represent between one-quarter and one-third of the water industry, are specifically preserved under Clause 11. I regard this as unacceptable, and I am glad that my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell), speaking from our Front Bench, made clear that the private water companies will be taken into public ownership by Labour.
  It should be noted that the maintenance of the private water companies as such is contrary to the advice of the Central Advisory Water Committee, which no one could call a politically motivated body. The Metropolitan Water Board issued a statement on 1st February saying:
  "We are still of the opinion that the private companies should not be retained in the proposed organisation. There is no justification for treating them any differently from other types of undertakers, and they will unnecessarily complicate the task of the Authorities."
  When the Metropolitan Water Board makes such a categorical statement, a
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  more convincing answer must be given than we have heard so far.
  Having spent a good deal of time, it seems, with sewage, on dirty beaches and wading through the effluent from factory farming—we have not had time to deal with that today, but it is a matter of increasing importance in the whole subject of sewage disposal—I awaited publication of the Bill with great interest. It does not meet many of the recommendations which we made but I hope that it will be a starting point, and I accept it as such. I am glad that the Minister promised further measures soon on the aspects of water pollution, but I have to say, with regret, that the matters which I have briefly raised make it impossible for me, in spite of all my interest and concern in this matter, to support the Bill.
  7.0 p.m.
  Sir Frederick Corfield: I begin by following the hon. Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) to a small degree on the subject of the meters which worry her and her hon. Friends. My experience in my constituency and otherwise is that my constituents do not at all appreciate the idea of paying for water through their rates, irrespective of how much they use. The idea that the present system is so popular that no one wishes to consider an alternative is flying in the face of reality.
  I do not for one moment suspect that metering for domestic purposes is likely to come our way for a long time, for one of the reasons the hon. Lady gave, namely that the cost of installation and inspection is likely far to outweigh any economy that might be achieved. I have no doubt that in 10 or 20 years someone will develop a meter which sends an electronic message to a centralised computer. Then things will be very different.
  It must be borne in mind that this proposition has been put forward on a number of occasions, under both Governments, to my knowledge. It has always been turned down purely on the technical argument that installation and reading would outweigh the benefits. To dismiss it and to imagine that attaching water charges to the rateable value of a house is an ideally logical arrangement is in my view nonsense.
  Mr. Simeons: My right hon. and learned Friend will be interested to know that in my constituency meters are installed which can be read by telephone.
  Sir F. Corfield: That is helpful. No doubt we shall get to the further stage I have mentioned in the near future.
  Surely hon. and right hon. Gentlemen opposite are not pretending that there is not a vast amount of waste among domestic water consumers as well as in industry. It so happens that unlike my hon. Friend the Member for City of Chester (Mr. Temple) I turn off taps regularly, partly because the hot water costs me electricity but largely because I was brought up in a house where we pumped every drop of water and we were very very short indeed. I can assure hon. Gentlemen that if we had used the 50 gallons per person per day which is now the average we would have been out of water after the first fortnight of any normal summer. I assure hon. Members that we were perfectly clean, and that a hip bath in front of the fire has a lot to be said for it.
  Mr. Spearing: There is a lot to be said against it too.
  Sir F. Corfield: I assure hon. Members that one can keep clean in every respect on a good deal less than 50 gallons a day. Everyone knows that.
  I fully accept the necessity for a fully comprehensive reorganisation of the management of our rivers and of water generally. To a large extent the proposals in the Bill are an extension of those in the Water Resources Act 1963, with which I was fairly closely connected. It was argued later that the main defect was that we failed to give executive powers to the Water Resources Board on the one hand and, on the other, that we were not sufficiently drastic in cutting down the number of then river boards to fewer river authorities. Therefore we ended up with river authorities too few in number and too small in size. As far as I can recollect, in doing that we were acting contrary to the advice of the Proudman Report, on which that Act was based. I think we made a mistake. I would not go so far as to say that in cutting river authorities down to nine water authorities we are not going a little
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  too far. I have in mind the Severn-Trent authority, to which I will refer later.
  My first main point is that we are superseding the Water Resources Board. Considering that it had no executive power, the way in which it has managed to achieve what it did by persuasion and tact among river authorities and without formal power earns it the highest respect. It is a great pity we are dissolving something which started so well. There used to be an old adage in Field Service Regulations: "Exploit success". It is no bad thing to build on success rather than to scrap it and start again.
  Mr. Arthur Blenkinsop: Would the right hon. and learned Gentleman also agree that it is unwise to abolish the research activities of the board without putting anything in its place?
  Sir F. Corfield: I am coming to that. There are two other aspects which have already been mentioned by my hon. Friend the Member for the City of Chester. The concept of a central, quasi-independent body such as the Water Resources Board is particularly valuable in regard to planning. There is no doubt that to the public, however determined the Minister may be in trying to appear to be completely impartial in a planning appeal, it is a grave disadvantage when the planning initiative comes from his own Department. It is much more satisfactory if these proposals for reservoirs and so on come from a body such as the Water Resources Board.
  In many cases they will come from the regional water authorities. There will, however, be combined schemes in which the main initiative certainly ought to come, if it is efficient, from the centralised body. It is much better that it should come from a body which is not directly under the Minister rather than from one within his Department.
  The hon. Member for South Shields (Mr. Blenkinsop) has mentioned the research side. We are splitting the research function and there is some doubt as to whether we will replace all that we should. I very much hope that my right hon. and learned Friend will re-think this situation and realise that there is something to build upon. It is unfashionable for hon. Members on this side of the

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  House to hark back to some of the things on which we prided ourselves in opposition. I would remind my hon. and right hon. Friends that we put in a lot of work with people who knew a great deal about this subject and we recommended then that there was a great deal to be said in matters of this sort, which are largely executive, for the hived-off Government agency. I hope that we shall not abandon that concept entirely.
  The second point relates to the failure to appreciate that there is a natural division in terms of technique and expertise between management of a river basin and all that means and the distribution of water supply. Of course the management functions include ensuring that there is an adequate supply, of adequate purity. It is not the same thing as delivering it up the pipe into the tap. As hon. Members have said, particularly the right hon. Member for Anglesey (Mr. Cledwyn Hughes), this is the end of the cycle which most affects the man in the street. We have made a great mistake in not preserving local authority water undertakings, whether local authority or joint boards, as well as the water companies as agencies to work in distribution. It is here that we have special expertise and much experience. It is here that we are operating closest to the ultimate consumer, where the local nature of the organisation is particularly important.
  I should declare that I am a former president of the Water Companies Association, although that was an entirely honorary appointment. I welcome the preservation of the water companies, but rather than saying, as do hon. Gentlemen on the Opposition benches, "Why give them separate treatment from the other water undertakings?" I say "Why not give the other water undertakings the same treatment?" That makes sense.
  The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) talked about exploiting water and about companies making a profit. I challenge him to look at the figures. He knows as well as I do that dividends are controlled by the Government, that capital issues have to be put out to tender, and that dividends paid by water companies are at present less than those paid by local authorities to service loans, for historical reasons. They certainly do not pay greater dividends than are forced by the
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  money market upon public authorities which have to borrow money to meet capital requirements. To talk about great profits is nonsense.
  This mechanism of the statutory undertaker—the statutory water company—should indeed appeal to both sides of the House. The Labour Party should regard it as an admirable mechanism for bringing in private money and controlling the abuses which it always maintains exist. To the Conservatives it is an admirable mechanism for getting private money which otherwise would not go there into the public sector. We should all study this mechanism to see whether it can usefully be applied in other services.
  I admit that the whole question of local authority representation is a difficult one. In my constituency when I have to take up a case that implies a criticism of a service carried out by the local authority itself, the natural reaction is to close the ranks and defend. If I take up with my local authority a case which concerns the Bristol Waterworks Company, the local authority's criticism is much more outright, the Bristol Waterworks Company is much more sensitive to that criticism, and it is quickly put right. It really does not necessarily follow that an authority run by elected representatives is the more sensitive to criticism by the consumer.
  With these regional water authorities, local government is in danger of having the worst of both worlds. Not one of these authorities will be entirely operated by one local authority. Although there will be a majority of local authority representatives, any one local authority or any one county, even if it pulls in its district representative, will have a very small minority voice. It will be quite unable to say, as it could under a straight local authority administration, "We can guarantee to put this problem right." Equally, I suspect the local authority will be less virulent in criticism of an organisation on which it is represented than of an entirely outside body such as a water company.
  To produce this highly unsatisfactory arrangement there will be on the London authority 40 members and on the horrible organisation of Severn-Trent, 38. When I was Parliamentary Secretary to the

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  Ministry of Housing and Local Government, 10 years ago, there were, I think, about 90 members of the Metropolitan Water Board. One can only say that water came to London despite the authority rather than because of it. Can anyone imagine a committee of 90 sitting down and making an executive decision? Of course not. It became a nice "ramsammy"—a lunch once a quarter—and the officers got on with the job. Thank heaven they did! To suggest that a committee of 40 or 38 can conceivably be an efficient executive body is nonsense. I hope that we shall try to ensure that the executive boards of these new authorities are much more streamlined and efficient.
  And this brings me to the intervention I made in regard to Wales. It makes much more sense to join the Severn to Wales, and I hope that along the border the English are mature enough to go along with Wales without making a great national issue of it. But to join Severn and Trent! What sort of person do my hon. Friends think will be persuaded to represent the local authorities on that authority? They will have to travel miles, and at the end they will have to sit down with 37 other people knowing perfectly well that there is not the slightest hope of reaching an executive decision other than by rubber-stamping the officers' recommendation—unless they stay overnight when they will have difficulty in finding hotel accommodation. One cannot expect men of the necessary calibre in local government to serve on an authority representing an area of that size. I strongly urge my hon. Friend to think many times before he lands us with that.
  I am not sure that the advice and expertise of the Water Space Authority Commission will be available to the British Waterways Board as well as to the new organisations. I hone it will be and that it will be made clear that the Waterways Board has been reprieved permanently, and that the axe is no longer hanging over it. Nothing is so disruptive to administration than the suspicion that the organisation is about to come to an end. There have been rumours of a further environment Bill. If there is to be one, I hope that it will be made abundantly clear that the British Waterways Board
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  can look to the future without this sword of Damocles hanging over it.
  I am not sure that it is right merely to advise regional water authorities to establish a fisheries advisory committee. It should, I believe, be mandatory. In many ways fisheries are just as important as drainage. Local fishery aspects varying from river to river and from canal to canal have to be taken into consideration. It is important, as with drainage, to have delegation right down. I am very fond of fishing, but nothing is safer than the fish when I am about, so we need not worry about depletion.
  To sum up, I should prefer the Water Resources Board to be built upon the basis of the local authorities relying much more on acting as agents in water supply. I should prefer the regional water authorities to be smaller and more streamlined and Severn and Trent to be severed; they are as incompatible in this context as are Lancashire and Yorkshire in others.
  7.18 p.m.
  Mr. Nigel Spearing: I agree with the right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) on his last points. I fear that in some parts of his speech his logic was somewhat at fault. He appeared to justify metering by a move back to hip baths. I do not go along with that.
  I think all hon. Members will agree with me in wishing the British Waterways Board to continue. I hope that the sword will disappear from above its head. A lot has been done for the canals, and I hope that much more will be done, as it will, if the board is allowed to get on with its job.
  I agree with what the right hon. and learned Member for Gloucestershire, South said about a possible alternative structure. Surely, the technique and experience in piping fresh water, the way in which dirty water is culverted and treated, and the way in which it is managed in rivers and moved from one place to another, whilst clearly of importance in terms of a water cycle, are three distinct techniques from the point of view of technical management and technical powers. What we wish to see for regional water authorities is effective management at the level of decision-making

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  in terms of quantity and quality, rather than on detailed management matters.
  I am afraid that I cannot support the Bill. I agree with its ends, but by no means with its means. This is a pity, because so far questions of water policy—apart from the matter of private water companies—have not been party matters. However, the Government in this Bill have gone out of their way to make the subject of water more party political than it should have been.
  We have had no Green Paper on this complex subject. This surely is an omission for a Government that is alleged to be devoted to the principle of open government. We have not even had a White Paper on the issue, and the apology for a White Paper entitled "Background to Water Reorganisation" is not entirely related to the Bill and is not a proper explanation of the Government's intentions. Indeed the Government's intentions were known only last Wednesday week, which has made it difficult for representative bodies to put their views to hon. Members in time for today's debate. This is reprehensible conduct by the Government.
  Every hon. Member who has spoken so far has deplored the demise of the Water Resources Board, but so far the Government have not given the House a proper reason for dispensing with it. The previous Secretary of State for the Environment made some great speeches at Stockholm and told the world to organise their rivers and waters on a national basis. When the right hon. Gentleman returned home he smashed up the Water Resources Board. No argument has been advanced for this action. The only comment I have heard—and it was a comment made outside the House—is that Whitehall interests are jealous of the independence of this organisation. That is not a good argument for doing away with the board. The overriding argument concerning the judicial powers of the Minister being mixed with his executive functions is a forceful argument, to which so far we have heard no reply.
  This point of view is taken outside this House as well as within it. I have an interesting document published by the CBI entitled "The re-organisation of water and sewage services", and on page 41 it says:
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  "The final major issue is that of forward planning. The CBI sees very considerable cause for regret at the proposed demise of the Water Resources Board in the form in which we now know it. In the few years of its existence it has had a remarkably successful record. It has built up an unrivalled technical expertise of a multi-disciplinary character and this, coupled with the considerable independence it has enjoyed, has made it a force to be reckoned with. Although the CBI agrees that the ultimate decisions on future long term plans must obviously rest with the Department of the Environment, it sees much merit in forward planning studies being executed by a body which enjoys a substantial degree of independence from the normal administrative work of Government Departments, which is insulated from political pressures, and which is also free of the possibility of embarrassing the Secretary of State in the exercise of his appellate functions."
  I never believed that I would agree with a view put forward by the CBI, and I hope that the Government will give rhyme and reason why they disagre with that sentiment.
  The Metropolitan Water Board thinks that research should be under the
  "National Water Council, rather than in the Government's own creatures, the proposed Central Water Planning Unit and a new, ill-defined industrial research centre."
  When one reads the consultative paper on the new National Water Council and its satellite and inter-locking bodies, one is bemused by the various contortions of Government policy. The Water Resources Board says this about the Government's proposal:
  "The Government's proposal is for a central planning unit staffed by civil servants and reporting both to Departments and to the Council. This proposal is welcome in that it recognises the need for central planning capability. But it has the serious weakness that the unit will serve at least two masters and will be unable to resolve conflicts which will necessarily and rightly arise between them. The central planning unit should be an arm of the National Water Council. We recognise that Ministers will also need some expert advice of their own, but we do not believe that this need result in any wasteful duplication of effort. The proposed Industrial Research Centre has a vital defect that it fails to bring together the existing range of research and development expertise to match the new range of functions on which the regional water authorities will need research and development support."
  That is a quotation from the 9th Annual Report of the Water Resources Board, which has received universal acclamation. I have quoted it at length because I feel it should be on the record. It is up to

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  the Government to say why they want to smash a successful organisation.
  On the question of the regional water authorities it is clear that the chairman appointed by the Minister will be a key person. Since the National Water Council will be wholly appointed, it looks as though the Minister and Whitehall have drawn up this organisation for themselves. We at least now have an annual report from the Water Resources Board, and we shall not get such a report from central Government.
  Irrespective of the other merits of the regional water authorities, I regard these proposals as a backward step for democracy. If the House lets the Bill go through as it is, it will be another step towards the Governments proposal for a semi-corporate State which is not acceptable to me or to many of my hon. Friends.
  I turn to the speech of the right hon. and learned Member for Gloucestershire, South. I agree that it would be sensible and practical to have regional water authorities smaller than proposed with powers of co-ordination and direction over the movement of water in water courses, quality of water and the quantities to be assigned to various users.
  An important matter which has not been mentioned so far is the control of ground water resources and licences for historic users of this water. There is no reason why the administration with regard to the supply and piping of water, once delivered, and the taking away of dirty water and its proper processing to the degree of purity required before it is returned to the system, should not lie with local government bodies, either on the new boundaries or in joint arrangements. There is a difference between the new overall functions of planning and the detailed engineering matters which are connected with undertakings. Such a combination would be an excellent way of taking together the two requirements of democratic accountable management and the overall national and regional planning needed for water cycle control. We must have a strong national body—and we are not getting it in the Bill.
  I raise two matters which have not received proper attention during this
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  debate. The first is navigation and amenity; the second relates to arrangements for London. Navigation depends on the availability of water, but unlike land drainage, flood control, water supply and sewerage, navigation does not enjoy much financial backing. If there is not much of a financial stake, there is little chance of having a say in what goes on. But it is the navigator on the canal or river who relies on the good offices of the river authority for quantity of water and opportunity for navigation. Nowadays it is not just the navigable aspect alone which must be considered, but the total environment of the river, its surroundings, upkeep of banks and tow paths, ferries etc.
  Under the existing organisation of river authorities there are varying standards of accountability for navigation and for amenities. The Thames Conservancy, the oldest river authority, has an excellent record in this respect, but examination of its accounts would show that a good deal of finance for navigation and amenity must come from sources other than the user. Yet this Government in their consultative paper say that the user must pay for the facilities which are to be provided. I challenge the Government to say how this will operate in regard to navigation and general amenity. It will not work. One of the fundamental points about amenity is that although we all enjoy it we cannot calculate its value to a nicety.
  There is the so-called Water Space Amenity Commission. But it will have no powers. I wrote to the Under-Secretary of State not long ago and asked him why he thought it would be a protection for the navigator and for those concerned with amenity. His lame answer was that it would have access to the Minister. Who does he think he is kidding? Surely he is not seriously claiming that any body has power because it has access to the Minister. Local authorities have access to Ministers. Members of Parliament have access to Ministers, but they do not have any powers to control safeguards. In Broadland, the Yarmouth Port and Haven Commissioners have been at loggerheads with the river authority. On the Thames, the Thames Conservancy has been relatively good. However, we need statutory protection for navigation, but the proposed financial structure will

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  not allow the sort of amenity development which the Government talk about.
  In reply to an earlier interjection of mine the Secretary of State agreed that the Government would make water services pay for their capital. This is not just a water reorganisation Bill. It is a Water (Future Profits) Bill. With the taking away of the rate support grant referred to by the hon. Member for City of Chester (Mr. Temple) the central Government are doing away with their obligations in this respect. This is quite in line with the White Paper that they published when they came to office, which proposed to disgorge from the central Government anything which they did not have to pay for and to put it instead on the consumer. Water, navigation and amenities will be more expensive, but the central Exchequer will bear less of the cost.
  It was right for the hon. Member for Devizes (Mr. Charles Morrison) to say that the regional sports councils should be given teeth. He may not have gone that far, but I do. Each has Wits own water recreational sub-committee to deal with this matter. But at the moment the Bill does not deal with it.
  I turn finally to London. I am staggered by what the Bill contains. When it was published just over a week ago we were told by Press commentators that it was a triumph for local government and that the Government had conceded majority powers to the regional water authorities. They said that London would retain its land drainage powers. Many people reading that—I was among them, despite my close interest in this matter—though that all was well and that London would keep its main sewers. I discover now that that is not so. While the Government give land drainage powers to the GLC they are not proposing to allow the GLC to keep its main sewers, sewage works, sludge boats and all the apparatus which goes to make the important network of London's main drainage.
  If that is not astounding enough, those who have some experience of local Government are even more astounded when they remember that the whole history of local government in the last century was built upon the need to avoid disease by means of public health and drainage. The
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  Metropolitan Board of Works which built London's drainage system is the progenitor of the GLC. Along the river from this House one sees the embankment built by the Metropolitan Board of Works to take the east-west relief sewers. They put in a railway at the side. The GLC is responsible for the railway because of London Transport. It is responsible for the roads. It even says that there will not be so many lorries on them. It is at present responsible for the main great east-west sewers. Now the Government propose to take away the sewers. However they will leave the GLC the Holborn, the Walbrook and the Tyburn under its land drainage powers because they are supposed to be natural rivers. It may be that the Minister of Local Government and Development did not know that that was so. We shall have to iron out this matter in Committee. If there was ever a unit of local Government embedded in the very roots of London it is the main drainage and engineering services of the GLC. To suggest that they should be taken from the GLC and be administered by the Thames Regional Water Authority is ludicrous.
  All this underlines the principle I made earlier, which is that it would be far better to enable the existing agencies to continue as agents of the water authority so that there can be linkage with all the other local services.
  Sewers are concerned with the future planning of areas and the cost of putting them down is closely allied to the cost of development in any area. To suggest that in the Severn-Trent area this should be the responsibility of some large water authority which is virtually unconnected with planning is extremely questionable.
  In opposing the Bill I hope that the Government will be prepared to make concessions in Committee affecting a matter which goes right to the roots of the whole of our local government tradition.
  7.37 p.m.
  The Minister of State, Welsh Office (Mr. David Gibson-Watt): I hope that it will be for the convenience of the House if at this point I intervene briefly in the debate. I hope too that the hon. Member for Acton (Mr. Spearing) will forgive me if I do not immediately take

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  up the points which he made in his speech.
  This Bill carries out the Government's promise to set up a Welsh National Water Development Authority.
  The Government were greatly helped by the excellent report prepared by the Welsh Council on "Water in Wales"; in a number of important respects, the Bill's proposals go further than the Welsh Council itself had felt free to recommend.
  The Welsh National Water Development Authority will have responsibilities in every part of Wales and will be the Government's chief source of advice on water policies in Wales. It will exercise the functions of a regional water authority but it will have a unique range of special functions as well.
  One of the main principles of the Bill is that water services should be reorganised on the principle that river basins should be managed as a whole. On that point, the debate has shown that there is a certain amount of agreement. This view was accepted by the Central Advisory Water Committee and endorsed by the Welsh Council. In so far as the Welsh National Water Development Authority will exercise the functions of a water authority, it will do so in relation to river basins.
  A special problem arises in relation to the border rivers—the Dee, Severn and the Wye. Their proper management must, of course, take account of national boundaries; but it must also be based on the most sensible means of managing these great river systems as a whole.
  In the case of the Dee and the Wye this means that parts of England must come within the scope of the Welsh National Water Development Authority acting as a water authority.
  In the case of the Upper Severn Basin a large part of Wales must come for water management purposes within the Severn-Trent Water Authority.
  Paragraphs 41 and 42 of Schedule 3 of the Bill set out the arrangements which the Government propose to ensure that Welsh interests are properly safeguarded in the Upper Severn Basin. Thus, although the Severn-Trent Authority will be responsible for carrying out water authority functions in the Upper Severn,
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  it will have to consult the Welsh Authority on all matters of substance affecting the area. The Welsh Authority will be under a duty to keep the Secretary of State informed of its views on all matters about which it is in consultation with the Severn-Trent Authority. For the first time, therefore, the interests of Wales as a whole in the management of the country's water resources will be given a strong and effective voice.
  Mr. Arthur Probert: The Bill provides that it shall be the duty of the Authority to keep the Secretary of State informed. It does not say which Secretary of State.
  Mr. Gibson-Watt: This point was raised earlier. The term "Secretary of State" is interchangeable as Secretaries of State are one and indivisible.
  Mr. Probert rose——
  Mr. Gibson-Watt: Perhaps the hon. Gentleman will allow me to answer the point. In the Welsh context it means the Secretary of State for Wales. I hope that what I have said will make him happy.
  Mr. Temple: My hon. Friend has dealt with the position of English areas which come under Wales. Will he deal with the Cheshire area which is an English area which will come under Wales. Will our Secretary of State or the Secretary of State for Wales be responsible for the English area?
  Mr. Gibson-Watt: If my hon. Friend will be patient, I shall be making a reference a little later which covers the point he has made. However, I am grateful to him for raising it.
  Paragraph 42 of Schedule 3 also provides that should it be necessary at any time for land to be acquired in connection with the construction and operation of a reservoir in Wales by the Severn-Trent Authority, this land will be conveyed to the Welsh National Water Development Authority which will lease back to the Severn-Trent Authority the land or other interests in it as may be appropriate for the purpose of the reservoir scheme. The land would therefore be held in trust by the Welsh Authority.
  To answer the strong point made by the hon. and learned Member for Montgomery (Mr. Hooson), I repeat the assurance that in the final event if there is a

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  water supply dispute involving land in Montgomeryshire, the Welsh part of the Severn-Trent Water Authority, as this would be a planning matter it would fall to be decided by the Secretary of State for Wales. The point is that for planning matters in England it is the Secretary of State for the Environment and in Wales the Secretary of State for Wales.
  The Government propose that there should be an order-making power under Clause 3(10) of the Bill to prescribe the constitution of the Welsh authority by Statutory Instrument after the Bill becomes law.
  We want to be able to consider the recommendations of the Commission on the Constitution before proposing a definitive constitution for the Welsh authority. Because we will need to set up the Welsh authority in order to get on with the work of reorganisation before this can be done, we have in mind to provide an interim constitution.
  Mr. Rowlands: The Minister is seeking to be given a blank cheque to enable him to appoint and constituted the Welsh National Water Development Authority, and the only reason he gives is waiting for Crowther". Will he confirm that if he introduces an order it will not be capable of amendment, but will have to be dealt with under the negative resolution procedure? In that event hon. Members will be deprived of any opportunity to amend the constitution and appointment of this most important water authority.
  Mr. Gibson-Watt: I think the hon. Gentleman will agree that any Secretary of State would have to face this problem in view of the Crowther Commission. The Secretary of State will have to come to the House and propose an order which will be subject to the approval of both Houses of Parliament.
  Mr. Rowlands: It will not be amendable.
  Mr. Gibson-Watt: In framing it we shall be guided by decisions which Parliament will take on the form of constitution proposed for the regional water authorities. In particular, I assure the House that if the proposal that there should be a local authority majority on the English regional water authorities is found to be acceptable, the interim Welsh authority, too, will have a majority of members
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  from local authorities. The Government have already given an assurance that there will be representation on the authority of those parts of England in Herefordshire and Cheshire which fall to be administered by the Welsh National Water Development Authority, and I repeat this assurance.
  I hope that what I have said about the Severn-Trent Authority will convince and persuade the hon. and learned Member for Montgomery to support the Bill. He made two major points in his speech. He said that it was sensible to have a national strategy and he was in favour of a National Water Development Authority. I hope I have given him sufficient assurance on those points to persuade him to support the Bill.
  Mr. Hooson: I am not satisfied with this assurance. When the Dulas Inquiry was ordered by the Secretary of State it was not a planning matter. The inhabitants had resisted an application to carry out trial borings. The inquiry was ordered as a result of that, not before there was any general proposal. That is not covered by this part of the Bill at all.
  Mr. Gibson-Watt: I beg leave to disagree with the hon. and learned Gentleman. Although his knowledge of the law is probably greater than mine, I think that when he looks at the Bill more carefully he will find these two points are covered. There is no question of the Secretary of State for Wales not being the Secretary of State responsible in the final event for what happens in that part of Wales which comes under the Severn-Trent Authority.
  Mr. Cledwyn Hughes: I realise that the term "Secretary of State" is interchangeable in certain circumstances. Will the hon. Gentleman tell the House the precise authority for what he has just said to the hon. and learned Member for Montgomery (Mr. Hooson), namely, that the Secretary of State for Wales will be responsible within the Welsh boundary?
  Mr. Gibson-Watt: The authority is perfectly straight. The Secretary of State for Wales is responsible for planning matters in Wales.
  Mr. Cledwyn Hughes: What is the authority?
  Mr. Gibson-Watt: The right hon. Gentleman will find this matter is adequately covered.
  Mr. George Thomas: Will the hon. Gentleman give way?
  Mr. Gibson-Watt: The right hon. Gentleman must forgive me.
  Mr. George Thomas Mr. George Thomas rose— —
  Mr. Gibson-Watt: I will give way if the right hon. Gentleman will be very quick.
  Mr. George Thomas: I shall remember the Minister's bare courtesy. Will he tell us whether the Severn-Trent Authority reports to the Secretary of State for the Environment through the National Council or sends reports direct to the Secretary of State for Wales? Will he also confirm that the headquarters of the Severn-Trent Authority are at Nottingham?
  Mr. Gibson-Watt: I do not see that there is a great deal of point in giving way to the right hon. Gentleman. If he will be kind enough to listen, I shall be coming to those two points. The headquarters is the very next point to which I am coming.
  The new authority will be a very important public service, and the location of its headquarters and other major offices and works centres will be a matter of concern not only in relation to the proper management of water services, but in relation to our hopes for the development of employment opportunities generally. My right hon. and learned Friend told the House some time ago that he hoped the headquarters of the new authority would be in one of the smaller towns of Wales. I cannot say more on this subject at present.
  Mr. George Thomas: Where will the Severn-Trent Authority's centre be?
  Mr. Gibson-Watt: I have no knowledge where the centre will be. I cannot give the right hon. Gentleman the answer to that question. I am dealing with specific points regarding the Welsh National Water Development Authority.
  In addition to the general powers in respect of recreation and amenity which would be common to all water authorities, the Bill places special responsibilities on the Welsh authority in the sphere of
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  recreation and gives it specific powers to fulfil these responsibilities. This reflects the Government's acceptance of the conclusion reached by the Welsh Council in its report "Water in Wales" that the development of water resources for recreational and tourist purposes could make a significant contribution to the economy of rural areas in Wales.
  Wales has many natural lakes and also a large number of man-made reservoirs, few of which have hitherto been developed to their full recreational potential. If we are to make the most of the economic advantages which can arise from their use this development will need to be co-ordinated throughout the principality and the Welsh authority must be given effective powers to make a good job of it.
  Hence the Welsh authority will be required to prepare a plan for utilising water space in Wales and any land associated with it for the purposes of recreation. In formulating this plan, the Welsh authority will obviously wish to have the closest consultations with such bodies as the Committee for Wales of the Countryside Commission, the Wales Tourist Board and the Sports Council for Wales. In addition, in respect of the plan for the Upper Severn Basin there will have to be the closest consultation with the Severn—Trent Water Authority.
  The Bill provides for the establishment of a Water Services Staff Commission. I am glad to say that Councillor E. W. Williams of Mold, Flintshire, Chairman of the Central Flintshire Water Board, who has made a distinguished contribution to local government and water services in Wales, has agreed to serve on the Staff Committee which has been set up in anticipation of the establishment of a Commission.
  The general idea of a Welsh National Water Development Authority has been warmly welcomed in Wales. We all hope that its establishment will open a new chapter in the history of the development of the abundant water resources of Wales in the interests both of Wales and of those great English conurbations which are able to take supplies of pure water from the uplands of Wales.
  I hope that I have been able to shed a little light upon the Welsh provisions of the Bill and that this may be of help to the House.
  7.52 p.m.
  Mr. David Stoddart: I very much resent the fact that we are to have three Front Bench speeches. I feel sure that Welsh Members will very much resent the fact that too little time is to be given to their real problems. I should have thought that the Government would have provided at least half a day in which to debate Welsh water which, as we have heard from Welsh Members, is a prominent part of what we are debating. Back benchers have lost 15 minutes of their time today. They have little enough time in which to speak, and I had therefore better get on with the debate without very much further criticism of what has happened.
  What I am concerned about is that the Bill removes another power from local authorities. Time and again Governments come along and say to local authorities, "What wonderful chaps you are. What a good job you are doing. We love you. You experiment, and you lead the way in all sorts of ventures" but the next moment they take away yet another power from them. Only a short while ago the Government removed housing functions from the control of local authorities. Today the Secretary of State for the Environment, with a mandarin-like smile on his face, gave local authorities yet another pat on the back but in his hand he had a water dagger with which to stab them and remove some more of their powers.
  We are all aware, and have been for a long time, of the need for reorganisation in the water industry. Successive Governments have encouraged and, indeed, tried to cajole water undertakers into forming larger and more advantageous groupings, and in this they have had some success.
  I was associated with and, indeed, was an enthusiastic supporter of, an amalgamation scheme between Reading and county districts in Berkshire, although art that time, in 1957, we had to fight the local friends of hon. Gentlemen opposite before we could get anything done about it. However, after the requisite number of meetings at the town hall we managed to get the necessary Bill before the House. After 34 days before a Private Bill Committee, after agreeing to drop proposals to take into the amalgamation
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  a private water undertaking in Maidenhead, and at a cost of £100,000, we finally managed to do what the Government wanted local authorities to do, and that was to amalgamate into a more proper grouping. It may be that that daunting experience had some effect on other local authorities who wanted to do the same sort of thing, namely, to involve themselves in larger, more efficient groupings in order to assist the reorganisation of water supplies.
  It so happened that I became a member of that water board and chairman of the works committee. We found an enormous task facing us. Indeed, my earlier belief that the water industry needed reorganising was confirmed. Outside the county borough many areas were in a parlous state. Many people had no pressure at all. Often by nightfall storage capacity was exhausted. At the slightest sign of a dry spell restrictions were slapped on, and water carts were not an uncommon sight.
  The underlying problem was the lack of development of the system. Water sources had not been developed to meet the rising demand, storage facilities were inadequate and trunk mains were either not provided at all in many cases and in others were not of sufficient size to carry the necessary water pressure. During one mains replacement programme it was found that part of the system consisted of a wooden main, so we knew how long that had been in the ground.
  Following the amalgamation the whole supply system has been transformed to the extent that there is not only an adequacy of water from properly developed sources but there is also reasonable security of supply from adequate storage and an improved distribution network. I can safely say that the amalgamation has been a great success, but the point I want to emphasise is that this amalgamation and reorganisation was brought about by local authority members themselves. Indeed, I go further and say that their success is directly attributable to the fact that they were responsible to their local authority and responsive to the pressures of those they represent.
  The same sort of thing is true of the constituency that I represent in Swindon. There, the local authority has built up a fine water undertaking. It is second to

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  none in the country. It is highly efficient, it is providing a service that is envied by many, and it will not be excelled by any service that can be given by a regional water authority. The achievement is all the more remarkable as the authority was able, without any fuss or bother, to provide for the rising demand in water when the town was rapidly expanded.
  It is also worth noting that except during the period when the Government decided to "take on" the manual workers in local authority services the quality of sewage effluent returned to the Thames by Swindon is top class, and second to none in the country. It is clear that local authorities, given the opportunity and the right sort of leadership, can continue to play a major part in water distribution and sewage disposal. In the interests of modern democratic practice, it is vital that they should continue to have some responsiblity for these services. I simply do not accept that ten regional water authorities will meet the needs of efficient and democratic control.
  There is every reason to support the Opposition's proposals that water in itself should be in public ownership, that policy should be created by a national water board, and that the regional authorities should supply water in bulk to the new districts or groupings of them and leave the storage and distribution of water and sewage disposal to local authorities. This is possible and highly desirable.
  Turning to the vexed question of charges, I take issue once again with the Minister on the question of metering. During the debate on the Consolidated Fund Bill on 2nd August last year, I said that I believed that the Government were giving a positive lead in the metering of water supplies. The Bill certainly confirms that the Government have set their hearts on having water metered for all consumers. I must reiterate that I am against this costly and unnecessary exercise.
  The estimate for the countrywide installation of meters was given in the Minister's consultation paper as £500 million, but that figure is wildly out of date at present because of rising costs. I should have thought that a figure more like £600 million would be more realistic. Such an outlay is bound to impose a
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  huge burden of probably about £60 million a year on water consumers, for many years ahead, and inevitably must substantially increase the cost of water generally.
  If the figures sent to Members of Parliament by the Taf Fechan Water Board are correct, the increase is likely to be about 40 per cent., since that Board states that the cost of all domestic water supplies in the United Kingdom is about £150 millon annually. But the matter of cost does not end with the installation of the meters. The meters have to be serviced and replaced when they are worn out. Experience in Philadelphia has shown that meters need to be replaced every four years. The most recent estimate of the cost of a meter happens to be about £7. Apart from that, meters are not all that reliable. I feel sure, also, that a large administrative cost will be incurred, and that was referred to by some of my hon. Friends.
  I cannot understand why the Government have it so much in mind that metering is the only way of conserving water supplies. There are other ways.
  The Minister for Local Government and Development (Mr. Graham Page): The Government have never said that. In the Bill there is merely a permissive power to regional water authorities to use metering. But we have never said that that is the Government policy.
  Mr. Stoddart: No, I accept that the Government have never said that it is Government policy. But I must say to the Minister once again that this was the only alternative put forward in the consultation document that was sent out. One can hardly blame hon. Members or the public for believing that this was giving a positive lead to the new regional water authorities in the matter of charges, that the Government were saying that the best way of doing it was through meters and, through metering, they would not only be able to balance their books, perhaps with some profit, but also be able to conserve waters supplies.
  Mr. Leslie Spriggs: My hon. Friend will probably remember that this afternoon the Secretary of State, in the Government's opening speech, stated that he agreed with the principle of the

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  use of meters. That answers my hon. Friend's points.
  Mr. Stoddart: Yes, I think that he made that statement, although to be fair, he went on to say that it may be very many years before meters could be installed throughout the country. Nevertheless, all the declarations by the Government tend to make people believe that it is basically Government policy that water should be metered and that the new regional water authorities should be profit-making, should balance their books and, perhaps, make a certain amount on capital.
  This changes the whole emphasis of water supply, from an emphasis which until the present has been based on service to the consumer to an emphasis based merely on the need to recover money expended and, if necessary, to make a profit.
  I cannot help feeling that this policy is not only bad from the financial point of view, in that it will impose huge charges on the water authorities and, through them, on the consumer, but also that it has a public health aspect. The hon. Member for City of Chester (Mr. Temple) talked about cleaning his teeth in a glass of water. We have to recognise the other end of the cycle, the sewage disposal end. In most cases the sewage disposal end depends at present on a dry weather flow of water. Indeed, if that flow is not maintained, if we use too little water, we shall find that our present sewage disposal plants will be unable to deal with effluent.
  There is also the other aspect of public health. It was shown in the experiment of the Malvern Water Company, in which the company metered supplies to a certain number of consumers, that the people who used the least water were the poorest sections of the community, anyway. Is it suggested that by metering we should persuade the poorest section of the community to use less rather than more water? That is precisely what will happen if metering becomes the general order of the day.
  I hope that the Government will give this matter careful thought. All professional opinion is against the Government on this matter. Nevertheless, the leadership is still there; there is still the impression that the Government intend the
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  regional water authorities to charge for domestic supplies through meters. I urge the Government to reconsider their policy and to make it absolutely clear —if this is so—that it is not their policy to force regional water authorities to adopt this practice.
  In conclusion, I completely support my right hon. and hon. Friends' opposition to the Bill. We believe that the water industry needs reorganisation, but this is not the way to do it. It is not the way to do it to tell local authorities that they have no part in a service which they have administered very well over a very long period.
  8.9 p.m.
  Mr. John E. B. Hill: Those of us who use or drink water—whether metered or not—downstream from Swindon will be grateful and relieved that the hon. Member for Swindon (Mr. David Stoddart) has assured us that Swindon's sewage effluent is top-class. The hon. Gentleman described many of the urban problems. He will forgive me if I do not follow him further but turn to some of the rural problems contained in the wide ambit of the Bill.
  I regret that the time factor between publication and Second Reading has been so short—13 days. I have found it difficult to consult my constituents. It may be that my circumstances are rather worse than those of some hon. Members, because I have European commitments; but 13 days, even for an hon. Member who is in the country all the time, is rather too short. Many smaller authorities have not had time to hold meetings and make the representations they would like to make. The quicker ones arrived by this morning's mail. No doubt a few will arrive after the debate has ended.
  My constituents are very interested in water, whether from the land drainage point of view as farmers or whether from living in an area which alternates from drought to flood and where the costs of water distribution are high.
  We can accept the strategic aims of the Bill without difficulty. My misgivings arise about the degree of concentration of power in the Department and by virtue of having so many ministerial appointees. I regret that there appears to be a lack of an independent source of thought and advice. In the whole subject of water a continuing dialogue is

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  needed between Government, water suppliers and an outside body such as the Water Resources Board.
  Admittedly the Bill is better than the first proposals, which were to eliminate the functions of the Minister of Agriculture, Fisheries and Food. This would have been intolerable from an agricultural point of view. I remain suspicious and wary since the takeover bid was made and wonder how anyone came to think that it was ever a runner.
  Whatever the Bill says, no reorganisation of power and duties will alter the facts of nature. Far more rain falls on the West than on the East. The business of farming depends to a surprising degree on alternately moving water off the land and bringing it back again. The whole process of land drainage is infinitely variable and intensely local, as befits the amazing diversity of our soil and climate.
  I am not convinced that sheer size is an advantage in prosecuting overall national policies. I doubt whether it is desirable to concentrate responsibility so far back from the long front of coastline which is so vulnerable to the sea, or to have an area so big that members of a regional water authority cannot feel a sense of geographical responsibility for the area they represent.
  Twenty years ago this week I was, as a member of a river board, struggling in the aftermath of the great tidal surge, the biggest surge for 300 years. It caused untold damage up the whole of the east coast. I remember feeling that the area of the East Suffolk and Norfolk River Board, as it then was, was enormous to cope with.
  I declare an interest. On my farm I have made great use of Government drainage policy. Even 20 years after the great surge I still struggle from time to time with salt flooding, though my farm is six miles from the sea. Therefore, we on the east coast do not believe that the greatest size means the greatest safety.
  The proposed East Anglia Water Authority could be subdivided. It is gigantic, stretching from the Humber to the Thames Estuary. The local East Suffolk and Norfolk River Authority considers that it is self-contained. It hardly imports or exports any water and, therefore, could exist as a separate regional
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  water authority. If that were thought to be too small, the Lincolnshire and the Welland and Nene River Boards could make a regional water authority on their own, leaving a less big one for East Anglia and Essex.
  However that may be, it must be done in the course of the passing of the Bill because, if I have read the Bill correctly, there are no powers for reducing or adding to the number of regional water authorities should experience show that there has been a mistake and that either amalgamations or divisions should take place.
  I turn to the question of the use of inland water for recreation. Clause 20, which deals with the duties of conservation, should make some mention of agricultural considerations. A list is given of the amenity items to which special regard is to be paid. That suggests that such special regard should override agricultural considerations. This is a mistake, because much of the natural beauty of the landscape is man-made and regard should be paid to agricultural considerations, because over the years farmers are the best conservationists. There may be arguments about moving hedges, but without agriculture the whole land would be so much scrub.
  This is true in regard to the duties of the Water Space Amenity Commission. I think at once of the Norfolk Broads, which is probably the country's most used water space, man-made by the peat cutters. Although the Bill is likely to stimulate the recreational use of water, it does not meet, or provide for the meeting of, the serious problems of the Norfolk Broads.
  The Norfolk Broads were not designated a national park, although a proposal to this effect was made some years ago. In an endeavour to reach a solution a consortium of local authorities produced a considerable report entitled "Broadland" which I commend to anyone who has had a holiday there. This is very good value at only 9p more than the joint price of the Bill and its background booklet. The recommendations are typical of the considerations that become relevant in the varied and conflicting use of attractive water space. The consortium recognised that the first and overriding consideration should be to preserve the unique character and charm of the Broads; the second, to protect

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  important local enterprises, especially water conservation; then to facilitate the pursuit of scientific, educational and nature study and, fourthly, to get the maximum of enjoyment for recreational and holiday purposes, whether waterborne or land-based, with a minimum of conflict.
  For years there has been no agreement on the method of control and means of resolving conflict on the Broads, mainly because of a conflict between the interests of land drainage carried out under the river authority and those of navigation, discharged by separate Port and Haven Commissioners. There is common ground that more resources and a greater concentration of powers are needed and that any solution should be predominantly local but not parochial.
  Therefore, I must put on record that there would be great resistance in Norfolk if control of the Broads were taken back to a remote authority ouside East Anglia proper. The Bill in its present form does nothing to resolve these problems, and I should like an assurance that the Government will not press on with these new policies while leaving the future of the Norfolk Broads in a state of deadlock.
  I wanted to say something briefly about charges. Let me point out merely that there is going to be great resistance and anxiety about the prospective changes in water charges. I mention small residential users in scattered areas with these high distribution costs, on the one hand, or farmers wanting to use spray irrigation and putting back on the land the water which is either underneath it or beside it. Those are two spheres where there might be great argument about charges.
  It seems to me absolutely vital that there should be scope for proper appeals and public discussion. If my right hon. Friend does not know why the appeal procedure was abolished, I beg him not to seek to explain the inexplicable, but to restore it. A Bill of this nature is bound to have a mixed and critical reception. All water Bills do. The importance of its objectives is undeniable, but they could be lost in administrative controversy and local anxieties. To make the Bill acceptable there needs to be much more clarification, and some amendment will be necessary in its further
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  stages. On that basis, but not without some misgivings, I support its Second Reading.
  8.23 p.m.
  Mr. John Parker: I support those hon. Members who have praised the Government for retaining the British Waterways Board. They have given way to pressure from interested parties who use the canals, and I think they are quite right to have done so, but I cannot understand why the British Waterways Board has been left out of the new system. Surely the canal system which crosses over from one watershed to another, and therefore should be kept in being for that particular purpose, should be fitted into any kind of national water policy.
  The British Waterways Board and its canals constitute one of the most important drainage authorities in the country. It sells water. It has property of considerable value which may or may not require development. As has been mentioned already, it controls certain parts of rivers. I suggest that the British Waterways Board and the canal system should be incorporated into the new water system. Its chairman and officers ought to be members of the national authority controlling water so that they can coordinate its activities with those of the various regional boards.
  Quite au elaborate system is to be set up for the development of amenities in the regional waterways. One of the most important functions of the British Waterways Board is to provide amenities for people to use the canals, whether they be anglers or boaters. In this case the amenity services run by the board will only be duplicating those set up in the rest of the country. Surely, there should be some co-ordination and unification.
  The most important of all the reasons for keeping the British Waterways Board as a single entity is that we need a body to control navigation. It is desirable also that there should be common navigation standards on the other waterways. Many of our rivers, like the Thames and the Trent, are widely used by the public and we need the same navigation standards on those rivers as we have on the canals. I suggest that if we incorporate the board as a regional authority into the new water setup, it could also be given the job of

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  supervising navigation standards of all the other waterways in the country.
  The hon. Member for Norfolk, South (Mr. John E. B. Hill) referred to the Broads. Certainly they ought to come in under this body. Their navigation requires controlling, and again co-ordination is necessary between the navigation, drainage and other needs of that area. Such canals which have been left out of this Bill should come under the board, which should not only run the canals that it has dealt with in the past but should be responsible for ensuring that the navigation standards are standard throughout inland waterways. That is common sense if we are to have a really national water system.
  One or two other matters need to be dealt with. There is the question of income. At present the board raises income partly from charges for angling and boating licences, partly from selling water and letting off buildings. Its income has risen in recent years, but, on the whole, the board has been hampered through lack of capital, in getting on with its job. Over the years it has received a certain amount of Government subsidy. That subsidy has been fairly small. I suggest that in any new setup there should be a substantial subsidy at least for the first few years.
  A great deal of interest has been shown by various firms in developing marinas on the waterways and building boats, but we shall only get such development if the waterways are there to be utilised. Therefore, there must be some expenditure on getting the waterways into a decent condition. I served on the Inland Waterways Amenity Advisory Council for nearly three years and I am certain that it has done a very good job. One of its most important jobs was to make a survey of the remainder waterways in this country. It made detailed reports on the waterways, some of which, it said, ought to be abandoned altogether, whilst others should be made usable as soon as possible. Others, it said, could be be used immediately for angling.
  There may be no immediate need to get them back into navigation but we should not ignore the possibility of that being done in the future. It is important that they should be kept in existence with their towpaths, and so forth, and it is most
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  important that the construction of new motorways should not be allowed to destroy them. One of the most important in this context is the Montgomery Canal on the border of England and Wales. That was threatened by the possibility of a motorway cutting across it, with the result that it might never have opened again.
  The board has been handicapped by a lack of capital, but it has done a good job in interesting various local authorities in the work of renovating waterways. Forty local authorities have either been working recently or are working now with the board in getting various canals reopened. One of the most interesting aspects of the matter is the way in which the number of people who come in as voluntary labour has grown. There is nothing finer than to see many of our young people, who are prepared to do a practical job at weekends, helping to open up and restore canals.
  I am certain that in years to come the canal system will be one of the most important amenities in the country, particularly for young people. Mucking about in boats is one of the most enjoyable pursuits that young people can engage in but the waterways must be there to enable them to do so. We must therefore consider this problem in the long term. Certain jobs must be done now and others must be put back to be attended to in the future. All round the North Derbyshire area is a complete ring of canals which are being reopened with the help of local authorities and voluntary labour. The Upper Avon is likely to be opened this summer which will provide another through system with the Stratford-on-Avon Canal. It is therefore most important to consider the future of the board in the context of our national water system. The whole problem of navigation needs to be dealt with on a national basis and not treated separately with the different areas taking independent decisions.
  It is proposed to set up a Water Space Amenity Commission. It is also proposed to keep the Inland Waterways Advisory Council in being to work with the British Waterways Board. I believe, however, that if the board is to be brought under the National Water Council the Water Space Advisory Council should be used to co-ordinate the amenity needs of the country as a whole.

