Sitting of 27 February 1973

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  HUMBER BRIDGE BILL
  As amended, considered; to be read the Third time.

  GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday next at Seven o'clock.

ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Unemployed Persons
    Mr. Cormackasked the Secretary of State for Employment whether he will give the latest figures for unemployment in England and Wales.
    The Secretary of State for Employment (Mr. Maurice Macmillan): On 12th February there were 597,415 people unemployed in England and Wales and the rate of unemployment was 2·9 per cent. The figures are provisional.
    Mr. Cormack: Is not this improvement an illustration of the success of the Government's policies and should it not make us even more aware of the danger in which the country stands at the moment? Would not all the achievements of the past three years be set at nought by ill-considered action on the part of the few over the next few weeks?
    Mr. Macmillan: It shows that the Government's policies are being successful in increasing employment. There are
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    signs that investment too is increasing. The more stable our economy and the more successful we are in controlling inflation, the more likely this is to continue.
    Mr. Prentice: Is the right hon. Gentleman aware that everyone welcomes any reduction in unemployment without any reservations? Will he answer two points? Does he agree that the figures announced last week no longer include over 11,000 temporarily stopped, so that a complete comparison with older figures should take this into account? Will he state firmly that a figure of 750,000 unemployed for the country as a whole is still intolerably high? Ought it not to remain the priority of the Government to take new measures to bring that figure down?
    Mr. Macmillan: I certainly acknowledge the point the right hon. Gentleman has made about the temporarily stopped. That has been made clear in the presentation of the figures. The trend of unemployment as shown by the three-monthly moving averages is still significantly downwards and the fall in unemployment is the greatest at this time of the year since the war.
    Mr. Marten: Is enough being done to help the mobility of labour so that people can move farther afield for their jobs if they so wish?
    Mr. Macmillan: My hon. Friend has a valid point. The Government have stepped up the range of assistance provided for meeting the expenses of people living away from home and those incurred in household removal. About 13,440 people took advantage of these measures in the last nine months of 1972 as compared with 6,180 in the equivalent period of 1971.
    Mr. Greville Jannerasked the Secretary of State for Employment by what percentage unemployment has increased in the city of Leicester since June 1970.
    The Under-Secretary of State for Employment (Mr. Dudley Smith): Between June 1970 and February this year the unemployment rate for Leicester rose from 1·2 per cent. to 2·2 per cent., an increase of 1·0 percentage points. This takes no account of the seasonal factors involved.
    Mr. Janner: Taking into account all the factors, has not the unemployment rate in the Leicester area doubled during this period? Is not the hon. Gentleman aware of the tremendous hardship caused by unemployment in a previously very prosperous city?
    Mr. Smith: I think that the hon. and learned Gentleman over-eggs the pudding. Unemployment in Leicester has fallen by more than 800 in the past year, it has fallen by 350 in the past month and the rate now is well below the national average rate. I hope that the hon. and learned Gentleman will now underline this good news for his constituents, as he was eager to underline the temporary rise in unemployment towards the end of 1971.
    Mr. Kenneth Lewis: Is my hon. Friend aware that these figures are highly satisfactory—
    Mr. Janner: Absolute rubbish.
    Mr. Lewis: —when one takes into account the recent influx of immigrant workers into Leicester with which Leicester is coping?
    Mr. Smith: I am grateful to my hon. Friend for that sensible comment. The Uganda Resettlement Board's figures show that about 2,200 people have gone to Leicester of whom about 350 are registered as unemployed. The city has done an excellent job in accommodating them and getting them employment.
    Mr. Stonehouseasked the Secretary of State for Employment what is the latest figure of wholly unemployed in the West Midlands and in Walsall respectively; and what action he proposes to reduce these numbers.
    Mr. Dudley Smith: On 12th February there were 3,381 people unemployed in the Walsall travel-to-work area and 61,577 in the West Midlands Region. The figures are provisional.
    The West Midlands, including Walsall, should continue to benefit from the measures we have taken to stimulate employment in the country as a whole.
    Mr. Stonehouse: Although that improvement is welcome, are not these figures still very serious? In regard to Walsall, what assessment has been made of the effects of the closure of the Tube
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    Investments factory? As for the West Midlands as a whole, is the Minister aware that the high interest rates which are now being charged by banks are a severe disincentive to many small industries to engage in the industrial reinvestment on which future employment will depend? Will the hon. Gentleman do something about that?
    Mr. Smith: In regard to Tube Investments, we shall be prepared to do all we can to help those who may be displaced. With respect to the right hon. Gentleman, however, he paints far too gloomy a picture. The position in the West Midlands at the moment is very encouraging. There has been a fall of 10 per cent. in unemployment since last month. Over the past year the fall was 26,600, which represents a reduction of 30 per cent.—a considerable achievement.
    Major-General Jack d'Avigdor-Gold-smid: Is my hon. Friend aware that in the neighbouring constituency of Lichfield and Tamworth the unemployment rate has considerably decreased?
    Mr. Smith: Yes, Sir. This reflects the general decline which has been going on and shows that the Government's measures are working, and working very well.

    Disabled Persons (Norwich)
    Dr. Stuttafordasked the Secretary of State for Employment if he is satisfied that there are adequate employment facilities in the Norwich area for the disabled.
    Mr. Dudley Smith: The unemployment rate for the registered disabled people in the area is significantly lower than the national rate and is now lower than at any time during the last four years. I welcome this trend, although there is always room for further improvement.
    Dr. Stuttaford: Does my hon. Friend agree that this is a satisfactory state of affairs? Has not this situation been revolutionised recently by the fact that more severely disabled people are more readily employed since Remploy negotiated a deal with a local firm? Will he also agree that there are several not so badly disabled persons who cannot get jobs? Does he further agree that if all employers took their share these too might find employment?
    Mr. Smith: That is true and, like my hon. Friend, I pay tribute to the work done by Remploy. We are never satisfied that sufficient employers take the right number of disabled people and we work all the time to encourage them to take their share.
    Mr. Molloy: Is the hon. Gentleman aware that the Fellowship of Workers for the Disabled and Handicapped recently presented a petition to Downing Street? Is he further aware that the gravamen of its case was that employers were not taking their proper quota of disabled people—people who can contribute to the wealth of the country? Will he look at this?
    Mr. Smith: That does not arise on this Question, but there are strong feelings about it and the hon. Member knows that we are currently considering this matter. There are no ready answers but we are endeavouring to find a solution.
    Mr. Money: Although we are all grateful for the better employment opportunities now available for disabled people in the eastern counties, may I ask my hon. Friend to say something about what is being done to provide training facilities for disabled people, particularly in East Anglia?
    Mr. Smith: Not without notice. Norwich has no industrial rehabilitation unit but vocational training is available. Training facilities for the disabled have improved in East Anglia and elsewhere. Again, this is a subject which we have constantly under review. If we can provide extra facilities we will do so.

    Energy Production
    Mr. Eadieasked the Secretary of State for Employment if he will give the number of vacancies notified to him that exist in industries in Scotland involved directly and indirectly in energy production; and what was the rate of contraction in these industries during 1972 and to the nearest available date in 1973.
    The Minister of State, Department of Employment (Mr. R. Chichester-Clark): I will, with permission, circulate in the OFFICIAL REPORT a table showing the numbers of notified vacancies remaining unfilled in certain industries involved in energy production, together with certain information about the reduction in
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    numbers employed in some of these industries during 1972.
    Mr. Eadie: Does the Minister accept that the House will want to study the figures when they are available, especially in relation to the location of the vacancies? Does he agree that the number of vacancies revealed should bear some relation to any policy decision that the Government will want to make about the exploitation of our indigenous energy resources?
    Mr. Chichester-Clark: Of course one takes account what the hon. Gentleman says; it is obviously a factor. In January there were 123 notified unfilled vacancies in these industries in Scotland compared with 65 in 1972. During the past year the number of vacancies in all industries has more than doubled.
    Following is the information:

    NOTIFIED VACANCIES REMAINING UNFILLED IN CERTAIN INDUSTRIES IN SCOTLAND ON 3RD JANUARY 1973

    Coal mining

    …

    55

    Petroleum and natural gas

    …

    32

    Coke ovens and manufactured fuel

    …

    —

    Mineral oil refining

    …

    5

    Gas

    …

    17

    Electricity

    …

    14

    Total

    …

    123

    The statistics relate only to notified vacancies remaining unfilled and do not purport to measure the total unsatisfied demand for labour.
    CONTRACTION IN EMPLOYMENT
    The following figures have been supplied by the nationalised industries concerned.

    Numbers employed at the beginning of 1972

    Approximate reduction in numbers during 1972

    Coal mining

    …

    28,900

    2,000

    Gas

    …

    7,800

    200

    Electricity

    …

    17,700

    300

    Community Industry
    Mr. Milneasked the Secretary of State for Employment if he will give details of the projects organised under the aupices of Community Industry in the Blyth constituency, the Northern Region and other areas of the country; and if he will make a statement.
    Mr. Dudley Smith: Altogether Community Industry has undertaken 197 projects including 86 in Northern Region and one in the Blyth constituency. I recently

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    announced the Government's decision to increase the support for the Community Industry Scheme.
    Mr. Milne: Is the Minister aware that this is a welcome development and that even further expansion is needed—not that we are ungrateful for the increased support that has been made available? Will he consider linking this scheme with the Government training centres? If the excellent training facilities given by Community Industry are passed on to the Government training centres this will help to combat youth unemployment in the region, which is one of our main problems.
    Mr. Smith: I am grateful for what the hon. Gentleman says and I shall be happy to look at his suggestion. The scheme was never seen as a means of combating unemployment, important as that is. The scheme is a means of assisting individual young people with special employment problems. It is doing good work, and the increase is generous and realistic. I am glad that the increased support has been welcomed by those who have organised the scheme, including the director who has written in favourable terms to my right hon. Friend.
    Mr. Charles Morrison: I congratulate my hon. Friend on increasing the support to enable Community Industry to provide more than three times its existing number of places. Will he undertake to look sympathetically at any request that might come from the organisers of Community Industry if it is able to provide work opportunities for even more than the 2,000 places already provided?
    Mr. Smith: Yes, Sir. This matter will be kept constantly under review. We shall see how it goes. The initial scheme was a pilot one, we are satisfied that it is working well and this is a further expansion. We shall certainly look at it again in due course. In addition we shall look at the areas which have expressed interest in the scheme and are prepared to undertake it. About 40 local authorities have recently been in touch with us about it.

    Industrial Disputes
    Mr. Hardyasked the Secretary of State for Employment what was the total number of working days lost through
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    industrial disputes in the five years 1st January 1965 to 31st December 1969 and the number of days so lost in 1972.
    Mr. Maurice Macmillan: The figures are 19·6 million and 23·9 million respectively.
    Mr. Hardy: Does not that huge, fivefold increase suggest that the Conservative promise of a sovereign remedy in 1970 has proved to be merely an aggravation of a problem which the Conservative Party grossly distorted in the period up to 1970?
    Mr. Macmillan: As the hon. Gentleman knows, the 1972 figures have been distorted by stoppages in the coal, building and docks industries. The number of stoppages has been accepted by successive Governments as being an equally important indicator, and the annual average number of stoppages in the two complete years of the present Government is slightly less than the average annual number of stoppages over the five complete years of the previous Labour Government.
    Mr. Redmond: Was not 1972 the worst year in terms of days lost through strikes since 1926? Is not that hardly surprising in view of the fact that 1926 was the last occasion before 1972 when we had to decide who governed the country—Parliament or the trade unions?
    Mr. Macmillan: If my hon. Friend is saying that in 1926 and in 1972 we suffered coal strikes, that is certainly so, but the strikes in the building and docks industries contributed to the exceptional difficulties in 1972.
    Mr. Harold Walker: The right hon. Gentleman said that the number of strikes was as significant as the number of days lost. Is he aware that his predecessor stressed repeatedly to the House that it was of much greater significance that the number of strikes should be reduced? Contrary to the presentation which the right hon. Gentleman has given to the House, in 1972 the number of disputes was greater than the average for the whole of the period of the Labour Government and significantly higher than in four of the years of the Labour Government.
    Mr. Macmillan: The number of stoppages in 1972 was very much lower than the number in 1970, and the average annual number of stoppages in the five years of Labour government was slightly more than the average annual number of stoppages in the two complete years of Tory government.

    Employment and Training Bill
    Miss Joan Hallasked the Secretary of State for Employment whether he can now say when he expects to publish the Employment and Training Bill.
    Mr. Sutcliffeasked the Secretary of State for Employment when he plans to introduce legislation to implement Government proposals on training.
    Mr. Dempseyasked the Secretary of State for Employment if he can now give an approximate date when he expects to publish the Employment and Training Bill.
    Mr. Maurice Macmillan: The Bill will be presented this week.
    Miss Hall: I am delighted to hear that. The consultative document was published a long time ago and the situation has become embarrassing to a number of us who are involved in training. I am grateful to my right hon. Friend for getting rid of the embarrassment.
    Mr. Macmillan: I apologise for having embarrassed my hon. Friend and I am glad to be able to relieve her of her embarrassment.
    Mr. Marks: Is the right hon. Gentleman aware of the considerable concern in the youth employment service at the delay in introducing the Bill? Will responsibility for youth employment be with local education authorities or with the Government, and what implications will the Bill have on the Bill dealing with local government finance? Who will pay?
    Mr. Macmillan: I ask the hon. Gentleman to await the White Paper or other explanatory document which it is intended to publish at about the same time as the Bill and which will explain how the youth employment service is to be treated. The object is to allow young people to retain the facility of using the full employment services while maintaining the local
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    authority special services for young people and school leavers.
    Mr. Sutcliffe: Will my right hon. Friend say in advance whether the object of the Bill is to provide more adequate training courses for school leavers than the present skills appreciation courses which are inadequate to their needs?
    Mr. Macmillan: This will become clearer on publication of the Bill. The basic purpose of the Bill is to set up a Manpower Services Commission to operate the training services agency and in due course the employment services agency. It is primarily a Bill to deal not with the levels of training but rather with the methods.
    Mr. Dempsey: Is the right hon. Gentleman aware that the delay in presenting the Bill has created a regrettable element of uncertainty for the future of those training establishments? Does he realise that it has not been possible to plan instructions, especially for first-year apprentices? Will the right hon. Gentleman give the matter urgent attention in the legislative programme ahead?
    Mr. Macmillan: I am aware that there have been uncertainties in some areas as a result of the length of time required for consultations in trying to prepare the Bill. It is a fairly considerable departure. A new effort is being made, with the help, advice and approval of both sides of industry, to set up a manpower services commission representative of industry to control the training services agency and the employment services agency. It is not a minor measure. It has been necessary to think it right through to the end before proceeding with it.

    Safety and Health
    Mr. Skeetasked the Secretary of State for Employment what progress has now been made in consultations on the Robens Report on Safety and Health at Work; and whether he can say when he proposes to introduce legislation.
    Mr. Dudley Smith: We have obtained general reactions from nearly 100 non-Government organisations; discussion of particular aspects is continuing both within and outside Government. My right hon. Friend hopes to introduce legislation in the 1973–74 Session.
    Mr. Skeet: I was hoping that my hon. Friend would say it was to be next week. Is he aware that the report was presented about nine months ago and that there has been ample opportunity to consult the hundred different organisations? Will my hon. Friend indicate where the shoe is pinching? Is it on the unified inspectorate or on the voluntary approach?
    Mr. Smith: The proposals are very wide-ranging and raise a number of complicated issues. In undertaking a measure of comprehensive reform of this type it is essential to get the basic decisions right. As I have said, my right hon. Friend hopes to introduce legislation next Session. I think that that is reasonable in the circumstances.
    Mr. Heffer: Where there are existing regulations, for example the building regulations, is it proposed that they should continue in force or are the Government discussing the idea of unifying regulations of this type in general regulations throughout industry?
    Mr. Smith: A whole range of regulations is being discussed from the point of view of unification. The object is to promote a more self-regulating system of health and safety at work. This has to be worked out in consultation, and it is very important to get the right advice from those concerned. It is important to have a strong back-up of powerful sanctions. Provided we have those, I believe that no one need worry that the new regulations will not do better than the old ones.
    Mr. Simeons: Will my hon. Friend comment on the division between the duties of factory inspectors and those of alkali inspectors and say whether the division makes the job of controlling emissions more difficult?
    Mr. Smith: There is a very distinct division at the moment. It is far from clear in the public mind on occasions which authority is responsible. It is one of the difficulties to which the Robens Report drew attention and one that the Government are currently considering. It is a matter of some importance.
    Mr. Harold Walker: Does the hon. Gentleman recall that every measure put
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    forward by the Labour Government for two years was resisted by the then Opposition because, it was said, we were waiting for Robens? Are we now to wait two years for Macmillan, as appears to be the case? May we have an assurance that before the Government commit themselves to any final policy on this matter they will include this House in their consultations?
    Mr. Smith: The hon. Gentleman knows that that is not a matter for me. It is one for my right hon. Friend the Leader of the House. But how right we were to resist legislation proposed by the Labour Government in view of Robens. The report is extremely comprehensive. The fact that there is a delay of a Session is not unrealistic in the circumstances. This will be a major piece of legislation and we have to get it right if it is to be effective.

    Cost of Living
    Mr. Carterasked the Secretary of State for Employment, taking the cost of living index at 100 on 18th June 1970, what has been the percentage increase since, based on the General Index of Retail Prices.
    Mr. Chichester-Clark: The General Index of Retail Prices rose by 22·4 per cent. between 16th June 1970 and 16th January 1973.
    Mr. Carter: is not that answer a savage indictment of a Government which won the General Election on a promise to cut prices "at a stroke"? Does not the hon. Gentleman agree that in areas of high unemployment and low wages such as Lincoln, Dundee and Chester-le-Street, people's standard of living has been eroded at a far faster rate than in many other areas?
    Mr. Chichester-Clark: I thought that this Question might not be unconnected with by-electioneering, which would be better done on the hustings than in this House. However, I recall that a member of the Labour Cabinet at the time of the last election has told us that, seeing the growing shadows of things to come, his right hon. and hon. Friends ran away from rising prices.
    Mr. Scott-Hopkins: Can my hon. Friend say what has been the rise in the

    1267
    level of earnings over the period referred to in the Question?
    Mr. Chichester-Clark: The increase in earnings over that period was 34 per cent.

    Vacancies
    Mr. David Mitchellasked the Secretary of State for the latest estimate proportion of job his Department.
    Mr. Dudley Smith: Accurate information about total job vacancies is not available. The best estimate is that about 25 per cent. of total annual job changes are being notified to my Department's employment services.
    Mr. Mitchell: Does not that suggest that there are more than 800,000 jobs now available nationally and that in the South-East alone there are 400,000 vacancies for 139,000 unemployed people? Will my hon. Friend comment on that and on the growing number of acute shortages in a number of trades, especially certain skills? Does not that suggest that there is need now for greater priority to be given to retraining than to general Government measures to reduce the level of unemployment?
    Mr. Smith: There is a great need for retraining. We have recognised this and tried to supplement it. There are big regional imbalances of labour shortage. It is a problem that we have always recognised and tried to tackle. It is a question of matching, and I hope and believe that the modernisation of the employment service now being undertaken will result in a better supply of vacancies coming through as a result of more sophisticated matching. Again these matters are not achieved overnight, but progress is being made.
    Mr. Thomas Cox: Surely the problem of attendance at retraining centres on the rates of pay being paid to those undergoing retraining, quite apart from the cost of travelling to training centres, is a great deterrent. When will the hon. Gentleman look at these two specific problems?
    Mr. Smith: We look continually at the costs involved. I remind the hon. Gentleman that those who are training receive about £5 over and above
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    unemployment benefit. I am glad that there has been a resurgence of applicants for training throughout the country. One of the big difficulties spotlighted by this Question is that there are often a large number of vacancies in some parts of the country but considerable unemployment in other parts and it is difficult to match the two. We are doing what we can about it.
    Sir P. Bryan: Will my hon. Friend comment on the demand for retraining? Is it increasing? Are there long waiting lists?
    Mr. Smith: There is a considerable demand and, as my hon. Friend will recall from his days at the Department, there are quite long waiting lists. Again this is a matter that we are trying to iron out so that people's enthusiasm is not diminished and that they can get to a training centre within a reasonable period of time.
    Mr. William Hannan: Is the hon. Gentleman aware that some of us take his point about the regional imbalances? Is not the answer that whereas in the North, especially in Glasgow, there are 10 boys running after one job, in London and the South-East there are two jobs for every unemployed boy? What does he intend to do about it?
    Mr. Smith: The hon. Gentleman is right to say that there is this disparity. The Government have done a tremendous amount by their regional policies and their introduction of extra industry in these difficult areas. Considerable progress has been made but it takes time, as we said when we came to office and we faced a high and rising rate of unemployment. We are tackling this, and the unemployment figures generally are coming down substantially.

    North Sea Oil
    Mr. Douglasasked the Secretary of State for Employment what discussions he has had with trade unions regarding the terms and conditions of employment of workers on oil rigs and production platforms on the North Sea.
    Mr. Dudley Smith: My Department has not received any requests from trade unions for such discussions.
    Mr. Douglas: Is the hon. Gentleman aware that there is considerable disquiet among trade unionists, particularly in Scotland, about the difficulties of obtaining adequate conditions for many of those employed on production drilling rigs? Will he undertake to discuss with the companies concerned how trade unions can get the opportunity of ensuring membership of trade unions of the people undertaking work on these production platforms?
    Mr. Smith: My Department's manpower advisers are always ready to discuss problems of industrial relations, particularly if they are brought to their attention. Trade union recognition and attendant problems are matters primarily for the employees, trade unions and employers concerned. However, if they wish to get together and want advice we are only too ready to help.

    Construction Industry Training Board
    Mr. Robert Taylorasked the Secretary of State for Employment what was the approximate state of indebtedness of the Construction Industry Training Board at 1st February 1973.
    Mr. Chichester-Clark: On 1st February 1973 £2,144,000 was outstanding against the loan of £8 million made by the Department to the board following an early repayment of £3 million in January 1973. I am pleased to say that the outstanding amount has been repaid since then and the debt is now cleared.
    Mr. Taylor: I welcome that improvement in the cash flow, as forecast in the annual accounts. Is not this training board unique among industrial training boards in that the auditors found it necessary in the last annual accounts to point out that no allowance had been made for the grant due to be paid out of levy income? Will my hon. Friend instruct the board for the year ended 31st March 1973 to make clear the amount of grant which is due to be paid out of the levy income that is collected?
    Mr. Chichester-Clark: My hon. Friend is incorrect in thinking that there is anything unusual about the way the accounts have been audited. He is assuming that grants to be paid out following the end of the board's financial year have to be
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    funded from a levy already collected. This is not so. They are funded from a subsequent levy. My hon. Friend will find that the system is similar with other boards—from recollection, the Chemical Industry Training Board, the Petroleum Industry Training Board and the Ceramics Industry Training Board.
    Mr. Heffer: Is not one of the problems that, because of the growth of labour-only subcontracting, there has been failure to collect the levy from about one-third of those involved in the industry? This is an absolute scandal. Should not part of the Government's policy be to tackle this question to overcome the problem, for example, of future apprentices coming into the industry?
    Mr. Chichester-Clark: All these matters are taken into consideration. I am aware of the hon. Gentleman's particular interest in the matter which, as he said in the House recently, follows my interest. We must take all these matters into account, but they are not, as he knows, easy problems to tackle.
    Mr. Idris Owen: Is my hon. Friend aware that there is a critical shortage of skilled labour in the construction industry, particularly in the stress areas? Is he also aware that as a result of that shortage labour is costing a considerable amount? May I ask him not to countenance any attempt to discourage a massive increase in training for skilled tradesmen in the construction industry?
    Mr. Chichester-Clark: The answer is an emphatic "Yes, I agree."

    Picketing
    Mr. Arthur Jonesasked the Secretary of State for Employment whether he has received any further approaches from the Trades Union Congress with regard to reviewing the law of picketing and drawing up a code of picketing practice.
    Mr. Maurice Macmillan: No, Sir.
    Mr. Jones: Is my right hon. Friend satisfied that the TUC and the unions in membership are prepared to co-operate in ensuring that there shall not be intimidation on the picket line?
    Mr. Macmillan: Mr. Victor Feather, the General Secretary of the Trades Union Congress, has made it perfectly plain that

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    he is against all forms of violence and intimidation on the picket line and the joining of the picket line by unauthorised persons. I am prepared to consider any suggestions which the TUC may care to make on the subject. I think that a voluntary code of practice issued with the authority of the TUC could be very useful.
    Mr. Arthur Lewis: As we have a unique situation today with many thousands of civil servants on strike for the first time in our history, will the right hon. Gentleman consult the Civil Service unions today? Perhaps they could give him some idea of how this matter could be resolved and also discuss their wage problems.
    Mr. Macmillan: Such evidence as I have seen of the picketing which has been going on today shows that it has been entirely peaceful.
    Sir F. Bennett: My right hon. Friend said that he had not received any representations from the TUC. Has he received any representations to expedite the review of picketing which the Government are carrying out?
    Mr. Macmillan: We are considering a review of the law. The major problem is not so much the adequacy of the law, particularly the criminal law—as my right hon. Friend the Home Secretary made clear in a speech at Dulwich on the 13th of this month, the ordinary criminal law is not suspended on the picket line, and I do not think that has been disputed—as the question of enforcement. We are considering whether anything can be done to explain the law more clearly to those concerned.
    Mr. Eadie: Does the right hon. Gentleman agree that it would assist him in any discussions with the TUC if he put forward a code of practice for Prime Ministers when we recall that on 13th August 1966 his right hon. Friend the present Prime Minister said:
    "The power to break agreements already made is particularly objectionable, and is in sharp contrast to the policies followed by the Conservative Government in the past"?
    Mr. Macmillan: What the hon. Gentleman has read out is totally irrelevant to the Question. I am perfectly certain that neither he nor any right hon. or hon. Member on either side of the House would in any way wish to suggest that
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    the trade union movement as a whole approved of violence, intimidation or breach of the criminal law on picketing.
    Sir Harmar Nicholls: In view of all that is happening in this respect, could not the Government forgo their normal fundamental philosophy and think in terms of nationalising the trade union movement?
    Mr. Macmillan: That would give rise to some interesting problems and considerations.
    Mr. Prentice: Will the right hon. Gentleman confirm that, to his knowledge, there is no complaint against picketing in the gas dispute or in any other current dispute? Is it not important that we get this matter in perspective: that whereas on the one hand we would all condemn the rare occasions on which violence or intimidation was used, on the other hand we should all condemn those members of the Conservative Party who use it as an excuse for union bashing?
    Mr. Macmillan: I think that the greater part of that supplementary question by the right hon. Gentleman was less that generous. There is genuine concern not only among right hon. and hon. Members on this side of the House but in the country as a whole, not least among trade unionists, at some manifestations in the past of violence and intimidation which we cannot deny have taken place. I am happy to confirm that, as far as I am aware, in the current gas industry dispute there has been no question of anything of that sort.

    Apprenticeships
    Mr. James Hamiltonasked the Secretary of State for Employment what were the number of school leavers who were granted apprenticeships in the engineering industry in Scotland in the years 1969, 1970, 1971, 1972 and 1973 to the latest available date.
    Mr. Chichester-Clark: In Scotland in 1969, 1970, 1971 and 1972 respectively, 2,061, 1,863, 1,500 and 1.344 young people under 18 entered apprenticeships in the enginering industry as their first jobs on leaving full-time education. Figures for January 1973 are not yet available.
    Mr. Hamilton: Is the hon. Gentleman aware that the number of apprentices entering the engineering industry has shown a marked depreciation? Is he also aware that some very large companies in Scotland have not employed apprentices for over three years? Are the Government prepared to carry out an inquiry and, if my information is correct, try to encourage these industrialists to employ young people as apprentices?
    Mr. Chichester-Clark: I made an inquiry about a particular large firm in the hon. Gentleman's constituency within the last few days. It is true that it has not been taking on apprentices but the apprentice school is still open. The engineering industry was particularly affected by the decline in economic and industrial activity in latter years. As a result, there has been a sharp fall in the number of apprentices. We have taken action in other spheres, notably in sharing with the industrial training boards the costs of apprenticeship places and so on, to contribute towards the maintenance of an adequate future supply of trained craftsmen. There are other methods which apply particularly to Scotland as an assisted area.
    Mr. Thomas Coxasked the Secretary of State for Employment what discussions he has had with the Confederation of British Industry in an effort to increase apprenticeships for school leavers.
    Mr. Chichester-Clark: The Confederation of British Industry has been fully consulted about the plans for the future of industrial training, including apprenticeship training, which were announced by my right hon. Friend on 8th August and 22nd November 1972. It is also represented on the National Youth Employment Council which keeps opportunities for school leavers under regular review.
    Mr. Cox: Notwithstanding that reply, is not the Minister aware that, despite repeated promises in the House, the opportunities for young people to enter apprenticeships continue to decrease? Is he further aware that in London, for instance, we now have one of the highest weekly redundancy figures for any region of the country and a continuous decrease in apprenticeship opportunities? When
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    will he discuss with hon. Members constructive opportunities for young people to enter worthwhile apprenticeships?
    Mr. Chichester-Clark: I should have thought that there would be a good deal of opportunity to do that with the introduction of the Bill which my right hon. Friend announced today—and I am very glad that he did. As for London, 27·9 per cent. of boys entering employment in 1972 went into apprenticeship as against 38·7 per cent. in Great Britain as a whole. The level, however, is counterbalanced by a higher entry of clerical employment and employment of other kinds with planned training.
    Miss Joan Hall: In his talks with the CBI and the TUC, what discussions has my hon. Friend had about increasing the opportunities for girls in apprenticeships, since the position at the moment is very bad?
    Mr. Chichester-Clark: The number of girls entering apprenticeships has increased steadily from 16,000 in 1970 to 18,000 in 1972. So that is a rather better story.

    Building Industry
    Mr. Charles R. Morrisasked the Secretary of State for Employment whether he will initiate action to encourage building employers in the Manchester area to recruit more indentured apprentices.
    Mr. Chichester-Clark: The recruitment of building apprentices is primarily a matter for the employers, in co-operation with the Construction Industry Training Board. My Department is at present meeting half the cost of the construction board scheme for initial training of boys unable to secure apprenticeships immediately, and also makes grants to building employers in the Manchester area who take on more apprentices.
    Mr. Morris: Is the Minister of State aware that many young boys in my constituency want to pursue careers in the building industry but feel that private builders and employers are letting down young people by encouraging lump labour, so that the requisite number of indentured apprentices is simply not available? Will he do something about this?
    Mr. Chichester-Clark: We have already discussed to some extent today the question of lump labour and the difficulties involved in dealing with it. I understand that the Construction Industry Training, Board is considering the possibility of introducing a scheme on a larger scale to encourage building employers to take on more apprentices. I very much welcome that.
    Mr. Marks: Will the Minister congratulate the Manchester Corporation direct works department on its commitment to 500 building trade indentured apprentices? Will he urge private employers to have as large a proportion of apprentices to other workers as the direct works department has?
    Mr. Chichester-Clark: I hope that everyone concerned will try to increase the number of apprentices. What I know is that the building industry in Manchester and the country as a whole is recovering from the low levels of 1971, which followed the depression in which the party opposite left the building industry.

    ECONOMIC POLICY (PRIME MINISTER'S SPEECH)
    Mr. Meacherasked the Prime Minister if he will place in the Library a copy of his public speech to the Conservative local government conference on 10th February on the economy.
    Mr. Redmondasked the Prime Minister if he will place in the Library a copy of his public speech on Saturday 10th February to the Conservative local government conference at Westminster on the subject of rates.
    Mr. Skinnerasked the Prime Minister if he will place in the Library a copy of his public speech made on 10th February to the Conservative local government conference in London on the economy.
    Mr. Norman Lamontasked the Prime Minister whether he will place in the Library a copy of his public speech to the Conservative local government conference on 10th February on the economy.
    Mr. Carterasked the Prime Minister if he will place in the Library a copy of the speech he made on 10th
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    February 1973 to the Conservative local government conference on the economy.
    Mr. Adleyasked the Prime Minister if he will place in the Library a copy of his public speech to the Conservative local government conference in London on 10th February on the economy.
    The Prime Minister (Mr. Edward Heath): I did so on 12th February, Sir.
    Mr. Meacher: Since in that speech the Prime Minister said, in his own words, that he wanted the lower-paid to be helped more than those at the top of the scale, why is he cutting back the gasmen to an extra £2·25 a week when, in a month, he will award to those on his own pay level an extra £6 a week in surtax reductions, an extra £5 a week in phase 2 and an extra £3·50 a week in reduced tax on unearned income? Why do people like him need six times the increase of the gasmen?
    The Prime Minister: The hon. Gentleman knows perfectly well the arrangements for phase 2. These were confirmed in detail yesterday in the Green Paper. As for the changes in taxation, they were dealt with in the last Budget.
    Mr. Redmond: When my right hon. Friend made that speech, he referred to the rates. In any discussions that he has on rates, will lie remember that we must not cloud the responsibilities of local councillors to their electors? Has he seen a report in last night's Bolton Evening News which shows that the Bolton rate is going up by the highest figure for 10 years under Labour control, whereas Tory councillors are even now keeping things on an even keel?
    The Prime Minister: It is desirable that ratepayers should see the extent to which their rating assessment is being changed as a result of revaluation and the allocation of the actual rate poundage as between different items, for most of which local authorities are responsible, and no doubt they will compare one local authority with another.
    Mr. Skinner: When the Prime Minister talked to the local government conference about monitoring public spending, why did he not point out that he himself was having a £40,000 heated indoor swimming pool built at Chequers? Is not that a

    1277
    luxury item? What is the Prime Minister's new slogan—"Come bathe with me and beat the freeze"?
    The Prime Minister: The Trustees of the Chequers Trust accepted a present, which involved no public expenditure, in order to commemorate the two visits of President Nixon to Chequers—once under my predecessor and once when I was there —and his meeting with the Queen.
    Mr. Lamont: On the subject of incomes policy mentioned in his speech, has my right hon. Friend seen the report in the Glasgow Herald of 26th February of a meeting of gasmen addressed by the Leader of the Opposition at which he said that the gasmen were not breaking the law and could depend on Labour's backing? Does not this show that the so-called peace plan put forward by the Leader of the Opposition is simply a twice-weekly charade in this House?
    The Prime Minister: I read the report by the political correspondent of the Glasgow Herald. I have no means of judging its accuracy. No doubt the right hon. Gentleman has. He said, I see:
    "Both in its content and its total impact, Mr. Wilson's speech was inflammatory and not designed to placate."
    It is interesting that that speech was made after he had written to me but before he had received my reply.
    Mr. Carter: When the right hon. Gentleman wrote to the Civil Service staff side in 1966, deploring the Labour Government's wage control policies, he no doubt wrote sincerely, but in the light of his own experience would he not agree that that letter was unwise?
    The Prime Minister: No. Perhaps I can draw attention, not only for the House but for all civil servants and for people outside, to the letter which was sent to the staff side which I have already quoted once in the House and which was designed to deal specifically with an occasion of this kind. I can read it again. It says:
    "Subject to any requirements of an overriding national policy of general application the Government intends to continue to reacts and implement settlements on the basis of surveys by the pay research unit."
    There can be no doubt, whatever anyone has said about the Government's policy on pay and prices, that it is an overriding
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    national policy and this was given to the staff side at the beginning of 1971.
    Mr. Adley: Is it not clear that everybody in the country, or almost everybody, recognises the danger of inflation? Would my right hon. Friend agree that it appears that the Labour Party either has capitulated or is about to capitulate totally to the wishes of the militant trade unions and that this can do nothing whatever to cure inflation?
    The Prime Minister: I do not believe that a policy which says that the whole of the price structure should be controlled and that there should be absolutely no control of wages is a viable policy. What is more, the trade union leaders themselves know that it is not a viable policy.
    Mr. Harold Wilson: Since the Prime Minister invited me to intervene, if he will read all the reports of that speech—[Interruption.]—including that in The Times, he will see that I spoke entirely within the terms of the letter which I wrote to him and which he so foolishly rejected. Reverting, however, to the speech which was the subject of the Question, which was the Prime Minister's speech, can the right hon. Gentleman now vary the answer he gave me before Christmas about interest rates? In view of the almost weekly leapfrogging between clearing bank base rates and the interbank market dealings, against the background of a £4,000 million Government borrowing requirement and a demoralised gilt-edged market, in view of the inevitable consequences—[HON. MEMBERS: "Too long.")—for mortgage rates, which Conservative Members made so much of in the last election, will he now vary that answer and take interest rates in control?
    The Prime Minister: As I told the right hon. Gentleman before, we take the same view as his administration: that interest rates are part of the means of securing an expansion or otherwise of the economy. If interest rates are to be used in that manner, obviously they cannot be controlled. What we have done is to deal with this under the allowances when people are calculating their costs, and I believe that to be the right approach. But if the right hon. Gentleman is saying that his speech, to which allusion has been made, was entirely in the terms of the letter lie wrote to me, it is strange that

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    the conclusion should have been drawn that
    "unwittingly he undermined his own peacemaking role by characterising it as nothing more than a trap".
    Mr. Wilson: It was not a trap, although the right hon. Gentleman has created one for himself on that basis. But on the question of interest rates, does not the Prime Minister realise that, while any Government must be free to use purposive interest rates and other monetary policy, since the setting up of this free market in the City for interest rates the Government can now no longer control interest rates? They are out of their control. There is no bank rate and because of the £4,000 million Government borrowing requirement and the gilt-edged market, is it not a fact that there is no monetary policy at all—except one of steadily rising interest rates which are inflationary?
    The Prime Minister: I cannot possibly agree with the right hon. Gentleman. He must have misunderstood the position. There never was a control of interest rates concerning money rates in this country under his administration. Obviously interest rates are interlocking with the demand for money and the demand created by overseas interest rates as well. I remember the right hon. Gentleman, when he was Prime Minister, on many occasions delivering a lecture on this matter to the House.

    NORTHERN IRELAND
    Mr. Ormeasked the Prime Minister if he will make an official visit to Londonderry, Northern Ireland.
    The Prime Minister: I have at present no plans for a further visit to Londonderry.
    Mr. Orme: If the Prime Minister visits Northern Ireland, and particularly Londonderry, will he make a speech in which he makes a clear distinction between industrial action in this country and terrorist action in Northern Ireland or from whichever quarter it comes? In that regard will he repudiate the statement by his right hon. Friend the Secretary of State for Northern Ireland at Penrith on Sunday and tell the House clearly whether or not that speech represented Government policy?
    The Prime Minister: What my right hon. Friend was saying in his speech was a very straightforward point: that his responsibility in Northern Ireland was to try to prevent people from being oppressed by force. It is the responsibility of the Government to protect the weak members of the community, such as the aged and the lower-paid—[Interruption.]—who are being harmed by industrial action.
    Mr. Kilfedder: Would it not be the wish of my right hon. Friend that the news media throughout the world, instead of broadcasting wild and false allegations about the security forces which are doing a noble task in Northern Ireland, should expose the murderous terrorism of the IRA and its cowardly callousness, which was sadly demonstrated at the weekend when a 10-year-old boy was murdered while playing in the garden at the back of his home on the Creggan Estate in Londonderry? [Interruption.] This is not a matter for jokes from the Opposition. The young boy accidently triggered off a landmine which had been deliberately placed there by members of the IRA who are totally indifferent to human life.
    The Prime Minister: Very full accounts of this terrible incident have appeared in the Press and the House will agree that it was a deplorable incident The Provisional IRA has now acknowledged responsibility for it. What is also deplorable is that the IRA is now attempting to blame the Army for not defusing the bomb before it blew up the young lad when in fact the bomb was intended to blow up the Army. The whole House will agree about the terrible nature of the incident.
    Mr. Merlyn Rees: In view of what the hon. Member for Down, North (Mr. Kilfedder) has said in his supplementary question about the terrible incident in Londonderry, was it not a mistake to equate the action of terrorists with the action of people going about their business of industrial action?
    The Prime Minister: I must correct the hon. Member. My right hon. Friend was not equating terrorists with—[HON. MEMBERS: "Yes, he was."] I would ask the House to read the text of the speech which my right hon. Friend—
    Mr. Raphael Tuck: It looks jolly like it.
    The Prime Minister: The hon. Gentleman says it looks jolly like it but perhaps he will read the full text and he will see that this is not the case. What my right hon. Friend was saying was that whereas he had responsibilities to see that people were protected in Northern Ireland, so it was also necessary to deal with inflation in order to protect those who suffer from it.
    Mr. Duffyasked the Prime Minister if he is satisfied with the co-ordination between the Secretary of State for Defence and the Secretary of State for Northern Ireland on the private possession of firearms in Northern Ireland.
    The Prime Minister: Yes, Sir.
    Mr. Duffy: Is the Prime Minister aware that the Secretary of State has indicated that he is considering asking for new powers? Does he not think that the right hon. Gentleman could best demonstrate his good intentions by showing to the people on the Unionist side henceforth that they will be treated exactly the same as people on the anti-Unionist side, and that this is nowhere more urgent than in the private possession of firearms? Will he therefore urge upon his right hon. Friend the need for the revocation of all licences, their issue on the most selective basis, mandatory sentences for those in illegal possession and, finally, impartial spot checks?
    The Prime Minister: My right hon. Friend has been ensuring that both sides are treated alike. It cannot have escaped the notice of the hon. Gentleman that my right hon. Friend was violently criticised from the Protestant quarter for the firm and stern action which he and the GOC has taken. In fairness to him, that should be acknowledged. My right hon. Friend has already told the House that he will be taking further action about the control of arms. It will be taken under urgent procedure by Order in Council and will be taken in the near future.
    Mr. Biggs-Davison: Can my right hon. Friend tell me, or can the Secretary of State for the Home Department tell him, whether the firearm which Miss Mary McGuire, a defector from the Provisional IRA, has told the Press she has carried and continues to carry is licensed?
    The Prime Minister: Without notice I could not answer my hon. Friend's question. I shall endeavour to write to him.
    Mr. Harold Wilson: Will the right hon. Gentleman spell out a bit further his reference to the Secretary of State's intentions about action under an Order in Council, which I do not believe is fully understood by the House?
    Secondly, as we are approaching in a few weeks' time the second anniversary of the date on which the Labour Party demanded action about the private ownership of licensed arms, does the right hon. Gentleman realise that the whole issue is that if all of them are made illegal, except those that are very strictly reissued, there can be spot checks which are not invidious as between one religious community and another, and all of them over a period can be called in because of what we have suggested—namely, mandatory sentences for anyone holding arms, which would then be illegal?
    The Prime Minister: The Order in Council, which my right hon. Friend will present, will include powers to require that hand guns licensed for personal protection should be brought in for ballistic or any other necessary test. It will also include powers to revoke licences in certain circumstances and to restrict further the numbers of licensed firearm dealers. I think that this will cover quite a considerable amount of the ground which the Leader of the Opposition has often emphasised in the past.
    Mr. McNamara: While we accept what the Prime Minister has said although we do not regard it as going far enough, may I point out to his right hon. Friend the Secretary of State for the Home Department, and also to him that half the trouble that arose in Northern Ireland was because moderate men were not listened to when they voiced legitimate grievances about the situation in Northern Ireland and, therefore, the situation was driven into the hands of the extremists? Would it not be a good idea if the Secretary of State for Northern Ireland, instead of drawing parallels from the situation in Northern Ireland and trying to equate British trade unionists with that situation, looked more carefully at the situation in Northern Ireland and said "This is what can happen if moderate

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    and reasonable men with reasonable ideas for the future well-being of their country are not listened to"?
    The Prime Minister: I have already explained my right hon. Friend's speech. The whole House respected my right hon. Friend the Secretary of State for Northern Ireland for the way in which he listened to the moderate men. On my last visit to Northern Ireland I was criticised for flatly refusing to meet those whom I regarded as extremists.

    WALTHAM FOREST
    Mr. Tebbitasked the Prime Minister if he will pay an official visit to the London borough of Waltham Forest.
    The Prime Minister: I have at present no plans to do so, Sir.
    Mr. Tebbit: Is my right hon. Friend aware that his answer is a disappointment to me because I had hoped that if he had visited that borough he would have spoken to the leaders of the Labour-controlled council to ask them why their rates are soaring while those of the Tory GLC are held down, and also to make the point to them that they should not come as supplicants for Government money while they refuse to take notice of the Government's request that they should sell council houses to tenants who wish to buy them?
    The Prime Minister: I think that my hon. Friend has made his point admirably without my paying a visit to his constituency. I support his view that local authorities should sell council houses and I can confirm that more and more local authorities have been doing so during the past year.

NEW TOWNS (INITIATION) BILL
3.35 p.m.
Mr. John Farr: I beg to move,
That leave be given to bring in a Bill to confine the initiating of new town projects to public development companies acting on Government authority.
The Bill has been brought about by an example in my constituency in Southern Leicestershire, at a village called Catthorpe, about three years ago.
Mr. Speaker: Order. I ask right hon. and hon. Members to withdraw quietly.
Mr. Farr: About three years ago a block of about 800 acres of land at Catthorpe was acquired by a developing company called Webco for the purpose of obtaining permission to build a new town. An ordinary agricultural price was paid for the land, which is in a remote part of the county, with no normal development value, as it is some miles away from the nearest town.
Not unnaturally, all the local planning authorities turned down the scheme. The greater part of the development is in Leicestershire, but part of the proposed new town will be in Warwickshire and Northamptonshire. The three local planning authorities turned down the scheme to build a new town in this remote part of the country as it was an unsuitable site. Webco, the proposed developer, has appealed and the matter is now going through the normal planning procedure.
I shall not go into the merits of this application. My concern is for the suffering and distress of my constituents who live in and around the little village of Catthorpe. They do not know from one day to another what their future is to be. It is impossible for them to settle down and live their normal lives when at any moment they might be swamped by homes for up to 15,000 people which will be built around them. They have no security in maintaining and repairing their houses. Further, there is no security for those who work on the land in this area.
Moreover—and here I come to the purpose of my Bill—there is nothing to
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prevent them remaining in this position more or less indefinitely. WEBCO can see the prospect of changing a purchase of 800 acres at £400 an acre into an investment worth £10,000 an acre. With that substantial profit in mind there is no shadow of doubt that it is likely to make repeated applications. A succession of public inquiries are likely to be held unless consent is forthcoming.
The Bill endeavours in the public interest to lay down guide lines for developments of this nature by speculators. WEBCO has said that, if it is successful, this pilot effort will be the forerunner of repeated applications for new towns throughout the country.
New town projects of this size are too big and have too great a social consequence on the rest of the country. With the limited land that we have available, haphazard applications should no longer be left to speculative developers like WEBCO.
The Bill will provide a regulatory framework. It will require such developers, before proceeding through the normal planning channels, to approach a regional economic planning council to have the whole project vetted by the council. The council will vet the suitability of any project on the basis of national and regional requirements. Until the availability, for example, of employment, sewage services, water services, accessibility by road, lighting, heating, health and educational facilities has been satisfactorily vetted and passed by the regional economic planning council, an applicant will not be authorised to proceed through the normal planning channels.
The Bill will contain a clause to limit planning applications to construct a new town at certain places to once only. When a ministerial refusal has been given, such refusal would remain effective for 20 years. By that means I hope that those who live on speculators' sites will be given some peace. I seek the leave of the House to introduce the Bill.
Question put and agreed o.
Bill ordered to be brought in by Mr. John Farr, Mr. Sydney Chapman, Mr. Charles Morrison, Mr. Alfred Morris, Sir Gerald Nabarro, and Mr. William Price.

NEW TOWNS (INITIATION)
Bill to confine the initiating of new town projects to public development companies acting on Government authority, presented accordingly and read the First time; to be read a Second time on Friday 4th May and to be printed.[Bill 78.]
ORDERS OF THE DAY
  COUNTER-INFLATION BILL
  As amended (in the standing committee), considered.
New Clause 1

  RESTRICTIONS ON INSURANCE PREMIUMS
  '(1) The Secretary of State shall have power to restrict insurance premiums, where the relevant transaction is effected at a time when Part II of this Act is in force.
  (2) The powers conferred by subsection (1) above shall be exercisable by order, or by notice given to the insurer, or each of the insurers, affected by the notice.
  (3) An order or notice under this section may make provision for the giving of consents by the Secretary of State to the doing of anything otherwise prohibited by the order or notice.
  (4) Before making or giving an order or notice under this section (other than one which only removes or lessens a restriction), the Secretary of State shall give 14 days notice to the insurers who would be affected by the order or notice, and shall afford to them an opportunity of making written representations to the Secretary of State.
  (5) If, in the case of an order under this section, it appears to the Secretary of State to be impracticable to give notice under subsection (4) above to all the said persons, the Secretary of State may instead publish 14 days notice of his intention to make the order in the Gazette and in such other ways as may be prescribed, and shall afford to all those persons an opportunity of making written representations to the Secretary of State.
  (6) Where an order or notice under this section is contravened, the liability for the contravention attaches to the insurer who charges the insurance premium.
  (7) An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament'.—[Sir G. Howe.]
  Brought up, and read the First time.
  3.42 p.m.
  The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): I beg to move, That the clause be read a Second time.
  This is a clause dealing with insurance matters, and it takes account of the special nature of insurance business. It takes account of the extent to which there is already in existence machinery for the supervision by the Government of insurance companies and their conduct.

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  As the House knows, the Department of Trade and Industry exercises detailed supervision over insurance companies, under the Insurance Companies Acts, specifically for the purpose of maintaining their solvency. The House will also know that there is an Insurance Companies Bill now under consideration in another place to extend and improve that system of control. That control was established and is exercised because of the overriding importance of the stability and effectiveness of insurance companies not only to policy holders but also to third parties.
  In the context of the measure now before the House it has been concluded that it would be inappropriate for the insurance industry to be subject to two supervisory bodies, the Department of Trade and Industry, on the one hand, and the Price Commission, on the other hand. That is because there is a need for decisions about price control to take account of and be consistent with the requirements of solvency. Whereas a manufacturer normally knows his costs when fixing his price, an insurance company can inevitably proceed only on the basis of an estimate of what its claims experience will be.
  It is against that background of fact that techniques have been evolved over the years within the Department for assessing future liabilities of insurance companies for the purposes of solvency. Inevitably, in order to carry out that work, experienced staff have been gathered together, staff of a quality and with qualifications which are not easy to find. It would not be fruitful or useful, or in the interests of price control or of the community generally, for that staff to be duplicated or dispersed to the Price Commission as well. In addition, there is available in the Department information about the present position of insurance companies which also makes it sensible to combine both functions in the Department.
  Lest any hon Member should think that this change can have or is intended to have the effect of letting off insurance companies with any less stringent policy for price control than is applied to other prices, I can assure him that that would be quite untrue. We, too, in the Department of Trade and Industry will need, like the Price Commission, to receive in-
  1290
  formation about the current state of any given insurance company. But for the most part we shall have that and be receiving it regularly and automatically. In addition, we shall have the capacity to analyse that information with at least as much expertise and, because of experience, probably more than the Price Commission will have. So against a more informed background the control is likely to be more firm rather than less so.
  The House will know that the pattern of control of insurance rates during the standstill has been very firm and tight. It will continue on that basis in accordance with the general rules enunciated in the Green Paper. Insurance companies have been required to absorb cost increases until this stage. From now on they will have to work on an allowable costs basis. Increases in scheduled rates will have to be notified and scrutinised. The only other adjustment that would normally be permitted is an adjustment in relation to bad claims experience or in relation to individual policy holders who have particular insurance claims records which would ordinarily justify a change in their premium. That, inevitably, would have to continue.
  It is upon the basis that that is the right and sensible way of handling the control of insurance company pricing during the second stage that I commend the new clause to the House.
  Mr. Ray Carter: I want to deal briefly with the alleged stringency which the Minister says will be applied to motor insurance companies in particular.
  We note the fact that the responsibilities that the Department of Trade and Industry now has for solvency will be paralleled with fresh responsibilities for premiums. I remind the Minister that the Bill now in another place came into existence largely because the solvency of one company in particular and of many motor insurance companies in general was found to be insufficient, and, moreover, is insufficient now.
  Notwithstanding these new powers, if the margins on which companies are operating are insufficient for solvency, will the Minister direct an insurance company that a premium increase should occur in order to maintain sufficient solvency margins? Presumably that is precisely

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  the intention of the Bill now in another place.
  Regarding the new clause, I remind the Minister that whenever motor insurance companies are approached about increases in premiums, they say—they constantly tell this to the Press and the motoring public—that their business is run at a loss. Most accounts of insurance companies show not only a loss now but a loss that has been apparent over many years. That being so, one is entitled to ask precisely why the Government are introducing a new clause to restrict premium increases.
  Finally, as the code is not likely to become law for some weeks, if not months, shall not we see a massive attempt on the part of the motor insurance companies to raise their premiums this side of the code coming into force? If that is so, precisely what powers has the Minister to ensure that the accounts are turned to the good, that losses disappear and that any premium increases that are requested in the future will be adequately dealt with by the Government? Prior to the code coming into effect, what powers does the Minister have to deal with those companies that seek unjustifiably to increase premiums?
  Mr. Nicholas Ridley: I can well understand the Government's acute dilemma over whether to put the new clause into the Bill. The subject of the control of insurance was not mentioned in Committee, and I am sure that my right hon. and hon. Friends are wondering on which side of the fence to come down. I wonder whether the considerations about which the hon. Member for Birmingham, Northfield (Mr. Carter) has been talking were uppermost in their minds. They are considerations which, I confess, when I was in my right hon. and learned Friend's Department, were in my mind—the question of solvency and of making certain that insurance companies were able to meet any claims which might fall on them. On the other hand, there is the question of premiums which is now before the House.
  Which of these two is to predominate? Here there is a direct conflict between two aspects of Government policy—on the one hand, to ensure that insurance companies will not become insolvent and,
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  on the other hand, to ensure that people are not overcharged for their premiums.
  I should have been tempted to omit the new clause unless more convincing evidence of abuse could be brought before the House. The control of insurance rates is not like the control of any other price. When considering the price of shoes, manufactured goods or hairdressing, one is operating on a set of known costs, of which the producer of those commodities or services has experience and which one can ascertain and check.
  Insurance operations involve making guesses, although they are guesses based on experience, about what future claims will be. This is less true of life insurance, but it is especially true of motor insurance and of general and accident insurance. In the early 1970s inflation caused motor repairs to rise to such a point that there were considerable losses because insurers had not been able to estimate the extent to which those costs would rise when they took premiums.
  It is difficult to know on what basis the Government will exercise control of insurance premiums. I shall be grateful if my right hon. and learned Friend will give more guidance on the considerations which he will have in mind. Let us suppose that insurers decide that because building costs are rising they wish to charge more to insure people's houses. Who will tell them that they are wrong, and on what basis will the decision be made? I believe that this matter should appear in the code. I have seen no reference in the code to the criteria upon which the control of insurance premiums will be carried out. May we be told why there is no reference in the code to the method by which these determinations are to be made?
  I am sure that the House will agree that the insurance industry is highly competitive. It was the burden of the Opposition's case at the time of the Vehicle and General affair that the industry was too competitive and that competition had so undermined the level of premiums that companies were not only making losses but were being made bankrupt because they had undercut too much and they were thus unable to meet claims. Fire insurance has been referred as a subject for investigation by the Monopolies Commission and the cosy

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  arrangement is to be broken up. I am all for this, but certainly the rest of the industry is highly competitive. Therefore, I wonder whether it is necessary to put in front of the Government's obligation to prevent bankruptcies the Government's policy to control prices—particularly when competition in insurance appears to be so effective.
  How many people will be needed to control insurance premiums? This new idea about controlling insurance charges has been thought of since the manpower requirement was drafted. Presumably there will now have to be an additional manpower requirement to monitor premiums if an order is made to give this power to the Government. I appreciate that no order has so far been made, but if it is made we shall undoubtedly need a considerable number of extra staff.
  This may raise yet another problem. Staff skilled in supervising insurance companies are hard to come by and are in short supply. One of the troubles in the Department of Trade and Industry in the past has been the great difficulty in recruiting sufficient staff with knowledge and expertise of insurance to deal with the many companies whose accounts had to be supervised. If the Government are now to supervise premiums as well, then they will need a great deal more staff.
  My worry is that the staff in the Department who deal with insurance companies are so overburdened with the work that is already on their plate, plus the requirements to monitor prices under the freeze, that we shall find that the entire staff of the Insurance Division of the Department is concerned with the monitoring programme rather than with getting on with the job of supervising those insurance companies which might be in financial trouble. Which of these two legs of policy will be more important, control of premiums or control of solvency? I should like an assurance that authorisations of new insurance companies, control of solvency, and all the many supervisory matters contemplated in the insurance legislation now before another place will not be jeopardised by taking staff from those aspects and putting them on to the control of premiums. If there is to be a choice between the one task and the other, I believe the former to be the more important.
  Mr. Arthur Lewis: The speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) contained a great deal of truth, particularly towards the end. He should know more than anybody about this subject because he was in the Department when the maladministration and neglect in that Department were so apparent to all concerned. It was not so much the insurance companies that were at fault. It was the hon. Gentleman and his then Department.
  My hon. Friend the Member for Birmingham, Northfield (Mr. Carter) will recollect that it took months for us to get answers to letters which we sent to the Department. From what the hon. Member for Cirencester and Tewkesbury said, it would appear as though he and his Department were so overworked that they neglected to do their duty. That probably was the inference contained in the report on the Vehicle and General affair.
  Undoubtedly the Department has a great deal on its plate in a number of tasks, and I am wondering whether it will now be in a position to deal with these additional matters from the point of view of the consumer. Whenever I have tried to get in touch with the Department of Trade and Industry I have found that it takes three or four weeks to get a reply merely saying that the matter is being examined. On 23rd December I wrote a letter to the Department about one small price increase. I did not receive a reply until 26th February—and the reply merely informed me that the Minister was referring the matter back to the Camden Borough Council. It has taken virtually three months for the Minister to notify me of what was happening. If this is what happens now, what will happen in future when all this additional work has been loaded on to the Department?
  We were told only a month or two ago that any housewife who thought she was being robbed by price increases had only to telephone London. Heaven knows what was supposed to happen if that lady lives in Scotland. We are now being told that there will be a special Department to monitor premiums imposed by insurance companies, to look into solvency matters and all the rest of it, when we cannot even be told in the case of a penny or twopence on a single item, first, who should deal with

  1295
  the matter, secondly which Department is responsible and, thirdly, and more important, what procedure is to be adopted.
  It is well known that insurance premiums among the EEC countries are double the premiums in this country, and in some cases even treble. What will happen when there is harmonisation of insurance premiums within the EEC, a subject on which I understand discussions are now taking place? Will insurance companies be compelled to adopt uniform systems of insurance premiums based on the continental rates? Will the insurance companies come forward and say, "We must treble our premiums, not because we want to do so, or because we need the extra money, and not because we want to make any more profits. Mind you, we do not mind taking a double or treble profit, but this is all being done because we are being controlled by the Common Market"?
  Here is my question for the Minister. Does he then say, "Because we have been forced into the Common Market without the full-hearted consent of the public and Parliament, because we find that we are being compelled to double or treble premiums, I am now going to insist that these insurance companies increase their premiums, because you have given me the power under this Bill so to do."
  I ask my hon. Friends to watch this very carefully because I think it is an inflationary clause and would have an effect directly opposite to that which the Government prophesy, since it gives the opportunity of doubling or trebling insurance premiums, if desired, on cars in particular and on other items of insurance.
  4.0 p.m.
  Mr. Nicholas Edwards: In making my remarks, I must first declare an interest. I am a director of an insurance broking firm and a Lloyds underwriting agency and a member of Lloyds.
  It seems to me that one or two things need to be said and one or two questions asked about this clause. First, I think we should have it clearly stated by the Government that we are not setting out on a dangerous and slippery slope which we have up to now avoided in this coun-
  1296
  try—that is, the detailed, permanent long-term control of the rating of insurance premiums. One of the strengths of the insurance industry and its competitive position in the world has been this avoidance of the detailed control which has been applied in many other countries. If we are to accept this clause we must do so only with reluctance and on the basis that it is only for the period for which Part II of this Bill applies.
  I am disturbed about the way in which this matter is being dealt with. We have here a new clause, tabled, I believe, last week, and, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, not referred to in Committee. Both the hon. Member for Birmingham, Northfield (Mr. Carter) and my hon. Friend the Member for Cirencester and Tewkesbury have referred to the code and have implied that it applies to this clause. This is one point I want clarified. I am not clear as to the status of the code in relation to this clause, where the responsibility is being placed with the Department of Trade and Industry. Does the code in fact apply? Do the guidelines laid down in the code have any relevance to insurance premiums?
  We had the briefest possible introduction from my hon. and learned Friend, and here again we have a contrast with other matters provided for in the Bill. For most things, we have the consultative document, which has to be debated and discussed. Representations on it are to be considered. Then it is to be brought before this House again as a White Paper. Here, with the insurance industry, we have a clause on which certain principles have been set out briefly by my right hon. and learned Friend in the House this afternoon, and this is all that we know about the way in which this provision is to be administered. Apparently there is to be no room for consultation, but if there is, may we know from my right hon. and learned Friend this afternoon what form it is to take?
  There are a number of specific questions. As far as other business transactions are concerned, we know that exports and matters dealing with overseas trade are excluded. This clause as I read it, contains no such exclusion. Apparently it would be within the power of the Minister to control rates applying to overseas business. This may not be his

  1297
  intention, but will he tell us the way in which he intends to deal with this matter and the manner in which he intends to define insurance in applying the control which this clause gives him the power to administer?
  Again, we have heard from him in his speech this afternoon that action is apparently going to be based upon the information available to his Department—that is, the regular information about the state of insurance companies. Will he, therefore, confine himself to a broad study of the profit margins of insurance in particular fields as they arise from the information that his Department receives, or will he get involved in the detailed control of individual cases?
  I am bound to say, as a practising insurance broker, that I am filled with awe at the thought of his attempting to apply the kind of controls that are apparently envisaged. It seems to me that there will be some difficulty for insurance brokers. Having failed to get the terms they wish from the underwriter, they then ring up the Department of Trade and Industry, ask for my right hon. and learned Friend, and say that the underwriter has been unfair and charged too high a rate, and what is he going to do about it. I do not see how, in practice, individual rates can be controlled in this way. Can my right hon. and learned Friend give some guidance to the industry about how it is to carry on its business?
  My hon. Friend the Member for Cirencester and Tewkesbury referred to one difficulty—that is that insurance is considering events that are going to happen in the future. I will take two examples. In marine insurance, rates are based on experience in past years, but the repairs frequently take place one, two or three years later when repair costs have risen greatly. In liability insurance, claims are frequently settled five, six or seven years after the event and underwriters are seeking to assess the position for the future in a very rapidly changing world, a world in which the whole scope of law and its application, particularly in the United States, are changing month by month. Are factors of this kind going to be taken into account by the Depart-
  1298
  ment in telling underwriters that they should not increase premiums?
  I think that, if we are to give the Minister the wide and extensive powers contained in this clause, we are entitled to a good deal more information than we have had from my right hon. and learned Friend from the Dispatch Box this afternoon. I believe that we are entitled to at least as much guidance and information as are given on other matters in the price and pay code, which is a consultative document.
  Mr. John Biffen: I should like to apologise to my right hon. and learned Friend for not having been here at the beginning of the debate on this new clause. It was an unintentional discourtesy and one which could not be avoided.
  My hon. Friend the Member for Pembroke (Mr. Nicholas Edwards) made one observation and his speech contained one characteristic comment which, for those of us who are on the Standing Committee, had a very familiar ring. His observation was that there was nothing like enough information in the Minister's speech and that there did not seem as if there ever would be very much information forthcoming in the debate, but that we should not worry about that because in the best of all possible worlds, either it would be a farce or it would be all right on the night.
  His second observation was that, with his working experience, he could not see how on earth the Minister would try to carry out all the things that lay within the ambit of his purported ambition. It might have been my hon. Friend the Member for Brighouse and Spenborough (Mr. Proudfoot) talking about the grocery trade and the ambitions of the Bill as compared with the realities of the retail business as he knew them. It might have been the hon. Member for Salford, West (Mr. Orme) talking about the determination of wage rates on the shop floor when confronted with the ambitions of the legislation and the realities of the commercial and the industrial world.
  Therefore, we have begun the Report stage in a manner reminiscent of our Standing Committee, comparing the apparent omniscience of the authors of the Bill and the practical limitations in

  1299
  the world outside. The unequal and inequitable reconciliation between the purported all-powerfulness of the Government and the known random effect of their legislation will lead to the most destructive and unrelenting opposition to the policies that the Bill embodies.
  Like my hon. Friends the Members for Pembroke and Cirencester and Tewkesbury (Mr. Ridley), and, indeed, the hon. Member for West Ham, North (Mr. Arthur Lewis), I have some difficulty in relating the clause to the general character of the Bill. First, exactly what is the notification procedure? Is it merely to be the conventional way in which information reaches my right hon. and learned Friend, with his existing authority and responsibility for the insurance industry in his present departmental capacity, or will notification procedures be sought under Clause 5?
  The anxiety expressed by my hon. Friend the Member for Pembroke about the relevance of the code to the clause is understandable. We are led to suppose from the terms of the clause that the Secretary of State is to be the monitoring agent, but the rubric alongside Clause 2 says:
  "Code for guidance of Agencies."
  It does not say that it is a code for the guidance of my right hon. and learned Friend. Therefore, we should like to know exactly how my right hon. and learned Friend seeks to interpret his responsibilities, and above all what is to be the relevance of the code.
  We see from paragraph 65 of the code, under the heading "Services", that
  "In general, paragraphs 7 to 49 of the Code apply to the prices of service enterprises …".
  Is insurance, for the purpose of the clause, a service enterprise?
  We know—and it cannot be stated too often—that the Price and Pay Code, either as a consultative document or in its final statutory instrument form, has no legal authority in itself. After realising the elaboration of nuances of control contained in the consultative document, many people in industry and commerce must be only too thankful that it does not carry the sanction of law.
  1300
  4.15 p.m.
  On all these points my right hon. and learned Friend will naturally be anxious to assuage the doubts not merely of the professionally informed, such as my hon. Friend the Member for Pembroke but of a wider public. Inevitably, there will be an expectation that my right hon. and learned Friend is some kind of Sir Galahad who will stop the upward thrust of insurance premiums. Therefore, although we do not know by exactly what means notification will be legally required, I predict that there will be an increased flow of postal complaints to Members of Parliament or, perhaps mistakenly, to the agencies, and certainly to the Department direct, asking, "What will you do about proposed increases in insurance premiums?"
  I hope that my right hon. and learned Friend will reassure the House that it is not the Government's intention to politicise the insurance industry on the scale on which it has been politicised in many other West European countries and in North America.
  Mr. Nicholas Edwards: Hear, hear.
  Mr. Biffen: I am glad to have the verbal support of my hon. Friend.
  It is with an almost careless rapture that the Treasury Bench now seeks to politicise almost every aspect of industry and commerce. I cannot believe that that is consistent with what I had assumed to be Conservative philosophy, but I leave that on one side, as we do not wish to have a teach-in on Tory philosophy. I doubt also whether it is consistent with good economic practice. One of the virtues we have proudly proclaimed over the past few years—the ability of the City of London to be the commercial centre of the enlarged community—is not likely to be sustained if there is to be a great deal of ministerial interference with the insurance industry.
  That there must be a further ministerial presence, we all agree. That is why there is legislation in another place. But much more daunting is the prospect of capricious and random interference in the workings of the insurance industry, as there seems to be in prospect random and capricious interference in the pricing structures of a great deal of British manufacturing industry.

  1301
  That is the dilemma before the House when it tries to address itself to the almost gargantuan task of making the present policy comprehensive. The arguments that take us into insurance will inevitably take us into food prices and interest rates. I look forward with some anxiety to my right hon. and learned Friend's answers to these arguments.
  A great deal of the quality of the control that we may expect to be exercised can be gauged from the additional number of staff that it is proposed shall be engaged for the purpose. There is something about the clause uneasily reminiscent of Clause 10 on rents. We were told in Committee that the Department of the Environment was to have a wide-ranging remit to study the proposed rating policies of local authorities throughout the country. We were unable to discover how many additional civil servants would be hired for that fairly ambitious exercise. The House would like to know from my right hon. and learned Friend how many additional staff he believes it will be necessary to employ to discharge the additional responsibilities that he undertakes under the clause.
  In addressing himself to all these points, my right hon. and learned Friend will have to allay at this late stage in the Bill's progress the sort of anxieties expressed by my hon. Friend the Member for Pembroke, which are widely felt in the City. They are anxieties born not of neurosis, but of a working knowledge of the industry.
  Mr. Brian Walden: I say at once that the Opposition has no objection to the Department of Trade and Industry monitoring insurance premiums. We are glad to see a Minister, or indeed anyone, from the Department present. In Standing Committee word was brought from afar from time to time about what the Department might think on various issues, but of members of that Department we saw none. It must have been a pleasure for the Minister to have discovered what we have been talking about in the Committee, although his speech introducing this new clause was commendably brief—indeed cursory.
  In principle we have no particular objection to what is suggested is being done by this new clause, although there are some great oddities. Like the hon.
  1302
  Members for Pembroke (Mr. Nicholas Edwards) and for Oswestry (Mr. Biffen) I have no clear idea of how this fits with the code.
  Mr. Ridley: It does not.
  Mr. Walden: The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) says that it does not, and he may be right. That we shall not find out at this stage and we did not find it out in Standing Committee. I think it was generally understood that the monitoring arrangements related to agencies, but outwardly here they are to be supervised by the Secretary of State.
  I do not make much of it, but I make some comments on this suggestion. I do not believe for a moment that it will happen. The document could have a rubric saying, "Prices and Pay Code (Recipe for Bankruptcy)" because if the Government were to carry out the suggested provisions that is precisely what would happen. I regard this as a complete sham and window-dressing used to effect a pay freeze, but it will not happen. It is inconceivable that the Government could do this, and certainly they have not the staff which would be needed. For the sake of form, I join the hon. Member for Oswestry in asking how many additional staff the Government would expect to use, but I have no confidence in any answer that could be given, because I do not believe that they intend to do it.
  I believe that there will be a little random, capricious and no doubt foolish intervention on such occasions as when the Government see a little political capital to be made out of it, or when there is a particular storm about insurance premiums and increases in premiums, which are disliked by everyone except those who underwrite them. But the idea that there will be any State monitoring is not one on which I shall waste the time of the House investigating with care.
  Strictly on the subject of insurance premiums, it has always seemed to me—and nothing said in this short debate has changed my mind—that the great factor of instability in insurance relates to motor car insurance premiums. This may possibly apply to life insurance, despite what the hon. Member for Pembroke said—I thought he rather inclined to a different opinion—and it has always been my

  1303
  opinion that it may apply to marine insurance also. I believe that personal insurance has been relatively stable, but the whole business of prognosticating about the future is difficult in motor insurance. A scheme whereby the State could provide for motor car insurance would do more to regulate insurance premiums than anything likely to be done under this clause.
  Mr. Ridley: Does the hon. Member agree that if control were exercised by the clause at any stage any insurance company would be liable to come back to the Government saying, "You have controlled our premiums. Therefore can you subsidise us if we go bankrupt?". What the hon. Member is suggesting would surely be a step on the road to nationalisation?
  Mr. Walden: I do not disagree, but I do not regard this as a first step. If a member of my party came to me and suggested this as a method that should be used, I would say, "No, if we are to start messing about with premiums we might as well take them all over because we shall be held responsible for any loss." However, I say that there is no serious intention of doing anything of this kind despite what was said from the Treasury Bench. A sensible thing for the Government to do when they have a free moment from changing their mind would be to think about the whole issue of motor car insurance and whether a State scheme in that sphere would not make a better contribution than this clause.
  We shall not divide the House against this clause. We shall underwrite the questions which have been asked. We are not very optimistic about the answers we shall get, but we shall listen, as we always do, with interest to see whether for once we can cull some information as to how in practice this proposal could work.
  Sir G. Howe: The welcome by the hon. Member for Birmingham, All Saints (Mr. Walden), which I acknowledge, is, I fancy, more penetrating than warm. I shall try to answer some of the questions which have been put.
  I begin by asserting quite directly that the powers sought here in relation to insurance company charges are exactly the same type as those provided for in earlier
  1304
  clauses of the Bill in relation to prices and charges of other kinds. They are of the kind that has been exercised during the standstill as appropriate for exercise during stage 2. They have been exercised during the standstill with complete effect because there have been no increases of insurance company scales since the commencement of the standstill on 6th November, except in one exceptional case of a small company in a loss-making situation. They are, therefore, powers which are intended to be used, which can be used and which will be effective so far as they are used. There is nothing relating to a sham such as was suggested by the hon. Member, either in this field or in any other. They are part of an effective policy of control of prices and charges.
  Mr. Norman Atkinson: Will the right hon. and learned Gentleman reiterate what he has just said? I understood him to say that during the period of freeze all premiums which were renewed were renewed at the same level as applied last year. Does he say that there were no increases in premiums?
  Sir G. Howe: I said that there were no increases in premium scales and that in fact where a new scale was introduced and brought into effect, as each policy holder came up before 6th November that new scale applied. There was no introduction of new scales starting after 6th November. That is what I said and what I meant to say. Obviously if a new scale came in during April last year and policy holders came on to the new scale, it would be at the higher rate, but there were no increases in the scales at which renewals have been taking place since 6th November.
  The hon. Member for Birmingham, Northfield (Mr. Carter) asked whether the Minister's power to direct rate increases, or the Minister's powers generally under the Insurance Companies Acts, would be exercisable during and notwithstanding stage 2. The answer is, yes indeed, just as they remained exercisable during the standstill, because the two matters have to be considered together. If the situation is reached in which an insurance company appears to require intervention under the Insurance Companies Acts, that power to intervene remains and has not been affected. That

  1305
  is not inconsistent with the overriding objective of controlling price or cost increases in insurance or elsewhere.
  4.30 p.m.
  He also asked why the clause was needed in relation to insurance premiums, tending, I thought, to imply that they ought to be exempt from control, because of his anxiety about the possibility of insurance companies moving into bankruptcy. The answer is that insurance company charges are an element forming part of the total panoply of prices in relation to which control should be exercised so far as is consistent with the continued prosperity and soundness of the industry in question.
  The position in that respect is the same as it was for insurance and resinsurance in 1966. The hon. Member also suggested that there would be a massive attempt to raise insurance premium rates before phase 2 started. The answer is that such an attempt would be no more permitted for insurance premium rates than it would be for any other prices. Insurance company rates are subject to the standstill and if any attempt were made to raise them before phase 2 began, the powers already in existence could and would be exercised.
  Mr. J. Bruce-Gardyne: While accepting what the Minister says about phase 1, may I ask him to confirm that once we come to phase 2 there will be nothing in law to prevent insurance companies from putting up their premiums to the extent that they believe necessary?
  Sir G. Howe: Insurance companies will be subject to the same guidance as other sectors of service industry.
  Mr. Biffen: Can the Minister say what is the legal position under the Bill when enacted? Are insurance companies legally required to give notification of alterations in scales and if so, under which section?
  Sir G. Howe: My hon. Friend knows the answer to that quite well. He may criticise it but his criticism would be without foundation. I will amplify that a little. The position is that so far as the code will be operative and so far as the standstill guidelines have been operative, they acquire the force of law when an order is made dealing with
  1306
  prices under Clauses 6 or 7, or whatever the relevant clause may be.
  Until such an order is made those concerned with the fixing of prices or charges are responding to the requirements, not legal requirements, set out in the standstill. My hon. Friend the Member for Oswestry (Mr. Biffen) sounded as if he were complaining about that position in the first part of his speech and in the latter part he sounded as if he were rejoicing because he was suggesting that to have the entire framework of the code contained in a body of immediately and directly applicable criminal law would be unacceptable and unpalatable.
  If guidelines are laid down, as they are in the code, if they are approved, as they will be if the code is approved by Parliament, and if the Statute gives power to enforce those guide-lines when they are manifestly being infringed, then that is a more sensitive way of applying this kind of policy for controlling prices or wages than any other alternative.
  Mr. Biffen: The longer he speaks the more my right hon. and learned Friend sounds like the Secretary of State for Employment. I do believe that it is the subject which infects the speaker. My question was under what section of the Counter-Inflation Act, if it is enacted, will insurance companies be required to notify the Government of any alteration in scale charges?
  Sir G. Howe: They are not required to notify under any part of the Bill as it now stands. The fact is that no applications for or notification of rate increases have been made—[HON. MEMBERS: "Why should they?"]. Hon. Members must understand the effective and sensible way in which this proposal works. During the period of the standstill there have been several hundred complaints about alleged increases in insurance company scale rates. They have all been investigated. With three exceptions, none springs from changes in insurance company scale rates since 6th November. There were three exceptions identified which were the result of clerical errors and not of any change in the rate being applied. In all those cases the excess premium has been returned to the policy holder. The fact

  1307
  that there has been that degree of information about the working of the standstill for insurance company premiums enables me to assert that there have been no changes in insurance company scale rates.
  Mr. Carter: Is the right hon. and learned Gentleman saying that as insurance companies are not required to notify his Department about premium increases or intended increases, and if he receives no complaints from the general public, insurance companies are at liberty to increase their premiums to whatever level they want?
  Sir G. Howe: They are subject to the possibility of a requirement to reduce their scales as a result of an order made under the Act in the same way as any other increase in price or charge could be reduced. It is upon that basis that the standstill has been and is being observed, with the support of the insurance industry, as with the great mass of industry and trade in the country. It is subject to exactly the same sanction of having its prices and scales reduced by order or notice under this measure as anyone else fixing any other price.
  My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) suggested that there was a conflict between the requirements of insurance companies legislation and that set out in the Bill. It was said that the power now proposed to be taken in this clause was a new one additional to those contained in the Bill as considered in Committee. The nature of the change now being proposed is merely an identification of the Secretary of State as being the person who should exercise the power in connection with insurance companies.
  Insurance companies have been under control during the standstill period. This is merely an identification of the way in which they should be controlled. It is to remove any possibility of conflict that we propose a provision of this kind, to have the Insurance Companies Acts control and the control under this measure exercised by the single authority of the Department of Trade and Industry.
  Mr. Anthony Wedgwood Benn: If the insurance legislation is intended to see that premiums are high
  1308
  enough to prevent insolvency and the present Bill is designed to see that they are low enough to prevent inflation, and if both these powers are to be exercised by the Minister's own Department, what discretion is there left to the insurance companies, and if there is any discretion left to them, under which powers do they exercise it?
  Sir G. Howe: Insurance companies have the same discretion as anyone else to fix a price or charge during the standstill or the stage 2 period. The discretion has to be exercised in the context of the policies laid down in the code for stage 2 just as anyone fixing the price for any other commodity has to have regard to the code because of the prospect that he could have his price reduced or rolled back by order or notice made thereafter. An insurance company is subject to the same guidelines.
  Mr. Ridley: Suppose my right hon. and learned Friend were to control the level of a premium where an application had been made by an insurance company, as is assumed by his Department, and subsequently that insurance company went into bankruptcy with the result that hundreds of thousands of policyholders lost the value of their policies—which might well be life policies—would he not agree that the Government would then be bound morally to accept responsibility for compensating all those policyholders? Will my right hon. and learned Friend confirm that the Government are now taking responsibility for bankrupt insurance companies if an order has been placed restricting the premiums the companies may charge?
  Sir G. Howe: I cannot confirm that. My hon. Friend the Member for Cirencester and Tewkesbury knows, because of the arguments he was advancing in relation to the powers of the Department to intervene in insolvency when he was there, that the factors that have to be taken into account are the same as those he was then taking into account.
  As the hon. Member for Birmingham, All Saints said, this is no more a first or a second step towards nationalisation of insurance companies than are the provisions of any insurance companies Bill.
  Governments of both parties have accepted as a perfectly legitimate and necessary exercise of governmental power

  1309
  some surveillance by the Department of Trade and Industry in the interests of solvency. Surveillance to prevent inflationary price increases in insurance premiums for the duration of this Counter-Inflation Bill is not a fundamental change in what already exists in the insurance companies legislation.
  Mr. Benn: This is an important point. There is, of course, a difference between seeing that premiums are high enough to meet one's obligations and the Government's giving an order that premiums are to be kept down. If, following an order by the Minister to keep premiums down, there is an insolvency, is the Minister saying the Government would accept no responsibility for those policyholders who had lost what would otherwise be owing to them as a direct result of Government action? Are not the Government in a sense bound to underwrite the consequences of their own orders restricting the premiums which are to be charged as a result of the orders?
  Sir G. Howe: The Government would be no more directly and automatically bound as the right hon. Gentleman implies in those circumstances than they are in a comparable situation under the existing insurance companies legislation because the same judgment and criticism could be advanced the other way round. Indeed, the hon. Member for Birmingham, Northfield said so in the context of V and G.
  Mr. Carter: If the Minister is denying what my right hon. Friend said, were he, under the power he has regarding solvency, to find that a company is on the verge of bankruptcy and, in order to get out of that position, that company requires an abnormally high premium increase, would he sanction that increase? If that is the case, what reason is there for the clause as it stands?
  Sir G. Howe: The criteria that arise in that case are identical to those that arise in relation to any other enterprise as set out in the code. Just as the code makes provision for either a loss-making or low-profit enterprise, so the same kind of considerations would have to apply in the situation to which the hon. Member has just referred.
  The hon. Member for West Ham, North (Mr. Arthur Lewis) raised some
  1310
  shadows from the European scene. I do no more than remind him that the provisions so far before the Communities concerning harmonisation relate not to insurance company rates but to establishment.
  The hon. Member for Pembroke (Mr. Nicholas Edwards) and several of my other hon. Friends inquired about the intention of the Government to make any long-term change. The hon. Member for Pembroke talked about dirigisme. My hon. Friend the Member for Oswestry, in not quite an Anglo-Saxon but in a Greco-Anglo-Saxon way, talked about politicisation of the insurance industry. Neither of those is either an objective of the Government or the result of these provisions. We fully recognise the extent to which our own insurance company business has operated in some ways distinct from others round the world. That is reflected, for example, in the Bill now under consideration in another place.
  All that is being proposed here is the power to require notification by use of the powers under Clause 12 in relation to insurance companies just as to everyone else and the power to make orders under this new clause to restrict increases in premium rates.
  As to the specific question asked by my hon. Friend the Member for Pembroke, overseas insurance rates, in the same way as exports of other commodities, are not intended to be covered, nor are those forms of insurance of the kind to which he was referring where rates are subject to negotiation from case to case. The area intended to be covered is primarily that where scheduled rates are the main factor in fixing the cost of insurance.
  4.45 p.m.
  Mr. Bruce-Gardyne: I am afraid the Minister still has not cleared up what would be the legal position under phase 2 if this new clause is approved in two respects. First, subsection (1) of the new clause says
  "(1) The Secretary of State shall have power to restrict insurance premiums".
  Does it mean that if my insurance company puts up my motor premium and appeals to the Secretary of State he will have power retroactively to have that premium reviewed? According to my

  1311
  understanding, that is not what the new clause says. Secondly, he has just said that the Secretary of State would have power to require notification of premiums. Where does he find that in the new clause?
  Sir G. Howe: I answered the second question of my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) when I referred to the power already existing under Clause 12 to require notification.
  Mr. Biffen: Would not my right hon. and learned Friend agree that in the real world, and in the terms in which my hon. Friend the Member for Pembroke (Mr. Nicholas Edwards) is considering this matter, there is a fair distinction whether this notification will be required by notice or by order, leaving aside the question of the parliamentary considerations that flow from that decision? Would the Minister take this opportunity to elaborate a little more precisely how he will require the notification of this information and what types of information he will require?
  Sir G. Howe: My hon. Friend the Member for South Angus asked me where the Minister had power to require such notification. The answer is that this derives from Clause 12 either by notice or by order.
  The question of how far the Minister will find it necessary to use statutory powers to require notification is one that does not yet have to be answered because notification of the kind likely to be forthcoming in respect of other prices and other commodities may well be forthcoming without the need to exercise statutory powers. The matter is at present under discussion between my officials and the industry. As in earlier periods, it may well be possible to secure a voluntary pattern for notification which is obviously preferred to a statutory requirement. The statutory power arises under Clause 12. The statutory power to restrict the premium arises under subsection (1) of the new clause we are now discussing.
  Mr. Nicholas Edwards: My right hon. and learned Friend made a very important statement before the most recent interventions.
  1312
  Time and time again whilst speaking from the Dispatch Box the Minister has talked about the control of insurance scales. He has just said that these powers do not apply, apparently, in cases which are individually negotiated. I should be grateful if the Minister will elaborate on this point. Is he saying that the powers provided under the clause apply only in cases where insurance scales are published by the insurance companies?
  Sir G. Howe: The powers are, generally, the powers provided under subsection (1), but it is not the intention that they should be exercised in relation to overseas insurance or insurance contracts which are the subject of individual negotiation. Equally, for example, the power to make variations in individual premium ratings because of individual changes in risk would not normally be interfered with. It is in relation to scale rates, which can exercise a substantial influence on the cost of living, that it is the intention to exercise the powers contained in the clause.
  Mr. W. R. Rees-Davies: I understand my right hon. and learned Friend to say that, whilst it may be possible to exercise some control over the general rates applicable across the board, there is no intention to deal with the case that arises with motor insurance where the individual characteristics of the driver may determine the insurance risk. It is only in the very broadest terms that the Government consider that they should take power to monitor loosely general control. Is that the nature of what my right hon. and learned Friend is saying?
  Sir G. Howe: The nature of what I am saying is that we recognise—and this is an explanation for the two questions asked by my hon. Friend the Member for Pembroke—that some flexibility is required in relating premiums to the kind of claim and the nature of the risk, particularly in individual cases. The intention is to exercise control consistent with the provisions of the code dealing with services in relation to scheduled rates. These are the broad matters operating across, the board which could adversely affect the cost of living if prices were to increase too sharply. The clause will give us the power to exercise that intention in a way that is most effective.

  1313
  most workable and consistent with the rest of the proposals.
  Mr. Ridley: If there is to be a higher claims expectation and a rise of, say 10 per cent. in the premium, will paragraph 19 of the code apply, whereby only 50 per cent. of allowable costs will be taken into consideration? My right hon. and learned Friend will agree that there can be no increase in productivity through a worsening in claims experience. Productivity is not relevant in that situation. If insurance companies are to have 50 per cent. of their increased costs disallowed, it means, automatically, if the code is applied, that they will be threatened with lower and lower solvency margins.
  Sir G. Howe: Unusually for him, my hon. Friend has read paragraph 19 of the code with less than his usual care. Paragraph 19 requires not more than 50 per cent. of allowable cost increases arising from pay increases to be passed through as price increases, and paragraph 19 does not apply to the provisions covered by the clause.
  Mr. Brian Walden: The Minister has given way generously, and I did not interrupt him while his hon. Friends were questioning him as I did not wish to intrude into private grief. The Opposition cannot allow the clause to go by with the answers that the Minister has given to his hon. Friends on the legal situation without at least saying how they understand it.
  Whenever Ministers are asked this question—the right hon. and learned Gentleman is not the only Minister who is guilty—an incredible "duckspeak" comes out which must be incomprehensible outside the House and is barely comprehensible inside. The reason—a dangerous one—is that the Government are trying to con us that they are doing things by law when they are not doing things by law but by exhortation.
  Under this clause, as under the other provisions of the Bill, the Opposition's understanding is that discussions are going on about notification. It might become a statutory requirement, it might be done voluntarily. Eventually, doubtless after the Bill has become an Act, hon. Members will read in the newspaper one morning which it is to be.
  1314
  On the other question about where the legal sanction is, the legal sanction is that one can do as one chooses and remain within the law until such time as the Government or the agencies serve an order on one, and then, as a law-abiding citizen, one must obey the order. That is how the Opposition understand it, and why the Treasury Bench cannot put it like that I do not understand.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 2

  EXTENSION OF PROVISIONS OF RENT ACT 1968
  For the purposes of the Rent Act 1968, properties having a rateable value on 31st March 1973 of £600 in the Greater London area or £300 in the rest of the country shall be treated as if those rateable values were £400 and £200, respectively.—[Mr. Tugendhat.]
  Brought up, and read the First time.
  Mr. Christopher Tugendhat: I beg to move, That the Clause be read a Second time.
  I will not delay the House by making a protracted speech. Unlike many other right hon. and hon. Members in the Chamber, I was a member of the Standing Committee, and I feel that it is desirable that others should have the opportunity to make a contribution to the debate.
  The object of the new clause is to improve the Bill. It is not to bring about a radical change in the way the Bill is set out or in the way it applies but simply to bring about an improvement covering one sector of the economy. I hope that the Government will understand that social justice and a severe problem in the London housing market require action and that they will give an assurance that they are prepared to take action.
  I am not suggesting that the way in which the new clause is framed is necessarily the ideal way of meeting the problem. We have put forward a proposal which we think will be workable and helpful, but our object is to draw the Government's attention to the problem and to get them to act. If the Government can find another way of dealing with the

  1315
  problem, we shall approach their ideas with a completely open mind.
  The problem to which I drew attention mainly affects London, although it has some effect on a number of towns and cities outside. It is about London that I will speak because that is the place I know best. In London, as in the rest of the country, most of the housing market is subject to controls and restraints, but the unregulated tenants are excluded from the housing legislation—and, as the Bill is drafted, will be left entirely unprotected from staggering rent increases after the freeze ends. I appreciate that rents are a delicate subject, and I have no intention of reopening debates which range much wider than this Bill. I hope that the House will agree that the position of the tenants I am talking about is exceptional.
  I have brought to the House several letters from constituents which show that the increases range substantially over 100 per cent. and sometimes over 200 per cent. I have here two examples of rents which are expected to go up as soon as the freeze ends from £850 to £3,000 and from £700 to £2,800. I do not advocate that special privileges or protections should be accorded to these tenants. I am not suggesting that they should be given any protection which is not available to other sections of the community. But some shield is necessary to protect them against immediate, sudden and absolute increases of that kind.
  The main argument that is used against the extension of control into this area is that it would dry up the market. Those of us who are familiar with the situation in Central London do not find it easy to accept that argument. The market is already drying up rapidly and it has diminished significantly in recent years. One has only to look at any of the blocks in neighbourhoods around the Palace of Westminster to see the number of flats which were on the rented market a few years ago and which have now been withdrawn. Some companies have made very substantial sums of money out of this break-up activity, as is well known.
  5.0 p.m.
  There is still a rented market in this sector but it is much less vital to the health of our society than it sometimes
  1316
  appears. The situation in the rented market is not anything like as beneficial to the people living in London as is sometimes alleged. Increasingly, flats of the kind of which I am speaking go not to people who live and make their life in London in the real sense of those words. They go to diplomats and business executives, either foreign or British, people who are not really living in London, but who regard their accommodation here as a pied-à-terre, where they stay during the week, returning at the weekend to the place where they have their real home. Alternatively these flats are going to people who regard London as a post in which they stay for a year or two, or three, four or five years, and then return to the place where they have their main home and main career.
  Of course, a great commercial centre like London must provide accommodation for people of that kind. We need the diplomatic and international business community, and executives from companies outside London who have to have accommodation within London. We recognise that, and nothing that I am saying should be taken as in any sense attacking those persons. But there are serious implications when a community of people who live their lives in London, in the sense that they bring up their children and participate in the life of the community, staying here for many years and feeling themselves a part of the city, find it impossible to secure rented accommodation and are pushed out of the middle of the city.
  It may be said that they ought to buy. It may be asked, why do they not buy? That is not always possible. The price of the kind of flat we are talking about has risen astronomically in recent years. Many are priced at anything from £30,000 to £60,000 or more. In this pile of letters I have the example of a flat for which the occupant is at present paying an annual rent of £950 and for which the landlord is asking a purchase price of £55,000.
  It simply is not possible for a great many people to raise mortgages of that kind, and even if they strain themselves to the uttermost to do so, they may well find that they are mortgaging themselves to the point of foolishness, beyond the point to which they can afford to go. The people most affected by this development

  1317
  are often the old and people past the peak of their earnings who have given a lifetime to the community, people whose roots are deeply embedded in it but who have no possibility of either increasing their income or raising the kind of money that would be needed to pay a mortgage of that kind. Another group who are seriously affected are the young, people bringing up families, who are hoping to be able to play a large part in the community.
  It is a matter of sorrow to me, as I am sure it is to those of my hon. Friends who represent central London constituencies, when we find that increasingly people move out of our areas as soon as they begin to have families, because they can no longer afford to remain. When a city reaches the point where the old and the people bringing up a family can no longer afford to live in it, the life and heart goes out of it and it becomes in many ways almost a desert of buildings. There are, therefore, important social implications in the movement about which I am speaking.
  As I have said, I am not suggesting that the particular proposals we are putting forward are necessarily the ideal way of tackling the problem, but they draw the attention of the Government to a serious problem and one which I would hope the Government will feel able to tackle. I recognise, too, that many of the difficulties I am talking of arise because the pool of rented accommodation in London at all levels has diminished in recent years, and it is essential to increase that pool of rented accommodation and to build more homes, both for rent and for sale, in London. It is also important to attract into the market more landlords so as to reverse the situation where we have a diminishing pool of accommodation falling into the hands of a diminishing number of landlords.
  That, of course, is a bigger problem, outside the scope of this Bill. Here we are talking of a specific, identifiable problem of people having at present no shield against very heavy increases. We ask that they should be given the same rights and privileges as other tenants. I hope that the Government will see their way to meet our wishes, if not here, then in another place.
  Mr. Geoffrey Finsberg: I should like to support my hon. Friend
  1318
  the Member for the Cities of London and Westminster (Mr. Tugendhat) in his argument. It is clear that there is a growing shortage of this type of property in inner London. Since the break-up and disappearance of probably one of the largest landlords, Key Flats, one has seen the disappearance of what I would call a broad social idea of landlordism which was practised by London County Freehold and the growth of certain characteristics which, frankly are alien, I believe, to everyone in this House.
  In the new clause which we are asking the House to accept we are saying that there should he an increase in fairness. At the moment one has the situation that in one block there are some flats with a rateable value of £390 and other flats with a rateable value of £410. The first flats have all the protection of the Rent Acts in respect of rent allowances and security of tenure, while the person unlucky enough to have a flat with a rateable value of £410 has no protection of any kind.
  It is right to point out that the figures which we have put in this new clause relate to the rateable value as at 31st March this year and take no recognition of the rateable values which will come into effect on 1st April under the new clause. Because there is a wide amount of confusion on this, it is right to say again that there is no alteration at all in the existing values of £400 or £200 so far as the rateable value limits are concerned.
  Having said that, I want to develop one of the arguments put forward by my hon. Friend the Member for the Cities of London and Westminster, that there are certain characteristics which are wrong and which are driving out of London the kind of social mix we want to see. I feel it is right that I should again give to the House details of a case which I have already given, that of a tenant who lives in my constituency whose lease had come to an end. He was negotiating with his landlords, the Freshwater Group. This current rent was £850. His lease being up he was negotiating by letter with the area manager of Freshwater. Finally, they had a meeting and after a fair amount of discussion there was virtual agreement that the new rent should be £1,350. Just as the Freshwater area manager was leaving my constituent he asked, "Your rateable

  1319
  value is below £400, is not it?" My constituent replied, "No. It is £410." The Freshwater man then said, "I am sorry. I withdraw that figure." A few days later an offer in writing came through of £2,000 per annum. It is alleged to have been a mistake in that Freshwater did not know that they were covered by the freeze. But that is not so important. What is important is that in the same block of flats there were people whose rateable value was just under £400 who had the full protection. That is why my hon. Friends and I feel it right to try to extend the protective figure for greater London from £400 to £600.
  Although this is mainly a problem in greater London it is also occurring in some cases in other parts of the country where the rateable value is £200. We say that the same proportionate increase should be applied to bring it up to £300.
  As my hon. Friends and I have said before, there are other issues which still operate such as the phoney service charges, and I hope very soon that my hon. Friend the Minister for Housing and Construction will be able to tell us that he has received the report on this subject which he commissioned some time ago.
  I hope that the Government will find it possible to accept this clause. I know that all Governments say that they cannot accept any new clause which is drafted by anyone other than a parliamentary draftsman. Even a clause drafted by one of my hon. and learned Friends—even my right hon. and learned Friend the Minister for Trade and Consumer Affairs—still would not be acceptable to a parliamentary draftsman. It may be that we shall have to accept a request from the Government not to press the clause and instead to allow a "properly" drafted clause to be inserted at a later stage.
  However I hope that my hon. Friend the Minister for Housing and Construction will appreciate that there is great strength of feeling on this issue in greater London and that it is an issue of fair play and social justice. That is precisely why we have picked this figure. We feel that it operates at a reasonable level.
  The House will recall that the tenants whom we are discussing are covered under phase 1 in that their rents cannot be
  1320
  increased and they cannot be evicted if their leases come to an end under phase 1. I hope that my hon. Friend will agree that what we are asking the House to accept is right even though the detailed wording of the clause may not be wholly acceptable. In any event, if the wording is not acceptable and my hon. Friend asks to be allowed to produce parliamentary language at a later stage, any tenant who is affected should not tamely accept any notice to quit and leave his property. He should go to the courts and say to the landlord who is trying to get him out, "I want a court hearing to give me the protection of the law while phase 1 is in operation".
  I hope that my hon. Friend will have found a way of accepting this principle so that tenants receive the protection of the 1968 Act which means the security of tenure which they deserve and the protection of the fair rents system and rent allowances to which I contend they are entitled.
  5.15 p.m.
  Sir Brandon Rhys Williams: I want to speak briefly to congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat) and my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg). In central London we have our own special kind of inflationary problem in that too many people are chasing too few rooms.
  Although it has been said in the past that above the £400 limit there is a free market and that buyers and sellers can work out a reasonable balance between them, that is no longer true and it is especially untrue in South Kensington where there are a large number of retired and professional people who are quite unable to compete at the prices that they are asked.
  The reason why I say that there is no longer a free market is partly that the incomes of such people are fixed. It is also that people who are seeking accommodation have special reasons why they are willing to pay almost any price. It may be that they come from abroad and have the backing of multi-national companies or embassies which feel for prestige reasons that they need accommodation in central London of a particular quality.

  1321
  Very often the developer has in mind a change of user and is hoping to turn his accommodation into hotel or short-stay furnished accommodation which for a time can be very lucrative. It may be that there are potential purchasers who are willing to offer lump sums. These may be people who lose little of their net income whatever they pay but who have every reason at present to expect capital gains when eventually they dispose of their properties.
  Over the years, the effect of controls in central London has been to freeze the redevelopment of property and to prevent the natural improvement of much of the area. This has created an artificial shortage which is felt especially in South Kensington.
  Furnished tenants will shortly get the help of the new rent allowances. I congratulate the Government on the speed with which they have brought in the rent allowances for furnished tenants. But something must be done for people who have no protection left when their present leases expire. There is a great deal of anxiety in my constituency about this matter, and it is partly occasioned by the Counter-Inflation Bill. We need a new policy for Central London. But for the present we must have an interim measure of protection for people in accommodation above the £400 limit. I do not know whether the wording of the clause is ideal, but I am certain that the intention of my hon. Friend the Member for Cities of London and Westminster is right and I hope that the Government will pay attention.
  I should like to be able to say from today that people whose leases are expiring in properties which are not subject to any kind of control need have no more anxiety and that they should stay put when their leases end, counting on the Government to take appropriate action as part of their counter-inflation measures.
  Mr. Kenneth Warren: As a Member representing a constituency outside London which has many similar problems to those mentioned by my hon. Friends, I wish to support the clause. There is need for an up-grading of these scales. We have cases in Hastings where there are not only revaluations going from £210 down below £200 and still not qualifying for the protection of the 1968 Act because they were not operative
  1322
  on the qualifying date of the 1968 Act, but many just over £200 where people should have the protection warranted by the extension proposed by my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat).
  In speaking of one town on the south coast, I hope that I am perhaps speaking of many which have the same component as that mentioned by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) of a large concentration of retired people who need the protection that this extension can give them.
  Mr. Reg Prentice: So far this Report stage has been fascinating in that it has consisted mainly of an exhibition of the private griefs of right hon. and hon. Members on the Government benches, with right hon. and hon. Gentlemen on the Treasury Bench making the Government case and their supporters on the back benches making the Conservative Party case. I can promise—
  Mr. Warren: It ought to be made clear that this is not a private grief. It is a matter of considerable importance to thousands of our constituents.
  Mr. Prentice: If the hon. Gentleman had contained himself a little longer, he would have heard me agree. The Opposition will be discriminating and will look at each case on its merits. In some cases we may find ourselves supporting the Government as the lesser of two evils.
  Hon. Gentlemen who have spoken have made out a sound case. It was slightly nauseating for some of us to listen to their arguments on behalf of the tenants concerned, because many tenants are suffering hardship, and the prospect of greater hardship, besides those in the relatively high rents bracket whom we are discussing on the new clause. Any serious counter-inflation policy should include the suspension of rent increases due under the Housing Finance Act. There will be a real problem of hardship and unfairness to thousands of people when the temporary provisions come in. Therefore, the new clause deserves support. But we should look at the new clause not only from the point of view of protecting the tenants affected, but because high rents of this kind generate high incomes.

  1323
  According to the hon. Member for Cities of London and Westminster (Mr. Tugendhat), if people own the right properties in the right place at the right time they are able to secure higher rents of the scale mentioned by him. Clearly this makes a complete nonsense of the income limits which are an essential feature of other parts of the policy.
  For those and many other reasons which can be given, I suggest that the new clause deserves support.
  The Minister for Housing and Construction (Mr. Paul Channon): I know that the House is anxious to make progress with the Bill today. Therefore, I will not detain it long. I am sure that everyone in the House has great sympathy with the speeches by my hon. Friends the Members for the Cities of London and Westminster (Mr. Tugendhat), Hampstead (Mr. Geoffrey Finsberg), Hastings (Mr. Warren) and Kensington, South (Sir B. Rhys Williams) on what is obviously to them an important and deeply felt issue. I also note what was said by the right hon. Member for East Ham, North (Mr. Prentice).
  As a preliminary, I should like to deal with one point in the speech by my hon. Friend the Member for Hampstead. He is not in his usual place. I had better not say that he has gone to another place as that has not yet happened. He asked about service charges and whether I had had a report. I am engaged in looking at the report on service charges, which has only recently arrived. I note what my hon. Friend said about the issue, and I recall the argument that he and others pressed last year.
  I discussed the problem of this section of tenants with my hon. Friends on a number of occasions. They are concerned about it, and I think that everyone will agree that they have acted in the best traditions of constituency Members in bringing this matter to the attention of the House.
  The House might be interested to know the figures involved. I estimate that there are about 20,000 tenants of unfurnished property above the rateable value limit. About half of these are in inner London. The other half are largely alongside the South Coast, which no doubt caused the interest of my hon. Friend the Member
  1324
  for Hastings. I know that my hon. Friend the Member for Hove (Mr. Maddan) is also deeply concerned about the problem.
  About 80 per cent. of these properties in London appear to come within the bracket chosen by my hon. Friends in the new clause. Typically these properties are let on three, five or seven-year leases and the rents are market rents. It will be within the recollection of hon. Members that the rateable value limits were fixed in 1965 at £400 in London because it was felt that there was no shortage of rented accommodation above that level and that therefore there could be a market above it. I should emphasise that we are talking about constant levels. The rateable values do not increase until the end of next month.
  I accept that that situation no longer seems to apply today and that there is a shortage of accommodation in the lower rateable value bracket with which my hon. Friends have dealt. I am aware of their concern because of this new situation. My hon. Friend the Member for the Cities of London and Westminster discussed this matter in Committee. I know his views well and have discussed them with him on many occasions. I also know the views of my hon. Friend the Member for Kensington, South and other hon. Members who have not spoken today.
  My hon. Friends are worried about steeply increasing rents and the distress that can be caused to some tenants. They are worried, as we all are, about frequent changes of landlord and insensitivity towards the personal needs of tenants to which such changes have given rise. They are worried about the plight of tenants who have to look for new accommodation because they cannot afford the new high rents being asked. I accept to a considerable degree my hon. Friend's diagnosis of the problem.
  I recognise that this is a serious issue. My hon. Friends suggest that the answer is to raise the rateable value limit to a level which I calculate would bring 80 per cent. of unregulated tenancies within the Rent Acts. This would give tenants full security of tenure and access to the fair rents system and they would become protected regulated tenancies in the same mould as existing regulated tenancies. This is a possible course of action.

  1325
  The House will appreciate that we are dealing with counter-inflation measures which have a limited life. This is an important problem, but it has not been central to the main issues confronting us in the Bill.
  Therefore, in view of the views that have been expressed, the Government are considering what measures might be appropriate to meet the problems which have been described. If necessary, we are prepared to propose amendments to the Bill in another place to give effect to our conclusions on this issue. I could not go further than that in telling the House what the outcome might be. However, my hon. Friends having drawn attention to a serious and difficult issue, I assure them that I am sympathetic and the Government will, if necessary, propose amendments to the Bill to give effect to our final conclusions. I hope therefore, especially as one of my hon. Friends pointed out the difficulty imposed on private Members of drafting a clause and the essential nature of getting whatever measures are proposed right and watertight, that in view of the assurance that I have given my hon. Friends will not press the new clause.
  Mr. Tugendhat: My hon. Friend's speech was the most helpful and sensitive that we have heard from the Treasury Bench regarding this problem which has worried us for a long time. We are delighted that the Government should now appreciate the nature of the problem and are prepared, if necessary, to bring forward amendments in another place to deal with it. On the basis of the assurance that we have received, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 3

  RESTRICTIONS ON PAYMENT OR CHARGING OF INTEREST BY BANKS, ETC.
  (1) The Treasury shall have power to restrict the payment or charging of interest by banks and other financial institutions.
  (2) The power conferred by subsection (1) above shall be exercisable by order, or by notice given to the institution, or each of the institutions, affected by the notice.
  (3) An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.—[Dr. Gilbert.]
  Brought up, and read the First time.
  Dr. John Gilbert: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Miss Harvie Anderson): With new Clause 3 it will be convenient to take Amendment No. 24, in Title, line 4, after 'dividends', insert 'interest'.
  Dr. Gilbert: The new clause is intended to give the Treasury power for the first time, in the context of the Government's counter-inflation programme,
  "to restrict the payment or charging of interest by banks or other financial institutions."
  The new clause is set down at a time when interest rates in this country have been soaring faster and higher than ever before. The commercial banks have recently raised their base lending rates to a record height of 9½ per cent. The Bank of England's rate, which used to be called Bank Rate, is up at a record figure. Personal overdrafts, which were at 6½ per cent. or 7 per cent. a year ago, are now costing 12½ per cent. to 14 per cent. In short, Britain is now the most expensive country in the industrialised world in which to borrow.
  What is more, the end is far from being in sight. As the banks are bidding frantically in the open market for funds, so we can expect the process to continue in a higher and higher, giddier and giddier spiral until the Government take drastic action.
  When we look to see who is hurt by spiralling interest rates, the answer is almost everyone—everyone who has an overdraft, everyone who has or wants a hire-purchase agreement in the near future, and everyone who wants credit. Recently I drew attention to the fact that the Government permitted the introduction of the new Access credit card with rates of interest of between 19 per cent. and 21 per cent. on extended terms. That was a clear conniving at the substitution, under the overall credit limits, of higher cost sources of credit for relatively low cost sources from overdrafts and that type of borrowing. The cost is enormous. Mr. Graham Searjent in the Sunday Times of 25th February calculated that, already, the increase in interest rates was costing the average family about 25p to 30p a week.