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  Some real powers should be given to the Water Space Amenity Commission. It might be suitable to examine requests for financial grants to particular waterways—whether they are rivers or canals —which might need money spent on them so that they may be reopened. A body along the lines of the University Grants Commission could look at these problems, and it should have money at its disposal with power to grant aid to schemes that it considers worth while.
  Those proposals would give some purpose to the Water Space Amenity Commission. It would have money to distribute and it would be able to follow on the work of the advisory council in studying and making recommendations about waterways. That is clearly a job which needs to be reviewed from time to time as some canals are opened up and others come forward, ready for the work to begin.
  Therefore, while I generally welcome what has been done in the Bill, I cannot support it because it does not deal with some of the essential matters that my hon. Friends and I have raised.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Six-minute speeches will enable me to call quite a few hon. Members, but I shall not be able to call every hon. Member who wishes to speak.
  8.34 p.m.
  Mr. John Hunt: I hope that the hon. Member for Dagenham (Mr. Parker) will forgive me if I do not follow him in his journey along the canals and waterways, because I want to develop a point first raised by the hon. Member for Acton (Mr. Spearing) and to deal specifically and exclusively with the situation in greater London under the Bill.
  I begin with a brief quotation:
  "Under our new style of Government we will devolve Government power so that more decisions are made locally."
  I hope that I shall not be accused of indelicacy if I remind my right hon. Friends that that is an extract from our 1970 General Election manifesto. It illustrates and underlines why so many people in local government, particularly within the greater London area, are so unhappy about the Bill, which proposes to transfer the Greater London Council's main drainage services and pollution con-
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  trol powers to the new mammoth Thames water authority. Instead of having directly-elected councillors controlling these vital services, we shall have the faceless men of the new regional water authority—non-elected, undemocratic and remote. That is a far cry from the devolution that we were promised at the last election.
  In his opening speech my right hon. and learned Friend the Secretary of State made great play of the fact that there would be local authority representatives on regional water authorities. But I remind him that in the case of the Thames water authority London local government has precisely 14 seats out of the total of 40, although greater London represents about 70 per cent. of the area of the new authority. That is not a particularly fair or balanced representation.
  No one can defend the proliferation of small water and sewerage authorities. I am in no way challenging the principle of rationalisation. Indeed, I accept and support it, and therefore have no quarrel with the major part of the Government's legisation. What I am saying is that greater London presents a special case that deserves much more attention and consideration than the Government have so far given it. In London, and only in London, an effective regional authority specifically charged with the responsibility for strategic planning already exists.
  The Greater London Council is an authority competent and eager to take over full responsibility for the capital's water services and to continue to tackle the unique problems of its tidal estuary. These problems are quite separate from those of the inland Thames, and again illustrate the absurdity of combining the tidal estuary with the upper reaches of the river within the proposed new mammoth authority.
  Flood protection, for example, is a subject on which the Greater London Council has built up a wealth of expertise over the past eight years. The £50 million flood barrier scheme at Woolwich Reach is a major engineering project which has aroused interest throughout the world. The GLC's sewage disposal facilities, too, are acknowledged to be second to none.
  It is not reasonable or rational to expect all this to be handed over to the

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  new water authority, either now or in 1980. Is it any wonder that both Conservative and Socialist members of the GLC and the London boroughs are united in their condemnation of the proposals and feel bitter and resentful about the provisions of a Bill that will deprive them of responsibility for the major water and sewerage work they have been undertaking on behalf of their ratepayers?
  The case that the GLC puts forward in the debate is that it should be allowed to take over direct responsibility for that part of the Thames Water Authority which falls below Teddington Weir, which is roughly the dividing line between the inland Thames and the tidal estuary. I believe that that is a perfectly fair and feasible proposition. If it were implemented it would mean that the remainder of the proposed Thames Water Authority area would coincide roughly with the area now managed by the Thames Conservancy. With a population of over 3 million, it would still be comparable in size with other regional water authorities proposed by the Government under the Bill. It would thus be a perfectly viable unit.
  Therefore, I contend that London is a special case. It is the capital city, and unlike other areas it already possesses a regional authority which has been established and in operation for eight years. It seems unreasonable to ask the GLC, in the interests of a notional blanket uniformity, to give up the powers it is exercising today, with skill, intelligence and expertise, to an untried and unrepresentative water authority.
  I therefore beg my right hon. and learned Friend to listen, even at this late stage, to the insistent and unanimous appeals to him from the GLC and the London Boroughs Association. I must warn him that unless substantial concessions are made to London's point of view the ripples of resentment could spread much wider than the immediate issue of water. They could sour and undermine the whole spirit of local government in our capital city.
  8.40 p.m.
  Mr. W. E. Garrett: This has been a low-key debate. Possibly that has been due to the fact that the Secretary of State for the Environment
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  initiated the debate in a low key I noticed that the right hon. and learned Gentleman kept rigidly to his brief. That might indicate that he does not want to get too much involved in water and the Bill.
  I am not going to say that I oppose the Bill in its entirety. Some good things have been added to the Bill. Like many other hon. Members, I oppose it because I am not too happy about some of the worst parts, which have been emphasised repeatedly.
  I am pleased that the Secretary of State, who represents Hexham, in which I live, is now in his seat. I refer to a decision he made about the Kielder reservoir. My thinking is beginning to come around to the view that possibly he has deferred his decision or he has given a "no decision" until the Bill gets on to the Statute Book. He can then pass the buck to the 10 regional authorities, or leave it with them for a long while in the hope that someone else will have to make a decision. If that is so, I hope that he will admit it. If it is not so, I hope that later when his hon. Friend replies, there will be advanced some indication of why a "no decision" was made.
  I hope that the House will excuse me from being parochial on this occasion. However, this matter is causing immense concern—so much so that many people who have not yet made representations will be doing so. It has spread dismay in industry. I speak as a person who served in an industry where water was one of the most vital commodities, and where it was used to a large degree. Unless the existing industry in the North-East can get some assurance about future supplies, it is doubtful if they will find sufficient impetus to expand its present output. The attitude of new industry was adequately explained by the hon. Member for Durham, North-West (Mr. Armstrong).
  The right hon. and learned Gentleman must know that even within his own party and amongst his supporters there is great concern. I hope that he will take note of what has been said so that maybe later this week he will give a further and more detailed explanation. If he does not do so, then he is not only causing a false degree of optimism in his constituency, where the proposed reservoir is

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  to be situated, but causing uncertainty and confusion in industry.
  The hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott), who is not in his seat, gave an excellent exposition of the qualities needed to be a director of one of the private companies. It is a poor man who cannot flatter himself on occasions, and the hon. Gentleman did so adequately today. However, I am at a loss to understand why the hon. Gentleman, an able hon. Member and, I understand, a good farmer, can be such an expert on this highly complicated industry. One of his colleagues happens to be Sir John Hunter, who is a good shipbuilder. No one would deny that. But what expertise does Sir John have which makes it desirable to put him on the board of a water company? I know that his ships have to float on the water when they are launched, but that is taking interest to ridiculous lengths.
  My main criticism of the private company is the degree of perpetuation that is brought about by the appointments. I hope that the companies will take note. I hope that if they continue to make these appointments they will at least explain the technical abilities or qualifications. They may even be financial qualifications.
  I welcome the decision to give some control over the amenities. Many years ago in this House I advocated the nationalisation of the rivers so that fishermen could fish all along rivers instead of only in the less popular parts.
  I say this for the existing authorities—they have given pleasure to millions of anglers throughout the country by the way and the manner in which they have used the fishing facilities and made them available. I see them now expanding such facilities further, and that part of the Bill at least is a good idea. Millions of anglers will, oddly enough, thank the Secretary of State for that aspect.
  8.45 p.m.
  Mr. Charles Simeons: I must declare an interest. I advise certain companies on the technical aspects of effluent treatment.
  Two views can be taken of the Bill. Either we can look over our shoulders and opt out of the realities of the modern world, or we can look upon the Bill as a new start, meeting the needs of modern
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  technology. For the first time, the fact that water is part of a cycle has been recognised and it is logical that it should be treated as such. If it is, I believe that it is best dealt with by one authority over a wide area. The change does not, of course, overlook the very good work which has been done by sewage works belonging to local authorities, such as Luton, or by authorities which form parts of main drainage authorities. The Bill removes overlapping between one authority and another in respect of purification, provision of water and extraction. This, I believe, gives it enormous merit.
  But all of this requires good direction, and I believe that the new National Water Council must have executive powers with its own support in terms of research and planning of water resurces. I too, lament the passing of the Water Resources Board—not just that its name should change but that apparently it is to be split. I believe this to be a great mistake. If the council has no planning unit, it will be in the Minister's pocket and it will not seem to be independent, which I believe it must be if it is to manage its own affairs.
  Mr. Eldon Griffiths: My hon. Friend will appreciate that the Secretary of State appoints the members of the Water Resources Board and that he will also appoint a proportion of the members of the National Water Council. Why does my hon. Friend assume that they would be independent when appointed by my right hon. and learned Friend to the board but not independent when appointed by him to the council?
  Mr. Simeons: For the very reason that the Secretary of State has to act in a quasi-judicial capacity, and if he is having to make decisions, and then goes to the same body to make those decisions from which the council has to seek advice, no one will believe him.
  I believe that the regional water authorities need have no specific members who represent local authorities. There is no reason why the members should not all be local authority members and no reason why there should be any local authority members at all. I do not see why water which passes under a certain area is a local authority matter any more than the

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  air space above it. No one suggests that local authorities should deal with aeroplanes. Where they do—as the Luton authority does—most people try to remove that power from them. The criterion must be that members of these bodies are chosen because of the expertise which they can bring to bear. In many instances, they will be drawn from those in all walks of life who have not the time to give to local government but do have an expertise from what they are doing in other jobs.
  We are now entering an era of new chemicals with little known effects. Who can honestly say what the effects of the pill will be as more and more oestrogen enters the water? Can we say that in 20 years' time half the Members of the House of Commons will not suddenly become sterile? I hope that I am not getting my right hon. and learned Friend worried. But we are entering an era when the effects of chemicals going into the water are immensely important. I am sure that my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) could tell us of the immense panic which took place in his constituency, for example, when a mysterious taste suddenly appeared in the water. No local authority wanted to know anything about it. In fact, experts were called in from a much wider area.
  Control in the technical sense will best be achieved, I believe, by offering a good career structure, and this the regional water authorities do. They will attract people qualified in water management. At present, water extraction has most of the graduates, and sewerage has very few. If those entering water management can see that there are good prospects, we shall have a much wider range of qualified people coming in.
  Those qualified people must be supported by adequate monitoring equipment. Methods of detection involve skilled operatives, and this is an expensive matter in both people and equipment. Finance will be immensely important here. Proper quality control is expensive, but the alternative is periodic scares.
  The method of pricing will have a vital effect on costs, and it may affect the ability of companies to compete internationally. The great virtue of the regional water authorities, I believe, is that they
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  can progress art varying rates. Where the rivers are clean, they must remain clean. Where the rivers are dirty, the rate at which those who are polluting the rivers alter their ways can be governed according to their ability to compete internationally.
  The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) referred very properly to the question of recycling. The pricing of water will do more than anything else, I believe, to influence recycling, because, once finance officers know what the cost will be, they will be able to advise their boards whether it is cheaper just to discharge and have the effluent treated elsewhere or whether it will be in their interest to treat and recycle.
  The Bill is a good beginning for facing up to a highly complicated technological problem of the modern age. If we ignore the challenge, we do so at our peril. The opportunity must not be passed by.
  8.53 p.m.
  Mr. Julius Silverman: I object to the Bill on several general grounds. First, as the hon. Member for Bromley (Mr. Hunt) said, it is a departure from democratic procedures. Second, it discriminates against the local authorities as compared with the statutory private bodies. In response to an intervention of mine, the Minister said that the statutory bodies have done a good job. So have the local authorities. Why should we take over the local authorities and not the statutory private bodies? Also, the Bill is opposed by all the local authority associations, and that in itself would be sufficient to condemn it.
  I come now to my constituency interest in Birmingham. Birmingham owns the reservoirs and dams in the Elan Valley in Wales—Mr. Deputy Speaker knows this well, because he once served on the Birmingham City Council—and it owns the Claerwen reservoir. These reservoirs supply Birmingham with its water. With great foresight, long before our time, the city fathers bought these reservoir areas and developed them, securing for the citizens of Birmingham a supply of pure and soft water which, though it may be equalled, is not surpassed anywhere in these islands.
  These water resources will be lost to Birmingham. They will pass to another,

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  Welsh, authority, and then the Birmingham citizens or the members of the new authority will have to decide whether to buy back the water created by Birmingham, provided that the new authority is prepared to sell it in bulk to the authority of which Birmingham is a part. Naturally Birmingham looks askance at this. The first thing it wants to know is will it continue to get the supplies of water and the facilities which it has created. I would like a reply from the Minister about this.
  The hon. and learned Member for Montgomery (Mr. Hooson) suggested that we had somehow cheated the Welsh out of their water. That is a piece of nonsense——
  Mr. Hooson: I did not suggest anything of the kind.
  Mr. Silverman: Or we had taken it for next to nothing.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. and learned Member knows that he cannot conduct a running commentary. If the hon. Member gives way that is all very well, but not otherwise.
  Mr. Hooson: I have asked the hon. Member——
  Mr. Silverman: I am sorry. I have a little time left and it may be that someone else will still be able to speak in the debate. The hon. and learned Member implied that somehow or other Welsh farmers were being treated unfairly.
  Mr. Hooson: Will the hon. Member give way?
  Mr. Silverman: Very well.
  Mr. Hooson: I did not suggest that Welsh people had been treated unfairly. I said that people from whom the water is derived should gain the benefit from it. I have never heard such a conservative argument as that which says that because grandfather was prudent and far-seeing his descendants should in no way be deprived.
  Mr. Silverman: As far as I know the water comes from Heaven. It is not provided by the Welsh. In this case the extraction of water from Wales has proved to be of benefit to the people of Wales as well as to the citizens of
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  Birmingham. It has provided employment for the people of Wales and it has also provided a considerable rating contribution. When a local authority there decided to celebrate the coronation in 1937 it held a party and put it on the rates. The major ratepayer was Birmingham which met 89 per cent. of the rates. The Birmingham ratepayers provided a party for the Welsh.
  This is one of the minor instances of the benefits bestowed on the local population by Birmingham which has looked after the farmers there and provided employment. There are other reasons why it is desirable that there should not be separation, in the case of Birmingham, between the authority which supplies the water and the authority which distributes and consumes it.
  The production of water is not like the production of electricity. It is a continuous process from the time it is collected to the time it is distributed. There are various forms of chlorination and purification taking place all the way, some in Wales, and some in Birmingham.
  Supply requires a continuous connection between the place where the water is extracted and the place where it is consumed. If the reservoirs in Birmingham become too full it is necessary to contact the Welsh authority in the Elan Valley immediately.
  If the function is divided between two authorities this continuous process will suffer. The efficiency of the undertaking will suffer if Birmingham's water undertakings are taken away. The present authority has managed its functions extremely well, with skill and with general regard to the public. I ask the hon. and learned Member for Montgomery to remember that a large number of my constituents are Welsh, and they derive the benefit of water which originates in Wales and is stored in reservoirs owned by Birmingham. There is a case for making an exception for Birmingham so that it continues to retain control over the supply of water from Wales.
  9.1 p.m.
  Mr. George Thomas: We have had a high-level debate in which every hon. and right hon. Member who has taken part has been very knowledgeable on the subject. We have listened to some who are experts. Not one speech,

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  except that which was made from the Government Front Bench, supported the Government's proposals for the abolition of the Water Resources Board. There has been a unanimous appeal to the Government to think again.
  I was much impressed by the speech of the hon. Member for Luton (Mr. Simeons), who is obviously an expert in this field, as he confessed at the beginning. We are all nervous of experts, but we ignore them at our peril. The hon. Member for Luton warned the Government of the major mistake they are making. Anyone who has carried responsibility for water in Wales, as once I did, knows what a debt we owe to Sir William Goode and his colleagues, who have amassed enormous expertise, who are masters in research, and who will now be divided.
  I believe that the time is opportune to reorganise our water resources. Both sides of the House acknowledge that the supply of water is a vital service which must be highly efficient, and that we cannot afford to waste any of our resources. But I verily believe that the National Water Council will be a toothless, bloodless body—a zombie-like body—instead of the full-blooded, all-powerful body that we need. The Minister is wrong to make such a body merely advisory. The board should be respresentative of the Sports Council. The National Anglers Council should be directly represented both at national and regional level. The three million anglers in the country have a great interest in these matters. They number more than the entire population of Wales, and the number is growing. We in this House have a responsibility to ensure that their interests are protected. I assure the Minister that when we discuss this measure in Committee we shall make every effort to ensure that fair play is given to those other interests.
  I wish to refer to the problem in Greater London. We heard much about this subject from the hon. Member for Bromley (Mr. Hunt), and my hon. Friends who represent London constituencies have outlined the offence given to local government by the Government's attitude. Sir Desmond Plummer is one of the most outspoken among those who have condemned the Government's attitude. He declared,
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  as reported in the Financial Times on 13th November 1972:
  "Assets in which ratepayers have invested hundreds of millions of pounds would pass out of control of elected local government representatives into the hands of faceless bodies who would be unaccountable to the public for their management of water and sewerage control."
  Sir Desmond's charge against the Government is echoed by local government all over the country. Ratepayers have invested in waterworks a total of well over £1,000 million. There has developed in local government an expertise and knowledge of the industry, with an appreciation of the needs of consumers, but the Minister is now prepared wantonly to disregard these factors.
  When the Government said that by making local government units larger it would give them greater responsibility, we thought that they meant what they said. But once again they are standing on their heads and they are consistent only in their inconsistency. The Government, with recent memories of the controversial debates on local government reform, now seek to introduce a measure which strips more real power from local government. But in this debate we have also had a taste of ideological differences. The Tory philosophy comes out clearly in this Bill, especially on the metering of water. The power given to the Minister allows water authorities to put a water meter in every home in the country. The Secretary of State said that this would not happen in a hurry, because it would cost £500 million to do it, but he hoped that it would come. This has been echoed by his colleagues all along the line.
  Mr. Rippon: I did not say that I hoped it would come. I said that I thought it reasonable that bodies should have the power if they thought it right. It must be remembered that on such bodies there would be a majority of local authority representatives and that those authorities could take this action in regard to different classes of consumer.
  Mr. Thomas: Since the Secretary of State has given powers in the Bill it is obvious that he wants them to exist. The true Tory philosophy has been repeated by hon. Members in this debate. The philosophy is that people should pay for the services they receive. The hon. Member for City of Chester (Mr. Temple) is

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  quite clear about it. Right hon. and hon. Gentlemen opposite would return to the days when our children had to take coppers to school to pay for the services rendered. The Government want to put the clock back in this regard.
  Mr. Simeons: On the subject of compulsion, may I remind the right hon. Gentleman that this House gave permission for vasectomies to take place? However, that permission will not be universally applied.
  Mr. Thomas: I hope that the hon. Member for Luton is not too worried about that subject. However, there is a world of difference between the Government and the Opposition when it comes to public services like water. We regard water in much the same way as we regard the health service, education, and so on. They are not services for which people pay when they use them and all members of the community derive the same benefits.
  The Government fought the General Election on the promise of a better tomorrow. We are seeing more and more what that better tomorrow is like. If the Secretary of State gets his way not only will every house have its electricity meter and its gas meter. It will also have its water meter. Not only will it have its electricity board and gas board inspectors; it will have its water board inspector. As some of my hon. Friends have pointed out, water board officials will have power to enter premises whether people are present or no. I can imagine the storm from right hon. and hon. Gentlemen opposite if a Labour Government had introduced a measure giving the right to bureaucrats to enter people's homes at will.
  The Government also show their ideology in the way in which they have protected the private water companies. Everyone knows that the companies are not there because of a sense of public service. Everyone knows that they are interested in profit. They would not be there otherwise. Once again the Government have sold out to those who back them.
  I turn now to deal with Welsh interests in this Bill. I am surprised that the Secretary of State for Wales has not yet realised his obligations to Wales and to
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  this House. He failed to make a statement to this House when the then Secretary of State for the Environment made a statement and was pressed by my hon. Friend the Member for Brecon and Radnor (Mr. Roderick), rather innocently I thought, who asked:
  "When shall we have an opportunity of questioning the Secretary of State for Wales?"
  The Minister—the right hon. Member for Worcester (Mr. Peter Walker)—replied:
  "That is a matter for the Secretary of State for Wales but the information will, of course, be made available."
  The only trouble was that we could not find the Secretary of State for Wales. He made his statement not to this House but to the Press. There is a growing tendency on the part of this Government to feel that they can ignore the House and resort to making statements outside.
  My hon. Friend the Member for Pontypridd (Mr. John) ——
  Mr. Peter Thomas Mr. Peter Thomas rose— —
  Mr. George Thomas: I will not give way to the Secretary of State tonight. We might as well understand that at the beginning. I will tell the House and Wales why. The right hon. and learned Gentleman should have been replying to this debate. Instead, we had that pitiful little intervention by his Man Friday, the Minister of State, who contributed nothing to the debate. The Secretary of State for Wales knows that in the measure before the House we are dealing with one of the most controversial issues in Wales, and he has elected not to take part in the debate.
  Mr. Peter Thomas Mr. Peter Thomas rose——
  Mr. George Thomas: No, I will not give way.
  Hon. Members: Give way.
  Mr. George Thomas: I will not give way. We have already had three Government Front Bench speakers tonight. We are entitled to our full time if I am to do justice to my arguments and to sit down in time for the Minister's reply.
  Mr. Peter Thomas Mr. Peter Thomas rose——
  Mr. George Thomas: I am not giving way.

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  My hon. Friend the Member for Pontypridd asked the then Secretary of State for the Environment if he would try to ensure that his right hon. and learned Friend would come to the House and answer questions. The right hon. Gentleman replied:
  "I am sure that there will be plenty of opportunity for the proposals of my right hon. and learned Friend on this topic to be debated in the Welsh Committee."—[OFFICIAL REPORT, 2nd December 1971; Vol. 827, c. 682–8.]
  If there is one Committee which it is difficult to get the Secretary of State for Wales to attend, it is the Welsh Grand Committee. [HON. MEMBERS: "Not true."] Of course it is true.
  Mr. Peter Thomas Mr. Peter Thomas rose——
  Hon. Members: Give way.
  Mr. George Thomas: No. Normally I should have no hesitation in giving way, but the Secretary of State has elected not to address the House on this matter. He put up the Minister of State. I say no more than that.
  The House will know that Wales has suffered great divisions over the supply of reservoirs. Every valley in Wales has a history of which our people are proud. Great feeling is aroused if it is only a little wayside chapel that has to be flooded. However, there are people in Wales who, for political purposes, are willing to exploit the emotions of our people. The Secretary of State knows as well as my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) and I that in Wales water is a highly emotive issue. So the question of water boards and their relations with the Welsh people are of first importance to us.
  The Minister of State in his brief interruption, said—and said with such pride, since he has been unable to say it for so long—that the Government have kept their promise of a water board for Wales. He was then thrown into the reservoir by the hon. and learned Member for Montgomery (Mr. Hopson), who was quick to remind him that under the Bill an important part of the water supplying area in Wales is not controlled by the Welsh authority, but by that enormous, elephantine body, the Severn-Trent Water Authority, reaching from Gloucestershire to the North Sea, with its headquarters at Notting-
  144
  ham. When the hon. and learned Gentleman pressed the Minister about the responsibilities of the Secretary of State in this regard the hon. Gentleman replied, "Of course my right hon. and learned Friend is responsible for the decisions that will be taken by the Severn-Trent Water Authority".
  Mr. Gibson-Watt: I should be grateful if the right hon. Gentleman would not paraphrase my speech but would, instead, look at what I said in HANSARD tomorrow. The right hon. Gentleman has made a bad speech so far, and I hope that it will be better from now on.
  Mr. Thomas: The Minister of State must not speak to me in the way that he speaks to his tenants in Radnorshire. He is dealing with somebody else here. It is no good his bringing his old squire attitude to the House of Commons. We all heard the hon. Gentleman's speech. He said that of course the Severn-Trent Authority would have to consult the Welsh National Water Development Authority. Why cannot the shoe be on the other foot The Severn-Trent Authority is an enormous body. Why cannot we give the Welsh National Water Development Authority the obligation to consult the Severn-Trent Water Authority whenever vital decisions are at stake? We shall put forward this proposal in Committee, though I doubt whether we shall see the Secretary of State for Wales there. I have never yet seen him in a Committee, except the Welsh Grand Committee.
  In his Press notice the Minister said—[Interruption.] The public school manners of the hon. Member for Hereford (Mr. Gibson-Watt) do not reflect credit upon himself or his party. He said in his statement:
  "The Welsh authority will be obliged to prepare all plans for utilising water space in Wales and any land associated with it. The Welsh authority will be able to acquire land."
  Every hon. Member who carries responsibility for a Welsh constituency knows that when land is taken for reservoirs there is a tremendous upheaval, and now the Government are planning to give a nonelected body the right to get this land. Does not the Minister think that he is making a rod for his back? Does he think that this will satisfy the Welsh people?

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  We believe in a Welsh water authority that is responsible to the Welsh people. We believe that it ought to be an elected authority. We have made this clear. The Government say that we should wait for Crowther, but that is one thing that the Secretary of State has refused to do with regard to local government and Health Service reforms. If the Secretary of State were to go ahead and provide us with an elected water authority for Wales and later found that it was necessary to amend that because of what Crowther said, there would be nothing to stop him from introducing the necessary amending legislation in the House.
  The truth is that the Minister is taking power away from the Welsh people. He is transferring it to the bureaucrats, and this new water authority will be unrepresentative and, therefore, untrusted. It will be remote from our people. We were all worried—certainly I was worried—about the proposal for these large authorities in Wales. We are creating large authorities which are remote from ordinary people. But now, with this regional board, non-elected wherever it meets, the man in the street will not stand a chance with his representations, and my guess is that neither will local authorities.
  We believe in a national water grid. There is no reason why the elected Welsh water authority should not sell the water to the national grid. We have complained all along about metering for domestic purposes. All I want to know is whether the Secretary of State for Wales will make one of his visits to Wales to tell us that he wants to see a water meter in every house, and that that is his idea of a Tory way. That would be the last that we should hear of him. The tap would be turned off then.
  Mr. Peter Thomas Mr. Peter Thomas rose—
  Mr. George Thomas: No. The Secretary of State has thrown away his opportunity to speak here tonight.
  Wales is treated on a basis quite different from that for England in this measure. The Water Space Amenity Commission does not apply in Wales because the regional board is to have the powers in Wales, unlike regional boards covering larger areas in England. We have no provision for a consumer council in
  146
  Wales, and we have been given by the Minister of State tonight an assurance that the majority of our regional board will be members of local authorities. I hope that I did not do the hon. Gentleman an injustice, but I think that that was the assurance he gave. But the Secretary of State will be the person who will select them all.
  There is a threat to local government and to our democratic system in the Goverment's approach to the problem of the conservation and use of our resources. In this winding-up speech I have not dealt with the question of land drainage or sewage, but on sewage, the arguments are identical to those we have produced about water.
  I want to say something about the costs. The hon. Member for the City of Chester reminds us that there is a £50 million assistance from the Treasury for sewage works now under way to help local authorities. We are told in the Bill that all costs of sewage will now have to be met by charges. Is this another example of the Government's transferring their burden from the Exchequer to the ratepayers? [HON. MEMBERS: "Yes."] The ratepayers have had a raw deal from the Government.
  In Committee we shall ensure, as far as we can, that this measure is amended, and that we bring a greater degree of democratisation into it. As best we can, we shall try to protect ratepayers and domestic consumers from the attack which the Bill makes upon them. We shall go into the Lobby tonight against this measure because it is anathema to us
  9.30 p.m.
  The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): Before seeking to reply to the debate, Mr. Speaker, may I say that my right hon. Friend the Minister for Local Government and Development would normally be replying. He has taken a very considerable interest in this Bill, and I am sure that the right hon. Member for Cardiff, West (Mr. George Thomas) will be glad to know that he expects to serve on the Committee which will be dealing with the Bill.
  I know that I carry both sides of the House with me when I say that I am sorry that my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke),

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  who has taken a very special interest in land drainage and whose representations had considerable effect, is not able to be here tonight owing to illness, and I am sure the House will wish him a very quick return.
  Hon. Members: Hear, hear.
  Mr. Griffiths: The debate has been characterised by a lucid and forward-looking exposition of a great and necessary reform by my right hon. and learned Friend the Secretary of State—a reform which is complementary to that of local government and also of the reorganisation of the health service. The reorganisation of the water services, along with that of local government and the health service, adds up to a third pillar in the modernisation of the machinery of government and administration in this country.
  The debate has also been characterised by the very clear statement by the right hon. Member for Cardiff, West and the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) that the Labour Party's solution to the problem of giving local authorities more control and to leaving more of the management of water in the hands of Wales is to nationalise the lot and take it away from them all, to be run by a nationalised United Kingdom board. No doubt this matter will be debated in great detail, but I am sure it is helpful to my hon. Friends to know that the Opposition's solution to the problem is to nationalise the lot.
  Thirdly, the debate has been characterised by a number of points of well-informed comment and criticism from my hon. Friends and others on the benches opposite. They have dealt with the size and scale of the new water authorities. My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) had some doubts about the size of the Anglian regional water authority, and I think the right hon. Member for Anglesey (Mr. Cledwyn Hughes) was concerned about the possible remoteness. He spoke of consumers being confronted by the need to telephone Leviathan. Then, too, a number of hon. Members have spoken on the subject of local authority involvement and the proportions that local authorities will have on the new water boards.
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  There have been a number of very good speeches about the importance of the Water Resources Board. The hon. and learned Member for Montgomery (Mr. Hopson) and my hon. Friend the Member for Devizes (Mr. Charles Morrison) spoke of that, as, indeed, did a number of others.
  There have been some useful speeches, including a particularly valuable one from my hon. Friend the Member for City of Chester (Mr. Temple) on the question of financing and future charging policy. There have been a number of quite surprising revelations. For example, my right hon. and learned Friend the Member for Gloucestershire, South (Sir F. Corfield) told us how he pumped water for his hip bath during his early life. The hon. Member for Holborn and St. Pancras, South (Mr. Lena Jeger), whose report I was pleased to receive, told us of her expedition to examine the vacuum toilets of the Swedish navy, and I have no doubt that the House learned a great deal from that. I will see that the Boat Show is made aware next year of her researches, in case any persons in this country feel the need to take advantage of them. My hon. Friend the Member for City of Chester gave us a very intimate description of how he brushed his teeth and thereby used rather more water than he had intended.
  However, this is a serious debate and therefore I want to deal with two essential aspects of the Government's policy. The first is that the future supply of water in this country gives rise to serious concern. We have plenty of rain, but most of it falls in the north and the west, while demand for water is growing in the Midlands, East Anglia and the South. As a result, some areas of this country are already facing potential water shortages, and a prolonged dry spell could leave some parts short of good water to drink. The basic reason is the rapidly rising demand. At present we consume about 50 gallons of water per person per day, about half for industry and half for domestic purposes. Within 20 years that will increase to about 100 gallons per person per day. The increase in demand reflects higher standards of living, with such things as more baths and more cars. It also represents the fact that modern industry uses

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  much more water, for example in chemicals, paper making and steel, and it is important here to look for greater economies in the use of water, as was pointed out by the hon. Member for Holborn and St. Pancras, South.
  The present reliable yield available to water undertakers is about 18 million cubic metres per day. The estimated demand within 20 to 25 years is 28 million cubic metres per day, leaving a gap of almost 10 million cubic metres per day which needs to be provided from other sources. That presents us with a serious problem that needs to be overcome. There are various approaches to the problem. We could build more reservoirs. They are unpopular in many parts of the country—not least in East Anglia and Wales—but they are necessary from time to time. The new provisions of the Land Compensation Bill, now in its Committee stage, will materially help.
  Another approach is to provide for more estuarine storage. Here we are making good progress in studies of the possibilities of Morecambe Bay, the Dee and the Wash. No doubt the Secretary of State will find appropriate opportunities to make announcements when the time comes. We could also go in for large new groundwater schemes, such as that now envisaged in Berkshire by the Thames Conservancy. It is also possible that at some stage, though probably in the distant future, desalination will make a contribution.
  Yet by far the most important contribution to our future water supply must come from the rivers; the rivers which can be used several times throughout the course of their length; the rivers where it is possible to augment the flow in the dry season from one source and then from another source at a different period of the year; the rivers which in this country must no longer be treated as drains and sewers but as regional water mains, capable of transporting large volumes of water over long distances from the sources of supply to the main areas of demand; and the rivers which are also capable, provided that they are not abused, of purifying and restoring the quality of their water for drinking purposes as they go along. The great virtue of rivers, endorsed within the Bill and by
  150
  a succession of Acts, is such that we must now make a policy of cleaning them and using them more effectively for water supply the centrepiece of any national water structure.
  Already one-third of all the water we consume is taken from rivers which at one stage or another have already received large quantities of sewage and industrial effluent. This proportion is certain to increase. That is why the first leg of the policy the Bill embraces is to bring together and to plan together all the aspects of water conservation and supply, sewerage and sewage disposal, the prevention of pollution, fisheries, and land drainage and reclamation. I believe that that is the right policy.
  At present 1,500 separate authorities are engaged in the task. I do not criticise what has gone before. On the contrary, almost all our water and sewerage services have been well managed. But I doubt whether we can cope with tomorrow's demand on the present basis.
  I offer the House just two examples, beginning with water supply undertakers. Those who have to provide the water for our homes have an absolute duty under the law to provide all the water that people in industry need. Yet the river authorities upon which, in many cases, they have to rely have no absolute duty to grant them the licences to abstract.
  Secondly, the river authorities have a statutory duty to keep the rivers clean, yet in many of their areas they have in practice only a very limited ability to control the nature and volume of the filth that various dischargers, both local authorities and industries, are putting into those rivers. It is not possible to clean rivers in the way that we shall need unless these various controls and agencies are brought much closer together.
  That is the first fundamental reason for the proposed reorganisation. It is the reason for all-purpose authorities, which are at the heart of the Bill.
  The second main leg is that we have reached the conclusion, after a great deal of study, that it is necessary to have authorities not only all-purpose but stretching over wider areas. The essential reason is that the rain does not fall, the rivers do not flow, and the water-bearing beds were not laid down, on the basis of any

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  local authority or other man-made boundary. Hydrological and geological realities, much more than political or administrative frontiers, need to form the basis of our water planning. I know that the hon. Member for Holborn and St. Pancras, South, who has studied the matter, will agree.
  Moreover, the time is coming—it has already arrived in many parts of the country—when we shall need to move more and more of our water over long distances, crossing the frontiers of dozens of local authorities. We have already seen this in the Ely-Ouse scheme, which was comparatively easy because it crossed only one or two local boards and local authority boundaries. But I do not doubt that before long we shall need to plan the supply of water to London, for example, in terms not only of what is available in the Metropolitan Water Board area but of the water supply situation in the Cotswolds, the Chilterns and beyond.
  In short, we must organise supply over a wider area, having regard to hydrology and geology and not simply to political and administrative boundaries. Therefore, I believe that the case is made out not only for the all-purpose organisation but for the regional authorities.
  I come to the points made in the debate.
  Mr. Spearing Mr. Spearing rose——
  Mr. Griffiths: I shall come to the hon. Gentleman's point.
  The hon. Member for Small Heath said that the Government's proposals did not have a friend in the world. But among the engineers and chemists who have sent us their support are the Institution of Civil Engineers, the Institution of Water Engineers, the Institute for Water Pollution Control, the Society of Chemical Industry and the Society for Water Treatment and Examination. Those are the technical people who support the Bill.
  I come now to the administrators: The Society of Clerks and Treasurers of the Water Authorities, the Association of River Authorities, the Confederation of British Industry, the Central Electricity Generating Board, the trade unions, including the National Union of Water-
  152
  works Employees, and the Association of Waterworks Officers.
  Mr. Denis Howell Mr. Denis Howell rose——
  Mr. Griffiths: And now I turn to the environmental bodies. There is the Royal Commission on Environmental Pollution—that is no small beer—the Committee for Environmental Conservation, which is the body that speaks for all the main conservation and environmental organisations in the country, the National Anglers' Council, the National Federation of Anglers and the Salmon Trout Association. If that is not to have a friend in the world, it is a position I occupy with some satisfaction.
  Mr. Cledwyn Hughes: What about the Archdruid of Wales?
  Mr. Griffiths: I think that the Arch-druid of Wales spoke just now. I know that he will hate me to say this in view of the seriousness of his speech, but he made what any Archdruid would have regarded as a singularly pagan speech.
  I turn now to the geography of the regions. A number of hon. Members have made the point that the regional water authorities cover a wide area. My right hon. and learned Friend the Member for Huntingdonshire was concerned about the size of the Anglian authority. There have been a number of speeches on the general size of the Severn and Trent authority. My hon. Friend the Member for Norfolk, South (Mr. John E. B. Hill) was concerned about the problems of Norfolk and whether they would be properly dealt with in so large a regional water authority.
  The lines on the map are essentially hydrological. They are based on technical considerations and very wide consultations. I hope that the House will not approach them on a purely administrative and political basis. I think that my right hon. and learned Friend will agree that we can in committee look if need be at all the lines on the map. I know that my right hon. and learned Friend would not wish to stand in the way of any adjustments or amendments of the frontiers that make sense, so long as they are judged on wider grounds and not on only political and administrative grounds.

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  Hon. Members have asked why the Secretary of State should appoint the chairmen of the water authorities. It is possible to argue that question in many ways. The Central Advisory Water Committee's report on the whole favoured appointment by the Secretary of State. The reason is that the Bill lays upon my right hon. and learned Friend the obligation to work out and implement a national water policy. As the new regional water authorities will be crucial agents in carrying through what essentially is a national water policy, it is right that the Secretary of State should make the appointments.
  The hon. Member for Durham, North West (Mr. Armstrong), my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) and the hon. Member for Wallsend (Mr. Garrett) spoke about the water situation in the North-East. I cannot for a moment accept the assertion of the hon. Member for Durham, North-West that the decision by my right hon. and learned Friend to obtain more information before making any final decision about Kielder was, in any sense, as he put it, scandalous. It cannot be regarded as improper that my right hon. and learned Friend should want to place himself in possession of all the relevant evidence and to look at all the possible alternatives before he makes what is, after all, when a valley is flooded, an irrevocable decision.
  My right hon. and learned Friend is well aware of the evidence. He will consider all the alternatives and he will make, as the House expects, an impartial and objective decision.
  The hon. Member for Holborn & St. Pancras, South was concerned, and I understand her concern, that the recommendations of the report "Taken for Granted" have not been able to be implemented.
  Mr. Blenkinsop: May I have clear confirmation that the final issue about the future of the Kielder reservoir is not yet settled?
  Mr. Griffiths: My right hon. and learned Friend will make his decision on that as soon as possible. But I must press on now because a number of other hon. Members have raised points which require answer.
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  I again congratulate the hon. Lady the Member for Holborn and St. Pancras, South, as others have done, on her excellent report. She is disappointed that the Bill does not contain the pollution clauses to implement her recommendations. I share her disappointment. The clauses were drafted but I think that she will recognise that parliamentary time is limited. My right hon. and learned Friend has said that he hopes there will be opportunity in this Parliament for an environmental protection Bill to deal with the recommendations which she and others have made.
  It may help her if I tell her that we have it in mind to bring before the House proposals to insist on information being published relating to discharges or applications for consents; to take action to protect underground water; to prevent accidental pollution, giving powers to the regional water authorities to take the necessary action; to bring under full control the discharge of public effluent into public sewers; to control discharges of water raised from working mines; and to control very tightly pollution from boats, particularly from sanitary appliances, and also to prepare for increases in the penalties for pollution offences. When time permits, we shall bring these proposals before the House.
  My hon. Friend the Member for City of Chester was concerned about the transitional period and how in practice this reorganisation will be implemented. I assure him that there will be no sudden change overnight, dislocating all the arrangements or, indeed, producing any hiatus. It is our intention, if Parliament approves, to set up the regional water authorities in shadow form by the middle of this year, and in this way their chairmen-designate will be able to help in preparations for the full-scale transfer in 1974, thus ensuring that there will be no disruption or lack of continuity.
  In this connection, as my hon. Friend knows, we have set up provisional management units for all three of the services —water supply, sewerage and sewage disposal, and river management. For water supply, we have proposed, with the full support of the British Waterworks Association, that the provisional management units should, broadly speaking, be the existing statutory water undertakings.

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  Similar arrangements have been made in connection with the river managements —that is to say, the existing river authorities will continue to provide in the transitional period the provisional management units.
  The area of greatest change will, of course, arise in sewerage and sewage disposal. The House will know, and I believe welcome, my right hon. and learned Friend's acceptance that the local authorities should continue to handle sewerage in their areas at the district council level within the overall strategy of the regional water authorities. We have set up a provisional working arrangement whereby something like 80 or so large and strong provisional management units will be operating on the sewage front. We have invited local authorities to join us in the steering committees, and although it is true that for some time the local authorities were unwilling and not happy, I am glad to say that they have now agreed to join in so that progress can be made along this front with all the others.
  But I agree that the heart of the matter is the staff, and I assure the House that the Water Services Staff Advisory Committee, whose chairman is Sir Patrick McCall, former Clerk to Lancashire County Council, is starting work and is looking after staff interests all the way. We have gone to considerable lengths to ensure that this staff committee is broadly based. Lord Cooper, the former General Secretary of the General and Municipal Workers' Union, Dr. Millis, formerly director of the British Waterworks Association, the former Town Clerk of Birmingham, and the Chairman of the Central Flintshire Water Board are helping to make up this group, and I hope that their names demonstrate that the charge by the hon. Member for Small Heath that the Secretary of State is packing these authorities is not borne out by the facts.
  I come now to the question of recreation. Without doubt, we need to make greater provision for people to enjoy the water space. About 5 million people regularly engage in water-based sports and leisure activities, and the time has come when we must say to all water undertakers not that they "may" but that they "shall" open their water space for the benefit of those who wish to use it for sports of all kinds. This is why
  156
  we are setting up, under the aegis of the National Water Council a Water Space Amenity Commission which will advise the Secretary of State and the water authorities on the performance of their statutory duties relating to the recreational and amenity use of water. It will consist of a chairman and members appointed by the Secretary of State, and I am glad to tell my hon. Friends that we shall make sure that angling interests are effectively represented upon that body.
  I come now to the Water Resources Board——
  Sir Gilbert Longden: My hon. Friend has not said anything about the commercial potential of the canals.
  Mr. Griffiths: With respect, the canals do not come under the Bill. Perhaps we can deal with that on another occasion.
  I had just referred to the Water Resources Board. I pay tribute, as other hon. Members have done, to the admirable work performed over the years by the Water Resources Board, by its chairman and its dedicated staff. One of my hon. Friends said that it was wise to invest in success. It is the very success of the Water Resources Board which has led us to the conclusion that rather different arrangements are needed.
  The need for the water resources board arose from there being about 200 statutory water undertakers and 29 river authorities. Reorganisation will reduce their number to a much smaller group of all-purpose authorities. What we intend to achieve is that the planning side of the Water Resources Board will be kept, along with other planning agencies, as an independent source of advice to the Secretary of State and the National Water Council.
  On the research side, we shall ensure that from the Water Pollution Research Laboratory, from the Water Research Association and from the Water Resources Board there is a facility by which the best methods of research are made available to the industry.
  My hon. Friend the Member for Bromley (Mr. Hunt) spoke about London. Much as I sympathise with the views of the Greater London Council and of the London boroughs, I must remind my hon.