  1327
  5.30 p.m.
  Briefly, his calculations were to the effect that the higher cost of mortgages on individuals, plus the higher cost of hire-purchase loans, plus the higher cost of bank loans, will amount to well over £200 million—the difference between the gross costs of outstanding borrowings at today's interest rates and the cost of the same borrowings at rates prevailing only a year ago. One fears that it will not be long before there is a general move upwards in mortgage rates
  The Building Societies Association is already talking ominously about rates of 10 per cent., as against current rates of 8½ per cent. With the return on bank deposit accounts now nearly up to that which the building societies themselves can offer, it will not be long before the building societies have to offer more in order to keep their share of the funds coming into the market.
  Everyone who wants to borrow suffers, but who is suffering least? As usual under this Government, those who suffer least are those who are most well off. Under the Finance Act, 1972 deductibility of interest was restored for speculative purposes and the more money one has, of course, the more advantage one derives from that enormous tax concession. It applies to everyone who wants to borrow, except, of course, under this Government, when one is borrowing only about £400 or £500. If one's interest charges are only £35 a year, one gets no relief. If one is paying £3,500 as a big speculator on the Stock Exchange, one gets virtually total relief of one's interest. It is all subsidised by the general run of taxpayers.
  But who benefits? Somebody benefits under this scheme of things, and the people who benefit in times of high interest rates are those with money to lend. Those who can deposit funds with the commercial banks get a slightly higher return, but the people who make the most money are the moneylenders, the hire-purchase firms and above all the banks—as one might expect, the banks.
  There has never been such an explosion of bank profits in British history. The figures are absolutely startling. Over the last couple of weeks or so, the four big commercial clearing banks have reported
  1328
  huge increases in profits. The profits of the National Westminster Bank have risen by £42 million, those of Barclay by £35 million, those of the Midland by £20 million and those of Lloyds by £16 million—a total increase of about £113 million in bank profits. The increase in the second half of 1972 is of the order of 60 per cent. pre-tax.
  We have every reason to expect that this increase in profits will continue and to believe that those figures understate the true position, because to some extent they are weighted down by the profits of the banks' overseas operations, which are on nothing like such a munificent scale as the profits from their operations in this country.
  To quote Mr. Michael Blanden of the Financial Times about a week ago:
  "Stockbrokers are united in expecting further substantial profits growth from the big banks."
  How right he is, and how right they are.
  There is nothing at all in the code, as I read it, that constitutes a direct attack on interest rates as such. How do the Government propose to control them? So far as I can see, they propose to rely, possibly, to some extent, on paragraph 38 of the code, on the question of the degree of profit in the best two of the last five years. But those five years are up to 1st April 1973, and as I have already shown, that would include one of the biggest bumper years in banking history.
  It should be noted that the code contains provisions allowing companies price increases if their last five years' profits are unrepresentatively low. Of course—but there is nothing in the code to deal with those cases in which any two of the last five years contained profits which are unrepresentatively high. The Government's attitude is virtually total helplessness.
  Mr. Bruce-Gardyne: Before the hon. Gentleman concludes, could he help the House by giving an indication of the impact he thinks that acceptance of his amendment would have on monetary policy, and whether that impact would be desirable or undesirable, in his view?
  Dr. Gilbert: I will come on briefly to the general question of monetary policy. The amendment is not quantified. It does

  1329
  not instruct the Government what should be an ideal level of interest rates but merely gives them power to control them. Obviously, one cannot deal in quantitative terms without considering the total volume of money and of lending, the level of Government expenditure and taxation and so on.
  The Government's general attitude is virtually total helplessness. It is true that they try, under paragraph 21(ii) of the code on page 5, to exclude certain types of interest charges from costs which will be allowable under phase 2.
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin): The hon. Member's reference to that paragraph allows me to put on record our apologies for a misprint. The word "not" should appear before "normally" in paragraph 21(ii). We are dealing here with interest which is not usually chargeable profit and loss account. Some of the Press have gathered that but some have not. Of course, in the subsequent issues of the Green Paper, we shall see that a correction slip is included. Those distributed yesterday did not have that correction and I therefor draw attention to the misprint.
  Dr. Gilbert: I am grateful to the Chief Secretary. I had concluded that there had to be a misprint of precisely that nature. The effect, of course, if one reads paragraph 21(ii) with the "not" included, is that increases of interests rates attaching to debenture charges and that sort of thing will not be allowable costs but that interest on bank and hire purchase charges—
  Mr. Jenkin: We are not in Committee, but I think that the hon. Gentleman has misunderstood the principles. The interest which would not be allowed as an allowable cost is interest which would normally be chargeable to capital account. Debenture interest would normally be charged to the profit and loss account, and any increase in the interest would be the allowable cost to the extent provided in the consultative document.
  Dr. Gilbert: Very good. To the extent, then, that paragraph 21 disallows certain rates of interest for purposes of calculating profits under phase 2, it helps in the attack on the increase in the cost of living. For that, we must be grateful.
  1330
  There is no direct attack on interest rates and there is therefore no direct relief for individual borrowers. For all practical purposes the Government are washing their hands of the situation and are saying that there is nothing whatever they can do about it.
  This is particularly surprising in the light of the American experience in these matters. The Government have been at pains to copy as many salient points from the American phase 1 and phase 2 programmes as they possibly could, and have, like the Americans, set up a Price Commission and a Pay Board, using precisely the same terms and giving them similar powers. But there is one American institution they have completely neglected to imitate. As a third body reporting under the Cost of Living Council the United States Administration set up a Committee on Interest and Dividends and the attention of the Government has been drawn to their omission. They have done nothing about remedying it.
  The Committee for Interest and Dividends in the United States has precisely the same sorts of powers as the Pay Board and the Price Commission. It has not been without effect. It was reported from New York as long ago as last November that as a result of administration attempts to "talk down" interest rates—as the phrase is over there—the First National City Bank agreed to alter the formula it used for computing its prime lending rates in order to lower these by about one-eighth per cent. as a result of the Government's suggestion. The Bankers Trust Company also agreed to abandon its floating prime rate for the time being as a result of a request from the United States Administration. More recently, at the beginning of this month when some of the large banks raised their prime rates from 6 per cent. to 6¼ per cent. the United States Administration, in the person of Mr. Arthur Burns, chairman of the Federal Reserve System, sent telegrams to all the banks asking for details of why they were changing their rates and what changes in costs and earnings lay behind it. He is reported to have insisted that
  "higher marginal cost of funds from sensitive money market sources should not be permitted to unduly influence institutional lending rates."
  It is quite clear that if the will is there, at least something can be done by an

  1331
  administration which is determined to act. Why are we suffering now? The answer, of course, is perfectly clear. We are paying the price of the enormous borrowing rates of the Government, the enormous deficit on public account, the enormous excess of public spending over public taxation. I do not share the general philosophy of Conservative Members that the only way to deal with this is by cutting public expenditure. What we are now getting and what we are now paying is the price of the Government's tax cuts that they gave over the last couple of years to their most enthusiastic and well-heeled supporters. Let no one be under any illusion about this. These tax cuts were presented as a cost-free bonanza to the British public. They were nothing of the sort. The public have been paying for them in higher prices and we are paying for them in higher interest rates.
  Government spokesmen get up time after time at the Dispatch Box and at public meetings and boast about the enormous tax concessions they have handed out. They boast about how they have cut taxes by £1,000 million, £2,000 million and £3,000 million. They never say what is the inevitable reverse of the coin—that because of the tax cuts, by keeping public expenditure at the same level, there is an enormous deficit which is growing higher inevitably, as the report of the Expenditure Committee revealed only the other day. The CBI has just given as its estimate that if there is neither an increase in taxes nor a cut in public expenditure there will be a deficit of about £4,000 million in the coming year, even higher than this year. It must have its effect either on higher interest rates or on higher prices.
  The Government face a very serious problem of debt funding just over the horizon. Their options are quite clear. They will have to make drastic cuts in public expenditure, or they will have to raise taxation, or there will be continued inflation, or there will be higher interest rates. The probability is that there will be a compromise with a combination of all four.
  The Chancellor's chickens are coming home to roost at a rate and with a ferocity—if one may use that word about chickens—that I think he never would have anticipated. We on the Labour side
  1332
  consider that the present level of interest rates, the pattern of interest rates, the way in which they are accelerating and the way in which they are being accompanied by indecent bank profits is a gross affront to this country. We say to the Government that they cannot hope to get the ordinary people to co-operate in the objectives of the Bill while the Government are prepared to sit back and see the moneylenders profit to such an outrageous extent at the expense of ordinary men and women who find it necessary to go into debt.
  5.45 p.m.
  Mr. Bruce-Gardyne: Fortunately the hon. Member for Dudley (Dr. Gilbert) more or less destroyed the case for his clause in his concluding remarks. I took it from the concluding passage of his argument that the Opposition would not seek to press the clause to a Division and I look forward to my hon. Friend's confirmation that if the Opposition had had any intention of doing so Government Members would have been invited to resist it.
  The amendment is totally and utterly incompatible with the direction of monetary policy on which my hon. and right hon. Friends have now said—in my view a little belatedly—that we are embarked. The hon. Member for Dudley drew attention to the recent increase in bank profits and the only part of his argument with which I found myself in broad agreement was when he said that the increase in bank profits was likely to continue. He was absolutely right. I imagine that bank profits next year will be substantially higher than those just declared and I hope that will be the case because I belong to a minority cult in this House which continues to believe in profit. I have some reservation about regarding a certain level of profitability as excessive.
  I certainly accept the hon. Member's proposition that we shall see a further increase in bank profits because, as far as I can tell, we shall see a further substantial increase in interest rates if the Government are genuine in their determination to bring the growth of money stock gradually under control. Although the hon. Member was careful in response to my intervention not to quantify the clause, and not to set levels at which the limitation on interest rates would begin

  1333
  to apply, nevertheless he could hardly dispute that any artificial limitation on interest rates would be incompatible with a coherent monetary policy. The need to impose a control on interest rates would presumably arise only if interest rates were rising, and interest rates would be rising because unless they rose the money stock would grow more rapidly than the Government were prepared to tolerate. That is a logical sequence of events which could not very well be disputed.
  The latest indications that we have had on the growth of the money supply are perhaps not entirely reliable. It is true that we should not judge too much by one month's figures. However, I doubt whether my hon. Friend the Chief Secretary would go very far in disputing the proposition that the rate of growth in the money supply to the latest period for which we have information is wholly excessive. We shall have a need in the months ahead for a more restricted monetary policy. At the same time, I am inclined to agree that the outlook for the net borrowing requirement in the next 12 months is, to say the least, ominous.
  I do not regard the CBI as necessarily the ultimate font of all wisdom under its present direction. I am inclined to the view that its estimate of the likely net borrowing requirement in the year ahead may turn out to be an underestimate. It seems possible that the figure will be nearer £5,000 million than £4,000 million, not least because I suspect that this year's net borrowing requirement will turn out to be rather less than that predicted in my right hon. Friend's Budget last year. Inevitably public expenditure spending programmes have slipped behind schedule and, therefore, they will come on with greater force and volume in the year ahead.
  The hon. Member for Dudley tried to some extent to cover his flanks by suggesting that rather than allow interest rates to rise to meet the predicament, the Government should go for higher rates of taxation. I do not believe that it is as simple as that. Alas, it is difficult to devise a type of additional taxation which will conflict neither with the objectives of this legislation nor with the objective of achieving a 5 per cent. rate of growth and an improvement in industrial investment.
  Mr. John Cronin: Would the hon. Gentleman be sympathetic towards a tax on profits made on land values? That surely would not upset any of the criteria which he has mentioned?
  Mr. Bruce-Gardyne: I should like to see us trying to tackle the causes of inflation for a change rather than dealing with the symptoms. I confess that that is not conventional wisdom at present. The course of honour and glory at present, in the eyes of many observers of the nation's affairs, lays the emphasis on dealing with the symptoms of inflation, rather than the causes. If we are to do that, something along the lines of what the hon. Member for Loughborough (Mr. Cronin) is talking about would fit in with that pattern. I should rather see us tackling the causes than the symptoms.
  Dr. Gilbert: The hon. Gentleman challenges me to offer any tax changes that would fit into this programme. Would he care to discuss the point which I raised—namely, as a result of last year's Budget, interest charges are not deductible and that that is a direct incentive for people to borrow and force up the value of land and homes? That is an incentive to speculate.
  Mr. Bruce-Gardyne: I do not want to be dragged too far wide of the amendment. Of all the various suggestions put forward from the Opposition benches, the one which the hon. Gentleman has just mentioned is one with which I find myself least unsympathetic. I do not go beyond that. In general, I put the proposition that it would not be easy to enable us so to restrict the net borrowing requirement in the year ahead by increases of taxation that there was not a pressure to continue with a further and continual rise in interest rates, without coming into conflict with either the overall objectives of the Bill or the objective of encouraging industrial investment, if two objectives are compatible, which I doubt—but that is a matter with which we shall have to deal at another stage.
  The amendment is totally incompatible with the requirements of the monetary policy as far as we can see them for the year ahead. That in itself is a more than

  1335
  adequate reason for rejecting the amendment. It would also be totally incompatible with competition and credit control. I know that there has been a growing volume of opinion among commentators, most of whom are finding that they are having to pay a real rate of interest on their overdrafts for the first time for many years, to the effect that competition and credit control should be thrown into the ash can.
  I was relieved to hear a reply from my hon. Friend the Minister of State, Treasury, last week to my hon. Friend the Member for Kingston-upon-Thames (Mr. Norman Lamont), who asked my right hon. Friend the Chancellor of the Exchequer whether he was satisfied with the working of the policy of competition in credit. My hon. Friend the Minister of State said:
  "Yes, Sir. The changes have resulted in a welcome increase in competition and innovation in the banking sector.'
  Further, in answer to my hon. Friend, he said:
  "… A return to ceilings on bank lending in the private sector would stifle competition and in any event would have severe limitations as a monetary tool."—[OFFICIAL REPORT, 22nd February 1973; Vol. 851, c. 657.]
  I was inclined to say "Bravo". I hope we shall hear nothing tonight which will in any way show an indication of wavering from that robust assurance. The amendment is totally incompatible with competition and credit control.
  Dr. Gilbert Dr. Gilbert indicated assent.
  Mr. Bruce-Gardyne: I am glad to see that the hon. Gentleman agrees with that. That in itself would be another reason for opposing it. I agree entirely with the sentiments expressed by my hon. Friend the Minister of State.
  We are impaled on the horns of a slightly embarrassing dilemma when we are discussing the amendment. The dilemma arises from paragraphs 38 and 40 of the Green Paper, to which the hon. Member for Dudley referred. He rightly pointed out that paragraph 38 says
  "Prices should be determined so as to secure that net profit margins do not exceed the average level of the best two of the last five years."
  He further pointed out that paragraph 40 says
  1336
  "Where the reference level has been exceeded, or where in the light of interim accounts or other evidence it is likely to be exceeded, price reductions … should be made according to the actual or expected excess."
  Here we seem to be in a slight difficulty. I agree with the hon. Member for Dudley that the profits of the clearing banks in the year ahead will exceed the reference point. That is very likely. Of course, if the banks are required to abolish their charges, we might even be paid for keeping an account with the banks. However, I have a nasty suspicion that unless we are paid large sums for keeping our accounts with the banks we shall find that the impact of higher interest charges in the year ahead will mean that the banks are over the top of their reference point. What do we do then? It seems that this is a slight embarrassment. The amendment must be rejected.
  I am not so clear about what we can do, other than accepting the effect of the amendment, to ensure that the banks conform to paragraph 40. I hope that my hon. Friend will make it clear that paragraph 40 will not under these circumstances apply to the banks. That will be the sensible line for us to take. That will make the policy completely consistent. We shall then have an assurance that the Government will pursue a coherent and responsible monetary policy in the year ahead. But if my hon. Friend the Chief Secretary is not prepared to give that assurance, we shall be left with considerable doubts and anxieties on what the likely course of monetary policy is to be in the years ahead. My hon. Friend must seriously address himself to this dilemma.
  6.0 p.m.
  Mr. Cronin: I support the new clause so ably moved by my hon. Friend the Member for Dudley (Dr. Gilbert).
  The important aspect of the new clause is that it reflects a serious disquiet which is shared by both sides of the House about the high rates of interest prevailing at present. The clause asks the Government to take powers to reduce interest rates. As far as I know, since the First World War we have never had such high rates of interest. This is a symptom of the thoroughly rotten state of the economy under the administration of the present Government.
  Mr. Arthur Lewis: It makes sense to the bankers.
  Mr. Cronin: Yes. I am grateful to my hon. Friend, but I should like to come to that point later.
  We have never previously had a situation in which the equivalent of the minimum lending rate of the bank was 8¾ per cent. Only about a month ago it was 9 per cent. This means in effect that a first-class borrower has to pay 11 per cent. for his borrowings. How can the Government expect any substantial expansion of the economy in those circumstances?
  It has been pointed out by my hon. Friend the Member for Dudley that the only gainers from this are the banks. My hon. Friend gave some very useful figures about enormous increases in bank profits. He may not have mentioned the percentage increases. However, last year the National Westminster Bank for instance, increased its profits by 50 per cent. That is an organisation which is supposed to have some degree of public service attached to it, and not to be a pure blight on the economy.
  It is disappointing that there is no reference in the Green Paper to bank interest rates except for the rather scanty references at paragraphs 21 and 66.
  If I may digress, we have been told that at the top of page 5 there is a misprint, and that the word "not" should be inserted. Will the Chief Secretary give an assurance that there are no similar misprints in the document, no other "nots"? It would be nice to know that a fundamental document of Government policy has been accurately printed and is not full of careless mistakes of this nature. It is extremely difficult to debate a subject such as this when one is suddenly told at the last moment that the word "not" should be inserted and that the opposite is meant.
  Mr. Bruce-Gardyne: If the hon. Member consults paragraph 91 on page 16 he will find a not entirely dissimilar instance there.
  Mr. Cronin: That is very helpful to know. But no doubt the Chief Secretary will deal with that point.
  It is an obvious truism that the high interest rates which we are asking the Government to control will have a deplor-
  1338
  able effect on capital investment and on the building up of stocks and, therefore, will increase unemployment. We need not develop that point because both sides of the House are enormously and painfully aware of it. An important thing to remember is that these high rates are not having any effect on the property speculator, the pampered child of the Government. As things are going at present, it does not worry a property speculator if he pays even 15 per cent. interest. He knows that in a few months' time he will make 100 per cent. profits. Property speculators will not be affected.
  This will affect everyone else, however, who makes a worthwhile contribution to the economy. Most important, of all, it will affect principally the small man. The large borrower, the man in big business, will be able to offset these high interest rates against his taxation. The man who pays a high rate of surtax, or large amounts of tax under the new tax code, will be very much less affected, whereas the smaller man, like the small businesses all of us know in our constituencies, will be much more severely affected by these interest rates which are now so high. Yet the Government have declined so far to take any action to control and to reduce these rates.
  Perhaps the Chief Secretary will correct me if I am wrong, but I presume that the Government's reluctance to control interest rates is due to an intention to let them rise as high as possible to cut down the money supply. I do not know whether that is the intention, but I suggest that these high rates would not occur if the Government took some very sensible steps to reduce the inflation on borrowing. If the Chief Secretary could persuade his right hon. Friend the Chancellor of the Exchequer, in this time of national crisis, to take the very sensible step that was taken by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) when Chancellor, and to ensure that in future the interest paid on borrowings could not be set against taxation as an expense, except in cases where that was particularly helpful in the national interest, that would bring down interest rates enormously. It would not then be necessary for us to demand that the right hon. Gentleman should have some effective form of control.

  1339
  The other important thing is that there should be some quantitative control of interest rates. One of the maddest things that the Government did at the end of 1971 was to abolish all quantitative controls of interest rates and controls on hire purchase and to cease giving the banks any directions about who should receive loans and who should not. If we had quantitative controls, this would be much more help for the economy and these high interest rates would be unnecessary.
  In conclusion, it is essential that the Government should have power to control these high interest rates. At the same time, however, such rates would not be necessary if the Government abandoned their crazy policy of subsidising a demand for credit and at the same time raising its price.
  Mr. Biffen: The hon. Member for Loughborough (Mr. Cronin), who is, I suppose, a somewhat fastidious social democrat within the Labour Party, nevertheless committed the solecism of describing our present circumstances as
  "this time of national crisis."
  It would be helpful if in all of these debates we tried somehow to disembarrass ourselves of this almost latter day sense of impending doom.
  I was delighted to hear my right hon. Friend the Secretary of State for Trade and Industry on the radio this morning when he put his radio interviewer very firmly in his place when being asked about the nature of the present industrial unrest.
  We are living through a period of economic difficulty, although I cannot remember when we were not doing that. Without doubt the present rates of inflation are intolerable and carry in their consequences the destructive elements which are immensely socially harmful as well as possibly economically harmful.
  We are now discussing a good-nature tease. It is a good-natured demand by the Opposition—and they are entitled to a tease—to probe some of the frontiers of Government competence in controlling the price mechanism. It is true that we could use this as a debate to examine the balance between expenditure and taxation and the consequence which that balance has for interest rates. However,
  1340
  I shall not be beguiled into following that line of argument because a much more apt occasion will present itself immediately after 6th March.
  This debate highlights the anomalous position of banks. It has been observed to be a lacuna in the legislation and the way in which the legislation will be operated by the Government, which perhaps is even more important than the legislation itself.
  My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) made a splendid speech about the banks and spoke of their opportunity and potential. I felt that here was the Clive Jenkins of the banking world. He had gone through the document and had come to certain conclusions. If we look at paragraph 66 we see
  "Subject to paragraph 10, all charges of banking enterprises other than interest rates are within the control and the system of allowable cost increases and the limitation on net profit margins apply to them."
  The qualifying phrase "other than interest rates" is exactly the sort of material that provides a livelihood for the Clive Jenkins of this world, whether in respect of Threadneedle Street and its immediate surroundings or of the white collar or blue collar unions.
  My suspicion is that the blue collar unions will be the last people to recognise these circumstances, but eventually they, too, will appreciate the situation. It is this area of fudge and ambiguity that will give rise progressively through time, as we have these three years in prospect, to a sense of inequity and injustice as one section of the community rather than another can spot areas where they can operate pricing systems more effectively than otherwise would be the case.
  The hon. Member for South Angus lighted on the centre point of this debate, which must be the process of learning from my hon. Friend the Chief Secretary to the Treasury where the Government now stand in respect of the Bank of England's competition and credit control. The Green Paper has cast a shadow of doubt on the determination of the Government to stand by that policy. My hon. Friend will be performing an immensely valuable service not merely to the Treasury Bench, of which he is a most distinguished member, but to the banking and financial community generally if he

  1341
  uses this occasion to say clearly that the Government still stand by the Bank of England's competition and credit control.
  6.15 p.m.
  Almost inevitably if the Government stand by the competition and credit control, it seems to me to be impossible to foresee circumstances in which the mortgage market does not become affected. I believe that there will be an upward thrust of mortgage rates unless action is taken to prevent that occurring. I am particularly anxious to know the Government's attitude. It puts the building societies in an impossible position if they are unable to compete along with other elements in the banking system for the resources available for lending. We may find ourselves in a situation where there is an artificial shortage of mortgages created because the mortgage market is leaned upon.
  I do not suppose that notice will be served under Clause 5. I imagine that it will be part of the process of Government by invitation which was put so succinctly by my right hon. and learned Friend the Minister for Trade and Consumer Affairs earlier this afternoon. Government by invitation is one of the most offensive forms of government that can be undertaken. It is particularly offensive when we live in an age in which, quite properly, we are told that law and order are very important and essential elements in political discussion. I like to feel that the Government feel bound by authority as well as requiring others to abide by it.
  Therefore, in the context of a continuation of the Government's adherence to competition and credit control, I hope that the Government will take the opportunity to clarify what they believe will be the degree of independence that will be permitted to building societies. It is clear that there are already gathering day by day further doubts and question marks about the execution of this aspect of Government policy. It is an area in which speedy elucidation is needed.
  Mr. John Mackie: I am tempted to my feet by the remark of the hon. Member for Oswestry (Mr. Biffen) that this is a teasing clause. That was a light-hearted remark if ever there were one.
  1342
  The clause seeks to bring some measure of control over interests rates, and I should like to relate my own experience as a medium borrower in an industry that is seeking to increase production. When my sons and I were considering a project to increase beef production, we discovered that present interest rates precluded us from going ahead with that project. Anybody who has studied the matter will know that there has been a severe fluctuation in the price of beef which has fallen from £22 per cwt. to £18 or £19 per cwt. Admittedly that is still high, but farmers have to make their plans on the basis of present-day prices.
  The Chief Secretary to the Treasury said in Committee that his right hon. Friend the Minister of Agriculture would try, through the price review, to bring in some control of farming profits. If that is to be the case, and if at the same time there is to be no control over interest rates, then increases in production will be inhibited. I emphasis once again that this clause is by no means a teasing provision, but is a serious contribution.
  Mr. Patrick Jenkin: This debate in a short time has ranged very widely. I shall not take up the remarks of the hon. Member for Enfield, East (Mr. Mackie) on the subject of the problems of farm price reviews and beef prices. The hon. Member for Dudley (Dr. Gilbert) and one or two of my hon. Friends, including my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), sought to raise budgetary matters—for example, the borrowing requirement and the possibility of tax changes. These are matters about which I must maintain the silence of a Trappist monk. There was also discussion of future movements of interest rates, which is a matter on which Treasury Ministers speculate at their peril. So, for reasons which I am sure the House will understand, I shall have nothing to say on these matters but will confine myself to the narrow but, I concede, important points which the hon. Gentleman raised in moving this new clause.
  Two central issues have been mentioned in the debate, arising out of the problem of the high rates of interest which we are at present experiencing; first, the burden of these high rates on the individual borrower and, secondly, the benefit which they mean for the banks

  1343
  and other financial institutions and the relevance of that benefit to the counter-inflation policy. As the hon. Gentleman recognised, these are two sides of the same coin, and it is the intention of this new clause, by conferring on the Government power to restrict the rates of interest, that both these problems should be dealt with. I must make it clear to the House that I am afraid the new clause is unacceptable and I hope that the House will resist it.
  The freedom for interest rates to fluctuate is an essential instrument for the overall management of the economy. If interest rates were controlled in the manner which the hon. Gentleman envisaged in bringing in his new clause the authorities' ability to influence monetary conditions in the country would be severely hampered. It is indeed widely recognised —and has been for some time now, as my hon. Friend the Member for South Angus pointed out—that control of the money stock is essential in the battle against inflation. The new clause, by depriving the authorities of the instrument of control in this regard, would help to defeat the whole purpose of the Bill. In other words, as my hon. Friend the Member for South Angus said, the power which it is sought to give to the Treasury under this new clause is incompatible with the rest of the Government's counter-inflation policy.
  I recognise that this is not easy for the man-in-the-street to comprehend. To him, the interest he pays—whether on a mortgage or an overdraft, or through hire purchase—is a price, or a charge. When his income is restricted and he sees other prices and charges being restricted as severely as the newspapers this morning recognise it is the Government's intention to restrict them, he cannot see why this charge should not also be restricted. And especially must this be true at a time when, as has happened in the past few months, the action by the authorities to keep the expansion of the money supply in check has put an upward pressure on all interest rates.
  Dr. Gilbert: I understand the Chief Secretary to say that if we tried to set interest rates in any rigid pattern it would be totally impossible to work any monetary policy. This clause is merely an enabling one; it does not set any limits,
  1344
  or specify types of interest rates. If this is so, can the hon. Gentleman explain why countries such as the United States and Canada, for many years, quite outside the conditions of the economic emergency, have had permanent controls over various types of interest rates? If they can do that, why cannot we?
  Mr. Jenkin: I am sure the hon. Gentleman recognises—and I was going to deal with the point—that conditions in other countries, with their various institutional arrangements, are bound to differ. He is quite right: in the American counter-inflation policy they had their committee on interest and dividends, but the experience and the problems of the United States differ in many respects from what we face here. It simply does not follow that because it was right to set up in America a committee of the sort President Nixon set up in connection with his pay and prices policy it would be appropriate to do the same thing here.
  What is more significant is that the United States did not, in fact, impose statutory controls on interest rates, and, for reasons which I am coming to and have indeed already adverted to, it would be inappropriate to do so here.
  There are other differences. We have taken the view—and I do not think it has been seriously challenged on either side of the House—that in the interests of fairness and in order to be seen to be dealing fairly with all categories of our population, we should introduce a control on dividends, and the House may think it is a pretty stringent control. They have not had a control on dividends in America.
  Dr. Gilbert: That is irrelevant.
  Mr. Jenkin: The hon. Gentleman may say that is irrelevant, but I think we would have heard in very strong language from him if we had decided not to do it. The fact is that if there is to be control of the incomes of employees and the self-employed, and profit margins, and distribution, we feel it right that at the same time restrictions should be placed on investment income paid in the form of dividends. That is another difference between ourselves and America, because they do not do that.
  The ordinary man may well ask how the Government can claim to be fighting

  1345
  inflation by letting interest rates rise as they have. The short answer is that there is no effective method of controlling monetary aggregates other than the use of interest rates. The hon. Member for Loughborough (Mr. Cronin) invited me to return, as he put it, to some form of quantitative control on lending. I just do not believe that that is right. The quantitative controls on bank lending which were employed for many years, particularly by the party opposite, simply do not represent a viable alternative for the control of monetary aggregates to the movement of interest rates. I entirely agree that they did succeed in holding back certain sorts of lending. They held down bank lending to the private sector by the operation of lending ceilings, but only at the cost of great distortions in the allocation of credit and considerable inefficiencies in our financial system. These grew more and more severe and the anomalies became greater and greater as time went on. Constrained by ceilings, the banks and finance houses had no incentive to go out and compete for business, while borrowers, particularly those in non-priority areas, were forced to seek funds, often at very high cost, from fringe institutions outside the credit control net.
  Mr. Cronin: I am sure the hon. Gentleman will at least concede that in the days of the Labour Government there was not this absolutely crazy escalation of land and property prices, brought about by the subsidies given by the Government to the speculators.
  Mr. Jenkin: I will answer the hon. Gentleman now; I was coming to it later. In the matter of the tax allowance for interest on borrowing to invest in land, the purchase of land, and the improvement of land and buildings, the rules today are exactly the same, word for word, pound for pound, as they were under the hon. Gentleman's Government. We have not changed by one iota the tax allowance for interest on money borrowed to invest in land purchase or land improvement. All the talk we have had about the allowance helping the land speculators, and so on, comes ill from hon. Gentlemen opposite. The reforms of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) left the tax relief for interest on borrowing unchanged, and it stands today as he left it.
  Mr. Benn: But the hon. Gentleman will agree that as a result of leaving it as it was, land and property speculation has occurred and, since the Government have changed their own policy several times in the past two-and-a-half years, if they recognise that there has been a link between the existing system—left by the last Government—and what has happened, there is no reason at all why they should not respond by changing the policy.
  6.30 p.m.
  Mr. Jenkin: If the right hon. Gentleman is suggesting that there should now be a disallowance for tax relief for interest charged on money borrowed by, say, businessmen investing in the buying and selling of land, he should say so. That was never the policy of his party, and it would be a very difficult policy. But we are moving a little wide of the clause—
  Mr. Benn: As the hon. Gentleman has challenged me on this, I remind him that one of the matters raised by the TUC in its discussions with the Government was that action should now be taken to deal with the scandal of the rise in land and property values, which is affecting rents and payments for houses by members of the unions. This is not a new or surprising matter, but one that might have some bearing on the prospects of reaching a voluntary agreement.
  Mr. Jenkin: I am sure that the right hon. Gentleman realises that this is not the time to refer at greater length to paragraph 23 of the counter-inflation White Paper of January, in which we said that the Government
  "intend, before the next stage of the policy comes into operation, to bring forward proposals which will increase the availability of building land and reduce the extent to which it is possible for people to make disproporionately high profits from transactions in land."
  I must ask the right hon. Gentleman to await the appropriate announcement from my right hon. Friend.
  I return to the question of the money supply and the path that the hon. Member for Loughborough was asking me to re-tread. There is no evidence that in the longer term the imposition of lending ceilings had much impact on the growth of the money supply. Their main effect

  1347
  was to alter the channels by which the market supplied money, and the money often flowed in a much less efficient way. If the demand for money exists the supply will usually be forthcoming by one means or another. If the banks are forbidden to satisfy the demand the public will try to find other ways, perhaps by selling gilt-edged stock or going to fringe institutions.
  We saw under the previous Government the kind of thing that happens. If the authorities go into the market to purchase debt in an effort to prevent interest rates from rising, their actions simply provide the money that ceilings prevented the banks from making available. There cannot be much sense in that.
  I think that it is widely agreed, not only on the Government side, that the fundamental changes in the techniques of monetary supply that we made in 1971 have led to a much sharper and more competitive approach in the financial system, which has been of general benefit to the whole economy. Important and far-reaching structural changes have occurred in the past year or so as the banks have come to play a much greater rôle in channelling funds through the economy. Part of the big increase in bank lending to the private sector has been an inevitable catching-up process after years of rigid controls which had greatly distorted the allocation of credit.
  I can respond to the requests of my hon. Friends the Members for Oswestry (Mr. Biffen) and South Angus by assuring the House that it is not our intention, by resorting to quantitative restrictions, to throw away the striking gains in the efficiency of the financial sector that have been achieved under the new arrangements. That would be a retrograde step, and one that would not avoid the need for high interest rates if an excessively rapid growth in the money supply is to be reduced.
  But that is not to say that there should be a free-for-all in the allocation of credit under the new system. We reserved the right to give qualitative guidance to the banks from time to time as we felt necessary. Last August, as the demand for funds from industry started to pick up, we reminded the banks of the importance of satisfying the needs of industrial borrowers and asked that they
  1348
  should, as necessary, curb their lending to property companies and for financial transactions.
  The banks are very conscious of their responsibilities in this regard, and as financial conditions have tightened in the past few months there are indications that they have been cutting back on other types of lending, particularly for the purposes mentioned in the guidance. With the system of overdraft facilities in this country, the effects of that process take time to show up in the figures, but they will become more evident as existing facilities fall due for renewal.
  No one—least of all the Government —wants to see interest rates at a high level. The key to lower interest rates lies in the success of our efforts to curb inflation. That in turn requires that the growth of the money supply be kept in check. If we are to achieve that, interest rates must remain free to fluctuate.
  Mr. Bruce-Gardyne: How does my hon. Friend reconcile paragraphs 38 and 40 of the White Paper with the consequences for bank profits of the exemption of interest from control?
  Mr. Jenkin: Every hon. Member who has spoken has raised the question of the banks' profits—the other side of the coin. What effect will the high interest rates have on the banks' profits, and what are the implications for stage 2 of the counter-inflation policies? A number of hon. Members have referred to paragraph 66 of the Green Paper, where we make it clear that charges of all sorts—fees, commissions, bank charges and so on—are within the ambit of control by the Price Commission. They are subject to the regime of allowable cost increases and to the profit margin control. If those margins are exceeded, not only will no increases in the charges be allowed, but there will be power under the Bill for the Price Commission to order reductions.
  However, as will be apparent to anyone who read Michael Blanden's perceptive article in the Financial Times this morning, the operation of the controls in relation to banks is not straightforward. There are problems of definition and control. Mr. Blanden mentioned in particular the problem of how to define the turnover of a bank. Here it is

  1349
  essential that the Government should take the opportunity of the publication of the Green Paper, which is a consultative document, to consult the banks and the finance houses on the precise application of the controls in their sector.
  But I must make it clear that it is our intention, so far as it lies within our power, to ensure that the banks and other financial institutions are not excluded from the limits that apply to the rest of the economy, and that the Price Commission should be able to exercise its powers under the Bill to implement the code in relation to the banks and financial institutions.
  Mr. Peter Hordern: Can my hon. Friend confirm that no measures will be taken with regard to the banks other than those mentioned in the Green Paper?
  Mr. Jenkin: I cannot be as specific as my hon. Friend would have me be, because we are to consult the banks, the finance houses and other bodies, and I do not want to tie the hands of the Government and those who will carry out the consultations in deciding the best way to achieve the purpose I have just outlined.
  However, it would not be compatible with the rest of our counter-inflation policy to seek to control interest rates, for they must be free to fluctuate as required for the overall management of demand, which is an essential element in the control of inflation.
  The new clause is not only inconsistent with the rest of the counter-inflation policy; it is unnecessary to achieve one of the objects of that policy—to subject bank profit margins to the same sort of strict regime as that applicable to other enterprises.
  Therefore, I ask the House to reject the clause.
  Dr. Gilbert: With the leave of the House, I should like to reply briefly.
  Paragraph 66 of the Green Paper says:
  "Subject to paragraph 10, all charges by banking enterprises other than interest rates are within the control …".
  One of the first things the Chief Secretary could do with regard to that paragraph is to make sure that the banks publish their charges. We should all be better off.
  1350
  The hon. Gentleman might also force all the banks to publish true financial statements. The last answer I received to a Question on the subject showed that about 90 still refused to disclose their true profits. That is another step forward that the hon. Gentleman might take in his discussions with the banks.
  I welcome what the Chief Secretary said about consultations with the banks but I cannot accept his airy dismissal of the way in which things are done in other countries as being totally unsuitable for trying to control inflation here. I refer him to page 46 of the report of the Cost of Living Council of the United States for the period 1st January-31st March 1972, where it is said that the council had determined that:
  "the issuance of mandatory regulations and orders providing for the stabilization of interest rates and finance charges is not necessary at this time"—
  that is not surprising, because American interest rates are much lower than ours—
  "to maintain such rates and charges at levels consonant with economic growth."
  In the United States they have powers to set mandatory limits to interest rates. There is no reason why this Government should be so reluctant to take such powers. The man in the street finds it difficult to understand their continued tenderness to the banks.
  Later on the same page of that report it is said that
  "Several large banks, in announcing increases in the prime rate, stated explicitly that they were not increasing consumer loan or mortgage loan rates."
  It would be nice to have some assurance that that would be the result of the consultations which the hon. Gentleman intends to have with the banks. The report also says that
  "the Committee on Interest and Dividends has met with representatives of the commercial banking industry …. with a view toward discovering obstacles to lower rates and to the avoidance of future rate increases."
  The only things not controlled in the Bill or the code are bank interest rates and bank profits. Difficulties of definition apart, we absolutely reject that philosophy. We say that just because there is difficulty of definition, and so on, it is that more important to act on interest rates.

  1351
  I have no hesitation in asking my hon. and right hon. Friends to divide the House in support of this new clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 218, Noes 282.

  Division No. 68.]

  AYES

  [6.42 p.m.

  Abse, Leo

  Griffiths, Will (Exchange)

  Oram, Bert

  Allaun, Frank (Salford, E.)

  Hamilton, James (Bothwell)

  Orbach, Maurice

  Archer, Peter (Rowley Regis)

  Hamilton, William (Fife, W.)

  Orme, Stanley

  Ashley, Jack

  Hannan, William (G'gow, Maryhill)

  Owen, Dr. David (Plymouth, Sutton)

  Atkinson, Norman

  Hardy, Peter

  Padley, Walter

  Barnett, Guy (Greenwich)

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Barnett, Joel (Heywood and Royton)

  Hart, Rt. Hn. Judith

  Pardoe, John

  Beaney, Alan

  Hattersley, Roy

  Parker, John (Dagenham)

  Benn, Rt. Hn. Anthony Wedgwood

  Heffer, Eric S.

  Parry, Robert (Liverpool, Exchange)

  Bidwell, Sydney

  Howell, Denis (Small Heath)

  Pavitt, Laurie

  Blenkinsop, Arthur

  Huckfield, Leslie

  Peart, Rt. Hn. Fred

  Boardman, H. (Leigh)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Perry, Ernest G.

  Booth, Albert

  Hughes, Robert (Aberdeen, N.)

  Prentice, Rt. Hn. Reg.

  Bottomley, Rt. Hn. Arthur

  Hughes, Roy (Newport)

  Prescott, John

  Boyden, James (Bishop Auckland)

  Hunter, Adam

  Price, William (Rugby)

  Bradley, Tom

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

  Probert, Arthur

  Broughton, Sir Alfred

  Janner, Greville

  Rees, Merlyn (Leeds, S.)

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

  Jay, Rt. Hn. Douglas

  Rhodes, Geoffrey

  Buchan, Norman

  Jeger, Mrs. Lena

  Richard, Ivor

  Butler, Mrs. Joyce (Wood Green)

  Jenkins, Hugh (Putney)

  Roberts, Albert (Normanton)

  Callaghan, Rt. Hn. James

  Jenkins, Rt. Hn. Roy (Stechford)

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Cant, R. B.

  John, Brynmor

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

  Carmichael, Neil

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

  Rodgers, William (Stockton-on-Tees)

  Carter, Ray (Birmingh'm, Northfield)

  Johnson, Walter (Derby, S.)

  Rose, Paul B.

  Carter-Jones, Lewis (Eccles)

  Jones, Barry (Flint, E.)

  Ross, Rt. Hn. William (Kilmarnock)

  Castle, Rt. Hn. Barbara

  Jones, Dan (Burnley)

  Rowlands, Ted

  Clark, David (Colne Valley)

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

  Sandelson, Neville

  Cocks, Michael (Bristol, S.)

  Jones, Gwynoro (Carmarthen)

  Sheldon, Robert (Ashton-under-Lyne)

  Cohen, Stanley

  Jones, T. Alec (Rhondda, W.)

  Shore, Rt. Hn. Peter (Stepney)

  Concannon, J. D.

  Judd, Frank

  Short, Mrs. Renée (W'hampton, N.E.)

  Corbet, Mrs. Freda

  Kaufman, Gerald

  Silkin, Rt. Hn. John (Deptford)

  Cox, Thomas (Wandsworth, C.)

  Kelley, Richard

  Silkin, Hn. S. C. (Dulwich)

  Crawshaw, Richard

  Kinnock, Neil

  Sillars, James

  Cronin, John

  Lambie, David

  Silverman, Julius

  Crosland, Rt. Hn. Anthony

  Lamborn, Harry

  Skinner, Dennis

  Crossman, Rt. Hn. Richard

  Lawson, George

  Small, William

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

  Lee, Rt. Hn. Frederick

  Smith, John (Lanarkshire, N.)

  Darling, Rt. Hn. George

  Lestor, Miss Joan

  Spearing, Nigel

  Davidson, Arthur

  Lewis, Arthur (W. Ham, N.)

  Spriggs, Leslie

  Davies, Denzil (Llanelly)

  Lewis, Ron (Carlisle)

  Stailard, A. W.

  Davies, Ifor (Gower)

  Lipton, Marcus

  Steel, David

  Davis, Clinton (Hackney, C.)

  Lomas, Kenneth

  Stewart, Rt. Hn. Michael (Fulham)

  Davis, Terry (Bromsgrove)

  Lyon, Alexander W. (York)

  Stoddart, David (Swindon)

  Deakins, Eric

  Lyons, Edward (Bradford, E.)

  Stonehouse, Rt. Hn. John

  de Freitas, Rt. Hn. Sir Geoffrey

  Mabon, Dr. J. Dickson

  Strang, Gavin

  Delargy, Hugh

  McBride, Neil

  Strauss, Rt. Hn. G. R.

  Dell, Rt. Hn. Edmund

  McCartney, Hugh

  Summerskill, Hn. Dr. Shirley

  Dempsey, James

  McGuire, Michael

  Swain, Thomas

  Douglas, Dick (Stirlingshire, E.)

  Mackenzie, Gregor

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

  Douglas-Mann, Bruce

  Mackie, John

  Thomas, Jeffrey (Abertillery)

  McNamara, J. Kevin

  Thorpe, Rt. Hn. Jeremy

  Driberg, Tom

  Mahon, Simon (Bootle)

  Tomney, Frank

  Duffy, A. E. P.

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

  Torney, Tom

  Dunn, James A.

  Marks, Kenneth

  Tuck, Raphael

  Eadie, Alex

  Marquand, David

  Varley, Eric G.

  Edelman, Maurice

  Marshall, Dr. Edmund

  Wainwright, Edwin

  Edwards, Robert (Bilston)

  Mason, Rt. Hn. Roy

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

  Edwards, William (Merioneth)

  Mayhew, Christopher

  Walker, Harold (Doncaster)

  Ellis, Tom

  Meacher, Michael

  Wallace, George

  English, Michael

  Mendelson, John

  Weitzman, David

  Evans, Fred

  Mikardo, Ian

  Wellbeloved, James

  Faulds, Andrew

  Millan, Bruce

  Whitehead, Phillip

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

  Miller, Dr. M. S.

  Whitlock, William

  Fitch, Alan (Wigan)

  Milne, Edward

  Willey, Rt. Hn. Frederick

  Fletcher, Raymond (Ilkeston)

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

  Williams, Alan (Swansea, W.)

  Ford, Ben

  Molloy, William

  Williams, Mrs. Shirley (Hitchin)

  Forrester, John

  Morgan, Elystan (Cardiganshire)

  Williams, W. T. (Warrington)

  Fraser, John (Norwood)

  Morris, Alfred (Wythenshawe)

  Wilson, Alexander (Hamilton)

  Freeson, Reginald

  Morris, Charles R. (Openshaw)

  Wilson, Rt. Hn. Harold (Huyton)

  Galpern, Sir Myer

  Morris, Rt. Hn. John (Aberavon)

  Wilson, William (Coventry, S.)

  Gilbert, Dr. John

  Mulley, Rt. Hn. Frederick

  Ginsburg, David (Dewsbury)

  Murray, Ronald King

  TELLERS FOR THE AYES:

  Golding, John

  Oakes, Gordon

  Grant, John D. (Islington, E.)

  O'Halloran, Michael

  Mr. Donald Coleman and

  Griffiths, Eddie (Brightside)

  O'Malley, Brian

  Mr. Tom Pendry.

  NOES

  Adley, Robert

  Fox, Marcus

  McNair-Wilson, Patrick (New Forest)

  Alison, Michael (Barkston Ash)

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

  Maddan, Martin

  Allason, James (Hemel Hempstead)

  Fry, Peter

  Madel, David

  Amery, Rt. Hn. Julian

  Galbraith, Hn. T. G. D

  Maginnis, John E.

  Archer, Jeffrey (Louth)

  Gardner, Edward

  Marples, Rt. Hn. Ernest

  Astor, John

  Gibson-Watt, David

  Marten, Neil

  Atkins, Humphrey

  Gilmour, Ian (Norfolk, C.)

  Mather, Carol

  Awdry, Daniel

  Gilmour, Sir John (Fife, E.)

  Maude, Angus

  Baker, Kenneth (St. Marylebone)

  Glyn, Dr. Alan

  Mawby, Ray

  Baker, W. H. K. (Banff)

  Godber, Rt. Hn. J. B

  Maxwell-Hyslop, R. J.

  Balniel, Rt. Hn. Lord

  Goodhart, Philip

  Miscampbell, Norman

  Batsford, Brian

  Goodhew, Victor

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

  Beamish, Col. Sir Tufton

  Gorst, John

  Mitchell, David (Basingstoke)

  Bell, Ronald

  Gower, Raymond

  Moate, Roger

  Bennett, Sir Frederic (Torquay)

  Grant, Anthony (Harrow, C.)

  Molyneaux, James

  Bennett, Dr. Reginald (Gosport)

  Gray, Hamish

  Money, Ernie

  Benyon, W.

  Green, Alan

  Monks, Mrs. Connie

  Berry, Hn. Anthony

  Grieve, Percy

  Montgomery, Fergus

  Biffen, John

  Griffiths, Eldon (Bury St. Edmunds)

  More, Jasper

  Biggs-Davison, John

  Grylls, Michael

  Morgan-Giles, Rear-Adm.

  Blaker, Peter

  Gummer, J. Selwyn

  Morrison, Charles

  Boardman, Tom (Leicester, S.W.)

  Gurden, Harold

  Mudd, David

  Body, Richard

  Hall, Miss Joan (Keighley)

  Murton, Oscar

  Boscawen, Hn. Robert

  Hall, John (Wycombe)

  Nabarro, Sir Gerald

  Bossom, Sir Clive

  Hail-Davis, A. G. F.

  Neave, Airey

  Bowden, Andrew

  Hamilton, Michael (Salisbury)

  Nicholls, Sir Harmar

  Braine, Sir Bernard

  Hannam, John (Exeter)

  Noble, Rt. Hn. Michael

  Bray, Ronald

  Harrison, Brian (Maldon)

  Normanton, Tom

  Harrison, Col. Sir Harwood (Eye)

  Nott, John

  Brinton, Sir Tatton

  Onslow, Cranley

  Brocklebank-Fowler, Christopher

  Haselhurst, Alan

  Oppenheim, Mrs. Sally

  Brown, Sir Edward (Bath)

  Hastings, Stephen

  Orr, Capt. L. P. S.

  Bruce-Gardyne, J.

  Havers, Sir Michael

  Osborn, John

  Bryan, Sir Paul

  Hayhoe, Barney

  Owen, Idris (Stockport, N.)

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

  Heseltine, Michael

  Page, Rt. Hn. Graham (Crosby)

  Buck, Antony

  Hicks, Robert

  Page, John (Harrow, W.)

  Bullus, Sir Eric

  Higgins, Terence L.

  Parkinson, Cecil

  Burden, F. A.

  Hiley, Joseph

  Peel, Sir John

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

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

  Percival, Ian

  Carlisle, Mark

  Hill, S. James A. (Soulhamplon, Test)

  Peyton, Rt. Hn. John

  Carr, Rt. Hn. Robert

  Holland, Philip

  Pink, R. Bonner

  Channon, Paul

  Holt, Miss Mary

  Pounder, Rafton

  Chapman, Sydney

  Hordern, Peter

  Price, David (Eastleigh)

  Chichester-Clark, R.

  Hornby, Richard

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

  Churchill, W. S.

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Proudfoot, Wilfred

  Clark, William (Surrey, E.)

  Hunt, John

  Pym, Rt. Hn. Francis

  Clegg, Walter

  Hutchisen, Michael Clark

  Raison, Timothy

  Cockeram, Eric

  Iremonger, T. L.

  Ramsden, Rt. Hn. James

  Cooke, Robert

  Irvine, Bryant Godman (Rye)

  Rawlinson, Rt. Hn. Sir Peter

  Coombs, Derek

  James, David

  Redmond, Robert

  Cooper, A. E.

  Jenkin, Patrick (Woodford)

  Reed, Laurance (Bolton, E.)

  Corfield, Rt. Hn. Sir Frederick

  Jennings, J. C. (Burton)

  Rees, Peter (Dover)

  Cormack, Patrick

  Jessel, Toby

  Rees-Davies, W. R.

  Costain, A. P.

  Johnson Smith, G. (E. Grinstead)

  Rhys Williams, Sir Brandon

  Critchley, Julian

  Jones, Arthur (Northants, S.)

  Ridley, Hn. Nicholas

  Crouch, David

  Jopling, Michael

  Ridsdale, Julian

  Crowder, F. P.

  Joseph, Rt. Hn. Sir Keith

  Rippon, Rt. Hn. Geoffrey

  d'Avigdor-Goldsmid, Sir Henry

  Kellett-Bowman, Mrs. Elaine

  Roberts, Michael (Cardiff, N.)

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

  Kilfedder, James

  Roberts, Wyn (Conway)

  Dean, Paul

  King, Tom (Bridgwater)

  Rodgers, Sir John (Sevenoaks)

  Deedes, Rt. Hn. W. F.

  Kinsey, J. R.

  Rossi, Hugh (Hornsey)

  Digby, Simon Wingfield

  Kirk, Peter

  Rost, Pater

  Dixon, Piers

  Kitson, Timothy

  Russell, Sir Ronald

  Dodds-Parker, Sir Douglas

  Knight, Mrs. Jill

  St. John-Stevas, Norman

  Drayson, G. B.

  Knox, David

  Scott, Nicholas

  du Cann, Rt. Hn. Edward

  Lambton, Lord

  Scott-Hopkins, James

  Dykes, Hugh

  Lamont, Norman

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

  Eden, Rt. Hn. Sir John

  Lane, David

  Shelton, William (Clapham)

  Edwards, Nicholas (Pembroke)

  Langford-Holt, Sir John

  Simeons, Charles

  Elliot, Capt. Walter (Carshalton)

  Le Marchant, Spencer

  Sinclair, Sir George

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

  Lewis, Kenneth (Rutland)

  Skeet, T. H. H.

  Emery, Peter

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

  Soref, Harold

  Eyre, Reginald

  Longden, Sir Gilbert

  Speed, Keith

  Farr, John

  Loveridge, John

  Spence, John

  Fenner, Mrs. Peggy

  Luce, R. N.

  Sproat, Iain

  Fidler, Michael

  McAdden, Sir Stephen

  Stainton, Keith

  Finsberg, Geoffrey (Hampstead)

  MacArthur, Ian

  Stanbrook, Ivor

  Fisher, Nigel (Surbiton)

  McCrindle, R. A.

  Stewart-Smith, Geoffrey (Belper)

  Fletcher-Cooke, Charles

  McLaren, Martin

  Stodart, Anthony (Edinburgh, W.)

  Fookes, Miss Janet

  Maclean, Sir Fitzroy

  Stoddart-Scott, Col. Sir M.

  Fortescue, Tim

  McMaster, Stanley

  Stokes, John

  Foster, Sir John

  Macmillan, Rt. Hn. Maurice (Farnham)

  Stuttaford, Dr. Tom

  Fowler, Norman

  McNair-Wilson, Michael

  Sutcliffe, John

  1354

  1355

  Tapsell, Peter

  Turton, Rt. Kn. Sir Robin

  White, Roger (Gravesend)

  Taylor, Sir Charles (Eastbourne)

  van Straubenzee, W. R.

  Wiggin, Jerry

  Taylor, Frank (Moss Side)

  Vaughan, Dr. Gerard

  Wilkinson, John

  Taylor, Robert (Croydon, N.W.)

  Vickers, Dame Joan

  Winterton, Nicholas

  Tebbit, Norman

  Waddington, David

  Wolrige-Gordon, Patrick

  Temple, John M.

  Walder, David (Clitheroe)

  Woodnutt, Mark

  Thatcher, Rt. Hn. Mrs. Margaret

  Walker-Smith, Rt. Hn. Sir Derek

  Worsley, Marcus

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

  Wall, Patrick

  Wylie, Rt. Hn. N. R.

  Thompson, Sir Richard (Croydon, s.)

  Walters, Dennis

  Younger, Hn. George

  Tilney, John

  Ward, Dame Irene

  Trafford, Dr. Anthony

  Warren, Kenneth

  TELLERS FOR THE NOES:

  Trew, Peter

  Weatherill, Bernard

  Mr. Kenneth Clarke and

  Tugendhat, Christopher

  Wells, John (Maidstone)

  Mr. Paul Hawkins.

  Question accordingly negatived.

New Clause 5

  DISPLAY OF PRICES
  'The Minister shall by order provide that any person engaged in the sale of goods or the performance of services in the course of business must display to the public a complete list of all prices and charges both current and on the date when this part of this Act came into force'.—[Mr. Pardoe.]
  Brought up, and read the First time.
  Mr. John Pardoe: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): We shall take at the same time Amendment No. 56, standing in the name of the right hon. Member for Blackburn (Mrs. Castle) and the names of her right hon. and hon. Friends, in Clause 6, page 5, line 21, at end insert—
  '(6) The Prices Commission may by order instruct retail establishments to display prominently a notice giving details of the address to which customers may refer complaints of price increases for investigation'.
  Mr. Pardoe: I do not claim that new Clause 5 is necessarily in perfect form, but I hope that the Government will take note of the idea enshrined in it and will be prepared to accept that idea. To my way of thinking, if a prices and incomes policy is to work it has to do so at two levels—by means of direct intervention by the Government through control, and by means of a psychological impact, particularly working on people's expectations of inflation. New Clause 5 is designed to help along the whole process of stopping those expectations rising and also to keep the people informed how the policy is working.
  It is a simple idea, which the American policy had from an early date. Basically, the idea is that every store of any size should have displayed for the benefit of
  1356
  the public a list of current prices and those which were current when this part of the Bill came into force. Thereby, throughout phase 2 the housewife could see exactly what effect the controls introduced by the Government were having on the goods she wished to buy. She would be able to see by how much they had increased in price, if they had increased, and whether there had been any decreases.
  This was an essential part of the American prices and incomes policy, because it was seen early on in the planning of the policy that unless one could enlist the support of ordinary shoppers on behalf of the policy one had not a hope of stopping prices from rising. Indeed, at an early stage the American boards directed that the ceiling prices which had been set at the beginning should be available for public inspection at the point of sale. That had to be done from 1st November 1971. It was stated that they did not necessarily have to be on display, although it was recommended that they should be. The basic point was that price lists were there and that a person who wanted to see what had happened to the price of a product between the time the policy came into force and when he wanted to buy it was able to do so.
  Later on, it was stipulated that retail stores with an annual turnover of 200,000 dollars or more would be required to display base period prices. That was from 17th January 1972, so the American Government confirmed and toughened the requirement by stipulating that stores must display these price lists and not merely have them ready for inspection.
  This is a simple idea. It does not seem to me to impose a great burden on the larger shops. Admittedly, new Clause 5 would apply to all stores, and the Government may feel that they should exempt some of the smaller stores in the same

  1357
  way as the American Government did. That is up to them. But I see no reason why the Government should not be prepared to accept the idea enshrined in the new clause and I hope that they will do so. Unless we can conscript the housewife—the ordinary shopper—on behalf of the whole idea of prices and incomes control through this sort of measure in the shops at the point of sale, I do not believe that we have any hope of getting a price control policy at all.
  Mr. Sydney Chapman: The hon. Member for Cornwall, North (Mr. Pardoe) has raised an interesting point. My first reaction is that although his suggestion may have been relevant and valid in the United States there is a fundamental difference in this country. New Clause 5 misses the point. One of the most fundamental changes in the prices of goods and services will be through the introduction, in five weeks' time, of value add tax, replacing selective employment tax and purchase tax. There will be quite a movement in prices. Many will stay the same, many will go up and many will come down.
  I am disappointed that the Government have not seen fit to accept a suggestion which I, and no doubt many others, have made—that where there is going to be a price change in goods or services on 1st April the extent of that change which has come about through the new tax system should be clearly marked. That would be of much greater help to the consumers—the housewives in particular—than the proposal in new Clause 5.
  The consumer has never been so discerning. There are two main reasons for this—an unhappy one, and another. The unhappy one is that we have been living through almost rampant inflation for five years. The fact that prices have risen relatively by so much has made the housewife that much more careful and that much more knowledgeable, for strict economic reasons, about the prices of goods and services.
  7.0 p.m.
  The second reason is that it is true to say that housewives have been bombarded by the mass media in recent weeks. It is almost as if each housewife has acquired her own built-in consumer council kit. They know much better than
  1358
  some hon. Members in this House the day-to-day movements in prices. My point is simply that no matter how discerning, how intelligent, not even the most academically distinguished person could possibly have at his finger tips a knowledge of the complex movement in prices there will be as a result of the introduction of VAT.
  For example, I am told that if a person buys a refrigerator of under 12 cubic feet capacity on 1st April the price is likely to be reduced by 10 per cent. If it is over 12 cubic feet capacity it is likely to increase by 10 per cent. What I ask is that such an article at present on the market at, say £50, should after the introduction of VAT have the price "£50" crossed out and there should be written the words "less £4 VAT—price for sale £46". The same should apply to prices which have increased.
  In striking a blow at the problems of pollution and population the Government are ensuring that the cost of cots and prams rise as a result of VAT. Whatever the change in price may be—it is a matter of little concern to me as a batchelor—the increase ought to be clearly marked so that the consumer, the expectant mother or the successful housewife or whatever will know that she has not been diddled by the manufacturer or retailer. If a 20p tube of toothpaste decreases in price by 1p that should be clearly marked on the price ticket. I do not believe that the Government's answer to this holds water.
  Of course there will be this famous shoppers' guide which the Under-Secretary of State for Trade and Industry announced in reply to a Question of mine in the House yesterday. Of course the Government will continue to monitor price increases. The sort of proposal I am putting forward will be such more beneficial and I hope that even though there is less than five weeks to go before the introduction of VAT the Government will have second thoughts.
  Amendment No. 56 deals with the address to which complaints should be sent. I have no particular views about this. Most people will know where to make a complaint. From a public relations point of view I would have thought that it was in the interests of retailers to display these notices, but I

  1359
  do not think it should be a statutory requirement.
  Mr. Benn: I hope that the Chief Secretary will not be misled, by the relatively thin attendance or the fact that few hon. Members have spoken, into believing that this is not an important amendment. It is an amendment which, somewhat surprisingly, brings together the three parties in the House represented by possibly the only three speakers who will be taking part in this debate before the Minister replies. It is often my impression, listening to debates on economic matters, and notably to some erudite speeches math on rates of interest, profit ratios and profit margins, that we sometimes forget that for the shoppers—and I do not mean only the housewife, because men shop too—these considerations pass entirely over their heads.
  Shoppers want to know whether prices have risen, and if so, why and where. We often forget that it is upon their confidence in any policy that a great deal depends. The housewife is being beseiged by a great deal of conflicting information given by the media and the Government. The Government's argument is that there is a freeze in operation. That is the information the housewife gets from Ministers. Her experience when she goes into the shops is that there is not a freeze on at all.
  Let me take the increase in food prices from November to mid-January: they rose by 3½ per cent. If we go back over the last two years we see that they have increased by 27 per cent. Increases in fresh food prices since 6th November amount to l4·7 per cent. Frozen food prices have increased by 5·8 per cent. and all food prices by 7·3 per cent. On the one hand the housewife is told, "We are going through a period of freeze", yet on the other hand she is paying higher prices.
  She is often also told by the shopkeeper to buy before VAT comes in, yet we do not know at what rate VAT will be levied and we cannot know what effect phase 2 will have on prices in the shops because under phase 2 the Price Commission, not yet set up, will have the power to consider applications for price increase, to approve them and to make orders to keep prices down. The Minister has the power at some stage to
  1360
  overturn the Prices Commission. In the midst of all this confusion all that the shopper wants to know is what is the price and what it was before the changes occurred.
  On Monday the Minister said that the Government would be producing a handy guide, which presumably one can carry about in a pocket. It is to give a broad indication of what might or should be happening to detergents or washing machines, or whatever else people buy. To suppose that it will be a help to the shopper is an illusion. In practice, when a shopper enters a shop there is such an enormous range of products that it will be impossible to pull out this guide and refer to an average expected increase. What is required is that the relevant information should be on the label.
  If this is done the shopkeeper is under some pressure from the shopper who is armed with some information which will enable him to know whether he is being overcharged. This is of special importance because the Chief Secretary, in our debates in Standing Committee H, was candid with the Committee in explaining how the price control worked. He said:
  "I entirely agree with those who have asked how on earth a Price Commission, comprising no more than 400 or 450 people, could possibly control one-and-a-half million traders. It will not even try to do so. What it will do is effectively to police the big firms, monitor the medium-sized firms and let the forces of competition, which are very real among small firms, ensure that price stability is effective."—[OFFICIAL REPORT, Standing Committee H, 8th February 1973; c. 422.]
  That was a candid answer, such as the Chief Secretary always gives to the House and Committee.
  Let me underline the key words. The hon. Gentleman said that the Price Commission would not even try to police prices; that it could not try to do so. Unless we can harness the knowledge and self-interest of the person who goes to buy products from the shops to some form of policing, this will be ineffective. It is no good saying that competition will solve the problem, because without the new price on the label the shopper will not know why the price has increased and whether the shopkeeper is taking advantage of VAT.
  I hope that in considering their attitude to the amendment the Government

  1361
  will give serious consideration to the benefits it would bring to the people whose confidence has to be won by this policy on the prices side if there is to be any measure of co-operation, as the Government are supposed to want, with other aspects of their policy.
  With the new clause we are discussing Amendment No. 56, which would enable people who go into the shops to know to whom they can make their complaints.
  I do not take the view that this process is very easy for people. Theoretically, they should know the address of the Department of Trade and Industry, and they should know about the weights and measures officials, but in practice they do not. When people go into a shop and think that a price has increased unduly, they should at that moment be able to see to whom they should make their complaint.
  The Government have made it clear in the drafting of the Bill that they do not believe they can police price increases unless they have access to a mass of information, which they propose to extract from firms by law.
  Clause 12—which we debated in Committee and shall debate again with the Government amendment some time today or tomorrow—makes it clear that the Government regard the supply of accurate detailed up-to-date information as an essential ingredient for their own policing of price increases.
  That being so, how can the shoppers know anything at all unless they are given the basic information, "What did it cost before; what does it cost today?".
  Given that we have had three speeches only, but that they have represented the three parties, I hope the Minister will give serious consideration to the amendment, which I commend to the House.
  Mrs. Barbara Castle: Amendment No. 56 is so simple in purpose and administratively that I am confident the Government will accept it.
  Everybody knows that the operation of effective price controls can be difficult and complicated. To rely on the weights and measures inspectors is to pin hopes on already overworked men. In the British housewife the Government have to hand perhaps the most impassioned policeman of all when she goes into a
  1362
  shop, as she does today, and finds that mysteriously, inexplicably, and apparently in contradiction with the Government's policy, the price of an article has risen in a matter of days. The present mood of housewives when they go through this experience is one of bitter frustration, of which the Government would be well advised to take note.
  At this time, when there is supposed to be a freeze, prices are rising. A few days ago I had an opportunity to talk to a number of housewives in the shopping precinct in Lincoln. Every one of them had some example to give me of an article the price of which had increased in a matter of days in the major chain stores of the town. When I spoke to them, they just said, "But what can we do?" I replied, "Well, why don't you complain?" and they said, "Where?" Even Members of Parliament are sometimes at a loss to tell a person in a particular area just where he or she should complain.
  My experience in Lincoln inspired me to support, and add my name to, the amendment. Indeed, I suggested it to my hon. and right hon. Friends who are associated with it. I cannot imagine anything that would do more to inspire the housewife's confidence that she could do something about rising prices than this very simple proposition that I support today.
  Imagine the housewife going into Tesco's, Woolworths or Mothercare and finding, in contradiction to everything the Government may say, that within a matter of a week she is faced with a mysterious price increase. If in those premises there were a notice giving her a name, address and telephone number to which she could apply immediately with her complaint, she would at least feel that she could try to do something. What is more, I suggest to the Government that this is a very good way of making some manufacturers and retailers stop and think. At present they are getting away with unjustified increases, despite the freeze, because they know that they alone have the key to the complicated mystery of what is authorised and what is unauthorised, what the Government may have allowed because of raw material price increases, or what may be the complicated elements

  1363
  of tax deducted or tax added to a particular price. The manufacturers and retailers are the masters of the situation, because they are the masters of the mystery. Naturally they will abuse the situation when faced with a housewife who feels totally helpless and incapable of influencing what she is expected to accept.
  7.15 p.m.
  The Government must recognise that at present they can offer the country no simple price formula. There are qualifications here, and things allowed there and not allowed somewhere else. The housewife will feel that she can act only if she can at the very least get at somebody quickly with a demand that her complaint be investigated. That having been done, if the agency—whether it be a weights and measures inspector or someone else—does not at least produce an explanation to which the housewife is entitled she has something she can take up in a wider sphere—something about which she can write to the local newspapers or to her Member of Parliament.
  Members of Parliament are inundated at present with complaints about price changes that nobody can justify or understand, but by the time the complaints come to us it may be too late. The housewife may not have the invoice; she may have forgotten the exact day she made the purchase; she may have forgotten the exact pennies and halfpennies that were added to the previous price. But if she can act quickly and register a complaint, then something is on the record that everybody anxious to fight these unauthorised price increases can follow up.
  I hope that by this means we may see forged that kind of highly effective partnership between Press and Parliament that has helped to alleviate so many injustices; such as gave us the breakthrough, for instance, on the scandal of the thalidomide children. Give us this weapon to forge that partnership of Press and Parliament to fight the price exploiters and those who are evading the Government's policy.
  Nothing could be simpler than the proposition contained in Amendment No. 56. It does no more than authorise the Price Commission to insist on the prominent display of a notice. Who could
  1364
  possibly object to that except those who do not want an attack on the price scandals that we all know are taking place?
  I believe the credibility and good intentions of the Government are at stake in their reaction to Amendment No. 56. If they turn it down or refuse to include a similar provision in a different clause in the Bill, perhaps in a different form, then we shall be sure of what some of us suspect; that they do not really care about arming the housewife against those who are exploiting the Government's policy.
  I await the comments of the Front Bench with interest, and so do the housewives of Britain. If the amendment is not accepted they will know that the Government are not their champion.
  Mr. Norman Atkinson: I support the amendment and all that my hon. Friends have said about it. This is an opportunity to put right one or two misconceptions of hon. Gentlemen on the Conservative benches about Labour Party policy. The Prime Minister seems to be suffering most from delusions about what we are saying. At Question time today he said that he thought that the Labour Party's policy on prices was not a viable alternative. He did not see how the Labour movement could advocate free wage bargaining within a system of regulated prices. He thought that was not a viable proposition. The Prime Minister and his hon. Friends never go on to tell us why a particular proposition is not viable.
  In a debate of this kind we have to spell out the ideas that the Labour Party has been talking about for some time. I do not suggest that now is the moment to do that, but there are one or two aspects of the structure and method of price regulation that should be put right.
  If we are serious in advocating that the whole nation should participate in an attempt to regulate prices, we must equip shoppers with the necessary means of participation. The public are not equipped effectively to pursue the policies projected by hon. Gentlemen on the Conservative benches. It is meaningless to talk about a shoppers' guide unless the price is exhibited on the product. I hope that those who advocate a shoppers' guide will advocate also the exhibition on all goods of the retail price of the product.