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  Friend that London local authorities have never been responsible for the whole of the Thames. They are not responsible for the Thames Conservancy. They are not responsible for the tidal river in so far as the Port of London Authority is the body concerned with pollution. It is just not true that some regional control of water is now to be taken from London. The Greater London Council will continue to be the land drainage authority in the Excluded Area, to be responsible for the Thames tidal barrier, and it will have a substantial proportion of the local authority membership on the new Thames Water Authority.
  The Opposition by their speeches, with the exception of those from the Front Bench, have shown a good deal of understanding of this complex and difficult problem, but by their vote tonight they will demonstrate that, whenever a proposal for a modern and forward looking move is made, they are against it, as they are on this occasion. I commend the Bill to the House as good for the water industry and for the country as a whole.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 220, Noes 210.

  Division No. 48.]

  AYES

  [10.0 p.m.

  Adley, Robert

  Fisher, Nigel (Surblton)

  Luce, R. N.

  Allason, James (Hemel Hempstead)

  Fookes, Miss Janet

  MacArthur, Ian

  Amery, Rt. Hn. Julian

  Fortescue, Tim

  McCrindle, R. A.

  Archer, Jeffrey (Louth)

  Fry, Peter

  McLaren, Martin

  Astor, John

  Gardner, Edward

  Maclean, Sir Fitzroy

  Atkins, Humphrey

  Gibson-Watt, David

  McMaster, Stanley

  Awdry, Daniel

  Goodhart, Philip

  Macmillan, Rt. Hn. Maurice (Farnham)

  Baker, Kenneth (St. Marylebone)

  Goodhew, Victor

  McNair-Wilson, Michael

  Balniel, Rt. Hn. Lord

  Gower, Raymond

  McNair-Wilson, Patrick (New Forest)

  Bennett, Sir Frederic (Torquay)

  Grant, Anthony (Harrow, C.)

  Maddan, Martin

  Benyon, W.

  Gray, Hamish

  Marten, Neil

  Berry, Hn. Anthony

  Green, Alan

  Mather, Carol

  Biffen, John

  Grieve, Percy

  Mawby, Ray

  Biggs-Davison, John

  Griffiths, Eldon (Bury St. Edmunds)

  Maxweli-Hyslop, R. J.

  Blaker, Peter

  Grylls, Michael

  Meyer, Sir Anthony

  Body, Richard

  Gummer, J. Selwyn

  Mills, Peter (Torrington)

  Boscawen, Hn. Robert

  Gurden, Harold

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

  Bossom, Sir Clive

  Hall, John (Wycombe)

  Mitchell, David (Basingstoke)

  Bowden, Andrew

  Hall-Davis, A. G. F.

  Moate, Roger

  Braine, Sir Bernard

  Hamilton, Michael (Salisbury)

  Monks, Mrs. Connie

  Bray, Ronald

  Harrison, Col. Sir Harwood (Eye)

  Monro, Hector

  Brewis, John

  Haselhurst, Alan

  Montgomery, Fergus

  Brinton, Sir Tatton

  Hastings, Stephen

  Morgan-Giles, Rear-Adm.

  Brown, Sir Edward (Bath)

  Havers, Sir Michael

  Morrison, Charles

  Bruce-Gardyne, J.

  Hawkins, Paul

  Mudd, David

  Bryan, Sir Paul

  Heath, Rt. Hn. Edward

  Murton, Oscar

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

  Hicks, Robert

  Nabarro, Sir Gerald

  Buck, Antony

  Hiley, Joseph

  Neave, Airey

  Butler, Adam (Bosworth)

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

  Noble, Rt. Hn. Michael

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

  Hill, James (Southampton, Test)

  Nott, John

  Carlisle, Mark

  Holland, Philip

  Oppenheim, Mrs. Sally

  Carr, Rt. Hn. Robert

  Holt, Miss Mary

  Orr, Capt. L. P. S.

  Channon, Paul

  Hordern, Peter

  Osborn John

  Chataway, Rt. Hn. Christopher

  Hornby, Richard

  Owen, Idris (Stockport, N.)

  Churchill, W. S.

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Page, Rt. Hn. Graham (Crosby)

  Clegg, Walter

  Howell, David (Guildford)

  Page, John (Harrow, W.)

  Cockeram, Eric

  Howell, Ralph (Norfolk, N.)

  Parkinson, Cecil

  Coombs, Derek

  Hutchison, Michael Clark

  Peel, Sir John

  Cooper, A. E.

  Iremonger, T. L.

  Percival, Ian

  Corfield, Rt. Hn. Frederick

  James, David

  Peyton, Rt. Hn. John

  Cormack, Patrick

  Jenkin, Patrick (Woodford)

  Pink, R. Bonner

  Costain, A. P.

  Jessel, Toby

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

  Critchley, Julian

  Kaberry, Sir Donald

  Proudfoot, Wilfred

  Crouch, David

  Kellett-Bowman, Mrs. Elaine

  Pym, Rt. Hn. Francis

  d'Avigdor-Goldsmid, Sir Henry

  Kershaw, Anthony

  Raison, Timothy

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

  Kimball, Marcus

  Ramsden, Rt. Hn. James

  Dean, Paul

  King, Evelyn (Dorset, S.)

  Rawlinson, Rt. Hn. Sir Peter

  Dixon, Piers

  King, Tom (Bridgwater)

  Reed, Laurance (Bolton, E.)

  Dodds-Parker, Sir Douglas

  Kirk, Peter

  Rees, Peter (Dover)

  Drayson, G. B.

  Kitson, Timothy

  Renton, Rt. Hn. Sir David

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

  Knox, David

  Rhys Williams, Sir Brandon

  Emery, Peter

  Lamont, Norman

  Ridley, Hn. Nicholas

  Eyre, Reginald

  Lane, David

  Rippon, Rt. Hn. Geoffrey

  Farr, John

  Langford-Holt, Sir John

  Roberts, Michael (Cardiff, N.)

  Roberts, Wyn (Conway)

  Fell, Anthony

  Le Marchant, Spencer

  Rossi, Hugh (Hornsey)

  Fenner, Mrs. Peggy

  Lewis, Kenneth (Rutland)

  Russell, Sir Ronald

  Fidler, Michael

  Longden, Sir Gilbert

  St. John-Stevas, Norman

  Finsberg, Geoffrey (Hampstead)

  Loveridge, John

  Sandys, Rt. Hn. D.

  Scott, Nicholas

  Taylor, Frank (Moss Side)

  Walker-Smith, Rt. Hn. Sir Derek

  Scott-Hopkins, James

  Taylor, Robert (Croydon, N.W.)

  Walters, Dennis

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

  Tebbit, Norman

  Ward, Dame Irene

  Shelton, William (Clapham)

  Temple, John M.

  Warren, Kenneth

  Shersby, Michael

  Thomas, John Stradling (Monmouth)

  Weatherill, Bernard

  Simeons, Charles

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

  Wells, John (Maidstone)

  Sinclair, Sir George

  Tilney, John

  White, Roger (Gravesend)

  Skeet, T. H. H.

  Trafford, Dr. Anthony

  Winterton, Nicholas

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

  Trew, Peter

  Wolrige-Gordon, Patrick

  Soref, Harold

  Tugendhat, Christopher

  Woodhouse, Hn. Christopher

  Spence, John

  Turton, Rt. Hn. Sir Robin

  Woodnutt, Mark

  Sproat, Iain

  Vaughan, Dr. Gerard

  Worsley, Marcus

  Stanbrook, Ivor

  Vickers, Dame Joan

  Stodart-Scott, Col. Sir M.

  Waddington, David

  TELLERS FOR THE AYES:

  Stuttaford, Dr. Tom

  Walder, David (Clitheroe)

  Mr. Kenneth Clarke and

  Sutcliffe, John

  Walker, Rt. Hn. Peter (Worcester)

  Mr. Marcus Fox.

  Tapsell, Peter

  NOES

  Abse, Leo

  Gilbert, Dr. John

  Mellish, Rt. Hn. Robert

  Allaun, Frank (Sallord, E.)

  Ginsburg, David (Dewsbury)

  Mendelson, John

  Allen, Scholefield

  Golding, John

  Mikardo, Ian

  Archer, Peter (Rowley Regis)

  Gourlay, Harry

  Millan, Bruce

  Ashley, Jack

  Grant, George (Morpeth)

  Miller, Dr. M. S.

  Ashton, Joe

  Grant, John D. (Islington, E.)

  Milne, Edward

  Atkinson, Norman

  Grimond, Rt. Hn. J.

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

  Barnett, Guy (Greenwich)

  Hamilton, James (Bothwell)

  Molloy, William

  Barnett, Joel (Heywood and Royton)

  Hamilton, William (Fife, W.)

  Morris, Alfred (Wythenshawe)

  Benn, Rt. Hn. Anthony Wedgwood

  Hannan, William (G'gow, Maryhill)

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Hardy, Peter

  Morris, Rt. Hn. John (Aberavon)

  Bienkinsop, Arthur

  Harrison, Walter (Wakefield)

  Mulley, Rt. Hn. Frederick

  Booth, Albert

  Hattersley, Roy

  Oakes, Gordon

  Boyden, James (Bishop Auckland)

  Heffer, Eric S.

  O'Halloran, Michael

  Broughton, Sir Alfred

  Hooson, Emlyn

  O'Malley, Brian

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

  Horam, John

  Orbach, Maurice

  Brown, Ronald(Shoreditch & F'bury)

  Houghton, Rt. Hn. Douglas

  Orme, Stanley

  Buchan, Norman

  Howell, Denis (Small Heath)

  Oswald, Thomas

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

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Owen, Dr. David (Plymouth, Sutton)

  Campbell, L (Dunbartonshire, W.)

  Hughes, Mark (Durham)

  Padley, Walter

  Carmichael, Neil

  Hughes, Robert (Aberdeen, N.)

  Paget, R. T.

  Carter, Ray (Birmingh'm, Northfield,

  Hughes, Roy (Newport)

  Pardoe, John

  Carter-Jones, Lewis (Eccles)

  Hunter, Adam

  Parker, John (Dagenham)

  Castle, Rt. Hn. Barbara

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

  Parry, Robert (Liverpool, Exchange)

  Clark, David (Colne Valley)

  Jeger, Mrs. Lena

  Pavitt, Laurie

  Cocks, Michael (Bristol, S.)

  John, Brynmor

  Peart, Rt. Hn. Fred

  Coleman, Donald

  Johnson, Carol (Lewisham, S.)

  Pendry, Tom

  Concannon, J. D.

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

  Prentice, Rt. Hn. Reg.

  Conlan, Bernard

  Johnson, Walter (Derby, S.)

  Prescott, John

  Cox, Thomas (Wandsworth, C.)

  Johnston, Russell (Inverness)

  Price, William (Rugby)

  Cronin, John

  Jones, Barry (Flint, E.)

  Probert, Arthur

  Dalyell, Tarn

  Jones, Dan (Burnley)

  Reed, D. (Sedgefield)

  Davidson, Arthur

  Jones, Gwynoro (Carmarthen)

  Rees, Merlyn (Leeds, S.)

  Davies, Denzil (Llanelly)

  Jones, T. Alec (Rhondda, W.)

  Rhodes, Geoffrey

  Davies, G. Elfed (Rhondda, E.)

  Kaufman, Gerald

  Richard, Ivor

  Davis, Clinton (Hackney, C.)

  Kerr, Russell

  Roberts, Albert (Normanton)

  Davis, Terry (Bromsgrove)

  Kinnock, Neil

  Roberts, Rt.Hn.Goronwy (Caernarvon)

  Deakins, Eric

  Lamborn, Harry

  Robertson, John (Paisley)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lamond, James

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

  Dempsey, James

  Latham, Arthur

  Roper, John

  Dormand, J. D.

  Lawson, George

  Rose, Paul B.

  Douglas, Dick (Stirlingshire, E.)

  Leonard, Dick

  Ross, Rt. Hn. William (Kilmarnock)

  Douglas-Mann, Bruce

  Lestor, Miss Joan

  Rowlands, Ted

  Duffy, A. E. P.

  Lewis, Arthur (W. Ham, N.)

  Sandelson, Neville

  Dunn, James A.

  Lipton, Marcus

  Sheldon, Robert (Ashton-under-Lyne)

  Dunnett, Jack

  Lomas, Kenneth

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

  Eadie, Alex

  Loughlin, Charles

  Short, Mrs. Renée (W'hampton, N.E.)

  Edeiman, Maurice

  Lyons, Edward (Bradford, E.)

  Silkin, Rt. Hn. John (Deptford)

  Edwards, Robert (Bilston)

  Mabon, Dr. J. Dickson

  Silkin, Hn. S. C. (Dulwich)

  Ellis, Tom

  McBride, Neil

  Sillars, James

  Evans, Fred

  McCartney, Hugh

  Silverman, Julius

  Faulds, Andrew

  McElhone, Frank

  Skinner, Dennis

  Fernyhough, Rt. Hn. E.

  Mackenzie, Gregor

  Small, William

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

  Mackie, John

  Spearing, Nigel

  Fitch, Alan (Wigan)

  McMillan, Tom (Glasgow, C.)

  Spriggs, Leslie

  Fletcher, Raymond (Ilkeston)

  McNamara, J. Kevin

  Stallard, A. W.

  Fletcher, Ted (Darlington)

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

  Steel, David

  Foot, Michael

  Marks, Kenneth

  Stewart, Rt. Hn. Michael (Fulham)

  Ford, Ben

  Marquand, David

  Stoddart, David (Swindon)

  Forrester, John

  Marsden, F.

  Strang, Gavin

  Fraser, John (Norwood)

  Marshall, Dr. Edmund

  Summerskill, Hn. Dr. Shirley

  Freeson, Reginald

  Mason, Rt. Hn. Roy

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

  Galpern, Sir Myer

  Mayhew, Christopher

  Thomas, Jeffrey (Abertillery)

  Garrett, W. E.

  Meacher, Michael

  Thorpe, Rt. Hn. Jeremy

  160

  161

  Tinn, James

  Weitzman, David

  Wilson, Rt. Hn. Harold (Huyton)

  Tope, Graham

  Wellbeloved, James

  Woof, Robert

  Urwin, T. W.

  Wells, William (Walsall, N.)

  Varley, Eric G.

  White, James (Glasgow, Pollok)

  TELLERS FOR THE NOES:

  Wainwright, Edwin

  Whitlock, William

  Mr. Ernest Armstrong and

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

  Williams, Alan (Swansea, W.)

  Mr. Joseph Harper.

  Walker, Harold (Doncaster)

  Williams, W. T. (Warrington)

  Wallace, George

  Wilson, Alexander (Hamilton)

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee, pursuant to Standing Order No. 40 (Committal of Bills).

WATER [MONEY]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to make provision for a national policy for water, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of—

(i) any expenses incurred by any Minister under that Act;

(ii) any increase attributable to the provisions of that Act in the sums payable out of moneys so provided under any other enactment; and

(iii) any grants made by the Secretary of State to water authorities established under that Act;

(b) the issue out of the National Loans Fund of sums required by the Secretary of State for making loans to water authorities or the National Water Council so established;

(c) the payment into the National Loans Fund of sums received by the Secretary of State by way of repayment of the principal of, or payment of interest on, such loans;

(d) the issue out of the Consolidated Fund of sums required by the Treasury for fulfilling guarantees given by them of the repayment of the principal of, and payment of interest on, loans made to water authorities or the Council by persons other than the Secretary of State; and

(e) the payment into the Consolidated Fund of sums paid by water authorities or the Council in or towards repayment of any sums issued out of that Fund for fulfilling such guarantees and payments of interest on sums so issued.—[Mr. Eldon Griffiths.]

10.12 p.m.
Mr. John Farr: I should like to make some reference to this resolution. I wish to deal with some of the financial effects of the Bill, should it be enacted.
In Clause 29, so far as I can see, a considerable number of existing authori-
162
ties which are maintained at the Exchequer's expense are to be abolished. Clause 29 includes such bodies as the Water Resources Board, the Central Advisory Water Committee, all river authorities, the Conservators of the River Thames and the Lee Conservancy Catchment Board, the Isle of Wight River and Water Authority and many others including all joint sewerage boards, all of which are to be abolished.
Whether or not one agrees that it is a good idea to dispose of the services of these different authorities—and I personally have grave doubts whether all of them should be abolished, and certainly the Water Resources Board has done a first-class job—the fact remains that the removal of these bodies listed in Clause 29 and its subsections will mean a considerable saving——
Mr. Deputy Speaker (Sir Robert Grant-Ferris): I must draw the hon. Member's attention to the fact that we are discussing the Money Resolution, and anything outside its terms is out of order. These matters could have been discussed on Second Reading. Unfortunately, the hon. Member for Harborough (Mr. Farr) was unable to be called, but I hope he will not take advantage of the situation and will keep to the terms of the Money Resolution.
Mr. Farr: That is exactly what I intend to do, Mr. Deputy Speaker. I was merely pointing out that Clause 29 lists a considerable number of existing authorities which will be abolished once the Bill is enacted. One would imagine that in certain respects a saving will accrue to the Treasury. Some of these authorities will become the responsibility of the new regional water authorities, but we see from Clause 29(a) mention of the Water Resources Board——
Mr. Deputy Speaker: The clause of which the hon. Gentleman is speaking, Clause 25, is not affected by the Money Resolution.
Mr. Fan: With great respect, Mr. Deputy Speaker, I was referring to Clause

163
29 which lists those authorities which are to be abolished. I was saying that I thought there would be a considerable saving.
Mr. Deputy Speaker: If the hon. Gentleman can show me how Clause 29 is covered by the Money Resolution, I shall gladly allow him to proceed.
Mr. Farr: It affects the resolution in that, with the abolition of the Water Resources Board, the money at present spent on that board and its works will no longer be required. I was trying to ascertain how such savings as the House may expect to be made by the passing of this Bill will be put to good use. I was saying that the saving which will ensue when the Water Resources Board——
Mr. Deputy Speaker: No. I am afraid that this will not do. The hon. Gentleman must relate what he says entirely to the Money Resolution. Certain matters are in order. Certain others are not. So far, I am afraid that the hon. Gentleman is not in order.
Mr. Farr: I bow at once to what you say, Mr. Deputy Speaker.
I turn, then, to another aspect. Before we pass this Money Resolution I hope that the House will consider its contents and whether sufficient finance is likely to be available for research and development work in connection with water and various forms of water supply and conservation. I have in mind especially the considerable sums of money needed for research and development into desalination. It is a topic which must be covered by the terms of the resolution.
My reason for raising this matter is that the country spends less on research and development into various forms of desalination——
Mr. Deputy Speaker: Order. Will the hon. Gentleman help me? Will he indicate the exact words in the resolution to which he is referring?
Mr. Farr: I think that my remarks are more than amply covered by paragraph (b) of the resolution. That being the case, it is imperative for adequate sums to be made available for research and development into desalination processes. Germany, France, America and
164
Italy all spend considerably more on desalination than we do. As we led the field at one time and as we shall be very short of water from conventional sources in a few years, it is imperative for us to be satisfied that ample money will be made available for a continuance of British work in this respect.
Adequate research and development into new desalination processes is a subject which requires the expenditure of a great deal of money. Last autumn the Water Resources Board pointed out in its report that to obtain fresh water from salt by the now known methods of desalination the average cost was two or three times that of the present conventional methods. In the document accompanying the Bill, the Government said that they would be quite happy to allow any future development in desalination to be covered by a committee of the United Kingdom Atomic Energy Authority, with a small amount of laboratory research.
I suggest that this is not adequate. Sooner or later we shall have to face the fact that with the shortage of land and the forthcoming shortage of fresh water we cannot leave research and development on such a vital matter to a committee of the United Kingdom Atomic Energy Authority.
I hope to be assured by my hon. Friend the Under-Secretary of State that adequate sums will be forthcoming for the research and development which will be needed in the next two decades if Britain is to keep in the forefront of all the different methods of de-salting sea water.
10.20 p.m.
The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): I am in some difficulty. I should like to give my hon. Friend the Member for Harborough (Mr. Farr) the assurance that he seeks, but I should be out of order if I did. Therefore, I will say "Yes" to him and go to the terms of the Money Resolution, which is relatively straightforward.
This is a machinery Bill and, as the Financial Memorandum indicates, it is not expected that reorganisation as such will lead to any significant changes in the total expenditure on water resources in the short term, while in the longer term it should lead to economies, though the House will understand that I cannot attempt to quantify those tonight.

165
Items (a)(i) and (ii) are in common form and essentially repeat the terms of Clause 33. Item (a)(ii) is a safeguarding provision covering
"any increase attributable to the provisions of that Act in the sums payable out of moneys so provided under any other enactment".
This is a narrow point. It is conceivable, though quite improbable, that local authorities may incur expenditure as a result of the Bill—for example, in discharging the duty under Clause 10(3)
"to take such steps from time to time as may be necessary for ascertaining the sufficiency and wholesomeness of water supplies within their area".
By increasing the aggregate revenue expenditure of local authorities by what could conceivably be an infinitesimal sum and recognising that that aggregate expenditure may need to be taken into account in determining the level of Exchequer grant, this increase could indirectly increase marginally the amount of rates support grant. This provision covers that remote and improbable contingency.
Item (a)(iii) covers the payment of
"any grants made by the Secretary of State to water authorities established under that Act".
This essentially allows him, with the approval of the Treasury, to pay grant to a water authority, if he so decides, to give the water authority a direction as to the purpose for which the grant is to be used.
Items (b), (c), (d) and (e) relate respectively to Clause 34(2) and (4) and Clause 35(3) and (5). These deal in standard terms with the making of loans by, and their repayment to, the National Loans Fund, through the Secretary of State, and with payments by the Treasury out of the Consolidated Loan Fund under any guarantee of water authority or National Water Council borrowings from
166
persons other than the Secretary of State. They also cover arrangements for the refund of those payments under guarantee to the Treasury.
The Money Resolution puts no limit on these amounts. It is, as I said at the outset, a formal though none the less not unimportant recommendation. I hope that with the brief monosyllabic assurance I was able to give my hon. Friend the House will accept the Financial Resolution.
Question put and agreed to.
Resolved,
That, for the purposes of any Act of the present Session to make provision for a national policy for water, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of—

(i) any expenses incurred by any Minister under that Act;

(ii) any increase attributable to the provisions of that Act in the sums payable out of moneys so provided under any other enactment; and

(iii) any grants made by the Secretary of State to water authorities established under that Act;

(b) the issue out of the National Loans Fund of sums required by the Secretary of State for making loans to water authorities or the National Water Council so established;

(c) the payment into the National Loans Fund of sums received by the Secretary of State by way of repayment of the principal of, or payment of interest on, such loans;

(d) the issue out of the Consolidated Fund of sums required by the Treasury for fulfilling guarantees given by them of the repayment of the principal of, and payment of interest on, loans made to water authorities or the Council by persons other than the Secretary of State; and

(e) the payment into the Consolidated Fund of sums paid by water authorities or the Council in or towards repayment of any sums issued out of that Fund for fulfilling such guarantees and payments of interest on sums so issued.

NORTHERN IRELAND (FIRE SERVICES)
10.24 p.m.
The Under-Secretary of State for Northern Ireland (Mr. Peter Mills): I beg to move,
That the Fire Services (Northern Ireland) Order 1972, a draft of which was laid before this House on 19th December, be approved.
First, I must apologise profusely for my voice which has been affected by a bad cold which I caught in Northern Ireland only last week-end.
The purpose of the order is to provide for the establishment of a single fire authority to be responsible for fire cover for the whole of Northern Ireland.
A Fire Services Bill was introduced in the House of Commons of Northern Ireland on 1st March 1972 and was given a Second Reading in that House on 16th March 1972, but it fell with prorogation of the Parliament of Northern Ireland. This order follows closely the provisions of that Bill.
At present Northern Ireland has two fire authorities, namely, the Northern Ireland Fire Authority which is responsible for the fire cover for the whole area of the province outside the Belfast County Borough boundary and the Council of the County Borough of Belfast which is responsible for the fire cover for the area of the county borough.
The Northern Ireland Fire Authority was established in 1950 when that authority and the Council of the County Borough of Belfast became the two fire authorities for Northern Ireland. These authorities operate under the Fire Services Act (Northern Ireland) 1969 which consolidated the Fire Services Acts (Northern Ireland) 1947 to 1965.
The majority of the fire-fighting personnel of the Northern Ireland Fire Authority's fire brigade are employed on a part-time or retained basis, while the Council of the County Borough of Belfast employs a full-time fire brigade.
The establishment of a single fire authority will have the effect of bringing together into a single fire fighting force of roughly 1,200 men two very efficient fire brigades with a wealth of skill and experience behind them. Even though I have been in the Northern Ireland office
168
For only three months, I am full of praise for all the work they do. They are remarkable forces, and only this weekend they demonstrated that in the way in which they dealt with the tanker. The citizens of Northern Ireland and we here should be extremely grateful to these men and their officers.
The size in manpower terms of the new brigade will be that suggested as the optimum by the Holroyd Committee in its report on the fire service in Great Britain, namely, one containing between 1,100 and 1,300 men.
The order introduces an important change in the financing of fire services in Northern Ireland by providing for the new authority's funds to come from the Exchequer or Consolidated Fund of Northern Ireland. Under existing arrangements the Northern Ireland Fire Authority's funds come partly from a Government's grant and partly from a levy on local authorities, while the Council of the County Borough of Belfast receives no direct financial assistance from the Government towards the cost of fire services in Northern Ireland will become a regional service and a regional rate will be levied for the purposed of all regional services.
This is a short order which seeks to provide for the reorganisation of Northern Ireland's fire services by the adaptation of the Fire Services Act (Northern Ireland) 1969. This it will do by amending many of the provisions of that Act, repealing others and adding some new provisions.
Lists of the amendments and repeals necessary are set out in the schedules to the order, while new provisions to be inserted in the Act appear in the body of the order.
10.28 p.m.
Mr. Stanley Orme: I understand the Minister's physical difficulties. Remove a politician's voice and he becomes almost powerless, but the hon. Gentleman managed to get over the main points that he wanted to put before the House.
I propose to make a few brief comments on behalf of the Opposition and to reiterate that the occasions on which we have this type of legislation in the form of orders late at night, with short debates,

169
is mounting. This is the 28th piece of legislation that we have had in this form, though there is an exception in this instance in that the matter was debated at Stormont and received a Second Reading. It is, however, worth pointing out that although there may not be a large attendance in the Chamber tonight there was not a large attendance at Stormont either when the matter was debated there. The hon. Member for Antrim, North (Rev. Ian Paisley) who, unfortunately, is not here, made that point during the debate at Stormont and it was underlined by Vivian Simpson, a Member of the Labour Party in that House.
Mr. Stanley R. McMaster: I hope that there is no reflection in what the hon. Gentleman said. He will be aware that in this House, with 630 Members, many important measures are passed with a very small attendance.
Mr. Orme: I was making the point that we do not have a large attendance tonight. It was debated, but only for a short while. Probably the unanimity on the issue was one of the reasons for its general acceptance. The Opposition accept the general proposals outlined in this Statutory Instrument.
It is also worth remembering that we have consulted the Fire Brigades Union, which recommended a unified fire service for Northern Ireland in its evidence to the Review Body on Local Government and the Macrory Committee. Therefore, the order, the central purpose of which is to create such an authority, is to be welcomed, especially as most of its detailed provisions are eminently sensible from our point of view.
I have one or two reservations. I am not too sure about the new name for the force, which is the Ulster Fire Authority, in view of the historical connotations of the word "Ulster". In the setting up of different regional authorities in Northern Ireland—
Mr. Peter Mills: If I may clarify that point, it is the Fire Authority for Northern Ireland.
Mr. Orme: I probably saw that from an earlier debate. For electricity, housing, and so on, they are known as the Northern Ireland authorities, so that clears up that point easily.
170
The district councils, other than the Council of the City of Belfast, have only the same number of representatives as Belfast on the new authority, although the population involved is about double that of Belfast. The Minister is entitled to appoint more members than there will be local government representatives. Therefore, the representatives of local democracy could be out-voted—I do not suppose that that is the Minister's intention, but that could occur—as there is no specific representation allowed of either the members of the brigades or of the Fire Brigades Union. We believe that the union should have a specific representative on this body.
On the first point, this could be altered by changing the present nominations proposed by the Ministry to, for instance, four, six and seven respectively. I am talking now of the four by the city of Belfast, four by the other district councils and nine by the Minister. The balance could be changed, if this were felt to be sufficiently important.
We understand that it is estimated that the new authority will employ 1,242 people. That is an increase of only 6 per cent. and is accounted for almost entirely by an increase in part-time firemen. Representations we have received from firemen in Northern Ireland make it clear that the present forces are seriously undermanned, especially as a result of the exceptional demands made on the service in recent years.
We associate ourselves with the Minister's remarks about the work that this fire service does. We fully support the special allowance the men receive. In that regard, the fire services are often closely associated with the police force, and so on. As we know, they have made such a demand, and we would support them in their current representations.
Those are salient points, particularly that about the name of the service, which has been cleared up by the Minister and which the hon. and gallant Member for Down, South (Captain Orr) will try to contradict. We make these representations to the Minister. Although, because of the nature of the instrument, we cannot amend it in any way, we look to the Minister seriously to consider the valid points we have made. Under the terms of the order he will have powers to make such changes. We welcome the order.
10.35 p.m.
Captain L. P. S. Orr: I join the hon. Member for Salford, West (Mr. Orme) in commiserating with my hon. Friend the Under-Secretary on his cold and his lack of voice. If at the end of this debate he feels that it would be more appropriate to reply by letter we shall be perfectly happy. We think that he is very gallant to undertake his duties tonight in his present state.
The hon. Member for Salford, West, spoke of this being the 28th Order in Council, and that is perfectly right. It is a very difficult, cumbersome, undemocratic way of dealing with legislation, and it is useful to take this opportunity of underlining it. This order, however, differs from all the others in that it is almost entirely non-controversial. In fact, it was passed through the House at Stormont, and, as the hon. Gentleman rightly said, received general approbation—so much so that hardly anybody attended the debate. Indeed, we do not want to keep the House very long tonight because we approve the order.
On the other hand, it would be wrong to let the occasion pass without asking one or two important questions and paying tribute, as my hon. Friend the Under-Secretary and the hon. Member for Salford, West did, to the work performed by the fire services in Ulster. I do not think anybody who lives in the comparative calm and quiet of the rest of Great Britain can possibly understand exactly what it costs the people who operate the normal public services—the police, the police reserve, the fire and ambulance services. When one thinks of an unarmed fireman going out into a potentially dangerous riotous area, with bullets and other things flying about, having to do his duty in that kind of situation, the extent of the courage shown by these people almost passes belief.
In passing, I would make one point. It perhaps does not concern my hon. Friend, but it ought to concern somebody when it comes to recommendation for decorations and awards for gallantry. If anybody deserves awards for gallantry, if anybody deserves recognition, it is people of this sort, in this walk of life, in Ulster, who carry out these tasks with so much devotion to duty.
The order, as has been said, was passed in Stormont in the form of a Second
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Reading. Curiously enough, it should have come about many years ago. I do not know whether my hon. Friend or the hon. Member for Salford, West had a look at the situation in 1950 when the fire authority for the rest of Northern Ireland was established. If it had not been for petty disagreements at that time —and petty disagreements they were—the Belfast Corporation fire authority should at that time in 1950 have been included with the rest. It is a pity that this did not come about. The Belfast Corporation fire authority not only set a high standard in efficiency but until recently it has been the only local fire brigade in the United Kingdom which has received no financial assistance from central Government. Perhaps that says something for its independence throughout this time, but I think the Macrory Report and everybody concerned understands that that cannot continue.
Both fire authorities are entirely satisfied with the Bill and with the order. There is no complaint on that score. In fact, they have been working very closely together for some considerable time. In 1962 the joint Northern Ireland branch of fire engineers was set up and there has been close co-operation between the two bodies from that time. A joint working party was set up a year ago chaired by the principal officer at the Ministry of Home Affairs, and the order merely gives legislative effect, therefore, to what has been happening already.
To a large extent the Northern Ireland fire brigade is dependent upon the good will of outside employers. It is not often realised to what extent employers in Ulster have been co-operating with the fire authorities. The authorities have been happy with the co-operation they have been getting. Each of the authorities feels that morale in its own fire service is excellent and that the service is of a high order when, due to terrorist activities, it has been stretched to its full potential. I agree with the hon. Member for Salford, West that every effort must be made to increase the number of firemen, to improve their conditions of service and the rewards they get. They are vital to the community.
The hon. Member asked questions about the order which I should like to underline. In Article 3, for example, what are the principles for selection in the

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authority? In Article 3(b) the hon. Member pointed to an imbalance between the appointed and the elected representatives. For some considerable time there will be no elected representatives because the district councils themselves will not be coming into operation until at least the autumn, or whatever it is. What arrangements will be made in the interim? Will there be no representatives from local authorities in the interim period? The existing local authorities are continuing. Perhaps my hon. Friend would like to look into this matter. I know that it is slightly esoteric but the hon. Member for Salford, West was on to a fair point in that there should be some kind of democratic representation, even if it be in only a token sense.
The order lays down that four persons shall be nominated by the Council of the City of Belfast and that four shall represent the interests of the district councils. It is true that Belfast has one third of the population but I am inclined to agree with the hon. Member for Salford, West here. Surely a more representative distribution would be three from Belfast and five from elsewhere. Is there to be no representative from Londonderry, the second city of Ulster? What about each of the six counties which geographically represent large areas?
There is the issue of disqualification in these bodies. It may be that local district councillors with an eye on a political career will find themselves disqualified from membership of the central Parliament because they serve on the Ulster Fire Authority. Is that a weakness at a time when there is need for education of a new political cadre?
Why is the new chief fire officer to be appointed by the Secretary of State or by whatever authority may succeed him and not by the fire authority itself? If the fire authority does not have the power, perhaps subject to the Secretary of State's approval, to appoint the chief fire officer, does not that make the fire authority a purely advisory body instead of its having the proper executive authority, with the real power in its hands? Will there be an annual report of the fire authority which we could debate in the House from time to time if the need arose?
I understand that the Secretary of State received a deputation from the Fire Brigades Union fairly recently, and that
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a Mr. McArdle, one of the leaders of the union, stated that the union was concerned about two matters. The first was that the legislation should not be deferred too long. That point has been met. His second point was that at present the Joint Working Party was adequate, but that once the legislation was passed the union should be allowed representation on the fire authority, too. I believe that that is a reasonable request. The union has a considerable vested interest in putting a point of view on the fire authority. I support the hon. Gentleman on that.
There is not much more that I can say, except to ask the question that the hon. Gentleman asked in reverse. He asked why the title should be the "Ulster Fire Authority". I ask why that should not be its title, and upon whose instigation it was changed. It was originally to be called the "Ulster Fire Authority" and it is now to be the "Fire Authority for Northern Ireland." Why has the change been made? What is wrong with the name "Ulster"? [Interruption.] It is obvious that the nigger in the wood pile is not the hon. Gentleman, because he did not even know that the change had been made.
Subject to that point, we on this side are absolutely satisfied with the order. We hope that the new fire authority will have considerable success, and that the greatest possible support, encouragement and reward will go from this House to the devoted servants of the Crown covered by it, who are doing such good work for their fellow human beings in a ghastly and difficult situation.
10.48 p.m.
Mr. Stanley R. McMaster: As the hour is late, I do not intend to keep the House long.
I welcome the establishment of the fire authority. The Bill on which the order is based had its Second Reading in Northern Ireland before the Parliament there was dissolved, which underlines the great difficulty this House has in finding time for necessary measures which have already been considered in Northern Ireland. The delay mentioned by the hon. Member for Salford, West (Mr. Orme), emphasises the point made frequently during such debates—there have been 28 of them now—that the House is not capable of dealing with the many items of

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legislation for Northern Ireland, simply because of the great pressures on the time of Parliament at Westminster in dealing with all the affairs of State. Therefore, we should repeat tonight that the Ulster Members look forward to the restoration of a democratic form of government in Northern Ireland which can deal with such matters—and that as soon as possible.
I also underline what my hon. and gallant Friend the Member for Down, South (Captain Orr) said, and pay my own tribute as a Belfast Member to the great courage of the firemen in Northern Ireland. I have seen them operating under considerable difficulty. I have seen them being shot at whilst attending to fires. As we all know, there have been a large number of horrible bomb outrages in Belfast during the past three years. Many people have been killed and injured in those outrages. But it is even worse to see the firemen shot at by IRA terrorists when they are called to deal with the resulting conflagrations.
The feelings of commendation which have already been expressed should take a more tangible form. The firemen in Northern Ireland should receive special remuneration to meet the peculiar risks and difficulties under which they are now operating. In spite of the pay pause, consideration should be given by way of special remuneration to take care of the special risks. Some consideration should be given to increasing their take-home pay.
That should be done for two reasons: first, to reflect the esteem in which the House holds the fire service in Northern Ireland; secondly, to encourage recruitment. We are dependent on these people, If the situation grows worse over the vital weeks ahead—and I am afraid the indications of the past week-end are that it may become worse—it is essential that the men in this public service should be properly looked after by the Government.
We are establishing this authority for the whole of Northern Ireland, and we are doing it at Westminster. It would be appropriate if some increase in wage or salary, either directly or indirectly, could be made to coincide with the passing of the order.
That is the main point which I wish to make tonight. I endorse all of the re-
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marks of my hon. and gallant Friend the Member for Down, South. I was particularly horrified by the incident which took place this weekend when a tanker full of petrol in the centre of Belfast had a bomb placed inside it. If that bomb had gone off there would have been chaos in Belfast. Burning petrol would have poured through the busy shopping streets and elsewhere in the city. When we remember the closeness of the buildings in Belfast, it is easy to understand what a terrible disaster that would have been. It is at a time like this that one must pay attention to the men who are operating in the fire service and ensure that they are properly looked after by this House.
10.54 p.m.
Mr. Peter Mills: I will try to answer the points that have been raised. If I do not clear up anything properly I will write to hon. Members. The hon. Member for Salford, West (Mr. Orme)—and I am grateful to him for what he said—paid tribute to the gallant and brave men in Northern Ireland. He is right when he said that the matter was fully debated in Stormont. Even though the number of hon. Members present tonight may be small, it is not always numbers that are important but the quality of the people.
The hon. Gentleman was right when he said that the unions are in favour of the order. They came to Stormont recently and I had a long chat with them. I was very impressed. They raised various matters, but there is no doubt that we have their full co-operation. That is terribly important. The hon. Gentleman was wrong about the name of the authority. It is the Fire Authority for Northern Ireland. The commission finally agreed to that name.
Mr. Orme: When did that change take place?
Mr. Mills: I cannot answer that question precisely. I think that the change took place some months ago. That is one of the commission's functions.
It is true that representation on the authority is four plus four plus nine. My right hon. Friend the Secretary of State for Northern Ireland is well aware of the union's feelings. It is important to realise that one does need a wide cross-section of representation, for the fire

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authority is working for the benefit of the whole of Northern Ireland. But, of course, what the hon. Gentleman and my hon. Friend the Member for Belfast, East (Mr. McMaster) have said will be noted.
The question of staff has been raised. It is a little early to be dogmatic, but, although I have no knowledge that there is understaffing, I understand that 72 more personnel will be needed, with nine more at the headquarters at Lisburn. I had the pleasure of visiting Lisburn to see the control system and the work done there, and I can testify that it is going ahead even before the order is approved. It shows how well the brigades are working together.
It is important to realise that in this new authority there will be advantages for these very gallant men. There will be more scope for promotion; new equipment is needed in certain areas; new fire stations must be built and so on. A lot of work has to be done but it will be of advantage to the men and to the efficiency of the service in the long run.
I am grateful to my hon. and gallant Friend the Member for Down, South (Captain Orr) for his welcome to the order and for what he said about the fire service. If hon. Members could go over to Northern Ireland and see what these men do, and could read of some of the incidents in which men have died, they would be amazed at their bravery and devotion to duty. My hon. and gallant Friend mentioned co-operation, and he is quite right. It is already under way. There is no argument about boundaries. When there is a fire in the city of Belfast, they all help each other, and that spirit augurs well for the future.
My hon. and gallant Friend also mentioned the interim period. If approved, the order will come into force on 1st October and the local councils should be under way by then. I do not, therefore, think that we shall have that little problem.
My hon. and gallant Friend also referred to the question of the choice of the chief fire officer. It is the intention of my right hon. Friend to ask the Civil Service Commissioners to appoint a board of selection. I understand that that is the correct procedure. The annual
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report, which would normally have been laid before Stormont, will be available to us here to study. I should add that the Advisory Commission decided on the name of the authority.
I am grateful for what my hon. Friend the Member for Belfast, East said in welcoming the order. Obviously, in his constituency he has had a lot of experience of the working of the fire brigade and what he had to say was absolutely correct. It is not only the firemen but the police, too, who have to go to incidents such as those we have had this last weekend, for example. The co-operation between the Army, the police and the fire brigade is very important.
I also take note of what my hon. Friend said about recognition, and I hope that those in authority will take note of it as well. These men are very worthy indeed of some recognition.
It is important to recognise that the united brigade in the new fire service will be slightly more expensive, but there will be an expansion of work—for example, through the new legislation on fire precautions in hotels and boarding houses. Their work will expand, and with the new equipment and new stations to which I have referred, a better service will be given.
I understand that the arrangements for pay, rank and pensions are all carefully covered, so that the men need have no fear of being at any disadvantage. The problem of uniform also is being solved.
I commend the order to the House. It represents another advance in Northern Ireland, and I am sure that it will be to the benefit of all concerned there. The whole House, I am sure, will not only welcome the order but will wish the new authority every success and hope that it will be able soon to get down to its task of fighting normal fires, if I may so put it, rather than the very unpleasant fires which the fire services have had to tackle in recent times.
Question put and agreed to.
Resolved,
That the Fire Services (Northern Ireland) Order 1972, a draft of which was laid before this House on 19th December, be approved.

FAMILY INCOME SUPPLEMENTS
11.1 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): I beg to move,
That the Family Income Supplements (Computation) Regulations 1973. a draft of which was laid before this House on 23rd January, be approved.
By next April it will be 12 months since the family income supplement prescribed amounts were raised, and it is time therefore to arrange for a further uprating in order that this benefit may retain its effectiveness. All family income supplement payments go to families in need of help. They are families with at least one dependent child, the breadwinner in full-time employment and the weekly resources of the family below a prescribed level.
The scheme continues to provide help for a large number of families. The latest figures relating to the end of 1972, show that 84,000 families were receiving the supplement, and the average weekly amount was a little over £2. In addition about 20,000 families subject to the wage stop were receiving increased amounts of supplementary benefit because of family income supplement. Many more would have been subject to the wage stop but for the effect of family income supplement.
Altogether, therefore, family income supplement is bringing help to over 100,000 families, containing 250,000 children. Among the FIS families are more than 30,000 single-parent families, a group which has special needs, and a similar number of single-child families which do not receive family allowances. All these families gain by having the passport to the other related benefits—free welfare milk and foods, free school meals and so forth.
I am glad to be able to announce a substantial drop in the number of two-parent families with resources below supplementary benefit levels. The latest estimates suggest that, largely as a result of the introduction of the family income supplement in August 1971, the number of two parent families with resources below supplementary benefit levels had fallen by the end of 1971 by roughly one-quarter to about 74,000. This is to be compared with an estimated figure of 105,000 at the end of 1970.
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We continue to take every opportunity to ensure that potential claimants are aware of the family income supplement. There are extensive standing arrangements for giving information about the scheme to those who may be interested—for example, to claimants for maternity benefit and family allowances and to persons returning to work after receiving supplementary benefit.
During the past year we have also made the special arrangements to which I referred in the debate on the uprating regulations in 1972. First, an appointed officer in Scotland. Wales and each of the 10 English regions of the Department has spent six months reviewing all publicity arrangements. Contacts were made with local authorities, social workers, employers and trade unions. The Department of Education and Science in February 1972 sought the co-operation of local education authorities to issue FIS leaflets to applicants for free school meals.
I come to the amount of the increases. Regulation 2 increases the prescribed amounts in the following way. A one-child family has an increase from £20 to £21; a two-child family from £22 to £23·50; a three-child family from £24 to £26. For all larger families the prescribed amounts are £2·50 higher than the present amounts. Since FIS is half the difference between the gross family income and the appropriate prescribed income the effect of the regulations is to increase the weekly payments by amounts ranging from 50p for the one-child family to £1·20 or £1·30, according to rounding. for the four-child and larger families.
Because last year and this year families of different sizes had different increases we must look at the two upratings in conjunction to see the effect in terms of percentage increases. On this basis, for the 20-month period since the scheme started the prescribed amounts have moved for one-child families by 17 per cent., for three-child families by 18 per cent. and for six-child families by 16 per cent. During the 17 months up to the end of 1972 prices have moved up by 10 per cent. Thus, prescribed amounts are more than keeping pace with movements in prices.
Last year the maximum weekly payment was raised from £4 to £5, a very substantial increase of 25 per cent. We do not propose to increase it again on this occasion. The 4,000 families who

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will be on the family income supplement maximum in April will not gain anything immediately but they will stand to benefit from the uprating in the long run. By the time their claims come up for renewal most will have had an increase in earnings in the 12 months since the previous FIS award was made. The increase in earnings would normally tend to reduce the renewal awards but the April uprating of the prescribed amounts will counteract the increases in earnings and help families to retain their maximum awards.
I come now to the arrangements for putting the awards into payment. These will start from the same date, 3rd April, as the change to 12-month awards and the arrangements will be co-ordinated. Each family will be told by letter of the effect which the changes will have on their award. They will not have to make a renewal claim. Families awarded FIS before 13th February will be asked in stages to return their order books. The books will be over-stamped at the new rates and returned to beneficiaries. At the appropriate time continuation hooks will be issued automatically to cover the additional 26 weeks.
All claims received between 13th February and 3rd April will he considered under both sets of prescribed amounts. Awards will be at the old rate until the end of March and the new rate from 3rd April and will include the extension for the additional 26 weeks.
Those families with entitlement to free welfare milk and vitamins with their FIS will also receive further tokens to enable them to get their free milk and vitamins during the 26-week extension. During the extension families will automatically get the other benefits to which they are entitled through FIS, such as free school meals and free prescriptions.
When we discussed the current regulations last January, I said that exaggerated talk about families finding themselves worse off after a pay rise was based on hypothetical cases. I added that the Government accepted the need for research in this area and would be watching the whole question of incentives very carefully.
In subsequent weeks a number of commentators published their predictions about the marginal tax rates that would
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apply from April when the new FIS rates took effect. The basis of these predictions was that wages would rise and that the FIS levels would rise but that other things would stand still. These predictions were falsified. The Budget altered the tax thresholds, and as the year went on other changes were made. Income levels for free school meals, rent rebates and many other benefits were raised. The result was that low earners who got wage rises broadly comparable with the increase in the cost of living did not lose benefit over the year as a whole. But that was not all.
Earlier this Session Parliament passed the Pensioners and Family Income Supplement Payments Act, under which all the FIS awards will be increased under these regulations in April will be extended for six months. None of them, therefore, will run out before October. It is no good drawing up tables now to show how much benefit a family might lose if it got a wage increase in November. By then many benefit rates will have been adjusted again, and in making those adjustments we shall be concerned to minimise the so-called marginal tax rates, just as we have been concerned to do so in drawing up these proposals in relation to FIS. By November, not only FIS but free school meals and free welfare milk will have gone over to the 12-month award system, and the possibility that anyone will find himself worse off following pay awards of the proportions necessary to offset increases in the cost of living will be still further reduced.
I hope that I have explained fully to the House the purport of these regulations increasing the FIS, and I have pleasure in commending them to the House. They will ensure that FIS continues to bring help directly to a section of the community which is in need, and I hope that the regulations will be welcomed.
11.13 p.m.
Mr. Brian O'Malley: The Under-Secretary of State has not commended the regulations to the House with any great sense of confidence. I had the overwhelming impression that, being aware that the amount of increase in the prescribed amounts was open to serious criticism, he used all the Department's resources to find complex and convoluted arguments to attempt to overcome the

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simple and basic objections which apply to the level of the movement in prescribed earnings contained in the regulations.
The Under-Secretary has explained the purpose of this Statutory Instrument as being to provide additional help to the lowest paid workers with families. Whatever the purpose, the result is that the poorer families will be relatively poorer in 1973 than they were in 1972. We are discussing 100,000 families, 250,000 children. Those figures include a considerable proportion of single-parent families.
The hon. Gentleman obviously decided that it was not to his purpose to discuss the level of the increases in the prescribed amounts by laying them alongside the movement in earnings or even of prices during the 12 months from April 1972 to April 1973. The figures between April 1972 and April 1973 do not happen to suit his purposes. The hon. Gentleman obviously went to the Department and said "Find me some figures which put a better complexion on these regulations." However, we are not bound to confine our remarks or our statistical estimates to the 17-month period—which incidentally is a very unusual period but one which, as I have said, best suits the hon. Gentleman's purpose.
The Department of Employment's index for full-time male manual workers between April and November 1972 shows that the percentage movement during the period was 10 per cent. If we seek to make some kind of estimate from April 1972 through to April 1973 on the basis of phase 2 of the prices and incomes formula of £1 plus 4 per cent. as the rate of increase for a full year, we can expect as a minimum up to April 1973 a 3 per cent. increase. What we are talking of is a movement of earnings between April 1972 and April 1973 of 14 per cent. It will not do for the hon. Gentleman to start talking about price movements. In all the political arguments both inside and outside the House over the last decade it was been pointed out that what is important for pensioners is that their pensions should move not with prices but with national average earnings. That is far more advantageous to groups of individuals with income from the State.
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The Under-Secretary of State was unconvincing in giving the 17-month figures and trying to draw comparisons between the prescribed sums and earnings. The more relevant figure is that for full-time manual workers, and on the phase 2 formula we are likely to see during this period a movement in the index of earnings of 14 per cent. We are told that the phase 2 increases will help the lower paid man, but the man on the lower scale of earnings with three or four children will still need to draw FIS in the financial year 1973–74. It follows that whatever claim the Government try to make for their prices and incomes policy as being designed to help the lower paid, there will still be substantial numbers of men in full-time work who do not meet even the poverty level laid down by the State.
Let us compare the movement in national average earnings in the index with these prescribed amounts. The prescribed amounts in the regulations are very much smaller than 14 per cent. For a family with one child, the movement in the prescribed amounts will be 5 per cent.; for a two-child family it will be rather larger, 6·8 per cent.; for an eight-child family, 7·4 per cent. But even for large families the biggest percentage increase will be only within a range of 8 per cent. The highest figure of all which applies to a family of four children is 9·6 per cent. Therefore, the prescribed amounts have not kept pace with movements in earnings which have taken place between April 1972 and April 1973.
I suppose the Government could say that they have given lower paid workers in these categories help in other ways—for example, by giving them rent rebates and allowances under the Housing Finance Act 1972——
Mr. Dean Mr. Dean indicated dissent.
Mr. O'Malley: I am glad to see that the hon. Gentleman does not go along with that. So he is confirming that what the Government are giving with one hand through their Housing Finance Act they are taking away with the other hand by these regulations.
In drawing attention to the fact that it is the larger families with between three and six children which will obtain the

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largest percentage gain as a result of the increases in the prescribed amount, I do not complain about the decision to treat larger families more generously than smaller ones on this occasion. This is the first time that the allowances for children have been raised since the family income supplement was introduced in December 1970. Previous increases have been the same for all families regardless of size and therefore have been proportionately more generous to the small family.
Having said that, the increase of the prescribed amount from £2 to £2·50 for each additional child up to the fourth does not restore the balance of assistance between families of different sizes as was envisaged originally. If that were to be achieved, let alone a comparable movement with national average earnings, the figure of £2·50 would need to be substantially higher. The Government's failure to increase the maximum supplement payable further affects about 4,000 families which are receiving the maximum amount. The hon. Gentleman attempted to overcome this argument by pointing out that it would help to keep these families on the maximum award. Of course it will. But that does not alter the fact that the maximum award is not increased in these regulations.
The restricted scope of the increase which leaves the £2 as the prescribed figure for children in families beyond the fourth child while increasing it to £2·50 for the second, third and fourth children makes the system more complex. At the beginning we criticised the scheme because it was means-tested and we warned the Government that they would have major problems in take-up, as they have had and are still having. But the system as envisaged originally was simpler than the one that the Government are operating as a result of the introduction of this new prescribed amount for some of the children in these larger families.
Every change made in the scheme which increases its complexity is bound to affect the percentage take-up. The Secretary of State and the Under-Secretary have been notably coy about the level of take-up. They have been
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obliged to say that about half of those entitled were taking up the FIS payments. That means that half of the families which need some kind of payment from the State have not been getting it. With the increased complexity of the scheme as a result of the terms of these regulations, one is bound to ask the hon. Gentleman what additional measures his Department is having to attempt to increase take-up. Because of the level of turnover of cases, what is needed is not spasmodic but constant publicity to maintain the rate of take-up which the Department has described as being about one-half. The Government are in a trap of their own making. If they insist on attempting to deal with family poverty by using a narrow means-tested scheme, they will have an increasing problem with take-up.
I understand that the Department has carried out an experiment in which family income supplement claim forms were delivered to all the houses in a particular area or areas. I do not think there has been any announcement about that. Since the Government are making the scheme more complex as a result of the regulations, may I ask the Under-Secretary to tell us about their arrangements for publicity, what the effects have been in percentage terms as the result of their FIS salesmen all over the country between April and October 1972 and what they have learned from that delivery of FIS application forms to all the houses in a particular area or areas? That seems to be one way of getting a high level of take-up. However, I suspect—in fact I am sure—that the cost of publicity of that kind would exceed many times the cost of the means-tested benefits themselves.
I should also like to raise the question of appeals against decisions on the level of family income supplement which is payable. It is clearly relevant, because there are bound to be more appeals as the system becomes more complex. Because of the nature of these increases for only some children in a family the system is clearly becoming more complex.
In Committee on the Family Income Supplements Bill my hon. Friend the Member for Oldham, West (Mr. Meacher) argued that it was inappropriate to make

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the supplementary benefit appeal bunals responsible for FIS appeals. He said:
"The central reason is that the supplementary benefits appeal tribunals are largely concerned with the exercise of discretion".
My hon. Friend's suggestions were turned down. He went on to say:
"By contrast, FIS is clearly a matter of legal entitlement and the only questions that will arise are matters of fact and law."—[OFFICIAL REPORT, 18th Nov., 1970; Vol. 806, c. 1355.]
It is interesting to note that the system is running into trouble and is bound to run into even more trouble as the result of the increased complexity arising from the regulations.
Paragraph 80 of the Annual Report of the Council on Tribunals for 1971–72 begins as follows:
"Supplementary Benefit Appeal Tribunals. In the course of our visits to these tribunals we detected some dissatisfaction among chairmen and members with their role in relation to the initial working of the Family Income Supplement Scheme."
These tribunals are not equipped to decide legal points. In most cases none of the members of the supplementary benefit appeal tribunals is legally qualified. Yet there is no higher tribunal to which the claimant can appeal if he is dissatisfied with their decision, whereas on the national insurance side there is a further right of appeal to the commissioner. Perhaps the Under-Secretary will attempt to help us on that point.
Our original opposition to the Family Income Supplement Scheme is by no means allayed by the changes in the prescribed amounts proposed in the regulations. The regulations make the means-tested scheme more complex, they continue a system which has all the human and administrative defects of all means-tested schemes and they continue a system which contains formidable disincentives.
The hon. Gentleman mentioned the poverty trap. It is interesting to note in this respect that during the debate on poverty on 6th November 1972, the Secretary of State, when talking, as he said, theoretically, admitted that at most 160,000 families, or 3 per cent. of the working population,
"might theoretically suffer a surtax of 100 per cent. or over, and I agree that this would be very serious."—[OFFICIAL REPORT, 6th November 1972; Vol 845, c. 661.]
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The figure of 160,000 is almost certainly too low. The fact that in these regulations the Government are changing the levels of the prescribed amounts does nothing to alleviate the severity of the poverty trap and therefore the system contains formidable disincentives.
The Government have initiated and set up their own scheme. It is not a scheme which we feel we can support or commend to the House. It is the Government's scheme, and we feel that if they are to operate it, taking into account all the criteria, particularly the movement of national average earnings as shown in the index I have used, the figures are not generous. On the contrary, they do not help poorer people to keep pace with those who have higher earnings and who are, therefore, not entitled to FIS.
It seems a pity that at a time of rapid inflation the Government, using their own scheme with all its disadvantages and inherent defects, have not found themselves able to do more for these poor families and have provided a level of movement in the prescribed amounts which will mean that poorer families will be relatively worse off in 1973 than they were in 1972.
Question put and agreed to.
Resolved,
That the Family Income Supplements (Computation) Regulations 1973, a draft of which was laid before this House on 23rd January, be approved.

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

NORTH SEA OIL
11.32 p.m.
Mr. Dick Douglas: I wish to raise the matter of the International Management and Engineering Group's report on British industry and North Sea oil and gas. I think that what the House will wish to have made plain is first the background to the IMEG report, secondly the recommendations in the report itself, and thirdly the validity of the Government's actions on the basis of those recommendations.

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Essentially, the background is one of disquiet about the performance of United Kingdom industry in the offshore oil and gas market. It could be argued that this was a new market for United Kingdom industry and its potentialities were difficult to assess. But these difficulties, I submit, were made the greater by the policy decision to push ahead as fast as possible with the exploitation of the resources of the United Kingdom sector of the Continental Shelf.
I do not criticise the present Government wholly for that because Governments of both parties accepted this basic policy criterion and failed to alert British industry to the consequences of this decision, failed to establish the degree of support departmentally that was necessary to ensure that industry was alive to the needs of the oil industry and failed to ensure that the Department was alive to the capabilities and deficiencies of United Kingdom industry with regard to these needs.
Broadly speaking governmental policy may have been correct regarding balance of payments considerations, but was manifestly inadequate regarding the deepening and widening of the United Kingdom petroleum technological base. I have considered these matters essentially in a United Kingdom setting. This is not a Scottish debate. This is a matter for the United Kingdom. It is not a matter that is restricted to the resources and dependance of Scottish industry. What we are concerned with is to see how, in United Kingdom terms, we can get the most advantage from this new-found source of supply.
The dominance of the United States oil industry in international terms naturally induced the companies operating in the North Sea to use United States equipment and technology. Arguably, the experience of United States concerns in their own offshore drilling made operations in the North Sea an extension rather than a new development. This might be conceded for the southern sector, but not for the northern area where most of the oil has been found. The technology of exploitation here was new to the Americans and called for a considerable effort on their part and on the part of the oil companies to solve these problems—if, indeed, they have been solved.
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In debates and questions I have consistently argued that in the absence of a licence condition giving agreed opportunities to United Kingdom bases, equipment and personnel, the Government had to devise some means to monitor the companies' operations.
I interpose here the new conditions for Norway. The Royal decree of December 1972 states:
"The licensee shall use Norwegian goods and services in the activity as far as they are competitive with regard to quality, service, schedule of delivery and price. Norwegian contractors shall be included in invitations for tender so far as they produce goods or render service of the kind required."
And there is more of the same kind.
This is an important ingredient. If we are to find ourselves with these resources offshore, it is essential not only to monitor but also to cajole or to lean a little on the companies. I understand that the Government have devised some means, albeit belatedly, to monitor the requirements and orders of companies. We are now told that this is being done. But if the meaningful criterion of speed is not to be upset, considerable efforts will have to be made by United Kingdom industry to match the needs of the oil companies.
Let us examine the IMEG report with that in mind. The central recommendation of the report is to establish a petroleum supply industries board. In the considered view of the consultants, this board would he independent and would have its own distinct financial resources. Realising that this would require legislation, IMEG gives a short-run alternative of a unit within the Industrial Development Executive, but only as an emergency arrangement pending legislation.
I accept wholly that finance is the key. IMEG argues for financial independence and collaboration with and not control by the Department of Trade and Industry's Industrial Development Executive. I cannot judge the reasons for this approach on the part of IMEG but I argue that financial independence is not only desirable but imperative if a bigger share of this market is to be won by United Kingdom industry.
The Government's case is that the Industry Act 1972 is a suitable source of finance. I submit that unless vastly different criteria are applied to the offshore industry, this will prove wrong.

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In operating Sections 7 and 8 of that Act the Industrial Development Executive, the Government agency, will have to work within established rules with regard to regional and industrial assistance and the evaluation of projects. These rules are totally unsuitable for operations in the North Sea.
An independent source of funds is a "must" for such operations. We on the Opposition side of the House, having advanced some ideas for an industrial holding company, shall have to do our homework to see how such a company would have the flexibility required and the public accountability which is desirable.
I have estimated—these may be rather optimistic estimates—that in total terms the flow of funds to the Exchequer from North Sea revenues might be between £250 million ad £350 million annually in the period from 1980 to 1985. This cash flow is a windfall in terms of Exchequer revenues and ought to be devoted to regional development, primarily if not wholly within Scotland. It should be possible to allow a petroleum supply industries board to be financed against anticipated revenues from the North Sea for petroleum technological purposes and to unite if possible both public and private funds in this development. If the assertion made in the Press by the new Government appointee, Mr. J. P. Gibson, is true—that there is an ample source of private funds willing to invest in North Sea operations—it ought to be possible to unite both private and public funds here. This would give more flexibility in operations and a greater chance of speed than the present arrangements.
The Government's response to the IMEG recommendations is inadequate and timid. They run away from the need for new legislation and avoid their responsibility. I take two examples, partially but not wholly covered by IMEG. The first is the construction of liquefied natural gas carriers. On more occasions than I care to remember I have put to the Government the case that this type of ship could be constructed in a United Kingdom yard. On 12th April 1972 I argued the case for development contracts and I received a reply from the Under-Secretary as follows:
"I think it will be possible to assist the industry by offering to look carefully at the
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difficult technological sphere which this involves."—[OFFICIAL REPORT, 12th April, 1972; Vol. 834, c. 1402.]
There was a promise that if industry came forward with a package, the Government might act.
As I say, I have argued for design contracts to be placed within United Kingdom yards. Nine months later IMEG recommended that
"an in-depth study should be made of the opportunities for British participation in all aspects of design and equipment supply in the LNG industry, including the supply of LNG carriers."
What disturbs me about this is that if one requires a very costly firm of consultants—and I hope the Under-Secretary will tell us the cost to public funds—to say that here is a world market, a growth market in terms of LNG carriers, this causes disquiet with regard to the association between the Government and industry and the capability of civil servants adequately to advise Ministers. It may be presumptuous on my part but I despair of civil servants' knowledge of industry. I apologise for attacking people who are not capable of replying, and I hope the Minister will say something adequate in their defence.
The Government have instruments under their control which, united with industry, could accomplish this, but not within the framework of the Industrial Development Executive. An independently financed petroleum supply industries board could, on a customer-contractor basis, seek to place such a design study with the Naval Construction Research Centre at Dunfermline. This centre has the expertise and could be expanded for such a study, if we could shake out of our minds the view that the study of defence subjects should be undertaken only at defence establishments. Indeed, we have to some extent shaken off this view because this centre's computer study of very large crude carriers is of world-wide repute. It has already given advice to Shell on the construction of LNG carriers. Given that this type of customer-contractor relationship is the correct approach, or given that the IMEG view is right that these studies should be undertaken, how do the Government see the machinery which they have created to fulfil this purpose? We require an answer, if not tonight at some subsequent date.

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As regards the construction of rigs and production platforms, United Kingdom-based concerns have already received orders for the construction of these items. When one talks to the oil companies about the standards of construction, the blithe reply is that they have adopted a "belt and braces" approach. We know that the Department has had a committee doing a desk job to arrive at construction standards, but no research and development of an independent kind has been undertaken into the nature of the stresses to be imposed on these devices or, for that matter, corrosion studies related to North Sea conditions. This again might be part of a study which an independent petroleum supply industries board might initiate.
How do the Government see the new body being able to carry out such tasks? I have no great desire to criticise severely the oil companies which are operating in the difficult and new conditions or to be unduly alarmist, but on grounds of safety and the protection of the environment, to say nothing of the technological spin-off, such studies must be undertaken.
Time does not permit an adequate examination of the statistics of the expected flow of North Sea oil and gas in the 1980s. I have argued that the Government have been too conservative in their estimates and to some extent, though not wholly, the IMEG report supports my views. The Government's report sticks very rigidly to the figure of 75 million tons per annum by 1980 and I recognise that that report would have to be updated in the light of the returns of the 1972 drilling programme. But the figure of 75 million tons is much too conservative, especially in the light of the finds announced recently by Occidental.
The Under-Secretary of State for Trade and Industry (Mr. Peter Emery)indicated dissent.
Mr. Douglas: The Minister shakes his head. I despair of the Government's estimates in view of the IMEG report and the views of independent observers like Mr. Jack Birks who tremble at the Government's figures. But whatever the accuracy of those figures, because of the quality of the finds much oil will have to he processed outside the United Kingdom. A policy must be devised to limit that
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quantity to a minimum. The BP Forties field will start production in 1974 and is expected to reach 20 million tons per annum by 1980. That flow is more than twice the capacity of the Grangemouth refinery and we had confident expectations that the plans for expansion at Grangemouth would be firmed up by the company. It appears that the company is now looking askance at any projected expansion of refinery capacity in Scotland. There is no time to comment on the merits of refinery expansion in other parts of the United Kingdom, but it is clear that continued delay on expansion at Grangemouth is intolerable. It may fall to Ministers to tell the company that it is in the interests of the United Kingdom economy that it should make a firm decision about Grangemouth within the next six months. They should indicate that permission will not be granted for the export of oil from the Forties field in advance of such a decision. They must insist that the oil shall be landed in the United Kingdom. The Government should tell BP that its arm-twisting tactics will not be tolerated.
Present finds are at depths of between 450 and 600 ft. and I believe that attention will be turned eventually to the prospects lying in 1,000 ft. or at greater depths. These are high-risk ventures for the suppliers of equipment and for the operators. Lockheed Petroleum Services has begun preliminary design work on a sea-bed oil completion system for the North Sea. The company's work in the Gulf of Mexico has convinced it that it is entirely practicable to complete wells on the sea-bed under one-atmosphere conditions. Shell has agreed to embark on joint development with the company. Again, having in mind IMEG's view on such matters, I should like to know how the Government's proposals ensure that United Kingdom industry will break into this market.
Because of the restriction of time, I have not been able to deal as comprehensively with the subject as I should have liked. We have a unique opportunity to redress the industrial inbalance of 100 years or more, an opportunity which should not be lost. The returns from success are considerable, but failure will result only in an extension of industrial and scientific helotry which was so condemned by my hon. Friend the

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Leader of the Opposition when in government.
11.50 p.m.
The Under-Secretary of State for Trade and Industry (Mr. Peter Emery): I reject in the strongest possible terms many of the exaggerated criticisms made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas) in his comments on the IMEG report and the carrying out of its recommendations by the Government.
It is misleading industry and the people of Scotland when the hon. Gentleman denigrates the major steps taken by the Government to carry through the IMEG recommendations. It appears that the hon. Gentleman has not yet realised what the Government are providing in the massive aid and guidance to industry to benefit from the potential business and orders arising from North Sea development. [Interruption.] If the hon. Gentleman does not, industry certainly does. The hon. Gentleman is depressingly out of touch with what is happening not only in this country as a whole but in his own Scotland.
As little time has been left to me, I shall quickly go over the action taken before the IMEG report, because that was the subject of part of the hon. Gentleman's criticism. In December 1971 there was confirmation of commercial quantities of oil in the North Sea. From that date until early spring the Government worked out the exact requirements for setting up the framework of a report by a group of experts. The report was commissioned in the spring and was received by the Department of Trade and Industry in late September. The Government have since published it. We hoped to do so just before Christmas, but publication was in mid-January. There were then made known not only the report but the recommendations and Government action to implement them. This involved the creation of an Offshore Supplies Office and a Scottish Petroleum Office and the appointment of the Director, Mr. Gibson.
In addition, in the period between the commissioning of the report and the Government's acting on it there had been definitive action. The Government had
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demanded from North Sea oil operating companies fair and full opportunities for British firms to obtain orders which might have been placed abroad. In the summer we set out with the oil companies to establish the precise pattern of orders being placed, and a reporting procedure to see that that was reliably carried out was brought into being. All this time we have constantly reinforced the policy that as a criterion for granting new licences the Government would assess the contribution made by the applicants to the economic prosperity of the United Kingdom.
I turn to the position of reserves. The Government stand by the figures we have made public time and time again—that is, the figures taking account of the discoveries that have been announced. It is interesting also to note, in view of frequent criticism throughout the country that the Government are allowing all the benefit to escape to companies outside the United Kingdom, that the British share of the proven oil reserves is 58 per cent. For gas the figure is 35 per cent. The figures for reserves in the public sector are 25 per cent. for oil and 20 per cent. for gas.
In the drive being given by the Government to encourage industry to participate in supply to the North Sea, I do not think it matters one iota whether the Government or IMEG are correct on the exact amount of oil that may be delivered by any given date, whether 1975 or 1978. The Government are urging Scottish and British industry to meet the demands of the North Sea not only because of the potential around the coast of the British Isles but also as a major lead into international markets, a lead-in to trade overseas. Everyone realises now that more and more exploration and development of oil resources will be in areas of deep water similar to that found on the Continental Shelf. Thus experience and knowledge gained from the North Sea will be the entry to the international markets for years to come.
The IMEG report recommended that a special agency to sponsor and assist the development of an internationally competitive British supply and contracting capability should be set up. The hon. Gentleman criticised the fact that that was not being done. As was explained in

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the House last month, the Government decided that the quicket and most effective way to act upon this recommendation was to create an Offshore Supplies Office within the Industrial Development Executive.
I happen to believe that the hon. Gentleman does not have a full understanding of the degree of flexibility which can be operated within the Industry Act. Only at the end of last week I was trying to ensure that assistance can be given to a Scottish shipbuilder who wants to get into the market of building supply vessels for the North Sea.
The Offshore Supplies Office is within the Government rather than independent because in that way it can be set up with the minimum of delay and with all the advantages of working within the Industrial Development Executive. There will be no overlapping, conflict of interest or crossing of communications. We have already appointed the director. I am taking him at the end of this Week, I hope, to Glasgow so that Scotland can meet him for the first time in his new post.
We have also given special recognition to the importance of offshore developments to the Scottish economy by our decision to establish a new Scottish Petroleum Office through which the Offshore Supplies Office will discharge its responsibilities in Scotland. It is being set up in Glasgow as part of the Scottish Industrial Development Office. It will have at its head a man with experience of oil-related industries. Alongside it in Glasgow we shall put a branch of the DTI Petroleum Division, staffed largely with expert petroleum engineers. That will create an effective Scottish centre for stimulating industrial development relating to offshore oil. The centre will bring together the Scottish Industrial Development Office, the Offshore Supplies Office and the DTI Petroleum Division. It will work in the closest co-operation with the Scottish Office and with the Scottish Economic Planning Board, which now has a new North Sea Oil Development Committee.
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This creates an entity within Scotland which hon. Members on the Opposition side too often do not wish to accept. It will create the sort of stimulus for which they have been asking. Now that it has been carried through by the Government, they will not accept the benefits which will arise from it. We hope that the expansion which we will see from this approach will be beneficial specifically to the smaller industries and to the medium-sized industries where the development has not been as great as we might like.
The House should remember when criticism is being levelled about the IMEG report and the British Government's action, which is what the debate is about, that within four years of commercial discovery Britain will be obtaining about one-quarter of her oil from her own resources. By 1980 the figure should have risen to 50 per cent. The exploration programme carried out offshore has taken place in 20 months. It has brought larger discoveries of oil than anybody ever dreamed about.
The British Government have reacted to that and in the massive drive for exploration the British share of the proven resources is 58 per cent. To meet the challenge of providing equipment for development, from January to September 1972 over £60 million has been spent in Britain. In the Forties field development, out of an estimated £327 million, £225 million will come from United Kingdom firms, which is over 66 per cent.
The hon. Gentleman asked me about the Grangemouth expansion. I believe that BP is still entirely intent on going forward with it. But do not let anyone in this House suggest that oil exports are not to the benefit of this country, specifically in the matter of the balance of payments. This whole effort that the Government have been able to stimulate with industry and with the oil companies is worthy of praise and not of condemnation.
Question put and agreed to.
Adjourned accordingly at one minute past Twelve 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 Lincoln

MAPLIN AIRPORT PROJECT AND AIRCRAFT DEVELOPMENTS
LORD BALFOUR OF INCHRYE: 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 reconsideration can now be given to the need to proceed with the third London Airport (Foulness) project, having regard to new factors and developments since the decision to proceed, including, first, rapid introduction of wide multi-seater types of aircraft such as Jumbo and Tri-Star; secondly, increased engine silence efficiency; thirdly, improved computer air traffic control allowing higher density traffic acceptance at existing airports; fourthly, likely short-fall of air traffic forecasts of the Roskill Committee.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, we are satisfied of the need for additional airport capacity to serve the London area at the end of this decade, having taken account of all the points mentioned by my noble friend. Maplin will meet this need and also will bring some prospect of relief from increased noise disturbance to hundreds of thousands of people living near the existing airports.
LORD BALFOUR OF INCHRYE: My Lords, do I understand from the Government that they reject any idea of a reappraisal, though admitting that these new factors exist in the situation?
LORD DRUMALBYN: My Lords, the Government have reappraised this. They reappraised it at the time when the position of the runways at Maplin was being considered last year.
LORD BALFOUR OF INCHRYE: My Lords, in view of this refusal to have any reappraisal, may I ask whether the Government are aware that, as this legislation will be a hybrid Bill, they may have great difficulty in getting it through both Houses of Parliament? Really one is forced to ask, when does Government decision stop and political obstinacy start?
LORD DRUMALBYN: My Lords, I am grateful to my noble friend for the warning he has given us about a possible difficulty in getting the Bill through. I am bound to tell him that it was very much on the advice of this House that we went to Maplin rather than to another airport.
LORD SHACKLETON: My Lords, would the noble Lord not recognise that even in the last few weeks new information has come in which could warrant some further inquiry, either by the Government or by a Select Committee? Further, would he correct his statement that it was on the advice of this House that we went to Maplin?
LORD DRUMALBYN: My Lords, I well remember the debate on the Roskill Report in this House. The great majority of the speakers seemed to support the preference for Maplin rather than Cublington or any other airport. As to the other point, I must assure the noble Lord that as this project involves very great expenditure, the Government are keeping it under absolutely continuous review.
BARONESS BACON: My Lords, is the Minister aware that most people at that time were thinking in terms of a third London airport, but there is now a body of opinion which is thinking more in terms of a third British airport, not necessarily in or near London? Would he give consideration to the fact that a big airport is badly needed in the North Midlands and the North-East of England?
LORD DRUMALBYN: My Lords, the Civil Aviation Authority is now commissioning a study on the desirable future structure of the airport system in the North-West, Yorkshire and Humberside, West Midlands and East Midlands and, if necessary, the Bristol and South Wales area also.
LORD WYNNE-JONES: My Lords, does not the noble Lord remember that there was one very well-informed Member of your Lordships' House who called attention at the time to the inadvisability of going ahead with this scheme? Do the Government pay no attention to the dangers to other geese, such as the Brent geese?
THE EARL OF LAUDERDALE: My Lords, would the noble Lord accept that there are many on both sides of Parliament, and particularly on this side, who hope that the Government will keep to their course, who supported them and who pressed for this decision, and that we mean to support them in pursuing it?
LORD DRUMALBYN: My Lords, I am much obliged to both noble Lords. If noble Lords will look up the debate, I am sure they will find that in the debate on the Roskill Report there was a minority—undoubtedly of powerful voices—against having a third London Airport at all, but the majority were in favour of it.
LORD SHACKLETON: My Lords, might I ask the noble Lord whether he would again consider the possibility of an inquiry, and not draw conclusions from particular remarks that are made? It may correct an impression that he may have formed that I am personally against Maplin. Is he aware that there is anxiety that the right decision should be taken, and that this may warrant a further inquiry which will confirm or otherwise the Government's decision?
LORD DRUMALBYN: My Lords, I shall convey to my honourable friend the Minister for Aerospace and Shipping, and to the Secretary of State for the Environment, what the noble Lord, the Leader of the Opposition, has said. However, I am bound to say to the House that when there is a long-term project of this sort there is bound to be opposition, stimulated from various quarters, from those who are adversely affected by the plans. It may well be that there is something in what they have to say. We shall continue to watch this matter, and I shall convey to my right honourable friend what has been said.
LORD SLATER: My Lords, is the noble Lord aware that the supplementary question that was asked by my noble
832
friend Lady Bacon mentioned the North-East? Is he not aware that at one time the North-East was earmarked for an international airport? Does he not think that it ought to come within the ambit of the list that he has given to noble Lords in this Chamber this afternoon? He spoke of the consideration that is to be given to various parts of the country.
LORD DRUMALBYN: Yes, My Lords. International airports generally have to be related to the more densely populated areas, and I said that the study that is being commissioned will cover the North-West, Yorkshire and Humberside, where the population density is higher than it is in the North-East.
VISCOUNT ST. DAVIDS: My Lords, will the noble Lord confirm one point, which may make some difference to the thinking of a number of us? Is it not true that even if we do not use Maplin for an airport the bird sanctuary, the valuable cocklebeds and the sailing, which I used to enjoy so much in earlier years, will still be ruined, because of the fact that the Port of London must shift downstream and spread out into deep water in that area?
LORD DRUMALBYN: My Lords, the movement of the Port of London is undoubtedly an important consideration, and no doubt the noble Viscount is right in the conclusion he draws.
LORD BALFOUR OF INCHRYE: My Lords, may I ask the Minister to withdraw one sentence which he used in reply to a supplementary question by the noble Lord the Leader of the Opposition? He said that there is bound to be opposition from those who have interests or from those who are interested. Will he accept that there are many, such as myself, who are opposed to this scheme but who have no interest? We accept the fact that a third airport is necessary, but we have no interest, material or otherwise.
Loma DRUMALBN: Yes, my Lords. Of course I most willingly accept what my noble friend has said, and I apologise to him if he took any implication out of what I said.
LORD BALFOUR OF INCHRYE: I did, my Lords.
THE EARL OF BUCKINGHAMSHIRE: My Lords, is the noble Lord aware that

833
local people have repeatedly remarked that shifting sands would make it impossible to build an airport at Maplin—an opinion backed by Dutch engineers?
LORD DRUMALBYN: My Lords, I thought those words were derived from the Bible. I would only say to the noble Earl that a sea wall is being built around the area and there is no reason to suppose from examination of what is happening now, that the sands are shifting.
LORD LEATHERLAND: My Lords, while not wishing to talk about shifting sands, on which the Government's policy is built, may I ask the noble Lord whether it is not a fact that much of the new agitation derives from the fact that there has not been sufficient publicity and consultation with regard to the routes to be followed by roads and railways? If the Government could be more forthcoming on those two points, much of the present agitation against the fundamentals of the scheme would disappear.
LORD DRUMALBYN: My Lords, I take note of what the noble Lord has said, and I shall convey it to my right honourable friend.
THE EARL OF LAUDERDALE: My Lords, will my noble friend bear in mind that in addition to easing the noise problem of people living near Heathrow and Gatwick this project also offers an unparalleled opportunity to bring about a redevelopment to the East side of London, which has been needed for very many generations?
LORD DRUMALBYN: My Lords, the Government are aware of those considerations and I am very glad that my noble friend has drawn attention to them.

M.5 MOTORWAY AND NEW AVON BRIDGE
2.46 p.m.
LORD COTTESLOE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they expect the bridge on the M.5 motorway over the River Avon will be completed.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, many technical and other difficulties have delayed work on this bridge, but my right honourable friend the Minister for Transport Industries is closely in touch with the situation. Every effort is being made to expedite its completion, but I regret that I am unable at this moment to say when the bridge will be opened.
LORD COTTESLOE: My Lords, while thanking the Minister for that reply, may I ask him whether he is aware that a stretch of twenty-two miles of the M.5 motorway South of the River Avon was ceremonially opened on January 25, but that there are no signs to enable motorists to find it, and that it is known locally in the headlines as "The lost motorway", and that the only access to it from the North bank of the Avon appears to be by a side road labelled, "To Clifton Zoo"? May I also ask whether it is really the intention to do everything possible to deter motorists from using this new stretch of motorway for a period of, perhaps, eighteen months until the bridge is completed; and, if so, whether it might not have been better to wait until it can be brought fully into use before opening it with a flourish of trumpets?
LORD SANDFORD: My Lords, I am glad to be able to say, in answer to that supplementary question, that interim arrangements have now been worked out with the highway authorities concerned and with the police for making the best possible use of the section of motorway which lies South of the uncompleted bridge. The details are rather complicated, and I shall have them published in the OFFICIAL REPORT.
LORD COTTESLOE: My Lords, I thank my noble friend.
LORD CHAMPION: My Lords, may I ask the noble Lord whether it is a fact that the Government are making a large contribution to try to overcome the labour difficulties which have caused some of the delay on this bridge; and, if so, what is the expected effect of that contribution?
LORD SANDFORD: My Lords, I can confirm that negotiations are proceeding between the contractor and the unions representing the men; my information is,

835
that they are being resumed to-day. In view of that fact, I am sure the noble Lord will agree that the less said in question and answer across the Floor of the House at this particular moment, the better.
[Following are the details referred to by the Minister]:
Southbound traffic: Alternative route for heavy vehicles from Bristol via B.3128, B.3129 and A.369 to the motorway at Portbury. The same route for light vehicles, except that these can use the more direct Portbury Lane instead of B.2129.
Northbound traffic: At Edithmead, M.5 Bristol and Midlands traffic to be signed along A.38. Traffic for Weston-super-Mare, Clevedon and Portishead signed along M.5. At Portbury a reverse system to that for Southbound traffic along the local roads, except that light traffic can use A.369 to reach Bristol without turning off (there is a steep hill at Ashton Park on which weight restriction will be imposed).

ECONOMIC POLICY: EFFECT ON SHARES
2.49 p.m.
LORD WIGG: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will move for an inquiry under the Tribunals of Inquiry (Evidence) Act 1921 into the relation between:—

(a) statements made by a Minister and others on January 19 and 24 about the effect of the Government's economic policy and connected share dealings; and

(b) the effects upon the savings and investments of thousands of United Kingdom citizens.

THE LORD PRIVY SEAL (EARL JELLICOE): No, my Lords.
LORD WIGG: My Lords, while that reply is not unexpected, may I ask whether the noble Earl is aware that the fact has now been clearly established that the Secretary of State for Employment did brief the Press and that as a result of that briefing there were widespread losses on the Stock Exchange? I submit to the noble Earl that it is imperative, in the interests of the Government and of the nation, that the facts of what happened
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should be clearly established by Government inquiry.
EARL JELLICOE: My Lords, I do not accept the implications of the noble Lord's supplementary question. As my right honourable friend the Prime Minister has made clear, a number of Ministers spoke to journalists, as is natural, after the White Paper was published, explaining its terms. They, and no doubt my right honourable friend the Secretary of State for Employment, drew attention to paragraph 32 of the White Paper, which deals with this particular point. But, from all that I have been able to ascertain, nothing that the Ministers said could properly have been held to imply tougher policies in phase 3, as I think was the interpretation of the Sunday Press.
LORD WIGG: My Lords, is the noble Earl asserting that the seven journalists who met the Minister are telling untruths? Because we have the record—it is available to the noble Earl, and I am sure he has consulted it—that seven independent, responsible newspapers said that the Minister had given the briefing which the Prime Minister now asserts did not take place.
EARL JELLICOE: No, my Lords; I am asserting nothing of the sort. The noble Lord must be as well aware as I am of the conventions of this and another place in relationship to journalists. I certainly do not wish to breach any confidence, and I do not wish to be drawn into breaching any confidence. But as I understand it—and I suspect that this is what the noble Lord is referring to—my right honourable friend the Prime Minister said that no Press briefing took place on the particular day, which was a Saturday, which was suggested by the Leader of the Opposition, I think, and that in fact nothing that any Minister said could have been held to imply a toughening of policy in phase 3. If this was the interpretation put by journalists on what any Minister might have said, it was a false interpretation.
LORD WIGG: My Lords, the noble Earl must be now asserting that the Prime Minister was playing with words, for although the Leader of the Opposition made a mistake with regard to the day it is an insult to the country's intelligence to explain that fact. Is the noble

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Earl aware that the only interpretation which can now be placed on what took place is that the Secretary of State for Employment was briefed by his officials but that he did not know what he was going to say when he spoke, he did not know what he was saying when he sad it and he did not know what he had said when he had finished?
EARL JELLICOE: My Lords, I am asserting nothing of the sort. What I am suggesting is that there is nothing here which demands the elaborate machinery of a tribunal inquiry; and I am also suggesting, if I may with due politeness, that the noble Lord is flogging a very dead duck on this particular issue.
SEVERAL NOBLE LORDS: Hear, hear!
LORD AVEBURY: My Lords, is it not rather disingenuous of the Prime Minister to deny that this meeting took place on the Saturday, when it now appears that it did take place, but on the Friday? Would not the noble Earl agree that, if these briefings were held and a widespread impression was created that tougher policies would continue into phase 3, even though he now says, that this was quite different from what it was intended to convey, then it is a definite matter of urgent public importance within the meaning of Section 1 of the Tribunals of Inquiry (Evidence) Act 1921, and that such an inquiry should be held?
EARL JELLICOE: My Lords, I really do not accept—and I have made it absolutely clear that the Government do not accept—that this is a matter for a tribunal of inquiry.
LORD WIGG: My Lords, is the noble Earl now asserting, in view of his last reply, that the Government's policy of not allowing "lame ducks" to exist has now been abandoned in favour of a policy linked with dead ducks?
LORD SHACKLETON: My Lords, while the entire House admires the noble Earl's skilful defence in this matter, and while not necessarily accepting that a tribunal of inquiry is the appropriate way to proceed, may I ask him would he none the less agree that there is a great deal of public concern and that, notwithstanding the fact that there are certain conventions with regard to unofficial briefings, where consequences such as have flowed
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from this particular briefing arise there is justifiable public concern? Will he consider whether or not there is some other way, perhaps by a Select Committee or some other process, which would enable us to judge the facts in the light of the evidence of the journalists themselves?
EARL JELLICOE: My Lords, I should certainly wish to take careful note of what the noble Lord the Leader of the Opposition has said, but I would suggest to him that there were many factors, other than any meeting between Ministers and journalists, which might or might not have taken place, which could have led to the movement on the Stock Exchange in the week or so following the issue of the White Paper.
LORD HALE: My Lords, would the noble Earl take the opportunity to say—and I think it is an opportune moment—that the Tribunals of Inquiry (Evidence) Act 1921 will never be used again; or, at any rate, not until the recommendations of the Salmon Commission have been fully implemented?
EARL JELLICOE: My Lords, I think I can take this opportunity to say that these recommendations have been receiving the careful attention of Her Majesty's Government, and that this House, as indeed Parliament as a whole, will soon be acquainted with the results of that consideration.
LORD LEATHERLAND: My Lords, may I ask the noble Earl—and I do so as one who wants to preserve the conventions of the Lobby, because I was a Lobby correspondent in the other place myself fifty years ago—whether, if he will not agree to a committee of inquiry or a tribunal, he will arrange for a transcript of the relevant part of the proceedings to be put in the Library of this House?
EARL JELLICOE: My Lords, I should have thought that, as a former member of this distinguished assembly of Lobby correspondents, the noble Lord would be the first to agree that nothing could be more in breach of the normal conventions than that.
LORD LEATHERLAND: But, my Lords, have not the consequences of this particular incident been so damaging to the national economy that special measures are necessary?
EARL JELLICOE: My Lords, without getting into a long debate—and we are going very shortly to have a debate on the White Paper—I have suggested that there are a great many contributory factors which could have caused the movement of share prices on the Stock Exchange.
LORD LEATHERLAND: My Lords, who are we to believe—the Minister, who says one thing, or the group of Lobby correspondents who unanimously say the other?
LORD HAWKE: My Lords, may I ask my noble friend whether there is any other occasion on which a 10 per cent. fall on the Stock Exchange has been greeted with such consternation by the Labour Opposition?
EARL JELLICOE: My Lords, I have been greatly touched by the solicitude which the noble Lord, Lord Wigg, has shown for the Stock Exchange on this matter.
LORD WIGG: My Lords, on the contrary: I hope that the noble Earl will accept that I want to see the abolition of the Stock Exchange and of this House. That will be a double event which I hope will be realised before my days come to an end.

CROWN AGENTS' LOAN AND COMPANY'S PROFIT
2.58 p.m.
LORD PEDDIE: 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 aware of a statement in the Investors Review of January 12, 1973, that solely in consequence of financial support to the extent of £20 million made available by Crown Agents (some of it possibly since the Stevenson Report) private operators have made a profit of £20 million based upon a mere initial capital of £24,500 and, if this is so, whether they would agree that this action on the part of Crown Agents has made a mockery of the pay and prices policy; and whether Her Majesty's Government are able to restrain Crown Agents from pursuing
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financial practices which run counter to Government economic policy.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELFIELVIE): My Lords, credit up to £20 million was made available by the Crown Agents to the company mentioned in the Investors Review, which also secured large loans from other sources. When the company was sold, the price was not disclosed. The Crown Agents' investment will secure resources to sustain services provided to overseas countries, and is subject to taxation. The Crown Agents are subject to the Government's economic policy.
LORD PEDDIE: My Lords, I thank the noble Baroness for her Answer to my Question though I hardly see how the latter part of the Answer relates to the Question that I addressed to her. As a supplementary, I should like to ask whether or not the Minister would agree that applying Crown Agents' funds to speculative activities at a time when such funds would not be available through traditional sources was in keeping with the Government's economic policy at that time.
BARONESS TWEEDSMUIR or BELHELVIE: My Lords, there is no legal constraint on the kind of transaction described in the Question between a willing buyer and a willing seller.
LORD PEDDIE: My Lords, if there is no legal constraint, may I ask whether there is not some direction from the Government to ensure that organisations which come under their influence at least conduct themselves in such a way as to be of assistance to the Government's general economic policy, rather than that they should pursue policies which are detrimental to the best interests of the nation?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the fact remains that this particular transaction was of course of benefit, by backing up the services which the Crown Agents give to their principals overseas.
LORD SHEPHERD: My Lords, could the noble Baroness say who received benefit, apare from the shareholders of this company; and could she also explain

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how it is that, if a loan was made by Crown Agents, a sale took place without the Crown Agents either being informed or being aware of it?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I never said that the Crown Agents were not aware of the sale. Indeed, there was a report to the effect that the particular property had been sold.
LORD SHINWELL: My Lords, may I ask the noble Baroness whether she refutes the statement contained in the Question: that private operators made vast profits estimated at £20 million? Does she refute that? If she does not, can she say whether it is consistent with the Goverment's policy of anti-inflation?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I said in my reply, the sum was not disclosed when the sale was made.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, may we assume from the replies of the noble Baroness that Her Majesty's Government feel no sense of disquiet at all about such operations by the Crown Agents?
BARONESS TWEEDSMUIR or BELHELVIE: No, my Lords; the Crown Agents have a very high reputation in this country and overseas. The purpose of their investments, as I sought to explain, was to give them backing for the services which, I believe, are widely welcomed in many countries.
LORD PEDDIE: My Lords, I understand from the Answer that the total sum was not disclosed. How does it come about that the Investors Review was in possession of information which indicated this profit and further went on to state that an amount of £65 million of gross assets did not come into the profit computation that was indicated originally?—showing a profit that was utterly fantastic and one which I thought would lead the Government themselves, having some influence upon the Crown Agents, to have a measure of interest in their activities.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I have said, the total sale price was not disclosed. Therefore, I am not in a position to know how the Investors Review came to
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assess their particular figure; but the fact remains that there are problems of property and of land and that the question of pay and prices is one of the broad subjects which will be under discussion this afternoon.
LORD HOY: My Lords, is the noble Baroness aware that the Crown Agents are responsible to the Public Accounts Committee in another place? If the transactions which have been suggested in this Question have taken place, have they not to report the results of these transactions to the Houses of Parliament through the Public Accounts Committee?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the fact is that the Crown Agents are responsible primarily to their principals overseas, but they also have to take into account Government policy. It is a fact that there is no restraint on a transaction between a willing buyer and a willing seller.
LORD PEDDIE: My Lords, I apologise for pressing this matter unduly; but may I ask whether or not the traditional finance houses, including the Bank of England, have indicated at any time their concern at the activities of the Crown Agents in this particular field?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the Crown Agents were carrying out, and have been carrying out over a period of years, perfectly straightforward investment. This it was their duty to do.