  1365
  We have long advocated that people who have something to sell or who provide a service should display the price. With the present method of retailing, with all the supermarket techniques that are used, it is necessary for the price to be marked on the product not necessarily to equip the shopper with the information but to equip the staff who are selling the product with the information so that they can check out the purchasers quickly. The technique is now so sophisticated that retailers are dealing with an enormous throughput. When the price is stamped on all the articles the staff at the exits are quickly able to reckon up the total bill on a machine. Only in the smallest establishments is the price not stamped on each article.
  We have not far to go. If the Minister decides that maximum prices must be exhibited on all products, we are already nearly there. It is necessary to link that with a shoppers' guide or the exhibition on the premises of a list giving differences in prices over the period of price regulation to ensure that shoppers participate and make the policy effective.
  We advocate price regulation not only of essential foodstuffs but of a wide range of goods. Once a Labour Government is returned a method of price control will be introduced. I predict that we shall contest the next election on a policy of providing permanent, flexible price control not only of manufactured and primary foodstuffs but right across the board. Such a system will be devised in time for a future Labour Government. I regard this as essential if we are to pursue the policies that are already outlined for a future Labour Government.
  We are moving into a managerial capitalism completely different from anything we have known in the past. We have got rid of all the traditional means of regulating the economy. Employment is no longer relevant as a means of regulation. Tax is no longer relevant to the business of managing the economy. The cost of money, the money flow, the control of monetary policy and most of the fiscal instruments available to Governments of the past are no longer relevant. Therefore, a new means has to be found of managing the economy. With those old regulators no longer there, the argument is between the control of wages on the one hand and the control of prices
  1366
  on the other. It depends to which side of the House hon. Members belong whether they support capital or labour, and that is the argument which we are presenting, in the sense that I hope that all hon. Members on this side of the House, with the exception of hon. Members on that peculiar row—when they are there—
  Mr. Carter: The post-capitalist party.
  Mr. Pardoe: The hon. Member for Tottenham (Mr. Atkinson) is aware that not only members of the Liberal Party but also members of the two main parties are elsewhere today. There is no question of there being no party in this House that stands for both capital and labour. There is a party that stands for both. It is perfectly possible to believe in an equal partnership of capital and labour and not to take up a stance on one side or the other. The tragedy of these debates is that one party derives its income from one side and the other party derives its income from the other side.
  Mr. Atkinson: I am grateful for that intervention because it leads me to my next analysis. In my view it is a question of which side of the argument one supports whether one argues for price regulation or regulation of wages. Therefore, from a Labour Party point of view it is absolutely logical to advocate free wage bargaining within a system of price regulation.
  If we add that to this whole business of equipping housewives and shoppers generally with the necessary instruments to make this policy effective, then we have to argue closely the whole question of price regulation in relation to various authorities to whom a person should complain, and about permanent, flexible price regulation as a built-in feature of our policy.
  7.30 p.m.
  I can see an end completely to free competitive pricing and to the existing price mechanism. I do not think that that is very far away, anyway. I know many hon. Members opposite would agree that they, too, can see the end of the free price mechanism. But if we are talking about permanent price controls in this new form of capitalist society we would want, from the Labour Party point of view, either to

  1367
  have negative VAT or negative purchase tax. In other words, as well as the ability to put a tax upon products for sale we would want perhaps to offer a subsidy, that is, to offer a purchase tax in reverse. Therefore, we would have negative purchase tax and negative VAT as part of the equipment.
  Again one cannot present that argument in a sophisticated way in the absence of some understanding of how all this is conveyed to the participants, the housewives. We have to find the instruments and means whereby we can do this. In regard to flexible price regulation there are already, of necessity, a number of marketing boards which must be involved, and just as there are now marketing boards for certain basic food products, obviously a future Labour Government must increase the number of regulating authorities to whom people will no doubt wish to complain if there should be a variation from the guidelines set down by the central authority. Thus, even in engineering or manufacturing industry generally, there would be a need for participation, because the price regulating authority would be a different group. Therefore, there would be a need to exhibit some notice stating to whom any complaint should be addressed and who should be called on to investigate such infringement and whether retailer or manufacturer had strayed beyond the guideline.
  All this is part of something which I envisage as a means of permanent price regulation in this country, for no other reason than that I do not believe that modern Western capitalism is any longer capable of self-regulation. Those days have gone. It cannot have a means of protecting itself from inflationary trends because the very nature of the system itself produces an inflationary situation. Therefore, if we are to overcome and to regulate that situation, new methods must be devised.
  It is no accident that this trend is to be seen in capitalist society in Western Europe and in the Western world, in the United States and some of the South American societies, in Sweden and other Scandinavian countries. These are notable examples of this kind of trend which is developing at the moment throughout the EEC. All these countries have had
  1368
  at some time to have some kind of price regulation. If that is so, I should think there is overwhelming evidence in the capitalist world that that kind of society, an ex-entrepreneurial society, is no longer capable of preventing the kind of inflationary drift that is now taking place.
  Having once got rid of the traditional regulators and of all the controls of money supply, once having lost control of the price mechanism because of its monopolistic tendencies and so on—because all the kinds of change we can see taking place, incidentally, are contradictory to the traditional methods—we have to spell out very clearly what we mean when we talk about price regulation of this kind. But even more than that, even in this situation—which the Government believe to be a temporary situation, but obviously it is not—the Government themselves have to come forward with their own ideas of how they think such a system can be best policed and organised and how means of communication can be established between the point of sale and the authority laying down the guidelines, and what kinds of communications the Government require.
  Therefore, in exactly the same way in which my right hon. Friend the Member for Blackburn (Mrs. Castle) set out the argument, I believe there are very good reasons for the Government telling us how they themselves see the situation and how they hope to get maximum use out of a shoppers' guide, or whether it is just another gimmick from hon. Members opposite.
  7.36 p.m.
  Mr. Stanley Orme: I want briefly to support my right hon. Friend's amendment to which I am a signatory. I do not want to take issue with my hon. Friend in a detailed analysis of the price mechanism and how it might effectively be controlled because as Members of the Standing Committee will know I have some criticism of how this can operate within the market forces now before us. But if the Government are serious they can at least adopt this very simple Amendment No. 56 because it says only that there should be displayed in any shop or establishment information on where a complaint can be made.
  In the best-regulated circles in industry, as in a reputable hotel or public

  1369
  house, prices are displayed and customers are told that if they are not charged the correct price they can raise objection. The best manufacturers have some form of real consultation with customers in the sense that they tell customers what the prices are and that complaint can be made. This amendment takes that a stage further by providing in retail establishments information on exactly where a complaint can be made. I do not believe that this is any form of "snooping". It is giving the shopper the right to ascertain how prices have moved.
  Let us be under no illusion. When VAT comes in and taxes that now operate are ended, few will be able to understand how prices are to go up or down and whether they have been correctly charged. We know that the Government said in Standing Committee that they are to issue a shoppers' guide. The great difficulty here is that that is like telling women to shop around. Many of my constituents are working in a full-time job and have a family to look after and they cannot have the luxury of shopping around. They go into a shop and they may feel that something is not right when they find, as they probably do, that prices have increased over the previous week. If they knew immediately to whom they could complain, they could channel that complaint and something could be done about it.
  I feel, as I felt in listening to the earlier debate this afternoon on the consultative document, that this is a complete load of nonsense. It will not operate. It is highly complicated. It has no legal status, even when it becomes the code itself. Only when the Government make an order will it be able to roll back, and we know from experience how difficult it is. Therefore, why not give the right to the housewife not to telephone the Ministry of Agriculture, Fisheries and Food but to lodge a complaint knowing that it will be followed up and that some action will be taken?
  My right hon. Friend the Member for Bristol, South-East (Mr. Benn) described this as an extremely modest amendment. It does not try to close all the loopholes. However it states clearly to the dissatisfied shopper where a complaint can be made. It is as simple as that. We want to know from the Government why they will not accept it.
  Mr. Carter: I support the remarks of the hon. Member for Birmingham, Hands-worth (Mr. Sydney Chapman). I agree with all that he said about the need to ensure that the prices of a whole range of consumer durables and of certain other items are made clear to the purchaser in the transitional period once VAT is introduced. The hon. Gentleman's arguments were put forward by me and by other hon. Members in Committee and examples were given of how already, long before VAT is upon us, various retailers, manufacturers and distributors are conducting a pre-VAT campaign which is doing nothing to enlighten the public but instead is creating ignorance, which is an appalling state of affairs when one considers that the introduction of VAT will be the biggest tax change that we have experienced for many years.
  The Government listened to these arguments. They said that they were concerned and that they disapproved of this, that and the other. They said that they did not like what certain people were doing. At times they sounded quite annoyed. It was then that the Minister told us that the Government intended to issue instructions to industry, commerce and the retail trade, and finally we got a promise of a shoppers' guide.
  The Government's counter-inflationary package has been criticised by a number of hon. Members who have said that they regard the various aspects of the policy as window dressing. I believe that the Government's attempts here are another example of their window dressing. If they had any intention of ensuring that a massixe tax change of the kind that we have not seen in living memory was brought about with justice for the consumer, they would have started an educational campaign many months ago to inform the housewife of the precise effect that the introduction of VAT will have not only on her cost of living, but on the individual items that she would be buying.
  Apart from the examples given to the Minister in Committee, we see other illustrations on our television screens of the way that one group after another is "conning" the public already. My right hon. Friend the Member for Blackburn (Mrs. Castle) told the House how in Lincoln she heard of the efforts of Mothercare to ensure that when VAT

  1371
  is introduced it will make exorbitant profits. A few evenings ago I was watching television. A complete programme was devoted to the way in which Mothercare, as VAT comes in and presumably for a year or so afterwards, will make exorbitant profits at the expense of those who probably most of all in our community, with the exception of old-age pensioners, are least able to bear its exorbitant prices. I refer, of course, to those with young families. Viewers saw label after label ripped off packages exposing old prices which bore no relation to the supposed 10 per cent. rate, which may be 7½ per cent. and may even be 5 per cent. If it proves to be 5 per cent. I doubt very much whether Mother-care will ask its retailers to reduce their prices. It seems to me that the company has made up its mind to charge a certain price after the introduction of VAT whether the final rate is 10 per cent., 7½ per cent. or 5 per cent.
  I put one other point to the Minister on this subject of labelling. It concerns the free offer and the twopence and three-pence off offer. Supermarkets contain a range of items from television sets and electric cookers right through to a tube of toothpaste where customers are told that there is £10 or £5 off in the case of an electric cooker or twopence or threepence off in the case of a tube of toothpaste. If the Minister responds favourably and says that he will advise retailers to label their goods correctly with the pre- and post-VAT prices, I hope that he will also ask retailers to suspend all free and introductory offers for a period while VAT is being introduced, because I think that it will be impossible for a housewife looking at a label bearing the pre- and post-VAT prices and a twopence or threepence off offer to decide precisely what is the accurate price. The free and introductory offer is a major part of commercial practice and I should have thought from every point of view, especially that of the housewife, that for a period after the introduction of VAT the practice ought to be suspended. I hope on that score that we shall obtain a favourable response from the Minister.
  7.45 p.m.
  Mr. Patrick Jenkin: I assure the right hon. Member for Bristol, South-East (Mr.
  1372
  Benn) that I regard these as important amendments. In my remarks I shall treat them with the importance that they deserve.
  I agree very much with the right hon. Member for Blackburn (Mrs. Castle), who said that there was no simple price formula. We have had a variety of recipes offered us during the debate. The hon. Member for Cornwall, North (Mr. Pardoe) urged that we should have compulsory price posting, by which I understood him to mean lists of goods displayed in shops indicating their prices at the beginning of stage 2. My hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman), echoed by the right hon. Member for Bristol, South-East, urged that in some way there should be "before" and "after" prices on labels. Here I think that my hon. Friend was referring more to the VAT changeover than to the continuing stage 2. The right hon. Member for Blackburn and the hon. Member for Salford, West (Mr. Orme) laid emphasis on providing shoppers with information telling them where to address their complaints. I shall come back to that in a moment. The hon. Member for Tottenham (Mr. Atkinson) treated us to a dissertation on the economic structure that he hoped to see under some future Government. I mean no disrespect when I say that I hope that he will forgive me if I do not pursue that too far. However I take note of what he said in supporting the right hon. Member for Blackburn.
  I deal first with the main point made by the hon. Member for Cornwall, North in arguing for price posting. This is an amendment which has certain attractions. But I believe that they are superficial and do not survive a fairly close examination of what the implications would be.
  Since we introduced the standstill last November several suggestions have been made that price posting should be mandatory. The Government have given careful thought to this idea. We have particularly looked at experience in America, to which I shall come later. We have come to the conclusion that mandatory price posting would not serve the purpose as usefully as some hon. Members have supposed. We do not have any law requiring prices to be posted.

  1373
  Despite that, I think that the majority of shops now display prices. Where this is not done, it may be because it is not always practicable to do so. For example, displaying a list of current and base date prices would hardly be practicable for food retailers where the number of items is so large and where special offers are customary. I question whether it would be meaningful in such cases.
  Mr. Arthur Lewis: Food retailers already display prices.
  Mr. Jenkin: They display prices, but not the base date prices. The argument of the hon. Member for Cornwall, North was that there should be a starting point and that all the prices in force at that time should be permanently displayed so that shoppers may compare current prices, perhaps two, three or even six months ahead, with the price at the starting date.
  In the United States, where there were mandatory requirements for the price posting of significant items and for the keeping of records of base date prices, it was found that the benefits to the consumer were not so marked as the burdens that it imposed on the shops. Price posting was not successful in America—this is the opinion of a number of observers there—because it did not fit in with the control based on gross percentage margins which was the same there as we are proposing for the distribution trade here. It confused and tended to irritate consumers because it appeared to provide a means whereby the housewife could compare current prices with those at an earlier stage while not providing real information to enable her to check whether the increases shown—increasingly as we move away from the base date there are bound to be increases as allowable costs are passed through—were justified.
  Price posting might have some purpose and might be useful if we had a system of price control based on increases within a norm, but we have rejected such a system because, as I think the right hon. Member for Bristol, South-East might agree, a norm tends to become a minimum. Therefore, it is not as effective a system of price control as that which we are seeking to introduce—and have outlined in the Green Paper—for the distribution trade based on gross percentage margins.
  Mr. Benn: The purpose of posting base and current prices is not to permit the shopper to reproduce in her own mind the Government's control of profit margins; it is to allow her to exercise her judgment in determining whether to buy a product that has increased in price, to go to another shop and bring some competition to bear, or to complain. The Chief Secretary should not confuse the arguments that have been put forward. We are not saying that the housewife could monitor whether the increase was legitimate, but that she would know what was going on. If the shopper does not know what is going on, the Government are denying themselves a powerful monitoring operation in support of their policy.
  Mr. Jenkin: I take the right hon. Gentleman's point. But that was not how the argument was put by the hon. Member for Cornwall, North. It does not answer the point that I made that the American experience showed that this system tended to confuse and irritate the shopper. Whatever the right hon. Gentleman may say about the purpose of the exercise being to provide her with information, in fact it tended to suggest that this was somehow a legitimation of the price increases which were taking place. Her complaint was that she did not know whether the increases shown by the difference between the base and the current price were legitimate.
  One report which I have seen states,
  "The Price Commission took considerable pains to try to devise a visibly effective method of control of retail prices and to enlist the consumer as a 'watchdog'. The results, however, cannot be said to have been convincing to the average shopper, although the controls may none the less have had the effect on prices for which they were designed."
  That is the overall control.
  "Retailers are supposed to sell at the 'base' prices (usually the ceiling price allowed for a given item during the freeze) except that (a) if the price paid by the retailer has risen in accordance with Price Commission rules, the retailer may pass through the increase to the consumer, provided that (b) the overall margin of pre-income tax profits as a percentage of sales in the store, or chain of stores, does not exceed the base period margin.
  The fact that allowable costs can be passed through makes the list of 'base' prices obligatorily posted in the store virtually useless to all but the most analytical customer"—
  I think that this is the answer to the right hon. Gentleman's point—
  "and the programme is controlled only by the retailer's honesty and the watchdog

  1375
  operations of the AFLO-CIO and the Internal Revenue Service."
  In this country that function will be performed by officers of the Price Commission and, during the VAT changeover period, by the weights and measures inspectors.
  Therefore, American experience is not encouraging. It appeared to them, as it appeared to many here, to be a good idea when started, but experience from a number of reports that we have seen and from some of the Press comment has shown that this system does not have the advantages that were claimed for it. Therefore, I could not advise the House to accept the new clause.
  Mr. Atkinson: May I take the hon. Gentleman back to the beginning of that argument? He said that the Government had rejected the idea of using norms because they tended to become minima. Why is it that the Green Paper spells out a 50 per cent. norm for retailers passing on the cost of wage increases? The technique of using the norm is set out there in some detail. Why the two?
  Mr. Jenkin: I do not wish to be led too far away. The hon. Gentleman is referring to what has become known as the productivity offset. This is a restriction of the right of the retailer to pass on what would otherwise be allowable costs and assumes that part of that will be absorbed by an increase in productivity. It is aimed at industry and commerce generally, not merely at the distribution trades.
  Mr. Atkinson Mr. Atkinson rose—
  Mr. Jenkin: I must get on. This is not within the terms of the new clause or the amendment that we are discussing.
  Mr. Atkinson: I am sure that the hon. Gentleman—
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. We cannot have two hon. Members on their feet at the same time.
  Mr. Jenkin: I do not wish—
  Mr. Atkinson: On a point of order, Mr. Deputy Speaker. If there are not two hon. Members on their feet at the same time, how does one indicate to the other that he wants to make an intervention in the debate?
  Mr. Deputy Speaker: That is a good point, but the hon. Gentleman knows what I mean. We cannot have two hon. Members persistently on their feet at the same time.
  Mr. Jenkin: I have no desire, as it were, to choke the hon. Gentleman off, but he is moving wider than the new clause and the amendment and is getting involved in the 50 per cent. productivity offset. We are primarily concerned with the provision of information to the shopper, and she will not be concerned with that.
  Mr. Atkinson: This is an important point. If the Minister is talking about norms becoming minima, I accept that and will refer to it when we get on to the wages question later. But his comment about the 50 per cent. is that it is likely to become the minimum.
  8.0 p.m.
  Mr. Jenkin: With respect, I think that the hon. Gentleman has misunderstood the 50 per cent. It is a productivity offset. It is the limitation of a firm's right to pass on a cost increase the existence of which cannot be denied.
  My hon. Friend the Member for Birmingham, Handsworth suggested the use of double pricing on labels during the changeover from purchase tax and SET to VAT. He will perhaps have read the report of our Committee proceedings, when I explained that it would be open to customers who thought that a trader had not repriced his goods properly to take the matter up with the local weights and measures inspector. It will then be for the inspector to carry out the necessary investigation. Provision has therefore been made in the Bill for this critical and important changeover which the hon. Member for Birmingham, Northfield said is perhaps the biggest tax change for many decades in this country, to enable consumer complaints arising from the changeover to be handled and investigated thoroughly.
  My hon. Friend may then ask how the customer is to have any idea whether the changeover has been fairly done. Here, I must return to the major campaign of information which it is the Government's intention to launch as soon as the details are settled—Press and television advertisements, and the shoppers'

  1377
  booklet which will be available to guide the shopper on a wide range of consumer products and to give her some idea of what she may expect.
  On the basis of the example of the slippers which the right hon. Lady literally produced in the House last Thursday, it would be difficult for a shopper who became aware of those facts not to become suspicious and to have enough information to take the matter up with the weights and measures inspector. I did not see the programme that the hon. Member for Birmingham, Northfield described, but if it were anything like his description it cannot have done the firm concerned much good.
  In the Government's information campaign, we shall be providing shoppers with the material on which they can judge whether the change is being operated fairly. The weights and measures inspectors will be carrying out their own policing. We have made certain that the price standstill will go on until 28th April, so that, during that period, the only price changes which should take place are those attributable to the change in tax. So far as possible, it is the intention of the DTI and the Ministry of Agriculture to keep other price changes to an absolute minimum.
  The right hon. Member for Bristol, South-East also pursued the idea of two prices on the label, but he pursued it through into the whole of phase 2. That is impracticable. It would be a much more cumbersome method even than compulsory price posting, which would impose a massive burden on retailers and which, as I have indicated, judging from the American experience, would bring little real help to the consumer. So that is not the most helpful way in which to deal with what is undoubtedly a difficult problem.
  One can adopt a much more sympathetic approach towards Amendment No. 56. While agreeing with the objectives, however, one does not necessarily agree that this provision is needed in the Bill. After the VAT changeover period, during which the weights and measures inspectors will be active and their existence known, we shall be entering the second stage of the operations on the prices front, the beginning of stage 2 for prices. Administration of the controls during this
  1378
  period will be the responsibility of the Price Commission, which will then be in operation. It will have a staff of local officers, based on the centres in which the DTI already has regional offices. It is to these centres and these local officers that customers will be invited to direct their complaints.
  The important thing is that they should know about this. The Government envisage that the Price Commission would make, as a major part of its publicity activities, use of a wide variety of media to make shoppers aware of the existence and the location of these regional price officers.
  The right hon. Lady the Member for Blackburn asked us to go one stage further and give the power to the Price Commission to order shops to display this information. This would mean taking a sldegehammer to crack a nut. It would be a very swingeing power indeed to impose this duty on presumably all retailers, or all those above a certain size, in an area, to achieve the same objective which can be achieved through the media—the local Press, posters and so on—
  Mrs. Castle Mrs. Castle indicated dissent.
  Mr. Jenkin: The right hon. Lady disagrees with me. I am trying to express sympathy with her objectives, while casting some doubt on the means she suggests.
  Mrs. Castle: My objective is very simple. It is to specify that there shall be a notice in the retail establishment. Has the Chief Secretary sympathy with that objective or not? If he has, it is no answer to say that the Price Commission, through its local offices, can stick posters somewhere else. He must take it from me that it is at this point that the reaction comes for a woman shopper. It is in the retail establishment, at the point at which she makes her purchase, that she becomes indignant and wants to see the address to which she can express her indignation. This should happen in the retail establishment. It is no good having sympathy and then saying that one can do nothing about it.
  Mr. Jenkin: We must agree to differ on this. I can see the force of what the right hon. Lady says and the attractions for the case that she is making of

  1379
  imagining that, in every shop, a notice giving this address should appear behind the counter. But this is taking a substantial power to bring to the attention of shoppers that which will be brought to their attention by other means—
  Mrs. Castle: It would only be a power.
  Mr. Jenkin: It would be a power to insist on the display in every shop—not just licensed premises, which already have to display certain notices—the name and address to which complaints can be sent.
  Mrs. Castle: The hon. Gentleman is implying that it would be a substantial new power to say that, for Government purposes, notices must be displayed in every shop. Does he not know that, under the Shops Acts, notices are displayed giving the entitlement of employees to certain time off? What is so different about having a notice to give the rights of the customers?
  Mr. Jenkin: I cannot take this any further. I appreciate that the right hon. Lady feels strongly, but I believe that this would be an excessive power, given the publicity campaign which will be deployed to make these things known. These arrangements should prove adequate for stage 2. Should there be any need to modify them in the light of
  experience, the Government will do so, and Schedule 4 provides sufficient flexibility in this respect. In the light of what I have said, I hope that the right hon. Lady will not seek a Division on her amendment.
  The hon. Member for Birmingham, Northfield described the price control powers as sheer window dressing. I do not believe that he is reflecting the view throughout the national Press this morning when they were confronted with the powers which we propose to write into the code and which have been disclosed in the consultative document.
  The general weight of opinion on the matter has seemed to express surprise that the powers are as severe as they are and there has been some recognition that what the Government propose goes a long way to meeting the objections of trade unions and others who have been complaining that the prices side of the policy would lack teeth. The prices side will be every bit as effective as any of the rest of the policy and the powers that the Bill confers upon the agencies will see that this is so.
  Question put, That the clause be read. a Second time:—
  The House divided: Ayes 221, Noes 283.

  Division No. 69.]

  AYES

  [8.11 p.m.

  Abse, Leo

  Concannon, J. D.

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

  Allaun, Frank (Salford, E.)

  Corbet, Mrs. Freda

  Fitch, Alan (Wigan)

  Archer, Peter (Rowley Regis)

  Cox, Thomas (Wandsworth, C.)

  Fletcher, Raymond (Ilkeston)

  Ashley, Jack

  Crawshaw, Richard

  Fletcher, Ted (Darlington)

  Atkinson, Norman

  Cronin, John

  Ford, Ben

  Barnes, Michael

  Crosland, Rt. Hn. Anthony

  Forrester, John

  Barnett, Guy (Greenwich)

  Crossman, Rt. Hn. Richard

  Fraser, John (Norwood)

  Barnett, Joel (Heywood and Royton)

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

  Freeson, Reginald

  Baxter, William

  Darling, Rt. Hn. George

  Galpern, Sir Myer

  Beaney, Alan

  Davidson, Arthur

  Gilbert, Dr. John

  Benn, Rt. Hn. Anthony Wedgwood

  Davies, Denzil (Llanelly)

  Ginsburg, David (Dewsbury)

  Bidwell, Sydney

  Davies, Ifor (Gower)

  Golding, John

  Blenkinsop, Arthur

  Davis, Clinton (Hackney, C.)

  Grant, John D. (Islington, E.)

  Boardman, H. (Leigh)

  Davis, Terry (Bromsgrove)

  Griffiths, Eddie (Brightside)

  Booth, Albert

  Deakins, Eric

  Griffiths, Will (Exchange)

  Bottomley, Rt. Hn. Arthur

  de Freilas, Rt. Hn. Sir Geoffrey

  Hamilton, James (Bothwell)

  Boyden, James (Bishop Auckland)

  Delargy, Hugh

  Hamilton, William (File, W.)

  Bradley, Tom

  Dell, Rt. Hn. Edmund

  Hannan, William (G'gow, Maryhill)

  Broughton, Sir Alfred

  Dempsey, James

  Hardy, Peter

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

  Douglas, Dick (Stirlingshire, E.)

  Harrison, Walter (Wakefield)

  Buchan, Norman

  Douglas-Mann, Bruce

  Hart, Rt. Hn. Judith

  Butler, Mrs. Joyce (Wood Green)

  Driberg, Tom

  Hattersley, Roy

  Callaghan, Rt. Hn. James

  Duffy, A. E. P.

  Heffer, Eric S.

  Cant, R. B.

  Dunn, James A.

  Houghton, Rt. Hn. Douglas

  Carmichael, Neil

  Eadie, Alex

  Howell, Denis (Small Heath)

  Carter, Ray (Birmingh'm, Northfield)

  Edelman, Maurice

  Huckfield, Leslie

  Carter-Jones, Lewis (Eccles)

  Edwards, Robert (Bilston)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Castle, Rt. Hn. Barbara

  Edwards, William (Merioneth)

  Hughes, Robert (Aberdeen, N.)

  Clark, David (Colne Valley)

  Ellis, Tom

  Hughes, Roy (Newport)

  Cocks, Michael (Bristol, S.)

  English, Michael

  Hunter, Adam

  Cohen, Stanley

  Evans, Fred

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

  Coleman, Donald

  Faulds, Andrew

  Janner, Greville

  Jay, Rt. Hn. Douglas

  Mikardo, Ian

  Short, Mrs. Renée (W'hampton, N.E.)

  Jeger, Mrs. Lena

  Millan, Bruce

  Silkin, Rt. Hn. John (Deptford)

  Jenkins, Hugh (Putney)

  Miller, Dr. M. S.

  Silkin, Hn. S. C. (Dulwich)

  Jenkins, Rt. Hn. Roy (Stechford)

  Milne, Edward

  Sillars, James

  John, Brynmor

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

  Skinner, Dennis

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

  Molloy, William

  Small, William

  Johnson, Walter (Derby, S.)

  Morris, Charles R. (Openshaw)

  Smith, John (Lanarkshire, N.)

  Jones, Barry (Flint, E.)

  Morris, Rt. Hn. John (Aberavon)

  Spearing, Nigel

  Jones, Dan (Burnley)

  Mulley, Rt. Hn. Frederick

  Spriggs, Leslie

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

  Murray, Ronald King

  Stallard, A. W.

  Jones, Gwynoro (Carmarthen)

  Oakes, Gordon

  Stewart, Rt. Hn. Michael (Fulham)

  Jones, T. Alec (Rhondda, w.)

  O'Halloran, Michael

  Stoddart, David (Swindon)

  Judd, Frank

  O'Malley, Brian

  Strang, Gavin

  Kaufman, Gerald

  Oram, Bert

  Strauss, Rt. Hn. G. R.

  Kelley, Richard

  Orbach, Maurice

  Summerskill, Hn. Dr. Shirley

  Kinnock, Neil

  Orme, Stanley

  Swain, Thomas

  Lambie, David

  Owen, Dr. David (Plymouth, Sutton)

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

  Lamborn, Harry

  Padley, Walter

  Thomas, Jeffrey (Abertillery)

  Lawson, George

  Palmer, Arthur

  Thorpe, Rt. Hn. Jeremy

  Lee, Rt. Hn. Frederick

  Parker, John (Dagenham)

  Tomney, Frank

  Lestor, Miss Joan

  Parry, Robert (Liverpool, Exchange)

  Torney, Tom

  Lewis, Arthur (W. Ham, N.)

  Pavitt, Laurie

  Tuck, Raphael

  Lewis, Ron (Carlisle)

  Peart, Rt. Hn. Fred

  Varley, Eric G.

  Lipton, Marcus

  Pendry, Tom

  Wainwright, Edwin

  Lomas, Kenneth

  Perry, Ernest G.

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

  Lyon, Alexander W. (York)

  Prentice, Rt. Hn. Reg.

  Walker, Harold (Doncaster)

  Lyons, Edward (Bradford, E.)

  Prescott, John

  Wallace, George

  Mabon, Dr. J. Dickson

  Probert, Arthur

  Weitzman, David

  McBride, Neil

  Rees, Merlyn (Leeds, S.)

  Wellbeloved, James

  McCartney, Hugh

  Rhodes, Geoffrey

  Wells, William (Walsall, N.)

  McGuire, Michael

  Richard, Ivor

  Whitehead, Phillip

  Mackenzie, Gregor

  Roberts, Albert (Normanton)

  Whitlock, William

  Mackie, John

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Willey, Rt. Hn. Frederick

  McNamara, J. Kevin

  Robertson, John (Paisley)

  Williams, Alan (Swansea, W.)

  Mahon, Simon (Bootle)

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

  Williams, Mrs. Shirley (Hitchin)

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

  Rodgers, William (Stockton-on-Tees)

  Williams, W. T. (Warrington)

  Marks, Kenneth

  Roper, John

  Wilson, Alexander (Hamilton)

  Marquand, David

  Rose, Paul B.

  Wilson, William (Coventry, S.)

  Marshall, Dr. Edmund

  Ross, Rt. Hn. William (Kilmarnock)

  Mason, Rt. Hn. Roy

  Rowlands, Ted

  TELLERS FOR THE AYES:

  Mayhew, Christopher

  Sandelson, Neville

  Meacher, Michael

  Sheldon, Robert (Ashton-under-Lyne)

  Mr. John Pardoe and

  Mendelson, John

  Shore, Rt. Hn. Peter (Stepney)

  Mr. David Steel.

  NOES

  Adley, Robert

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

  Fidler, Michael

  Alison, Michael (Barkston Ash)

  Carlisle, Mark

  Finsberg, Geoffrey (Hampstead)

  Allason, James (Hemel Hempstead)

  Carr, Rt. Hn. Robert

  Fisher, Nigel (Surbiton)

  Amery, Rt. Hn. Julian

  Chapman, Sydney

  Fletcher-Cooke, Charles

  Archer, Jeffrey (Louth)

  Chichester-Clark, R.

  Fookes, Miss Janet

  Astor, John

  Churchill, W. S.

  Fortescue, Tim

  Atkins, Humphrey

  Clark, William (Surrey, E.)

  Foster, Sir John

  Awdry, Daniel

  Clarke, Kenneth (Rushcliffe)

  Fowler, Norman

  Baker, Kenneth (St. Marylebone)

  Clegg, Walter

  Fox, Marcus

  Baker, W. H. K. (Banff)

  Cockeram, Eric

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

  Balniel, Rt. Hn. Lord

  Cooke, Robert

  Fry, Peter

  Batsford, Brian

  Coombs, Derek

  Galbraith, Hn. T. G. D.

  Beamish, Col. Sir Tufton

  Cooper, A. E.

  Gardner, Edward

  Bell, Ronald

  Corfield, Rt. Hn. Sir Frederick

  Gibson-Watt, David

  Bennett, Sir Frederic (Torquay)

  Cormack, Patrick

  Gilmour, Ian (Norfolk, C.)

  Bennett, Dr. Reginald (Gosport)

  Costain, A. P.

  Gilmour, Sir John (Fife, E.)

  Benyon, W.

  Critchley, Julian

  Glyn, Dr. Alan

  Berry, Hn. Anthony

  Crouch, David

  Godber, Rt. Hn. J. B.

  Biffen, John

  Crowder, F. P.

  Goodhart, Philip

  Biggs-Davison, John

  Davies, Rt. Hn. John (Knutsford)

  Goodhew, Victor

  Blaker, Peter

  d'Avigdor-Goldsmid, Sir Henry

  Gorst, John

  Boardman, Tom (Leicester, S.W.)

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

  Gower, Raymond

  Body, Richard

  Dean, Paul

  Gray, Hamish

  Boscawen, Hn. Robert

  Deedes, Rt. Hn. W. F.

  Green, Alan

  Bossom, Sir Clive

  Digby, Simon Wingfield

  Grieve, Percy

  Bowden, Andrew

  Dixon, Piers

  Griffiths, Eldon (Bury St. Edmunds)

  Braine, Sir Bernard

  Dodds-Parker, Sir Douglas

  Grylls, Michael

  Bray, Ronald

  Drayson, G. B.

  Gummer, J. Selwyn

  Brewis, John

  du Cann, Rt. Hn. Edward

  Gurden, Harold

  Brinton, Sir Tatton

  Dykes, Hugh

  Hall, Miss Joan (Keighley)

  Brockiebank-Fowler, Christopher

  Eden, Rt. Hn. Sir John

  Hall, John (Wycombe)

  Brown, Sir Edward (Bath)

  Edwards, Robert (Bilston)

  Hall-Davis, A. G. F.

  Bruce-Gardyne, J.

  Elliot, Capt. Walter (Carshalton)

  Hamilton, Michael (Salisbury)

  Bryan, Sir Paul

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

  Hannam, John (Exeter)

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

  Emery, Peter

  Harrison, Brian (Maldon)

  Buck, Antony

  Eyre, Reginald

  Harrison, Col. Sir Harwood (Eye)

  Bullus, Sir Eric

  Farr, John

  Haselhurst, Alan

  Burden, F. A.

  Fenner, Mrs. Peggy

  Hastings, Stephen

  1382

  1383

  Havers, Sir Michael

  Mawby, Ray

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

  Hayhoe, Barney

  Maxwell-Hyslop, R. J.

  Shelton, William (Clapham)

  Heseltine, Michael

  Miscampbell, Norman

  Simeons, Charles

  Hicks, Robert

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

  Sinclair, Sir George

  Hiley, Joseph

  Mitchell, David (Basingstoke)

  Skeet, T. H. H.

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

  Moate, Roger

  Soref, Harold

  Hill, S. James A.(Southampton, Test)

  Molyneaux, James

  Speed, Keith

  Holland, Philip

  Money, Ernie

  Spence, John

  Holt, Miss Mary

  Monks, Mrs. Connie

  Sproat, Iain

  Hordern, Peter

  Montgomery, Fergus

  Stainton, Keith

  Hornby, Richard

  More, Jasper

  Stanbrook, Ivor

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Morgan-Giles, Rear-Adm.

  Stewart-Smith, Geoffrey (Belper)

  Hunt, John

  Morrison, Charles

  Stodart, Anthony (Edinburgh, W.)

  Hutchison, Michael Clark

  Mudd, David

  Stoddart-Scott, Col. Sir M

  Iremonger, T. L.

  Nabarro, Sir Gerald

  Stokes, John

  Irvine, Bryant Godman (Rye)

  Neave, Airey

  Stuttaford, Dr. Tom

  James, David

  Nicholls, Sir Harmar

  Sutcliffe, John

  Jenkin, Patrick (Woodford)

  Noble, Rt. Hn. Michael

  Tapsell, Peter

  Jessel, Toby

  Normanton, Tom

  Taylor, Sir Charles (Eastbourne)

  Johnson Smith, G. (E. Grinstead)

  Nott, John

  Taylor, Frank (Moss Side)

  Jones, Arthur (Northants, S.)

  Onslow, Cranley

  Taylor, Robert (Croydon, N.W.)

  Jopling, Michael

  Oppenheim, Mrs. Sally

  Tebbit, Norman

  Joseph, Rt. Hn. Sir Keith

  Orr, Capt. L. P. S.

  Temple, John M.

  Kaberry, Sir Donald

  Osborn, John

  Thatcher, Rt. Hn. Mrs. Margaret

  Kellett-Bowman, Mrs. Elaine

  Owen, Idris (Stockport, N.)

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

  Kilfedder, James

  Page, Rt. Hn. Graham (Crosby)

  Thompson, Sir Richard (Croydon, S.)

  Kimball, Marcus

  Parkinson, Cecil

  Tilney, John

  King, Tom (Bridgwater)

  Peel, Sir John

  Trafford, Dr. Anthony

  Kinsey, J. R.

  Percival, Ian

  Trew, Peter

  Kirk, Peter

  Peyton, Rt. Hn. John

  Tugendhat, Christopher

  Kitson, Timothy

  Pink, R. Bonner

  Turton, Rt. Hn. Sir Robin

  Knight, Mrs. Jill

  Pounder, Rafton

  van Straubenzee, W. R.

  Knox, David

  Powell, Rt. Hn. J. Enoch

  Vaughan, Dr. Gerard

  Lambton, Lord

  Price, David (Eastleigh)

  Vickers, Dame Joan

  Lamont, Norman

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

  Waddington, David

  Lane, David

  Proudfoot, Wilfred

  Walder, David (Clitheroe)

  Langford-Holt, Sir John

  Pym, Rt. Hn. Francis

  Walker, Rt. Hn. Peter (Worcester)

  Le Marchant, Spencer

  Raison, Timothy

  Walker-Smith, Rt. Hn. Sir Derek

  Lewis, Kenneth (Rutland)

  Ramsden, Rt. Hn. James

  Wall, Patrick

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

  Rawlinson, Rt. Hn. Sir Peter

  Walters, Dennis

  Longden, Sir Gilbert

  Redmond, Robert

  Ward, Dame Irene

  Loveridge, John

  Reed, Laurance (Bolton, E.)

  Warren, Kenneth

  Luce, R. N.

  Rees, Peter (Dover)

  Weatherill, Bernard

  McAdden, Sir Stephen

  Rees-Davies, W. R.

  White, Roger (Gravesend)

  MacArthur, Ian

  Renton, Rt. Hn. Sir David

  Wiggin, Jerry

  McCrindle, R. A.

  Rhys Williams, Sir Brandon

  Wilkinson, John

  McLaren, Martin

  Ridley, Hn. Nicholas

  Winterton, Nicholas

  Maclean, Sir Fitzroy

  Ridsdale, Julian

  Wolrige-Gordon, Patrick

  McMaster, Stanley

  Rippon, Rt. Hn. Geoffrey

  Wood, Rt. Hn. Richard

  Macmillan.Rt.Hn. Maurice (Farnham)

  Roberts, Michael (Cardiff, N.)

  Woodnutt, Mark

  McNair-Wilson, Michael

  Roberts, Wyn (Conway)

  Worsley, Marcus

  McNair-Wilson, Patrick (New Forest)

  Rodgers, Sir John (Sevenoaks)

  Wylie, Rt. Hn. N. R.

  Maddan, Martin

  Rossi, Hugh (Hornsey)

  Younger, Hn. George

  Madel, David

  Rost, Peter

  Maginnis, John E.

  Russell, Sir Ronald

  Marples, Rt. Hn. Ernest

  St. John-Stevas, Norman

  TELLERS FOR THE NOES:

  Mather, Carol

  Scott, Nicholas

  Mr. Paul Hawkins and

  Maude, Angus

  Scott-Hopkins, James

  Mr. Oscar Murton.

  Question accordingly negatived.

Clause 1

  ESTABLISHMENT OF TWO AGENCIES: THE PRICE COMMISSION AND THE PAY BOARD
  Mr. Prentice: I beg to move Amendment No. 1, in page 1, line 8, after 'Pay' insert 'Advisory'.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): With this Amendment it will be convenient to discuss the following Amendment No. 2, in Clause 2, page 2, line 29, leave out 'pay' and insert
  'tendering advice on levels of all types of remuneration'.
  Amendment No. 6, in page 5, line 26, leave out Clause 7.
  Amendment No. 7, in Clause 7, page 5, line 32, at end insert
  'unless the remuneration in question has been identified as a case for special treatment by an independent Court of Enquiry appointed by the Minister'.
  Mr. Prentice: All the amendments in various ways seek to modify the Government's pay policy. By way of introduction I put it to the House that the Government's attitude on the new clauses proves once more how weak their attitude is towards the whole question of price control. Meanwhile, events outside

  1385
  the House today have proved the widespread bitterness and discontent that exists in the country at the moment about the application of the Government's pay policy. The publication yesterday of the code confirms the basic criticism that has been made from the Opposition benches on so many occasions that we are dealing with a policy which is fundamentally unbalanced and unfair, which is seen to be unfair, and, therefore, which is unworkable in the long run or in the medium run.
  In moving the amendment I do not seek to open up afresh a debate on the whole policy, but I think that the amendments give the House an opportunity to put to the Government the simple point that they must be more flexible. Even by their own criteria they need to be more flexible in the way that they operate their pay policy in the coming months. If we consider the matter from the point of view of a Government trying to do this exercise in a freeze period, it can be said to be necessary to be adamant and to make no exceptions. In a freeze period it may be necessary to say, "We cannot allow exceptions. We know that the policy is unfair, but it has to be unfair. It is only on a rigid basis that a freeze can be maintained." However, once the country moves beyond the end of a freeze period, I put it to the House—and I hope that I carry the whole House with me—that a new situation arises in which there has to be an element of discrimination and an element of choice between the merits of different claims.
  There are problems which will not go away. They will not be solved by sending letters of admonishment in pay packets to civil servants, or by the Secretary of State for Northern Ireland making lurid speeches during the weekend, or whatever other secret weapons Ministers may have up their sleeves. Indeed, to a limited extent the Government have acknowledged in the code that there must be a greater degree of discrimination in phase 2 than in phase 1. Paragragh 122 of the code contains the statement, which I welcome, that on the due date, there will be full implementation of settlements reached before 6th November 1972.
  That point was urged upon the Government by the Opposition in Committee. I am glad that the Government have
  1386
  conceded the logic of what was said to them. But what does it mean? It means that where there was a written agreement—as, for example, in the building industry—for two stages of a pay settlement, the second stage can take effect.
  Many other cases about which the country is arguing today are almost the same as that, in principle. For example, there is the argument about the London teachers' allowance. It concerns the payment of an allowance which was regarded in April 1972 as part of the teachers' award. Its implementation was postponed for a few months. It would have been agreed by November if Ministers had not deliberately held up negotiations about detail. The London teachers can say that in principle they are in the same position as those who are covered by paragraph 122.
  The hospital workers' case cannot be formalised in quite the same way, but it is similar in principle. Hospital workers have traditionally been linked with local government workers. Both are low-paid workers, and they are linked to each other. Both perform essential community services which in the past we have never rewarded properly. Hospital workers have been forced to accept this situation, together with local government workers. They have a grievance which goes very deep. That fact should be recognised by hon. Members on both sides of the House.
  The civil servants have a similar case, the principle of which is set out in the Priestley Report. It has been accepted by successive Governments that Civil Service pay should be decided on the principle of comparability with people doing similar work outside. Because of the way in which that formula has worked, civil servants can never be the pace-makers, in terms of inflation. If this Government, or any Government, succeed in slowing down the rate at which people's incomes are growing, there will be a consequent slowing down within the Civil Service. It is very unfair to interpose the policy at the point when the Civil Service is due to catch up with rises that other people have already had.
  I underline the point that has been made in previous debates, that if the Government persist in their attitude they

  1387
  are in danger of doing permanent damage to the system of mutual trust, co-operation and joint consultation within the Civil Service which has existed under the Whitley system for 50 years. Over the years many people of good will on both the official and the staff side have contributed to that system. It is an area in which greater flexibility is needed from the Government.
  I now refer to another set of cases in which there has been an exceptional improvement in productivity. I shall argue the point entirely in counter-inflationary terms. Surely the message that has been accepted by all of us over the years is that productivity agreements in a factory or a plant—sometimes in a formal sense and sometimes by the co-operation of both sides—provide the way by which people can achieve higher real earnings without passing them on in the form of higher prices.
  Is not that a doctrine which we have alt accepted? Have not we all stood on productivity platforms, speaking of productivity weeks and productivity years, and so on, advocating the simple point that this is a way in which people can achieve higher real earnings without passive them on in the form of higher prices? Better still, there might be an increase in productivity, part of which could be nassed on in the form of lower prices. But part of such an agreement was always understood to he that the workers should agree to the extra productivity methods and, perhaps, to some upheaval in their working conditions—perhaps they had to agree to redundancies among their workmates—hut that they would share to some recognisable extent in the results of the productivity gains.
  The effect of the freeze period plus the effect of the phase 2 period—there is a total period, perhaps, of a year in which there are to he no gains for productivity—may do permanent damage to productivity bargaining and to the willingness of people to accept a degree of inconvenience and sacrifice in order to achieve greater productivity.
  8.30 p.m.
  This makes it very difficult for the present Government or any other Government to fight inflation, because part of an intelligent counter-inflation
  1388
  policy in an industrial society such as ours must be the encouragement of greater productivity by one means or another. Therefore, to stop productivity deals from having any effect, or to stop any gains flowing from new productivity arrangements, may just be acceptable in terms of a freeze situation, but it is not acceptable in terms of the period which follows a freeze.
  This analysis applies to the current miners' claim, and I believe that it applies to the current claim of the Ford workers. Above all, it applies to the current dispute in the gas industry.
  In passing, I make one further appeal to the Secretary of State for Employment to use his good offices in some way to try to bring to a close this unhappy dispute in the gas industry. What we have witnessed so far in the industry has been an amazing demonstration of moderation. People and newspapers have talked about a gas strike. In fact, there has not been a gas strike. There has been a strike by a minority of the workers in the industry and an overtime ban by the others, but gas supplies have been maintained to most consumers. But as one week succeeds another the action will be stepped up. I am not now pronouncing on whether or not it ought to be stepped up, I am simply saying that that is what is happening and what will happen.
  What is so terrible in this situation is that in so far as the Secretary of State for Employment is allowed by his colleagues to exercise his rôle as Secretary of State, he is allowed to act too little and too late. Last Friday week the right hon. Gentleman said that it would be possible for the board, or for a nucleus of the board, to consider this case at an early date. If he had made that statement before the industrial action began we might not have had the industrial action. But he made it when it was already too late to be acceptable.
  I urge the right hon. Gentleman once more to consider a court of inquiry along the lines suggested by Sir Henry Jones, a Royal Commission formula as suggested by my right hon. Friend the Leader of the Opposition or a similar formula which would enable the workers to recognise that they have a real chance to state their case before a tribunal which would consider its merits.