SUPPLY OF GOODS (IMPLIED TERMS) BILL [H.L.]
3.4 p.m.
LORD DRUMALBYN: My Lords, on behalf of my noble friend Lord Limerick, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3ª.—(Lord Drumalbyn.)
On Question, Bill read 3ª.
LORD DRUMALBYN: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.— (Lord Drumalbyn.)
LORD GARDINER: My Lords, as the noble Lord, Lord Airedale, and I were the only noble Lords to put down

843
Amendments to this Bill, other than Government Amendments, at the Committee stage perhaps your Lordships will allow me to say a few words before we part with it. The Bill represents a great advance in consumer protection law. I think I can say that in this House consumer protection law has always been non-Party and I should to-day pay tribute to the women Peers who always lead the way in this field, my noble friend Lady Phillips, the noble Baroness, Lady Elliot of Harwood, my noble friend Lady Burton of Coventry and others.
There seems to me to be rather a change in the atmosphere. We owe it to the Law Commission that a solution to this grave evil of the exemption clauses, which has been with us since before the Molony Committee and to which it was so difficult to find a right solution in law, has been found. We owe it to the careful work of the Law Commission that they found the solution, and to the Government for having implemented it. This is rather an unexpected Government, so far as I am concerned; for I am not quite sure what they are going to do next. But it looks to me as though the sun is rising on the consumer protection field.
In Sir Geoffrey Howe we have a real champion of consumer rights. I had happy relations with him when he was a junior barrister on the Bar Council. In my first year of office as Lord Chancellor I gave Silk to two promising junior barristers in another place, Sir Geoffrey Howe and Mr. Dick Taverne and I look forward to Sir Geoffrey's future activities in this field. The noble and learned Lord the Lord Chancellor will no doubt say that one of the tiresome things about reformers is that whatever reforms you give them they always want something more. Therefore, I must not say more than that we have got the Crowther Report on Consumer Credit. I think everybody believes this to be a first-class Report. I would respectfully hope that the noble and learned Lord the Lord Chancellor will join with Sir Geoffrey Howe in enabling it to be put before Parliament as soon as may be. Meanwhile, I am sure that all who are interested in this field would wish to express their thanks to the Government for putting through this Bill.
LORD DRUMALBYN: My Lords, may I in a word or two express my appreciation of what the noble and learned Lord has just said? I shall be very glad indeed to convey all that he has said to my right honourable friend Sir Geoffrey Howe, and I know that my noble friend Lord Limerick would wish me to express his thanks and those of the whole House to the persuasiveness and activity of the noble and learned Lord himself which I believe is going to lead to an improvement in the Bill.
On Question, Bill passed, and sent to the Commons.

COUNTER-INFLATION (TEMPORARY PROVISIONS) ACT 1972 EXTENSION ORDER 1973
LORD DRUMALBYN: My Lords, I beg to move that the Counter-Inflation (Temporary Provisions) Act 1972 Extension Order 1973, be approved.
Moved, That the Counter-Inflation (Temporary Provisions) Act 1972 Extension Order 1973, be approved.
On Question, Motion agreed to.

INFLATION CONTROL: THE SECOND STAGE
3.8 p.m.
LORD DRUMALBYN: My Lords, I beg to move, That this House take note of Command Paper 5205, The Programme for Controlling Inflation: The Second Stage. The White Paper explains the steps the Government believe are necessary in the next few months to make progress towards our objectives from the present breathing space provided by the Counter-Inflation (Temporary Provisions) Act. I need not say much about the present so-called "standstill", because what we are to discuss is the next stage. May I first say, however, that the purpose of extending the operation of Section 2 of that Act by the full 60 days permitted under it—that is, to April 28—is, first of all, to allow Parliament adequate time to consider the proposals for phase 2 contained in the White Paper which we are about to discuss and the Counter-Inflation Bill which gives legislative form to the White Paper—although, for reasons which I

845
shall be explaining later, we hope that Parliament will approve our proposals by the end of March. The second reason is to avoid a gap between the expiry of the existing powers and the coming into effect of the powers proposed in the White Paper and the Bill. The third is to enable the existing powers to stay in operation during the first month of the operation of value added tax. May I add that in December, despite the rise in food prices, the increase in the retail price index rose by one-quarter of 1 per cent. as compared with an average monthly increase of three-quarters of 1 per cent. in the summer, before the standstill began. The December increase was nearly all due to higher food prices. The index, excluding food, drink and tabacco, increased by less than 0·1 per cent.
My Lords, the success of the so-called standstill can perhaps best be judged in the light of the increase between June and December in wholesale prices of basic materials and fuels used in manufacturing. It was an increase of 12 per cent. due partly to the floating of the pound in June and partly to higher world prices. I used the phrase "the so-called standstill" because, of course, a complete freeze would have put some firms out of business entirely. But permission to make increases has been given only when justified on a strict interpretation. Industry was expected to absorb increases to the maximum extent possible, and the number of applications for increases has been relatively small. The Prices Units have been investigating complaints of alleged price increases. In all cases where firms were found to have increased their prices beyond the limit permitted by the standstill—some 800 in all—those firms have since agreed to reduce their prices and to comply with the standstill.
So far as the next stage is concerned, such controversy as there is is directed at means, not ends. The White Paper starts with the objectives. May I remind your Lordships that they are to maintain a high rate of growth and to improve real incomes; to improve the position of the lower paid and pensioners and to moderate the rate of cost and price inflation; and, of course, to secure a further reduction in the rate of unemployment
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On all these objectives there is broad agreement. During the 1960s the average money earnings increased by about 6 per cent. a year. In 1970 there was a marked acceleration and the increase over the figure for the previous year reached 13½ per cent. In 1971 the rate of increase fell to 11 per cent. But between July and October of last year the annual rate of increase surged up from 11·3 per cent. to 17·7 per cent. and some particular increases—for example, in the construction industry—were very much higher.
I remember vividly the debate we had on the White Paper and the Prices and Incomes Bill on August 3, 1966, a debate which the noble Lord, Lord Shepherd, introduced and I wound up for the Opposition. As the noble Lord said, the reason for that Bill lay in the fact that money incomes had been outstripping the rise in real output. He said that the then Government:
"had to tell our workers, particularly those in the higher-productivity industries, that at the present stage they were not to demand their pound of flesh; that we needed a period of restraint so that the lower paid workers could catch up. We made it quite clear that, if we are to have an economy with the minimum unemployment, there is no alternative to a policy seeking to influence directly the attitude and behaviour of those concerned with determining prices and incomes."—[OFFICIAL REPORT, 3/8/66; col. 1319.]
The noble Lord laid stress on the voluntary nature of the legislation but went on to say that because incomes were outstripping output,
"actions admittedly very radical for peace time have had to be considered. If I may say so, they are as repugnant to us, in our having to ask the House to accept them, as they are to those upon whom they may bear.—[Col 1324.]
With that sentiment we concurred then and we do still. Those powers were in Part IV of the Bill and later of the Act. They were to be brought in "if the need should arise", in order, as Mr. Harold Wilson had said:
"to ensure that the selfish do not benefit at the expense of those who co-operate."
As we all know, the need did arise and Part IV was ultimately brought into operation, despite the co-operation of the C.B.I. and the T.U.C. to which the noble Lord referred in his speech. The noble Earl, Lord Longford, then the

847
Leader of the House, ended the debate with these words:
"I cannot say too often that we hope we shall not have to use these statutory powers, but if we do use them we shall use them with a clear conscience; and we hope, and I venture to think, that in the end the country, including noble Lords opposite, will be glad that we have done so.—[Col. 1450.]
My Lords, we are, I think, all in agreement with the present objectives. The objectives are the same now as they were then. We are all agreed that it would be far better to achieve those objectives, if at all possible, by voluntary means. Nobody can deny that the Prime Minister and his colleagues have done their utmost to obtain agreement on the means and co-operation in implementing the means. Particular maladies, my Lords, need particular remedies. If we had succeeded in getting co-operation we, too, would have sought to rely on voluntary means, rather than enlisting statutory support for voluntary disciplines, as the last Government also had to do. And it may be that that particular method would have worked this time without resort to more drastic remedies, for the two situations are not exactly the same—two situations at different times never are. I ended my speech in 1966 with the all too prophetic words:
"My Lords, our objection to this policy is that at a time when production is stagnating it is likely to intensify stagnation. If that happens, we shall be driven further and further down the road of restriction, compulsion and national degradation."—[Col 1439.]
Alas! my Lords, that is precisely what happened, and despite a very gratifying improvement in our balance of payments this Government inherited that stagnation. Now the situation is quite different. The Government set a target for growth and at present we are practically on target.
Another difference is this. When the Labour Government held their consultation the C.B.I. did not say, "Yes, we will co-operate, provided you agree to our terms". What those terms might have been, had the C.B.I. been so minded, I cannot say. They might well have included dropping the nationalisation of steel. They might well have included fiscal conditions designed to enable them to avoid the loss of liquidity from which they suffered in consequence of the Labour Government's fiscal measures.
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The C.B.I. just co-operated, and so did the T.U.C. Things are not quite the same this time.
So, my Lords, in default of voluntary agreement, we had the standstill, and now we have the first phase in getting moving again so as to enable increases in pay to be resumed within the specified limits, while prices, profits, dividends and rents are held down within specified limits in so far as they are within our own control. I shall not rehearse in detail what is contained in the White Paper any more than did the noble Lord, Lord Shepherd, in 1966. I see my task as to set out the broad framework of the Government's plans.
In framing those plans the Government have had the benefit not only of the experience gained in the use of price and pay controls in the second half of the 1960s, but also of experience in the United States of America. I understand that between February and November of 1972 the rate of annual increase for all items as shown by the consumer price index in America fell from 4·8 per cent. to 3·1 per cent. and the wholesale price index from 6·9 per cent. to 4·9 per cent. The United States Government have now withdrawn the mandatory controls except for construction, food services and distribution and health services, but have retained the power to reintroduce mandatory rules if the voluntary control produces results inconsistent with the national anti-inflation objectives.
To regulate pay and prices Her Majesty's Government are proposing, as was done in the United States of America, to set up two agencies, a Pay Board and a Prices Commission, each composed of people with appropriate experience. Unlike the National Board for Prices and Incomes, the two agencies will be executive bodies carrying out the day-to-day work of regulation. The requisite expertise in the field of pay is not the same as in the field of prices; their broad tasks will be to implement the statutory controls over prices and pay in accordance with definite rules and standards.
In the United States the rules and standards were determined by two Boards subject to broad policy directives given by the Cost of Living Council. Here it is proposed that the two agencies should act in accordance with a Price and Pay Code

849
which will be prepared by the Treasury and submitted to Parliament for approval, and may be amended or revoked in the same way. The Appendix to the White Paper sets out the provisions which the Government are proposing to include in the Code on Prices and Pay. These proposals are to be subject to further consultation. Indeed, this debate can itself be regarded as part of the consultation process on the proposals, and the Government will be glad to consider suggestions for their improvement. The Code is intended, as the White Paper puts it, as
"both terms of reference for the agencies and a statement of the policies which the Government expects those concerned with prices and pay to observe."
It is in the voluntary observance of the Code, as much as anywhere else, that the Government feel entitled to hope for co-operation.
The agencies have been devised in such a way that they can operate under either a statutory or a voluntary system. If it proves possible, as the Government earnestly hope, to operate a voluntary policy in the course of phase 3, the agencies will thus be able to continue to play a part. Certainly the Pay Board will have an important role to play in advising the Government on problems of relativities and anomalies in phase 3. The aim will be to find ways in which, within an overall pay limit, progress can be made in resolving longer-term problems and in fostering beneficial productivity and restructuring agreements. Meantime, their task will be both an executive and advisory one: to adjudicate on whether the Code approved by Parliament is being implemented; to enforce the law while statutory controls remain in operation, and to advise the Government on any matters relating to prices, charges or pay that may be referred to them. If either agency considers that the Code is being or would otherwise be infringed, it may, after giving due notice, require a price or pay increase to be reduced, or not to be implemented, by issuing a formal notice or making an order. Anyone who infringed the notice or order could be prosecuted—in England and Wales only with the consent of the Attorney General—and would be liable to be fined.
It is not proposed that there should be any appeal against notices or orders except by prerogative order if the agencies
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were to exceed their powers. The Counter-Inflation Bill, however, provides for the Minister, after consulting the agency concerned, to intervene where it has imposed, or is thinking of imposing, a restriction on a pay or price increase, if he is satisfied that there are exceptional circumstances. This provides a means of Parliamentary accountability, without interfering with the independence of the agencies in their normal day-to-day decisions.
It is important that the transition from phase 1—the present situation—to phase 2 shall be both clear and smooth. But it is proposed that the arrangements for pay and for prices should be different: for pay settlements generally April 1, provided the Bill has received the Royal Assent by then; for prices, April 29. Let me say why. It is intended to maintain the standstill on prices throughout April in order to exercise strict control during the transition to V.A.T., which is due to come into operation on April 1. The level at which V.A.T. is to be charged will be announced by the Chancellor of the Exchequer in his Budget speech on March 6. But it is intended that the Price Commission should come into operation by April 1, subject to Royal Assent. The Orders setting out the Prices and Pay Code and Orders requiring notification of increases in prices and pay will be made as soon as the Bill becomes law. This means that the Price Commission will be able to examine notifications of proposed price increases and to discuss them with firms so as to start giving (or withholding) consents to increases under phase 2 at the end of April.
As to pay settlements, we want negotiations to be resumed as soon as possible and not to be held up by the need to postpone the price control system until the end of April. Where settlements have been reached before November 6 no settlement can be implemented before February 28. Those that were made at least twelve months after the operative date for the previous settlement and have been deferred by 90 days or more by February 28 can then be paid. Others can be paid when the settlement has been deferred for 90 days or on April 1, whichever is the earlier. These arrangements mean, in effect, that the original 90 days standstill applies equally to all settlements deferred under it, except that no settlement will be deferred beyond the

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date when the new pay system comes into operation.
After April 1 all pay settlements will have to conform to the formula in the White Paper—a maximum total increase of £1 plus 4 per cent. per head for the group concerned in the settlement. In effect, this works out at an average increase for the 12 months of new pay settlements of 7 per cent. The other limitation is that within the pay limit no individual, however elevated or lowly, may receive an increase of more than £250 a year. These maxima must include improvements in fringe benefits such as holidays and normal hours of work. The £1 and 4 per cent. is not an individual entitlement. Within the maximum there is complete freedom as to how the available money should be directed—for example, with special emphasis on helping the lowest paid in the group. The T.U.C. have complained that this
"will not allow necessary improvements in fringe benefits and keeping pace with the cost of living".
I do not know what improvements they consider "necessary". To quote the White Paper, however, the Government propose that
"Improvements in pensions and redundancy payments schemes may be negotiated outside the pay limit, as may reductions in standard working hours down to a net 40 hours per week and improvements in annual holidays up to 3 weeks."
The reason for the proposals about hours and holidays is because the vast majority of workers nowadays do have holidays of three weeks or more and a 40 hour week or less.
The T.U.C. have said that this puts collective bargaining in a straitjacket. My Lords, straitjackets are used to prevent certain types of invalids from doing themselves or others an injury. The Prime Minister has invited both the T.U.C. and the C.B.I. to suggest a means of operating a completely free system without renewed inflation. It really will not do for any one section of the community to claim that if only everyone else except themselves is controlled, all will be well. Nor does it help for any organiisation to say that the proposed Pay Board is "tainted" simply because they are unwilling to play their part in it. I hope that they will play their part in it, but I wonder what the T.U.C. would have
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said if a Tory Government had decided to exercise the controls direct instead of leaving it to an independent and impartial agency. The T.U.C. say this is cowardice on the part of the Government. I must again come hack to what Lord Shepherd said in 1966: that if money incomes outstrip the rise in real output there is bound to be inflation. The question is how to restrain money incomes from doing just that.
Then there is the question of sanctions. The noble Lord, Lord Shepherd, said then at (col. 1324)—I hope he will not wince at what he said—
LORD SHEPHERD: My Lords, I do not wince at all. What surprises me is the fact that the noble Lord appears to be resting his case on what I said in 1966, when he well knows that his Party divided in the other place against this very policy.
LORD DRUMALBYN: My Lords, we certainly did not divide against the policy in this House. I am quoting what the Government of the day said and drawing a parallel with what the Government today are doing.
LORD SHEPHERD: My Lords, I can assure the noble Lord that I do not wince. I do not withdraw a word of what I said then.
LORD DRUMALBYN: My Lords, I hope the noble Lord will not withdraw the words he said then. I congratulate him. I admit that perhaps I provoked that intervention; but what he did say appeared in column 1324:
"It is an inescapable fact that if Parliament creates legal obligations, it must provide penalties for those who break the law."
Our proposals are practically identical with those in the 1966 Act. except that under the Bill only those who call, organise, procure or finance a strike or industrial action short of a strike, or threaten to do so, are liable to be fined, and not those who merely take part.
My Lords, against the 7 per cent. increase in pay are to be set the restrictions on prices and profits and dividends. On prices, the broad intention, as the White Paper makes clear, is that manufacturers will only be able to increase prices in the domestic market to the extent that allowable costs rise. Even so, the

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whole of allowable costs will not be permitted; a reduction will be made to take account of increases in productivity. So business will have to find through increased efficiency and greater turn-over the higher profits they will require for the investment that we so badly need. They are, moreover, expected to share the fruits of higher productivity with the consumer in the form of lower prices. Price control measures will include a limitation both on profit margins on sales in the home market and on profits. Thus profits expressed as a percentage of sales will not be allowed to exceed the average of the best two of the previous five years. To enable the Prices Commission to exercise control, large firms will have regularly to send in particulars of their turnover, gross margins and profits; medium-sized firms will have to keep records of them, and smaller firms will be subject to spot checks.
As for dividends, control will remain with the Treasury. It is right that if income from earnings is to be subject to limitation, so should income from shares. Though earnings on average can increase by 7 per cent., dividends will only be allowed to increase by 5 per cent. The movement of the stock market recently seems to reflect doubt about whether there will be any increase in total dividends at all. It is true that if dividend increases are to he limited to 5 per cent. the average of dividend increases will be well below 5 per cent. But a growth rate of 5 per cent. will mean some increase in profits and there is something to be said for limiting dividend increases to the same percentage as the expected rate of growth. The main anxiety that has been expressed on the part of business is that even with this limitation there will not be enough retained profits to provide badly-needed investment. The Government believe this to be unrealistic. They are strengthened in their belief by American experience, which has shown that the manifest will to get inflation under control is the essential pre-condition of restoring confidence.
Wage earners, salary earners and those who have invested past earnings in equities are of course bound to face some increases in the cost of goods. Some of the recent increases in wages and salaries still have to work their way through to prices. World prices for food and raw
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materials have risen very rapidly and may well go up further. About a quarter of household expenditure on average is on food. Between one third and one-half of that is spent on fresh and imported food, which is not subject to the same control as other goods. The distribution of fresh food from the markets will be subject to the same control as the distribution of processed food and other products. We do, of course, recognise that the rapid rise in food prices presents a very serious problem. But the Government do not believe that it would be practicable or in the longer-term interest of the country to embark on a general system of fresh food subsidies to keep prices stable, whether at the present level or any other particular level. Food subsidies by their nature are indiscriminate, reducing prices for rich and poor alike. We believe that the increases in pay that the White Paper allows should be more than adequate to cover any likely further increase in food prices, including the increases resulting from our joining the E.E.C. We also believe that the duty of Government should be, on the one hand, to help those who need help most—namely, the low paid and the pensioners —and, on the other, to do all they can to encourage production at home. The Government have succeeded in ensuring that we do produce more food in this country—for example, milk and particularly livestock and cereals.
Nobody can question the priority we have given to pensioners. A rise of 35 per cent. in pensions since June, 1970, is quite unparalleled, even allowing for an increase of 22 per cent. in the cost of living over the same period. The Government have also taken action to increase rent rebates for those on low incomes. The present rebate scheme already has the effect of relieving those who qualify for rebate of two-thirds of any rate increase. Draft Orders have just been approved by the Commons to increase the income limits for the full rebate as from April 1 next. Paragraphs 29 and 30 of the White Paper deal specially with the low paid. Apart from the advantage to them built into the permitted level of pay increases—the £1 which the T.U.C. preferred to the flat across-the-board increase of £2 originally proposed—there are the exemptions from the maximum for one-third of the differential between

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women's rates and men's and of the improvements in hours of work and holidays. There is the increase in the needs allowance for rent rebates. The Government remain firmly determined to take all possible steps to help the low paid. Both sides of industry can also help by negotiating settlements within the limits laid down, which will benefit the low paid.
The Government intend to rely on the provisions of the Housing Finance Act and the Rent Act to regulate increases in local authority, New Town, and private sector rents after the end of the standstill period. At the same time the Government are increasing the needs allowance so that anyone already entitled to rent rebate will not have to pay more in rent during phase 2. A Bill has been introduced in another place to provide rent allowances for tenants of furnished private accommodation.
What the Government aim to do is to steady prices in a way that will both sustain a faster rate of economic growth than has prevailed in the past and be likely to be regarded as fair by the nation as a whole. It is the duty of any Government to hold a balance between the various interests—both those organised into groups and those unorganised. It is a matter of judgment whether a course of action commends itself, and will continue to commend itself, to the people. In the end Government and Parliament are answerable to the people and the people will pronounce judgment. At the moment the indications are that the majority of the nation approves of the treatment which the Government are prescribing for our present ills. One advantage of the treatment is that it can be adjusted from time to time with the approval of Parliament, both in the sense that the Code can be changed from time to time and that at the end of phase 2 broader changes can be made to remove anomalies and give fresh impetus towards the objectives, with, we very much hope, more emphasis on voluntary self-regulation.
Let me just summarise the contents of the package. On prices, no increase at all except where justified by allowable costs; on profit margins, no increase at all and in some cases a reduction; on profits, a strict control—not more than the average of the best two out of the
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last five years in proportion to turnover (and not all firms will achieve this level); on dividends, not more than 5 per cent. increase; on rates, extra Government help through rate support grant. On rents, help through rent allowances for the lower paid; on pay—noble Lords will understand that net incomes is a matter for the Budget—freedom to resume collective bargaining for collective increases within the limits set down, which are roughly equivalent to an average of 7 per cent. for each bargaining group. This is the medicine which the Government are prescribing as a cure for the excessive inflation that is putting all our plans for growth and national prosperity in grave jeopardy. I commend the prescription to your Lordships.
Moved, That this House take note of Command Paper 5205, The Programme for Controlling Inflation: The Second Stage.—(Lord Drumalbyn.)
3.39 p.m.
LORD DIAMOND LORD DIAMOND rose to move as an Amendment, to add to the Motion: "but views with increasing anxiety the economic situation and, while recognising the need for an equitable and effective policy against inflation, regrets that Her Majesty's Government continue to pursue budgetary, industrial and social policies that are unjust and divisive." The noble Lord said: My Lords, I beg to move the Amendment standing on the Order Paper in the name of my noble friend Lord Shepherd. Perhaps I might explain in just a few seconds that it seemed to us it would be more convenient that the debate on these very important issues should take place in the context of this Amendment to the Motion which the Government have put down rather than in an extension of the Order which your Lordships will have observed passed "on the nod".
I believe that your Lordships will all wish me next to thank the noble Lord, Lord Drumalbyn, who, with his usual precision and courtesy, has explained the purposes of the Government's policy and the Bill giving effect to it, and who has added some interpretation of events which perhaps he will forgive me if I do not completely share. The Amendment which I am moving begins by referring to the anxiety with which we view the economic situation, and it may be appropriate if I start my few remarks by reminding

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your Lordships of the record of achievement of the present Government—or perhaps I should say the record of record achievements of the present Government, because there are a series of records. The first record is in the field of balance of payments. Last year we had the largest visible trade deficit ever in our trading history. In that connection we are experiencing the largest ever switch from a balance of payments surplus to a balance of payments deficit over a period of two years in our history, no matter what view one takes as to the likely deficit in the current year. The next record relates to unemployment. More people have been unemployed for longer periods than at any time since the war. In case some noble Lords are not aware of the pressures elsewhere in the country and rely upon the slight improvement which has taken place, may I remind them that in the North, and in Scotland, there are between 7 and 10 unemployed people seeking each vacant job.
The next record is in relation to strikes. More days were lost last year than at any time since the General Strike of 1926 —a fitting commentary on the Industrial Relations Act. The next record, or series of records, is in relation to inflation. We have had a record increase in retail prices during this Government's period of office—something over 8 per cent. per annum since they took office. That is about double the average throughout the Labour Government's period of office. Food prices have gone up even more. They have gone up by 25 per cent, since June, 1970, and since the freeze began food prices have, on an annual basis, gone up by something of the order of 20 per cent. House prices are again a record. New houses rose in price by no less than 47 per cent. last year—and in this connection I refer to the country as a whole. If one looks only at the figures for London and the South-East, house prices nearly doubled in the course of one year. Perhaps it is worth commenting that the overall rise in one year is more than the total rise in the six years during which the Labour Government held office. Interest rates are at an all-time high. The lending rates of bankers are something of the order of from 9½ per cent. for first-class industrial borrowers, to something like
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12½ per cent. or even 13 per cent., for private individuals.
Those are the records that this Government have achieved and, to complete the picture—
LORD HAWKE: My Lords, the noble Lord left out one record.
LORD DIAMOND: I have not quite completed the picture. I will be glad to give way in a moment, as I always do. My Lords, to complete the picture, house building is down, especially in terms of council house building. Food consumption is down; it fell by 3·3 per cent. last year as compared with the previous year. Investment, which is the basis of our future growth, is still down on what it was two years ago. The pound is floating, and we are experiencing a virtual devaluation of the order of 10 per cent. I hope I do not interrupt the noble Lord, Lord Orr-Ewing; I apologise for interrupting him in the six or seven interventions that he has made while I have been talking.
LORD ORR-EWING: My Lords—
LORD DIAMOND: That is the eighth interruption. My Lords, no Government in living memory have ever achieved so many records in mismanagement. I think the noble Lord, Lord Hawke, wanted to intervene.
LORD HAWKE: My Lords, there was one record the noble Lord left out: wages, salaries and incomes in this country are higher than they have ever been before.
LORD DIAMOND: My Lords, I will, if the noble Lord wishes me to do so, repeat everything that the noble Lord, Lord Drumalbyn, has said, because he made that perfectly clear in his speech.
LORD ORR-EWING: My Lords, would the noble Lord allow me—
LORD DIAMOND: Certainly; I am glad to listen to the noble Lord who has now risen to speak.
LORD ORR-EWING: My Lords, I apologise if my natural ebullience led to my questioning some of the facts. I would point out that the pound was worth 2·40 dollars when the noble Lord

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left office and is now worth 2·35 dollars. That is not a 10 per cent. devaluation.
LORD DIAMOND: My Lords, we can go into that at greater length if the noble Lord wishes, but he will not find much support for that view. What I am trying to do is to paint the picture without going into too much detail. There are many other things that we could have said and which no doubt some of my noble friends would wish to say, but I am trying to paint the picture as the background against which this debate is taking place.
It is perfectly obvious to us that the various policies with which the Government started in office lie in ruins around them: there has been the complete reversal in many fields—
THE EARL OF ONSLOW: My Lords—
LORD DIAMOND: My Lords, I have no wish to appeal to the Leader of the House. I am interested to note that what I am saying is creating more reaction than it normally does from some good friends and from the other side of the House, and from those who normally listen with considerable care and courtesy.
I repeat, as the interruption may not have allowed everybody to hear, that it is perfectly obvious that the Government's policies with which they started in office are lying in ruins around them. The fact that they are changing their policies in very many fields and thinking of a long-term prices and incomes policy is about as big a reversal in Conservative thinking as one could imagine. This is especially so if one has had the privilege —as I and many of my noble friends have had—of listening to Conservative spokesmen, on both Front Bench and Back Bench in the other place throughout our period of office when we were attempting to deal with this difficult problem, and being voted against time and time again on every conceivable stage of the Bills which we produced. The noble Lord, Lord Orr-Ewing, was spoken against as well as voted against. Therefore I am entitled to say that this represents a considerable reversal of policy.
LORD ORR-EWING: My Lords, since the noble Lord mentioned me particularly
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may I say that in our debates I always conceded that it might be necessary to have a voluntary policy? Admittedly, I spoke against a statutory policy because I did not think that it would work in that climate. I still think that it is going to create a great problem in a democratic society.
LORD DIAMOND: My Lords, I am very glad to give way to the noble Lord; but he is going to make a speech later and I should have thought that he has now spoilt one of the most important points that he wanted to explain away.
What is happening, therefore, is that the Government in this field, as in many others, are now starting to rebuild some of the institutions which we created and which they, in their enthusiasm, destroyed in their early months of office. We recognise, as the Amendment makes quite clear, the need for an effective policy against inflation. I admit and assert that wage increases in excess of productivity are certainly one of the elements in cost inflation. But they are one of many. Wage earners are not responsible for increases in import prices, whether of raw materials or food, nor for increases in profit margins—and the profits continued to rise in 1972 in spite of the increased wages to which we have heard so much reference. In fact, the main responsibility must lie with the Government. It flows from their economic and financial policies; their deficit budgeting and money supply, which we discussed before; their increase in rents; interest charges; the discouragement of investment; the premature imposition of value added tax. All these things have added considerably to inflationary pressures, and the Government must not try to evade their own responsibility by putting all the blame, as usual, on to the workers.
In fact, nothing could better illustrate how wrong such an argument is than to have regard to the recent increase since agricultural wages were frozen, in particularly difficult and arduous circumstances, as we all remember. Since they were frozen, home-produced meat prices have soared upwards. So it is not the workers who are responsible for that increase.
THE EARL OF ONSLOW: My Lords, it is not the Government who are responsible for that increase either; it is world

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demand. I know because I produce the stuff.
LORD DIAMOND: My Lords, what the noble Earl is saying, presumably, because he produces the stuff, is that he gets a greater price for what he produces, without any greater cost, as a result of world demand; because there is no greater wage cost since agricultural wages were frozen. What he is saying—and I recognise its validity—is that, notwithstanding that agricultural wages have been frozen, he, a farmer, has received an increased price for his produce. That is what we were trying to demonstrate.
THE EARL OF ONSLOW: There is one other point, my Lords. The price of barley has gone from £26 a ton last year to £41 a ton, and that is what beef is fed on as well.
LORD DIAMOND: My Lords, the noble Earl will then say to his colleagues who grow the barley how delighted he is that they have been able to get an increase in their price of barley notwithstanding that agricultural wages have been frozen. It is a very simple point: I have said it four times, and I hope that the House will not require me to say it again. Wages are an element but not the total cause of cost inflation.
There are clear advantages in a prices and incomes policy provided it is an acceptable one, and few of us would disagree broadly as to the ends we are seeking. But there are very great differences as to the means by which we think they can be achieved. The United States' experience, which has been quoted, shows without question that it is essential to have broad acceptance if a policy such as this is to work. The United States in the whole of their experience over this policy have not taken any set of proceedings against any worker. They have taken hundreds a month (I think the figure is something like 300 a month) on prices. Such a prices and incomes policy does two things. The more obvious one is slowing down the rate of inflation; but the more important one, in my view, is reducing the level of expectation. Any prices and incomes policy does great service in achieving that as well as in achieving some measure of education of what the economic facts
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are. So we are not opposed in principle to any kind of prices and incomes policy —far from it.
What we want to seek is a policy which will be acceptable all round. Now, how do we achieve such a policy? I am now going to break it down. There are two parts in the Government's policy this time. There is a prices policy and there is an incomes policy. Dealing first with prices, it is perfectly clear that there is no real or very great difficulty in getting broad acceptance of a statutory price restraint policy so long as there are—and this is provided in the Bill—a reward for increased activity and increases in profits and dividends appropriate to the rest of the policy providing for a modest improvement. Such a policy of control of prices has to be statutory, because it is enormously widespread, for control to be effective. The interesting point about such a policy would be that it would not, in my view, break down because of its own lack of flexibility, of its own rigidity, because there are in fact so many varieties of goods and services to be considered and it is quite impossible to police every single transaction which takes place. Those two facts would produce a sufficient flexibility for such a statutory prices policy not to be borne down under the weight of its own rigidity.
But it is quite impossible to think of the most important and regular purchases of a citizen—namely, food purchases—being omitted from a satisfactory and acceptable scheme. Nor shelter. Neither food nor shelter. So the Government, in my view, must postpone the rent increases for which they have provided, and must provide a cushion against price rises in essential foods. There is nothing new in this at all. It is a matter of degree. It can be done in several ways. The Annual Farm Price Review, with which your Lordships are very familiar, illustrates a number of ways in which this can be done. All the relevant Minister said. when he spoke on the Bill on January 29 in another place, was that there are serious tactical difficulties. It is true that there are serious tactical difficulties, but it is also true that the country is in a very serious position; and so are the Government. So we hope that the Government will not close their mind to considering methods under which a cushion, at all events against price

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rises in essential foods, can be provided. So much for the prices side.
I want now to deal with the much more difficult side of wages, and what my speech is directed towards is finding a prices and incomes policy that would be acceptable and would go a long way—if not to extinguish, at least to reduce the rate of inflation. The first point I want to make is that there is all the difference in the world between wages and prices. Whether a tin of soup is sold at 9p or 10p is a matter of money only. No status is involved; no prestige is involved. If a manufacturer of an inferior quality of soup puts up his price by a penny a tin the shopkeeper does not feel compelled to put up all the other tins of all the other types by a penny to maintain the differential. But where we have wage increases all kinds of different and deep emotions come into play, based on status, on prestige, on the acknowledgement, as it were, of service given to the community.
A whole host of things depend on the recognition which the man sees in the fixing of his remuneration or pay packet. Price rises are about money, and wage rises are about people—and it is far too sensitive and fundamental a matter to be imposed on people by a third party. Wages are a matter for negotiation between the employee and the employer, and if any outside body imposed wage levels for a long period, as the Government propose—the Government are talking about three years-plus—the employee would undoubtedly feel compelled to resist them. Moreover, the circumstances affecting some 22 million work-people are so infinitely varied that no one set of rules could be sufficiently flexible, although I note carefully what the noble Lord has said about the area for negotiation within the group figure. That is clearly a step in the right direction.
Therefore I come to the conclusion that the only restraint that would be workable so far as wages are concerned would be a self-imposed one; and what one has to do therefore is to try to achieve circumstances in which people would be willing to impose upon themselves and accept that position of some measure of restraint. In order to do this the Government must pursue only to their logical conclusion the chain of policies which they have started.
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The Government have decided, as shown in the Bill, on a maximum increase of £5 a week for any one person—£250 a year—and that is a taxable figure. It represents remuneration, so that in spendable income it might be £4, or even less. But now that the Government have decided on a maximum of £4 a week as spendable they must reverse their previous decision to start paying in tax handouts some £6 a week spendable to company directors and others earning £15,000 a year—and, of course, if the money is unearned, the tax hand-out is much greater. And the two are timed to come into effect at broadly the same time. Now that the Government have decided to hold down the cost of living they must reconsider their previous decisions to put it up: decisions affecting rents; decisions affecting V.A.T.; decisions affecting food prices.
The noble Lord, Lord Drumalbyn, referred to the United States' experience but, so far as I understood it from a very authoritative commentator only this weekend, what the Prime Minister ascertained when he went to see the President was that they are moving out of stage 2 as they cannot hold it because of farm price increases. That is the American experience, as I understand it, and it seems to be relevant to what I am saying about the impossibility of completely excluding farm prices from our consideration in maintaining a stable cost of living.
I am asking that the Government should reconsider their policies in order to keep the new policies in line with their recent decisions. If the Government want an effective prices and incomes policy then in my view they must consult the T.U.C. in order to achieve an effective method of voluntary wage restraint. Especially they must devise machinery whereby the T.U.C. can monitor the wage demands of its members, advise them and secure the necessary measure of restraint through the normal democratic process of self-government in which we in this country believe, in which the trade unionists believe, and which is open to them only through their own organisations. Trade unionists are as good patriots as the rest of our countrymen, and they and their leaders are sick and tired of inflation. I believe that there is still time. I believe that the right policies could secure the necessary good will. So I urge the Government for once to err on the generous

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side and to make a real gesture, so as to give the nation the opportunity to enjoy a period of genuine co-operation between worker, employer and Government based on fairness, feasibility and self-imposed wage restraint. I beg to move the Amendment to the Motion, standing in the name of my noble friend Lord Shepherd.
Moved, as an Amendment to the Motion, to add: "but views with increasing anxiety the economic situation and, while recognising the need for an equitable and effective policy against inflation, regrets that Her Majesty's Government continue to pursue budgetary, industrial and social policies that are unjust and divisive."—(Lord Diamond.)
4.5 p.m.
LORD BYERS: My Lords, in following the noble Lord, Lord Diamond, I must confess that I did not find—uncharacteristically—his speech to be particularly constructive, because I had the awful feeling which I get in all these debates (and I think many of us suffer from it) that we have all been here before. I can at least claim that in the Liberal Party we have been consistent, if only for the last five or six years, but everything in the traditional philosophy of Liberalism runs counter to supporting a statutory prices and incomes policy—something which, ten years ago, I should never have thought the Party would accept. Yet ever since the last Labour Government grasped the nettle, if only until they recoiled from the sting of it, the Liberal Party has accepted the statutory route. I find it depressing to hear the noble Lord, Lord Diamond, talk about consulting the T.U.C. again to see whether we cannot get a self-imposed wage restraint; to see whether we cannot get a voluntary wage restraint going. These are the things which Labour had a long time and the power to influence the unions to settle, and that is why I say that I did not find that—uncharacteristically—a very constructive approach.
We have accepted this statutory route, first, because no Government of either Party has produced a voluntary system which has so far worked. Secondly, the present proposals, although far from ideal, incorporate certain new features which are a considerable improvement upon the thinking of the past. Thirdly, the form of the inflation from which we
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suffer to-day is, in my view, far more dangerous than that which we had in the 'sixties and requires very firm action indeed if we are to get on top of it. Inflation in the 'sixties was primarily the result of wage drift: in other words, we had national wage agreements across the board, followed by a topping-up operation at plant or company level. To-day we have a far more vicious inflation which arises from the enormous pay claims from the powerful unions on an industry wide level, unlike anything which occurred in the 'sixties, and this is in addition to normal wage drift. I say that this is back again to "I'm all right, Jack"; but it is "I'm all right, Jack" with a vengeance. The duty of Government, as the noble Lord, Lord Drumalbyn, has said and as the Labour Government said when they were in office, is to protect the nation against actions which may give a short-term advantage to the powerful unions but which in the medium term will be disastrous to everyone, including the very strong unions themselves. That is the duty of Government and of Parliament.
One only has to look back five years to see how important it is to stand firm against selfish, sectional pressure. The last Labour Government introduced a statutory policy which we supported, but their plans were soon undermined by the big trade unions, and despite a spirited rearguard action by Harold Wilson and Barbara Castle the unions killed the scheme. It was a classic example of power and responsibility. The unions had the power the Government were left with the responsibility which they could not discharge. That surrender to the unions built up their sense of power even higher than it was before and led to the massive wage demands of the past two years. In my view, this is one of the new factors in the whole picture. No Government can afford to surrender again to that sort of attitude: if they do, and if they fail to curb inflation, they will give substance to the widely expressed fears that the country cannot be governed. My Lords, this is intolerable. Moreover, the social and economic consequences of excessive inflation, as we all know, are appalling. In our view, the national interest must prevail over shortsighted, sectarian demands, and at the end of the day the Government and Parliament must be seen clearly to be

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in command of things and to be the boss.
I have said that the present scheme is an improvement on past ones, though I must say that my confidence was undermined when I heard the noble Lord, Lord Drumalbyn, try to prove that there was not much difference between the Labour and Conservative schemes. If the noble Lord goes on like that, he may be jeopardising the Vote. However, I feel that it is an improvement on what Labour proposed. It gives greater flexibility at company and plant level by relating increases to the previous earnings of the group or division, and it enables a more honest share-out to be made, giving preference, one hopes, to the lower-paid workers. It is interesting to note that from these Benches a number of years ago we put forward the idea that one way of dealing with inflation was to freeze the pay roll at company or plant level and say to the people, "If you want to improve your wages within this gross total you must get rid of people, and if necessary cut down the directors' salaries, but whatever happens you will not have more than this gross total."
The same principle is incorporated here, and I believe that at plant and company level it should be possible to get a really honest share-out, if people want to do so. I like this idea because it enables a more intelligent approach to be made to wage increases, based on the disclosure of facts —that is, facts relating to the plant and not facts relating to the statistics of the industry as a whole. Once again, in our view this underlines the need for a properly constituted works council system backed by a Statute which enshrines the rights and obligations of both management and workers. There is, therefore, a missing link in what has so far been proposed. If we had that machinery we should have a better chance of making a pay and prices system work.
LORD GLADWYN: As they have in Germany.
LORD BYERS: That is so, my Lords. The second improved feature is that the control of prices should stiffen the employers to fight wage drift, rather than take the easy way out and collaborate with workers to increase wages and so keep
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inflation going. From the national point of view, this is why price control during this period is vital. This will stiffen the spines of management, because they will not be able to pass on wage increases to the consumer while their prices are controlled. This is an improvement and I will not be told that there is no difference between the Conservative and Labour schemes on this aspect. I believe that this scheme could be further improved and that some of these improvements could make it easier for the scheme to be accepted by the trade unions. I should like to see it accepted by the trade unions. We cannot go on with this appalling confrontation the whole time in which we have a most important partner not cooperating in something so vital to the national interest, and I would go a long way to meet the unions on reasonable demands.
On the question of food prices, I cannot help but believe that the Government have taken the right line, because if these get out of hand and there is no remedy available, we will be in real trouble, and this could easily happen. Food subsidies are not the right answer; they are indiscriminate—they are given to the rich and poor alike—and I prefer a system based on a flat-rate increase for the lower-paid workers if food prices moved beyond a certain point by a given date. I would rather base it on that group, monitored at regular intervals, instead of having indisscriminate subsidies, which I am quite sure are totally unmanageable. We have not found a way adequately to protect the low income groups and we must not rule out improvements in family allowances and pensions. The record on pensions has been good, but if food prices go up, the increased prices heighten inflation right at the beginning and this is why it is important to monitor the rise in food prices.
There is an exceptional case for a moratorium on rents. I did not quite understand what the noble Lord, Lord Drumalbyn, was proposing. He will, I understand, be doing something about rents, but rent increases will not be acceptable in this period and I believe that something like a moratorium—if that is not what the Government have in mind—is essential. There is a strong case for slashing the tax concessions or mortgages in respect of high-priced

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houses. If we want to keep land prices down, it is worth while looking at the Liberal policy, which we have put forward year after year, on site value rating to see whether we can bring more land on to the market and bring prices down. I accept the need for dividend control, but I accept it mainly on psychological grounds because economically it makes little sense. All that happens is that surplus profits accumulate in the company and the shareholders get the benefit when the freeze comes off. The wage earner, on the other hand, has no benefit during the freeze itself or afterwards.
It is time that we looked at some new ways of dealing with this problem. Greater fairness would result if our priorities were organised in a few ways that I wish to propose. First—and I believe equal top—in order to maintain the dividend and provide the money for growth and expansion within the firm, why not consider issuing shares to workers in the company which could he taken up then or deferred, or why not consider additional contributions to industrial pensions funds to provide benefit later on in the form of higher pensions? This is a problem area in which I believe a solution is available. I believe that if measures such as these could be added to the package, there is no reason why the unions should not co-operate, as in my view the moderate ones would like to do.
After all, one cannot claim that the unions have had it too badly, if one looks at the latest statistics. The noble Lord, Lord Drumalbyn, gave some interesting statistics. What I find striking is the fact that the increase in average basic wage rates from October, 1971, to October, 1972, have amounted to 17·3 per cent. If one compares average earnings over the same period one finds that they have gone up by 15 per cent. In the same period the retail price index has risen by 79 per cent. and the index of industrial production has gone up by 6·2 per cent. This reflects a picture of real inflation, but one cannot say that there has not been a reasonable increase in basic rates and average earnings. As for the T.U.C.'s proposals for dealing with these problems I can only call them a hastily assembled hotch-potch of muddled thinking and I do not think that it is along the lines of their declaration with the Labour Party that we shall ever solve this particularly
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difficult problem. What I have said will undoubtedly be dismissed by Labour critics as "union bashing"—
LORD BLYTON: Hear, hear!
LORD BYERS: I expected that, but I hope it will not be the view that most noble Lords will take because that is the last thing I want. The militant trade union leadership is now a very strong political force in this country. It may even be the strongest political force we have. It is this sectional leadership, not the rank and file membership, which is inspiring public criticism and concern to-day. I believe that the trade union members themselves are beginning to sec the limits of this type of activity if we are to preserve the role of law and Parliamentary democracy. We must try to use our influence—this is where influence can come from the Labour Party—to see that the trade union leadership accepts its responsibility to co-operate to help to get us out of the inflationary mess in which we find ourselves. But the measures in the White Paper will not be sufficient. We still have the problems of monetary policy, the growth rate, investment policies and the like. All this is part of a big package, but I should like to see influence used in Parliament and elsewhere to see whether we cannot get the co-operation of the trade union leadership, even at this late stage in the game.
I have two further thoughts to put to the House. We cannot run our pay and prices system on statutory lines for very long. We must get down to a sensible voluntary system of productivity and properly shared prosperity without statutory controls. We may have to have statutory control in the background. We have to ensure, in my view, that phase 3 is less inhibiting than phase 2. But we have to take the nettle in a firm grasp now if we are to be able to get out of our difficulties and get away from statutory control. Phase 3 should be the phase that paves the way to normality and not the phase that turns the screw until the industrial patient dies.
A possible solution for the future may be along the lines of creating a tripartite body, rather like a much enlarged N.E.D.O. Its function would be to take into consideration all the relevant statistics on growth, earnings and prices, and

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to recommend the parameters within which wage negotiations could take place without upsetting the economy. I do not believe that it is right to leave this job with the Government or the Treasury. It would in fact do the job which the Government have had to do in producing the £1 plus the 4 per cent. formula, but in my view it should not be a Government body. The Government should be a weapon of last resort. The Government should not be involved in this body which should have on it employers, unions and representatives of the public interest. It should include within its membership those people who will be responsible for the major wage negotiations. In this way, they would be locked in and power would be seen to go hand in hand with responsibility. I believe that this suggestion is worth consideration as being something which will get us out of the difficulties that we are in at this moment.
My noble friends and I will support the Bill when it arrives and we will support the Motion tonight. We do not support it with any enthusiasm, but we support it because we see nothing better to hand. I only hope that this time we shall make a better go of it than we have done in the past.
4.22 p.m.
LORD THORNEYCROFT: My Lords, not for the first time I find myself in a large measure of agreement with many of the arguments which have been addressed to the House by the noble Lord, Lord Byers. But I would make the premise to my own argument that complex though this subject is, it is a great deal easier to write or to talk about than it is actually to do anything about if you have the responsibility of Her Majesty's Government. Indeed, the more one knows about the subject of inflation, the greater the humility with which one approaches any debate upon that topic.
I congratulate the Government on having adopted a statutory policy. It is indeed a step fraught with great difficulty, but it is one which I have urged upon them myself—and I see that the noble Lord, Lord Plowden, who has also brought arguments to bear upon these matters, is in the Chamber. I recognise that it is always possible to make witty speeches when Governments
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change their policies. I noticed that the Leader of the Opposition made a very witty speech in another place the other day. If it is of any comfort to Her Majesty's Government, I would say that when the time comes for Governments to be judged, they are not judged on whether they have changed their policies, but on whether their policies have worked. It is greatly in their interests, in the nation's interests and in the interests of the Socialist Party also that these policies should work, because if they fail to work it is a little difficult to see where the next step will take us.
I would say, therefore, just a few words about the nature of the disease. Inflation is a very bitter ill for a country to bear. Public opinion in this country is beginning, perhaps for the first time, to realise how bitter it can be. It hits the economy at home; it bears heavily upon external trade; and it is damaging, of course, to the rich, but it is even more damaging to the poor. In October last year the wage rate increase, year over year, was at the rate of 18 per cent. The increase of the money supply was running at 26 per cent. Manufacturing prices, or most of them, were held uneasily by a voluntary agreement with the C.B.I. at around 7 per cent. but all were poised for a savage surge forward in inflation, much of which is to-day, in any event, still unavoidable.
I am not going to make a speech about economics. I will leave that to those better qualified than I. I would say, however, that there are three landmarks on the road to the position which we have now reached: one was under the Labour Party and two under the Conservatives. Under the Labour Party there was the attempt by Mr. Wilson to introduce labour relations legislation and then his retreat from that position. The two under the Conservative Party were the smashing defeats they suffered in the case of the coalminers' claim and, afterwards, in the case of the railways' claim. Those three events—and I am not going to comment on their merits in any way—began to raise not only in this country but also outside, a deep doubt as to who really was in charge of the economy of the United Kingdom. It is that doubt, that lack of confidence, which is the most damaging feature in a spreading inflation.