  1389
  Finally, there has been much talk in recent weeks about the possibility of a major industrial confrontation arising from this policy. I have never believed that it would happen, and current evidence is that it will not. But I fear that from this policy will flow something more damaging to this country than a series of major strikes. I fear that we shall see the collapse of co-operative arrangements that have been arrived at patiently over the years and have been of great benefit to all members of the community. I fear that we shall see damage done to the Whitley system for civil servants, an unwillingness to enter into productivity agreements and greater sourness in industrial relations. This will be bad for industrial relations and, among other things, fatal to any policy for countering inflation.
  Mr. Orme: As we proceed in these debates the daily events thrown up by various industrial actions become the meat and drink of work on this legislation. What is happening is that because of the nature of the Government's policy every industrial action becomes a political matter. This has come about because the Government have prevented the carrying out of free collective bargaining as it has come to be operated in our society.
  It was said several times in Committee by Government spokesmen that the Government took pride in the fact that their present policy was based on President Nixon's United States policy. We were told on a number of occasions how successful the United States had been in this sphere, that they had moved from phase 1 to phase 2 and had now arrived at phase 3. We were told that this had been accepted by American workers and by the United States trade union movement. The American trade union movement is powerful in certain sectors of the American economy, but it is recognised that it has not the overall economic power of the British trade union movement.
  But now, alas, we see that the American experience is running into heavy water. I quote from this week's Sunday Telegraph under the heading "Nixon's phase 3 in trouble". The following item was part of a report by Richard Walker in Washington:
  "Phase 3 of President Nixon's economic plan to prod America toward 'the most bountiful prosperity ever'"—
  1390
  quoting the words of President Nixon—
  "is in direct danger of collapsing before it has begun."
  The report goes on:
  "The aim is that the tight wage and price control of Phase Two should be eased back into a system of mainly voluntary restraint. This, it is hoped, will lead to full employment and eventually to the disappearance of budget deficits. Six weeks after Phase Three's unveiling all indications are that it is not working out that way."
  Prices are rocketing in the United States, despite monitoring and all the rest.
  I now wish to refer to a report in the United States United Electrical Union Journal of 8th January 1973, from Chicago, under the headline:
  "Predict New Big Rise in Basic Food Items."
  The report quotes the Wall Street Journal and says:
  "United States consumers could be socked with spiraling prices of meats, milk and, later on, eggs."
  The report goes on to state that increases could be in the region of as much as six cents a pound for chicken, and gives other examples of price increases in the United States.
  Since the Secretary of State for Employment and his right hon. Friend the Prime Minister draw such succour from the American experience, should they not now tell the House what has gone wrong with President Nixon's policy and explain whether the Government are still intent on slavishly following that policy?
  Let us consider the current industrial disputes. Today deputations from the Civil Service came to the House because they are aggrieved that the Priestley recommendations have not been carried out. It will be recalled that in 1966 when in Opposition the present Prime Minister stated that there should be no interference in agreements which had already been reached. The non-implementation of the Priestley recommendations will prevent civil servants getting what they consider to be a justifiable reassessment.
  Many other workers are involved in the present situation. There are the gas workers, the Ford workers, and the many others who cannot be said to be just beginning wage negotiations but who are at the end of the process. We have seen for the first time in history major industrial action by civil servants in this

  1391
  country. It is rather amusing to get letters such as all hon. Members are receiving from civil servants, who are highly articulate people. The post flows in, so you send a letter to the Secretary of State. A civil servant drafts the answer and sends it back to the hon. Member, who sends it on to the civil servant. It is a process of paper circulating around—a sort of end process.
  But the serious aspect is that the civil servants are firmly agreed and have been forced to take industrial action. This is not industrial action dictated by some outside body, it is not industrial action called for by the General Council of the TUC, or anything like that. It is action which they feel it necessary to take themselves.
  Tomorrow we are to have no trains. The railways will be still and there will be a major rail strike. Why is there a major rail strike tomorrow? Many hon. Members will have received particulars of the train drivers' case as issued by the Associated Society of Locomotive Engineers and Firemen—the statement of their General Secretary, Mr. Ray Buckton. What he is saying in this plaintive statement is that they were promised negotiation after last year's dispute, the terms of reference of which were:
  "To review the Wages Structure for Footplate Grades, including mileage and bonus payments, in relation to outstanding and foreseen Railway requirements, and to make recommendations to the Railway Staff National Council."
  That policy includes negotiation on the 100-mile-an-hour-plus trains. It was accepted that these negotiations were to be separate from the general wage negotiations of the railways.
  So they entered into these negotiations and, as we all know in industrial relations, there was for a considerable time to-ing and fro-ing, a certain amount of pressure, meetings, and so on. They finally got down to discussing it, and then the Railway Board said they would discuss it in accordance with the terms I have read out. But, the report goes on, the Railway Board said that
  "it would be necessary for any recommendations stemming from the proposals to be interfaced both with the Government's programme for controlling inflation and the general pay claim which had been presented by the National
  1392
  Union of Railwaymen and the Transport Salaried Staffs' Association."
  So they say to the railwaymen, who have a claim for skilled industrial workers, who have a special claim in regard to their ability and the work they will have to do, after 12 months of negotiation—and these terms were arrived at peacefully last June and we had that industrial dispute 12 months ago—that it must come within the terms of £1 and 4 per cent. That is what the railway strike tomorrow is about. It is not about the normal wage application. It is about the procrastination which has been brought about by the Government's policy.
  8.45 p.m.
  I say to the House that in my opinion these industrial disputes which we now face are of such a nature that they could have been completely avoided. I made the case in the Committee in some detail, and I do not want to repeat it here, because it is on record and has been reported elsewhere, concerning the Ford workers' claim, and I and my colleagues have made out the case very clearly and succinctly in favour of the gas workers at this time.
  It is not the job of Members of Parliament to negotiate for trade unionists. That is what the trade union movement and free collective bargaining are about. It is for trade unionists to negotiate. Sometimes they are successful, and sometimes they are not. We live in an imperfect society, but with correct industrial relations, and workers who pay attention to increased productivity and production and so on, it is possible to reach amicable arrangements in more cases than it is not.
  But now every wage claim becomes a matter for Members of Parliament. Trapped by the Bill, trade unions have nowhere to turn. Industrial action will be illegal, if the Government make an order about the claim in question. There is nothing to stop British Rail settling with the railway drivers now. There is nothing to stop the Ford Motor Company settling with its workers. That would not be illegal. If the hon. Member for Oswestry (Mr. Biffen) has done nothing else, he has exposed the fact that without an order against a specific claim or pay increase it is legal at present for trade unions to negotiate wage increases above the recommended norm or for price increases to be

  1393
  imposed. There is no legal restriction under phase 2 other than an order in council made by the Secretary of State.
  Mr. Atkinson: People are beginning to write to Members about the legal position. We want to make it absolutely clear that, while it is not illegal for, say, the Ford workers to conclude an agreement with their employers, with the increase to be paid during the present period, the Secretary of State would issue an order forthwith preventing the workers from receiving the money. We should make it absolutely clear, therefore, that there is no legal loophole through which any group of workers can force their way.
  Mr. Orme: My hon. Friend has overlooked one point. The Government cannot make any orders under the Bill yet, because it is not an Act. They are asking people to enforce a measure which is not yet an Act. If the Government cannot act retrospectively, I do not think that even when the Bill has become an Act they will be able to overturn a settlement reached now. They can roll back a price increase or wage settlement once the Bill is on the statute book, but in my opinion they do not have the power legally to do so now, unless they take retrospective powers, which as far as I can see the Bill does not contain.
  We are in the twilight period between the freeze and the coming into force of the Bill. The nonsense of the current situation has been exposed. We have made these points time and again in Committee.
  The Government's policy is worsening industrial relations, increasing strikes and preventing free collective bargaining. It is the Secretary of State's duty to tell the Prime Minister to end the present policy and to return to a sane policy of free collective bargaining.
  Mr. Cecil Parkinson: One of the first speeches I heard in this House when I was elected in a by-election in November 1970 was made by the hon. Member for Salford, West (Mr. Orme) on the Industrial Relations Bill. I have heard him make many sincere and strong speeches about a cause in which he obviously very passionately believes. But I thought that tonight he was straining the credulity of the House by suggesting that the railwaymen had chosen tomorrow
  1394
  as the day to strike because this was the week of all weeks when their patience had finally run out. It seemed a very convenient week for their patience finally to run out, a week in which they could join with other members of the trade union movement in making a demonstration of strength against the Government. Many people who will be prevented from going to work tomorrow and many who will have their business life disrupted will regard it as a demonstration of strength and aggressiveness by the railway unions and not as a desperate gesture of a group of people whose patience has finally run out.
  Mr. Orme: The hon. Member must recognise that the railway unions were negotiating during the weekend with the Railways Board and up to last night to reach a settlement. They did not want a strike but they and Mr. Buckton wanted a form of agreement to prevent the strike. Therefore it was not premeditated. Matters do not work out like that in this country. The negotiations broke down and so we are to have the strike tomorrow.
  Mr. Parkinson: The hon. Member is entitled to his view, as I am entitled to mine, but, without being in any way presumptuous, I believe that the vast majority of the public will read the situation my way and not his.
  I listened to the hon. Member again tonight saying, "Let us get back to free collective bargaining." I share his ambition that we should do so, but until we tackle what I consider one of our big national problems free collective bargaining will remain something of a joke, and a rather sad joke. We have in this country nationalised monopolies, nationalised in the public interest, manned almost inevitably by a trade union monopoly operating within those nationalised monopolies, which has decided over the course of the last few years to start using that monopoly power in an anti-social way which would not be allowed to any private cartel.
  We would not even have allowed such private cartels to exist. We would have wheeled in the Monopolies Commission and the monopoly would have been investigated. But we have created these immensely powerful State monopolies which cannot go bankrupt, which are not

  1395
  subject to normal commercial disciplines and within which the unions have started to abuse their powers. When I listened to gas workers boasting that the Gas Council has already lost the £15 million surplus it made last year, my reaction was to hope that the Gas Council in that situation will withdraw its offer and make an offer that it can afford because until we get to a stage where one may lose by going on strike as well as gain, the idea of free collective bargaining is not to be taken seriously.
  Mr. Bruce-Gardyne: My hon. Friend has referred to the Gas Council making "an offer which it could afford". Will he elaborate what he means by "afford"?
  Mr. Parkinson: My hon. Friend knows as well as I do that the Gas Council probably could not afford to make the offer it then made, but it can now afford it £15 million less by the reckoning of the trade union movement. Every time anyone tries to react and urges the Government to use the power of the law, we are told that it would be interfering with free collective bargaining. I do not know what is free in the bargaining between the National Coal Board and the National Union of Mineworkers.
  Last year, the public were dragooned into believing that the miners were a group of very deserving men who had been left behind. The same group of men, who received very substantial increases as a result of last year's strike, are out to capture public attention again, and I intend to do all in my power, limited though it may be, to ensure that they do not succeed in gaining public sympathy this time for a case which was not a particularly good one last year and has little merit, if at all, this year.
  The right hon. Member for East Ham, North (Mr. Prentice) said there were unfairnesses in the policy. I agree that there are bound to be anomalies if one calls a halt at any given moment, if one does not let the wheel turn full circle. But there is not a moment in the year when the wheel has turned full circle. There is always someone who was due to enter negotiations, or had been on the point of completing them. There is not a moment when one can say that everyone has had a chance and that this is where we must
  1396
  stop. So I accept that there is unfairness, but I am sure that there would be greater unfairness if we did not tackle the problem.
  The right hon. Gentleman dragged out the old hoary tale about productivity deals. How do we measure productivity deals? We are constantly told about output per man shift and the increase in output, but there is no mention of the huge investment in capital machinery that may have taken place. That is totally discounted. The right hon. Gentleman knows as well as I do that often productivity deals are an excuse for breaching an agreement, that the productivity rarely matches up to expectations. It is often just a convenient peg on which to hand a capitulation for which one had to have an excuse. If we can find a proper way of measuring productivity, I shall become more enthusiastic about productivity deals, but at the moment our methods of measuring them leave a lot to be desired. A genuine productivity gain is not an easy thing to measure.
  The right hon. Gentleman talked of the degree of sacrifice involved in the Government's policy. We are constantly hearing about the degree of sacrifice in relation to the low-paid worker. The amount able to be paid under the Government's policy is an average of 8 per cent., but, in the event of agreement between the union and the employer, it is possible for an increase to represent 25 per cent. or even 33 per cent. We are constantly told about the £15-a-week man in this industry or the £20-a-week man in that industry. We on this side have the right to ask why, after six years of Labour Government, there were so many low-paid workers. Why, if wages have gone up so much in the last two years, did these workers start at so low a base when the economy had been in the hands of the Labour Government for six years, that they are still earning under £20 a week.
  A policy which gives the opportunity for 25 or even 33 per cent. increases to the lower paid can hardly be described as an affront, and surely a national average of 8 per cent., while it may involve sacrifice in certain cases, should not be under-estimated. The policy offers, as the right hon. Gentleman, who is a fair-minded man, will admit, opportunities for the lower paid, provided the unions

  1397
  and the managements agree, to be better off to the extent of 25 or 33 per cent.—the latter being the possible figure for the very low paid. These are very considerable figures.
  This country is sick to death of the hypocrisy involved in the low-paid worker being used as a means of boosting the wages of the high-paid. The trade union movement, with its love of differentials, is further bringing the collective bargaining system into disrepute by using the low-paid as an excuse for getting a really good deal for the high-paid. It needs the low-paid person because most of its manoeuvreings are based on the fact that he exists. Without him most of its arguments would be a sham.
  The views of hon. Members opposite are no doubt sincerely held but the country as a whole has had enough of this play on words, this talk of collective bargaining which is not free and which has been abused—this misuse of the plight of the low-paid. I do not believe that this Bill is any sort of threat and I do not believe that it is unjust to an extent which is not tolerable in the national interest.
  9.0 p.m.
  Mr. F. P. Crowder: I shall detain the House for only a few moments but I believe that everyone would agree—
  Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. I have been in this House long enough to know that one never criticises the Chair and I do not do so now. I raise this as a matter of general principle. It is, I believe, the usual custom and practice for the Chair as far as possible to proceed alternately in its selection of speakers and I am wondering whether your last selection was intentional or an accident on your part.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): I quite understand the hon. Gentleman's point. I realise that he knows what the rules are. I had thought that this might happen. I am glad to be able to explain to the House that, inadvertently, when the right hon. Member for East Ham, North (Mr. Prentice) sat down, I called the hon. Member for Salford, West (Mr. Orme) without seeing that the lion Member for Enfield, West
  1398
  (Mr. Parkinson) had risen. So now I call the hon, and learned Member for Ruislip-Northwood (Mr. Crowder).
  Mr. Crowder: I am sure that hon. and right hon. Gentleman opposite would agree that although we have in the past been faced with the sort of problem we are debating tonight—whichever Government has been in power—we have not succeeded in finding a solution. I do not believe that we shall ever get very far in these matters without setting an example. If a person sets an example in life, others will follow him and accept him by their own standards. That brings me to something which I put forward with great diffidence. Would it not be a sensible thing in the circumstances to reduce, even by a token percentage, our own salaries as Members of Parliament?
  Mr. Carter: Come off it!
  Mr. Crowder: It is not something I would seek to impose on any colleague in the House because I am the last person to do so. I earn my living at the Bar, and everyone knows it. I make no nonsense about that. Even a token and tiny percentage would have an effect in the country, albeit for only six months or a year. It would indicate that we really do care—as the Labour Party has so often said at times of a General Election.
  I wonder whether, through the usual channels, we could not arrive at some solution on that basis. However token it might be, it might have the effect of convincing the people that we really do care about these matters. I do not know what hon. Members opposite think. Those who earn anything outside of this House certainly should go into this 100 per cent. Those who do not should be exempted. I would not wish to see any unfairness in it at all. As Members of Parliament we have a duty to set an example to the people—
  Mrs. Elaine Kellett-Bowman Mrs. Elaine Kellett-Bowman (Lancaster) rose—
  Mr. Ted Fletcher Mr. Ted Fletcher (Darlington) rose—
  Mr. Deputy Speaker: Order. To which hon. Member is the hon. and learned Gentleman giving way?
  Mr. Crowder: Obviously to the hon. Lady.
  Mrs. Kellett-Bowman: Would my hon. and learned Friend for Ruislip-Northwood (Mr. Crowder) consider it intolerable if, instead of Members of Parliament taking a token reduction, their pay for the next six months were to be tied in inverse ratio to the cost of living, thus giving us a vested interest in seeing that prices do not rise?
  Mr. Crowder: I think that is a very nice idea.
  Mr. Fletcher: Would the hon. and learned Gentleman advocate that, in order to set an example to Members of Parliament, the Bar Council might suggest reducing barristers' fees?
  Mr. Crowder: I would be only too delighted—
  The Speaker: Order. I hope the House will not tempt the hon. and learned Gentleman too far along these lines.
  Mr. Crowder: I would be only too delighted to reduce fees by all means because fees do not matter. They all go in tax in any event at the end of the day. There is no problem there.
  Hon. Gentlemen opposite have always been very kind to me when I have put forward somewhat unusual proposals. They know that I put them forward only because I really believe in them. Hon. Gentlemen opposite, I think, would be the first to believe with me that we shall never achieve anything politically in this House or, indeed, in private unless we do it by example. If the House of Commons were to have a token reduction over a very short period in the amount of money paid to Members of Parliament—which is not very much in any event, having regard to modern circumstances; I accept that at once—that leadership and example might have an effect throughout the whole country. All of us will be faced with this problem in future whether we are in office or out of office.
  I believe there might be something in this idea. If I could get an agreement from hon. Gentlemen opposite on that sort of basis, however token or small the reduction was, then that might halt this ghastly process of inflation which is burdening the country to such a degree that almost no Government can face it except on the basis of the strikes now taking place. I put this forward as a proposition.
  1400
  I invite hon. Members opposite to give their views.
  Mr. Arthur Lewis: May I first thank you for your kindness, Mr. Speaker, in explaining what happened a moment ago. I am sure the House appreciated that.
  Before dealing with the points raised by the hon. Member for Enfield, West (Mr. Parkinson), I must deal with the hon. and learned Member for Ruislip-Northwood (Mr. Crowder). I have never heard such drivel in all my life. Here he is, an hon. and learned Gentleman who comes along to the House much more frequently than some of his hon. and learned Friends but, with great respect to him, not so frequently as some of my hon. and learned Friends now sitting behind me, making the suggestion that Members of Parliament should have their salaries cut for a little while. One of my hon. Friends interjected, I think rightly, "Why not cut out outside income?". The hon. and learned Member replied—and this is rather significant—that if the Bar Council were to cut the fees of barristers he would be in favour of it because all he gets in outside income goes in tax.
  The answer to all our problems is this then: give the railwaymen, civil servants, hospital workers and gas workers the same fees as the lawyers receive and let it all go in tax. I give the hon. and learned Gentleman the assurance that there would be no strikes tomorrow if all the railway workers were to get the same fees and the same refreshers as the hon. and learned Member receives when he goes to court.
  Mr. Crowder: Are they worth it?
  Mr. Lewis: I think they are more than worth it, with respect to my hon. and learned Friends. A chap who is driving a train and delivering freight and workers to and from their factories is much more important than a lawyer getting a £25 per day refresher fee or perhaps a 100 guinea a day refresher fee to decide whether some crooked speculator should or should not go to gaol. The railway worker is much more entitled to it.
  Mr. Crowder: If the railway workers want the fees that we get at the Bar why do not they go to the Bar?
  Mr. Lewis: The hon. and learned Member says that it is good enough for

  1401
  some people to be able to get what they like. They will still be able to do so. They will still be able to fiddle, because no one will know what is happening. The lawyers have the greatest united trade union in the House. No lawyer in the House can tell me that lawyers' fees will be controlled. The hon. and learned Member negotiates his fee through his solicitor or managing clerk. That is fair, free negotiation. There is free negotiation for the lawyer, but not for the engineer, the bricklayer, the carpenter and all the other workers. The hon. Member for Enfield, West agrees that that is not fair. He could not have been here at Question time today, when the Prime Minister repeated that the policy is fair and that the people support it because it is fair. I do not know where the Prime Minister has been in these last few days. The civil servants, the teachers and the engineers do not think that it is fair. They are strongly opposed to the policy because they know that it is not fair.
  Today I went to see the civil servants who are on strike. For the first time since the Civil Service was established 500 years ago civil servants have been on strike, with posters and picketing. Today I asked the Minister responsible for the Civil Service to state the rate of pay of the lowest-paid civil servant in June 1970, his pension entitlement after 40 years' service, and how those figures compared with the salary and pension of the Head of the Civil Service—the man who sent out a letter during this week telling the wicked civil servants not to strike. The reply I received contained illuminating figures that show up the fairness of the policy. On 30th June 1970 a female cleaner outside London had a salary of £12 18s. a week and a pension entitlement of £5 7s. 10d. At that time the Head of the Civil Service had a salary of £10,400 a year and a pension entitlement of £4,800 a year. On 31st December of last year the cleaner received £16·30 a week—a 30 per cent. increase—and a pension of £8·15 a week—an increase of about 50 per cent. What about the Head of the Civil Service? How has he done? At the same date he received £16,750 a year. What about the pension? It is £8,375—a 100 per cent. increase. Well might he support the policy. Well might he say to his cleaner,
  1402
  "You wicked girl, to go out on strike." That is the crookedness and dishonesty of the Government. They know that the policy is crooked, dishonest and unfair.
  9.15 p.m.
  Mr. Crowder: Does not the hon. Gentleman agree that at this moment it would be right for Members of Parliament to accept a token reduction?
  Mr. Lewis: No, because the whole thing is crooked, as I shall explain. The Government could take action, but they refuse. They take action, when it suits them, only against the lower-paid workers. The gas workers have been quoted. I saw in the Daily Telegraph only this week a letter from David Bassnet, the secretary of my union—I declare an interest; I am a member of the union—who mentioned that the gas workers came here lobbying. My hon. Friends and I took the trouble to go to meet them and discuss the question with them. There were 20, 30 or 40 other hon. Members who never took the trouble to go out and see them. There happened to be a Three-Line Whip here. I went through the list of those who did not go out and found that almost every one had outside interests, and made more, in salary, from their outside interests than they received as Members of Parliament.
  What a crooked thing it is to suggest that the salary of a Member of Parliament should be cut, when one knows that the person making the suggestion is getting three or four times that amount on a part-time basis outside. But let us not bring in Members of Parliament. When I raised a Question in the House the Government refused to take action. This is nothing personal; it is an illustration of a particular case to give point to the general. A one-time great footballer is a commentator on ITV—a chap called Jimmy Hill. He is a part-time commentator, receiving £10,000 a year. He has decided, by arrangement, to go to the BBC and do a part-time commentating job for the corporation at £22,500. The Government have been asked to take action on this case and they have refused. What do the Government feel will be the reaction of workers in the BBC who have given their life to serving the BBC and who have been told that they cannot have any increase, and who then find that

  1403
  a chap can come in overnight and get £22,500? Is it not obvious that Mr. David Coleman, Mr. Peter Dimmock and all the others already in the BBC will say, "If we are working here for £10,000 or so and we find a chap coming in and making £22,500 overnight, is not this inflationary?" Yet when I asked the Government to take action they refused.
  We had the same thing with regard to the chairmen of boards, in terms of the number of instances of which one can read in company directors' statements and company reports of company directors' fees rising by 100 per cent. or 200 per cent. We are told that the teachers should be looked after. In my constituency we have a great shortage of teachers, for various reasons. One is because the salary is not worth having; another is because there is a grave housing shortage, and a third because the London teachers' allowance is not sufficient to compensate for the housing difficulty. So we are now finding that teachers are leaving the area because they cannot afford houses. What happens? The Government do not attempt to help. Even though both employers and teachers have agreed to the payment of an extra sum, the Government come forward and in that instance they stop it. They cannot stop the others to whom I have referred.
  I believe that we see too much evidence of there being one law for the rich and another for the poor. Those who have, can have and still have. One cannot get facts and figures about what is happening. I noticed in the Estimates that the salary of a clerk in the Department of the Clerk of the House had been increased. When I tried to discover how and why I was told that I could not ask Questions on the matter and that no information was available.
  The hon. and learned Member for Ruislip-Northwood suggested that hon. Members should take a cut in salary. I have a better proposition. Every member of the House of Lords gets £8·50 a day tax-free just for poking his nose into the House of Lords. He does not have to do any work. It may be that he has a job as chairman of a State board at a salary of £20,000 or £30,000. He may have a part-time job on some advisory committee, for which he gets £1,000 or £1,500. So it goes on. I suggest that we
  1404
  might save some money and set an example by proposing that people of that sort have their salaries cut.
  In an earlier debate we talked about the Bank Rate and the way that the banks have made 50 per cent. for profit. The funny thing is that almost all these bankers are Tories, or Tory supporters. Of course, they are quite happy. The Bank Rate has gone up. They are making fabulous profits.
  This is so unfair. What is more, it is obviously unfair. It is known to be unfair. The poorest of the poor, those on the lowest incomes, are the very people against whom the Government's present policy is religiously and vigorously enforced. Those in the higher incomes groups find that the higher they get the better off they are and the less the action taken against them.
  Then there are the Government themselves, who pretend by shedding crocodile tears over the poor old-age pensioners, the sick and the disabled. What do they do? In April of this year they will give hundreds of thousands of pounds in surtax relief to the very wealthiest of the population. The hon. and learned Member for Ruislip-Northwood said that they were taking cuts. It would have been better if the hon. and learned Gentleman had voted with the Opposition when he had the opportunity, in an attempt to stop these large surtax repayments. Even better, the Government could set an example and say that they will not allow these large surtax repayments and intend to take action in the forthcoming Budget to prevent them.
  Mr. Crowder: Does not the hon. Gentleman agree that it is for Members of Parliament to set an example, and that even a very small token cut might steady the inflationary situation?
  Mr. Lewis: I agree that a token might be a good idea. But where does it start? In any event my suggestion would be to take token action against property speculators and to make sure that surtax payers who will be getting these large handouts do not get them. The hon. and learned Gentleman had a chance to vote with the Opposition on this matter. He failed to take it. That chance came with the last Budget. We may have another chance on the next one. I hope that the

  1405
  hon. and learned Gentleman will support the Opposition then.
  We find the Government claiming that everyone is out of step except "our Ted". I do not agree. I believe that "our Ted" might be the one who is out of step. It is just possible. One of my hon. Friends drew attention to the fact that last November or December, when the freeze was on and there was an attempt to cut back, we heard references to "setting an example". At about that time I happened to hear the radio programme "Any Questions" one Friday. One of the panel on that occasion was the right hon. Member for Taunton (Mr. due Cann). In the course of his reply to one question he said that we ought to have a vigorous attack on inflation and try to set an example. The newspapers which reported that he had just bought a £60,000 yacht also carried reports that the Prime Minister had bought a £40,000 yacht.
  A gas worker can work for 40 years and still not earn the amount that one man can spend on a yacht. Yet that man tells him: "Do not be greedy. Do not ask for too much. Do not hold the country to ransom." The ex-Chairman of the Tory Party can spend £60,000 on a yacht, but it would take the average working man or woman more than a lifetime to earn that amount. Is this fair? Of course not. The people of this country know it is not fair. That is why this policy must ultimately fail.
  Dr. David Owen: At this moment in my constituency and many others thousands of people are taking industrial action for the first time in their lives. Many of them are taking this action reluctantly. They never expected to find themselves in this situation. The House should ask itself why this situation has occurred. I ask the Secretary of State for Employment, when replying to the debate, to consider the psychological background against which we are debating this serious problem. I suggest that the Government have totally failed to understand the deep feeling of bitterness and resentment at this policy which is being foisted on the country.
  I speak as a firm and resolute supporter of a prices and incomes policy. I have always supported such a policy, although at times it was applied by the
  1406
  Labour Government in a way that I did not fully support.
  It is well known that on both sides of the House there are hon. Members who were root and branch against and consistently against a prices and incomes policy, as an unwarranted interference in either a market system or a collective bargaining system. I respect their consistency of view. The trouble is that as one prices and incomes policy follows another those people gain more supporters because of the lamentable failure of such policies judged overall since the war.
  The major problem is that immediately we accept a prices and incomes policy we put ourselves in a straitjacket. With each prices and incomes policy successive Governments have tried to make the straitjacket even tighter, even more rigid and inflexible.
  We reach for a prices and incomes policy only when the economic situation is desperate, and we ask of that policy what it cannot possibly deliver. In consequence, we are upset and disillusioned when it fails. A prices and incomes policy can operate only in the long term. It is not a major short-term manipulator of the economy. It has to operate, to be successful, in a climate of consent. It must have a major element of voluntary support.
  I am not against, and have never opposed, the concept that a prices and incomes policy, fairly applied, must have some form of statutory backing. Of course, it must apply to both prices and incomes. The current policy is statutory on incomes but it has had no impact upon prices. However, that is not the problem. This policy will fail because it was born out of failure.
  It does not lie in the mouths of right hon. and hon. Gentlemen opposite to lecture the Opposition about a prices and incomes policy, about the need for restraint, and all the humbug that has been pouring out of some Government spokesmen over the last few months.
  I will support a prices and incomes policy that is fair. I will support any policy which is designed to try to curb effectively inflation. The present policy is not. It fails to meet almost any of the criteria for success. It comes from a Government who do not believe in a

  1407
  prices and incomes policy—who do not see it against the background against which it must be introduced in this country, as a long-term way of changing the basic inequalities in British society.
  It must be done slowly, because it has to be done voluntarily. It must be done by consent, but it must be done with conviction. A Government who, when in opposition, opposed in a most hysterical way any form of prices and incomes policy, are not capable now of asking of the country the moral restraint that is necessary for such a policy. The Government do not have the necessary fund of good will or consent. That is why this policy will fail. As it gets more Draconian and detailed, so the failure will become more and more obvious.
  9.30 p.m.
  My plea to the Secretary of State is that the hope of this policy lies in his lowering his sights, claiming success for it only over a much longer period, taking on immediately a far more flexible approach and looking at the present wage claims with far less rigidity. Instead of relying on formulae the right hon. Gentleman should be taking each case on its merits. Of course, it will occasionally have unfairness in its application, but the right hon. Gentleman has already admitted that it has unfairness in its current application.
  This Government, like the Labour Government, have got away with a six months' freeze. The country, broadly speaking, was prepared to accept that, but I believe that it will not accept, without a deep-seated resentment building up, the current policy for phase 2. The sooner the Government introduce greater flexibility into it, the sooner they are prepared to recognise the causes why civil servants are currently taking industrial action, the better.
  The same applies to gas workers and hospital workers. I know from my own experience that hospital workers have worked on low pay for years and years, and—to their own detriment—have never sought to organise themselves. Their wages have been allowed to lag woefully behind, and they have worked long hours. All these people are fed up and frustrated, and the sooner the Govern-
  1408
  ment realise it the sooner they will get the country to accept that a prices and incomes policy has a sensible place in the way we run the economy. But we should not make for such a policy over-vaunted and, in my view, absurdly optimistic claims. What statutory backing there has to be is largely to cope with the rogue elephants. It is not detailed statutory backing that is needed. The more detailed the policy becomes, the more in many respects, it is doomed to failure.
  I ask the Government to realise that if they are now going to try to get the country to accept this type of policy—if we are to have any success in the fight against inflation, they will have to look into the hearts and minds of people. Their past dogma and doctrine will have to be thrown out through the window. They will have to have a more flexible, reasonable and sensible approach to this and many other problems. They cannot dissociate whatever policy they bring before the House on prices and incomes from their other policies, on taxation and housing, for example, or their overall attitude to inequalities in this country.
  Unless and until they see this policy in the round, for the long term, they will fail. Their failure will be the country's failure. All that will happen is that inflation will go on, bitterness will increase and disillusionment with any form of political solution to many of these problems will increase with it.
  Many hon. Members on this side are prepared to support a policy which will do something to redress inequalities in this society, but they are not prepared to see a policy foisted on many people who will have to make real sacrifices. The inflation in prices is not fully understood by hon. Members opposite, particularly the way it hits a man who may be taking home what sounds a reasonable wage—say £30 a week—who has two or three children and who is facing an ever-increasing spiral in the price of those things which constantly have to be bought, week in and week out, in rents, rates and other things. Inevitably, he eventually claims for improved wages. Unless the Government can recognise that now and recognise it very quickly and come off the rigid incomes and wages aspect of their policy it will fail. Therefore, I hope that the Secretary of State, before it is too late, will introduce a

  1409
  policy which does not have this minute attention to detail, this attempt to do the impossible but will go back to reason and to flexibility. If he does that maybe the policy will succeed. Maybe then we shall see an easing of the general frustration and ill-feeling that exists. The current policy and the current framework which the Government have introduced is doomed to fail and I believe also that the Government are doomed to fail. The sooner they recognise that a substantial re-think of their basic economic policies has to come the better for the people of this country and for the House.
  Mr. Hugh Dykes Mr. Hugh Dykes (Harrow, East) rose—
  Mr. John Mendelson: I want to concentrate on one point only—
  Mr. Dykes: On a point of order, Mr. Speaker, I apologise for intervening at this juncture but you have now selected three hon. Members on the Opposition side in turn.
  Mr. Mendelson: No one one stood up.
  Mr. Dykes: I stood up.
  Mr. Speaker: Order. This is a matter for me. Mr. Mendelson.
  Mr. Mendelson: I wish to concentrate on only one point which I wish to put to the Secretary of State as strongly as I can. The other day at Question Time I referred to those hon. Members of the Cabinet and the Government who are specially charged with the policies of industrial conciliation. I did so in the absence of the Secretary of State for Employment who was otherwise engaged, as we in the House all knew. I want to repeat the point for the right hon. Gentleman now, as he was the responsible officer I had in mind, as well as his colleagues in his Department.
  We have built up over many years a carefully designed system of indusstrial conciliation that many people in industry have relied upon and regarded as an essential part of the civilised way of doing our daily work. The great danger in this legislation as I see it—and as the House will know I saw this danger in similar legislation brought forward by my right hon. Friends when they formed the Cabinet—is that it introduces a rigidity which excludes the ordinary
  1410
  processes of conciliation. I regard this as the most dangerous aspect of the Government's attitude and consider that it is largely responsible for a great many of the serious industrial developments which we have been seeing in recent weeks, and particularly this week.
  I know that the right hon. Gentleman is in difficulty here. I have no intention of making any cheap political tactical point. The matter is far too serious for that. But I realise the particular difficulty in which he finds himself being at one and the same time a member of the body which collectively decides policy—the Cabinet—and head of the Department which contains the permanent officers, the chief conciliation officer and all his staff.
  This morning I received a letter from a gas worker, a gentleman who has never written to me before. He says,
  "As an employee of the British Gas Corporation residing in the Oughtibridge ward of Penistone, I would like to take this opportunity of writing to you to request that you raise the question of the gas employees' case in Parliament, and to explain to you the gas employees' case more precisely than has been published in the local and national press. A few years ago gasmen, as we are termed, considered themselves to have a well-paid and secure job, but today circumstances have made this position entirely the opposite. In 1967 with the introduction of natural gas the then Gas Council claimed that the new found fuel would bring more prosperity to the country, the Gas Board, its employees and to the consumer. The gas employees entered into the conversion programme with complete enthusiasm and carried out conversion of industrial and domestic premises with speed and efficiency, especially in the Sheffield area. A job scheduled to take 10 years was completed in four years. The prosperity natural gas brought to the Gas Board was increased productivity, a profit of some £15 million and reductions were also made to all consumers."
  He continues:
  "The promised prosperity it brought to the gasmen were in redundancies of 22,000 and for those still employed £22.84 a week, less in some cases, which after stoppages result in a take-home pay of £18.50. What a glowing tribute—and I quote—to 'the prosperity of natural gas'."
  That is the letter of a reasonable man who over the years has done his work. He now makes his appeal, which is typical of many of the people who work in an industry which has not seen a strike for over 50 years.
  My constituent in his letter asks me to ask the Government to set up a court of inquiry into the position of the gas

  1411
  workers. The Government have many times rejected the setting up of a court of inquiry. They argue that if we are to stick to the provisions outlined in the Bill there can be no room for a court of inquiry. If they say that, they are at the same time suspending all the long-built-up conciliation machinery at a moment when there is no other such machinery in existence. We are in a hiatus. The danger of the last few weeks is that the Government have stubbornly refused to use the conciliation machinery which we have built up over 60 years, and there is no other machinery available. All the talk about setting up the Pay Board in advance of the board starting its work, and all the difficulties that the Secretary of State for Employment has faced in his sincere efforts to find an approach that would get the Government and the country over a number of dangerous difficulties, failed completely because the right hon. Gentleman was not in a position to authorise or to offer the use of established conciliation machinery.
  That is a policy of madness. There is no justification for putting prestige and an attitude of firmness against the realities of the immediate situation. The right hon. Gentleman should assert himself. The present situation demands the use of his chief conciliation officer, his assistant conciliation officers and himself as leader of them all.
  It is necessary to accept the proposals of the gasmen and other moderate people in the trade union movement who have shown their interest in the industry in which they work over many years, and to accept the proposals to use as of tomorrow the existing conciliation machinery.
  It would be unreasonable to ask the right hon. Gentleman to do anything or to say anything that would weaken the Government's attitude to their legislation. We have all been here long enough to understand that no Government can do that. That is not the proposal that I am making. I am asking the right hon. Gentleman to say that this is an extraordinary situation which represents a grave danger to industry and to this country, which fully justifies reconsideration by the right hon. Gentleman's Cabinet colleagues and a declaration that we shall use all the machinery, including
  1412
  a court of inquiry, to get over these difficult weeks.
  The Minister has tried, but the proposal merely to set up the members of the board earlier than the legislation is enacted does not get him over the difficulty that any decisions, after consideration which the Pay Board might give, cannot come into effect until the autumn. That is too long to have to wait. The Government would lose no prestige—except with the leader writer in the Sunday Express, which they could well afford—if they made a declaration tomorrow that they realised the special difficulties of this situation and have reconsidered the usage of existing conciliation machinery until other machinery comes into effect.
  9.45 p.m.
  It will remain our case that the legislation is misconceived, but I am not dealing with that now. That is common ground on the Opposition side of the House. I have yet to meet many employers in my area who do not share the Opposition's view on this legislation. We believe it to be misconceived. But there are situations when other factors even more important than the immediate view of a pending Act of Parliament intervene. I say with profound conviction that we are in such a situation and that it is up to the right hon. Gentleman to see that immediate action is taken to use the channels of conciliation that exist today.
  Mr. Hugh Dykes: I want to intervene only briefly. I hope that the hon. Member for Penistone (Mr. John Mendelson) will forgive me if I do not refer in great detail to what he said.
  I am more concerned—as many other hon. Members would have said had they been called—with the unusually muddled approach of the hon. Member for Plymouth, Sutton (Dr. David Owen). He was clearly, in a paradoxical way, not making himself clear about precisely what he felt on a prices and incomes policy, the Government's policy and what would be the Opposition's alternative suggestions. All of us respect the hon. Member normally for the clarity of his views. But on this side of the House, at least, there is a feeling of considerable disappointment, because what the hon. Member said was misleading as well as muddled.

  1413
  It was misleading because he failed to make clear what he was getting at on the subject of a prices and incomes policy, what the Labour Party would have done in a similar situation, and why he was objecting to both the broad brush of the present Government's policy and to what he referred to as some of the minute details.
  This is the biggest danger for those on the Opposition benches, who attempt to construct a policy that they may regard as viable Opposition in some way and yet have nothing constructive to say in the context of what the Government are trying to do.
  We are all speaking frankly in this frank debate That does not mean, however, that there are not some of my hon. Friends who have considerable misgivings about some of the details of this policy. None the less, it is above all manifestly clear, beyond any doubts that are more than merely marginal or relative, that the overwhelming mass of the British public are now looking to the Government, even if they are not normally Conservative supporters and even if they feel disgruntled about what the Government have done up to the stage of phases 1 and 2, at long last to do something about the problem of inflation.
  This central problem assumes a national character which transcends party feelings. There are of course party and philosophical differences, but if the Opposition seek excessively to undermine the potential success of this policy of restraint up to the beginning of phase 3 they will bear a heavy responsibility.
  No doubt many hon. Members, if they speak honestly and frankly, will feel uncomfortable about the minutiae of the policy. There are some employers—employers who might be said by the Opposition to be traditional Conservative supporters—who may now say that enormous anomalies will be created because of the base reference date of 1st April in terms of the five-year test of profit margins. They may well feel that that is arbitrary and unfair. Furthermore, on the other side of the coin, the gas workers have a considerable case to argue over their own remuneration when they refer to their record and their responsible attitude. I am sure that all fair-minded Members will acknowledge that to be true. However, in implementing a
  1414
  policy of this nature, unfairness manifests itself in a crude way.
  The central problem which we face in these debates is much more weighty in the overall success of the policy given the number of months which will be needed to take us from phase 2 into phase 3 in the longer term. I believe that the Government are right to seek power to deal with the situation in the longer term. The situation admits of some unfairness and crudity, and in certain sectors the policy will be grotesquely unfair. This will affect unions as well as employers and will involve the distributive services as well as the service industries. It is a policy which is bound to be arbitrary and unfair in giving the country a breathing space.
  As a London Member I have the greatest sympathy with the London teachers' case. They wish to have a device under which the pay board can be set up as a provisional nucleus before it comes into statutory effect so that the board may examine the various arguments. Furthermore, the railwaymen for their part adopt arguments which relate to the overhang from a period which ended on 5th November 1972. I wish to emphasise that we now face a new era, and in that sense I hope that the House will seek to espouse new arguments.
  Mr. Neil Kinnock: The hon. Member for Harrow, East (Mr. Dykes) and I came into the House on the same day, and I believe we made our maiden speeches on the same day. In that sense, in parliamentary terms we can be said to have that much in common. But the hon. Gentleman has arrived at conclusions about the nature of political divisions which differ from my conclusions.
  The hon. Gentleman's analysis appeared to be based on the fact that the crisis of inflation is so monumental that it should lead Members of all parties to treat the matter as one which transcends party differences. I strongly differ from that opinion, although it might be said that one or two of my right hon. and hon. Friends would not agree with me. This is a matter of almost elementary difference in terms of interpretation of the way in which the economy should be run and from where the crisis springs.

  1415
  We have rehearsed the diagnosis of inflation frequently in past debates, and I should be out of order in further pursuing it, and shall not do so. I am sure we shall have further opportunities to undertake debates on that subject in the future. But I want to take up what my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) said. He said that the Government had to discover that they could not hope to undertake and run an efficacious, satisfactory prices and incomes policy without consent, without flexibility. I think the Government have already rumbled that fact and that there is no administration in history which has been more acutely aware of the need for consent and consultation in its application of policy.
  The difficulty of this Government is that, while they are aware of the need for this, they seem to be almost biologically incapable of carrying out their good intentions. They have almost grotesquely misapplied the whole concept of fairness repeatedly in many of their policies over the past two and a half years. The chief instances of these distortions have been the Housing Finance Act and the legislation we are discussing tonight.
  It is not a question of semantics, of what we mean by being fair. It is a case—and that is why I say it is a matter of very deep political division between the two parties—of deciding as Members of Parliament whose interests and which interests we represent. I say to my hon. Friend the Member for Plymouth, Sutton that if, as he said, we tried to be reasonable, if we tried to adopt consensus attitudes, if the Labour movement outside this House were to adopt such attitudes, I am sure that the apparatus which the Conservative Government are now constructing as part of their counter-inflation policy would roll right over all the democratic elements of free collective bargaining and parliamentary accountability.
  So we cannot afford on this side of the House to be sweetly reasonable. We must undertake to represent a partisan interest. The division between us is this: I believe, and I think that most of my hon. Friends believe, that we are here to represent, to defend and to extend the interests of working people. Our major criticism of this counter-inflation policy—and this
  1416
  is why these amendments are down on Report—is that the Government have decided deliberately and consciously to restrict the incomes of one sector of the population while doing nothing effective or significant as far as other sectors of the population are concerned. When the population of this country has been so consciously divided into interest groups by the very legislation we are discussing, we cannot be expected to be non-partisan and to adopt consensus postures when debating issues such as this.
  The first stage of the Government's persuasive technique was to use the idea of presenting a paranoiac obsession with inflation. Certainly inflation is an important problem, but we now have an exclusive obsession with the problem, so that all our attitudes, policies and thinking seem to be devoted to one thing. I suggest that this serves a very useful propaganda purpose, although it is a remarkable deceit and conceit which permits the Government—who in many respects have been more responsible than most elements in the economy for creating and generating this inflation—to be at the same time the wolf and the boy who cries "Wolf". There is an obsession with inflation. The Government employ the technique of talking about fairness and consultation, neither of which, when put to the test, have any meaning. Therefore, the Prime Minister—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Counter-Inflation Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Jopling.]
  Question again proposed, That the amendment be made.
  Mr. Kinnock: The Prime Minister a fortnight ago and the Home Secretary last night found it necessary to rattle their sabres. The Prime Minister said that compromise was an option that the country could no longer afford. Last night the Home Secretary became an economic jingoist. He said that he did not want confrontation, and nor did the Government, but if it became necessary, if they had to stand firm, that was what they would do. There was a popular song before the First World War:
  "We don't want to fight, but, by jingo if we do

  1417
  We've got the ships, we've got the men, we've got the money too."
  To tell a 10-million strong Labour movement, "We don't want a confrontation, but we are prepared to take you on", seems unusually heroic for the Home Secretary, with the kind of personality that he tries to present, but it betrays a certain attitude by the Government.
  After hearing the hon. Member for Enfield, West (Mr. Parkinson), I began to understand how much insistence there is from the Conservative back benches that the Government shall adopt a strongman posture. Even if the Government are fulfilling the expectations of their back benchers, they are not fulfilling the expectations of the nation at large. The hon. Member for Harrow, East said that the nation was looking to the Government to give a lead. If it is looking to the Government for anything, it is for them to get out so that alternative policies may be tried—[An HON. MEMBER: "Rubbish!"] I doubt whether the hon. Gentleman would find even solid Conservatives who would not confess that the Government's position in the country, their credibility, is in the shakiest possible state. Among the labour movement, in the battle that the Government have chosen, they would find no support. Over 2½ years, with greater frequency and drama more recently, the Government have managed to offend large sections of the labour force.
  Someone has said that the Opposition have wept crocodile tears over lowerpaid workers. Everybody is subjective about his or her income. The term "lower-paid" is subjective and relative. The workers who are making the present pay claims strongly believe themselves to be among the lower-paid sectors of society. They have been listed tonight—the gas workers, the teachers and the engine drivers. Either in relation to other working groups or the kind of responsibility or work they undertake, they believe that they are not sufficiently well paid.
  It could be a matter of scientific fact or merely that they believe themselves to be special cases needing special treatment. The important fact is that they are in a position to act on the basis of that belief, and the Government have nothing with which to answer them. The
  1418
  Government cannot inspire trust or confidence and do not even have the guts to make a stand-up fight, because they know that they would lose.
  Rumours have been spread and statements have been made that it might not be a bad idea for the Government to call a General Election on the basis of a confrontation with the unions on the issue of who runs Britain. As has frequently been said by Opposition Members in recent debates, if the Government are confident that that is how the election will be fought, let them call that election. The Government having failed both by letting rip and by their attempts to introduce a corporate State, with impositions on free collective bargaining as a means to try to control inflation, the only resolution to the continuing problem of inflation is for one party or the other to have a true mandate by fighting an election on the basis of the counter-inflation policy that it presents. Anything short of that cannot possibly have the kind of trust or confidence or consent that my hon. Friend the Member for Plymouth, Sutton talked about because the Government have now destroyed the mandate they sought in 1970—and there is an alternative to be presented. My hon. Friends and I will cheerfully and confidently present that alternative.
  The Secretary of State for Employment (Mr. Maurice Macmillan): The confidence of the Opposition in the by-election results may have been reflected in the majorities achieved during the course of this debate.
  The first two of these amendments which we are collectively debating would make the Pay Board an advisory body only, while leaving the Prices Commission statutory. The third goes further to this same end by leaving out all the powers of the Pay Board, and the fourth retreats somewhat and seeks, following the argument of the hon. Member for Penistone (Mr. John Mendelson), to exclude from the Pay Board's counsels any remuneration that has been adjudged by an independent court of inquiry appointed by the Minister. We must ask the House to resist these amendments, for reasons which I think have emerged during the debate.
  The argument has centred on two main points. The first is that no statutory

  1419
  policy can work, or should work, or ever has worked. That argument was put forward by the hon. Member for West Ham, North (Mr. Arthur Lewis) as well as by the hon. Member for Salford, West (Mr. Orme)—that there should be a statutory policy for control of prices and no policy whatever other than free collective bargaining in regard to wages. The general attitude throughout our debates upstairs and in the discussion in the country, by both the Opposition and the trade union movement generally, has been that we should have statutory control of prices but no limitation at all on free collective bargaining in wages. This, as was pointed out by my hon. Friend the Member for Enfield, West (Mr. Parkinson) is complicated by the problem of nationalised industries financing.
  The fact is that no real viable alternative has been put forward by any hon. Member opposite, or by the unions, to policies which the Government are seeking to pursue in this Bill.
  Mr. Atkinson: The Prime Minister and a number of his right hon. colleagues consistently argue that this is not a viable alternative. Will the right hon. Gentleman tell us in a few words why it is not a viable alternative argument that there should be free collective wage bargaining against price ceilings?
  Mr. Macmillan: Because by various means it has been tried from time to time—in declarations of intent, and so on—and has been proved to be totally incompetent in controlling information. When such success as there had been was abandoned, this was one of the difficulties that led to the high rate of inflation obtaining in June 1970.
  The second group of arguments suggested that we should bring into phase 2 the flexibility and the manner of dealing with anomalies which we are suggesting for phase 3 in the autumn. The hon. Member for Penistone appealed to me, as being responsible for conciliation, to use my position to out-argue my colleagues in the Cabinet in order to make possible a more conciliatory approach to the gas workers. The difficulty is that this is not a split in intent between myself and other members of the Government. If there is any schizophrenia it is within my Department, because we are
  1420
  not only a Department for conciliation, we are charged with carrying out the pay side of the policy. That has been the case under successive Governments, and there is nothing new in it.
  The hon. Gentleman put the case of the gas workers with considerable skill and moderation, and rightly expressed the moderation in which the letter which he quoted was written. That, indeed, was the tone of the discussions of the problems which I had at great length with the unions concerned. But there are other special cases as well, as the right hon. Member for East Ham, North (Mr. Prentice) and other hon. Members recognised.
  The difficulty is that any sort of inquiry which the hon. Gentleman seeks to establish now would judge not only the particular case of the gas workers. I have sought to explain the situation elsewhere. The hon. Member suggested that it was a little late, but it was the same explanation that we have given all along. We have explained that such a proposal does not deal with the question of the relationships of each of these special cases one with the other. But I do not want to repeat the argument at length, because we discussed it fully in Committee.
  It has been recognised by my right hon. and hon. Friends far more than by right hon. and hon. Members opposite that the most unfair system of all is represented by the sort of wage-cost inflation which we have been suffering for the past year. The hon. Member for Bedwellty (Mr. Kinnock) called it "almost an obsession", and spoke as if it were a problem peculiar to this country when, on the contrary, it has been the experience throughout almost the whole industrialised world.
  The hon. Member for Salford, West suggested—and I refute it now as I did in Committee—that my right hon. Friend the Prime Minister, as Minister for the Civil Service, was in some way guilty of breaching an undertaking he had given. But it was clear in that agreement that his undertaking was subject to the overriding application of policies of a national nature applying across the board. I do not think that there has ever been doubt about that.
  The hon. Gentleman also referred to ASLEF, and the promised restructuring.

  1421
  I am not totally familiar with all the details, but I suggest that it was a longer-term programme of restructuring and that it should have come as part of a general wage claim. In some ways it is a pity that ASLEF was unable to finish its own discussions in time to join the other two unions in the railway negotiations in their meeting with the British Rail management, which was due to have taken place today but could not, because of the absence of one of the unions.
  10.15 p.m.
  Mr. Orme: May I take up the point about ASLEF? The unfortunate thing is that it was not allowed to continue the negotiations. The terms of reference of the National Joint Negotiating Committee applied specifically to footplatemen. It is the freeze and phase 2 which is preventing a settlement. That is the point that the Minister must answer.
  Mr. Macmillan: Phase 2 is preventing the footplatemen only from pre-empting some part of the total payment available for the industry. The hon. Gentleman raised the question of the legality or otherwise of this. I should make it clear that the payment, as at this moment in time, of any claim would be contrary to the provisions of the 1972 Act. If the payment were continued and were above the pay limit in stage 2 after the 1972 Act is brought to an end, following the Royal Assent to this measure and the implementation of the code, the pay claim could be prevented under Schedule 3(8) of this measure.
  What is completely legal is to reach an agreement now to pay at the end of the standstill. The hon. Gentleman is correct in saying that this could be rolled back—that the extra payment could be stopped, not retrospectively, but from the date of the order being made. I hope that has made the position clear.
  The hon. Member for West Ham, North was attacking the entire system and not simply the Government's present policies to counter inflation. He was saying that, basically, the whole capitalist concept is totally unfair. He quoted the case of a commentator who received a large increase in part-time payment as being an example of the reason why chairmen of boards and other part-time workers earning large amounts would not
  1422
  be affected by phase 2. I refer him to paragraphs 104 and 105 of the Consultative Document, which says quite clearly:
  "In cases of individual promotion for regrading, an increase commensurate with greater responsibility or greater effort may be given outside the pay limit. Where this test is not satisfied any increase in pay counts against the pay limit. The cost of any general regrading scheme will count against the pay limit. Artificial regrading and changes of job specification should not be used as a means of avoiding the provisions of the Code."
  There is the question of new employees and recruits. Paragraph 105 says:
  "New recruits to existing jobs should not be paid more than those they replace or more than the rate paid currently by the employer concerned for the same job."
  Paragraph 106 says:
  "The rate for new work should not be more than the current rate paid in the locality for the same or most nearly similar work by the same or other employers."
  In practice this cannot be applied to those whose talents are such as leads the BBC to offer twice as much as ITV for their services. This may be a commentary on the policy of the BBC, and I would not seek to defend its action in this way. It is not an indication that company directors and others will escape the consequences of the pay policy, because they are clearly limited by the £250 limit. If they are doing various part-time jobs, that amount has to be split between those jobs.
  Mr. Arthur Lewis: If, as the Minister admits, the BBC can get away with this and is doing so, what is to stop the XYZ firm asking the worker who is working at, say Fords, to come in and do exactly the same job that he is doing at Fords at the XYZ company for double the salary? Nothing at all, because the same thing can happen, yet the Minister quotes the BBC as an example.
  Mr. Macmillan: The simple point is that in the case the hon. Gentleman has quoted paragraphs 104, 105 and 106 of the code would prevent it, because the work there is comparable.
  Mr. Lewis: It is exactly the same.
  Mr. Macmillan: Where it is not possible to prevent this is in the case of highly-paid entertainers who have a value put on them by different organisations to which they may seek to apply.
  Mr. Bruce-Gardyne: I have been thinking about what my right hon. Friend said regarding the legal position on pay settlements overlapping phase 1 and going into phase 2. Can he spell this out clearly? Am I right in understanding that if Fords now negotiated a £10-a-week increase with its employees it would be illegal for the company to pay that increase during the period of phase 1, but that it could pay the increase as soon as phase 2 began, although subsequently the Government might pass an order preventing Fords from continuing to pay it? Nevertheless, between phase 1 and the passage of the order to prevent the company from continuing to pay it, Fords would be entitled to pay it. Is that the position?
  Mr. Macmillan: To be strictly accurate, if Fords were to pay such an increase now, it would not itself be illegal, but it would be illegal to go on paying the increase after an order or notice had been received telling the company not to do so. That restraint can be continued to cover the gap mentioned by my hon. Friend under the powers contained in paragraph 8 of Schedule 3. The standstill powers under the 1972 Act remain in force until the capacity to give an order or notice under this Bill comes into being.
  I hope that has made the position clear to my hon. Friend.
  The right hon. Member for East Ham, North almost made the point for me. He was asking both me and the Government to be more flexible in the pay policy during the months immediately ahead, and he talked about trying to get a new system.
  We are now in the new system, and no longer in a standstill, and that implies choice—choosing between merits and requiring changes and suchlike in differentials. He welcomed that part of the pay code contained in paragraph 120 which gives a degree of flexibility in the conclusion of long-term settlements.
  In paragraph 123, to avoid any misunderstanding, the cost of such increases will count against the pay limit. Where the cost equals or exceeds the pay limit, there is no further increase of a kind which in itself could count against the pay limit that may be paid to the group during the following 12 months. In other word, it exhausts the capacity within the
  1424
  limit during the 12 months' period on which the code is based.
  The right hon. Member pointed out the London teachers, the hospital workers, the civil servants and a number of other cases which have been quoted. He also referred to productivity and the need to maintain the system of improving productivity. Again, this point was covered in Committee. I entirely agree with it. But the code does not prevent the conclusion of productivity agreements which have started, and are being applied under a system which obtained before the standstill, and where those are brought in at different periods and to different parts of the same firm. The position is set out clearly in the appropriate passage of the code.
  What are prevented during stage 2 are new productivity agreements. The matters which have been raised are matters intended for stage 3. That is precisely why stage 2 has been made relatively short. When the Pay Board is set up it will be able to deal with the anomalies and difficulties—especially those arising out of the standstill and stage 2.
  The hon. Member for Salford, West suggested that we followed the American pattern too closely. We have learnt a great deal from the American commissions, and from other countries. I hope that we have also learnt from the mistakes of past Governments. The hon. Member for Bedwellty, when he derided the need which the Government have stressed to stand firm at this stage of our counter-inflationary policies, was perhaps forgetting the result of the Labour Government's not standing firm.
  My hon. Friend the Member for Harrow, East (Mr. Dykes) is right in saying that the country generally welcomes these policies to counter inflation. Sympathetic as I always am to the arguments put forward by the hon. Member for Plymouth, Sutton (Dr. David Owen), I thought that this time he slightly confused the issue by constantly referring to the past or the future. He suggested that we should have sought a measure of agreement, that we should have consulted the unions and work people generally on the management of the economy and on the social policies we should follow. He said that we would have done better with a voluntary policy operated entirely

  1425
  by agreement with the unions and the employers. That is precisely what we sought for so long with the tripartite talks.
  The hon, Member for Bedwellty referred to the Housing Finance Act and other legislation. During the tripartite talks the Prime Minister made it clear that the effect of this type of legislation could be taken account of and that what we were unwilling to do was to repeal that legislation.
  The hon. Member for Plymouth, Sutton also forgot the offer which was made by my right hon. Friend the Prime Minister to the unions and the employers of consultation on those aspects of the management of the economy that particularly affect them. We tried to do what the hon. Gentleman suggested, and it was the failure to achieve that voluntary agreement that led to the need for the standstill. During the standstill we are seeking to maintain a rigid control of prices, and there have been complaints from my hon. Friends that there are those who find this price control almost too rigid while at the same time we are allowing an increase in wages amounting to just over 7 per cent. across the board.
  We are moving from stage 2 to stage 3 in the autumn. The Pay Board will start operating as soon as the Bill is passed. Officials are now busy on the preliminary work of studying the sort of cases which have been referred to. The Government will be seeking advice from the board on the anomalies and also on how best to establish the criteria for the stage 3 code, which will be debated in draft by the House and on which we hope to consult all those concerned, including the unions.
  For all these reasons I ask the House to reject the amendment.
  10.30 p.m.
  Mr. Robert Edwards: This is a stage in the debate where one or two points of fundamental importance might be discussed.
  There has been no meaningful consultation between the Government and the trade unions. For 13 years Governments have consulted unions and industries on every piece of social and economic legislation that has come before this House, until this present Government were elected. They have refused persistently to
  1426
  discuss principles. All that they have been ready to discuss with the trade union movement has been the details after they have decided the principles. It is this that has led to the conflict between the trade unions and the Government, and this fundamentally is the position dividing the two sides of the House.
  Both the Secretary of State and the hon. Member for Harrow, East (Mr. Dykes) made great play of the fact that it is impossible to have a policy controlling prices without controlling wages and salaries. But there is a great difference here. There is a sanction against wages and salaries because they have to be negotiated with employers. That is the basic sanction. There cannot be statutory control over such a sensitive area of collective bargaining involving hundreds of collective agreements and industries which are developing on the basis of technological changes, quite apart from considerations of productivity bargaining and piece work rates.
  I have been involved for 30 years in industrial negotiations, and I know that the whole movement of collective bargaining has been away from national negotiations to negotiations at factory level. It has been recognised that there are great differences between one factory and another, with constantly changing methods of production. It is impossible to devise a blanket agreement based on law with a complicated system of collective bargaining covering thousands of negotiations factory by factory. The Government have persistently refused to understand the traditional development of collective bargaining, and this is why they see their policy breaking down before their eyes.
  The hon. Member for Harrow, East made a general observation about the problems of inflation. We have not yet started to consider them. Last Thursday we debated the effects of the multi-national companies on world-wide inflation. I heard a much-respected Member of this House who is supposed to be very knowledgeable about these matters, the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) say that the multinational companies had no liquid assets. I know for a fact that the liquid assets of 2,000 multi-national companies are greater than the total budget of the United States of America and greater than the

  1427
  total reserves of all public banks and institutions of the world. These are self-balancing and, in my opinion, the real causes of inflation in the western world. Unless we control the anti-social effects of the multi-national companies, we shall never solve the problem of inflation.
  We shall create industrial upheaval, which is quite unnecessary, and disrupt the whole economy.
  Question put, That the amendment be made:—
  The House divided: Ayes 210, Noes 288.

  Division No. 70.]

  AYES

  [10.35 p.m.

  Abse, Leo

  Golding, John

  Mulley, Rt. Hn. Frederick

  Allaun, Frank (Salford, E.)

  Grant, John D. (Islington, E.)

  Murray, Ronald King

  Archer, Peter (Rowley Regis)

  Griffiths, Eddie (Brightside)

  Oakea, Gordon

  Ashley, Jack

  Griffiths, Will (Exchange)

  O'Halloran, Michael

  Atkinson, Norman

  Hamilton, James (Bothwell)

  O'Malley, Brian

  Barnes, Michael

  Hamilton, William (Fife, W.)

  Oram, Bert

  Barnett, Guy (Greenwich)

  Hannan, William (G'gow, Maryhill)

  Orbach, Maurice

  Barnett, Joel (Heywood and Royton)

  Hardy, Peter

  Orme, Stanley

  Baxter, William

  Harrison, Walter (Wakefield)

  Owen, Dr. David (Plymouth, Sutton)

  Beaney, Alan

  Hart, Rt. Hn. Judith

  Palmer, Arthur

  Benn, Rt. Hn. Anthony Wedgwood

  Hattersley, Roy

  Parker, John (Dagenham)

  Bidwell, Sydney

  Heffer, Eric S.

  Parry, Robert (Liverpool, Exchange)

  Blenkinsop, Arthur

  Houghton, Rt. Hn. Douglas

  Pavitt, Laurie

  Boardman, H. (Leigh)

  Howell, Denis (Small Heath)

  Peart, Rt. Hn. Fred

  Booth, Albert

  Huckfield, Leslie

  Perry, Ernest G.

  Bottomley, Rt. Hn. Arthur

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Prentice, Rt. Hn. Reg.

  Boyden, James (Bishop Auckland)

  Hughes, Robert (Aberdeen, N.)

  Prescott, John

  Bradley, Tom

  Hughes, Roy (Newport)

  Probert, Arthur

  Broughton, Sir Alfred

  Hunter, Adam

  Rees, Merlyn (Leeds, S.)

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

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

  Rhodes, Geoffrey

  Buchan, Norman

  Janner, Greville

  Roberts, Albert (Normanton)

  Butier, Mrs. Joyce (Wood Green)

  Jay, Rt. Hn. Douglas

  Roberts, Rt.Hn. Goronwy (Caernarvon)

  Cant, R. B.

  Jeger, Mrs. Lena

  Robertson, John (Paisley)

  Carmichael, Neil

  Jenkins, Hugh (Putney)

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

  Carter, Ray (Birmlngh'm, Northfield)

  Jenkins, Rt. Hn. Roy (Stechford)

  Rodgers, William (Stockton-on-Tees)

  Carter-Jones, Lewis (Eccles)

  John, Brynmor

  Roper, John

  Castle, Rt. Hn. Barbara

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

  Rose, Paul B.

  Clark, David (Colne Valley)

  Johnson, Walter (Derby, S.)

  Ross, Rt. Hn. William (Kilmarnock)

  Cocks, Michael (Bristol, S.)

  Jones, Barry (Flint, E.)

  Rowlands, Ted

  Cohen, Stanley

  Jones, Dan (Burnley)

  Sandelson, Neville

  Coleman, Donald

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

  Sheldon, Robert (Ashton-under-Lyne)

  Concannon, J. D.

  Jones, Gwynoro (Carmarthen)

  Shore, Rt. Hn. Peter (Stepney)

  Corbet, Mrs. Freda

  Jones, T. Alec (Rhondda, W.)

  Short, Mrs. Renée (W'hampton, N.E.)

  Cox, Thomas (Wandsworth, C.)

  Judd, Frank

  Silkin, Rt. Hn. John (Deptford)

  Crawshaw, Richard

  Kaufman, Gerald

  Silkin, Hn. S. C. (Dulwich)

  Cronin, John

  Kelley, Richard

  Sillars, James

  Crosland, Rt. Hn. Anthony

  Kinnock, Neil

  Skinner, Dennis

  Grossman, Rt. Hn. Richard

  Lambie, David

  Small, William

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

  Lamborn, Harry

  Smith, John (Lanarkshire, N.)

  Davidson, Arthur

  Lawson, George

  Spearing, Nigel

  Davies, Denzil (Llanelly)

  Lee, Rt. Hn. Frederick

  Spriggs, Leslie

  Davies, Ifor (Gower)

  Lestor, Miss Joan

  Stallard, A. W.

  Davis, Clinton (Hackney, C.)

  Lewis, Arthur (W. Ham, N.)

  Stewart, Rt. Hn. Michael (Fulham)

  Davis, Terry (Bromsgrove)

  Lewis, Ron (Carlisle)

  Stoddart, David (Swindon)

  Deakins, Eric

  Lipton, Marcus

  Stonehouse, Rt. Hn. John

  de Freitas, Rt. Hn. Sir Geoffrey

  Lomas, Kenneth

  Strauss, Rt. Hn. G. R.

  Delargy, Hugh

  Lyon, Alexander W. (York)

  Summerskill, Hn. Dr. Shirley

  Dell, Rt. Hn. Edmund

  Lyons, Edward (Bradford, E.)

  Swain, Thomas

  Dempsey, James

  Mabon, Dr. J. Dickson

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

  Douglas, Dick (Stirlingshire, E.)

  McBride, Neil

  Thomas, Jeffrey (Abertillery)

  McCartney, Hugh

  Torney, Tom

  Douglas-Mann, Bruce

  McGuire, Michael

  Tuck, Raphael

  Duffy, A. E. P.

  Mackie, John

  Varley, Eric G

  Eadie, Alex

  McNamara, J. Kevin

  Wainwright, Edwin

  Edelman, Maurice

  Mahon, Simon (Bootle)

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

  Edwards, Robert (Bilston)

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

  Walker, Harold (Doncaster)

  Edwards, William (Merioneth)

  Marks, Kenneth

  Wallace, George

  Ellis, Tom

  Marquand, David

  Weitzman, David

  English, Michael

  Marshall, Dr. Edmund

  Wellbeloved, James

  Evans, Fred

  Mason, Rt. Hn. Roy

  Wells, William (Walsall, N.)

  Faulds, Andrew

  Mayhew, Christopher

  Whitehead, Phillip

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

  Meacher, Michael

  Whitlock, William

  Fitch, Alan (Wigan)

  Mendelson, John

  Williams, Alan (Swansea, W.)

  Fletcher, Raymond (Ilkeston)

  Mikardo, Ian

  Williams, Mrs. Shirley (Hitchin)

  Fletcher, Ted (Darlington)

  Millan, Bruce

  Williams, W. T. (Warrington)

  Ford, Ben

  Miller, Dr. M. S.

  Wilson, Alexander (Hamilton)

  Forrester, John

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

  Wilson, William (Coventry, S.)

  Fraser, John (Norwood)

  Molloy, William

  Freeson, Reginald

  Morgan, Elystan (Cardiganshire)

  TELLERS FOR THE AYES:

  Galpern, Sir Myer

  Morris, Alfred (Wythenshawe)

  Mr. James A. Dunn and

  Gilbert, Dr. John

  Morris, Charles R. (Openshaw)

  Mr. Tom Pendry

  Ginsburg, Dav'd (Dewsbury)

  Morris, Rt. Hn. John (Aberavon)

  NOES

  Adley, Robert

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

  McNair-Wilson, Michael

  Alison, Michael (Barkston Ash)

  Fry, Peter

  McNair-Wilson, Patrick (New Forest)

  Allason, James (Hemel Hempstead)

  Galbraith, Hn. T. G. D.

  Maddan, Martin

  Amery, Rt. Hn. Julian

  Gardner, Edward

  Madel, David

  Archer, Jeffrey (Louth)

  Gibson-Watt, David

  Maginnis, John E.

  Astor, John

  Gilmour, Ian (Norfolk, C.)

  Marples, Rt. Hn. Ernest

  Atkins, Humphrey

  Gilmour, Sir John (Fife, E.)

  Marten, Neil

  Awdry, Daniel

  Glyn, Dr. Alan

  Mather, Carol

  Baker, Kenneth (St. Marylebone)

  Godber, Rt. Hn. J. B.

  Maude, Angus

  Baker, W. H. K. (Banff)

  Goodhart, Phillp

  Mawby, Ray

  Balniel, Rt. Hn. Lord

  Goodhew, Victor

  Maxwell-Hyslop, R. J.

  Batsford, Brian

  Gower, Raymond

  Mills, Peter (Torrington)

  Beamish, Col. Sir Tufton

  Grant, Anthony (Harrow, C.)

  Miscampbell, Norman

  Bell, Ronald

  Gray, Hamish

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

  Bennett, Sir Frederic (Torquay)

  Green, Alan

  Mitchell, David (Basingstoke)

  Bennett, Dr. Reginald (Gosport)

  Grieve, Percy

  Moate, Roger

  Benyon, W.

  Griffiths, Eldon (Bury St. Edmunds)

  Molyneaux, James

  Money Ernle

  Berry, Hn. Anthony

  Grylls, Michael

  Monks, Mrs. Connie

  Biffen, John

  Gummer, J. Selwyn

  Montgomery, Fergus

  Biggs-Davison, John

  Gurden, Harold

  More, Jasper

  Blaker, Peter

  Hall, Miss Joan (Kelghley)

  Morgan-Giles, Rear-Adm.

  Boardman, Tom (Leicester, S.W.)

  Hall, John (Wycombe)

  Morrison, Charles

  Boscawen, Hn. Robert

  Hall-Davis, A. G. F.

  Mudd, David

  Bossom, Sir Clive

  Hamilton, Michael (Salisbury)

  Murton, Oscar

  Bowden, Andrew

  Hannam, John (Exeter)

  Nabarro, Sir Gerald

  Braine, Sir Bernard

  Harrison, Brian (Maldon)

  Neave, Airey

  Bray, Ronald

  Harrison, Col. Sir Harwood (Eye)

  Nicholls, Sir Harmar

  Brewis, John

  Haselhurst, Alan

  Noble, Rt. Hn. Michael

  Brinton, Sir Tatton

  Hastings, Stephen

  Normanton, Tom

  Brocklebank-Fowler, Christopher

  Havers, Sir Michael

  Nott, John

  Brown, Sir Edward (Bath)

  Hawkins, Paul

  Onslow, Cranley

  Bruce-Gardyne, J.

  Hayhoe, Barney

  Oppenheim, Mrs. Sally

  Bryan, Sir Paul

  Heath, Rt. Hn. Edward

  Orr, Capt. L. P. S.

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

  Heseltine, Michael

  Osborn, John

  Buck, Antony

  Hicks, Robert

  Owen, Idris (Stockport, N.)

  Bullus, Sir Eric

  Higgins, Terence L.

  Page, Rt. Hn. Graham (Crosby)

  Burden, F. A.

  Hiley, Joseph

  Pardoe, John

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

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

  Parkinson, Cecil

  Carlisle, Mark

  Hill, James (Southampton, Test)

  Peel, Sir John

  Carr, Rt. Hn. Robert

  Holland, Phillp

  Percival, Ian

  Channon, Paul

  Holt, Miss Mary

  Peyton, Rt. Hn. John

  Chapman, Sydney

  Hordern, Peter

  Pink, R. Bonner

  Chichester-Clark, R.

  Hornby, Richard

  Pounder, Rafton

  Churchill, W. S.

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Price, David (Eastleigh)

  Clark, William (Surrey, E.)

  Howe, Rt. Hn. Sir Geoffrey

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

  Clarke, Kenneth (Rushcliffe)

  Hunt, John

  Proudfoot, Wilfred

  Cockeram, Eric

  Hutchison, Michael Clark

  Pym, Rt. Hn. Francis

  Cooke, Robert

  Iremonger, T. L.

  Raison, Timothy

  Coombs, Derek

  Irvine, Bryant Godman (Rye)

  Ramsden, Rt. Hn. James

  Corfield, Rt. Hn. Sir Frederick

  James, David

  Rawlinson, Rt. Hn. Sir Peter

  Cormack, Patrick

  Jenkin, Patrick (Woodford)

  Redmond, Robert

  Costain, A. P.

  Jessel, Toby

  Reed, Laurance (Bolton, E.)

  Critchley, Julian

  Johnson Smith, G. (E. Grinstead)

  Rees, Peter (Dover)

  Crouch, David

  Jones, Arthur (Northants, S.)

  Rees-Davies, W. R.

  Crowder, F. P.

  Jopling, Michael

  Renton, Rt. Hn. Sir David

  Davies, Rt. Hn. John (Knutsford)

  Joseph, Rt. Hn. Sir Keith

  Rhys Williams, Sir Brandon

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

  Kellett-Bowman, Mrs. Elaine

  Ridley, Hn. Nicholas

  Dean, Paul

  Kilfedder, James

  Ridsdale, Julian

  Deedes, Rt. Hn. W. F.

  Kimball, Marcus

  Rippon, Rt. Hn. Geoffrey

  Digby, Simon Wingfield

  King, Tom (Bridgwater)

  Roberts, Michael (Cardiff, N.)

  Dixon, Piers

  Kinsey, J. R.

  Roberts, Wyn (Conway)

  Dodds-Parker, Sir Douglas

  Klrk, Peter

  Rodgers, Sir John (Sevenoaks)

  Drayson, G. B.

  Kltson, Timothy

  Rossi, Hugh (Hornsey)

  du Cann, Rt. Hn. Edward

  Knight, Mrs. Jill

  Rost, Peter

  Dykes, Hugh

  Knox, David

  Russell, Sir Ronald

  Eden, Rt. Hn. Sir John

  Lambton, Lord

  St. John-Stevas, Norman

  Edwards, Nicholas (Pembroke)

  Lamont, Norman

  Scott, Nicholas

  Elliot, Capt. Walter (Carshalton)

  Lane, David

  Scott-Hopkins, James

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

  Langford-Holt, Sir John

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

  Emery, Peter

  Le Marchant, Spencer

  Shelton, William (Clapham)

  Eyre, Reginald

  Lewis, Kenneth (Rutland)

  Simeons, Charles

  Farr, John

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

  Sinclair, Sir George

  Fell, Anthony

  Longden, Sir Gllbert

  Skeet, T. H. H.

  Fenner, Mrs. Peggy

  Loveridge, John

  Soref, Harold

  Fldler, Michael

  Luce, R. N.

  Speed, Keith

  Flnsberg, Geoffrey (Hampstead)

  McAdden, Sir Stephen

  Spence, John

  Fisher, Nigel (Surbiton)

  MacArthur, Ian

  Sproat, Iain

  Fletcher-Cooke, Charles

  McCrindle, R. A.

  Stainton, Keith

  Fookes, Miss Janet

  McLaren, Martin

  Stanbrook, Ivor

  Fortescue, Tim

  Maclean, Sir Fitzroy

  Steel, David

  Foster, Sir John

  McMaster, Stanley

  Stewart-Smith, Geoffrey (Belper)

  Fowler, Norman

  Macmillan, Rt. Hn. Maurice (Farnham)

  Stodart, Anthony (Edinburgh W.)

  1430

  1431

  Stoddart-Scott, Col. Sir M

  Trew, Peter

  Wells, John (Maidstone)

  Stokes, John

  Tugendhat, Christopher

  White, Roger (Gravesend)

  Stuttatord, Dr. Tom

  Turton, Rt. Hn. Sir Robin

  Wiggin, Jerry

  Sutcliffe, John

  van Straubenzee, W. R.

  Wilkinson, John

  Tapsell, Peter

  Vaughan, Dr. Gerard

  Winterton, Nicholas

  Taylor, Sir Charles (Eastbourne)

  Vickers, Dame Joan

  Wolrige-Gordon, Patrick

  Taylor, Frank (Moss Side)

  Waddington, David

  Wood, Rt. Hn. Richard

  Taylor, Robert (Croydon, N.W.)

  Walder, David (Clitheroe)

  Woodnutt, Mark

  Tebbit, Norman

  Walker, Rt. Hn. Peter (Worcester)

  Worsley, Marcus

  Thatcher, Rt. Hn. Mrs. Margaret

  Walker-Smith, Rt. Hn. Sir Derek

  Wylie, Rt. Hn. N. R.

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

  Wall, Patrick

  Younger, Hn. George

  Thompson, Sir Richard (Croydon, S.)

  Walters, Dennis

  Tilney, John

  Ward, Dame Irene

  TELLERS FOR THE NOES:

  Tope, Graham

  Warren, Kenneth

  Mr. Walter Clegg and

  Trafford, Or. Anthony

  Weatherill, Bernard

  Mr. Marcus Fox.

  Question accordingly negatived.

Clause 2

  CODE FOR THE GUIDANCE OF AGENCIES
  10.45 p.m.
  Mr. Arthur Palmer: I beg to move Amendment No. 26, in page 2, line 29, at end insert:
  'and also an obligation to take into account, where appropriate, the special knowledge, skill and responsibilities of groups of employees'.
  Mr. Speaker: I understand that with this Amendment it will be convenient also to discuss Amendment No. 25, in page 2, line 29, at end insert:
  '(3) The code shall not allow the real value in terms of purchasing power of any wage or salary to be diminished in comparison with the same real value at the time of the last pay settlement affecting such wage or salary'.
  Mr. Palmer: The amendments have some special relevance to the situation in the electricity supply industry.
  This is the first time that I have spoken in the course of this legislation, but I can claim to be something of a pioneer as a doubter of the value of incomes policies. In the middle 1960s when I was President of the National Federation of Professional Workers I was an outspoken critic I think of the incomes policy of my right hon. Friends who then formed the Government. I do not believe that such policies can work in a free society. They have certainly not worked anywhere in the Western world so far. If there were a change in the whole nature of society, in the whole balance of property relations, they could possibly work. But I am very doubtful whether the policy now before us will work in the long run in any real sense in precisely the same way that I was doubtful—and was proved right by events—whether the Labour Government's policy would work.
  I have a special worry about the Government. In this matter they are reformed drunkards. They have taken to water with all the enthusiasm that at one time they reserved for their gin. They came into office believing that a free-for-all in the economy would solve all their problems and now they seem to think that rules, regulations and formulae will decide everything. It can at least be said in defence of my hon. Friends that they believed in the water
  1434
  in the first place. The Conservatives moved from gin to water, and that, I am told, if done suddenly, can have disastrous results.
  My amendments, therefore, will test whether the Government are prepared to take a more moderate course, to take sherry, for instance. The amendments do that by raising two issues. One is differentials and the other is avoiding reductions in standards of some employees.
  Anyone with any practical experience of negotiations in industry, particularly, perhaps, for salaried staffs, where one is often negotiating not for a great number of people at the same level but for members of a group working in industry organised in a pyramid or hierarchy, knows that the differentials are the very essence of negotiations. Probably the great majority of claims, settled peacefully or otherwise, that come before negotiating bodies, arbitration tribunals, and so on, are about differentials.
  Differentials may be of various kinds. They may be within an industry, between one group of employees and another. They may be within a group of employees, between one employee and another. The other important class of differential is that between one industry and another. In the nature of things, understanding differentials is essential to the whole business of understanding pay negotiations.
  My experience in the electricity supply industry, as I think the House knows, is in connection with the fortunes of the salaried technical staff. In the course of our negotiations in looking after the practical interests of some 28,000 technical staff in electricity supply, if we are to be realistic, we are faced with the question of what, for instance, is a charge engineer in a power station worth as against an electrical maintenance engineer or a mechanical maintenance engineer. Such issues are fundamental and take up a vast part of the time of the negotiating bodies, and much attention is paid to evidence.
  If the electricity supply industry is now expected to fit its complicated system of staff differentials, which are always changing as techniques change, into the formula of £1 a week plus 4 per cent. of the pay bill over the previous year, whoever

  1435
  attempts to do it will need to be a wizard. It can scarcely be done in any satisfactory fashion, if done at all, by any body of human beings.
  What is and will be the grievance in my industry, as it will be in comparable industries, is that this means that the whole carefully built up system of pay comparisons within the industry, between one employee and another—the technical staff in this case—is simply to go by the board. It means that many years' work is to be lost, because it will not be easy to recover from the distortions which the Government's mistaken policies will bring about.
  It is important also to look at pay comparisons in relation to responsibility, training and skill between one section of employees and another. The differential with which technical staff in electricity supply are at present concerned is that in relation to industrial staff. This matter is being pursued in no spirit of jealousy, but if there is to be a proper chain of command and a system of responsibility differentials must apply. There must, for example, be a differential between supervisory and non-supervisory staff, just as there must be an adequate differential between skilled and unskilled workers.
  It so happens that industrial staff in the electricity supply industry—and I congratulate their negotiators on their ability—managed to get in their improvement before the standstill. But the technical staff were caught by the freeze and this has caused considerable bitterness. Does the right hon. Gentleman feel that the case for restoring differentials should be defeated by this official and arbitrary policy? No doubt the hon. Member for Cornwall, North (Mr. Pardoe) feels that it should be defeated, but I certainly see no justice in such an action. Furthermore, I do not think that the policy will work in any case.
  Another aspect of this policy which will affect the electricity supply industry relates to the flow of staff from that industry to other industries and vice versa. If the Government interfere with the pay structure and differentials which apply to the nationalised electricity supply industry—and the industry had to wait for a Conservative Government to find itself pushed into the financial red—it will mean that the industry will find itself
  1436
  being treated even more shabbily in future than already by the present Administration.
  The general secretary of my union, the Electrical Power Engineers, recently supplied me with some figures which are relevant to this debate. They prove that as a result of this policy the technical staff in electricity supply will suffer a lowering of standards in the next year. The figures show that between December 1971 and December 1972 the price index rose by 7·7 per cent., weekly wages rose by 13·8 per cent., and average earnings in industry increased by 16·5 per cent. From those figures the Prime Minister in a recent speech—I cannot remember the exact date of it—concluded that the increase over the last year in real wages has been 6 per cent. I must point out that the average take-home pay of members of my union—men who carry out a difficult and responsible job and who require considerable experience and qualification to do the job—is £2,500 per year. It is a larger income than that of many of my constituents, but it is nothing compared with incomes that are often taken for granted on the Government benches opposite.
  11.0 p.m.
  On the phase 2 formula of an extra £1 a week plus 4 per cent. of the total wages bill for a group of employees, the technical staff in electricity supply will have an increase of 5·8 per cent. The loss of the real purchasing value of their incomes, on the Government's own figures, will be 0·4 per cent. I cannot believe that that is just. The Government's only defence is, "We have so blundered over inflation that we can put it right only by the crude application of policies that we admit to be unjust to certain sections." That is no defence. If the Government are in doubt about where they stand, they should test it by putting to the people in a General Election the injustices that arise from their mismanagement.
  I make no apology for concentrating on my own industry, because we can get to grips with these issues tonight only by the use of specific examples. In the Sunday Express on 28th January there appeared an article by the hon. Member for Stratford-on-Avon (Mr. Maude), who is quite a frequent contributor and brightens my Sundays sometimes. I have

  1437
  given him notice that I intended to mention the article, which was headed melodramatically:
  "God Help Us if the Militants Wreck the Freeze".
  In it he wrote:
  "what happens if the electricity workers themselves come out on strike? I do not think they will do so as a whole but the militants just might manage to persuade enough workers to quit to make it impossible for the senior staff"—
  I think that the hon. Gentleman means the technical staff—
  "to keep the power stations going.
  What happens then?
  Frankly, I don't know—but I hope to God someones does. We have been told in the past that troops cannot run power stations. I have never been sure that this was true, given the presence of senior technical staff, but supposing it is? Could the Government raise enough volunteers with the necessary skills to keep electricity supplies going? It would certainly have to try despite the risk of industrial action spreading."
  The assumption in that article is that the technical staff will do the Government's dirty work and keep the power stations going. The technical staff are not bad trade unionists and would not act in that way in any case. But apart from that, when injustices of the present kind are being perpetrated by a Government on a section of loyal employees, who normally feel a great obligation to our public electricity supply and its consumers, if they were not militant before, those employees will certainly be militant in the future.
  In fact the whole of this policy is a perfect formula for turning moderates into militants. It is for this reason that I am glad to move this amendment which, with the associated amendment on the Order Paper may look—I shall not say innocent, but procedural. That is not the case. They were put down deliberately to illuminate points fundamental to the understanding of the unjust nature of this legislation to many.
  Mr. Bruce-Gardyne: I was interested by the peroration of the hon. Member for Bristol, Central (Mr. Palmer) when he said—and I apologise if do not quote precisely—that nothing could be more certain to turn moderates into militants than a policy of this kind. That rang a bell in my mind. I seem to remember hearing that said on occasion in years gone by,
  1438
  I think, perhaps, the Home Secretary, and I used to think there was a lot in it. I confess that I have not entirely lost my belief in the strength of that argument today, but no doubt the Secretary of State will be able to reassure us on that.
  The hon. Member has two related amendments, and for reasons I shall come to I cannot support him in the second but I have a great deal of sympathy with him in the first, which deals with the vexed problem of differentials. We have been told on numerous occasions that one of the great purposes of phase 2 is to help the lower-paid workers. A consequence of helping them is the erosion of differentials. I do not think there is any argument about that. I know that many observers seem to find it intolerable that there should be lower-paid workers, or indeed that there should be quite a number of people who earn less than the average wage. I gave up mathematics quite a long time ago and I may not be up to date, but I never understood how one arrives at a position where everybody earns the average wage or above. Many will be at the average and above—and on that basis there is a slight mathematical conundrum.
  We are assured that the purpose of phase 2 is to assist the lower paid, and that must lead to erosion of differentials. There were some wise words in the Economist—
  Mr. Brian Walden: A change.
  Mr. Bruce-Gardyne: The hon. Member says it is a change but that was several months ago. In those days the Economist said that the way to help the lower paid was to halt inflation. That is true. I do not think the way is to try to devise a wonderful structure which in some unexplained way will compensate the lower paid artificially, because the reasons they are the lower paid have to do with the structure of the industry in which they work and with their effective bargaining power. The most likely consequences of an attempt to differentiate in favour of the lower paid is to deprive the lower paid of employment because the firms in which they are the lower paid are probably firms which, if they are forced to move nearer the national average at any given time, would have to reduce their labour force drastically, in order to do so.

  1439
  However, there is the other side of the argument which the amendment is designed to deal with, and that is the problem of the erosion of differentials. I read the other day of a settlement reached between the teaching profession in Scotland and its employers to take effect in phase 2. I imagine that the settlement had the blessing of my right hon. Friends. I may be wrong about that, but if it did not have their blessing, one would be expected to hear something about it. One would have expected the Government to announce that they would slap an order on all the local authorities in Scotland, or whatever it is they do under the Bill.
  As I understand it, the effect of the settlement is that whereas for the lower-paid teachers—whom one presumes are those with the least qualifications and those in respect of whom supply is certainly adequate to meet demand, for instance, young unmarried women teachers who will not be in the profession for long—the increase in salary will be about 20 per cent., at the other end of the scale senior teachers, head teachers, and so on, will get 3 per cent. or less.
  I do not think that it requires very much calculation to see that, inevitably, in some schools in Scotland as a result of this settlement the position will be arrived at that head teachers or heads of departments will earn nothing at all—certainly nothing in terms of what hon. Gentlemen opposite like to refer to as take-home pay—above the earnings of their assistants.
  I remember in days gone by, in long years past, in a different existence in 1966, how we used to point out to right hon. and hon. Gentlemen opposite the folly of trying to recruit, for instance, the chairman of a nationalised industry on a salary which, first, would guarantee that we could not get the right man for that job and, secondly, would disrupt the whole salary structure within the nationalised industry to which that top limit was applied.
  I think that this problem arises, and will arise very widely, under what we are proposing in the Bill. I hope that my right hon. Friend the Secretary of State for Employment will be able to explain to the House the considerations
  1440
  which satisfy the Government that this problem will not arise under this legislation whereas we used to say how dangerous such problems were under the legislation introduced by the Labour Party. I think that perhaps we need a word of explanation about this.
  I turn briefly to the second amendment, which I could not support, for a simple reason. I was a member of the Sub-Committee of the Public Expenditure Committee which published a report the other day pointing out that at the present rate of progress of public expenditure it was not only most unlikely that there would be scope for a growth of consumer spending on the scale that we have experienced in the last year or more but that it was very unlikely that there would be scope for any significant growth in consumer expenditure over the next 18 months.
  I think that, broadly speaking, that is probably true, and if it is true there will have to be cases in which the real value in terms of purchasing power of a wage or salary may have to be diminished compared with the same real value at the time of the last pay settlement.
  Mr. Palmer: If the hon. Gentleman believes that and his Government believe it, is not the right policy one of increasing taxation, not reducing it?
  11.15 p.m.
  Mr. Bruce-Gardyne: As the hon. Gentleman realises, that hardly arises on this amendment. There were implications to be drawn from that report of the Public Expenditure Committee about taxation which the hon. Gentleman will no doubt have drawn. All I am saying is that if the conclusions drawn by the Committee were correct, it seems to follow as a probability that in some cases at any rate the situation which the hon. Gentleman's Second amendment is designed to avert is one we would have to expect to encounter.
  Mr. Palmer: What it amounts to under this policy is that some sections of the community will be arbitrarily taxed. Taxation should apply to all.
  Mr. Bruce-Gardyne: If there is little scope for growth in consumer expenditure in the next 18 months to two years, one would expect that the real value of the pay of certain groups could be expected

  1441
  to decline between settlements. I remind hon. Gentlemen opposite that under the legislation which their Government introduced this was not an exceptional circumstance. This was the whole purpose of the policy as defined by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). It was to reduce real incomes. This was part of the purpose of the policy.
  Mr. Harold Walker: For two years I was as intimately involved in the administration of that policy as perhaps any member of the Government, certainly any Member present tonight. I can assure him that no matter what his recollection is, this was never part of the philosophy of those responsible for applying that policy.
  Mr. Bruce-Gardyne: I will certainly check the precise words of the right hon. Gentleman. My recollection was that he made it clear that part of his aim was to secure some curtailment of earnings as part of the correction policy needed to deal with the balance of payments situation following devaluation. I would not support the second amendment because circumstances may materialise where such consequences as the amendment is designed to avert would be unavoidable.
  The first amendment raises a point of considerable substance to which the House needs an answer—the consequence of the erosion of the differential. The hon. Gentleman referred to one industry of which he has particular knowledge, but, as he emphasised, there are many examples. We on this side expressed real and understandable concern on this point when previous legislation was going through the House, and we need to know what circumstances have changed to make these anxieties unnecessary today.
  Mr. Pardoe: I am interested in the amendments and even more in the speech of the hon. Member for Bristol, Central (Mr. Palmer) because he has enormous knowledge of the electricity industry. It was interesting to hear him defend differentials in an industry where differentials have been enshrined for so long. The amendment is in defence of differentials. As we have heard, this is the conventional wisdom shared on all sides.
  I challenge the whole basis. How did differentials arise? If there were a pur-
  1442
  pose for them as we have them today, codified and solidified into an historical mould, that reason no longer exists. I doubt whether even the differentials in the electricity industry can be justified in economic terms, although they might be justifiable in social terms. To find out how differentials came about one would have to go back to Adam Smith, the pin factory and the division of labour. An individual wanted to specialise and to increase the value of his output. Through self-interest he became skilled and increased the value of his output and therefore his income. There is nothing wrong with enlightened self-interest, but that was individual action to advance self-interest.
  There might still be justification for differentials based on the value of an individual's output, but in the electricity industry today one could hardly justify differentials by reference to the value of the output of individuals.
  Mr. Palmer: There is a considerable differential between the hon. Gentleman's income and that of most of his constituents.
  Mr. Pardoe: I am coming to that. Do we need differentials to obtain skilled people? Do we have to pay graduates more for having received a privileged education? I do not see why we should send the privileged few—mostly from the middle class—to university out of money taken in taxes out of the pockets of the poor—who pay a higher proportion of their income in tax—and then say that those who have been to university should be paid more because they have had a privileged education. I have never thought that a privileged education entitled one to a higher income. In a just society precisely the opposite would apply.
  We are continually told that to get people to take responsibility we have to pay them a higher salary. But there are people who enjoy responsibility. There are people who went for a commission when they were doing their national service—not for the pay. When I was asked why I had gone for a commission I said, "National service is Hell, and I want to do Hell first-class." It was more comfortable than slogging it on the barrack square. That is one reason why people go for differentials, but I do not see why

  1443
  we have to back up differentials in a pay policy.
  Mr. Ronald Bell: Are not we hearing the official policy of the Liberal Party?
  Mr. Pardoe: All in good time. We rarely hear the official policy of the Conservative Party from the hon. and learned Gentleman.
  Why do we pay judges such an enormous income? I suppose that arose because we had to stop them being corrupt. Why do we pay the Chairman of the Pay Board vastly more than we pay a clerk in the Pay Board or a Member of Parliament? The job of chairman I imagine to be fascinating and there are many people who would like to do it without being paid £20,000. I imagine there are people who would be prepared to be Chairman of the British Railways Board without geing paid £20,000. It is argued that one needs to preserve differentials in order to have efficiency in industry. It is an argument that, holding an egalitarian philosophy, I cannot support because it is élitist.
  Mr. Brian Walden: It is late at night and I want to be certain that I understand what the hon. Gentleman seems to be proposing on behalf of the Liberal Party. Apparently, it is the idea that the cleaning woman at the court should be paid more than the judge because she does not enjoy her job and he does, or that the people in the cafeteria of the House of Commons should be paid more than Members of Parliament because we enjoy our jobs and they do not. It is not that I necessarily disagree with the hon. Gentleman, but I want it on record that this is the view of the post-capitalist Liberal Party.
  Mr. Pardoe: The hon. Gentleman is getting near to what the view would be.
  Mr. Walden: I thought so.
  Mr. Pardoe: I think the Liberal view would be a wish to narrow the gap at this stage, although not immediately to close it. I can imagine a situation in which, because cleaning floors and swabbing out lavatories or working in the mines—a ghastly job—or clearing dustbins were such nasty jobs, those who
  1444
  do them would, in a just society, be paid more than they would for doing nice, comfortable jobs in decent, carpeted surroundings. This is something we shall inevitably have to move towards. It is one of the reasons why the miners, for example, have been able to get fairly large increases vis-à-vis civil servants.
  Mr. Walden: Then what in the name of Heaven is the hon. Gentleman doing in a party called the "Liberal Party"? May I introduce him to an idea called "Marxism"?
  Mr. Pardoe: The hon. Gentleman is an apostle of one revolutionary philosophy but it is not the only revolutionary philosophy. I happen to base my political philosophy on the greatest revolution known to man, which was not that little affair in 1917 but the revolution of 1789. The second banner of that revolution was equality, and I believe that Liberalism is about liberty, equality and fraternity in equal proportions. I am an unashamed egalitarian, and I am not in the least surprised to find an unholy alliance between these mock 20th century Socialists and the party of the élite in believing that differentials have in some way to be preserved for ever and anon. These are the people who now defend the elitist concept of society. The hon. Member for Birmingham, All Saints, is an absolute product of meritocracy.
  Mr. Walden: I cannot say the same of the hon. Gentleman.
  Mr. Pardoe: No, but I am not desirous of being so.
  Mr. Walden: That is obvious.
  Mr. Pardoe: That is the difference between us. The argument of the hon. Member for Bristol, Central is not very different from that which has been put by hon. Members opposite. They argue that it is necessary to lower the rates of taxation on very high incomes because high rates of super tax are destroying incentive. I have never believed that argument. It is absolute nonsense. When hon. Members opposite tell us, with tears running down their faces, of some friend who earns £20,000 a year and keeps only 6d. in the £, one can only say that if that is a disincentive he is "bonkers" to be working in the job if he does not

  1445
  like it, for otherwise he is doing it because he likes it, irrespective of money. I suspect that there are many people who would willingly come forward to do these jobs without financial reward.
  If the hon. Member argues that his free collective bargaining and his precious differentials are needed for the lower paid, all I can say is that they seem to have done nothing for the lower paid. With free collective bargaining and differentials, we have been unable to solve the problems of the lower paid, and I do not believe that it will be possible to solve their problems—including, for instance, the badly paid women in industry—unless we close the gap, which means abandoning these precious differentials.
  Mr. Palmer: How does the hon. Gentleman suppose that in any kind of sane world he can get the kind of equality of incomes he is talking about without a complete change in property relations? That is the only possible basis on which it could be founded.
  11.30 p.m.
  Mr. Pardoe: That is right. There would have to be a complete change in property relationships. Part of Liberal policy is to distribute wealth. We are a distributionist party. One of the tragedies of six years of Labour government was that the Labour Party failed totally to redistribute wealth.
  Mr. Palmer: Property.
  Mr. Pardoe: Yes, property and wealth. Property is wealth. Property is an instrument of personality; we have to distribute it. I entirely agree with the hon. Gentleman.
  However, I do not agree with the hon. Gentleman that we need to preserve his precious industrial differentials, which have done nothing to solve the problems of the lower paid and which are based on nothing economic. They are historical and they should be abolished. Certain new differentials may have to be built into our pay system if incentives are required in the short term. In an ideal society, they would not be required. However, the differentials about which the hon. Gentleman speaks have come about as a result of history and bear no relationship to what we need in society today.
  Mr. Atkinson: I have a vested interest. I have not been a president of the Oxford Union and therefore I cannot join in the fun which has taken place between the two sides of the House. There seems to be a similarity of thinking between hon. Members opposite and one or two of my hon. Friends. My views are much nearer to those of another hon. Member who does not share my political philosophy. However, his views seem to be getting nearer to the policies which I hope the Labour Party will one day pursue.
  If this argument is about the creation of a fair society out of an unfair society, surely the narrowing of differentials must be part of that philosophy. It must be part of the political apparatus which we are attempting to set up.
  Mr. Brian Walden: My hon. Friend knows better than that. The clue is the question of property relationships. None of the differentials could be narrowed permanently without a transformation of property relationships. My hon. Friend has nothing in common with the hon. Member for Cornwall, North (Mr. Pardoe). What he says is claptrap. My hon. Friend is a Marxist. That makes some sort of sense.
  Mr. Atkinson: I am grateful to my hon. Friend. That was part of the argument which I was about to use. We are talking about property relationships. and therefore this discussion is about ownership. The basis of Labour Party politics is ownership of property. This is where the transference of wealth takes place. That is what the argument is about. I did not want to personalise it, but, in view of some of the comments made tonight, perhaps we should do so. If we say that one-sixth of the Liberal Party is involved with Royalty, we get the matter in perspective.
  Mr. Pardoe: One-eighth. It is one-ninth on Fridays.
  Mr. Atkinson: Let me deal with the arguments advanced by an hon. and learned Member who is a judge. He advocated earlier that Members of Parliament should accept a voluntary cut in their salaries as a method of giving leadership to the nation. [HON. MEMBERS: "Who said that?"] I do not know his constituency. I understand

  1447
  that he is known as "the Nabarro lawyer". He was involved in a recent famous case in which he gained some fame—and no doubt a sizeable brief. His earnings are about £25,000 a year outside this place. I understand that he is Recorder of Colchester. Taking that with the brief fees which he receives, I imagine that his earnings are about £25,000. When talking about differentials, he said that railwaymen were not as valuable to society as judges and lawyers. He went on to suggest that if there were one way in which the railwayman could help his economic problem it was by practising at the Bar. He said that there was no reason why this should not happen. I do not know whether that is a serious argument—that one can change a job in this way to solve the problem.
  The point is that there is an industrial dispute involving the railwaymen, with a consequent disruption of the economy. A serious situation has arisen as a result of these men withdrawing their labour. If all the judges withdrew their labour tomorrow I doubt whether many people would be inconvenienced. Some people would no doubt welcome the situation so created. That would also apply to barristers. I should think that we could solve many problems if we got rid of most of the barristers practising today, particularly those in the income bracket which the hon. and learned Member claimed to be in earlier, when he was putting himself alongside railwaymen in a serious argument about differentials.
  There is an argument that railwaymen are worth more than judges anyway, on that basis.
  Mr. Pardoe: And probation officers.
  Mr. Atkinson: And probation officers. A probation officer would be worth more than the man doling out the sentence. I know that the hon. Member for Cornwall, North was not serious when he was talking about the person cleaning the court as against the judges. But, recognising the argument about property, we are trying to narrow differentials.
  Mr. Brian Walden: Even at this hour, let us get this right. Within our present form of society, what a man is paid is what the market will pay him. That is
  1448
  known to all hon. Members. Of course, if we destroy the market and change the property values, those scales die, but until we do that they exist, and no legislation of this House can prevent their existing.
  Mr. Atkinson: I accept what my hon. Friend says. I do not challenge the basis of his argument. What he says is absolutely true, but in real life we are now faced with paying, wage increases in terms of percentages and flat rates right across the board. I share the view of the TUC that if we are to help those at the lower end of the scale we should stop talking about percentages and talk in terms of cash. If there is an immediate policy to be pursued in this situation it is the policy suggested by the TUC—a £3 flat rate—which was discussed at the Downing Street talks and elsewhere—as against the Government's £1. The TUC was talking in terms of a £3 or £2 increase right across the board, which would have the effect of reducing the existing differentials.
  Those are courageous arguments to put forward by men in the trade union movement, representing skilled workers and others who enjoy the benefit of the high differentials that exist in industry. The trade union leaders talk about flat rates of that kind, perhaps topped up by a fixed percentage, not unlike the present formula, although the Government's formula of £1 plus 4 per cent. is so unrealistic that it is out of this world. But there is an argument in favour of this sort of adjustment in the present situation, which is a critical one. I should have thought that one of our objects should be to reduce the differentials in society and take away the rough edges of unfairness which exist, and which we all recognise to exist.
  That brings me to the two amendments, both of which I support, with the qualification that I want to see a shrinking of the very wide differentials existing at the moment.
  For a wage earner in industry to maintain his standard of living, he must be paid about 4 per cent. in addition to the rise in the price index. In terms of take-home pay, anyone making average earnings in industry must be receiving 4 per cent. more than the rise in the price index to break even at the end of the day.

  1449
  This is the real cause of much of the dissatisfaction in the present discussions. Taking into account all the peripheral aspects of the argument about the 4 per cent. on top of the price index, possibly the result is a higher figure, but certainly that is the minimum. That is the case spelt out in the second amendment, and for that reason I support it.
  A very real point which many of my right hon. and hon. Friends argue is that there should be a lessening in present differentials if we are as soon as possible to move to a less unequal society. My experience in life is that the most wealthy make the least contribution to the wellbeing of the world. They make the least contribution to progress in any form in this or in any other country. The really great men whom I have had the privilege to know in my life have received the least money. There is obviously something wrong with a society which has its values upside down. Most of us understand why it has happened, but now it is revealed for all to see.
  I have had the privilege to know some of the world's finest engineers, and we should be proud of them. But I am amazed to see in our newspapers, especially at weekends, advertisements for civil, mechanical and nuclear engineers, and the salaries quoted are absolute pittances compared with those of the accountants, the financial lawyers and others who do all the financial manipulation. They are the wizards of our society, and they are compensated the most.
  It is an odd situation when some of the finest surgeons in the world are paid much less than people managing dance halls. A week or two ago I saw that a leading dance hall company was advertising for managers to take over the management of small dance halls up and down the country, and it was offering £15,000 a year. In the same newspaper there were advertisements for experienced and technologically advanced engineers to do extremely responsible jobs creating some of the most advanced and imaginative concepts in the world, and the salaries they were offered were about £4,500 a year.
  Between dance hall managers and engineers or surgeons there is this curious differential. Some of our greatest thinkers are paid the least. So we are all con-
  1450
  cerned about differentials in this immediate situation, whether they are at the wage level or at the professional level, if we are to get some sort of order into a confused society.
  Mr. Palmer: All the people to whom I have referred are workers. They can live only by selling their knowledge and skills. I am glad that my hon. Friend has made a differentiation between those people and those who live by other means altogether.
  11.45p.m.
  Mr. Atkinson: This is precisely the point. It is my experience, and I am sure that of all hon. Members, that the entrepreneur, the gambler, the person who plays the Stock Exchange, the fellow who manipulates the accounts in insurance, the "bod" who makes no significant contribution to our society but merely tinkers with the fabric, is compensated at the highest level. He is revered, he tops the honours list, he goes for all that is going. All that glitters in our society is presented to him. But the people upon whom our progress depends, the very essence of our society, are paid the least. So it is in the wage-earning world. The people with whom I associate who have a weekly wage packet also suffer from this lack of fairness in society.
  I am on the side of those who want to shrink differentials to create more fairness. I understand all the problems attaching to this matter. It will be many years—I doubt whether it will be in my lifetime —before we arrive at the state of affairs where we can judge the value of one industry against another or one group of people against another, where we can get common acceptance of these values, and people can begin to take from society the equivalent of what they put in. If that can be done by common agreement, I believe that we shall be well into our Socialist society.
  Mr. Brian Walden: A number of issues have arisen as a result of the amendment which are worth at least a cursory comment.
  I do not think that the Labour Party has ever disagreed with the proposition that differentials are too wide. All my right hon. and hon. Friends know how the differentials came to be set. They were set partly as a result of market forces and partly—this should be said

  1451
  frankly—as a result of trade union bargaining pressure. Where it existed we tended to get a better deal; where it did not exist, we tended to get a worse deal. If women are less well treated than men in terms of income, it is because they have been the most poorly organised group in our society.
  I agree with my hon. Friend the Member for Tottenham (Mr. Atkinson) that we need pro tanto agreements. Though this is partly a matter for the Government—a responsibility which they do not appear to intend to undertake—it is also a matter for the trade unions. In any wage negotiations the trade unions must put forward pro tanto arrangements. Some could argue that it will be easier under the arrangements that the Government have devised, because of the clauses about the lower paid.
  I am concerned not with this sham of a Bill but with the future years about which my hon. Friend spoke. The Labour movement can make an enormous contribution towards narrowing differentials if it always goes for pro tanto agreements. What it cannot go for is the rubbish of the hon. Member for Cornwall, North (Mr. Pardoe)—namely, job satisfaction. If we paid people on job satisfaction, the guards at Auschwitz would have had the biggest salaries in the world. That is nonsense. One can conceive of a situation in which the judge does not enjoy his job but the court usher does. The idea that one can go around and find the people who are not enjoying their jobs and pay them proportionately and then discover those who are and deduct something from their salaries is piffle, and has nothing to do with Socialism of any kind—
  Mr. Pardoe: Nor does the hon. Member.
  Mr. Walden: The hon. Gentleman is quite wrong. My hon. Friend the Member for Tottenham and I, and sometimes my hon. and right hon. Friends on the Front Bench and I, do not always agree, but we do work in a broadly similar direction, and we do work on the basis of a change in property relationships. We are coming to this, but until there is some substantial change there, the differential problem is a matter for the
  1452
  Government and the unions. But it should be isolated from the issue of job satisfaction. That is not a justifiable or sane basis on which to differentiate between people's monetary income, under any system—Socialism, capitalism or what the Government are now providing for us.
  Mr. Maurice Macmillan: These amendments are attempts to write into the Bill guidelines for the Pay Board on matters which should properly be dealt with in the code. It is for this reason that I ask the House to reject them.
  My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) asked me about militants. Militancy started under the previous Government, was checked for a while under our Government, and started again later. I agree with him that the best way of helping the low-paid is by decreasing the rate of inflation. I also hope that we shall be able to resume the talks with the unions and employers on the special problems of the lower-paid, which was a feature of the original tripartite talks, and which I hope might be considered as a separate and special problem.
  The terms of the agreement mentioned by the hon. Member for Bristol, Central (Mr. Palmer) were not imposed by the Government, and the formula to which he objected leaves room to negotiate. As to the amendment dealing with maintaining real value in terms of purchasing power, paragraph 75 of the Green Paper says that the first of the principles of the code relating to pay is
  "to limit the rate of increases in pay in money terms to a level more in line with the growth of national output, so as progressively to reduce the rate of price inflation and improve the prospect of sustained faster growth in real earnings."
  I am not sure how the hon. Member arrived at his calculation. Using the £1 plus 4 per cent. formula in the case of these staffs, he came mysteriously to a figure of 5·8 per cent. for that bargaining group, rather than 7 per cent., as is the case for most. I would have to consider this case in greater detail.
  The subject of the Budget has been raised, but that is not a matter for me or any Minister to speculate on. The hon. Member for Tottenham (Mr. Atkinson) took the argument about

  1453
  differentials rather wider, and it developed into an argument with his hon. Friend the Member for All Souls—[Laughter.] I apologise. I mean the hon. Member for Birmingham, All Saints (Mr. Brian Walden). It was the nature of the hon. Member's argument which led me to make a perfectly natural slip. Both hon. Gentlemen seemed to have an element of reason in their arguments, although I could not agree with all they said. I could not say the same about the arguments of the hon. Member for Cornwall, North (Mr. Pardoe). I found myself lost in a maze trying to follow the thread of reasoning through the words behind which he successfully hid it.
  The hon. Member for Tottenham returned to the narrower point about differentials when he talked about the market rate and the bargaining power of the unions. I say to him, to my hon. Friend the Member for South Angus and to the hon. Member for Tottenham, that the erosion of differentials is not in itself necessarily affected by the £1 plus 4 per cent. formula as used as a method of calculating the total amount available as a pay limit for a negotiating group.
  The hon. Member for Tottenham referred to the courage of the unions—some of them representing highly-paid people—in suggesting a flat rate. It would have been fairer, with a narrowing of differentials, if the tripartite talks had produced agreement on a flat rate to be applied across the board. But it is not an easy concept to introduce. It is simple to formulate as a concept, but in our complex pay structure it is not easy to introduce and it was the failure to get agreement on that point which led to the present policies.
  Mr. Bruce-Gardyne: I accept that the £1 plus 4 per cent. formula does not in itself necessarily lead to an erosion of differentials, but surely my right hon Friend would agree that the £250 limit does.
  Mr. Macmillan: Yes. The emphasis in the tripartite talks and thereafter was on helping the lower-paid, and certainly the ceiling of £250 limits the capacity of the higher-paid to get increases in salary.
  I say to the hon. Member for Bristol, Central, who started by saying that he was opposed to some of his hon. Friends
  1454
  on incomes policies generally, that I thought he was arguing against some of his hon. Friends in an earlier debate this evening. He wanted to make the code and policy less flexible by writing bits of it into the Bill. His hon. Friends were seeking to make it more flexible. The reason for the degree of flexibility we have sought to achieve in the formula is simply that it seemed important to the unions concerned when we were discussing it at various stages. Apart from the limiting effect of the £250 there is no necessity, in the method of negotiating, to give a specific advantage to the lower-paid, although it is an expressed hope of the Government. The formula has to be like that because it is the intention that it should have that effect.
  The hon. Member referred to a problem that has arisen in his and in one or two other industries, including the Post Office, where different parts of the same industry have different negotiating dates. That has led to one section being caught by the standstill and another section not being caught. It is precisely to deal with these sorts of anomalies that the Pay Board will give them early consideration during the course of phase 3, so that they can be rectified in the course of the next pay rise. I fully accept that this has led to considerable difficulties in comparisons between the supervisors and others and that it is a problem which will require early attention by the Pay Board.
  Mr. Palmer: Will the Secretary of State therefore give me an assurance that in cases like this, if it were found that in terms of real standards the incomes of one group compared with another had been reduced, it would be possible for the Pay Board retrospectively to put the situation right?
  Mr. Macmillan: In applying the policies of stage 2 the Pay Board will be bound by whatever are the terms of the code, after the consultations and debate have taken place on this document and the House has debated the draft code. The Pay Board will take this type of problem into consideration in advising on how to formulate the guidelines for stage 3 which, after consultation and debate in the House, we intend to embody into a code for stage 3. I can assure the hon. Gentleman that I am aware of the problem

  1455
  that exists in his industry and one or two others.
  12 midnight.
  We have had a fascinating debate on a somewhat narrow point. The hon. Member for Bristol, Central will accept that whatever assumptions one makes about his arguments and whatever conclusions one reaches on the points he has raised, they are matters of guidance for the Pay Board, and are therefore more appropriate to the code than to the Bill. They would be severely limiting on any freedom of action, in a way which has been deplored by the Opposition, particularly if they were written into the Bill. For those reasons I ask the House to reject the Amendment.
  Amendment negatived.