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We are now much clearer about where power lies, and the Government reluctantly—and I do not blame their reluctance because you pay a dreadfully heavy price for any policy that you adopt in these matters—but with determination have accepted a statutory policy. I do not want to develop the details of it; indeed, it would be very difficult to do so until we see the Code which will be published later, when one will be able to see some of these things with greater clarity. For my part I would say that I have never believed in the possibility of a voluntary policy, and though I may be a little isolated in the House in this matter, I hope that the House will bear with me if I develop, very shortly, the reasons why I believe that a voluntary policy is not likely to succeed.
I have never believed in a voluntary wages policy, in the same way that I would never have thought that a voluntary taxation policy was a valid concept. The noble Lord, Lord Diamond, will agree with me, as he also served at the Treasury. It would be very convenient if a voluntary taxation policy was a valid concept, but most of us who served in that Office have found that a degree of statutory authority is necessary in matters of that kind. The following reasons strike me as being important: first, neither the C.B.I. nor the T.U.C. is an executive body in any real sense of that term. They have no power whatever. That is not derogatory of them. They are both admirable volunitary bodies themselves and they have great roles to play in this country. But it is difficult to agree with anyone, or to reach an agreement with anyone, if that person cannot deliver the goods; and neither the C.B.I. nor the T.U.C. has any power to do so. This seems to me at least to be relevant to the argument as to whether you can have a voluntary policy. The second point is that if they did agree, both of them would lose most of their members. Whatever else the T.U.C. is for in the eyes of the trade union movement, it is not put there, or elected, for the purpose of agreeing to a 4 per cent. plus £1 a week increase. That is not the idea at all. Nor is the C.B.I. really supported for the purpose of placing limitations which are very difficult to understand on profit margins. For a time it is possible to influence these events, but their role, in the view of their
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members, is not to reach agreements on issues of that kind.
Moreover, it seems to me, thirdly, that if you did get a tripartite agreement between a Government, the C.B.I. and the T.U.C., the concessions that they would all have to make to one another would make such a nonsense of the resulting agreement that the thing could not conceivably work. I realise, of course, that the White Paper itself is a compromise; it obviously is. But it is a compromise reached within a British Cabinet, and most of us are familiar with the compromises that are reached within a British Cabinet. But at least there is a Cabinet and a Government responsible to Parliament for the compromise which has been agreed upon.
The fourth reason is illustrated by the Amendment which we are discussing. You could never get an agreement which was limited to the confines of this White Paper. Inevitably, other factors intervene. This Amendment deals with matters like budgetary policy, whether you ease the punitive taxation on the higher income brackets, the Industrial Relations Act, social policies like the Rent Act and the rest. I would probably disagree with the noble Lord, Lord Shepherd, if he is going to reply on these matters, on a number of these issues, but I would defend to the death his right to argue them and to introduce them into a debate of this character. He might have added the European issue, though he did not, for perhaps obvious reasons; but he could have done so. The moment you start an agreement on a narrow range, inevitably you are drawn into these other matters, and how could any Cabinet sit down with bodies and institutions, however important, but limited—they do not represent the whole public—and debate these matters? If it was narrowed, they would not get agreement, and if it was widened we should start seeing a Government which was not the type of Government we are accustomed to in this country, responsible to Parliament, but something very much nearer an agreement between great institutions bordering on—and I hesitate to use the word because it has overtones —the concept of the corporate State, which would certainly not be acceptable, at least in my view, in any England that I have ever known.

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I, for my part, am prepared to serve under any Government in this country—I sometimes have hesitations when I look at noble Lords opposite; but I am very happy to be in England under a Socialist or a Conservative Government. But I want a government, and a Government responsible to Parliament. That is the only type of arrangement to which we are accustomed and which I think we should ever tolerate. Therefore, for the reasons I have advanced—and I have deliberately advanced them because I thought the noble Lord, Lord Drumalbyn, was touching on these possibilities again, and I know Mr. Maudling and others have written about them—I say I have grave doubts (I do not put it any higher than that) as to whether voluntary agreements are really valid in this field.
LORD SHEPHERD: My Lords, would the noble Lord not agree that even with a statutory policy, even with all the laws and the penalties that are there, in the end there must be a voluntary acceptance by the community, and therefore the question of fairness does arise?
LORD THORNEYCROFT: Yes, indeed, my Lords. I am most grateful, because I was just going to move on to this very point. There is, therefore, a position where the Government take full responsibility for the decision which is taken. Consultation, yes; shared responsibility, in the sense that you pass outside the Government the responsibility for the decision taken, no. I could not agree more with the noble Lord, Lord Shepherd. Of course you need consultation. What is necessary now is to carry public opinion with the Government, and in public opinion I include most importantly trade union opinion. I mean the moderate opinion everywhere, and there is a great deal of moderate opinion; there is a great deal of moderate opinion among the trade union leaders at this present time; there is a great deal of moderate opinion among the trade union rank and file. I sometimes think that between the two there seems to be an element of extremism which is a little more difficult to handle. But I would agree absolutely with what I took to be the sense of Lord Shepherd's intervention: that at this moment we should seek, by every method open to us, to reach as much accommodation of views as we can.
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I would never ask the trade union movement to underwrite some settlement of all wages on a national basis—that is outside the role of the T.U.C.—but I would seek, by every means open to us, to get their co-operation, particularly, for example, in working on the Boards which are set up and in playing a part to try to get policies to work, even if the policies are not completely agreed. They can work outside to change the Government, to influence public opinion, through politics and other means; all those courses are open. But we should seek by every means to get the maximum support of moderate opinion in the things we do or the concessions we make. Free milk is a popular and bitter subject of political debate; concessions are made on that; concessions are made on the Rent Act—not as much as the noble Lord requires, but some are made. Of course concessions can be made. But, perhaps above all else, we need a little lowering of the acerbity of debate, a great deal more concentration by all of us on the things on which we can find agreement, rather than on a maximisation of the differences which exist within this country at the present time.
LORD WIGG: My Lords, if the noble Lord would allow me to say so, I am much interested in the play he is making about less acerbity in the debate. Does he not think it time to address his remarks to the Prime Minister, who, both by words and actions, has done more than any man in living memory to split this community and nation into as many pieces as he can?
LORD THORNEYCROFT: My Lords, being a modest man, I was addressing my remarks to your Lordships' House, which I think is the wise course to adopt. It is possible that what we say here is reported, or even listened to, outside. But I do not exclude anyone, Prime Minister, Leader of the Opposition or anybody. I am saying, in all seriousness, that in the national interest the position is grave enough to warrant our trying to find the maximum degree of co-operation and to minimise the differences, which are very real. I have been quite a controversialist myself, as the noble Lord knows; I can make the other sort of speech. But at this moment I think a little moderation would not come amiss.

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As to the cure proposed, we must await the Code itself. There are things in the Code—profit margins which strike horror into the industrialists, and things about wages which would upset most members of the trade unions—but the concept of trying at this moment to limit both wages and profits is something about which I think the whole of your Lordships' House is probably agreed. And to those who think that it is the end of a free society or of the capitalist system, I would say that I do not believe it is either a sunset or a new dawn; I believe it is the common light of an ordinary rather cold winter's day, having seen these problems myself in some degree, as many of your Lordships have, over quite a number of years. The objective should be to make stage 2 work well enough to be able to get stage 3 a little easier, not a little tougher, and to try to get the whole economy to the point where we could use moderate monetary mechanisms with more effect than we can possibly use them at the present time. In economic terms, that is the object we are seeking to achieve.
The problems are more limited than are generally supposed. In truth, most prices are fixed by competition. Most prices of most manufactured products are fixed by the hard fact that you cannot put them up because otherwise you will not be able to sell your goods. Profits, as a percentage of the gross national product have been falling over quite a number of years. The problem generally in the economy is to hold them at a level which will justify the necessary investment which all of us, on both sides of this House, want to have. I hope that most wages are going to be negotiated even under these arrangements, because, after all, the ceiling is somewhere near 7 per cent., which is not an insignificant figure. The basic and difficult things that are left, are food prices and prices of imported materials. Mr. Wilson found those impossible to deal with in 1965, 1966, and 1968, and he would find them as impossible to deal with if he were in office again. I admit that I found them impossible to deal with. I agree with the noble Lord, Lord Byers, that one might do something about threshold agreements, but that is about the only way in which one could tackle problems of that character.
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It is on matters of this kind that the help, the co-operation and the wisdom and experience of the trade union movement could be of immense help at the present time, because these matters have to be tackled. There is the question of food and of monopoly prices, or the strongly price-led prices. Those need to be monitored, and they can be, by fairly simple machinery. There are a few wage claims by a few powerful unions out of all proportion to what can be afforded at the present time, and the Government have to hold those at whatever cost. May I repeat those words: they have to hold them at whatever cost. They cannot, and must not, fail again.
I agree with the noble Lord, Lord Diamond, that wages are not the only factor in this issue. Wages and prices are only factors in the problem of inflation. Monetary policy—and I believe I should carry the noble Viscount, Lord Amory, with me here—is of critical importance. Deficit financing, the rates of borrowing, the scale of borrowing, are all of immense importance in the economy. Any policy which tried to tackle inflation from one end only and forgot that this vastly important flank was wide open would be in a very perilous position. Such a policy would fail. Therefore I say to your Lordships that to tackle inflation and I have learned this lesson—you have to do it from all sides, not from one; and I believe we shall attempt to do that. In the future and for the immediate period ahead we cannot avoid hardship. I believe that that hardship will affect all—it will affect the rich and it will affect those on the lower incomes too—but if, in the world ahead, we all get rather less than we desire or think that we deserve, it may be a price worth paying for a rather better and more stable world.
4.45 p.m.
LORD PEDDIE: My Lords, my noble friend Lord Diamond gave eloquent evidence of the opportunity that this programme presented to this side of the House to make political game of the Government. I, on this occasion, would indicate that I rather more rejoice at the conversion of the Government, which involves a rejection of some of the cardinal principles pronounced when they first came to office. I believe that the economic circumstances of the country to-day justify

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a policy such as is indicated in this programme—although there are many points of this policy which I hope we shall have the opportunity to debate at a later date. In spite of such a comment on my part, I would emphasise that I believe that the Government themselves are largely responsible for the steady worsening of economic conditions since they came to power. When this Government came to power the machinery for dealing with an incomes policy already existed. There was also a public acceptance of the need for such a policy. This is a tremendously important factor, as I shall try to demonstrate in the course of my speech.
I suppose that I personally must find some grim satisfaction in the fact that some two years ago I predicted the events indicated in this Paper. I do not think that it is necessary either from this side of the House, or from the Government Benches, unduly to emphasise the seriousness of this problem of inflation. That is why I personally would have appreciated it if the noble Lord, Lord Drumalbyn, had argued his own case on the basis of facts as they are, rather than on what my noble friend said six years ago. I know that some indicate to-day that inflation is a universal complaint, and that no industrial country has been free from inflation in the days since the war. That is true. Some countries where inflation has taken place have not felt the need for such drastic action as had to be taken by the previous Government and must now be taken by this Government; but this is largely because the impact of inflation is harder upon Britain than almost any industrial nation, and the character of our economy intensifies that burden. Our dependence on exports, and the dependence of our industries on the high proportion of their raw materials that come from abroad, are all factors which make this inflation and its consequential effect on the price structure of tremendous significance. Successive Governments have attempted to tackle this problem since the end of the war, and in varying degrees all have failed. They have failed because the public did not recognise the need for such a policy.
The Labour Government were extremely fortunate in being able to provide, as a basis for the expression of their policy, the Statement of Intent, which at
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least indicated that the trade unions, management, and Government collectively recognised the problem. It is true that over the course of the years, as I knew only too well, the intensity of their belief tended to diminish; nevertheless, for the first time there was a recognition of the seriousness of the problem, and of the necessity for collective action to deal with it.
In due course, we shall be discussing the machinery that will be laid down in the Bill, but this afternoon we have heard arguments about the merits of both a voluntary and a compulsory basis for an incomes policy. In a free economy, only conditions of emergency justify, or even make possible, an incomes policy that rests exclusively upon the compulsion of law. That does not mean that a successful incomes policy can operate only on a basis of compulsion; as I said a few moments ago, it depends to a high degree upon public acceptance, which in turn depends upon public recognition of the need for such a policy. This Government have one overwhelming advantage: in spite of the public demonstration of trade union policy, the general public recognise the desperate need to deal with this problem of inflation, and in consequence they will give support to the Government in their prices and incomes policy provided that it not only is fair but is seen to be fair. I would urge the Government to recognise that fact because, no matter what laws are passed, no matter what element of compulsion is introduced, a policy cannot be successful unless it has a high degree of public acceptance.
I was a member of the Prices and Incomes Board from the day of launching to the day of sinking; I think I was the only member who was able to survive the whole passage. In the last six months, during my period of chairmanship, we were responsible for 12 reports. I mention that fact only to point out something of tremendous significance. It may sound arrogant on my part, but I believe that during the last six months, at a time when everybody knew that the Board was coming to an untimely end, it demonstrated its worth and indicated that there was public recognition of the services it had rendered. It could have ground to an ignoble halt, but it did not. The staff were effective and accepted their continuing responsibilities until the very last day,

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and both unions and managements retained a respect for the operation of the Board.
One can imagine what could be the result of proceeding to a company to consider some wage or price problem, when the management of that company knew that one was for "the chopper" in a few months' time. Yet there was universal recognition of the fact that the Board had a worthwhile task. It is interesting to note that the chairman of one very well-known and respected public company started off with a violent denunciation of a particular inquiry for which we were responsible and which affected their business. Up and down the country he castigated the Board; but he ended up by paying public tribute for the first time in his published report and balance sheet. I say this not to indicate what a good job I did as chairman during the last six months but to demonstrate that both managements and trade unions are prepared to work with a body of that kind, provided that it is demonstrably performing its task in a manner which is calculated to be in the long-term—and indeed, the short-term—interests of the community as a whole.
I find it difficult to understand the trade union attitude in some cases, when they say that we should depend upon free bargaining; or the attitude of some noble Lords opposite, who claim that the free play of economic forces, with so-called competition, can effectively determine pay and prices. For that matter, I do not know that any free competition exists, or has ever existed. In the same way, I say to my trade union friends that free bargaining on the industrial front does not ensure equity in the determination of wages. The gains go to the strong. The weak, the ill-organised and the low-paid cannot exert pressure and they come off worse. That is why I regret the Government's proposal for a separate Price Commission and a Pay Board. I think there is an over-anxiety to be a little different from the old Labour Government's P.I.B., which causes them to make the two bodies separate.
I do not know how the Government reconcile that proposal with the statement in paragraph 24 that:
"Pay is the largest single element entering into prices which are under our own control or influence."
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Will the Government say to the Price Commission, "Investigate prices, but do not deal with the single element that is most effective in determining prices"? It just does not wash. I shall not argue that point further, except to say that I hope sincerely that if there is a separate Price Commission and a Pay Board they will not have two separate staffs, because if they do it will be difficult to go along to industry and urge greater efficiency and a reduction of staffs. I ask the Government not to duplicate staffs. Believe me, my Lords, speaking as one who knows something about the administration necessary for the performance of these functions, something will have to be done to deal with this situation, even if there has to be another body in control of the other two. I do not mind these bodies being separated in name, but to allow them to be completely separate, with complete autonomy, is without any doubt quite wrong.
I would also suggest that there is a need to concentrate upon prices. I know from practical experience the truth of what the Government have repeatedly said—which does not fall easily upon our ears—that it is more difficult to control prices than to control wages. There are elements in a price that are outside the control of any Government, whether it be Labour or Tory. Nevertheless, if an incomes policy is to pay it must demonstrate to those people whose wages are controlled that everything in the Government's power is being done to effect some restriction, examination or curtailment of price movements. I would concede that prices cannot be completely controlled, but the Government should go a little further than they have done in demonstrating that the operation of this programme will be fair.
There is one aspect of this document to which no one has yet made reference, though to my mind it is the most significant and important part of it. I refer to paragraph 30, which deals with the low- paid and suggests that a board will be established to
"improve the capacity of industry to raise pay levels for the lower paid."
One of the most important reports that the P.I.B. ever produced was about low pay, and we produced it during the last few months of the Board's operations. I advise Members of this House to read

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that report. It demonstrated that the relationship between the weekly earnings at the median and lowest decile has remained constant for a century. In other words all the activities of the trade unions have effected no change at all in the relationship between the low paid and the higher paid. As I am sure some of my colleagues will agree, most of the strong trade unions are more concerned with the maintenance of differentials than with raising the standard of the low-paid. I would argue that the redistributive effect of tax and social security has done far more to improve the position of workers with low earnings.
It is interesting to know what the situation is with regard to low pay. According to the latest Earnings Survey, covering just over 8 million men over 21 years of age doing full-time manual work, 23 per cent. earn less than £25 a week. Now it is absolutely impossible for anyone, particularly those who have to sustain a family, to live on £25 a week. Yet that is the number of people who live on less than that figure. I know I shall be told about overtime. Of course: but if you look at the overtime figures you find that over the past twenty or thirty years there has been no change in the number of hours worked by the average worker. He gets the added sustenance that he needs from the extra hours he has to work—a stupid situation! That is what is going on; and I would say that the Labour Government did but little to deal fundamentally with that situation. Both noble Lords opposite and the last Labour Government sought to deal with this problem in terms of what handouts they could give to the low-paid. Shall we have a national minimum wage? That is of transient value. You need more than that. You need something which is hinted at in this document; that is, to deal with this problem fundamentally.
For instance, you find that in the country to-day ten industries account for one-third of the people who come within the category of low-paid, and that, with the exception of agriculture, all of them are service industries. There is no single cause of low pay, and there is no single remedy. It may be in consequence of low skills: it may be inadequate capital in that industry; or it may be a need for a revaluation of the service that is offered
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by that industry. I would beg of the Government to accelerate their intention to set up this body, because there lies the answer. We must consider in detail why we have the low paid; and, having found out the reasons, we may be able to separate some of it from what one might describe as social considerations—inadequate physical and mental ability to deal with the situation, which causes workers to earn less than they ought to earn. That is a social responsibility, and that can be dealt with socially. But at least let us tackle this problem, because in doing so we shall not only be dealing with a social problem but will be making a considerable contribution towards raising the economic standards of this country.
I would say, in conclusion, that the major objectives of the incomes policy as indicated in this document will be, I hope, to provide, and be seen to provide, a sustained rate of increase in the general productivity of the country. If it does not do that, it is not worth a damn and it will not last. But if this objective is not realised then the policy will be judged simply as a mechanism to curtail pay, and the effectiveness of the policy will be restricted. In the early days of the old P.I.B., that was a problem. People thought that the Board was solely for the purpose of curtailing pay; other people thought we were the universal economic doctor, available to solve every problem. Both points of view were foolish, and almost ridiculous. We must make absolutely certain that we concentrate on the need for increasing general productivity. To-day, the trade unions quite justifiably expect inflation to continue, and they build an inflationary hedge into their demands. You cannot blame them. You cannot blame them, because employers have the same view, and expect to pass on their higher costs through higher prices; and they have been doing that for a long period of time. Therefore, it is wrong to believe that pay, and pay alone, is the factor which brings about inflation. All too often there is, or there has been in the past, a willingness on the part of employers to concede an increased wage because they can quite confidently pass it on—and if need be I could mention a number of industries where that has taken place.
I know, of course, that the greatest single obstacle to the implementation of

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this policy lies in the traditional trade union view that wages and profits are rival claimants for the industrial product, and I would say that, in the opinion of the trade unions, historical experience would confirm this point of view. It is not easy to demonstrate, as has already been stated, that the curtailment of profits cuts back investment, with adverse effect upon industry, workers as well as employers. It is true, my Lords, at least in a mixed economy such as we have now, that in the long-term the interests of capital and labour are identical—indentical in the sense that if general productivity rises there is a greater opportunity for us to do better together. But, talking about long-term interests being identical, so are the long-term objectives of stateroom and steerage passengers. They both have the same objective: but in the short term the overwhelming differences obscure any identity of interest—and to my mind that is one explanation which noble Lords opposite should take to heart. It is one thing to be able to demonstrate, as can quite easily be done, that, in the long-term, employers' interests are identical with those of labour. But at least do something in the short-term to indicate that there is some immediate advantage, as well as something in the distant future. An incomes policy, my Lords, is but one facet of an overall policy of economic development. An incomes policy, as I was able to see in the six years that I was involved in it, cannot achieve anything in isolation. It just cannot. A clearly defined incomes policy is an essential corollary to any effective plan for economic development.
I come now to my final point. The problem—and I know it is a difficult problem that would present itself to a Labour Government as it does to this Government—is to accelerate the rate of economic growth and at the same time devise equitable systems to determine wage differentials which take account of the changing character of British industry. That is the problem. I think the Labour Government made a great contribution towards that end. In my opinion, the establishment of the P.I.B. was a great step forward. I regret very much the action of the present Government, for either personal or political reasons, in destroying it. But I take great comfort in the fact that they have learned the
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lesson; and, having learned that lesson, if they are able to pursue a course along the lines that I have tried to demonstrate I am sure that this policy will be accepted by the public at large and will make a contribution towards the economic development of Britain.
5.8 p.m.
VISCOUNT AMORY: My Lords, my noble friend Lord Drumalbyn opened this debate with a very informative speech, as he always does. He was followed by the noble Lord, Lord Diamond, with what I thought was an interesting speech. I hope he will forgive me if I do not get entangled with him over his list of records, because if I did I should not have time to make the other points that I want to make. If I agree with him that the pressure of wage and salary increases is not the only reason for inflation, I hope he will agree with me that it is without question the biggest single one. As to the noble Lord, Lord Byers, if I may respectfully say so I always enjoy his speeches on subjects of this sort because they always seem to me (again if I may say so most respectfully) to be informed by a great deal of practical common sense derived from his wide experience. He started by making a claim for his Party of consistency. It may well be a well-founded claim, but I would facetiously remind him of a onetime distinguished member of his Party who I think described consistency as "the last refuge of barren and sterile minds."
My Lords, phase 2, the measures that we are debating this afternoon, is the logical sequel to phase 1. Both represent intervention by the Government in a field in which the present Government would have much preferred not to participate. Although I myself should much prefer non-intervention, I have no doubt that in present circumstances it is necessary to intervene and I admire the Government's courage in deciding to do so. Phase 2 seems to have been well received by the country as a whole. If that is so —and I believe it is—it is because the country has now woken up to the malignancy of the disease of inflation. I agree entirely with what my noble friend Lord Thorneycroft said about that, and indeed about most of the other things to which he referred. In passing, I may

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say that my noble friend always gives a sparkling performance. He is a brilliant extempore speaker, and I am always fascinated by his technique of having lying on the Bench beside him two huge sheets at which he glances from time to time and which on closer inspection, seem to me to look exactly like the menus that one gets in very expensive restaurants.
My Lords, these measures are drastic, and clearly the Government have taken great trouble to make them as fair as possible. I agree with the point made by the noble Lord, Lord Peddie, on that: fairness is an essential element in any scheme of this sort. Just as it was right when we were debating phase 1 to keep an eye on the shape of phase 2, so I think it is right now that we should peer ahead and try to envisage phase 3, which in one sense is still more important because I am convinced that it will last longer than either of the other two phases. An absolute freeze cannot be kept going for long because it is bound to lead to rigidity and stagnation. If these measures, in their present form, were continued for very long, they would suffer to a lesser extent from the same drawback. I think that this will be accepted by the Government.
What phase 2 will comprise is not yet clear. My own humble guess is that in our complex and interdependent society Government probably will never again be able, even if they want to, to extricate themselves completely from some degree of intervention in a field in which they would prefer not to intervene at all. I doubt whether ever again in the foreseeable future we shall see absolutely free and absolutely unfettered major wage and salary bargaining. The reason is the power that monopoly and near-monopoly —and, not even that, great strength in bargaining—gives. If it conflicts with the security of the nation and our society then it cannot be allowed to operate against the general interest. Nor, as an example, at the other end of the scale, can the owner of land, which is a scarce commodity in this small island, be allowed to take unlimited advantage of a temporarily narrow market—indeed, it may get narrower and narrower—if that works to the detriment of house development.
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The two questions that I think it is relevant to ask when debating these proposals are these. First, is the national situation serious enough to justify such detailed intervention? Secondly, are the proposals likely to be effective? As regards the first, I am afraid that without doubt our national situation is serious enough to necessitate these steps. What is the kind of balance sheet that I am referring to? First, an extremely rapid rate of inflation, and, what is particularly dangerous, a rate which during the last year or two has been more rapid than that of our main international competitors. Secondly, there are forecasts of quite large deficits in our balance of payments. There is no sign yet, unfortunately, of that upsurge in exports that one had hoped for from the last devaluation. Let us hope that that is a delayed effect which may come.
Thirdly, there is the alarming increase, to which my noble friend Lord Thorneycroft also referred in passing, in money and credit supply. I myself feel, with hindsight, that that increase was so rapid that not only was it enough to finance the inflation but, more than that, it probably aggravated it. I know that the Government allowed it for what seemed to be an excellent reason, that they wanted to stimulate the economy to bring unemployment down from the rather deplorable level it had reached last year. But I think that the money supply situation needs to be watched very carefully. Fourthly, there is the prospect, one would guess—I do not know, for I have not studied the forward figures, and I may be wrong—that Government expenditure above and below the line over the next few years may go beyond the share of the domestic national product to which the Government hoped to limit themselves. I may be wrong. I hope so. The other side of the picture is the upward trend in the standard of living and the welcome decrease in the unemployment figures over the past few months.
My Lords, it is the fashion, and I believe a dangerous one, to suppose that because sterling now floats we need not worry too much about an adverse balance of payments. That, I submit, is a complete delusion. I agree that in present circumstances it is right to allow sterling to float I hope that it will not be brought back to a fixed exchange too soon. But there is an insidious danger

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in a floating rate that, because its movements are gradual, few people realise what is going on. Politicians—God bless them! if they will allow me that little intervention—are particularly apt to think that with a floating rate it is none of their business what happens and that the market can carry that baby for them. How many people remember, for instance, that the recent floating, six or seven months ago, amounted to a devaluation of something over 8 per cent.? The price we have to pay for a drop in the floating rate is precisely the same as the price we have to pay with an enforced change in a fixed rate. We have learned in the past 25 years that the relief obtained by devaluation can prove very temporary indeed; and a continually falling exchange rate would put paid to any steady improvement in our national living standards.
We may at present be liable to the all-too-familiar criticism that it has been possible so often to level at this country's activities since the war: that we are trying to do too many things at once. I believe that the present situation is so serious that any surplus we can earn as a nation needs to be ploughed back to strengthen the stability of our economy rather than be paid out in higher consumption. Let me give one illustration of the illusive impressions of prosperity that inflation brings. If the balance sheets of companies were drawn up with an absolutely strict regard to real, as opposed to paper, values and profits, many, and possibly most, companies in this country at present would not be working at a profit but would be working at a loss. Like a company, in which the interests of the shareholders should keep dividends low and plough profits back, so we, nationally, should plough back whatever earnings we can make now to strengthen the basis of our economy.
My second question is: are these measures likely to prove effective? I believe that the answer is "Yes", if they are really backed by public opinion, as I believe they will be. They may well succeed in reducing the immediate pressure of inflation to a far less damaging rate. Our situation is one in which inaction is one course which is bound to he fatal. Here we have a series of measures designed by the Government not as the result of Party political dogma but pragmatically,
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after consultation with the C.B.I. and the T.U.C., to meet the urgent necessities of the position. If we could have got a voluntary agreement I think it would have been better, but I agree with my noble friend Lord Thorneycroft that that was a tremendous lot to expect. I suggest, my Lords, that a very heavy responsibility would lie on those who would deliberately impede such policies when they have been approved by Parliament. I know that I am to be followed by the noble Lord, Lord Douglass of Cleveland. I do not know how much he will agree with me in other things, but I think he will agree with that.
I have said that in phase 2 the Government have taken great trouble to be fair. Inevitably, in a complicated matter like this, it is easy to find individual impacts to criticise. Let me take one. The restriction on dividends alone still leaves profits which could, if the profits were bigger than the dividends, be used for the ultimate benefit of shareholders; while in the case of restriction on wages the amount restricted is lost forever. On the other hand, of course, retained profits may facilitate industrial investment. I hope that the Government will not listen to siren voices urging the introduction of general subsidies, including food subsidies. As I remember too well from the days when I was Minister of Food, that is a slippery slope, if ever there was one. I believe that the main difficulty in phase 2 may prove to be the policing of the restrictions. In our complicated economy it is impossible to control prices or individual profit margins in absolute detail. It is easy for the Government to deal with profits in the aggregate and ensure, by taxation, that they do not take more than a reasonable proportion of the domestic national product. So, once again, effective prevention of abuse by minorities will depend at bottom on the influence of public opinion. Also, my Lords, we shall delude ourselves if we do not realise that these measures will mean a very big increase in paperwork, both for companies and also for civil servants.
When we come to phase 3, I humbly prophesy that we shall enter an era when the Government, on the best technical advice possible, will lay down limits within which wages and salary bargaining—free bargaining—can take place without damage to the national economy.

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I think that there will be threshold agreements, as they are called, and that the Price Commission and the Pay Board will become permanent institutions. May I say to the noble Lord, Lord Peddie, who was a distinguished member of the Prices and Incomes Board, that I thought it a pity when that Board was abolished completely. I should have preferred it to be kept in existence. I think it a pity that the experience gained by Mr. Aubrey Jones and the noble Lord, Lord Peddie, should not be made use of in some way in the present circumstances. Perhaps it will be. As regards profits in phase 3, in the aggregate they will continue to be controllable by taxation, as indeed currently they can be, and I think that maybe the price of land for development will have to be subject to safeguards.
What am I advocating my Lords? First, though I regret the necessity for intervention, I advocate the strongest possible support for these phase 2 measures as the most radical and constructive effort so far put forward from any quarter to mitigate the rate of inflation. I also advocate that we do not worry too much about whether the national growth for the next year or two reaches 5 per cent. exactly or a little less. The present fashion for measuring the health of our national economy by these nicely calculated percentage growth rates is unsatisfactory. We do it because there is no better measure, but if your Lordships were to analyse the strange mixture of items which go to make up the G.N.P. computation you would be astonished. I think that my noble friend Lord Thorneycroft will recollect something of that, and I am sure that the noble Lord, Lord Diamond, does, too.
As I have pointed out before in your Lordships' House, while we want as rapid a rate of sustainable expansion as we can get, rapid growth alone eases some problems but aggravates others. In my submission, a modest rate of growth with minimal inflation is better than a rapid rate of growth with a high fever of inflation. The criticism has been made that the Government policies are divisive and, if that were true, I think it would be a great drawback to their success. But in essence, my Lords, surely it is not true. I believe in consensus government when it can be got without sacrificing essentials,
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but conciliation of every powerful section of the community as the dominating article of policy becomes mere appeasement. These measures are, in my opinion, the reverse of divisive, because their sole object is to unite the nation in an exercise in national self-discipline; and I feel that everyone who loves his country will pray that they will be successful.
5.28 p.m.
LORD DOUGLASS OF CLEVELAND: My Lords, I have listened with great interest to the speeches which have been made and the conciliatory tone in which they have been made. I think I might be forgiven if I contrasted those speeches with some of the speeches that were made by Government supporters when we tried to put over a wages policy some years ago. Then I was a fairly newcomer to your Lordships' House and I was surprised at the virulence of the attack made upon us when we were trying to do pretty much the same job as the present Government are trying to do, to overcome the problem of inflation and the inequities of wage and salary distribution. While cogitating on these matters yesterday I was really shocked at a report of what the Prime Minister had said about the people who had absolved themselves from responsibility. He was speaking about the Labour Party and I was shocked at the attacks he made on them. I was astonished, because he went into power on a market forces ticket. He intended that wages, like prices, should find their own level by competition within the particular industry. He reversed that policy and put a halo round his head for doing so. That sort of attitude on the part of the Prime Minister will not help the T.U.C. to persuade its rank and file members to get the T.U.C. immersed in this problem.
My Lords, I am in a very difficult situation. I am against an incomes policy based on legislation. I am against it by instinct. But my greatest difficulty is to see how we are to get one to work unless we have legislation. This means that I am backing the horse both ways. I have come to the conclusion that if you go on backing two horses you will not stay in the circus very long. Eventually, somebody will have to say that if people will not accept what is voluntarily agreed some method will have to be found of dealing with the

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situation. But if that time comes, I hope that we shall not have the kind of legislation that we had in the Industrial Relations Act, which, with all respect to the noble and learned Lord the Lord Chancellor, seemed to come from the Elysian heights of lawyers completely out of touch with what was happening in the workshop: and is being operated by a Government who have little idea of how to operate it now that they have it in their possession.
I think there are many things in the Industrial Relations Act which can help. In these days of powerful organisations, whether they be trade unions, employers organisations or Governments, I think the cooling-off period is essential. If there comes a time when you have, say, an electricity strike which stops water coming in to a city, which stops all sewage and all heat, you cannot just sit back until the people concerned in a strike of that character come to an agreement. In America they have a cooling-off period which has been condemned by the Democratic Party, to my knowledge, for the past 15 years; but when the Democratic Party gets into power it never tries to change that part of the Act. The fact is that in the cooling-off period 50 per cent. of the problems are solved without a strike. I think we have to consider whether it is right to allow a situation to develop such as we have at the present time, where people working in hospitals are so overwrought at the difficulty of getting their wage claim heard in the same atmosphere as an industry where a strike is possible, that they themselves threaten to go on strike, and say, nevertheless, that they are going to take care of the patients. They may be able to do this at the present time. But this is hound to overspill. And if it overspills so that hospital patients are affected, then the Government will have to step in and deal with the situation.
We come to a situation at the end of the day where I ask myself: in a voluntary system, would I accept what the employer is going to do in phase 2? Will there be limitations on dividends? Will he not invest and put up his costs in that phase so that he has automatic savings which he can use in the future, but in the machinery? It is as easy as pie to do that. Will he not adjust his accounts in different ways in order to
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save the money for his future use? I could not trust an employer not to do that (I do not mean the best employers of course) because their job is to make profits for the shareholders. There will have to be a restraint on that situation.
When you come to the trade unions, if a trade union executive agrees that it will not allow wage increases to rise beyond 5 per cent., or whatever it is, can the union he sure that some of the branches will not break that agreement? I do not think it can. In a situation like that, I think any political Party will have to face up to the fact that if agreement is to be reached it will have to be an agreement that will be kept. If that sort of agreement is not arrived at, you will run into legislation inside an incomes policy. This is inescapable. But it is not inescapable if it is kept in the background as a weapon that can be used if the agreement which is made is not operated properly.
Coming to the problems of the T.U.C., it is said that it has no power—I think the noble Lord, Lord Thorneycroft, said that. It has some power, because it recently expelled unions for not doing what the T.U.C. had decided they should do. There is no question but that the T.U.C. is growing more powerful. It is a political force in the world. For that reason, I liked the concluding passage in the speech of the noble Lord, Lords Byers, when he asked whether, even at this late hour, it was not possible to get back the good will of the T.U.C.
We have been told that the C.B.I. have not power over their members. But what do they do with their members? When one of their industries agrees to increase wages of a very high order, do they have any regard to those industries which cannot afford to pay those wages? Do they have any regard to the repercussions of paying high wages in one industry as compared with another—or, as we should prefer to put it, paying low wages in one industry as compared with another? Do they ever try to deal with this situation? Or do they just let it ride, and say to the T.U.C. "It is your job"; and then, when the T.U.C. cannot cope with it, say eventually to the Government, "It is your job"? Is that what the Government are doing to-day—doing the job of the C.B.I.? I know Campbell Adamson, the Director

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General of the C.B.I., very well, and I have a high regard for him. I knew John Davies before he went into a ministerial position with the Government. I was astonished when he came out with the idea that if you are going to have wages settled, they must be settled by market forces; and if you are going to have industrial problems settled, they will be settled by the "lame duck" theory. I never heard him put forward those ideas when he was with the C.B.I. and talking to the T.U.C.
The C.B.I. have a great deal of responsibility at the present time. They have been rather quiet about these things, saying that they agree with the Government, and even saying that they agree with the T.U.C. But if we are going to have a sensible incomes policy, somebody must ask some questions of the C.B.I. We shall have to ask them what they are going to do about some of the problems that are also being put to the T.U.C. at the present time. The trouble is that the T.U.C. are not talking to the Government. This I greatly regret. Unless there is conversation and communication between the T.U.C., the C.B.I. and the Government, none of these economic problems can be settled. If the obstinate antagonism that we have at the present time continues, it will live on when there is a Labour Government, and there will be repercussions from the employers simply because the trade unions have been obstinate.
My Lords, what do we do about a situation of that character? I have looked at it, and I would say that a big union like the Transport and General Workers' Union or the Amalgamated Engineering Union have precisely the same problems as the Government. Their members are low paid; their members are high paid. And do not forget that they are asking the unions what they are going to do about this. The lower-paid men want high wages; and they are not going to accept the fact that because they work in the Civil Service, in the hospitals or in the nationalised industries they are going to have lower wages than those who have similar jobs in the higher-paid industries. If the problem is not settled, as I said a few minutes ago, they will go on strike, with all the repercussions of such action. This problem exists within these particular unions.
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I hesitate to discuss unions individually, but I do not see how we can solve this problem unless we get to grips with it and talk about these things. The engineering union have set their face against co-operating in any way with this Government: they will not even defend their members at the industrial disputes tribunal. Anyone who has watched development in that union will have seen that they have lost millions of pounds, and thousands of members, and their skilled members are transferring from the higher grades to the lower grades in their own union. I would have thought that was an indication—and I am not giving secrets away because this has been published in the papers—to the public, to the Government and to the unions that the ordinary man in the street want co-operation with somebody to get us out of this tangle we are in at the present time concerning wage negotiations.
The Transport and General Workers' Union were fined. They resisted very strongly, but they did pay the fine and they decided to work within the Act. Again, this is public knowledge because the General Secretary spoke on the radio the other night; and he said that their membership has gone up by 250,000, and their capital assets are going up too. This is because they are using skilfully the powers they have inside the trade union movement to give satisfaction to the members. They have a problem as between the higher paid and the lower paid. I heard this question being put on the radio: "You have a problem now between the dockers and the people who stock and stuff containers. What have you done about it?" The answer was: "We have set up a committee to deal with this. We are examining the problem; we are not sitting back stubbornly and saying that it is someone else's job. We are going to deal with this one".
We have within the trade union movement not a Left Wing element but a sabotaging movement, consisting of a number of organisations who are determined to destroy the system—and that includes the trade unions. I can give many quotations from what they have said but I need give only one, which was printed in the journal of one of these organisations when the miners had their strike. They were encouraging the ruthless and foolish picketing which went on

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at that time, which certainly did not have the support of the miners themselves. The statement was that the destruction of the system under which we live and the throwing out of the coal bosses on the Coal Board was much more important than the wage claim itself. You have in this country to-day a number of organisations which are disrupting the trade union movement, with the intention of taking over power—and the Industrial Relations Act has given them power. This is one of the ironic results.
You will remember when we discussed the Industrial Relations Act in this Chamber, that my noble friends in the trade union movement and I pleaded with the Government not to destroy the closed shop. You cannot ask any trade union movement, or any other movement, to control its members if it controls only half of them. It must have control of them all if it is going to do anything. The closed shop was there to relieve us of the problem of going round and trying to get people to come within the trade union movement. We were spending our money and time trying to do things like this. When we should have been organising, negotiating, calculating, designing, planning, and so on, we were dissipating our energies. The Government will never be forgiven for having destroyed the closed shop.
When I heard the noble Lord, Lord Byers, suggest that it was not too late and that we should again get the trade unions to talk, I was happy. Now, how do we do that? Most speakers have said that we ought to do something, but I do not think I have heard anybody suggest how it might be done. In the trade union world the first word you must learn is, "How?". It is no use just saying that we ought to have this, that or the other thing: you have to do something and you have to take responsibility. The National Economic Development Council has not been used anything like as much as it should have been, either in regard to the Industrial Relations Act or in this prices and incomes policy. I was a founder member of the Council, along with my noble friend Lord Cooper, and we have sat round the table and there discussed almost insoluble problems. We have tackled them; and we have solved some of them. Do not start creating new vehicles: use the ones you have got.
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Go back to Neddy. I have had many years of close association with Sir Frank Figgures in EFTA. There you have an extremely wise Director-General, one who in my presence has solved problems in four or five languages—so he has a good chance of solving this one in just one language. He would get out the necessary background papers in this type of job.
First on the agenda if you want to pull the T.U.C. back into discussions must be the restoration of the closed shop. If you do that you will help the T.U.C., because they have a dilemma at the moment. The T.U.C. decided to suspend a number of unions-30, I believe—and is now considering expelling them. Why have those unions quarrelled? One of them, the seamen's union, has members scattered all over the globe. How do you force those men to be members of the union? How do you negotiate for them if you do not force them? And if you do not negotiate for them, how can you settle wage problems? Do not forget that when we had a previous problem with the seamen's union the then Prime Minister, Harold Wilson, named some of the malcontents who were causing trouble. After he had named them the union got shot of them and then got itself on to a properly organised basis so that it could go back to the T.U.C. and the Government. Their reward has been a situation the result of which has been that the T.U.C. has now suspended them.
I hope that this Government will get down to tackling this matter straight away. I would hope that the first thing they do is to give back to unions of this character, all 30 of them, the right of the closed shop. Then the T.U.C. will begin to think that there is at least an attitude of sincerity when the Government say they want the T.U.C. to do something about this inflationary problem. If such action is not taken, I think you can forget about any co-operation with the T.U.C.
Having got Neddy working on this problem, where do you go from there? I think you have to examine what happens in wage negotiations. You will find then involved several large groups, such as those engaged in metal working, agriculture, textiles—perhaps nine of them altogether. There is a long list in the Ministry of Labour Gazette, but there

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are a number of groups. When, for example, in the engineering industry they settle a claim, it is unbelievable how this reflects itself in so many other industries. The steel industry invariably follows suit—though not slavishly: there is a little change here and there. And if you can get a reflection from Neddy, although Neddy will not solve the problem, an idea might materialise that will be considered by the T.U.C. and the C.B.I. You will then discover that there are a number of groups in which subsequent wage claims problems can be examined, together with the problem of differentials between those different groups. They can consider how the problem came into being, whether it is justified and whether it ought to be changed. Once you start the habit of discussing differentials in such a problem you will get to grips with the problem. You will not settle it overnight, or perhaps even in a decade. It will be a rolling problem, but you will be coming towards a settlement. You will have the C.B.I., the T.U.C. and the Government—any Government—talking about the problems, because you have laid down a background as to what they are. With such a scheme going forward, I can see the possibility of the acceptance of phase 2 as set out in this Bill.
A good deal has been said about phase 2 levelling things out. It seems to be the impression that all national agreements are negotiated on a percentage basis and that there are no flat rate agreements. There are many flat rate national agreements in this country that are not on a percentage basis. There are national negotiations and the labourer gets as much as the man at the top. If there is an agreement for an across the board payment of £1 a week plus 4 per cent., all that has been achieved is an extension of differentials in some industries. I do not think the Government have understood what they are doing. I do not understand it all; but I understand some. I am making a plea to the Government to go back on what they have done with the Industrial Relations Act. That will be much less difficult than going back on the incomes policy. The Government have done that; why not go back on the Act? The Government should say to the T.U.C. "We want to talk to you on some matters
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in the Industrial Relations Act. We will immediately examine some of these problems." Do not make it a condition that they do something: ask them and show good will. Having done that—and they can quote me if they like—they should refer to some of the problems of the big unions. My noble friend Lord Cooper will bear out what I am saying. Inside the union of my noble friend Lord Cooper they have the same problems. Let us talk about these things. With a spirit like that, I think we should get somewhere.
VISCOUNT AMORY: My Lords, I am following the noble Lord with great interest in the very interesting speech he is making. I am under the impression —I do not think I am wrong—that the Government have said that they will be pleased to discuss the contents of the Industrial Relations Act with a view to discovering particular points where the shoe pinches.
LORD DOUGLASS OF CLEVELAND: My Lords, that is after they have had some more experiences of it. I should have thought they had had enough experience of it up to now—we have. The noble Viscount, in rising, takes my mind back to him and to the noble Lord, Lord Thorneycroft. We discussed more difficult problems than this when I was chairman of the Economic Committee. I remember that the first time I met the noble Viscount, Lord Amory, was when he was Chancellor of the Exchequer. We had a long and difficult argument and, as was going out of the room, he ran after me and said, "Mind! this is what I said". He did not trust me; he thought I was going to twist what he said. He never said that to me again because he knew, and I knew, that what we both said across the table we meant, and we were not going outside to twist it. At times we did not quote all that we said when we went outside. On a second thought, consider the Ministry of Labour, or, as it is now called, the Department of Employment and Productivity—
LORD SHEPHERD: The Department of Employment.
LORD DOUGLASS or CLEVELAND: There have been so many changes that I cannot remember its title.
VISCOUNT AMORY: My Lords, I have the happiest recollections of those talks, as I am sure my noble friend Lord Thorneycroft has. They are such happy memories that my noble friend said that if there should be another Labour Government he would continue to live in this country. My Lords, my intention is the same—if I can live long enough. A smile came over the face of the noble Lord, Lord Diamond, at the prospect of assessing my noble friend on Schedules D, E and F incomes when that day comes.
LORD DOUGLASS OF CLEVELAND: My Lords, that is a reciprocation of the good will that I am trying to reincalcate inside industry. The old Ministry of Labour did not have the wide responsibilities that the present Minister has. I remember Jain Macleod—should I say, the Right Honourable lain Macleod? I was too much of a friend to call him anything else but fain. When we inside the industry met him on a labour problem we knew we should get a quick answer. The discussion would not last more than a couple of hours, but his arguments were sound. If you had an argument he would give way to you as soon as you convinced him; and he was open to conviction. Then there was dear old Sir Walter Monckton. With Walter one always knew that one was going to talk until about midnight before one achieved a settlement because he was much too kind to say, "No". They were two different men who had two different ways, but they achieved a settlement and had good will with the T.U.C. I remember that when Selwyn Lloyd became Chancellor of the Exchequer I spoke on the television and said that he was too much like Khrushchev for my liking. I do not think that Selwyn ever forgave me for that, but it made no difference to our friendship. We discussed all the problems of balance of payments.
Here is another idea—and I will resume my seat very soon as time is flying by. When negotiating wages, why not make it a condition that you negotiate prices, too? Why should we discuss wages without any acknowledgment of the effect an agreement is going to have on prices? Why not ask the trade unions in every case when they are negotiating wages to talk about prices as well? My Lords, I cannot continue because I have spoken beyond my time, but what I have tried
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to do is to say how these things ought to be done. I think that most of us have said what ought to be done; I have tried to tell you how in my humble opinion it ought to be done.
6.57 p.m.
LORD GORE-BOOTH: My Lords, it is a great privilege indeed for me to speak after the noble Lord, Lord Douglass of Cleveland. He has spoken with such humanity and courage as to impress us all very deeply. I have the good fortune to regard him somewhat as my mentor in these matters and I feel the virtue flowing out of him, possibly because I sit, fortunately, so near to him in your Lordships' House.
When I looked at the list of speakers for the debate I nearly decided to forget that I had put my name down. We have had such a weight of authority that it brings to my mind rather the last days of cricket before World War II. Cricket XIs then consisted of ten professionals and one amateur who was there for the look of the thing. But this is a problem which must affect everybody very deeply, so I have allowed my name to remain on the list of speakers for two reasons: one is that I am the only Member of the Cross Benches who is down to speak; therefore I felt I could perhaps say something from the point of view of the ordinary citizen without other obligations. The second reason is—and perhaps it is a more persuasive point—that there was a special comment in the speech of Mr. William Rodgers from another place. He began by saying substantially that to take part in a debate on this subject was a very humbling experience. He went on to say that those who dealt with the matter were so seldom right. It is a measure of the complexity and enormity of this problem that we still find it frustrating us, despite unanimous agreement that we ought to defeat it. I was most interested and impressed that the noble Lord, Lord Thorneycroft, with all his expertise, should feel exactly the same.
I thought I might contribute one idea in this form. This debate has been immensely impressive and authoritative on the subject of inflation and the measures to be taken to deal with it, but all within the scope of that one subject. One noble Lord (it may have been the noble Lord, Lord Thorneycroft) suggested

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that we should not be too ghoulish about the situation. In that respect we have not been ghoulish, but it is worth while to refer to at least two internal and external effects if we do not get this question right. We are not considering inflation in a cocoon of its own; we are considering the threat of inflation simultaneously with other influences operating in the world, influences which are not always of a healthy or welcome kind.
For instance, if I may start from abroad, which is my location, as it were, I am sure that noble Lords will have noticed the other day that General Amin of Uganda ordered Ugandan journalists to report more fully the difficulties and troubles of the United Kingdom. This was not just one of the General's eccentricities which have done so much harm to the African cause; it was also a symptom of something worldwide: namely, that democracy, as we understand it, is under heavy pressure. There are many people in this world who want to set up or to maintain States run either by dictatorial or by doctrinaire methods, and they realise that in this country we have in some sense the focus of the development and maintenance of democratic institutions. Therefore, not only do many people around the world (and I assure your Lordships that this is quite genuine and serious) welcome the difficulties of this country, but some of them seek to promote them. Therefore the defeat of inflation is not only important for its own sake, but I suggest that it is also important for the cause of democratic institutions in the world as a whole. If we should fail in this matter we shall be failing not only our own people but also the world as a whole.
Then, if one may come home, another part of the environment of this question (and it was referred to by the noble Lord, Lord Douglass of Cleveland) is the environment of what one might call selective law-observance. There are people in this country who are propagating the theory, which was recently put epigrammatically by somebody active in politics, that man makes laws; therefore man can break them. It is very seductive, if one says it like that, but of course it means that man makes laws legally, and then it is concluded from that that he can break them illegally.
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Here again, the unsettlement caused by inflation, which is fatal enough in itself, is magnified if these other disruptive tendencies, external and internal, are also floating around. Therefore, while I do not in any way suggest that noble Lords have underestimated the danger of this question which oppresses us, it is even more dangerous than that precisely because of other disruptive elements which can combine with it to upset our democratic system.
So it is an instinctive feeling for these things that has caused what many speakers have described as a public welcome for what the Government are seeking to do. There was one moment of truth about this. On the morning after the day on which the Government produced the White Paper I happened to listen to that admirable summary by the B.B.C. of "To-day's Papers". I expect noble Lords will have heard it, but what it revealed was that every single paper except one said that something like this must be done. The one exception, for which only one guess is needed, was the Communist Morning Star. I do not need to elaborate on that. As a fact it simply speaks for itself.
One comes to the vital matter to which the noble Lord, Lord Douglass of Cleveland, drew our attention: the question is not so much the "What?" as the "How?". On this, I am less qualified to make suggestions than are many noble Lords who have already spoken, but there are one or two points which perhaps I might just mention if only to bring them into the discussion. First, the question of fairness, I suppose that the attitude on this matter has to be, in a sense, the attitude towards the moment when a driver puts his foot very hard on the brake of an express train. There is at that moment some very rough injustice as between the man who has finished his cup of coffee and the man who has not started. I think the sudden production of something which is very welcome obviously leads to a few immediate anomalies. If too much concession is made for the purpose of alleviating these anomalies, of course there is the danger of the whole apparatus being broken down by exceptions. But when the debate is wound up I wonder whether the Minister would say just a word on

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whether the Government have anything in mind for immediate and real anomalies, as opposed to the kind of inevitable injustices which will arise. I perhaps have not studied the White Paper for long enough to know, and I must say that I was somewhat left wondering when I read in the draft Bill the splendid piece of Whitehall English which says:
"The Pay Board shall exercise the powers conferred by this section in such ways as appear to them appropriate for the purpose and ensuring that the provisions of the code which concern remuneration are implemented"—
Sir Ernest Gowers would have enjoyed that. It possibly covers the point, but it might be a useful, if secondary, point to consider.
Another, and a very difficult, point on which I hope the Government might be able to say a little more, is food. There seems to be unanimity among those who are really expert that a crude remedy is not possible. What one would like to feel is that somewhere in the Government machine, just in case some real disaster should arise out of the shortages in the world at the moment, some thought was being given to what would have to be done if there were a real emergency of a kind which led to real suffering and widespread discontent. The difficulty (and I realise this) in my asking about this is that if the Government gave some sort of assurance it might have an effect on food and commodity prices which was undesirable. Therefore, I will not say that I am expecting any assurance at all; I am simply putting out this idea.
Where I think that the crux of the matter will lie, as many of your Lordships have said, is in whether communication can be re-established where it has been broken off. I felt a little disappointed that in his brilliant analysis the noble Lord, Lord Diamond, brought us to that point and then said simply that it must be done. I would hope that some way from the grass roots upwards could be found; but I feel—and I come back again to the beginning—that the point has arrived, from both the external and internal points of view, where something of the nature of what is in this White Paper was absolutely imperative and will be welcome. That leaves only the question of whether it will succeed. On that, my crystal ball is as dim as
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anyone's, but I simply come back to an old, old quotation which is often used in this context. It is a quotation from the philosopher Ralph Waldo Emerson, who a century and a quarter ago simply said that: "He thinks of this aged England"—aged even then— "this aged England with an instinct that she sees a little better in a cloudy sky". I just hope that that is still true.
LORD WIGG: My Lords, before the noble Lord sits down would he be kind enough to elaborate a point he made? He found it of profound significance that every newspaper with the exception of the Communist Morning Star accepted the Government's proposals. Is that an inverted sneer, that those of us who do not accept the Government's proposals are ipso facto neo-Communists?
LORD GORE-BOOTH: No, my Lords. All I was saying was that it was a spontaneous reaction, except from one source, that something like this—those are my words: something like this—would be necessary. Since then there have been qualifications, of course, and amendments, and we shall go on through this debate. But it was a fact that the spontaneous, immediate reaction was as I say, and the noble Lord may deduce from it whatever he wishes.
LORD WIGG: My Lords, would the noble Lord consider the possibility that all the Press, with the exception of the Communist Morning Star, are the capitalist Press who are trying to buttress a completely bankrupt system?
LORD GORE-BOOTH: My Lords, I am sorry that the noble Lord compels me to prolong my speech and reminds me of a sentence that I left out by mistake. One of the bitternesses in this situation is the attempt to convert this very difficult human problem into a doctrinaire confrontation between the capitalist and the—I suppose used in inverted commas—"Socialist system". This is not in fact a quarrel about that. This is a problem of whether the mixed economy can survive; the economy in which some scope is given to the natural human desire for power and some scope to the natural human desire to make money, and in regard to which neither of them should be allowed to get out of hand. Can a democracy manage these

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two impulses on the present scale? I am sure this is what we are trying to do, and what the vast majority of people in this country, including the noble Lord, Lord Wigg, would wish to happen.
6.12 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I do not wish to enter into the argument between the noble Lord, Lord Gore-Booth, and the noble Lord, Lord Wigg, but I should like to say that when, in 1966, the last Labour Government brought their White Paper before this House and we had a debate on the prices and incomes policy, I think I was the only Conservative Member of this House who spoke in favour of it. I said that I feared it was doomed to failure, owing to the almost impossible task that the Government of that day would face in implementing it as a result of the militancy of some unions—certainly not all unions but some. Today we see that the militancy of some unions has increased. I think it was the noble Lord, Lord Douglass of Cleveland, who said that some of the militants are not really interested in bettering the lot of their members; they are interested in destroying the economy. There I completely agree with him. I very much enjoyed his speech, but the noble Lord said one thing which I did not quite understand: he said that the Government must bring back the closed shop. But surely under the Industrial Relations Act the Government have not abolished the closed shop. We have perhaps made it slightly harder for a closed shop to victimise an individual, but we have not abolished it. We have only tried to bring the unions within the law, as in other countries.
LORD DOUGLASS OF CLEVELAND: My Lords, of course the Government have abolished the closed shop, and they said they would abolish the closed shop in the discussion leading up to the agency shop. The agency shop was established on condition that the members registered. Many of the unions had a fundamental disagreement about registering, and because they had an objection to registering it meant that they could not have a closed shop. But the noble Viscount ought to know how simple it is because the Government drafted the legislation; not I.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I still maintain that we have not completely abolished the closed shop. However, just to illustrate the militancy of some unions I might tell a story concerning a business man, a friend of mine, who went to Czechoslovakia three or four months before the last docks strike. He was arranging a business transaction and he was told, "It is no good arranging for this import of goods during that period, because there is going to be a dock strike in England". That was three or four months before the dock strike actually happened and it rather makes one think about where some of the militancy begins.
I will confine my remarks in regard to inflation to food and land. Although I say it myself, I have some practical experience in these matters. However, before coming to that subject I must just point out, as did my noble friend Lord Drumalbyn, that the rise in wages during the last year has in fact outstripped the rise in prices by 9 per cent. The noble Lord quoted the figure of 16½ per cent. increase for wages in the twelve months up to November last, and the figure for the increase in the retail price index of 7½ per cent. Therefore wages have outstripped prices by 9 per cent. I should like to give a small bouquet to manufacturers and retailers because they have held down prices in this period, and even before. They have tried to absorb the increased costs by increased efficiency. Perhaps I may now come to the subject which has caused a hullabaloo, and I think a hullabaloo out of all proportion to its importance. I refer to the subject of beef. I have been breeding beef ever since I was a fairly young man and I should like to make a comparison regarding the rise in the price of beef and one or two other commodities.
Let me take coal. I remember as a boy at my parents' home in the West of Scotland that we used to get coal from Glasgow, about 100 miles away, by sea, and it was delivered on the shore at about 24 shilling to 27 shillings a ton. If one were to get that coal today it would cost, with the transport, about £25 a ton. We have had that price rise in spite of all the hundreds of millions of pounds which have been poured into the coal mines in new equipment. I am not complaining

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about the price of coal, and I have always been for the miners; I only want to make a comparison with the price of beef. If we take the price of beef, which of course has risen considerably in the last six months, and compare it with the price of beef in the 1930s, so far as I can gather the rise is certainly not more than six times, as compared to a rise in the price of coal of twenty times over the figure at which it stood in the 1930s.
Again, if we take the price of corn and compare it with the price in the 1930s, we find that corn has only about trebled in price. So I think that certain members of the public have been rather harsh in pointing a finger of scorn at agriculturists on account of the rise in the price of beef. All over the world, and certainly on the Continent, beef is a luxury, whereas to hear people speak in this country one gets the impression that it is a necessity, like flour. From the time of conception it takes about three years to produce a 10 to 12 cwt. steer. On the other hand, the cow may slip her calf, in which case the farmer has a capital asset worth at least £200—the value of the cow—idle. Not every cow will produce a calf. Considering that it takes three years to produce beef, I do not consider that the price of beef should have become a great public or political issue. Indeed, our farmers have for years past been producing the cheapest food in Europe and they deserve our congratulations.
My noble friend Lord Drumalbyn pointed to a fact which I wish to emphasise. About one-quarter of the housewife's budget goes on food, one-half of this quarter on fresh food such as vegetables, meat and eggs. The other half goes on manufactured foodstuffs, and it is those manufactured foods which will be controlled under the retail prices arrangement in the White Paper. I emphasise how difficult it is to control the percentage of food which is imported. For example, I believe that China has had a drought, while Russia has suffered from a very bad harvest and the entire world is at present extremely short of grain. I support what the noble Lord, Lord Byers, said about the difficulty of controlling the price of imported foodstuffs and I agree with his comments about the need to take action when the price of foodstuffs rises above a certain level.
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He suggested that some means should be devised to provide lower paid workers with sufficient money to offset such increases. That would not be a true subsidy. I, too, am against subsidies. If we tried to subsidise a scarce commodity like beef we should simply increase the demand for that commodity, and then we should need to introduce rationing to get fair shares for all. As the noble Lord, Lord Byers, said, food subsidies are indiscriminate because they go to the rich and poor alike. Due to Government policy we in this country have increased our food production greatly in the last two years or so. We had a record grain harvest last year, and it is clear that one of the ways to obtain cheaper food is to increase production.
I was glad to read in paragraph 23 of the White Paper the Government's intention to make more land available for building. I am sure that plenty of land could be made available. British Railways, the Ministry of Defence and various other organisations own a lot of land which I am sure could come into the pool. I also support the Government's intention, mentioned in the White Paper, to reduce the very big profits which some people have been making from the sale of land. Some of the prices that have been paid for building land have been disgraceful. I own land, but I have never benefited from its sale in this way. I am sure that if we could devise some means of controlling the price of building land—remembering that escalating land prices are inflationary—house prices would not continue to rise in the way they have.
Capital gains tax does not help to keep house prices down when the tax is paid on the sale of the land, because the tax goes straight into the Exchequer. Is it possible to devise a means whereby the tax went back into the cost of the houses to be built so making them cheaper, be they rented or sold? Something must be done about this problem and, in this connection, I am in favour of the Government's intention, outlined in the White Paper, to continue the standstill on business rents. Obviously this includes shop and office rents.
I am somewhat confused by the Amendment. It appears in the name of the noble Lord, Lord Shepherd, but it seems that the noble Lord, Lord

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Diamond, is moving it. May I assume that it is really the noble Lord, Lord Diamond's Amendment? It
"…regrets that Her Majesty's Government continue to pursue budgetary, industrial and social policies that are unjust and divisive."
I think I am right in saying that we spend more of our gross national income on social security and other free benefits than any other country in the world. If the noble Lord, Lord Diamond, thinks that that is unjust, I cannot understand him. Does he also think it unjust that this Government should have increased pensions by 22 per cent.? What about the efforts we have made to reduce the rents of the lower paid?
I thought rather amusing the little argument which arose earlier, at Question Time, between noble Lords opposite and occupants of the Government Front Bench. I seem to recall reading in The Times a comment by Professor Kaldor to the effect that the policies of Her Majesty's Government would put the Stock Exchange movements up by a considerable amount, to the benefit of the capitalists. I think Mr. Victor Feather said the same thing. In fact, £5,000 million has been knocked off the Stock Exchange quotations, equal to about £200 per investor. I am sorry if noble Lords opposite have burned their fingers. Perhaps some of the big unions with vast sums invested through the Stock Exchange have burned their fingers. The Conservative Government have knocked £5,000 million off the Stock Exchange quotations and for that surely the Labour Party should be throwing them bouquets. I cannot understand what all the row is about. Noble Lords ought to be very pleased with the Conservative Government. I will not go into that further, but it is surprising that they appear to object to stopping Stock Exchange inflation.
The other thing I cannot really understand relates to foodstuffs. We import much of our foodstuffs from the primary producers in developing countries. On the one hand, we hear people saying, "We must help the developing countries more, and give them more funds". Then, when we pay more for our imported foods from the developing countries those same people say that the price of foodstuffs is too high. They cannot have it both ways.
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My Lords, I shall not keep you any longer, but I should like just to say that I support the White Paper. It certainly goes against my Conservative principles, as it goes against a great number of Conservative principles. But the point is that the Government did everything they possibly could to get voluntary agreement, and time is running out. They had no option. I only hope that phase 2 has every success. It will certainly slow down inflation. However, if one really wants to cure inflation it is necessary to cut down on State spending. The Government are now spending a third of the national income. That is nearly all unproductive, and it amounts to £15,000 million. If only we could cut down on that, we should be able to cure inflation, but that is a very difficult thing to do in a democracy. I should, however, like to repeat that when the suggestions in the White Paper become law they will certainly go a long way towards controlling inflation.
6.32 p.m.
LORD DAVIES OF LEEK: My Lords, I listened with interest to the noble Viscount who has just sat down and I want to recall what we are talking about. We are not in any way denouncing the excellent speech made by somebody who has spent his lifetime negotiating and in the trade union movement. We do not deny that there is a need for some type of control, but what we are concerned about is the fact that the way this is being enunciated, practised, and will ultimately be brought into force, is divisive in society; it is unfair, and demonstrably unfair. It is no good saying that pensions have gone up by 20 per cent. Of course they have gone up by 20 per cent., but so has the price of fresh fruit gone up; and by 32·3 per cent. according to the Grocer. I shall not bore your Lordships with masses of figures because my noble friend on the Front Bench in his opening exposition gave a brilliant analysis of this.
VISCOUNT MASSEREENE AND FERRARD: The noble Lord must go to the wrong grocer.
LORD DAVIES OF LEEK: I am quoting from the Grocer and the Financial Times: from the Financial Times grocery prices index of November 11 to January 22. If any noble Lord

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wants to check them, he has only to step into the Library. The figures given show that all prices have gone up 3 per cent. The Grocer then gives figures showing that fresh fruit has gone up 32 per cent. and fresh fish by 20·9 per cent. We will not spend any longer on that as the House has had a busy day. As a consequence, I am saying that 20 per cent. is also a fallacy of percentages. That fallacy is befogging the minds of people. If a man's original income is only 20p and it has gone up by one-fifth it goes up only by 4p. But give a man with £2,000, a 20 per cent. increase and that is a different matter. That is the hidden fallacy of percentages which is one of the reasons for our Amendment. My noble friend in the trade union movement pointed out this struggle for the lower-paid workers.
We have had a constructive appeal by men in the trade union movement and the Government on how to approach this matter. That is what I was interested in, and that is why I want to admit masses of statistics which are well known to everybody on both sides of the House. We were given an excellent method of approach, and I hope that the Government will read the speech made by my noble friend Lord Douglass of Cleveland on how to approach this matter. I do not believe that we should stand adamant and say that we are not going to talk. Without blaming any particular Government (and here I should like to make one statement because someone interrupted my noble friend on the Front Bench), during the period—and I use the phrase that we have used—of the Labour Government's effort to control prices and incomes we were very successful: the increase in the whole of that period was between 1·2 per cent. and 2·2 per cent. only, compared with the massive increases shown by the statistics to-day. Yet noble Lords opposite and Members in another place voted 102 times (my noble friend said "109", but I will take the lower figure); they voted in the Lobbies and marched through like troglodytes 102 times, against a constructive policy for the control of prices and the battle against inflation. That is accurate.
I now want to move to another point. I was delighted to hear the noble
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Viscount who has just sat down—and I am quite sure that, despite his vast land ownership he really means what he said—say he thinks that the prices of land are amoral.
VISCOUNT MASSEREENE AND FERRARD: Immoral!
LORD DAVIES OF LEEK: I said "amoral": immoral, if you like, but it. is more accurate to say, "amoral". The connotations of "immoral" and "amoral" are two different things. As I suggested long ago, a moratorium could be approached now. If we had meant what we said we could have had it. I would suggest that if the present Government want to act courageously the time has come once again, with population pressure on limited land space, for a Domesday Book on the ownership of land. Let no one tell me that it is a difficult matter: of course it is a difficult matter, and it may take a long time. But it would take no longer to trace, through the Land Register, the ownership of land to-day than to construct some good modern dictionaries. In this transition period, if the powers-that-be wanted to convince the wage earners by hand or brain that they were sincere in their efforts to control inflation, there could be during the transition period a moratorium on land prices.
I will not push the Henry George theory which moved the Labour Party 30 or 40 years ago at some of its annual conferences, that there should be a taxation on land values; but I believe that something like that will have to come. In the reign of Queen Elizabeth I, when there were only 5 million people in England, it is easy to see how there would be vast areas of land capacity and that land prices would be relatively cheap. But as the world is increasing in population, and the amount of land we have to live on is limited, the basic foundation of 90 per cent. of world inflation is this pressure on land, particularly in the technologically developed parts of the world. The first elementary lesson of economics is that there is no wealth but life; and the second is that all wealth proceeds from life being applied to land. That may sound old-fashioned, but so do many of the other things in this world that are truths. Man to-day lives not by truth alone but mainly by myth.

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He lives by myth more than reality, and that I believe to be the truth.
LORD SOMERS: My Lords, may I interrupt the noble Lord for a moment? While I sympathise entirely with him on this question of land prices, may I suggest that it is not quite as simple as he implies, because if a man pays £25,000, say, for a house, he is not going to be very pleased if he realises that he has to sell it for only £7,000.
LORD DAVIES OF LEEK: I do not know how that deduction was made; nor how the noble Lord arrived at that conclusion, because I was not making that suggestion at all. If that really should happen, within the five years after he bought £25,000 worth of land, he would still get only £25,000 for his land five years later. I do not want to rob the poor old lucky man.
I was delighted to hear the ex-Chancellor of the Exchequer. We were shot down in flames in the other place when any of us said, "Look! This fetish of the balance of payments is ruining us." We were struggling to get the balance of payments right—the apotheosis of the pound sterling. Suddenly we are tiptoeing into Europe and these things no longer matter. We are told on the authority of an ex-Chancellor of the Exchequer that for years we have been worshipping a myth. It is time we realised the realities of production are much more important than this.
I was delighted to hear my noble friend Lord Cooper of Stockton Heath, when another noble Lord was speaking, say that nobody has mentioned the vital importance of intelligent investment. In this White Paper there is no constructive approach to investment policy. I am trying to live in the world of realities where men are entitled to dividends if they invest; also where they are afraid that if there is no stability in the future, investment will not be worth while. This does not only hurt the workers; it also hurts the entrepreneur and ultimately comes back on to the workers. Consequently I am for an intelligent investment policy. I should like another form of Government enterprise to come in. Your Lordships may not like the old-fashioned word "nationalisation". But let us take an industry that produces
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everything from raw materials in Britain—namely, pottery—and earns vast amounts overseas. When the Government see an industry like that in trouble for lack of investment, provided the capacities of its production and its work-people are able to get ahead with the job, it would be a dastardly act to let an industry like that, which produces from home raw materials, disappear simply because of lack of finance. Intelligent advice to the banking system from the Government on being a little more generous with loans in small packets to that type of industry would help to keep the employment factor better in many of the homely industries (I use the old-fashioned term) that are still of value to this country.
I have, as usual, decided to cut out about 90 per cent. of my speaking notes, because time seems to go magically in this place. The purpose of this policy, I believe, is once again to regain our position. I still think that neither side of the House, and none of us in Britain, has realised the new position of Britain. I think we have to revise many of our former ideas about Government overseas spending. We are no longer able to police the world, and a factor over which we still have some control is how much we spend in future on our commitments overseas. We ought to analyse this carefully, because Government overseas spending was one of the troubles that we had as a Labour Government, and that also faced the Conservative Governments before and after us. Consequently, when we are looking at this period of transition and inflation, we ought not to be coming down to this House asking for increased commitments and expenditure in military effort, but asking for the best possible from the amount of money we are already spending in the military field.
Finally, my Lords—and I am trying to keep my promise; I have been eleven minutes—I wish that Governments of both Parties had taken notice of the Radcliffe Report. It is a sad fact—I have mentioned this before in the House; and I still have in my study at home the famous May Report of 1931: there are many here with vast experience who must see this—that the same kind of phrases were used in the 1930s, in 1926, and are still used to-day when we come

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to these crises. Each time a marvellous group of people have been got together and nothing seems to have been done. The Radcliffe Report made all kinds of suggestions about dealing with our monetary system in relation to the present world. I am not one of the fanatics. I remember Professor Soddy at Oxford, 30 years ago, being a first-class exponent of the value of getting a sound monetary system to run society. I think there is much more in it than that. Nevertheless, eve never rescue ourselves simply by getting a Commission to produce a study.
I think the whole theory of economics and the whole theory of our approach to government must be re-written, and in our universities and other places there should be more practical thinking about the realities of the world in which we live. Inflation is not caused by any one particular Government. Of course it is correct that South-East Asia and the Far East are wanting higher standards. I have seen, and so have most noble Lords in this House, their demands for higher standards of life, and as they demand them so things are going to be more costly. But it is not beyond the wit of man to find equity and fairness and a reasonable life in that kind of society. That is what we must all do, and I hope that notice will be taken of our reasoned Amendment in this House to-night.
6.45 p.m.
LORD O'NEILL OF THE MAINE: My Lords, those of us who have been a little critical of the Government's economic policies since 1970 must, I feel, be glad that at long last a complete change has been made, though, of course, we cannot quite forget all that has passed. I remember when there was an announcement early in the life of this Government which seemed to threaten the continued provision of aid for the regions. I was told in reply to my intervention on that occasion that the Government's policy would so improve the economy that the regions would benefit along with the rest of the nation. I remember putting down a Question asking what benefits had accrued from the abolition of the Prices and Incomes Board and the Conservative-created Consumer Council. To-day, we have a Minister for Consumer Affairs, who was very highly praised by a former Lord Chancellor, and two separate agencies instead of the old Prices and
918
Incomes Board. Moreover, some people feel—rightly or wrongly, I do not know—that these two new agencies appear to be bodies of such power that they might by-pass Parliament altogether. So while we must rejoice at the change of policy which has been made, we must also hope that these measures will not be too late to save us from further serious trouble.
I believe that politically it has been amply proved that no Party can win the support of a majority of the electorate unless it can occupy the middle ground. Certainly in to-day's conditions the policy of confrontation, while at the same time pouring scorn on the Butskellism of 13 years of Tory rule, has led only to disaster. While I am talking about those 13 years, we had, of course, speaking to-day two ex-Chancellors from those 13 years of Tory rule. How moderate, sensible and reasonable their speeches were to-day, as they have always been in the short period in which I have had the honour to be in this noble House. If we are fortunate, it may be that even at this late hour we can emerge triumphant.
But if things continue to deteriorate and the new policy of Government aid and intervention does not work, then as I have said before, some people will have to put country before Party and consider the formation of a National Government. It would, therefore, seem to me that when a Government have the courage to change direction we should support them, hoping that this total alteration in direction has come about in time to save the nation. That is why I rather regret that we are going to have a vote to-night, because, as somebody said earlier—I think that it was probably the noble Lord, Lord Thorneycroft—we did not necessarily want consistency from a Government, we wanted sensible policies.
I would also hope that the trade unions, forgetting their understandable alienation from former policies, will now cooperate with the Government. Many of us in this noble House listened with tremendous interest to the speech of the noble Lord, Lord Douglass of Cleveland. As a sensible trade union official (who, I hasten to add, is not a Member of this House), said to me the other day, "This is my country too, and I want it to survive". If only this could be the national sentiment, then indeed we should not only survive but we might raise our

919
standard of living to a Swedish or a German level.
The Government must show that they care, and the trade unions should consider the future of their country. Then it could well be that phase 3, instead of being tougher than phase 1—and I am not going into the question of who leaked that to the Press—might be proved to be a step back to normality. For, make no mistake about it, if we become the "sick man of Europe" there will be no special relationship, no Marshall Aid, no old Commonwealth rush to our rescue; we shall merely be a cheap tourist attraction for the rich nations of Europe, where the trappings of an imperial past will have to take the place of a Mediterranean climate. Let us now hope, therefore that the great British spirit of compromise will assert itself, and that we shall be spared the horrors of rampant inflation in a divided community.
6.53 p.m.
LORD BROWN: My Lords, I do not think that anything illustrates the problems we face to-day better than the U-turns that Governments have to take in the course of pursuing their planning. I thought it was a little unfortunate when the noble Lord, Lord Drumalbyn, went back to the past and quoted the noble Lord, Lord Shepherd, as he did. During one of my exits from the House I looked up what somebody on the Opposition side said during the last Labour Government's term of office when the Labour Government were introducing their Prices and Incomes Bill in 1966. This is what was said:
"This is the divide between us now. The Government's way, the First Secretary's way, leads, through Part IV to compulsion, to the complete control of the economy … and to increasing restrictions on personal liberty, to a freeze of everything, including, above all, a freeze on progress … It solves none of our long-term problems and damages most of our prospects."—OFFICIAL REPORT, Commons, col. 502, 3/8/1966.]
The speaker was no less a person than Mr. Edward Heath. I do not want to indulge in the swapping of quotations from the past, because I do not think that it ever does much good. However, I just counterpoise what the noble Lord, Lord Drumalbyn, quoted by what Mr. Heath said in 1966 to show that there is
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a profound state of confusion in high quarters in this country to-day about this whole great problem, and that it leads to the sort of swapping of quotations that has been going on.
LORD DRUMALBYN: My Lords, from what the noble Lord said, it sounded as if I had been critical of the noble Lord, Lord Shepherd, in the quotations that I gave, but that was not so.
LORD BROWN: My Lords, I have to spell it out a little more. The noble Lord, Lord Drumalbyn, was supporting his Bill on the basis of what the noble Lord, Lord Shepherd, had said some time ago, but may I point out that, although he supported the Bill on that basis, what the noble Lord, Lord Shepherd, said some time ago was the object of the criticism from Mr. Heath that I have just now read out. I think that the logic of what I am saying is clear. Perhaps the noble Lord would read it afterwards, if he does not understand me as I go along.
Frankly I do not think that anybody can deny that some drastic measure is currently necessary, but I am going to support the Amendment for these reasons: first, I think that the Government have failed to sugar this pill sufficiently; secondly, I do not think that they realise the situation in which most of our trade union leaders are placed in the task which lies ahead of them if they want to co-operate with the Government in selling these policies about a prices and incomes freeze to their membership. What we have to face to-day is that power has devolved from the trade union leadership downwards to groups of fairly militant shop stewards. Union secretaries are the servants of their union members, and not their bosses. They have to go back to their members with something, to put it in the vernacular "to sugar the pill", and this has not been given them. I believe that if, in the November discussions between the Prime Minister and the T.U.C., some measure of concession had then been given in the way perhaps of suspending the Rents Act or the implementation of VAT, a voluntary policy might have been accepted at that time. That is the reason why I like the wording of the Amendment, and I shall support it, notwithstanding the fact that I believe that drastic measures to deal

921
with general inflation, and wage inflation in particular, are straight away necessary.
We in this House with a particular point of view on this subject have spoken on several occasions in the past, and I apologise to those who are tired of hearing me, but I am going again to venture my views in perhaps a slightly different fashion. The current Order which we are considering is admittedly a temporary measure. Phase 3 is referred to in terms of temporary measures. We must somehow in this country begin to get something that looks like a permanent means of dealing with this enormous and growing problem. I do not believe that any long-term solution is available to us within the current frame of reference or thinking. We have to move right out of it and look at the problem quite differently. The first fact that we have to face is that of the existence of power in the hands of millions of people organised in trade unions. In a way, it is a slightly new phenomenon, in that this has been growing rapidly and is now so powerful that it is quite clearly shaping the course of Governments. So long as people possess power in society and no constitutional authority, the only way they can use that power is by disruption. Indeed, we are facing the fact now of millions of people who had not joined trade unions in the past, and trade unions that have not militantly fought for the interests of their members, to-day being forced to do so in order to avoid a situation where their reasonableness keeps their wages low, while they have to pay the highest prices brought about by the successful claims of their more militant colleagues in other unions and by various other forms of inflation.
If one looks at our historical past, one finds that we have seen situations like this emerge before. Prior to the Reform Act 1832 new power groups were emerging in society—mercantile groups and groups of work-people; and politicians like Wellington, Pitt and Melbourne, were desperately scared of the measures they thought they would have to take to enfranchise these power groups. But eventually they faced their responsibilities and introduced the necessary Reform Acts, of which the 1832 Act was the first, followed by a succession of other measures. Each one of them, they feared,
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would bring about terrible results in the country. But none of them did so, and that was the great secret of our constitutional growth in the 19th century when we became the admiration of Europe.
To-day we face the emergence of new sorts of power groups in society; that is, the occupational groups. Whereas we could move easily, by extending Parliamentary franchise, towards enfranchising the power groups which were emerging, enfranchising occupational groups is an entirely different and much more difficult matter. That is why I say that we are faced to-day with a constitutional problem, and the trouble is that we are looking at it as a sociological or economic problem, whereas it is in fact constitutional. The only way of dealing with constitutional problems is by constitutional means. We must give constitutional authority to those who possess power so that they may give up the use of their power in a disruptive fashion.
Where is this constitutional authority to be directed? I believe that wage differentials are the key to our current problem. I believe that the psychological energy which has to be generated to support this disruptive action is largely generated by fear of losing one's place in the pecking order—fear because the differential pay which different blocs are receiving is felt to be unfair in regard to the pay, salaries and profits earned by others in society around them. People are increasingly anxious about a situation where the greatest wealth goes to the strongest and the least to the weakest. I am not talking only about wage earners now. The dreadful spectacle of the sums now being made by land and housing speculators is a psychological incitement to people to strike for ever higher wages, however high they may be now, because they feel that so long as some people can earn millions in a year, they are entitled to use their power to go for the maximum gain which they can achieve.
As I said, new institutions are required, and the one I am seeking to convince as many people as possible should be established is one which would bring together the representatives of all the occupational groups in this country, through their trade unions, and which would give those people who have great power in society the collective power to settle the pattern of differentials in all types of

923
employment groups in our society. I suggest that they would have to be given limits within which a settlement would have to be arrived at, and those limits would have to be set each year by agreeing in Parliament on a percentage addition to the wage bill which that new body could distribute to the employment groups. I do not want to detail too much of the proposal, about which I have both written and spoken freely in this House, but I want to call attention to one salient feature; that is, that Government speaker after Government speaker—and indeed speakers from both sides of the House—have this afternoon drawn attention to the need one day to get back to free collective bargaining. Some have spoken against it, notably the noble Lord, Lord Peddie, but it has been the general tenor of thinking in this Government and in the previous Government, that, in the last analysis, free collective bargaining is the way by which differential wages should be arrived at.
I do not believe there has ever been any such thing as free collective bargaining over wages. A collective wage deal has to be made between an employer and a trade union. The participants in the deal must agree; they cannot disagree. Bargaining is a process whereby two parties come together, they exchange offers and if they cannot agree they separate. In the early part of the Industrial Revolution, the power of employers in this country was so great that the most utterly disgraceful conditions were imposed on employees. I need not detail these. We all know the tales of children of six being employed in the mines and so on. Then, as the power of trade unions grew, the balance began to swing and for a long period it looked as though bargaining was taking place, because the distribution of power as between employers and representatives of employees was not too great.
But now this swing has gone right over, and we see to-day unions which can impose their will on employers, who face either granting a major proportion of the increases asked for or the possibility of bankruptcy. We have always been in the presence of power-dominated negotiations, and we must face the fact that we have never really had what the economists would call true bargaining. For
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that reason, it is no good thinking that we can solve our future problems by a return to free bargaining, because whichever side to that bargain is stronger will impose his will on the other; and I think that trade unions will be the stronger side for as long as we can see into the future.
It is for this reason that the institution which I see as being necessary will exclude employers. I do not think employers have ever really taken into account, in their individual bargains with the trade unions about the wages to be paid in their companies or industries, the question of national differential pay. It has not been their role to do so. They have their differentials within their companies, but not on the national scene. I see no reason why an institution composed of representatives of all the occupations in the country should not be given the job of settling the distribution of a percentage addition to the national wage bill, agreed by Parliament in their Budget debates.
It is only that situation which would allow the law which emerged from those deliberations to be supported by sanctions, for no Government to-day can really impose sanctions on those who strike against some law freezing wages or distributing differentials, because they cannot use sanctions if they are at the same time supporting the idea of free bargaining. A Government cannot come down on one side of the bargain, according to the way they think justice goes. But if you give the job to those who have power to settle these differentials and to support them, then you get into an entirely new situation, for a strike against a law based on a recommendation from the trade unions of the country to distribute what the nation, through its Parliamentary processes, felt it could afford in terms of an increase in the national wage bill, would be a strike to take some of the wage increase away from some other fellow trade unionist. In those circumstances, it would be possible to impose sanctions on strikers against that form of law. Any other situation precludes the use of sanctions, and law without sanctions is not really law at all. So I believe that we have to move right out of our present framework of thinking and into a new one.
Let us look at the prizes which would accrue to us as a nation, if we could

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get a situation where we began moving towards a fair pattern of differential earnings. First, the mere fact that we should stop moving in the other direction—more and more to the stronger; less and less to the weaker—would itself be a great psychological boost. Secondly, once we face the fact that the rate of rise in wages and incomes and the level of employment are independent variables and have to be controlled by different mechanisms, then we are in a position for the first time to be able, by Government macro-economic measures, to create full employment without its inevitable consequence in current circumstances of a rapid rise in wages and incomes. So it holds out the prospect, if we can once get a long-term grip on wage inflation, of maintaining full employment into the future.
What does full employment really mean? My Lords, I do not think we are sufficiently alive to the full effects of even marginal unemployment in this country—unemployment at the 400,000 or 500,000 level. It not only deprives a large number of people of the opportunity to work: it deprives millions more in work of the opportunity to achieve the sort of role in industry, commerce or government which fully employs their talents. It freezes up the promotion ladders for everybody; it makes everybody anxious; and if one has millions of people working at tasks which are below the level at which they ought to be employed in order to give them that feeling of creative doing which everybody wants, then it breeds cynicism. If, further, one adds to that a growing sense of unfairness about differentials, then one gets within industry that mood of hostility and despair, bellicosity and cynicism which I think is slowly robbing this country of its greatness. So I am not talking about small aims; I am talking about big aims. I am talking about big changes to bring about very great improvements in the whole climate of feeling and outlook in the employment zone of this society of ours. I believe that unless we are prepared to face very large measures of this kind, then we shall go on sinking gradually but surely into a state of ever greater cynicism about employment itself; and that would indeed be a tragedy.
My Lords, I am sorry that in making this speech I have involved myself so
926
much in the future, but I feel that the Paper which is in front of us to-day must be regarded as a flash in the pan, as a necessary instrument to give us time to think; and I thought it was worth while to spend my time this evening commenting on the sort of measures which I hope will be entering into a consideration of what is going to happen in phase 3.
7.13 p.m.
LORD PARGITER: My Lords, I think the essence of this debate is not stage 1, stage 2, or stage 3 but the fact that was touched on by the noble Viscount, Lord Amory, when he said that some sort of permanent machinery will undoubtedly emerge. That is the essence that we must have at the back of our minds when we consider what we should do about the present situation. The Government have done a complete somersault from a free enterprise stand to that of a planned economy; and, much as they may dislike those words, that is in effect what they are now proceeding towards. They do not want to spell it out, but we can spell it out for them. Much as they may dislike the words, this is what they have done; and the fact is that while you can do a somersault forward and go from one to the other, it is a very difficult job to do a backward somersault in order to get back to the point where you previously were. I do not think that this Government or any Government can do that. I think that having reached this particular point, what we must be looking at now is the type of machinery which we may be considering after phase 2 or phase 3, whatever the case may be, and which may form a permanent part of our Constitution, if I may put it in that way.
This obviously needs both compromise and co-operation. It seems to me that the Government must look at this, as my noble friend Lord Douglass said, from the point of view of what their other activities have been and the extent to which those either hamper or help towards that co-operation. Let me put it in a personal way. If a noble Lord from the opposite Benches were to bash me over the head with a big stick and immediately afterwards say, "Will you please co-operate with me?", I should tell him to go to Hell. That is virtually what the trade unions have told the Government. But if, immediately afterwards,

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that noble Lord said, "I did not really intend to use the stick in that way, so I will throw it away and perhaps we can now get down to talk", I think that would provide the beginning of a basis upon which we could talk. In similar circumstances I think the trade union movement would be willing to talk. That is the first consideration, in my view, because there is no question about the depth of feeling in the trade union movement about the Industrial Relations Act.
What the trade unions object to is that the Government got that Act on a false prospectus. The whole of their propaganda before the Election, we must recollect, was towards curbing wildcat strikes; it was to say that when agreements had been arrived at they should be observed by the trade unions, and there would be legislation to provide for that. That was the basis upon which a large proportion of the people in the country voted for the Tories—because they wanted that done. They did not want the Industrial Relations Act; and the sooner the Government recognise that and the fact that they have got to do something about that Act in order to get the necessary co-operation of the trade union movement, the better it will be. And if, for full measure, the Government would like to have another look at the Housing Finance Act and possibly have a look in the next Budget at the give-away bounty which they provided for the well-to-do and which comes into operation next April, they would go a long way further towards allaying some of the suspicions that exist in the minds of the vast majority of the working people of this country. These are some of the things that it seems to me it is necessary to do as a beginning.
Moreover, I think that someone has to spell it out at some time that some sort of statutory machinery will undoubtedly have to exist; and the Government have to say, and have to convince people, that they will put right some of the things that they are doing, or that they will do other things that need to be done. Let us take, for example, food prices. Today, there is nothing which riles people more than for the Government to throw up their hands and say that they can do nothing, or virtually nothing, about food prices. The Government added 10 per
928
cent. to the cost of imported food by devaluing the pound. They might as well admit it, because that is in fact what has happened. A good deal of the increased cost of imported food is due to the fact that the pound has been effectively devalued by approximately 10 per cent. What are the Government going to do about it? I am not necessarily advocating subsidies as a permanent means of dealing with this particular problem, but if this devaluation is a temporary sort of process which will iron itself out in due course, the Government could do something towards reducing the cost of imports of food in some way. That would go a long way, so far as the ordinary public are concerned, to allay their suspicions about what the Government's intentions really are.
There are other aspects of this matter, and here I am not a little bit interested in the question of the limitation of dividends. This is an old one which does not really cut any ice with me, because limited dividends are going to be paid out, either in scrip form or in some other form, at a future date. People are getting too wary to "wear" that one any more. But the Paper does say something about the limitation of profits and profit margins. This is all right, but it seems to me that one of the first things the Government must consider is the massive number of methods of accountancy which can be used, according to the sort of balance sheet you want to produce. You do not cheat; in other words, you do not deliberately misuse figures. But you use them in particular ways which will give you the appropriate results that you want, to produce either a balance sheet which is showing pretty favourable results from the point of view of profit ratio—not necessarily actual profit, but profit ratio—or one that shows a poor result, according to the circumstances.
LORD SELSDON: My Lords, may I interrupt the noble Lord for one moment? I hope he is not in any way querying the integrity of the British accountancy profession, which is second to none in the world.
LORD PARGITER: Not a bit. I will not apply this in its entirety, but there is an old saw that figures cannot lie but liars can figure. I am not suggesting that