Clause 3

  COMMENCEMENT OF PART II
  Mr. Ronald Bell: I beg to move, Amendment No. 51, in page 3, line 17, leave out from 'transaction' to end of line.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): With this amendment it will be convenient to debate Amendment No. 48, in Schedule 3, page 24, line 36, leave out from 'whatsoever' to end of line 40.
  Mr. Bell: After the wild gallop across country which developed as a result of the amendment moved by the hon. Member for Bristol, Central (Mr. Palmer), my amendment may seem a little static, but it is nevertheless important.
  The amendment to Clause 3 is a mere paving amendment for the main amendment in Schedule 3. The amendment would remove from the Bill the right of the Minister to interpret the provisions of Part II. Paragraph 1(1) of Schedule 3 states that
  "An order or notice under Part II of this Act may be framed in any way whatsoever".
  If my amendment were accepted the paragraph would end there, but as at present drafted the paragraph continues:
  "and may define any expression used in the provisions under which it is made or given (other than an expression defined by section 18(1) of this Act) both for the purposes of the order or notice, and for the purposes of the
  1456
  said provision as it applies in relation to the order or notice."
  That provision is very similar to the provision which exists in the Counter-Inflation (Temporary Provisions) Act. It happened that I was asked to advise professionally upon that similar provision in that Act. It was then—and, I am afraid, only then—that I found that no one could be advised on his rights under the Act, and that it will not be possible to advise anyone of his rights under Part II of the Bill. In each case the application of the provisions in the statute is by the making of an order or the serving of a notice. The Act does not take effect of itself; it is applied to provisions by a Minister's serving a notice or making an order. In that order or notice the Minister may say that anything in Part II of the Act means what he says it means, and that is conclusive.
  The exception in Clause 18(1) is unimportant. At this hour I shall not go through the reasons why it is unimportant. Clause 18(1) defines certain things of a fairly obvious character. The sort of examples which may be interpreted by the Minister in an order or notice are of the greatest significance. I shall mention a few of them to show how it would apply. There is, for example, the phrase "increases in any prices", the words "remuneration" and "implementation" of an increase, the word "restrict" and, above all, the word "transaction", which can be given any meaning at all in an order or notice by the Minister. There is the word "selling"; the phrase "performing services"; the words "restriction", "agreement", "arrangement", "employee", and "payment". There is the phrase "terms or conditions of employment", and so on. I shall not go through them all, but it is above all the word "transaction", and the freedom to give any meaning at all to the expression "relevant transaction", which puts the subject completely at the mercy of the Minister. There can be no appeal to a court, because the Minister can make the law as he goes along. And if notices are mainly used, as seems most likely, there is no possibility of challenge in this House, because notices cannot be challenged here.
  Wide drafting, which is carried to extreme limits in the Bill, is one thing, and one might argue that the need justifies

  1457
  the means, though I find that a hard argument to accept in peacetime. But the conferment on Ministers of a power to give any meaning convenient to them to the words of an Act of Parliament, and to do so in a way which withdraws their exercise of that power from the scrutiny of this House as well as of the courts, is immensely objectionable and inconsistent with the practice of a free society in which people have defined and ascertainable rights and defined and ascertainable duties.
  It is no answer to say that Ministers are answerable to this House generally for the discharge of their duties, for a Parliament so dominated by the executive that it would concede to it the right to interpret the law conclusively would not be a Parliament that would call the executive to account for oppressive use of that power.
  Nor is it any answer to say that the discretion otherwise given to the Minister in this Bill is so wide that this further power hardly matters. If the power is unnecessary, it is all the more objectionable. But the objection I make in the amendments is not that the powers are wide, as they are—too wide, I think—but that they have no defined limit. It is not that a person within the scope of the Bill is subject to a wide discretion but that a person cannot know whether he is or is not within the scope of the Bill. He cannot be advised about that because a Minister can make Part II mean anything he wants it to mean. He is given an unlimited right of interpretation of any expression.
  That was bad enough in the three-months' temporary provisions Act. We should not let it through in that measure. I confess that I did not then notice those words in the schedule. In a measure that is intended to last three years such a provision is a constitutional outrage.
  I hope that my hon. Friend the Chief Secretary will not offer a collection of bad precedents. Some dreadful things escape the notice of this overloaded House. Great battles are sometimes joined on the early clauses of a Bill, but incredible things slip through in the calm after the storm. I do not believe that in peace or war there is any parallel, in scope and importance, to the delegation of parliamentary sovereignty to what the amendment relates.
  1458
  I hope that we are about to hear from my hon. Friend that at least the principle of the amendments is accepted. At this hour I do not intend to press the amendment to a Division. I doubt whether there is anything left to divide. After the hilarious episode through which we have just lived I doubt whether there is even the energy left to divide. But I impress upon my hon. Friend that this is not a trivial matter. Far too many things go through the House unnoticed. I should not have noticed this extraordinary power in the Bill if, in another capacity, I had not been called to scrutinise the existing temporary provisions Act. I do not think that most hon. Members on either side are aware of the power conferred. I am sure that it is unnecessary. It goes far beyond what the circumstances of the time require, and it is a lamentable precedent for the future.
  Inasmuch as the Bill can be operative as an Act without the power, and inasmuch as the power would entrench inescapably upon the proper rights of the people, I hope that my hon. Friend will not brush the matter aside as merely one of the appurtances of an emergency Bill that we should take along with all the rest without looking too closely at it.
  These things do matter. Too many of them go through the House late at night. Too many slip through in schedules, and the matter before us should not be allowed to go through at all.
  Mr. Peter Rees: Although I find the Bill unpalatable, I recognise the need for it and support it in principle, but it equips the executive with far-reaching powers over every aspect of our national economic life. Beyond that, the executive have equipped not only themselves but the commission and the board with such powers. It is therefore of supreme importance that the House should scrutinise with great care the powers conferred by the Bill.
  Like my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) I am appalled by the scope of the powers contained in paragraph (1) of Schedule 3. The point was raised in Committee, when I found the answers of my hon. Friend the Chief Secretary singularly unconvincing. I should like to give

  1459
  some examples of the kind of construction an order could put on the simple words contained in Part II.
  12.15 a.m.
  The word "company" could be defined as a unit trust; "debenture dividend" as including interest, and "pay" as including a Christmas gift. My hon. Friend the Chief Secretary, possibly without the assistance of our right hon. and learned Friend the Solicitor-General, attempted to import some concept of reasonableness. He said that the courts were bound to insist on some concept of reasonableness being inserted to circumscribe the powers of definition in the Clause. I know of no such overriding power as my hon. Friend has invoked. The courts may say that the definition must bear some relation to the Bill, but this is a very tenuous connection. If this provision is construed in the way suggested it will be largely otiose.
  If it is, in other words, merely to clarify an expression in Part II, it is pointless, because the courts would always allow a word to be defined in that way, but sub-paragraph (1) has given the executive power to enlarge the scope of the phrase used in Part II. It is designed to bring within the definition of "company" things which in the ordinary use of language would not be included.
  In Committee my hon. Friend said—I hope that I interpret him correctly, having read it—that the provision must be read as defined—as limited in some way —by the introduction of the code. I see no connection between this provision and the code. The code would not be considered by the courts as limiting the power of definition. We recognise that "company" could not be held to include "elephant", because the courts would recoil from such a definition, but there is much scope on the fringe for matters to be swept into the provisions of the Bill without people recognising it.
  As the years go by there seems to be a growing tendency for the Legislature to legislate for overkill. That is utterly wrong, for one knows the power of the executive and its capacity to force unpalatable legislation through both Houses. It is important that it should limit the powers to those strictly necessary for the operation in mind. It has
  1460
  gone far beyond the necessary powers in this case.
  There may well be a case for bringing in unit trusts, dividends, debenture interest and Christmas gifts, but if that be so let the case be made on substantive parts of the Bill, and in such a way that it can be debated on the Floor of the House and not in a roundabout, covert way by a subsequent order.
  As my hon. and learned Friend said, at this late hour we shall not press the matter to a Division, but we expect much greater reassurance from the Chief Secretary than he was able to give in Committee.
  Mr. Brian Walden: I need not detain the House as long as either hon. Member opposite has—and that implies no criticism of them. The hon. and learned Member for Dover (Mr. Peter Rees) said the Bill was unpalatable but that he supported it in principle—which says a good deal more for his loyalty than for his sense, because what he is complaining about, not having had the high and joyous privilege of being a member of the Standing Committee, occurs in every clause of the Bill. The hon. and learned Member had better get used to the idea that he is buying a pig in a poke.
  Of course the hon. and learned Gentleman will not receive an answer that satisfies him, and it would be out of order for me to tell him of all the many other occasions on the Bill when he will similarly not get answers to matters which are of legal concern which affect the philosophy of his party and the lives of his constituents. The hon. and learned Gentleman had better get used to that idea.
  What the Conservative Party as a whole has to get used to is the idea that, probably for the first time in its history, it has underwritten the massive power of the executive to do more or less as it chooses and defines with private interests. That is the price which the hon. and learned Gentleman must pay for supporting the Bill in principle.
  Mr. Peter Rees: The hon. Gentleman has impugned my sense. I said "unpalatable", not "very unpalatable". I said that I recognised the need for the Bill. I believe that the party to which I am proud to belong is prepared, in

  1461
  moments of national need, not to be over-concerned with dogma. I should find it difficult to reconcile this with the dogmatic utterances made by myself before I was in the House—when the Labour Government were in power—and the dogmatic utterances of hon. Members who grace the Front Bench and adorn my party, but in a moment of national need my party is not going to be concerned overmuch with the niceties of dogma.
  I am complaining not about a question of principle but about the detail of the Bill. The hon. Gentleman said that there are many points of detail, but this is a particular point on which I take issue with my hon. Friend, and I do not feel that it is any discredit to my sense.
  Mr. Walden: I am sure that the hon. and learned Gentleman will not think me discourteous if I say that I find him somewhat cumbersome. Mr. Disraeli put it much better as an exposition of Toryism when he said
  "Damn your principles! Stick to your party."
  That is what the hon. and learned Gentleman is doing, and he knows it as well as I do. That is what makes the hon. and learned Gentleman a Tory and me not. I do not believe in that creed. The hon. and learned Gentleman will damn his principles and stick to his party.
  I can tell the hon. and learned Gentleman that he will not get satisfaction on this matter. We had no code in Committee, and there is no code now. We have a Green Paper which, apparently—as my old friend the Chief Secretary said today—contains a number of unfortunate printing errors, which may or may not, subject to the House, ministerial second thoughts and everybody else's second thoughts, eventually emerge as some kind of code.
  The hon. and learned Members for Buckinghamshire, South (Mr. Ronald Bell) and Dover have more sense than to think that they will get any kind of satisfaction on a matter such as this. They must lump it. I think that they are right in saying that this provision conveys enormous powers upon the executive. The Chief Secretary will tell us, as he always does, that these powers will be limited by the Government's good sense, and that is the best that we can expect to get. For God's sake, why
  1462
  strain at a fly when one is prepared to swallow a camel? What the hon. and learned Gentlemen should be worrying about in the 1922 Committee is why, in the name of Heaven, the Conservative Government are prepared to take this Bill at all. The amendments are irrelevant, and from the Opposition's point of view the Chief Secretary can be as brief as he likes.
  Mr. Patrick Jenkin: Almost all this legislation is acutely unpalatable to Ministers and to members of the Conservative Party. That may be a measure of the degree of necessity which exists for it.
  I have a great deal of sympathy with the points made by my hon. and learned Friends the Members for Buckinghamshire, South (Mr. Ronald Bell) and Dover (Mr. Peter Rees). I, too, was dissatisfied with the answer that I gave in Committee when the matter was raised by my hon. Friends the Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley), and although I then gave no undertaking to return to the matter on Report I immediately instituted an inquiry with those who advise the Government to see whether there was a better way of achieving our objective here.
  Like my hon. and learned Friend the Member for Buckinghamshire, South I am referring to Schedule 3(1), which is the substantive provision. In Committee I explained why we felt it necessary to have what are admittedly wide powers of definition. Perhaps I can begin to reply to the powerful attack by my two hon. and learned Friends by saying that the powers are not quite as wide as they appear at first sight.
  I know my hon. and learned Friend the Member for Dover challenged what I said about the reasonable interpretation. I stick by that. I believe that any court called upon to consider an order or notice —and they are challengeable in the courts —which imported a definition of a phrase used in a provision conferring power to make an order or notice would be bound to apply a concept of reasonableness in the exercise of that power of definition.
  It would not be merely the "black cannot be white" example I used in Committee or "a company" cannot mean "an elephant". It would be a question of

  1463
  what is "reasonable" having regard to the overall intentions of the Act, as embodied in the legislation passed by Parliament. Further, the court would be bound to have regard to the terms of the code. The agencies, as well as the Minister, have power to make orders and issue notices under Part II. When the agencies exercise the power to define expressions they are wholly circumscribed by the code—which will have been debated in draft and subsequently, if Parliament is so minded, passed into law. They are enjoined by the Bill to exercise their powers to restrict pay or prices for the purpose of ensuring that the provisions of the code are implemented.
  They would not be able to use the power conferred by this paragraph to bring within their purview any matter expressly excluded by the code. As an illustration, let me put this to the House. It is clear that the agencies cannot, by the use of this sub-paragraph, or any other provision in the Bill, confer upon themselves power to issue price reduction orders or notices affecting, let us say, insurance premiums, under the first new clause that was incorporated into the Bill this afternoon.
  This is because, provided the code follows the line of the consultative document, that control on insurance premiums will be reserved to the Secretary of State as a consequence of new Clause 1. I quote that as an example. I differ with my hon. and learned Friend the Member for Dover, who has greater legal training than I, when he says that the code is irrelevant. The power which will be exercised by one of the agencies must have regard to the code and it cannot exercise power in a way that goes outside the code. Therefore, it cannot exercise its power to define a provision in a way that takes it outside the code.
  Mr. Peter Rees: Perhaps I put the case a little high in making the point. I intended to say that no definition or restriction of definition can be found in the code to limit the power, although I recognise the point that my hon. Friend makes, that the commission or board have power to perform its functions in implementation of the code. The point may be of considerable interest in the City, and to insurance companies. Clause 6(2) provides that
  1464
  "For the said purpose the Price Commission may restrict any prices or charges for the sale of goods or the performance of services in the course of business…".
  Notwithstanding the new clause that was introduced this evening—and I do not recall that that limited insurance to the purview of Ministers—the agency could, under paragraph 1 of Schedule 3, define the performance of services as including the business of insurance. Therefore, it would be perfectly proper for the Price Commission to make orders in relation to the insurance business. Will my lion. Friend deal with that?
  12.30 a.m.
  Mr. Jenkin: Clause 2(1) provides that
  "it shall be the duty of the agencies to have regard to that code in performing their functions under this Act."
  The Government intend that those words should be limiting. They limit and define the powers of agencies so that they cannot act outside the terms of the code. Although the words in Clause 6 would, on the face of it, entitle the agencies to make orders about any price or charge, in fact they are constrained by Clause 2 to have regard to the code. The words limit the power not only to make orders but to define provisions under paragraph 1 of Schedule 3.
  Mr. Brian Walden: Why be so modest about it? There is a further limitation. If the Minister does not care what the agencies have done he will make use of his appellate functions and override them, and return to the status quo ante.
  Mr. Jenkin: The hon. Gentleman is making mischief, but he does so in such an engaging way that it is difficult to feel any malice towards him.
  Within these limits the powers conferred by the sub-paragraph are, in the Government's view, essential. I have satisfied myself of this. They are essential to enable the control powers to be exercised effectively and clearly. In the interests of the persons affected it is obviously desirable that orders and notices imposing restrictions should be as precise as possible.
  Here I refer to a point that was made repeatedly in Committee. The code does not set up legal obligations or restrictions. Those arise only when one of the agencies, or a Minister, makes an order or issues a notice in pursuance of

  1465
  the code. Therefore, what is important is that the notices or orders should define with the greatest possible clarity the ambit that they are intended to cover.
  Mr. Ronald Bell: What is equally important, if not more important, is that the individual—a company, perhaps—should know where he stands and whether he is subject to an order or notice. How can he be advised whether he falls just outside or just inside the purview of the Act? He may go to a lawyer, like myself, but how can he be advised when there exists power to define so that the boundary line is not clearly drawn but diffuse? Not to be able to tell someone whether or not he is within the scope of the Act cannot be in accordance with our traditions.
  Mr. Jenkin: Because the order or notice sets up the legal obligation it is important that it should define its scope as precisely as possible. The extent to which a person may be potentially within the ambit of an order or notice which may be contemplated cannot, by its nature, be determined. We are not dealing with fiscal legislation, where a person over many years—subject to one or two notable exceptions, of which we are aware —is able to say with a fair degree of certainty whether he is within or without the charge to tax. This legislation is not that kind. Having regard to the purpose of the Bill, the broad intent, the necessity for which my hon. and learned Friend the Member for Dover acknowledged, unpalatable though it may be, it is essential to include a power of this sort to ensure that we sweep up, as it were, within the terms of any order or notice particular kinds of pay or price or charge which might not, on an ordinary judicial interpretation of these words without an extended definition, be apt to include them.
  I give another example. It is desirable that the expression
  "charges for the performance of services"
  should be capable of applying to sums which are clearly payments for services, whatever they may be called. They may be called "admission charges", but they are, in fact, payment for services. It is right that in these circumstances—if it is deemed necessary, as it was under the Counter-Inflation (Temporary Provisions) Act, to issue a notice restraining certain
  1466
  admission charges—it should be made clear that they are within the scope of the notice issued.
  Mr. Peter Rees: It is important to clarify these points. Does my hon. Friend mean that the court will have no regard to the form of a transaction when applying the terms of the Bill?
  Mr. Jenkin: I do not think that is a question I can answer.
  Mr. Brian Walden: I am sure it is not.
  Mr. Rees: Perhaps I phrased it badly. Is it the Government's intention that the court should have no regard to the form in which a transaction is cast?
  Mr. Jenkin: If an order were made embodying a definition extending—shall we say?—to the word "charges" a particular meaning, if the question were at issue in the litigation the court would be bound to have regard to the use made of this paragraph to give an extended meaning of the word "charge"; whether that was reasonable, having regard to the general purport of the legislation, and whether it was comprehended, supposing an agency had made the order, within the terms of the code.
  Clearly the court would have regard to the nature of the transaction to which the order or notice was directed. It could not otherwise construe the power that had been used. Deciding, "Was one comprised in the other?" will be a difficult question—difficult enough for the court and even more difficult for a lawyer advising his client. But by the time the lawyer is advising his client he has the order or notice. That is the point at which the legal obligation arises.
  My hon. and learned Friend mentioned the phrase "relevant transactions". It is essential that it should be capable of definition in many different circumstances which apply, on the one hand, in relation to sales or agreement for sale of goods and, on the other, to charges for the performance of such services, for instance, as aircraft flights.
  I turn now to the question of sale or agreement. It may be important to know whether a transaction comes under the Counter-Inflation (Temporary Provisions) Act or under this Bill. If it is an agreement for the sale of goods at

  1467
  a future date, is the transaction to be regarded as coming at the time when the agreement was made, which might fall within the Counter-Inflation (Temporary Provisions) Act, or at the time when the goods are delivered or appropriated to the contract, which might fall within after phase 2 is in operation? It is necessary to ensure that it will be made clear in the notice which transaction is to be regarded as the relevant transaction for the purpose of the notice or order. It is necessary for the person concerned to know where he stands.
  Mr. Ronald Bell: That is why I attached importance to the phrase "relevant transaction". It means that the Minister can decide which phase he will put it in. The Minister can decide whether it comes under the temporary provisions Act or under this Bill. By a suitable definition of "transaction", the powers can be used retrospectively. The contract may be terminated, the payment finished, and then, by definition, transaction "may include the carrying out of a contract so that the Minister can catch people at almost any time afterwards. This is thoroughly oppressive, because no one will know where he stands until a notice has been made, and then he cannot appeal against it.
  Mr. Jenkin: I hesitate to meet my hon. and learned Friend's legal arguments head on because he is a much more experienced lawyer than I am, but I should have grave doubts whether we could define a transaction as referring to a transaction which was past and finished and no longer in existence—
  Mr. Bell: Still being executed.
  Mr. Jenkin: Then one would have to refer to the transaction as it was in being at the time. However, I take my hon. and learned Friend's point. I conceded in Committee, and I have conceded on Report, that these are very wide powers. However, in the Government's view—and I have examined the matter with great care—they are essential if the general purport of the legislation, which the House has accepted, is to be carried into effect.
  Over the years the words "remuneration" and "pay" have been given a
  1468
  variety of different and conflicting meanings in the courts. That alone points to the need for a power to define what one meant when making an order or notice referring to a particular kind of employee benefit. In addition, pay negotiations are becoming increasingly sophisticated. Many fringe benefits which hitherto perhaps have not often figured in the negotiations are now becoming more frequent. I refer to paragraph 113 of the Green Paper to show the range of benefits which may be included.
  Ideally, and in theory, one should be able to spell out in the Bill every one of those benefits. In practice, it is asking the impossible. The ingenuity of employers and employees in inventing new forms of employee benefit is limitless. It would be unfortunate, and contrary to Parliament's intention in giving the Bill a Second Reading, that people should be able to circumvent the main purposes of the Bill by methods of that sort. Hence, this power is needed to extend to these other forms of remuneration the order-making, notice-giving power in Part II.
  I have been referring to orders and notices made by the agencies. Orders can be made by Ministers—for instance, in relation to insurance premiums, dividends and rent. On dividends, I repeat what I said in Committee. I regard it as highly improbable that the word "dividend" could be construed to include interest, in the ordinary sense, though the code clearly indicates that there might be certain kinds of interest which are dividends dressed up as interest which are a distribution of profits and not a charge on the profits. In that case, it would seem not unreasonable that the definition should be extended to include them. But it would be an unreasonable extension of the word "dividend" to include straight interest—debenture interest or interest on a bank loan. That would be a matter for a court ultimately to decide.
  In so far as one is dealing with orders made by Ministers there is a further safeguard. Use of the power will be subject to scrutiny by the Joint Committee on Statutory Instruments. The sub-paragraph is needed for ministerial orders and notices since in the light of the circumstances of each case, it will be necessary to define such expressions

  1469
  as "premium", or "insurer"—in relation to syndicates of underwriters or even brokers— "ordinary dividends", "distributions", and so on. The phrase
  "restricting or preventing increases of rent"
  in Clause 10 is another phrase which would need to be defined to get round the massive ingenuity of those who deal with property if they are not to be allowed to circumvent the Bill's intentions.
  12.45 a.m.
  I hope that I have said enough to make it clear that it would be extremely difficult to include any express limitations on this power—let alone to spell out the complete parameters of the power—without running a real risk of providing opportunities for those who are determined to seek loopholes and thereby frustrate the purposes of the Bill.
  In Committee we referred to the long list of suggestions made by Mr. Clive Jenkins as to the way in which members of his union might circumvent the provisions of the Bill. We realise that we need to combat the ingenuity of such men if the purposes of the Bill are not to be frustrated. The important thing is that this subparagraph enables definitions to be made to deal with a widely differing variety of matters that fall within the scope of the Bill, but they do not and cannot be made to deal with matters falling outside the scope of the Bill and to deal with powers of the agencies. They cannot be made to deal with matters that fall outside the scope of the code.
  I, too, regard powers of this sort as distasteful. I regard the whole legislation as distasteful, but if that legislation is to carry this policy into effect and not be frustrated, I believe that powers of this nature are necessary in the Bill.
  In the light of this explanation, I hope that the House will accept that I have carefully considered both what my hon. Friends said in Committee and the points made by hon. Members today, but I cannot advise the acceptance of these amendments.
  Mr. Brian Walden: I shall not detain the House for more than a few minutes. The Chief Secretary ploughed on like the battleship "Potemkin", for the simple reason that what is in the mind of the hon. and learned Member for Buckinghamshire, South (Mr. Ronald Bell) is the position of the man on the Clapham omnibus. He is trying to get a definition of "reasonable", but the Chief Secretary —a shrewd old bird—has been conning him along with the idea that somewhere in this legislation there is something that has some kind of applicability to the sort of law that the hon. and learned Member understands.
  That is why the Chief Secretary tried to shrug off what I said as a joke. It is not a joke. I repeat—for the benefit of the hon. and learned Member—that it is true. If the Secretary of State does not like what one of these agencies has decided he will not implement it. If he does not think that it has gone far enough he has reserved the right to himself, in the Bill, to put in incidental or supplemental propositions. He can switch it and turn it to suit himself. This must be a surrender of authority to the executive. The Chief Secretary can talk all night. He can wring his hands and talk about his grief at this unpallatable legislation, and it will not change one jot or tittle. The Conservative Party had better get that idea into its head. It is true. It is not a joke; it is a fact.
  Amendment negatived.
  Further consideration of the Bill, as amended, adjourned.—[Mr. Patrick Jerkin.]
  Bill, as amended (in the Standing Committee) to be further considered this day.

  ADJOURNMENT
  Resolved, That this House do now adjourn—[Mr. Goodhew.]
  Adjourned accordingly at eleven minutes to One o'clock.

EMPLOYMENT
  Training
  Training
  Building Industry
  Building Industry
  Birmingham
  Birmingham
  Departmental headquarters (Relocation)
  Departmental headquarters (Relocation)
  National Industrial Relations Court
  National Industrial Relations Court
  Health Hazards
  Health Hazards
  Picketing
  Picketing
  Placings
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  Earnings and Prices
  Earnings and Prices
  Unfair Dismissal (Complaints)
  Unfair Dismissal (Complaints)
  Youth Employment Service
  Youth Employment Service
  Professional and Executive Service
  Professional and Executive Service
  Scotland
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  Rockware Glass, Greenford
  Rockware Glass, Greenford
  Fine Tubes, Plymouth
  Fine Tubes, Plymouth
  Mechanical Engineering (Production Methods)
  Mechanical Engineering (Production Methods)
  Vacancies
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  Factory Inspectors
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  Gas Industry
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  Longer-Term Prospects
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  Community Industry
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  Doctors (Insurance Cover)
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  Fishing Certificate Course
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  Industrial Disputes (Lost Working Days)
  Industrial Disputes (Lost Working Days)
  Industrial Accidents (Cheadle)
  Industrial Accidents (Cheadle)
  Leek
  Leek
  Portsmouth
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SOCIAL SERVICES
  Nurses (Pay)
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  Benefits (Strikers)
  Emergency Relief Services (Commercial Companies)
  Emergency Relief Services (Commercial Companies)
  Road Accidents (Emergency Medical Teams)
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  Psychotropic Drugs
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  Pharmaceutical Manufacturers (Voluntary Price Regulation)
  Pharmaceutical Manufacturers (Voluntary Price Regulation)
  Health Centres
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  Pemphigus vulgaris
  Pemphigus vulgaris
EDUCATION AND SCIENCE
  Northern Economic Planning Council
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DEFENCE
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TRADE AND INDUSTRY
  Concorde
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  Steel
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  Replica Firearms
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  Meat Substitutes (Protein Content)
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  RATES
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  COUNTER-INFLATION POLICY
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  COMPENSATION FOR PERSONAL INJURY (ROYAL COMMISSION)
AGRICULTURE, FISHERIES AND FOOD
  Wheat (Denaturing Dyes)
  Wheat (Denaturing Dyes)
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  Meat
  Meat
  Nuts
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  Fruit and Vegetables (EEC Proposals)
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  Food (Subsidies)
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  COURT OF PROTECTION
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CIVIL SERVICE
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  Greater London Development Plan
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ENVIRONMENT
  Manchester-Sheffield Motorway
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  Historic Buildings (Bromley)
  Historic Buildings (Bromley)
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  Road Accidents (Eyesight Tests)
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  Greater London Development Plan (Motorway Proposals)
  Pedestrian Precincts
  Pedestrian Precincts
  Local Government Finance
  Local Government Finance
  Traffic Intersections (Study)
  Traffic Intersections (Study)
  Crown Properties (Tenants' Protection)
  Crown Properties (Tenants' Protection)
  Kearsley (Rates)
  Kearsley (Rates)
FOREIGN AND COMMONWEALTH AFFAIRS
  Police Officers (Saigon)
  Police Officers (Saigon)
  Pharmaceutical Manufacturers (EEC Fines)
  Pharmaceutical Manufacturers (EEC Fines)
HOME DEPARTMENT
  Indian High Commission (Shooting Incident)
  Indian High Commission (Shooting Incident)
  Replica Weapons
  Replica Weapons
NATIONAL FINANCE
  European Communities (Publications)
  European Communities (Publications)
  Crown Properties (Rateable Value)
  Crown Properties (Rateable Value)
NORTHERN IRELAND
  Rents and Rates
  Rents and Rates
  Border Poll
  Border Poll
  Casement Park (Army Occupation)
  Casement Park (Army Occupation)
WALES
  Cervical Cytology
  Cervical Cytology

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

PAGE COMMITTEE'S REPORT ON NATIONAL SAVINGS
LORD HOY: 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 to publish the Report of the Page Committee.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, in answer to the noble Lord's Question, I understand that the Page Committee, which was set up in September, 1971, is at present drafting its Report on National Savings which will be presented to the Chancellor of the Exchequer. It is hoped that it may be possible to publish the Report around Easter.
LORD HOY: My Lords, I am grateful to the noble Earl for his reply. May I ask him whether he realises the importance of this subject? There are 13 million accounts in the trustee savings banks in this country, and they are still the greatest savings banks in the world, but along with the national Post Office they are under the handicap of not being able to offer services to their depositors because of the present law. May we have an assurance that when Page does report no time will be lost, not only in presenting it to Parliament but, I hope, in making provision for the trustee savings banks and the Post Office savings banks to meet the needs of at least one quarter of the people of this country?
EARL JELLICOE: My Lords, I am grateful to the noble Lord for expressing his gratitude for my reply. I am glad that he was grateful, because of course I gave him a direct Answer to a direct Question. As for the substance of the
522
Report, I believe that it would be right for us all to await the Report itself and for the Government then to consider the matter. This is a vast and very important area. I can assure the noble Lord that the whole area will receive the attention that it undoubtedly deserves to have.
LORD DAVIES OF LEEK: My Lords, after spending an hour this morning finding out what the Page Report was, may I ask the noble Earl whether he is aware that some of us believe that in these inflationary days it may be worth the Government's while, when this Report is put out, to consider increasing the interest on National Savings as an incentive to ordinary people to invest?
EARL JELLICOE: My Lords, if the noble Lord had telephoned me I could have told him very quickly what the Page Report was about. I was asked a Question about the timing of the publication of the Report, and I have given a reply to that. I have assured noble Lords that it will receive the careful attention of my right honourable friend. I think it would be quite wrong for me at the moment to be drawn on to the substance of the Report, which the Government have not yet seen, let alone this member of the Government.
LORD HOY: My Lords, while interest rates are always important, services inside the banks are also very important. Trustee savings banks are prevented at the present time from offering services to depositors, and have to transfer to the joint stock banks those services together with the cash that belongs to the depositors in the trustee savings banks. This is an important point so far as Page is concerned.
EARL JELLICOE: My Lords, I take due note of the point that the noble Lord has made, but I must again revert to the position that I should be very willing that this House should debate the Page Report, but I think that it would be a mistake to try to debate it and the area around it until we have the Report.

LIGHT RAILWAY ORDERS: CENTRAL WALES LINE
2.38 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question

523
which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are now able to say when the draft for a Light Railway Order for the central Wales line (Craven Arms to Llanelli) will be implemented; whether there are plans for other similar Orders; and whether they will make a Statement on the usefulness of such orders as the means to reduce the overall costs of railway services in areas of light traffic.
LORD MOWBRAY AND STOURTON: My Lords, the Order was made on March 29, 1972, and the line is already operating as a light railway. It is for the Railways Board to decide whether to seek similar Orders where they consider this might offer practical or economic advantages, and my right honourable friend would judge such applications on their individual merits.
THE EARL OF KINNOULL: My Lords, I thank my noble friend for that reply. May I ask what savings it is estimated this Order will effect upon that branch line?
LORD MOWBRAY AND STOURTON: My Lords, I cannot give an absolutely exact answer to that question because I do not think that we have had long enough time to collect all the figures. By and large—and I am not going to be pinned down exactly by the noble Earl—there will be an estimated saving of about 10 per cent.
LORD CHAMPION: My Lords, can the noble Lord tell us whether the Railways Board have made any other applications in relation to other areas?
LORD MOWBRAY AND STOURTON: My Lords, I am not at this moment aware of any other applications that the Railways Board have made to make railways into light railways.

PARKING FACILITIES IN ROYAL PARKS
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, in order to effect an immediate reduction in the number of daily commuter cars entering Central London, they will withdraw all parking facilities in the Royal Parks.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, the Government's policy is to provide parking for genuine visitors to the Royal Parks while deterring parking by the all-day commuter. With this in mind, parking before noon will shortly be prohibited in St. James's Park, Green Park and Hyde Park and before 11 a.m. in Regent's Park. If more stringent controls are needed my right honourable friend the Secretary of State for the Environment will not hesitate to introduce them.
LORD BALFOUR OF INCHRYE: My Lords, while those controls will go some way towards reducing the number of commuter cars, is the Minister aware that it would be far better to prohibit parking in the Royal Parks for all time, so that the number of cars is at once reduced by a tough and positive decision?
LORD SANDFORD: My Lords, I am afraid that I cannot agree with my noble friend. The Royal Parks are there for people to enjoy, and in our parking policy we have to distinguish between the provision to be made for genuine visitors to the Royal Parks and restricting the facility for the all-day commuter. We believe that this policy will secure that result.
LORD REIGATE: My Lords, if it is the policy of Her Majesty's Government to reduce the number of commuter cars in London, will my noble friend and his Department extend their inquiries to cover the use of parking facilities within the perimeter of various Government Departments and at such places as the Horseguards, around the Ministry of Defence, and so forth?
LORD SANDFORD: My Lords, the Horseguards is part of the Royal Parks. As to the rest of London, the G.L.C. is the main traffic authority.
LORD REIGATE: My Lords, arising out of that answer, may I point out that

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what I meant was the perimeter of Government Departments?
LORD NUGENT OF GUILDFORD: My Lords, is my noble friend aware that his Answer is much to be welcomed? Is he aware that for years now the parking space in the Royal Parks has been occupied from early morning to late at night by the same cars, and has long since ceased to perform the purpose which we would wish of providing for the occasional visitor? Also, is my noble friend aware that, if the action proposed is not sufficient, he should go further still?
LORD SANDFORD: My Lords, I am most grateful to my noble friend.
LORD SHINWELL: My Lords, if it is impossible to reduce the number of cars parking in the Royal Parks—which has already become a bit of an abomination and is very unsightly—why not try to raise revenue by introducing parking meters for them? What is wrong with that?
Loan SANDFORD: My Lords, there are a number of possibilities beside those which I have just outlined, and we shall keep them all under review. But these proposals are the ones which at the present moment we think will secure the policy we want to pursue.
LORD STRABOLGI: My Lords, may I ask the noble Lord whether the Government are aware that there is an enormous underground garage at Marble Arch which is very sparsely used, probably because it is too expensive? Will they investigate means of making this easier to use?
LORD SANDFORD: My Lords, needless to say we looked with the G.L.C. into the situation that pertains around the Parks before we decided to introduce these measures.
LORD HANKEY: My Lords, will the Government bear in mind that if unduly savage measures are taken they might damage the economy of London, and indeed of the country, and will probably cause more unemployment?
LORD SANDFORD: My Lords, noble Lords will have seen in my right honourable friend's comment on the Layfield Committee's Report on the Greater
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London Development Plan, that he takes the view that traffic control requires a combination of measures to produce the desired results.
LORD BALFOUR OF INCHRYE: My Lords, reverting to the Minister's original reply, am I to understand that it is the policy of the Government to retain parking in the Royal Parks in order that the small minority of visitors who use motor cars should have that facility granted to them, at the expense of many thousands of people who visit the Parks without the need for cars?
LORD SANDFORD: My Lords, again I cannot entirely agree with my noble friend. If all parking were prohibited around all the Royal Parks they would then be used exclusively by the people who are lucky enough to live around them. They are available for Londoners as a whole, and I am sure it must be possible for people to go to the Royal Parks from wherever they happen to live and park their cars there. What we are anxious to prevent is the use of the Royal Parks as all-day car parks by commuters.

NATIONAL HEALTH SERVICE REORGANISATION BILL [H.L.]
2.47 p.m.
EARL ST. ALDWYN: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the National Health Service Reorganisation Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I beg to move that this Bill be now read a third time. If I may trespass on your Lordships' time for just a moment or two, it is appropriate to thank your Lordships for the very constructive way in which you have dealt with this Bill. On Second Reading I drew attention to the fact that this is the first time that a major Bill has started its life in this House, and it follows an undertaking given by my noble friend

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the Leader of the House that he would see what could be done to balance out the spread of legislation between the two Houses. He has discharged that obligation by producing at least this Bill as the first major Bill to start its progress in this House. It has been a unique experience. It has not always been easy and there have been certain difficulties. Not having had a previous sifting of the Bill by the other place has caused a great deal of extra work, particularly for Members of the Benches opposite. But I am grateful to all your Lordships for all the constructive work you have done on the Bill, and I believe that it has been a successful precedent. We have made a great many Amendments to the Bill and most of them are significant improvements. We have made more effective the professional advisory machinery. We have recast the whole set-up so far as community health councils are concerned. We have introduced some important Amendments on the subject of the Health Service Commissioner and with regard to staff consultation. We have also had some useful debates on many other matters of policy arising out of the Bill, especially the linkage between the health authorities and the local authorities, and have had some useful discussions on the subject of family planning, including one major Amendment.
I am particularly grateful to the three Graces, if I may so term them, on the Front Bench opposite, the noble Baronesses, Lady Serota, Lady White and Lady Llewelyn-Davies of Hastoe. Brightness, joyfulness and bloom were the Graces, and the noble Baronesses certainly displayed those qualities as well as being very powerful advocates for their viewpoint, and all of them have had a significant influence on the Bill. Associated with the Graces was the god Hermes—in this case the noble Lord, Lord Garnsworthy. The god Hermes, your Lordships will remember, was a precocious child and the god of eloquence, and certainly the noble Lord was very eloquent in defence of the interests of the staff, about whom both he and I have a deep concern.
I should also like to thank my noble friends on this side of the House. They have not always supported me in the Lobbies; in fact, some of my noble girl
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friends have been particularly rebellious. But I should like to thank all those noble Lords, especially some of my noble friends who have deep experience of the Health Service—the noble Lords, Lord Grenfell, Lord Reigate and Lord Auckland, Lady Ruthven, Lord Cottesloe, and others. In particular, perhaps, may I thank my noble friends Lord Amory and Lord Brooke of Cumnor, the Castor and Pollux, I think, of our side, for their very constructive assistance and suggestions to help this Bill forward. Others of your Lordships have played a considerable part in the Bill. The noble Lords, Lord Platt, Lord Brock and Lord Amulree have effectively watched over the interests of Aesculapius; and the right reverend Prelate the Bishop of Lichfield, who is an old and valued friend of the National Health Service, has been very helpful, too. Finally, may I thank my two colleagues on this Bench, my noble friends Lord Belstead and Lady Young, for their patience and untiring support in the course of the passage of the Bill? I beg to move.
Moved, That the Bill be now read 3ª.—(Lord Aberdare.)
2.52 p.m.
BARONESS SEROTA: My Lords, I know noble Lords will be very appreciative of the generous and humorous words of the noble Lord, Lord Aberdare, and would undoubtedly wish me, first and foremost, to thank him and his colleagues for the unfailing patience and courtesy, and fortitude, which they have shown consistently throughout our consideration of this major measure. Apart from the sheer physical stamina involved in steering a Bill of this size through the House, the noble Lord, Lord Aberdare, has accepted Government defeats on a number of issues of policy without bitterness or rancour, and without seeking to reverse the will of the House at a later stage. He has also—and we are most appreciative of this—listened to and taken heed of the strength of feeling expressed on all sides of the House, as well as from these Benches, on certain aspects of the Bill, to the point of submitting Government Amendments at the Report stage to meet many of the matters raised during the examination of the Bill by noble Lords who spoke from long experience and direct knowledge of the National Health Service.

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In addition to those whom I have learned in the course of these debates to call my noble Health Service friends I should particularly like to thank my colleagues, the noble Baroness, Lady White, Lord Garnsworthy, Lord Stow Hill and Lady Llewelyn-Davies, who unfortunately is unable to be with us to-day, for their invaluable support throughout the examination of the Bill and for all the time, tolerance and effort that their participation in this truly co-operative endeavour has involved. The kind references by the noble Lord, Lord Aberdare, to my noble friends and myself are greatly appreciated and we in our turn would wish to thank the staff of the Department, through the Minister, for all that they have done in these many months, if not years, on the preparation of the legislation, its passage through this House, and the preparation for the transition in which they are now heavily involved. As a result of all our labours I would warmly agree with the noble Lord, Lord Aberdare, that the Bill which will now go forward to another place for consideration and scrutiny has greatly benefited from starting its passage here early in December, and I only hope that this experience, apart from bringing credit on this House, will encourage rather than deter the Government from seeking in future Sessions to balance the burden of the legislative programme in this way.
The Bill still does, however, contain a number of major provisions, particularly in relation to the composition and the functions of the proposed Regional and Area Health Authorities, to which we on this side are as firmly opposed as ever. In spite of all our efforts, the Government have refused to give an inch on the rigid doctrine of absolute Ministerial appointment and control of the new Health Authorities which has determined the pattern of the reorganisation provided in the Bill. They have also completely failed, in our view, to take the opportunity of this first major reorganisation of the Health Service since its inception in 1946 to decentralise and democratise one of the greatest of our social services by allowing the producers of the service—the doctors, the nurses and other Health Service staff—together with the consumers of the service to play a more direct part in the new authorities which will take over in April, 1974. We are
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also particularly concerned at their refusal to provide for any arrangement to coordinate the strategic planning of health care services at regional level with other major social services to which they relate. I have little doubt that this very crucial question of the relationship of the new Regional Health Authorities with other regional agencies and to local government both now and in the future will be raised in another place. We also welcome the improvements the Government have made to Clause 9. There are still a number of matters in relation to community health councils that could be discussed further particularly in relation to staff and premises. Again, there will be opportunity for these matters to be further considered elsewhere.
My Lords, throughout the consideration of this Bill we have been constantly aware of the need for Parliament to bring to an end, as soon as is compatible with a full and thorough examination of the Government's proposals, the long period future of a Service which depends above ably experienced since the publication of the first Green Paper nearly five years ago. We have therefore refrained from putting down any further Amendments or raising particular issues to-day on Third Reading although we greatly regret that the Bill still does not contain a number of proposals that have been made in the course of our discussions. But I know that my noble friend Lord Garnsworthy and all concerned with the future of a Service which depends above all on those who provide it would particularly wish me to thank the Government, and the noble Lord, Lord Aberdare, especially, for the undertakings that have been given and for the way in which the Bill has been improved in relation to consultations with staff interests in the processes of reorganisations and in the extensive preparations for the April, 1974, changeover which is now gathering momentum. For, in spite of the provisions of Clause 1, the real burden of this major reorganisation will undoubtedly fall on their shoulders while they must continue at the same time in every respect to maintain the level of the existing services to patients. We would therefore want to give them our full support at this time and wish them every success in the difficult months, the

531
all too few months, to come in which they will have to effect the transition once Parliament has determined the final shape of the Service.
Finally, my Lords, I know that there are some noble Lords who genuinely doubt whether this reorganisation will really benefit individual patients or justify the great upheaval that is undoubtedly involved. I am afraid that the dominant emphasis in Government policy on the bureaucratic management and control of the new Service from Whitehall downwards has reinforced these views. For my part, I believe wholeheartedly in the very real advantages which could flow to patients and to the community as a whole from the development of a truly integrated and comprehensive community-based Health Service from which the existing inequalities between Regions, between social classes and particularly between people with handicaps and those without must be eliminated; but such a service, in our view, must be based on democratic principles of participation and control by managing authorities which are truly representative of, and sensitive to, producer and consumer interests from the outset.
Moreover, the new Service must surely be planned and provided at all levels and not merely at Area level in conjunction with the other great complementary social services—housing, education, the personal social services and environmental planning—if the needs of the individual patients are to be more effectively met and if we are to develop health-care services with a stronger emphasis on prevention and real care in the community. Unless this reorganisation succeeds in strengthening the general practitioner and community base of the National Health Service by developing improved local health and social care services to the family doctor and his team we shall not reduce the present demands on the Hospital Service and effect the much needed change in the balance of emphasis between prevention and cure. We shall therefore watch the progress of this Bill with great interest as it is considered in another place and hope that it will be returned to us with even more improvements than we have managed to achieve in this House. Although it is primarily concerned with organisation and struc
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ture, it is a Bill which will undoubtedly affect the future health and wellbeing of every single citizen and of future generations.
3.2 p.m.
LORD REIGATE: My Lords, may I, too, congratulate my noble friend on navigating this great measure through your Lordships' House? Perhaps I may also be allowed briefly to utter a very slight lament: it is that one of the outstanding changes in this Bill is the abolition of the independent boards of governors of the teaching hospitals. Speaking as one of the chairmen, I think that many will share my regret at the passing of a long and honourable tradition which goes back into the mists of time and has, I think, helped to make British medicine the very great service that it is. Those with whom I am associated in the Teaching Hospitals Association have endeavoured to point out some of the consequences as we see them. My noble friend and the Secretary of State have always listened with kindness, but not always, perhaps, as sympathetically as we should have wished. Nor, I think, have our arguments always been comprehended. However, my Lords, if this is the price of unity, we feel that we must accept the decision although with regret and with some misgivings.
It is fair that I should point out that through all the discussions, through all the long arguments, no one has ever sought to claim that this change is going to improve medical education. It is also fair to point out that the future of the Health Service must in the long run depend on the standards of medical education. Teaching hospitals exist to serve patients first and foremost, but also to serve the medical schools, and it is possible that the medical schools may find that the Area Health Authorities, which have many other irons in the fire and on which the schools will have only a small representation, will not be such sympathetic partners as the teaching hospital boards to whom they have been accustomed. I do not want to indulge in any way in an unnecessary jeremiad but merely to give a warning. After all, my Lords, if there are faults in the Bill, even when it becomes an Act of Parliament they can be remedied in the next National Health Service Reorganisation Bill. If history teaches us anything it should teach

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us that as the measure of 1949 followed that of 1946, the next measure should be in 1976.
3.5 p.m.
LORD GRENFELL: My Lords, I also should like to congratulate my noble friend on the successful termination of this Bill. I think that we are passing on a far better Bill than the measure that came to us. My noble friend has always been ready to listen to the voices in this House, and that is vitally important. In reorganising the Health Service I am not convinced that the Ambulance Service should remain under the G.L.C. rather than come under the umbrella of the new Health Service, but that has been the will of the House. My hospital management committee felt very deeply that a statutory duty should be put on the community health councils to inspect and report on hospitals rather than merely have access to them. I think that is a sound idea, and I hope that it will be considered in another place. I feel that we have greatly improved the constitution of the community health councils. I would stress very sincerely the real importance of ensuring that no part of the Health Service should be subjected in any way to Party politics. I wish the Bill all success. We shall be be able to judge its effect better and more fully in about two years' time when we see how this actually works. In any case, I feel convinced that all concerned will endeavour to ensure that the patient is always looked after to the best of their ability.
LADY RUTHVEN or FREELAND: My Lords, I should like to add my thanks to my noble friend the Minister of State for what he has done to this Bill. He was most amenable to suggestions from both sides of the House. I suppose that in a way it was rather difficult for him to accept changes in the Bill which were suggested from his own side of the House, but he did it in a charming and delightful manner. As a Back Bencher of his Party, I should like to thank him for all he has done to make the Bill a much better Bill to go to the other House.
3.8 p.m.
LORD PLATT: My Lords, speaking from the Cross-Benches, I must first regret that, having had to attend a
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luncheon, I was not able to be in your Lordships' House in time to hear the beginning of the Third Reading debate on this Bill. I would add my thanks to the Minister, who has carried the measure through with such courtesy, efficiency and obvious knowledge of the questions involved. I am most grateful to him.
LORD AMULREE: My Lords, I should like to say a word of thanks from these Benches to the noble Lord, Lord Aberdare, for the great care and attention that he has given to this Bill and for the able and competent way in which he dealt with all the various problems involved. I am certain that one of the reasons why we were lucky enough to get the Bill introduced in your Lordships' House was because the Secretary of State knew that the noble Lord would be in charge of it. I should like to thank him for the Amendments which he accepted from us and for the kind and able way in which he conducted the business.
3.10 p.m.
BARONESS WHITE: My Lords, may I add a word or two to those so felicitously spoken by my noble friend Lady Serota? First, I should like to thank the Minister for his charming compliment. In my most dreamlike moments I do not think that I ever cast myself as a Grace. A Muse may be, but not a Grace. However, it was no less agreeable that someone should have thought of me in those terms. I am very happy that we are sending the Bill to another place as much improved as I think it has been by the labours of noble Lords on both sides of the House. There has been a quite remarkable unanimity on certain matters—that is to say, unanimity with the exception of the Minister, but he has been most forthcoming where he rightly felt that the strong feeling of the House was in a certain direction.
I have only two matters which still rather concern me in relation to the Bill. As some of your Lordships who took a close interest in the matter know, I was myself especially detailed to study the community health councils and the provision of an Ombudsman, a Health Service Commissioner. I should like to make the point which I made last week on the race relations debate. I was somewhat concerned at the proliferation of bodies for the protection of the citizen in various directions. We have now had

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Government support for a special police tribunal for possible complaints against the police; we have the machinery which we are setting up under this Bill, and major local authorities in various parts of the country are also establishing offices for the protection of the citizen including their relationships with the Social Security Department. It seems to me that the time has come when the Government ought to be giving some thought to this proliferation and to ask themselves what the local administration should be and whether we are justified in setting up networks of different bodies to follow up various procedures without interrelationship one with the other.
The other point which concerns me, my Lords, is the fact that the National Health Service Reorganisation Bill does not take cognisance of another section of the health care in this country, the occupational Health Service. I know that we passed a Bill last Session on the establishing of the Employment Medical Advisory Service; that consultations are going on about the Robens Report on Safety and Health and that work and legislation are to follow upon that, but these matters are under the care of a different Department, the Department of Employment, and one would hope that there is genuine collaboration between the two Departments. I have here the circular which was sent out by the Department of Employment concerning the Employment Medical Advisory Service which refers to liaison with general practitioners, hospital staffs, works medical officers and others interested in occupational medicine. It is being established on the basis of nine regions which may or may not have any relationship at all to regions set up under the Bill now leaving this House. Certain National Health facilities, particularly of a diagnostic nature, including a central pathology laboratory in London, are to be put at the disposal of the Employment Medical Advisory Service. This was not discussed in this House in relation to the Bill before us, yet the two things are to my mind plainly closely connected.
I am further disturbed by the comments made by a very highly respected Member of another place, Miss Mervyn Pyke, who was herself a Member of the Robens Committee. In addressing the
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annual conference of the occupational health section of the Royal College of Nursing recently, she said that the health part of the Robens Report was the woolliest and least satisfactory, and when she was taxed with this by one of the members of the Royal College of Nursing she said:
"To have gone into occupational health in sufficient depth, the Report would have had to be held up for six or seven months, and we felt we could not afford to lose that amount of time."
I mention this because if anything serious is to be done on the occupational health side I hope that there will be the closest co-operation between the Department of Health and Social Security and the Department of Employment. I think I am entitled to raise this plea because one Government after another has refused to face the real problems of occupational health. I do not blame this Government any more than I did my own, but I think it is wrong that we should not take cognisance of the difficulties we have not been able to tackle in this Bill. While we should congratulate all concerned on the Bill we have before us, we should regret that it did not extend to industrial and occupational health.
LORD ABERDARE: My Lords, I should like to thank your Lordships for your very kind personal references to me. I have had the greatest sympathy from my right honourable friend the Secretary of State which has enabled me to meet some of your Lordships' wishes. I recognise that there are still deep divisions between the two sides of the House on the administrative framework of the new National Health Service, but all that is on the Record and it would not be appropriate to re-argue it now.
May I say one word to my noble friend Lord Reigate. We have listened sympathetically to the arguments of the Teaching Hospitals Association. We are all deeply grateful to the members of the Board of Governors for the work they have done over many years past, as indeed we are to the members of all the other Boards and Committees that serve the National Health Service. I can assure him that if we can avoid it nothing we do will harm medical education, and the very fact of integration might well be of great benefit to medical education. I have listened with interest to what the

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noble Baroness had to say about occupational health and I will certainly study it.
On Question, Bill read 3ª, An Amendment (Privilege) made: Bill passed, and sent to the Commons.

IMMIGRATION RULES FOR CONTROL
3.17 p.m.
LORD O'HAGAN LORD O'HAGAN rose to move, That this House takes note of the Statements of Immigration Rules for Control on and after Entry: Commonwealth Citizens, and E.E.C. and other Non-Commonwealth Nationals, made by the Secretary of State for the Home Department and laid before the House on January 25, 1973. The noble Lord said: My Lords, I am afraid I must confess that I have come unprepared for this afternoon's debate. I am almost at a loss to know how to continue. I did not realise that it was the convention that the first speaker in a debate on Tuesday afternoon had to ornament his speech with a wealth of classical allusions. As to my own identity in classical mythology, I know I am not one of the Furies; I hope not a Cyclops with one single eye fixed forever on the subject of citizenship or immigration. I also very much hope that I am not a Cassandra with nothing but gloom and doom to give your Lordships this afternoon. Rather I hope to be able to prove to the noble Viscount, Lord Colville of Culross, that I am an Orpheus come to play sweet music to the Government with a wealth of constructive and harmonious ideas. I would also like to be harmonious at the beginning by taking this opportunity of congratulating the Government for at least taking the decision to re-unite many of the families who have been split after the confusion in Uganda. I congratulate the Government for taking the step they have just tentatively taken in this area.
We are doing something slightly curious this afternoon. We are not at a christening; we are at a funeral. We are going through the obsequies—and I hope if I have got it wrong the noble Viscount will leap to his feet and correct me—as laid down in Section 3(2) of the Immigration Act, which went through
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your Lordships' House and another place with so many trials and tribulations. We are debating a Statement of the Rules or any change in the Rules that the Secretary of State shall lay down from time to time. We cannot alter them; we cannot remove any rule that we dislike; we cannot say that a particular sentence is no good. All that we can do is to come along and make some brief (I hope) funeral orations on what has already been decided, and in this case, passed, by another place.
As your Lordships will have observed, the new Rules are to be in a different form from the version which was rejected by the other place. As a just reward, I suppose, instead of there being two Statements of Rules (as in the rejected version) there are now four Statements of Rules; so that we have twice as much. I think that this is an improvement because it makes clearer the distinction between the provisions for the E.E.C. and non-Commonwealth nationals and the provisions for the Commonwealth citizens. Although it is really too late to make any alteration and we have no alternative but to swallow them en bloc, I should like to make some specific criticisms of the Rules. There are some particular cases of changes that give one cause for thought. For example, what Mr. Enoch Powell called the "re-introduction of the qualifying grandmother", the grand-patrial clause, by the back door, is something about which I hope the noble Viscount will be able to reassure us. He may be able to tell us whether it is constitutionally proper that a provision struck out by a Committee of one House can be re-introduced by by means of subordinate rules some time later; although I admit the form of the re-introduced provision is almost, but not quite, the same.
There are one or two questions about changes between this and the former version of the Rules which I should like to put to the Minister. In the previous version (that rejected by another place) there was a phrase in Rule 16 which read:
"Admission as a visitor does not authorise the taking of employment for which a work permit is required."
This is a point about which a Member of your Lordships' House has asked me a question—mistakenly, I think, for I am

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not an expert on this matter. Whether you are allowed to work when you are admitted as a visitor is a tricky point and one which will arise from time to time. What has happened is this. In the new divided Rules this sentence is omitted in one form but retained in the other. It is omitted from HC79 but, as I understand it, it is retained in HC81.
There is the same sort of thing, the same strange lack of harmony between the two versions. For example, there is the discrepancy on supervised departure as an alternative to deportation. If the Minister, either now or in writing, could explain to me why this discrepancy should have arisen now that the Rules have been divided, I should be interested; because I should have thought that it was rather a strange thing to happen without any explanation or reason.
My Lords, perhaps one of the more constructive things that I can do this afternoon is to use some of the experience I have gained from going frequently to the countries of the E.E.C.—which I do as a Member of the European Parliament. Looking at these Rules when they first appeared, I was very interested to know whether our Statements of Rules covering nationals of the E.E.C. complied with their Rules. I took some pains to find out. I hope the noble Viscount can reassure the House that this matter has been gone into thoroughly—and I am sure that it has—because the official answers I get from the research staff in the European Parliament make it plain that this country has no obligation to show the authorities of the E.E.C. our Rules until they have been passed by both Houses of Parliament. The E.E.C. cannot officially take cognisance of our Rules until they are passed by both Houses. What happens if they do not like them? What happens if they do not fit in with everything they demand?
My information is that the formal processes do not require us to go closely into the form of the Rules with them before we have put them through Parliament. A reason behind my asking this question is that one of the Rules, that covering the freedom of movement and the rights of establishment of labour under the Treaty of Rome, lays down that when a person who is a national of
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a member State is moving about between one country and another of the Common Market he is entitled to take what the French call his conjoint (spouse). This is very much at variance with some of our citizenship laws. So far as the rights of transferring between husband and wife are concerned, we very much tend to think that they should go one way only. Perhaps there are some potential clashes here.
My Lords, there is one last point on the E.E.C. that I should like to bring forward. There is an Act, which I gather is still partly in force and which affects the Rules we are debating to-day, called the Aliens' Restrictions (Amendment) Act 1919. It has not been repealed in its entirety and, among other things (I must admit that this has now been repealed), it forbids any alien to change his name. I am informed by a Written Answer of yesterday that there are still sections of it in force which prohibit aliens from holding any pilotage certificates for any pilotage districts in the United Kingdom. If we have legislation of this sort on our Statute Book, are we sure that the E.E.C. Rules that we are talking about to-day comply with the conditions laid down by the Community for free movement of labour?
I should like now to come to what I hope is the constructive thing that I have to say this afternoon. As some of your Lordships may be all too painfully aware, I have been interested in this subject for some time. Since I have been going to the rest of Europe so often, I have found myself even more vividly aware of the confusion existing in our present citizenship laws. This is nothing particularly startling or new to say, but I think that the confusion of our citizenship laws is one of the underlying factors behind the disquiet and the despair in many quarters on subjects such as immigration and race relations. There is a feeling that something is being hidden and kept away. Governments are far too likely to wait until there is a crisis before acting in this field. We have had so many Immigration Acts recently—1962, 1968 and 1971—and decisions have had to be taken so fast that when taken they are not always the best decisions. I hope that before the next crisis arises, before the problem hits us all in the face and before we are forced to do something quickly

541
and therefore perhaps not entirely in a thought-out manner, we shall take steps to begin to tackle our citizenship problems. I would suggest to your Lordships that one of the ways we might do this is to have a Joint Select Committee of both Houses to look at the problem, study it and to make recommendations; or perhaps just a Committee of your Lordships' House where we have so much experience and wisdom of these matters from the great servants of the Empire and Commonwealth. Between the Houses we might mount a very powerful team to look at this problem.
During the passage of the Immigration Bill 1971, the noble and learned Lord who sits on the Woolsack told the House:
"The law in relation to citizenship, immigration and status is in a state of utmost confusion."—[OFFICIAL REPORT, 24/6/71, col. 1146.]
As those who followed that Bill will be aware, the Immigration Act of 1971 did nothing to improve the situation in regard to citizenship but only complicated the position, so that while what the noble and learned Lord said was true before the Bill was law, it is even more true now and I think we must begin to think out some of the very difficult decisions we will have to take on this subject before they are forced upon us. I believe that such a Joint Select Committee could do a great service by being a focus for collecting the relevant information and for making some practical recommendations in the light of evidence which it would collect which would in itself be something that could relieve anxiety, because people would feel that something was being done, someone was looking at the problem, and we were not waiting for the explosion which would force us to something drastic.
I hope I have been a mixture of Cassandra and Orpheus and that this debate will continue in the same vein. I feel that the fact that we have to have this debate at all shows that all is not entirely well with our immigration and citizenship laws. I believe the ideas I have ventured to suggest to your Lordships could be a small beginning to cutting down some of the anxiety and replacing it with a more confident certainty. I beg to move.
Moved, That this House takes note of the Statements of Immigration Rules for
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Control on and after Entry: Commonwealth Citizens and EEC and other Non-Commonwealth Nationals, made by the Secretary of State for the Home Department and laid before the House on January 25, 1973.—(Lord O'Hagan.)
3.32 p.m.
BARONESS WHITE: My Lords, I am sure we are grateful to the noble Lord Lord O'Hagan, for having provided us with an opportunity to have another look at the Immigration Rules, Rules which are slightly amended, although perhaps not as much as some of us would have wished, compared with those originally laid before us a little while ago. We look forward with keenest interest to hearing the two noble Lords who have chosen this occasion for making their maiden speeches. I am sure they will contribute greatly to our store of wisdom on what I think we all agree is a difficult and sensitive subject.
Looking back, I think one was perhaps more disturbed than one realised at the time of the statements made by the Home Secretary in another place on January 25 when he introduced these four sets of Rules to Parliament. When one considers the matter, it really is astonishing that a senior Minister of the Crown can say that it is important to reduce the immigration of citizens of other countries, both Commonwealth and non-Commonwealth, to the inescapable minimum when he is introducing a set of Immigration Rules which will in fact give, or extend, rights of immigration to this country to well over 200 million persons. I am speaking, of course, not only of the very large number who hypothetically would have the right to come here from the countries of the European Community, which admittedly make up the great majority of the figure I mentioned, but also of the additional rights given under these Rules to those Commonwealth citizens who can now provide, as Mr. Powell mentioned, the qualifying grandmother. There are other extensions not so significant but nevertheless included which will affect some people more favourably than others, particularly of course those who come for a working holiday, as it is called. This facility is now to be extended from three to five years. There will also be extensions of time limits for visitors; that factor is not discriminatory but could apply equally to everyone.