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accountants are liars, and they do not lie; but they are able to use figures in a way that suits the particular company for which they are working. Let us be quite clear about that: that is the reason why they are employed. They are there, in particular, when it comes to personal tax, to see how much can be put in upon which tax need not be paid. I am not blaming them for this. It seems to me that some sort of fairly simple standard system must be used to arrive at equity as between margins of profits between one company or one industry and another.
Another thing that the Government should do, and this is highly important, is to oversee the multi-national companies. They have a tremendous power of moving resources all over the world and of moving them in a way which suits the company, not necessarily internally but internationally. There is plenty of room here for avoidance of the restrictions which might be applied as a result of this White Paper. This it seems to me, apart from other reasons, is why the multi-national companies require some oversight. It would be a good reason to do it in connection with what is required of the White Paper.
If we are getting to the stage of having a planned economy, I think that it should be spelled out fairly soon. If we are going to take the necessary steps to get co-operation, particularly from the T.U.C., the Government ought to talk in order to see exactly what the T.U.C. are prepared to accept. The T.U.C. will not at this stage accept any restriction on what is called free bargaining or free negotiation of wages. I have never believed in the free negotiation of wages. I am inclined to agree with my noble friend Lord Brown that there has never been such a thing. The matter has always concerned two powerful people, and somewhere in the middle a compromise settlement. That is not necessarily free bargaining, nor is it necessarily just—in many cases, it is anything but just. But that is the situation which obtains.
It seems to me that if we are now going on from free enterprise, which the Tory Party have now abandoned in favour of a planned economy, the Government might as well spell out where we are going with respect to the trade unions
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and the employers' associations. We might as well have it understood that when we have a planned economy we do not have free negotiation of wages, or the pretence of them; or the free negotiation of profits. Another thing that we must have is Government intervention in the question of investment. This is very important. Investment should be governed by the needs of a planned economy, whether it be in relation to nationalised industry or to private industry. It is important that investment should go where it is needed. This is the path that the Government are on. I would say frankly that so far as the trade unions are concerned, as we embark on this course and as a planned economy seems to be fair between the sections of the community, so it will be accepted by the trade unions as an alternative to what is now called free wage negotiation and in favour of a more stable system which will assist towards the future.
My Lords, this Government have done more than any previous Government in history to make a means-tested nation of us. If your wages are too low, apply for a family income supplement; if your rent is too high, apply for a rent rebate; if the rates are too high, then apply for a rates rebate—apply for all these things which are means-tested! One thing that the average working man does not like is a means test. What the average worker wants is sufficient income from his endeavours in order to pay his way and to bring up his family to live decently and in dignity. Nothing that the Government are doing at this stage is of any help towards that end; but it is something that it is desirable to achieve.
EARL JELLICOE: My Lords, I have listened with interest to what the noble Lord has had to say. Would he not agree that when they are given effect to, the proposals of my right honourable friend the Chancellor of the Exchequer for a tax credit scheme will, at a stroke. do a very great deal to eliminate means-testing in our society?
LORD PARGITER: My Lords, I would have hoped that the noble Earl would not have used the phrase "at a stroke". It has been used before. It is used now here in connection with proposals for the future that we know very

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little about, proposals which are certainly not yet in the stage of being legislation.
EARL JELLICOE: My Lords, may I intervene once more? The noble Lord says that we know little about these proposals; but they have been fully ventilated in a Green Paper and were discussed in this House only a week or so ago at some considerable length.
LORD PARGITER: My Lords, what we are interested in is what this means in pounds, shillings and pence. That has not yet been spelled out. That is what we are looking for; not for theory but for fact. I shall listen with interest to what the noble Earl the Leader of the House has to say when the stage is reached on producing fact rather than theory. We have at the moment a means-tested society greater than any that has prevailed in history. This must be got rid of as soon as possible.
For reasons of this kind I support the Amendment—not because I am opposed to an incomes policy or a prices policy; for I think the two necessarily go together. I believe that control of capital must be brought into the matter in order that it may be a wholly effective planned economy. I support it because of the things that the Amendment says the Government have done, things which are totally against getting the necessary co-operation to ensure that success may meet their efforts.
7.27 p.m.
LORD ORR-EWING: My Lords, I must apologise for intervening at this late hour, but I have listened with interest throughout the debate. I am the first to concede that we have as a Government turned a somersault; but it could be that we caught this habit from noble Lords opposite. If I were to list eight points of credit to this Government, as the noble Lord, Lord Diamond, began his speech by listing eight points of criticism, then I am afraid I might outstrip both patience and time. But I would put two points: first, that they carried us into the Common Market; secondly, that they carried through the Industrial Relations Act on the lines of (and many clauses were taken from) the previous Government's plan, In Place of Strife. I could go on with six more.
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I think that what has emerged from this debate is that we all recognise that the country is in a state of crisis and that no Government could stand the present rate of inflation. I believe that the progress which we were making a year ago in trying to control inflationary wage awards and price increases and reduce them to a more sensible proportion, was undermined by the Wilberforce award of 24 per cent. That started wage claims in the motor industry—and in other places where the power of the unions was very great indeed—which were totally unrealistic and unmatched to an increase in productivity.
I welcome particularly the attention paid in the White Paper to the lower-paid workers. I think that the proposals in paragraph 30 were mentioned and supported by the noble Lord, Lord Peddie, on the other side; and I should like to endorse support from this side of the House. It seems to me to be a sensible arrangement that something special should be done for the lower-paid worker. This cannot be done without the maximum co-operation of the T.U.C. It is not right to say that in fact the lower-paid have suffered. A Written Question, apparently not noticed by any speaker here, or anywhere else, appeared in the Hansard of another place for December 22 last which showed that for the £1,000a-year man, in real terms, in the years between 1964 and 1970 his rewards, if he had two children, increased by 2·7 per cent. a year. In the last two years, 1970/72, they increased by double that rate, by 5·4 per cent. Whereas the man earning between £34 and £60 a week got only 0·7 per cent. increase during the six years of the Labour Government, he is now averaging 3·1 per cent; and at the top rate, the £12,500-a-year man—the sort of chief executive of a nationalised industry or of other firms—who got a 0·5 per cent. annual increase during the six years of the Labour Government, has got 2·4 per cent. If we look at the last two years, we find that the massive tax reductions and other social benefits have meant that the lower-paid workers got a 5·4 per cent. average increase in real terms whereas the higher-rewarded person got 2·4 per cent. There is a massive difference.
LORD PARGITER: My Lords, can the noble Lord, Lord Orr-Ewing, say what is the difference in the balance of payments for those two periods?
LORD ORR-EWING: My Lords, I do not think that is related to my subject of the lower-paid workers. I should be delighted to have a debate at some other time about the balance of payments; but I would say now that if you are running your economy up at a figure of 5 per cent. inevitably it happens, as it did in Mr. Reginald Maudling's time, that you start sucking in raw materials, which you buy and pay for overseas, long before your growth comes out in increased industrial output, and that is bound to put a strain on our balance of payments. That is why I endorse the view put by a former Chancellor of the Exchequer, my noble friend Lord Amory, who said he hoped we should leave the pound to float for a bit and not try to peg it too soon.
In his opening remarks the noble Lord, Lord Diamond, seemed to advocate food subsidies. I think it was the noble Lord, Lord Douglass of Cleveland who quoted Lord Monckton. For five years I was Lord Monckton's P.P.S., as Lady Ruthven of Freeland will know very well—an it was a very enjoyable and constructive five years. I remember that when there was a threat to withdraw food subsidies in the early 1950's Walter Monckton said that if this happened he might well have to resign from the Cabinet because he felt that if bread subsidies were touched he would lose the confidence of the T.U.C. In the event, bread subsidies were reduced and abolished, and I think it strange that he should have said that when his judgment was so good in almost all respects. Because there was hardly a ripple on the pool in respect of the well-being and understanding that he created with the T.U.C. when the subsidies were abolished; and there was very little reaction in the country.
I should totally oppose the wholesale re-introduction of food subsidies now. In another place, the figure of £200 million a year towards food subsidies was mentioned by the Labour Party. My Lords, if you begin to analyse that it means 1p saved on a pint and 1p on a loaf of bread—that is, £200 million a year. Is it realistic to think that that would affect the wage claims which are now being
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made? Once you start food subsidies, as was said earlier in the debate, it is wholesale distribution and you will find yourself on a slippery slope. I should much prefer to see the deserving, the poorly rewarded and those living on fixed incomes compensated in other ways: by threshold agreement which would compensate them for rises in food prices; by increases in family allowances, if they have family responsibilities; by the family income supplement and, as my noble friend Lord Jellicoe said, by the tax-credit system, in due course. That seems to me to be more fair; and, after all, we are all trying to discover a fair policy.
During the debate the noble Lord, Lord Diamond, if I understood him correctly, said that we ought not to set up Pay or Prices Boards and that pay certainly should be left to the T.U.C.—I think the noble Lord used the words—"to supervise and monitor the pay increases of the various unions". That view has been contradicted, I think, by speakers from his own Back Benches, but surely the T.U.C. has not the power, even if it had the will, to do this; and I believe that it has not the will or the inclination. This point was made by the noble Lord, Lord Peddie. I am sure that in this respect there must be a separate body, like the old Prices and Incomes Board, which will judge. Of course I recognise that the ultimate sanction must rest with the Government of the day, but I hope that the creation of a Price Board and a Pay Board will mean that we may avoid some of the unrealistic terms which have been quoted in our national newspapers and on television and which may raise sympathy for certain sections of the community and certain trade unionists; and that we shall get away from references to so-called basic pay. In this day and age, basic pay is so seldom real pay. It is the figure for earnings or take-home pay that is the most realistic and should be considered.
I believe that we are coming to a phase (in this I endorse what other speakers have said, particularly the noble Lord, Lord Brown), during which, except within a given percentage, we shall not see completely free collective bargaining reinstituted. If we did try to introduce that, and have no "buffer" in the form of those Boards, power would rest with

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those in the best position to practise blackmail. Often these people would be in the minority. Obviously, the electricity workers would have a tremendous advantage. They have only to pull the breakers and the whole of industry, and much of our life, comes to a standstill. I believe that we have to work in the context of some sort of Pay and Price Boards or some combined body.
Now I come to the point that has been raised by various people. At the moment the noble Lord, Lord Davies of Leek, is probably in the Hansard office reading the report of his speech, and I am sorry that he is not in the Chamber. I want to support the statement that too little has been made of the effect that limitation on profits may have on the investment in industry. It is our investment in this country that is lagging behind. I support these measures because, although they may be a reversal of policy, they maintain growth and they are not deflationary, which would be an alternative policy. But if growth is to be maintained at 5 per cent., we need to invest far more massively in industry in this country than we do at present. Wherever we look we see that there has been a steady fall in the fixed investment in machinery and in manufacturing industry—I have here the figures from 1969 to 1972. The same is true of investment in the building industry. If your Lordships compare these figures with the figures for our competitors you will find that there are quite outstanding figures from Japan. Whereas Japan was investing at the rate of 100 in the base year of 1963, she is now investing at the rate of 259. We were 163 in 1963, and now we are only 140. You may look at the figures for our competitors in the E.E.C. and you will find that they are all saving money to invest it in modern plant. Therefore the growth we are achieving now is not soundly based unless we can match it with investment.
I ask the Government, when they are drawing up the codes and considering means of regulating profits, to pay special attention to trying to devise some sort of encouragement for investment in modern industry. I would match this with the other side of the coin, which is private savings. The up-turn in interest charges is something about which we need to
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revise our thinking and we should encourage private savings further, because "bread" not eaten to-day and in the hands of private people, represents possible investment in the future. So, both in company investment and also in private investment, I hope that the Government will give most serious consideration to these matters when they come to draw up the codes for the Pay Boards and for the profit formula.
My Lords, to summarise what I have been trying to say, this must have been a very agonising choice for the Cabinet of the day. But I do not think that there was any alternative, and that fact has been brought out during this debate. I regard it as infinitely preferable to do this than to have massive deflation, which probably could have corrected our financial problems but only at the expense of industrial strife which might have been so serious that democracy would have been at risk. I prefer to see growth maintained, but this can be done, I believe, only if we have much greater dedication to the industrial investment which is essential.
It seemed, last November, at the Chequers meeting, that we were moving to a position where the Government might get agreement between the C.B.I. and the T.U.C. I do not quote Mr. Wilson very liberally in this House, but I think that one of the wisest things he said was that one person's wage increase is another person's price increase. This has been brought home forcibly to people all over the country, and that is why, by and large, they are behind the policy that your Lordships are debating. If the Industrial Relations Act is still the difficulty in getting the T.U.C. to the table, perhaps they could come forward and propose amendments. Let us have a constructive approach to this problem. Every other nation in the world has its own form of industrial relations legislation, and I think we were right to introduce it at the time. Even in Walter Monckton's day and lain Macleod's day we were asking the T.U.C. whether we could get some sort of industrial relations legislation. I remember George Woodcock saying, "Please leave it to voluntary agreement within the T.U.C." It played on, year on, year on. We contemplated setting up a Royal Commission on the subject. We never took

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any action in our 13 years of office, always hopeful that this could be done in the House by the T.U.C. Then, when the Government changed, the new Government set up a Royal Commission. They brought forward constructive proposals, In Place of Strife, but were forced to back down. So I hope that we can consider this Bill; and if it is a stumbling block to co-operation, let us have some proposals for amending it. For let us be quite certain, my Lords; unless we can get the Government of the day, the C.B.I. and the T.U.C. together, we shall all suffer and the standard of our living will go inexorably down.
7.41 p.m.
LORD SHEPHERD: My Lords, I like to think that one of my roles in your Lordships' House over quite a few years has been one of seeking consensus and agreement; confrontation and abuse, as they occur in another place, I have never found particularly attractive. I think there were some who had doubts whether we should have a debate to-day on the subject of prices and incomes, particularly as in a few weeks' time we shall need to consider Government legislation. I think I express probably the unanimous view of those who have sat through this debate if I say that we have had notable and constructive contributions from all sides of the House. I hope that the Government will take particular heed of two speeches. The first was that made by my noble friend Lord Peddie, with his long experience at the Prices and Incomes Board. Perhaps I may say here that, now that my noble friend has broken his silence to-day, I hope he will play an active role in your Lordships' House when the legislation comes before us. The other speech to which I hope the Government will pay particular attention is that made by my noble friend Lord Douglass of Cleveland with regard to the approach to some difficult, but I believe essential, conversations and negotiations between the Government, the C.B.I. and the T.U.C.
In a few weeks' time we shall have the Bill. We on this side of the House will not obstruct the Bill. We believe, particularly in the interests of those who are affected by phase 1, that this Bill should become an Act of Parliament. I hope the noble Earl, Lord Jellicoe, will
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recognise our difficulties and will respond to our request. A minority Party has only one power at its disposal, and that is time in debate—to press and press again. If, however, one agrees to a Bill going through rapidly, one gives up that one weapon. I hope that the Government will be infinitely more conciliatory and forthcoming than on a previous occasion, that of the E.E.C. Bill, when we made similar gestures to the Government. The Bill will come here, and we shall seek to amend it—I shall deal later in my speech with one or two aspects where I think we shall get a good deal of suport from all quarters of the House. Therefore I hope the noble Earl, when he replies, will give us an assurance that the Government will consider the Amendments on their merits, and will not use pressure of time as a reason for refusal.
My Lords, we thought it right to put an Amendment before your Lordships' House this afternoon. I suspect that on the first part of that Amendment there can be no disagreement. I cannot believe that there is in any quarter of your Lordships' House anything but the deepest anxiety at the economic position of this country, and, in particular, its prospects on entry into the European Community. I do not believe that since the last war the economic situation of this country has been worse that it is to-day. I agree with the noble Lord, Lord Thorneycroft, that if the proposals that the Government have put before us fail, then it is difficult within a democratic society to see what alternatives lay before a Government. To-day we have 830,000 unemployed. This we all regard as utterly unacceptable. We have investment in manufacturina industry, as the noble Lord, Lord Orr-Ewing, said, 10 per cent. below what it was last year. Looking at the rate of investment among our competitors within the European Economic Community, this is of dire consequence to this nation.
Then we have problems on balance of payments. When we left Office we left a surplus of some £600 million. A year later, in 1971, with the momentum of what was done during the period of the Labour Government, we had a surplus of £1,000 million, the greatest surplus that this nation has ever had. Here was a real springboard from which the difficulties within the economic life of our

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country, which we all recognise, could and should have been dealt with. It is with sadness therefore that we must recognise that a problem that has been sapping at our nation for many years now has to be dealt with not with a surplus, but with a trading deficit greater than any other in our history. It seems that during 1973 we are to be confronted with a balance-of-payments deficit of the order of £500 million or £1,000 million. So far as the economy of our nation is concerned—and we recognise that growth is an essential factor—it is problematical whether a Government or a nation can sustain growth of the order of 3, 4 or 5 per cent. with such a balance-of-payments deficit. I agree with the noble Lord, Lord Thorneycroft, that the Government to-day have very little room in which to manoeuvre, whereas when they took office they had a springboard. The matter for regret is that they did not take the opportunities that were bequeathed to them. Inflation is cancerous; unless it is dealt with eventually the nation will die.
All of us have sought over the years to deal with inflation. The Labour Government were confronted with it, coupled with a balance-of-payments problem. The Labour Government were required to shift resources into the export market. They could not permit any real increase in living standards or wages, but they brought forward a policy of prices and incomes. The noble Lord, Lord Drumalbyn, based much of his case on the speech which I made when we introduced a prices and incomes policy. Circumstances then were different from those of to-day. The noble Lord also based his case on American experience, but the noble Lord did not say that the case as between Britain and America was the same. We are open to all the effects of world trade and the prices of food, about which the noble Lord and others have spoken in great detail this evening. The United States is broadly self-contained. Therefore what was successful in the United States will not necessarily succeed here, and I think the fact that the noble Lord based his case, as he did, on the American example can only mean that he and the Government for whom he speaks are not convinced of the merits
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of the course which they have now undertaken in the field of prices and incomes.
We have put in our Amendment that this House should recognise the need for an effective and equitable policy on prices and incomes. The noble Lord will know that right through the period of his present office we on this side of the House have consistently, during every economic debate, made the case for a prices and incomes policy. We have not even turned our backs upon a statutory policy. On every occasion we have met with derision. We have been told that it is "pie in the sky", that there is no possibility of it and that in any case it is counter to the philosophy of Her Majesty's Government. I am not going to indulge, as the noble Lord, Lord Drumalbyn, did, in quotations. The speeches of the right honourable gentleman the Prime Minister are well known.
One may speak of militants. During the period of a Labour Government, on 109 occasions the Party opposite in another place went into the Division Lobby with Mr. Michael Foot and his colleagues, opposing Orders that were being made by the Labour Government to make effective a prices and incomes policy. So I can understand that the noble Lord comes to this House to-day with some doubt and some lack of conviction that the policy he is placing before the House will succeed. I myself have never been opposed to statutory legislation on prices and incomes, if it was necessary; and I must say that when I look at the economic situation of this country to-day I should find it very hard in my mind to say that such a policy is not justified. Whether a statutory policy as contained in the White Paper can survive the test of time is another matter. However, one thing I should have thought was quite clear: that in the kind of democratic society in which we live, unless the workpeople as a whole, together with those who negotiate for them, are convinced not only of the merits of the legislation and the machinery that has been set up but of the fairness of these, whatever the penalties may be, that legislation will founder. Therefore we thought it right in our Amendment to draw attention to the inequitable policies that continue to be pursued by Her Majesty's Government

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—because you cannot take the package contained in this Paper in isolation.
Little is done in this package in the field of housing and rents. My noble friends Lord Diamond and Lord Garnsworthy and myself, during the long debates on the Housing Finance Act, said that the policy proposed was inflationary, that rents were being raised for basically working-class people, and that these were bound to be taken into account when workpeople sought wage increases. We were voted down by noble Lords opposite, and yet in this White Paper the Government acknowledge that the case had been made. At least, they say that so far as the more lowly-paid workers are concerned special sums should be made available to meet potential hardships. But the Act remains in force. On rates, we argued again. I do not know what the final increase on rate demand is likely to be—I have seen a figure put forward of 30 per cent. Certainly representatives of the big cities are coming to see the Prime Minister to make their case. But there is nothing in this White Paper that will give any sense of satisfaction or security. It seems that the options open at the moment to local government are either to raise the rates or to cut the services. Those who are in local government well know that the services to-day barely meet the needs of the community.
My noble friend Lord Diamond dealt with house and land prices: these prices have all gone up. I wonder whether the noble Earl could help me about a report I saw in the Sunday Times yesterday, which illustrates the problem. Certainly problems will be caused for young people seeking homes of their own. A company is mentioned—a company which built in 1971 950 houses and made a profit of about £540,000. Last year it built about 150 more houses than it did in 1971 and the profit of that company for 1971 was £1,800,000. There is nothing in this White Paper which in any way will prevent that, or will ensure that the profit remains with the company and is not used for eventual distribution to the shareholders once the phase is over.
These are matters on which the trade unions and the general public will judge a prices and incomes policy. We shall need to go into this with great thoroughness when the Bill is before us. We
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argued on school meals and school milk; the Government have gone some way to meet the case that we made. But what some noble Lords do not understand (though I think the nobe Lord, Lord Thorneycroft, and the noble Viscount, Lord Amory, understand this) is that the measures that were taken by the Government at the early part of their period of office, when prices and wages were to find their own level, are now indelibly written into the minds of the trade union negotiators and members. This may not be eradicated, but it has undoubtedly to be smoothed before one moves into phase 3 which I hope, with the noble Lord, Lord Thorneycroft, is a phase of greater flexibility than the rigidity one finds in the present White Paper.
Listening to the debate as a whole, there was a unanimity that the policy of Her Majesty's Government on prices and incomes, and on all policies surrounding it, must not only be fair, but must be seen to be fair. I appreciate that the noble Earl may not be able to go much further this evening as the Budget is not far away. But I hope that he will take this issue on board if he can. To say to a workman that he can only have —1·80, when you know that those who are in the higher income brackets, as a consequence of the last Budget, either on earned or unearned income, are going to receive some £6 or more, is not likely to create a feeling of justice among our people.
Regarding the White Paper, I listened very carefully to my noble friend Lord Peddie. I agree with him that the Government should learn from our experience. I think that the noble Earl will find that in their White Paper on the machinery for an incomes policy the previous Labour Government had in mind two separate bodies: one for prices, and one for pay. But experience showed, as a consequence of consultation, that since pay plays such a vital factor in prices—and this is what the White Paper said—you could not treat these two aspects separately. The Labour Government decided that there should be one board. I hope that the noble Earl will give very careful consideration to this matter, and will consider some of the experiences of the Prices and Incomes Board, because when the Bill comes before your Lordships' House we will

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deploy arguments for a unified board dealing both with prices and incomes.
On the code of practice, I agree with the noble Lord, Lord Thorneycroft, and my noble friend Lord Douglass of Cleveland: a great deal will depend upon the code of practice that is presented by the Government. May I ask the noble Earl whether that code of practice will be available, even if only in draft form, by the time your Lordships' House is required to consider this Bill? This is of vital importance in the consideration of a piece of legislation that is not of a temporary nature. It is quite clear that the Government have in mind putting a permanent piece of legislation on the Statute Book.
Another aspect that we shall need to consider is the role of the agencies. I do not know why the Government, having changed so much of their policy, should jib at the use of phrases that are so well known in prices and incomes negotiations. Are the Government firmly committed to the view that these two bodies, whether they are separate or unified, are to be a form of supreme council, supreme court, answerable to no one in the sense that there is no appeal? This is highly dangerous because if any union, or any employer for that matter, has gone to either of these boards and has been presented with a decision that is unpalatable or unacceptable, it will make it very difficult indeed for such a board to be accepted by other applicants. I hope the Government will give very careful consideration to the experiences of the Prices and Incomes Board. That Board was a purely advisory board, leaving the Government of the day with the final decision as to whether a pay or price increase should be proceeded with.
My Lords, time goes so quickly. I suffer as much as noble Lords opposite from that factor. We have before us a problem which both the Labour Government and now the Conservative Government have had confronting them. We on this side of the House are ready to support legislation that is fair, equitable, and can be shown to be effective. This will depend a great deal on the way in which the Government present this Bill to your Lordships. By the time we have the Bill we shall have had the Budget,
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and we shall then be able to know whether the Government, having changed their policy on this occasion, will be willing to change policies which many of us feel to be utterly inequitable and therefore unworkable.
8.10 p.m.
THE LORD PRIVY SEAL (LORD JELLICOE): My Lords, the Opposition, in their Amendment, refer to their "increasing anxiety" about the state of the economy; and I think that in his opening remarks the noble Lord, Lord Shepherd, said that of course there could be no dissent from that general statement. I do, at least in part, dissent. Of course, you can be "bearish" or "bullish" about the economy, given the wide range of options offered by the cognoscenti on these matters, be they the London and Cambridge Economic Survey or be they Sunday Telegraph business forecasts yesterday. Possibly, very naturally, we tend to be a little more "bearish" in Opposition and tend to be a little more "bullish" when we are in Government. I do not wish to be thought complacent about the state of the economy, but I should like to say just this at the outset of my reply. When I last debated this general issue. I think it was in November or so, I drew your Lordships' attention to a fundamental aspect of Government policy, and that was our commitment to economic growth. Also I drew attention to the forecast given by my right honourable friend the Chancellor of the Exchequer in introducing his Budget last year of a 5 per cent. growth path.
Some noble Lords opposite expressed a great deal of scepticism about whether we were going to hit this target. All I would say, my Lords, but I say it with conviction, is that the indicators which I have seen all strongly suggest that we are on that course. I will not run over them; they are summed up to a certain extent in this increased economic activity, in something which we have all ardently desired: a substantial fall in unemployment. That fall, of course, equals nearly 175,000 from that intolerable peak last March. That fall was characterised by the noble Lord, Lord Diamond, in his book of records as a "slight improvement". A fall of that magnitude to be characterised as a "slight improvement" is, I would suggest, something of a slight on the use of the English language.
LORD DIAMOND: My Lords, as the noble Earl has said that, may I say to him that I think it is a very temperate use of the English language. It was an intolerable figure, and it is intolerable that the Government should not have been able to get the figure down by a much larger amount than that in the period that has been available to them.
EARL JELLICOE: My Lords, I entirely agree with the noble Lord that the peak was intolerable. All I was suggesting was that a reduction of 175,000 is no mean improvement.
My Lords, it would be foolish for me to portray everything in our economic garden as rosy. We have been deeply concerned, and rightly concerned, about laggard investment, the point to which my noble friend Lord Orr-Ewing rightly drew our attention. But here again the most recent indicators point the same way; and they are very definitely more favourables. The story is the same whether it is told by the D.T.I. survey, the C.B.I. survey or by to-day's Financial Times survey. Then, of course, there is our proper concern about the balance of payments. Here again the forecasts vary enormously. I would agree with my noble friend Lord Amory that the increase in exports to which we are looking is slow in coming forward. This may be the famous J-curve—we shall have to see. But, in any event, a great deal here depends on whether we are able to take full advantage of the upsurge in world trade. But the point I wish to make in these introductory remarks is that success on both the investment and the balance-of-payments fronts turns crucially on our ability to master inflation.
The noble Lord, Lord Shepherd, termed this debate a notable one and a constructive one. I agree with him. Despite the Amendment, I do not wish to be unnecessarily contentious in winding up because we have heard—and I say this in no patronising way—a succession of thoughtful and constructive speeches, some of them very notable. If our debate has been restrained, I do not think it has been any the less effective for that. But it has also revealed a very general measure of agreement on a number of the major issues before us. In the first place, no noble Lord, so far as I can recall, has questioned that it was right
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for the Government to intervene, and to intervene decisively, last autumn; and a very clear majority, albeit most of us would prefer the voluntary approach, have backed a statutory policy, at least at present.
Secondly, there has been a wide consensus that this is a problem which we cannot solve selectively, à la carte, as it were. Noble Lords have argued that however important an element of inflation is wages escalation, it is not the only important element; and I would not dissent. They have drawn attention, and rightly, to prices; to the importance of monetary policy, and indeed to the significance of public expenditure, and to certain budgetary considerations. The noble Lord, Lord Shepherd, was quite right in thinking that, with the Chancellor in purdah, I would not trespass far on to the ground of the Budget. Thirdly, they have emphasised that while the Government's proposals at the outset received, and I think rightly received, a large degree of public support, their effectiveness in the longer term will turn largely on whether they continue to be backed on the whole by public opinion. Again I would not dissent for one moment. I have been particularly interested to hear what was said in that respect by a number of noble Lords opposite—and I am thinking particularly of the remarks of the noble Lord, Lord Peddie, and perhaps above all of the remarks of the noble Lord, Lord Douglass of Cleveland.
Fourthly, a theme running through this debate—and it follows from the previous point of agreement—is that it behoves all of us to seek as wide an area of co-operation as we possibly can, above all from the trade unions and above all from the moderate elements in the trade union movement. I was greatly impressed by what my noble friend Lord Amory and my noble friend Lord Thorneycroft, in one of his masterful performances, had to say about this. This was very much the theme underlying much of the remarks of the noble Lord, Lord Byers, and it permeated the very important speech of the noble Lord, Lord Douglass of Cleveland—a speech, I think I am right in saying, to which the whole House listened with very particular attention. Fifthly, and finally, there has been a wide measure of agreement running

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through the debate that not only would the policies be effective only if they were hacked by public opinion, but they would be backed by public opinion, and should receive the co-operation we seek, only if our policies were fair and were seen to be fair.
My Lords, the Amendment criticises our policies as "unjust and divisive". I frankly cannot see how this line of argument can be sustained so far as the proposals in the White Paper regarding wages are concerned. The whole theme of these proposals, the thread that runs right through the White Paper, is on improving the relative position of those who are lower paid in our society. I will itemise briefly. There is the 4 per cent. plus £1 formula; its application can clearly favour the lower paid. There is the £250 maximum ceiling within the pay limit—again, preference for the lower paid. There is a special provision for hours and holidays and for equal pay for women. Next (I think the point which the noble Lord, Lord Peddie, dwelt upon) there is the point that the negotiators—and we propose that there shall be real negotiation in this respect in phase 2—will be negotiating with the bargaining group in each unit, as it were, and are free to determine the disposition of the money available within that bargaining group. The Government have also explicitly said that they hope negotiators will pay particular regard to the lower paid. I see nothing unjust about that. I see it rather as a test for the negotiators on both sides to prove that what many of them have professed about priority for the lower paid is really meaningful.
Again, there are the other elements in this very comprehensive and carefully considered package. There is the possibility of threshold agreements in phase 3. Again, this is an area in which we should like to work out something constructive in consultation with the unions. Not least, there is the question of the establishment of a board to consider the problems of the lower paid; that is a paragraph 30 proposal which again was dwelt on by the noble Lord, Lord Peddie, and rightly so. Here again I hope there is a field for co-operation and renewed discussions between the Government and the C.B.I. and the trade unions. There are also concessions about school meals,
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and so on—but I will not go through the whole list.
I can only assume that the Opposition not only are attacking the White Paper policies as being divisive and unjust; presumably—and this was confirmed by the noble Lord, Lord Shepherd—their attack goes back further and is on a wider front. I am quite ready to meet it, if need be, on that wider front. Again, I would merely remind your Lordships of all that we have done these last few years to help those who most need help in our society. The list is long; I could itemise it but I will spare your Lordships from that because, in the traditional phrase, "Time is getting on". All I would say is that this is not a Government that does not care; this is not a Government that seeks to divide and it is not a Government that does not care if there are divisive elements in our society.
On this question of divisiveness, I should like, if I may, because I attach particular importance to the words of the noble Lord, Lord Douglass of Cleveland, to come back for a second to what he said about industrial relations. I greatly regret—the Government greatly regret—the break in the dialogue between the T.U.C. and the Government. We have made it clear that we are ready to renew that dialogue at any time. The noble Lord, Lord Douglass of Cleveland, raised the question "How?"—and it is an important question. He referred to the Industrial Relations Act. Noble Lords will be glad to hear that it is not my intention to re-debate the Industrial Relations Act this evening. We are all entitled to our opinions about it. What I do wish to do is to remind noble Lords what my right honourable friend the Prime Minister has made clear on more than one occasion, and that is that the Government are very ready in due course to review with those concerned the workings of the Act with both sides of industry and in the light of experience—and I think that was the phrase taken up by the noble Lord, Lord Douglass.
LORD DOUGLASS OF CLEVELAND: My Lords, may I just ask the noble Earl what the phrase "in due course" means?
EARL JELLICOE: My Lords, perhaps it would be wrong for me to expand on that off the cuff "at this late hour" (as

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the saying is) but I can assure the noble Lord that I will bring his remarks to the attention of my colleagues because I think they were important ones.
I should like now to touch on another and vital aspect of fairness, and that is what we should do to ensure fair play between one group of employees and another—the problem of differentials. I have always recognised that at least in its initial phases the application of any national policy on incomes inevitably implies rough justice for some groups. One group of employees may escape, the other may be caught by the chopper when it comes down, and this problem is particularly intractable in the period when one 'moves from the standstill into the next phase of the policy. I wish to make it clear that the Government recognise that there is a very real problem here and that large numbers of our fellow citizens are affected by it. Here I find myself in considerable sympathy with what the noble Lord, Lord Diamond, was saying. I did not agree with his remarks about records, but I did agree with him when he said that pay is more than a question of mathematics, of a "nicely calculated less or more". It is a question of status, of pride in one's job and one's place in society. We recognise that, my Lords, and in this context I should like—and I hope noble Lords will excuse this slight detour—to refer briefly to the position of the Civil Service.
In previous debates on these matters I have more than once emphasised my personal attachment to what experts call "Whitleyism": that is, the practice of the spirit of reason and reasonable consultation between the management of the Civil Service and the staff associations which represent the Civil Service. Having mentioned this when problems lay elsewhere, I make no real apology for doing so again when they are much too close to my doorstep for comfort. I have been a civil servant myself, and I was proud to be one. I am also proud to have had a very close connection, as the noble Lord, Lord Shackleton, before me had, with this great Service for the last two and a half years. Too often too many of us take it too much for granted—take too much for granted the service which our civil servants provide up and down the country. Of course I feel this about the
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Civil Service. I wish to pick my words carefully this evening since the last thing I should wish to do would be in any way to exacerbate a tricky situation. But there are certain things which this debate gives me the opportunity (which I will take briefly) of saying.
In the first place, there has been a suggestion that this Government has in some way, in its capacity as employer, broken faith with its employees. I must refute this. In the first major pay negotiation after the Government came to office—and it was not an easy one—the staff side asked us for a clear assurance that we would adhere to the principles and procedures of pay and research established by the Priestley Royal Commission in the 1950s and developed since then, and we gave the staff side a clear answer. We said that we endorsed the Priestley principles and intended to implement them, subject—and this was spelled out quite explicitly—to any requirements of an overriding national policy and general application. Our proposals for the standstill and for stage 2 clearly represent such a national policy of general application. But, it may be asked, why did the Government make this proviso? We believe that as an employer, like any good employer, we must treat our staff fairly. That we intend to do. But by the same token we must also, as an employer, be subject to the constraints that are placed on other employers and on the community as a whole. Those who work for the Government rightly expect to be fairly treated, but they cannot expect that their employer should treat them in a preferential way which is not open to other employers.
I accept that with the Civil Service there is a real problem of catching up. We recognise this, and we recognise that the timing of the standstill has come at a particularly difficult moment in this process for a very large number of civil servants. What I would ask the Service to remember is that they are not the only people who can argue that the timing of the standstill has left them with catching-up problems. In the circumstances, it seemed right to us that the Civil Service should be treated in phase 2 of the policy as everyone else in a comparable position is being treated. They will be treated no better, but they will be treated no worse than those others.

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There is, however, a point here that I wish to emphasise. This is not to say that possible anomalies will not be considered, a matter which was in the mind of the noble Lord, Lord Gore-Booth. We have vet to process the evidence of Pay Research. If, when we have done so, it is clear that anomalies and problems of relativities still remain after the phase 2 guidelines have been applied—and I fully recognise that this could well be so—then any anomalies in relation to the Civil Service will be considered alongside any other anomalies. The Government will need the Pay Board's advice on this whole difficult area, and what I wish to emphasise to all those members of the Civil Service—and nearly 400,000 of them are in Pay Research this year—is that this provision for the consideration of anomalies in relation to phase 3 already exists. I have no doubt that it will be operated.
I also wish to stress that we recognise that the standstill had created a special problem for the pensions of those civil servants who were about to retire when "the chopper" came down. I am glad that as a Government we have been able to do as much as we have to improve the pensions of our public servants; and it has not been inconsiderable. But there is a real problem here. We recognise it, and it is not a new one. It raises great difficulties, difficulties which were not solved by former Governments, but I can give those concerned an assurance that if we can find a way round them we shall do so.
LORD SHACKLETON: My Lords, before the Lord Privy Seal leaves the subject of the Civil Service in what is obviously a very important and carefully considered statement, may I ask him to say whether, in the examination of anomalies, as he chooses to put it, the Government will stand by the principle of comparability, of Priestley?—because if so his choice of the word "anomaly" is a slightly unfortunate one. While appreciating the difficulties, and while not wishing to add to them in such an important area, I should he grateful if the noble Lord would say whether the comparability principle does mean ultimately a catching up. My impression is that we did not abandon this, although even the previous Government did on
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one occasion break faith to some point, though to nothing like the extent that is now threatened by the noble Earl.
EARL JELLICOE: My Lords, I should like to pick my words very carefully on this point. Quite clearly, the Pay Board will he considering this position—the anomalies which may have been thrown up—in the light of the whole situation, including the procedures which have existed up to now and to which I should very much hope that in an appropriate phase in our incomes policy we shall revert to, but I do not think I should go beyond that at this stage. As for prices, the area to which not unnaturally many of your Lordships have directed attention, my noble friend Lord Drumalbyn covered the ground I think adequately in his opening remarks and I can acid little to what lie said. I wish to make only three broad general observations. The first is that we are crazy if we try to "kid" ourselves that we can insulate ourselves, as the world's third greatest trading nation, from the impact of the outside world, and from the impact of an outside world which is clearly inflationary now. This is a hard fact of international life which we have to accept and which I think was accepted by every speaker in this debate.
My second observation is that we equally "kid" ourselves if we suppose, as some seem to suppose, that there is an easy way out of this dilemma by way of wholesale subsidy. I entirely agreed with, among others, the noble Lord, Lord Byers, on this point. Indeed, I agreed with most of his remarks on this subject. My third observation is that I do not for a moment minimise the importance of cushioning those who are most in need against the impact of rising prices. That is why the whole emphasis of the White Paper proposals is directed towards helping the poorer in our society; and this is also where threshold agreements could come in, the threshold agreements which we wish to see examined—their possibility in phase 2—in conjunction with the unions.
Economically our performance as a nation since the war has been very fitful and disappointing. I think we all accept that. We have not done nearly so well as our nearest neighbours. We

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have not done nearly so well as I am sure we, as a country, are capable of doing. It is my belief that we now have a real opportunity of breaking out from the thicket in which our economy seems to have been held these last decades.
On the other hand, if we fail to invest and modernise we shall drift further and further astern in the convoy of industrialised nations and become not only the poor man but also the socially sick man of Europe. This is something which we all wish to avoid, but we shall not invest and modernise and not get our house in order unless somehow we can contain this dangerous and wild beast of inflation. We all know the consequences towards, growth, towards modernisation, investment, labour relations and in terms of social injustice. I am convinced that continued inflation of the sort we have experienced, let alone the accelerating inflation with which we were threatened last Autumn, could undermine democracy as we know it, as we love it and as we so often abuse it in these islands.
We want of course to walk the voluntary path—to wrestle, in agreement with management and labour, with this problem—and this is surely the better way. I would submit that no Government and no Prime Minister have worked harder for this, and we will continue to work for it. But this is not the choice we face at present. It is only too clear that the voluntary agreement of the sort we have striven for is not at present available. The choice at present is not between a voluntary incomes policy, which we and most of us would prefer, and a statutory policy, which we believe to be essential. At present it is an unfortunate fact that the choice is a starker one. It is, as I see it, a choice between the broad policies enunciated in the White Paper, which I commend to your Lordships to-night, and the disaster of continuing unarrested inflation. There have been constructive speeches made in this debate. Perhaps—
LORD SHEPHERD: My Lords, I regret to interrupt the noble Earl, but may I ask him whether he is in a position
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to answer the question I put to him earlier, about the Code of Practice and the timing?
EARL JELLICOE: My Lords, I am in a position to answer two questions which the noble Lord put to me. First, I can give him an assurance that we shall naturally wish to have this Bill debated on its merits. I am sure that through the usual channels we can come to satisfactory arrangements over timing within the restrictions of which we are only too well aware. Secondly, it is certainly my hope that the draft Code of Practice will be available before we take the Bill on Second Reading, but this will depend on the process of outside consultations. And while expressing this as a hope, I hope that noble Lords will not take it as a commitment.
May I just say this in termination? There have been constructive speeches—and I gladly acknowledge it—from noble Lords in all quarters of your Lordships' House in this debate, not least from noble Lords opposite. But the Opposition have not as yet offered any constructive alternative to the policies which Her Majesty's Government are submitting to the nation and which I believe command the widespread assent of the nation at the present time. In their Amendment the Opposition termed our policies "unjust and divisive". In my view, as I have sought to explain, that accusation is in itself unjust. I hope, given the tenor of the debate, that noble Lords will not press their Amendment to a Division, but if they do so I ask my noble friends to reject it and to reject it decisively.
THE LORD CHANCELLOR: The original Question was:
"That this House take note of Command Paper 5205, The Programme for Controlling Inflation: The Second Stage."
since when an Amendment has been moved, at the end to insert the following words:
"but views with increasing anxiety the economic situation and, while recognising the need for an equitable and effective policy against inflation, regrets that Her Majesty's Government continue to pursue budgetary, industrial and social policies that are unjust and divisive."
8.42 p.m.
On Question, Whether the said Amendment shall be agreed to?

CONSOLIDATED FUND (No. 2) BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1ª.
Their Lordships divided: Contents, 52; Not-Contents, 93.

CONTENTS

Ardwick, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Arwyn, L.

Douglass of Cleveland, L.

Piatt, L.

Bacon, B.

Gaitskell, B.

Popplewell, L.

Beswick, L.

Gardiner, L.

St. Davids, V.

Blackett, L.

Garnsworthy, L. [Teller.]

Serota, B.

Blyton, L.

Geddes of Epsom, L.

Shackleton, L.

Bowden, L.

Greenwood of Rossendale, L.

Shepherd, L.

Brockway, L.

Hale, L.

Slater, L.

Brown, L.

Hoy, L.

Strabolgi, L. [Teller.]

Buckinghamshire, E.

Janner, L.

Summerskill, B.

Burntwood, L.

Kennet, L.

Taylor of Mansfield, L.

Burton of Coventry, B.

Llewelyn-Davies of Hastoe, B.

Wells-Pestell, L.

Chalfont, L.

Lloyd of Hampstead, L.

White, B.

Champion, L.

Longford, E.

Willis, L.

Cooper of Stockton Heath, L.

McLeavy, L.

Wright of Ashton under Lyne, L.

Crook, L.

Maelor, L.

Davies of Leek, L.

Pargiter, L.

Wynne-Jones, L.

Diamond, L.

Peddie, L.

NOT-CONTENTS

Aberdare, L.

Gainford, L.

Mountevans, L.

Abinger, L.

Gore-Booth, L.

Mowbray and Stourton, L. [Teller.]

Amherst, E.

Goschen, V.

Amory, V.

Gowrie, E.

Napier and Ettrick, L.

Armstrong, L.

Greenway, L.

Newall, L.

Auckland, L.

Grenfell, L.

Northchurch, B.

Balfour of Inchrye, L.

Grimston of Westbury, L.

Nugent, L.

Belstead, L.

Hailes, L.

O'Neill of the Maine, L.

Berkeley, B.

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

Orr-Ewing, L.

Brougham and Vaux, L.

Pender, L.

Byers, L.

Harvey of Prestbury, L.

Penrhyn, L.

Carnock, L.

Harvey of Tasburgh, L.

Rankeillour, L.

Conesford, L.

Hawke, L.

Reading, M.

Cottesloe, L.

Hood, V.

Redmayne, L.

Courtown, E.

Hylton-Foster, B.

Rennell, L.

Cowley, E.

Jellicoe, E (L. Privy Seal.)

Ruthven of Freeland, Ly.

Craigavon, V.

Kemsley, V.

St. Alwyn, E. [Teller.]

Croft, L.

Killearn, L.

Saint Oswald, L.

Cullen, of Ashbourne, L.

Kilmany, L.

Sandford, L.

Daventry, V.

Kinnoull, E.

Selsdon, L.

Davidson, V.

Lauderdale, E.

Sempill, Ly.

Denham, L.

Lincoln, Bp.

Stamp, L.

Derwent, L.

Lindsey and Abingdon, E.

Stuart of Findhorn, V.

Drumalbyn, L.

Loudoun, C.

Thorneycroft, L.

Dundee, E.

Macleod of Borve, B.

Trevelyan, L.

Ebbisham, L.

Macpherson of Drumochter, L.

Tweedsmuir, L.

Ecclcs, V.

Margadale, L.

Tweedsmuir of Belhelvie, B.

Elles, B.

Massereene and Ferrard, V.

Vivian, L.

Elliot of Harwood, B.

Merrivale, L.

Windlesham, L.

Emmet of Amberley, B.

Milverton, L.

Wolverton, L.

Falkland, V.

Molson, L.

Young, B.

Ferrers, E.

Monck, V.

On Question, Motion agreed to.

  LEAD POLLUTION HAZARD AND RESERVOIRS
  LEAD POLLUTION HAZARD AND RESERVOIRS
  KING'S LYNN ROAD COMMUNICATIONS
  KING'S LYNN ROAD COMMUNICATIONS
  UGANDA REFUGEES IN E.E.C. COUNTRIES
  UGANDA REFUGEES IN E.E.C. COUNTRIES
  GIBRALTAR TAXATION ORDINANCE
  GIBRALTAR TAXATION ORDINANCE