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The basic objections to the Rules very largely remain untouched in regard to this revised version. Some of your Lordships feel more strongly about this than others. They include the very favourable conditions for those coming here from the other Members of the European Community compared with Commonwealth citizens. Especially is this so in relation to the members of their families whom they are allowed to bring without let or hindrance, whereas Commonwealth citizens are not able so to do. May I remind your Lordships that a person coming here from Europe may bring in not only his wife and dependent children, but may also count as dependent children those up to the age of 21 rather than 18, which applies to the Commonwealth or, in certain circumstances in the Rules, strictly speaking only to those of 16 years of age. Such a person is also allowed to bring in parents and grandparents, again without having to comply with the extremely stringent conditions laid down in the Rules for citizens from other parts of the Commonwealth.
So it is with very mixed feelings that one still has to regard these Rules. The major change that has been made has been referred to by the noble Lord, Lord O'Hagan. It is what is called the "grandparent clause", and it has been included by the Government for reasons which politically are perfectly understandable. They were under great pressure from those who felt that some means must be found of indicating that we have a very special connection with persons from what, incorrectly, were called the old Commonwealth countries. Historically, that is not so. What was really meant was former white Dominions.
We ought just to examine the consequences of the Government having inserted this provision into the new Rules. I do not propose to quibble unduly about the constitutional propriety of putting into the Rules something quite deliberately reversed by Parliament when the principal Act on which these Rules are dependent went through Parliament. Parliament in its wisdom turned down the grandparent clause, and now it is brought in by the backdoor. It is just sufficiently different in law for the Government to be able to say that it is not
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in fact the precise provision that Parliament turned down. It is something of a legal quibble, but one can perhaps understand the political interests which led to the change. But I think one can fairly ask the Government whether, taking a slightly longer view, it has been worth making this change. I do so partly in the light of the statement by the Home Secretary on January 25, when he said, as I think we would all accept, that the actual number of persons likely to come to Great Britain for settlement from Australia, New Zealand and Canada is, in practice, likely to be few.
It was emphasised last week in the debate on these Rules in another place that in fact, if one looks at what has happened over the past few years, there has been a considerable net outflow from Britain of people from Australia, Canada and New Zealand who came here either just as visitors, or who came, did not really like it, and went home again. The figures suggest that net outflow of citizens from these countries has been about 250,000 in the past six years or so, so the numbers concerned in practice are going to be very small. And, of course, because it is linked not to citizenship of these particular countries, but to the grandparents of the persons concerned, the provision, while it may be gratifying to those who have the necessary grandparent, may also be regarded, and we understand has been regarded, as insulting by those Canadians, Australians and New Zealanders who do not have such a grandparent, although they are full and proper citizens of the countries concerned. This is making a distinction between citizens of those countries which is far from being acceptable to all the population there including, for example, French Canadians and others who would not be able to claim this right although their next door neighbours are able to do so. The excuse given by the Home Secretary for bringing in the grandparent was:
"that we need not in any way feel ourselves wrong in recognising close and genuine recent family ties with this country."
Well, my Lords, family ties, as we mentioned on an earlier occasion, could go back at least 150 years, which is not exactly recent. And, as against the kind of very distant and remote connection, one has far closer and live connection of people who are here but whose close

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living relatives are not allowed to join them except under the most stringent conditions.
The real objections, however, to having reinserted the grandparent clause is that it gives the appearance to people overseas of being racially biassed. I know again that it can be said that it is not so in form, but in practice, at least in the fairly near future, it is bound to appear to be so; and I think it has made things much more difficult, for example, in countries like India, which recognise that these particular provisions are directed not to help their former citizens, but those of other countries in the Commonwealth who are predominantly white. I very much doubt whether, even at the price of purchasing peace within their own Party, the Government were justified in putting back this grandparent clause.
Having said that, I should like to ask one or two questions as to just how the Government expect the provisions in the Rules to work. We have had issued almost simultaneously with the Rules some notes from the Department of Employment on the work permit scheme. I think it would be helpful if these could be enlarged upon a little so that we may know exactly what is the policy of the Government. For example, it is said that:
"Permits will be issued in future only for work requiring professional qualification, skill or experience and where the employment of an overseas worker is necessary."
There are a few exceptions. The exception for Malta we all know and accept; and there are certain exceptions for seasonal agricultural work, hotel employment and the like. But, broadly speaking, the provision is as I have said. I think we are entitled to ask that if such provisions are made they shall be firmly and equitably administered. When we were discussing this on an earlier occasion, the Minister of State may recall that I mentioned the people from the Philippines who had come here, as it seemed to me, quite unjustifiably, more particularly when at that time we were concerned with Asians from East Africa who could well to my mind, have been trained to do any work that the Filipino ladies have been doing. I was astonished to find from a Question which the noble Lord, Lord O'Hagan, put down recently that last year work permits were given to no fewer than
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2,677 persons from the Philippines, some of them, it has been revealed, coming to work here under most unsatisfactory conditions, both at low pay, and being obliged to enter into a bond, if they could not stand the working conditions here and did not stay for the necessary period, to repay their air fare, which for a distance of that kind must be quite substantial, out of their own pockets. When we have all the fuss that has been made over the Uganda Asians and others coming here, and when one finds this significant number of young women are imported for the benefit of certain manufacturers in this country, at low wages and with unsatisfactory living conditions—and particularly having regard to this question of the bond, which seems to have escaped all scrutiny by the Department of Employment, or whoever it was who was responsible—then one feels that a certain element of hypocrisy enters into this. We shall be happy to have assurances from the Minister of State when he comes to reply that there will be a stricter concern over conditions under which people are brought to work in this country.
Then, my Lords, there are some other matters in relation to the Rules which it would be helpful if we could have cleared up. I should be interested to know a little more about the matter of extending the working holiday (as it is called) from three years to five years. Five years is a very long time for a holiday of any kind. One would like to know what kind of work is contemplated as being permissible. There is no mention of these working holidaymakers in these notes on the work permit scheme that were issued last month. Nor is there any definition, so far as I can find, of what is meant by the word "young" in Rule 28 of the Statement of Immigration Rules for Control of Entry. There is reference to "young Common wealth citizens", but we are not told what that means. There is something about which we should be a little clearer, because again it is expected that these working holidays will be indulged in mostly by those who are white members of the Commonwealth, from Australia, Canada and New Zealand—they will not actually exclude others—and it appears as if this is a backdoor concession, in addition to the grandparent concession. I do not wish to be misunderstood. I

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have no objection to young people coming in and extending their experience by being in this country, but I do not think we should give the impression that we are doing something in a hole-and-corner way, and therefore we should know precisely what are the conditions contemplated.
In earlier discussions on these matters some of us felt fairly strongly about the bias against women in a number of these rules. Some of the points, following protests made on earlier occasions, have been slightly modified. For example, with regard to family deportation, the woman concerned, if her husband is deported, is not given any actual further substantial rights, but the instructions that the conditions which are to be taken into account in making decisions have been somewhat modified, and for that we are grateful. But there are one or two curious conditions which makes one wonder just how the mind of the Government works. For example, in his statement on January 25, as I understood it, the Home Secretary took credit for one of his four main points when he was describing the Rules. He said that Commonwealth citizens who marry women who reside here will themselves be admitted for settlement provided they had a grandparent born here—obviously trying to get some credit for doing something for women who reside here and who are perplexed about the way in which they have been treated.
In that case, of course, these men were entitled to come here anyway, and whether they are married or not or proposed to marry over here or not is neither here nor there. It seems quite absurd to appear to be taking credit for some concession and for rectifying the bias against women whereas when one analyses the supposed concession one finds there is no such thing. I do not wish to weary the House by going into further details, since the matter is really rather complex.
A number of other questions have been asked, one of them being about the various estimates of the numbers of categories of citizens who are now here. The Sunday Times a few weeks ago suggested that there were six categories. My own calculation is that there must be at least eight categories of persons who are concerned under these Rules. I was much
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interested in the final suggestion of the noble Lord, Lord O'Hagan, that we in Parliament should do what we could to examine and to expedite a review of the law of citizenship. I am well aware that the right honourable gentleman the Home Secretary has said that a Departmental study is proceeding on this matter. That is all well and good, but this state of affairs has now been going on for a very long time. It would be extremely interesting to hear the view of the Government on the suggestion that Parliament itself might be able to expedite the matter. If any suitable terms of reference can be worked out for a Select Committee from this House or for a Joint Select Committee with another place, I am sure I can speak for my noble friends on this side of the House in saying we should be very happy to co-operate with it.
3.53 p.m.
LORD PORRITT: My Lords, I crave the indulgence and forbearance of this noble House for a maiden speech, an experience which I am intrigued to find, despite the fact that I have reached and indeed passed the biblical age of three score years and ten, is as abrasive as that of a new boy going to school for the first time. Not unnaturally, I paid particular attention to what I hope I may call the "model maiden" made by the noble Duke, the Duke of Marlborough, about two weeks ago. I would hope to emulate his timing and brevity, but in choosing to take part in this discussion I cannot really claim to have eschewed a contentious subject. However, I am sure that your Lordships will agree that, referring to the debate in which the noble Duke spoke, we were all made fully aware that even in a simple matter concerning the protection of the humble badger it was possible to produce a remarkable number of divergent opinions.
When I went to New Zealand some five years ago as the representative of Her Majesty, I was delightfully and tactfully advised that in any pronouncements I chose to make it would be wise not to allow them to be labelled "political" or "contentious". This I found, frankly, to be quite impossible; and it is for that reason that I have to-day taken a calculated chance in speaking to this particular Motion. After all, I think your Lordships will agree that it is difficult in to-day's world to find any subject which

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is not contentious, or controversial—and probably it is a good thing that this should be so. I intend to deal only with those portions of the revised Immigration Rules for control on entry and after entry as they apply to Commonwealth citizens, and especially to New Zealand citizens. For these latter, I feel entitled to speak both from a birth qualification and from a very intimate knowledge of the country, its people and its way of life that I have been fortunate enough to glean in the last few years; but I hope your Lordships will agree that what I have to say applies in varying degrees to other Commonwealth countries, and particularly to the old Dominions.
First of all, I feel it would be churlish not to express appreciation of the valiant efforts of the right honourable gentleman the Home Secretary to mix oil and water. That there is some improvement in the revised Rules of January 25, 1973, one must admit: that there is not enough results from the fact that, under existing conditions, the path of the Home Secretary is very like that which Agag had to tread. In this connection we are dealing with people—in the case of New Zealanders, with our own kith and kin It would be very easy to treat the problem in a sentimental way, but I believe I am right in saying that this has already been done in this noble House. Your Lordships may also feel that the very word "Maiden", referring to a speech, carries a concept of sentimentality. I would personally prefer to consider sentiments in their literal meaning of "feelings", and would humbly suggest that often the feelings of people outweigh in value the facts of pounds and new pennies.
I think it is a consideration of such values in this mercenary, material, fast-moving and mechanised world in which we live that motivates the youth (the often sadly undisciplined youth) of to-day. They, quite often thoughtfully and honestly, object to restrictions and limitations on their activities which they consider unnecessary. I believe that New Zealanders and others will look upon even these revised Rules governing entry to this country in a rather similar way, Let us remember that during the whole of the 140 years of its British history, New Zealand was born in and has lived by British tradition: its way of life, de
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fence commitments, trade connections and cultural interests have all been inherently British. It is therefore unthinkable to the New Zealander that he should not be admitted freely to the country which he still calls, almost reflexly, "home" "the old country" or "the Mother country".
Searching through the intricate and involved phraseology of the revised Rules, one finds only one clause, Clause 27, which provides for anything approaching free entry—this is the clause which has been referred to by the noble Baroness, Lady White—and which applies to those who are so-called "patrials", or now the "grand-patrials". Is it appreciated that even this small group will in the course of nature become extinct in the next generation, or most certainly by the end of the century? For them at the moment the original insult has been tactfully converted into an inconvenience or an annoyance, though the hurt remains; but for their children—British children, my Lords—it will be a case, as it is now for non-patrials, of multiple restrictions and limitation of entry, the necessity of producing innumerable forms of various descriptions from various official Departments, of carrying birth and marriage certificates, confirmation of financial solvency and good conduct medals. And if and when they do gain entry, they will be limited as to the time that can be spent in the country, and restricted as to what they can do with that time. It would seem that under the existing Rules they will probably spend most of such time as is allowed to them in seeking extension of stay or removal of restrictions on their activities. Does any other country in the world put up such barriers against its own people?
My Lords, I would not for one moment plead a special case for New Zealand; such a connotation to-day, as your Lordships know, has an unpleasant aroma. I suggest, therefore, that there is no case at all. While one appreciates that exceptions make bad laws, it is usually admitted that the best of rules must allow for them. I must say that I find it an odd thought that had these Rules been in existence fifty years ago when I came to this country, I should probably have gained entry under the patrial clause, but I should almost certainly have been denied the privilege of addressing this

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noble House to-day. If I am to live with my conscience I must wholeheartedly support this Motion, and hope that it may lead to some constructive action.
4.2 p.m.
LORD FOOT: My Lords, it falls to my happy lot to be able to be the first to express pleasure and satisfaction to the noble Lord, Lord Porritt, on his maiden speech to which we have just listened. The attention that the House has given to it, and the clear interest which the House has shown in every word the noble Lord has spoken to us, will have conveyed already to him how much his speech has been appreciated. I took the precaution, when I saw that I was to follow the noble Lord, of having a look at his record in a well-known work of reference. I came across one item in the vast list of achievements and positions that the noble Lord has occupied which particulary interested me: I see he was a Brigadier in the Royal Army Medical Corps in the 21st Army Group. That enables me to point out that I have therefore a very remote and tenuous connection with the noble Lord. It so happened that for a short period of time I was attached to a brigade field ambulance under the authority at the top of the 21st Army Group. Therefore, in a remote sense I am able this afternoon to salute my very superior senior officer after a period of thirty years. It is an opportunity which I take with great satisfaction.
In discussing this subject which the noble Lord, Lord O'Hagan, has raised, my mind goes back to the debate that we had in this House on Second Reading of the Immigration Bill in 1971. I have looked back to see how the Act was commended to us at that time by the noble Lord, Lord Windlesham, who was in charge of the measure on behalf of the Government. I was particularly interested to remind myself of the objectives and the criteria which the noble Lord, Lord Windlesham, offered to the House as being the justification of that Bill.
The noble Lord attached particular importance to three criteria. The first criterion was that he thought it would be universally agreed that there was a general desirability of setting out clearly and simply in one comprehensive Statute the law controlling immigration into this country. The second criterion was that the Bill and the law should be as short
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and explicit as possible. The third criterion, and the most important for my present purposes, was that the Bill, the noble Lord said, proposed a new, single—and I emphasise the word "single"—system of control over all immigration—and I emphasise the words "all immigration"—from overseas to which everyone would be subject, except the patrials. That was the objective which was given to us when we first discussed that Bill in this House not so long ago.
I welcome the Rules which we now have in front of us on one count at least—and possibly on only one count—because if one reads the Rules one finds that they spell out perfectly clearly how the Government have utterly failed to meet the criteria which were laid down at the very beginning by which we could judge whether they had succeeded in their purpose. The first objective was clear and simple. I suggest it would challenge the ingenuity of anyone to produce a set of Rules more obscure, more difficult and more complicated than we have in these papers. On the matter of brevity, we have no fewer than 73 pages of these Rules. On the matter of explicitness, I simply ask this question. Is there any noble Lord here, with the exception of the Minister, who is always fully aware of everything, who could put his hand on his heart, having read these Rules, and say that he understands them all and understands all their implications?
Then, what of the criterion that there should be one single system of control for all immigrants, except patrials? That is completely in tatters; it has gone to the winds. The Community and Race Relations unit of the British Council of Churches have made an examination of these Rules, and in doing that they have succeeded in identifying no fewer than eight different categories of people, of potential entrants to this country, who are differently treated under these regulations, either on entry, or after entry, or sometimes in both situations. How can it possibly be contended that Rules that produce that result fulfil the test of being a single system applicable to all?
The fact that the Government have not succeeded in that is demonstrated by the fact that they have seen fit to issue two sets of Rules, one for dealing with Commonwealth immigrants and one for dealing with others. If this is a single system

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of control applicable undiscriminatingly to everybody, why is it necessary to set the Rules out in different places? What has happened here is not that the Government have simply failed in their objective, not that they have set out to try to devise a single system where everybody will be treated equally. I am afraid I have to suggest that it is not for want of trying that the Government have not done that; it is because the Government quite deliberately set out to build in these Rules a great edifice of discrimination and distinction. Therefore, it is not surprising to find that since the Government have fallen so far short of their own objective, these Rules are full of every kind of anomaly and absurdity.
It would be tedious to try to enumerate them, but may I just point to two examples? What could be more without rhyme and reason than the arrangements by which a third generation Australian who happens to be lucky enough to have had a British grandparent is regarded by the Government and by these Rules as having closer family ties with this country than a Commonwealth citizen whose family are already here as of right? That is what the Rules say. And what could be more ludicrous, as a test of whether a Commonwealth citizen is entitled to join his wife here—a British subject—than simply whether he happened to have a British grandparent?
I suggest that these Rules and the Act itself are based upon three major pretences. The first is the one about which I have been speaking: the pretence that there has been a genuine attempt to arrive at a simple, undiscriminating system of immigration control applicable to all people. The second pretence, I suggest, is that the Rules and the Act itself do not distinguish people on grounds of race or colour. And the third pretence is, as Mr. Carr put it in another place:
"The Rules reflect the Government's determination to ensure strict control of immigration"
as such: that is the immigration of all kinds of people; not merely coloured people, not merely Commonwealth citizens, but strict control of the immigration of all classes of entrants.
The noble Baroness, Lady White, has already pointed out that theoretically these Rules and the Act of Parliament
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allow for the first time the potential entry of 200 million people. She would no doubt agree that that is a theoretical figure but there are certain figures which are far from theoretical. The 1971 Act itself opened the door, for the first time since we introduced control in 1962, to some 4 million to 5 million patrial Commonwealth citizens. Until this Act came into force those people had no such free right of entry. Then under the amended Rule about grandparents the door has been opened in the same way, giving almost complete freedom of entry to what has been estimated to be another 8 million people—that is, 8 million non-patrial Commonwealth citizens. How can it possibly be contended with any sort of sense that these Rules and this Act reflect the Government's determination to ensure strict control of immigration? Before passing from that subject I think we ought to contrast another figure with those two figures. Those are the figures of the way in which the door has been opened, but there are about a quarter of a million United Kingdom passport holders who, under the Act and under the regulations, remain subject to the rigid control of the special voucher system.
I have listened, as I have no doubt everybody did, with interest to the proposal made by the noble Lord, Lord O'Hagan, that it might be helpful, and certainly would do no harm, if a Select Committee were set up consisting of Members of both Houses to study the problem of our citizenship law. While I would not be able to speak as to whether that is the most appropriate procedure for tackling the problem, I would certainly agree that until we get our citizenship law tidied up we shall not arrive at any kind of sane and sensible immigration control. Therefore, in principle, I am wholly with the noble Lord in thinking that this matter ought to be looked at urgently and should indeed have been looked at a long time ago. It is my opinion that these present Rules, because of their absurdities, anomalies and discrimination cannot last. In saying that I do not mean that they are unworkable, because anything is workable. However unfair and however indecent, one can always make it work. What I hope is that with the passage of time the British people, who are, as I still believe, fair minded and decent people, will come to the conclusion that these Rules, so

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discriminating and so absurd, can no longer be tolerated.
4.16 p.m.
LORD THURLOW: My Lords, the diffidence with which a newcomer to your Lordships' ranks addresses your Lordships is increased in my case by the experience that I had 15 years ago when I was asked to address a group of Peers within the precincts and omitted to obtain the leave of my boss. On returning to Whitehall I was summoned and ceremoniously dismissed from Her Majesty's service. I hope that addressing you to-day has not the same hazards. I should perhaps add that I was reappointed half a minute later.
I gladly accept the status that the noble Lord, Lord O'Hagan, suggested, as an adopted son of Cassandra and Orpheus. It seems to me that the Rules satisfactorily meet the position in the short run, not because they are the final masterpiece of human wisdom on the subject but because within the framework of existing nationalities, legislation and our European commitments they can be regarded as a fair compromise. But surely they can be regarded only as a stop-gap to patch up the old suit until the tailor can produce a new suit of a cloth and style suited to modern conditions. It has been my privilege over the last thirty years to serve in I think all the major Commonwealth capitals as well as in Whitehall: in Canada and New Zealand, in India, in African capitals and in the Caribbean. It is not without embarrassment that I look back on some of the episodes in the context of immigration control. I recall when I represented the Government in New Zealand in 1962 the belief of the Government at the time was that the restrictions would not have a significant effect on depriving people of bona fide movement, and we let that view be known. The Rules before your Lordships' House are a considerable gesture to the views previously expressed in debate here and elsewhere, but this labyrinth surely cannot be regarded as a permanent structure. Other Governments, as the noble Baroness and the noble Lord, Lord Porritt, pointed out are uneasy about the patrial formula. It creates awkwardness in integrating their own communities. I do not underrate the difficulties of producing a final and
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satisfactory solution. The views of India, African countries and others must be given due weight if wider British interests are not to be prejudiced.
I therefore warmly endorse the proposal of the noble Lord, Lord O'Hagan, that the whole subject of our nationality legislation should be reviewed. The contortions which we have been obliged to go through, and which our unfortunate immigration officers have to try to implement under the Rules, stem largely from the failure to face the realities when framing the 1948 legislation. It was thought then that a few new legal definitions would dispose of the problem of technicalities and that no practical problems need arise. I believe that the views expressed to-day and previously in Parliament have shown that for practical purposes the old system has broken down. It is desirable, therefore, and will be helpful I am sure, if the noble Viscount, Lord Colville of Culross, will consider taking steps to initiate a review such as that proposed by the noble Lord, Lord O'Hagan. If a Joint Select Committee is not the right method, some other means could be found. I venture to suggest that a departmental review is not enough because in my experience departmental committees are not the best suited to the grasping of nettles, especially nettles which have political overtones.
I thank your Lordships for listening so patiently. I hope that for addressing you on this occasion I shall not be sacked.
4.23 p.m.
THE EARL OF CORK AND ORRERY: My Lords, may I begin by associating myself with everything that has been so admirably said by the noble Lord, Lord Foot, on the speech of the noble Lord, Lord Porritt, in regard to whom I wish to add my admiration, respect and hope for the future.
It is with a strange mixture of pleasure and sorrow, the one every bit as genuine as the other, that I find myself the first person in your Lordships' House to utter the familiar words "the noble Lord, Lord Thurlow" with a new meaning. The death of Harry Thurlow was something which caused great sorrow to a great many Members of your Lordships' House, and those I know will be the first of a large number of people to experience pleasure and to extend a welcome to his

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brother. I know also that I have the House with me when I venture, I hope not impertinently, to congratulate him on his maiden speech, a speech of enormous clarity and, as one might expect from so distinguished and long-experienced a proconsul, of authority. I hope that we may have many more opportunities of hearing such speeches in the future.
The noble Lord, Lord Porritt, was speaking particularly from the angle of New Zealand and it is somewhere in that region that I wish to take my stand also, though on a somewhat wider area than the old Dominions. We can be fairly certain that if the noble Lord, Lord Clifford of Chudleigh, were here this afternoon he would certainly be speaking on behalf of the peoples of all of the old Dominions, particularly Australia and New Zealand. He is, however, in Australia and writes to me sending me, among other things, a quotation from a leading article in a newspaper, the West Australian, which says of these Rules:
"They are totally unacceptable. Those who have been loyalist longest become in effect aliens."
That I take to refer to those who because they, their parents and grandparents were born in the Dominions are not patrial and have not the right of abode. They do not benefit under the interesting new law that has been described as saying that the dog born in a stable is a horse. But none the less, they have retained from generation to generation their loyalty to the Mother Country.
I do not mean to pursue that line directly beyond making the point, which I believe your Lordships will concede that I make on good authority, that clearly in Australia at any rate there is still some bitterness over the Act and the manner in which it will operate through these Rules. The words I particularly fix on in the noble Lord's letter are these:
"The only answer is our reciprocal arrangement'."
Those last two words are in inverted commas. I confess that when I read that I thought that my old friend was barking up the wrong gum tree. My immediate thought was that reciprocity was alas! among the deader ducks. But something has happened since to show me that my judgment was over-hasty. Noble Lords will doubtless remember the word
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"reciprocity" which emerged as a new word in connection with immigration in the course of the Committee stage of the debate on what is now the Act of 1971. It was the noble Lord, Lord Clifford of Chudleigh, who introduced it and embodied the idea of reciprocity in an Amendment of which I may perhaps very lightly sketch in the history. It gave rise to ding-dong arguments, was seen to be unsatisfactory, and was withdrawn.
The word reappeared at the Report stage in an improved Amendment which was moved by me, the noble Lord, Lord Clifford of Chudleigh, being at that moment in Brazil. According to that Amendment the concept of reciprocity is very briefly this: a Commonwealth country is to be designated as reciprocal if, over a period of three years, that country has received from us more immigrants than we have received from it. A citizen of that country can apply to the Home Secretary for United Kingdom citizenship by registration, and with it the right of abode, after he has dwelt among us for two years, whereas for a citizen of any other Commonwealth country the minimum qualifying period is not two years but five. Countries that at present would be affected by that amendment would be Canada, Australia and New Zealand, though it is conceivable that others may turn out to be so affected later. It operates without regard to race or colour, indeed without regard to anything other than the simple arithmetic of the immigration figures. There will be no releasing anyone from immigration control because the right that the reciprocal immigrant would enjoy would be solely that of applying for registration. The Secretary of State retains the power to refuse it on grounds of undesirability. I need not enlarge on that thumbnail sketch because it is not my purpose in any way to reopen that debate.
To proceed with the history of the matter: I divided the House on that Amendment and, despite a most powerful and effective speech by my noble friend Lord Brooke of Cumnor, it was defeated by 118 votes to 21—nearly six to one. A resounding defeat, you may say. Nor in some ways was such a result to be wondered at, particularly in view of the attitude of the Government. I will quote a couple of the more trenchant remarks

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made by my noble friend Lord Aberdare in his reply. He said:
"We consider, … that we could not possibly accept this Amendment without breaching one of the main principles to which we hold, which is that it has never been the policy of any British Government to discriminate between one Commonwealth country and another."—[OFFICIAL REPORT, 11/10/71; col. 275.]
And again:
"I do not think that we should be justified in discriminating between one Commonwealth country and another. If we were to do so I think it would cause damage to the whole concept of the Commonwealth, and I can only advise your Lordships not to accept this Amendment."—[col. 278.]
Do your Lordships wonder that I thought our poor little reciprocity idea must be regarded as defunct? I am ashamed now of my faintness of heart, for it appears it was only stunned.
Last week the same Rules were debated in another place and the Home Secretary took part. I will quote from what he said, which was somewhat different from the remarks I have just quoted from Lord Aberdare. What he said was of such a striking character that I venture to repeat (I am sorry to say) one whole column of his speech, and this is it:
"I was glad to hear the right hon. Member for Stepney, while rejecting a grand parental connection as a qualification, say he believed it was right to have some special relationship recognised with those countries in the Commonwealth which are peculiarly British. I do not admit that it is in any way racial or prejudicial to admit openly what is a clear fact. I was glad to hear the right hon. Gentleman say that, I was hoping that he would have gone on to say what sort of connection this might have been, because that is what we all ponder and, so far, ponder without much flash of enlightenment. This is what we promised to explore.
"Since those pledges were given my right hon. Friend the Prime Minister has had discussions both in this country and in Canada with the Canadian Prime Minister.
"Concerning Australia and New Zealand, officials from the Home Office and the Foreign and Commonwealth Office went to Australia and New Zealand in the second half of January to have talks at official level in preparation for the visit at the beginning of February of my noble Friend the Secretary of State for Defence, who discussed these matters with the Prime Ministers of New Zealand and Australia and, of course, other Ministers particularly concerned in their Governments. I should also make clear that there have been diplomatic
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contacts on this subject with other Commonwealth countries.
"The upshot is that the subject—when I talk about the subject. I include discussion of reciprocity which, although it can have different meanings, was one sort of special recognition which hon. Members were suggesting in the last debate—has only just been opened up, and we have not by a long way carried these explorations to finality. I cannot, therefore, give any firm, let alone final, report. However, it is fair to point out that each of the three countries—Canada, Australia and New Zealand—see considerable difficulty in coming to bilateral or even multilateral reciprocal arrangements on this subject. It would be misleading the House to pretend that there is no difficulty or to let it think that if there is difficulty it is particularly on the United Kingdom's side. All three countries have considerable difficulty in this matter and we shall be pursuing it with them further."—[OFFICIAL REPORT, (Commons) 21/2/73; cols. 592/3.]
In those words my right honourable friend the Home Secretary presents us with the spectacle of the Government standing on its head. Six months ago he was holding up his hands in pious horror at the suggestion which I, and others in both Houses who thought as I did, had the temerity, if not the bad taste, to put forward. Now we learn that this suggestion, with others designed to bring about a special relationship with countries which are peculiarly British—the Home Secretary's own words—are discussed by our Prime Minister with the Prime Minister of Canada, are discussed at Cabinet level with the Governments of Australia and Canada and are discussed at diplomatic level with other countries of the Commonwealth. I am greatly heartened; so much so as to say that I think the Government shows to greater advantage standing on its head than it did when it was what it used to consider to be the right way up. May it continue in this becomingly antipodian pose!
If it should turn out that the difficulties are, after all, too great, may it be made very widely known in the countries affected and concerned that the difficulties were not all of our making, and that failure, if it should come about, does not arise from any lack of good will on the part of the British Government or Parliament or people. If the reciprocity principle, or something like it, should be found eventually to be workable, then I believe that a great blot will have been removed from the Bill and from these otherwise, as I see them, generally reasonable Rules.
4.35 p.m.
LORD GARNER: My Lords, at the outset I should like to be allowed to pay my tribute to what I am sure all noble Lords will agree were two very remarkable maiden speeches this afternoon. It gives me personally particular pleasure to do so because both the noble Lords, Lord Porritt and Lord Thurlow, have devoted their services to the Commonwealth, which has been my own life work, and Lord Thurlow has been a lifelong colleague and friend. I thought both of them addressed themselves to the subject with remarkable force and frankness, and indeed with great felicity of language, and I am sure all of us will hope to hear from them on many occasions again.
My Lords, I do not propose to speak at any length on this subject. I gave some views at considerable length when the Bill was first under discussion and when the Rules were first introduced. The only point that I wish to repeat is one that the noble Lord, Lord O'Hagan, has already made this afternoon; namely, that we cannot hope to make sense out of our immigration legislation until we have put some degree of order into our law of citizenship. This is a big subject which needs very careful going into, and I would very strongly support the suggestion that this should be done. Whether a Select Committee is necessarily the right answer I would not be able to judge. It seems to me that probably what is needed is a combination of the virtues of the Select Committee, which can take a broad view on a broad political issue, without some of the handicaps of the inter-Departmental committee which the noble Lord, Lord Thurlow, was decrying. What is needed, in addition to the broad brush, is technical assistance and legal advice on what in fact the very complicated law at present is. But however it is done, I trust that the Government will think of this very seriously so that a new view can be taken.
As to the Rules themselves, I think I can give three cheers for the revision of the Rules dealing with aliens on the one hand and Commonwealth citizens on the other. I think this is right for three reasons. First, it is right on grounds of substance. There are differences in the treatment of the two. They are not in many cases as broad or as wide or as
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distinct as I and perhaps many others would like to see them, but nevertheless there are distinctions, and it is right that they should be recognised. Secondly, and perhaps more importantly, I think psychologically it was of great importance to have this division of treatment, and I think it was the fact that they were all bundled together in one Regulation at the earlier stage that gave rise to the complaints that Commonwealth citizens were all being put in the same bag as aliens. Thirdly, there is the technical advantage that if you want to make changes—and several speeches to-day have indicated that changes may well be desirable—in respect of Commonwealth citizens or aliens, then you can do so without affecting the entire immigration procedures.
I think I can give two cheers for the statement about British passport holders. I can fully accept the reasons why it was found necessary for the Government to issue the warning that they did, and I do not myself see any inconsistency between that and the clear statement that they have made about accepting the British passport holders from Uganda when the crisis there arose.
Finally, I would give perhaps one cheer for the concessions which have been made in the various directions that have been suggested. I think here that perhaps I ought to make a confession, and I am sorry that the noble Lord, Lord Clifford, is not here to hear it. I have come to the conclusion that I, like many others, probably have sacrificed too long on the altar of non-discrimination and made too much of a fetish of it. I have now come to the view—and have for some time—that really there has been an element of hypocrisy in our actions and perhaps our sayings, and that there really is no reason why we should not make access easier for people who want to come to this country (not necessarily for permanent settlement) because they have a close association and a natural feeling for it. I therefore welcome the general principle which the Home Secretary asserted.
Where I think one runs into difficulty, as other speakers have suggested, is when one tries to put this principle into practice. I admit that it is an extraordinarily difficult matter. One would not wish

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specifically to object to two of the suggestions that have been made but one cannot regard them as ideal. The extension of the grandparental connection is obviously a completely artificial arrangement and, moreover, as we know, it is felt to be divisive in some of the Commonwealth countries that will benefit from it. I am bound to confess that to talk of a working holiday going on for five years seems to be an extraordinary misnomer. Nevertheless, one must be grateful for small mercies. I think that these are steps in the right direction and that the Government's heart is in the right place, although I am not satisfied that they have necessarily found absolutely the right way to put the ideas into practice.
I would conclude by expressing gratitude to the noble Lord, Lord O'Hagan, for giving us the opportunity to debate this Motion. I do not think that anyone would wish at this stage to throw the Orders out, but this debate has given us the opportunity to raise some points, and I dare say that, in the light of experience, we may want to come back to them from time to time. I would only hope that the Government will pay serious attention to some of the quite serious anxieties that have been expressed during this discussion.
4.42 p.m.
LORD BROCKWAY: My Lords, may I join with others in thanking the noble Lord, Lord O'Hagan, for moving this Motion this afternoon. He ended with certain constructive proposals, to which I want to refer before I conclude. I should like to take this opportunity of saying to him that I hope that now he has the distinction of being a Member of the European Parliament, he may be able to raise in that Assembly dynamic issues such as he has raised this afternoon.
LORD O'HAGAN: My Lords, may I interrupt the noble Lord, Lord Brockway, just to correct him? One of the first things I did when I arrived there was to put down a Question to the Council of Ministers about putting pressure on the British Government to reunite Ugandan Asian families. I have reason to believe that this returned via the proper channels, to the Cabinet Office at this end.
LORD BROCKWAY: My Lords, I appreciate that intervention. It is now over ten years that we have been discussing Immigration Acts, Regulations and Rules. The noble Lord, Lord Garner, who has just spoken, used the word "hypocrisy". I think that there has been a little hypocrisy in our whole attitude when we have discussed these issues. We have described it as "immigration control". It has not been immigration control at all; it has been colour and racialist control. Since the last world war, except for two years, more people have emigrated from this country than have come into this country. If we were honest with ourselves we would recognise that this series of Acts, Regulations and Rules has really concentrated on the issue of race and of colour.
In saying that, I recognise the necessity for some control. While we have nation States in the world, Governments have the right to decide what immigration there shall be according to the economic and social circumstances of their countries. Indeed, even when we have a World Government there may be some necessity for the control of migration into the more densely populated areas from those which are less populated. I want to urge very strongly indeed that, when we are considering the control of immigration, it should not be on the grounds of race, colour or sex. I add "sex" because I recognise the change that Her Majesty's Government have made in relation to sex. At last they have agreed that the 300 husbands who have wives here may come to this country, when before they only allowed wives to join their husbands. They have now recognised sexual equality in that respect and no longer regard the wife as the mere chattel of her husband.
In the two maiden speeches that have been delivered—and I want to congratulate the noble Lords on those speeches, and express some sympathy with them in having passed the ordeal—and in the speech of the noble Earl, Lord Cork and Orrery, we have had the argument that special provision should be made for those who have left this country and gone to the Dominions. I want to say at once that I recognise there is some strength in the kith and kin argument. I recognise that when people have gone from this country to Dominions overseas and

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still feel that Britain is their homeland there is a special case to be made in their favour. However, I think that the House must also recognise that a change is now taking place in the psychology of the Dominions. This is particularly indicated in what has happened in Australia in recent weeks. In the Dominions now there is less sense of belonging to the homeland than of asserting their own nationality. The number of people in the Dominions who have this sense of belonging to the homeland is decreasing, and is becoming limited to the older generation in the Dominions. As we make new Rules for immigration I hope we shall allow, as indeed these Rules accept, that there should be grounds for people coming here on the basis of their domestic relations with families in this country, as well as because of their technical capacities. If you apply those two conditions to the citizens of the Dominions you will find that the proportion of those who fulfil them is undoubtedly greater than in respect of other territories.
Having said that, I want to say that we have very special responsibilities for Commonwealth citizens who come from territories other than the Dominions. Sometimes the demarcation is described as the "old Commonwealth" and the "new Commonwealth", but those terms are misnomers. The oldest territories in the British Commonwealth are not the Dominions but the Caribbean territories, the West Indian territories; and if the length of association with our Commonwealth is to be regarded as a reason why their citizens should have the opportunity to come to this country, the claim of the Caribbean islands, the West Indies, is greater than that of the Dominions. But, in addition, there is this reason why we have a special responsibility for citizens of the Commonwealth who are not part of the Dominions. For 300 years we have occupied these colonial territories, and during that time we have used them to provide our foodstuffs and our raw materials but we have failed to build up balanced economies. The consequence has been wretched poverty and the heavy unemployment that there is in those territories now. Our 300 years' rule of those territories places upon us a special responsibility to give their people opportunities in life.
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I want to turn to one other point which has not been mentioned in this debate but which is frequently in the minds of people as they discuss this issue; that is, the fact that in our cities—in Birmingham, in Wolverhampton and in parts of London—there are now ghettoes occupied by non-white Commonwealth immigrants which are in appalling conditions of overcrowding and destitution, and opinion is motivated against the resident immigrants as being responsible for those conditions. The answer came rather surprisingly—and I welcomed it—in a speech by Mr. Robert Carr quite recently. In that speech he said that if there were not a single Commonwealth immigrant within those "inner cities", the conditions would be exactly the same: there would be the same shortage of housing, the same poverty, the same destitution, the same frustration which leads to violence. Commonwealth immigrants have been made the scapegoats for our shortage of housing, for our unemployment and for our social conditions. Before they came those conditions existed in this country, and they would exist in our "inner cities" now, whether the Commonwealth immigrants were here or not.
In conclusion, I want to turn to the constructive proposals which the noble Lord, Lord O'Hagan, has made. He was absolutely right when he described the chaos of nationality recognition and of citizenship: citizens of the United Kingdom, citizens of the United Kingdom and the Commonwealth, protected persons in the Commonwealth, residents in the Commonwealth who have declined to accept the nationality of their territories and who have remained British citizens. There is absolute chaos, and of course we should give consideration to the problems. The noble Lord has proposed a Joint Select Committee of another place and this House. It may very well be that that is the best method of dealing with the problem.
I would say only that the solution of the problem is not for the British Parliament alone; it is for the whole Commonwealth. It may be said that representatives of the Commonwealth could give evidence to a Select Committee. I believe that an American citizen has even given evidence to our

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own Select Committee on Sex Discrimination; and we should welcome that. But that is not enough. I am among those who have repeatedly urged in this House that there should be a conference of Commonwealth countries on this issue of migration and nationality. We are to have in Ottawa in August the Conference of Commonwealth Prime Ministers, and I would urge Her Majesty's Government to see that on the agenda is this whole issue of nationality, citizenship, migration, emigration and immigration. Because it is only if we co-operate with Commonwealth countries that we shall be able to solve this issue in a way which is approachable and constructive, not only for this country but for their peoples as well.
4.58 p.m.
LORD GORE-BOOTH: My Lords, may I join with other noble Lords in expressing both welcome and admiration to the two noble Lords who have made their maiden speeches? I found the speech of the noble Lord, Lord Porritt, particularly moving, because I have just been to New Zealand for the first time in my life and I think that, while the New Zealanders are not professional extroverts, somehow they and their beautiful country give one a feeling for their country, to which he referred, in a very short time indeed. What he said had a very direct human appeal. It was also very good to hear from my former colleague, the noble Lord, Lord Thurlow, who has so much experience of living in the Commonwealth and so much wisdom to bring to this subject.
In a debate of this kind, one feels that everything we do is inseparable from the name of the noble Lord, Lord O'Hagan, who introduced it. I do not think any of us will forget what a tremendous contribution of both wisdom and compassion he made in 1971, when your Lordships' House contributed a considerable degree of both humanity and common sense to the draft of the Act when it was still a Bill. I think we ought to keep up the Greek classical tradition, and I should like to ask him to consider whether he will also accept the Order of Athene, representing justice, and just a whiff, if you like, of Aphrodite, representing at least compassion, even if we go no further than that.
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I wonder whether at this stage of our debate, which the noble Lord rather tentatively described as a funeral but which I am inclined to think of as a launching pad, it might be helpful to make one slightly different approach to the question of these Rules which I do not think any noble Lord has yet attempted. There has been much criticism of the Rules as such, notably by the noble Lord, Lord Foot, but I have felt that the more violent that criticism, the further it got away from the reasons why we have an Immigration Act the way we do, and why the Rules have to be what they are; and I hope your Lordships will afford me your indulgence if I go through a few imperatives under which any Government of this country has had to act over the last dozen or so years. We started with the imperative, of which we were rightly rather proud for a time, that this was a country in which anybody from the Commonwealth could come and settle without questions asked. Then this became economically and socially impossible, and the Government had to decide how to limit the flow of immigration from the Commonwealth into this country. I think the noble Lord, Lord Brockway, may have unintentionally misled us a little by describing this as a racial formula. The problem was in fact the problem of the second imperative, which was how to do this in the then properly strong climate in favour of non-discrimination. Because we were faced with this we had to have some complicated legislation, not necessarily satisfactory in every respect, to apply these limits and, at the same time, to observe the principles of non-discrimination.
Then we were faced with a further difficulty. The difficulty was that if we applied these principles we appeared then to be discriminating against people who had a certain claim on us; and this is so delicate a subject that very often I think we feel it difficult to talk about it at all. Here I think we might give a few words in the Act to messrs. Scylla and Charybdis, because we are dealing with this question of our connection with the old Dominions—and "old" is a term of art and not a term of history. We are dealing with whether they have some special connection with us which is a discrimination but not a racial discrimination; and I noticed, as did the

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noble Earl, Lord Cork and Orrery, the felicitous way in which, in another place, Mr. Peter Shore alluded to this very real fact. He said that in his opinion it was right that we should acknowledge that a special relationship exists among Australia, New Zealand, Canada and this country. We now have already three imperatives jostling each other in the presence, as one might say, of the British Legislature.
Then we come to yet another imperative—and we have not yet done by any means with imperatives. We come to the requirements of the Treaty of Rome. The Governments of both our main Parties came to the conclusion that we should join the European Economic Community, which would mean an acceptance of the Treaty of Rome. That meant, by 1968, not only the acceptance of Article 48, Section 3, which allows people from one member of the Community to go to another to take up work, but the decision of 1968, which freed them also to go and seek work. That again became an imperative if we were to be accepted as members of the Community; and once again you had a further imperative or a further principle jostling against and conflicting with the principles which we had already accepted. So when we came then to discuss the Rules for the first time, we had not only these different influences, to all of which we had to yield to some extent, but the sudden reaction in Australia, particularly, and also in New Zealand, to the impact of the first edition of these Rules when it was published. There was a very strong feeling in those countries, and I was critical about this matter in a previous intervention in your Lordships' House. There was an immediate assumption, caused by the public relations not being correctly propelled, that made Australians feel for 24 hours that they had become aliens. Incidentally, I hope that the noble Viscount who is to wind up this debate for the Government will once again say in a firm voice that this Bill and these Regulations do not turn Australians, New Zealanders and Canadians into aliens, since the Government follow-up of what was said at that time has been practical and visible to all.
My Lords, confronted by all these imperatives converging on any British
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Government—and I underline the word "any"—it was simply not possible to draw up a set of plain and simple rules; and, whatever the noble Lord who was handling this earlier may have hoped to produce, it was simply not possible in the circumstances, in dealing with all these different convictions and influences, to draw up something short and simple. Certainly immigration officers, whom I have always found to be courteous and helpful, need precise guidance, but one cannot give brief guidance on a subject of immense complexity. I really do feel that all of us should recognise that if you are going to have Rules, as you must in a situation of this kind, then they must be complicated and they must be long. The only thing one can ask for is that they should be as clear as possible. The new Rules are, I feel convinced, a very laudable effort by civil servants and Ministers to find a mean between all these influences, and I think the Government should be given credit for that.
There are one or two items which lead to questions. I join the noble Lord, Lord Garner, in wondering whether it was really necessary to extend the working holiday to five years, because it seems to me that that creates a difficulty which need not have been created, since it is the period over which people coming in qualify for naturalisation. I know that the Home Secretary said in another place that power would be taken to prevent that if the British Government thought it was undesirable, but it is surely making a difficulty and then creating a remedy rather than saying, "All right; let us settle for four years."
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, perhaps I may correct the noble Lord, Lord Gore-Booth. My right honourable friend said—and it was picked up by my honourable friend the Parliamentary Under-Secretary—that the remedy is already there in the legislation. It is not a question of our having to create it: it is already in the legislation.
LORD GORE-BOOTH: My Lords, I thank the noble Viscount, and apologise to him. I expressed myself wrongly. But it still presents the problem of having to use the power, whereas if four years had been chosen it would not have been

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necessary to do so. Again, I think that in the other place also there was this problem of whether the safety valves which the revised Regulations allow are valid, or whether really one must again give any Government in these circumstances the benefit of the doubt in creating a situation in which, of course, there might be far too many immigrants under the proposals in the new Regulations. Again, the Government will have powers to prevent this; and I think the moral of that also is that in a question of this complexity the safety valves are bound to be such that the Government may have to use further powers in order to make sure the situation does not get out of hand.
So, in concluding my argument, I would say once again that I think any Government of this country, confronted by our past convictions and our present ideals, would have found this an immensely difficult matter to get right. I am sure that in the future there will be constant vigilance over the working of these new Rules, in which your Lordships will take part, to see whether anomalies arise and to bring them to the attention of the Government whenever it seems that this attention should be drawn. But, also in conclusion, I feel very much attracted, as have been other noble Lords, to the proposal by the noble Lord, Lord O'Hagan, that the time is now ripe for having a really good look at our citizenship laws. I think that the noble Lord, Lord Thurlow, made a good point when he said that we had been labouring with the 1948 Act for these many years. Perhaps I could add to the suggestion that the present Government have shown a laudable desire to have a look at all our procedures and institutions to see whether they are working well or badly, and producing legislation accordingly, that perhaps it would be possible for this institution and this legislation also to be looked at with a radical improvement in mind. In concluding, may I again express an obligation to the noble Lord, Lord O'Hagan, for raising this matter and may I reiterate my feeling that perhaps some of the criticisms that were hound to be made in this matter are due to the nature of the problem itself and not always to the iniquity of the policy makers and the drafters.
5.11 p.m.
LORD AVEBURY: My Lords, I hope that I may intervene having omitted to put my name on the list of speakers. There are a few words that I should like to add to what has already been said. May I start by taking up the point made by the noble Lord, Lord Gore-Booth, that there are various imperatives that we must consider in formulating an immigration policy in this country. He went through them one by one. If I may say so—and I am sure this is not because he did not attach importance to it, but because he was dealing with the mechanics of the situation—the one thing that he omitted from his list of imperatives operating over a period of time was the consideration of humanity. We can draw up all the Rules that we like, but there is one overriding imperative, to use Lord Gore-Booth's word, which must be uppermost in our thinking. Whether we have a Select Committee of both Houses—and the noble Lord, Lord O'Hagan, suggested this—or whatever is the way that we formulate our policy, we must not apply it in such a manner as to cause hardship, to divide husbands from families, to prevent people who legitimately want to come to this country to complete courses of study or to result in people who are our own citizens being severely fined or thrown into prison in countries where their presence is no longer welcome. It is to this aspect of the Rules that I should like to draw attention.
LORD GORE-BOOTH: My Lords, I thank the noble Lord for his intervention. I did intend my tribute to the noble Lord, Lord O'Hagan, to include the imperative of humanity; but I did not come back to it.
LORD AVEBURY: My Lords, I am sure that the noble Lord had that in mind and I am grateful for his assurance. The noble Baroness, Lady White, said that the new Rules extend the right of entry to over 200 milion people. She is quite right in saying that, theoretically, this is so; even if the people do not choose to take up their privilege. I think it is important that one should first consider the number who are likely to come into the country and then to think how it is possible to deal with that likely influx in the most humanitarian manner possible.

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If one looks at the figures over the last few years one finds, as the noble Baroness said, that there has been a net outflow from this country. From the Registrar-General's projection of population in this country from the year 1971 to the year 2011, one sees that he is making the assumption that emigration from the United Kingdom will exceed immigration by 50,000 in each of these years. This is an enormous number over a period of 40 years, vastly exceeding anything contemplated as inflow into this country in any single year or over the whole of that period. There is going to be a greater number leaving the United Kingdom than arriving.
It comes back to the point that Lord Brockway was making when referring to the social effect of migration on some of our larger cities, and it underlies the extreme importance of not blaming people from Pakistan and India for creating conditions which would have existed if no immigrants at all came to this country: conditions such as shortage of housing, shortage of school places and difficulties with the National Health Service. If they are caused by excess population in this country, they are due to the high fertility of the British people and not to the numbers of people from abroad. As the noble Lord, Lord Brockway, knows, such studies as have been undertaken into the use made by immigrants of the social services show that they are less of a burden on them than the native population; because the vast majority of immigrants have been of working age and therefore have contributed through rates and taxes and have not imposed a burden on the social services in the matter of the amount of retirement pensions paid to them.
I think that that more or less disposes of the matter of numbers and of the burden which immigrants put on to the social services. May I now turn to the main question, that of the imperative of humanity? I am indebted to the noble Lord, Lord Gore-Booth, for using the word "imperative", because it is fully justified if we consider not the Rules themselves but the way in which they are interpreted or are likely to be interpreted. We can judge this because many of the Rules correspond with those which appeared in previous editions. We can
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ask the Home Office, through the noble Viscount, just how they are going to look at the phrases which occur here in terms of how they apply to people arriving in the future. I was pleased and gratified that the right honourable gentleman, Mr. Robert Carr, made his announcement last week that we were going to admit the husbands of the Uganda refugee women who arrived in this country and who were initially allowed to come in to secure their own safety, but were told even before leaving the country that it would be necessary for them to resettle in some third nation as soon as their husbands gained permission to go there. It became clear that the United Nations High Commissioner was not resettling all the husbands in places to which they might wish to go or which were willing to receive them. I can only wish that the Home Secretary had made this announcement some time ago so that a great deal of unnecessary suffering could have been avoided—perhaps at the time when we last debated this matter on December 6. at which time I made a plea (unfortunately without effect at that time) to the noble Viscount, Lord Colville. But one should be grateful for small mercies that this has been done at the end.
My Lords, there are one or two questions to put despite the Home Secretary's statement. As I understand him, the husbands who are at present resident in the resettlement camps in Europe are to be permitted to come here if they wish and if the wives and children are resident in the United Kingdom under the previous concession. May I ask the noble Viscount to say whether this applies to people not in the resettlement camps? As he knows, there are husbands in various places in Europe—for example, I have a case in Frankfurt at this moment—but also in countries of the Middle East and Asia because these were the only places to which they could go when expelled from Uganda at the time of General Amin's action. I am certain that it was not the intention of the Home Secretary to say that if a person were unfortunate enough not to finish up in a resettlement camp he would be deprived of the right to join his wife and children in the United Kingdom. I should be grateful if the noble Viscount could give an assurance on that this afternoon.

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The second point, and one that I also mentioned before, concerns the question of students who were at Makerere before General Amin's expulsion order. When in the past I wrote to Mr. David Lane over the case of individual students (and I shall not give details here) he told me that the Immigration Rules provided that if the authority were not satisfied that a student would return to his country of origin on completing his course of studies, he must automatically be refused entry. I pointed out to Mr. Lane that it was quite impossible for any students coming from Uganda who have been at Makerere College to give an assurance that they will go back there when they finish their studies at Edinburgh University or the University of London. I know that the noble Baroness, Lady White, is extremely interested in this question. I was also told that the Committee of Vice-Chancellors had set up a Working Party concerning where these former students from Makerere College could best be fitted into our universities. I asked Mr. Lane what was the point of doing that if, every time one of the students arrived here, he was going to be told, "No, you have not the intention of going back to Kampala on completion of your course, therefore even if the head of computer studies at Manchester University, to take one example, has written to the Home Office to say that he is prepared to admit you and you are qualified to enter this course of studies, we are not entitled to admit you under the Immigration Rules".
The third section of humanity that I should like to mention and on which I should be grateful for an answer from the noble Viscount, Lord Colville, is this: I have had referred to me one or two cases of dependants living in Islamabad who want to come here and join their husbands who have already been admitted to the United Kingdom. To take a typical example, the wife in question has been told that she cannot even be interviewed until June 4, 1973, because there is a long queue of persons in a similar position all of whom have to be personally interviewed and their documentation thoroughly examined before they can be admitted to the United Kingdom.
When one looks at these Rules they appear to be quite straightforward. They say that the wife and children of a
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breadwinner who has already been admitted to the United Kingdom are entitled to entry as of right. There is no question of going back on that. What is happening, particularly in the case of Islamabad, is that the wife and children are being kept waiting for perhaps six months or even longer, and if at the end of that period there is any question of their entitlement to come here the matter is referred back to London and a further period of six months or a year elapses; so it might be two and a half years after the first formal approach is made by the husband, or by his wife in Islamabad, before she and her children are finally admitted.
In one particular case on which correspondence passed with the Foreign and Commonwealth Secretary, he replied, "It is most distressing to me that Mrs. X should be asked to wait this long", and he then said that the matter was being looked at. A team has been out in Islamabad to investigate the position. Some improvement has been achieved, but, my Lords, that improvement has still not secured any advance in the date at which this lady will be interviewed. I wish to ask the noble Viscount, Lord Colville—I know this is not his departmental responsibility, but perhaps he could discuss the point with his colleagues in the F.C.O.—whether in the case of many of these dependants (I understand there are over 4,000 in the queue at this minute) documentary evidence would be quite sufficient and a personal interview would not be necessary after all, because after we close the offices in Lahore or Rawalpindi that for many of the Africans would mean a journey of several hundred miles which they can ill afford financially and which puts them to very great inconvenience.
I realise, of course, that the system of registration of births, marriages and deaths is not as highly developed in some other countries as it is in Great Britain, and that in some cases there may be doubts concerning the validity of the documentary evidence; but where, as in the case that I am talking about, the Foreign Secretary is convinced that Mrs. X is married to the person who is already resident in this country, that these are her children, I do not see why it should be necessary to put them through the hoop of a long journey to Islamabad simply in order to be inter

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viewed for five minutes and have a form submitted on their behalf. I would think, if there are as many as 4,000 dependants in Islamabad waiting in the queue, that the Foreign and Commonwealth Office would be only too delighted if some of the cases could be dealt with on the basis of documentary submissions alone.
LORD BROCKWAY: Not weeks, my Lords, but many months.
LORD AVEBURY: My Lords, may I, in conclusion, say how very interested I was in the suggestion of the noble Lord, Lord O'Hagan, that we should have a Select Committee to look into all these questions of migration and citizenship. This illustrates one of the advantages of our representation in the European Parliament. The noble Lord, Lord O'Hagan, has already had the opportunity of comparing the laws on citizenship and migration of this country with those which operate in our fellow E.E.C. countries, and in some respects he says they are superior to our own in that they do not contain the elements of sex discrimination which we have discussed this afternoon. If another place would accept his suggestion I would be heartily in favour of it. Obviously we cannot decide on our own initiative that this would be a good thing there would be a process of discussion through the usual channels. But in view of the fact that not one noble Lord who has spoken in this debate has criticised the proposal which has been made by the noble Lord, Lord O'Hagan, I think that it would merit discussion through the usual channels with another place, with a view to getting something going as quickly as possible.
As my noble friend, Lord Foot, has said, we are discussing four sets of documents. They are extremely difficult to understand and they contain elements of uncertainty, some of which I have been discussing, which in the course of deliberations in a Joint Select Committee such as the noble Lord has proposed ought to be cleared up with 'the combined weight of expertise in both Houses. I personally think, although I cannot speak for my Party, that this suggestion ought to be very carefully and thoroughly explored by Her Majesty's Government, and I hope that in the end it is adopted.
5.26 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, when the noble Lord, Lord O'Hagan, said that his speech was in the nature of a funeral oration, I rather agreed with the noble Lord, Lord Gore-Booth, in questioning that sentiment. Perhaps, if I may restore the analogy away from the 20th century of the launching pad back to the classical idea of the phœnix, we have really had a debate arising out of the previous discussions in both Houses and very much following up what was said in another place last Wednesday. It has been a debate embellished by two notable maiden speeches in which I instantly join in congratulation to the noble Lord, Lord Porritt, and the noble Lord, Lord Thurlow, whose brother I knew very well indeed. We have also been singularly fortunate in having from the noble Lord, Lord Gore-Booth, as amended by the noble Lord, Lord Avebury, a very clear discourse on the history and the conflicting obligations that any Administration would have to deal with in this field. And, if I may say so, the noble Lord, Lord Brockway, made what seemed to me a realistic, statesmanlike speech on the whole matter which brought out many fundamental points which I have not heard put so clearly or so well put together for some time. I dare say there are one or two small points that I do not agree with, but it is unusual for me to go along with him so wholeheartedly in almost all he said.
I am sorry to say that this contrasted very much in my mind with the speech of the noble Lord, Lord Foot, which I considered to be full of barren sterility and which contributed nothing whatever positive to our discussion this afternoon. The noble Lord might like to bear in mind what his noble friend has said about humanity. As the noble Lord, Lord Porritt, put it, we are dealing with people. If the noble Lord wants something which is so neat and tidy that it can be wrapped up in a simple package, I suppose his policy is that we should have no immigration control at all and let in everybody regardless. I am afraid that I cannot see any other solution to what he said.
Some themes have emerged in this debate. The noble Baroness, Lady White, said that the Rules had not been amended as much as she had hoped. I can assure

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the House that everything said last time has been taken most fully into account. Also, I have made inquiries to see whether any noble Lord or noble Baroness wished to supplement what they said at the time; but I imagine that they were satisfied that they had conveyed their views to us adequately, because, so far as I can discover, there have been no further written representations or suggestions, although if there had been, we would have taken them into account as well. One has to realise that the room for manœuvre in the redrafting was slightly limited—in fact it was fairly substantially limited—by the controlling power which the Act of 1971 gives. For instance, no one has touched on the question of where the appeal against a refusal of entry might lie, but one is completely bound in this matter by Section 30 of the Act, and there was not much room for change.
I think everyone will realise (and putting together the various points of view expressed this afternoon I do not believe that this is anything that the House would seriously challenge) that while one wishes to be as flexible and humane in individual cases as possible, there is a real necessity to keep strict control over the rate of immigration. We can, and of course we must, allow in these Rules for accordance with accession to the Economic Community. We do not think—I have said this before—this accession will put much pressure on the population of this country in terms of numbers. We have sought as hard as we could to make concessions in other areas where they would be appreciated, on the psychological side and on the practical side in some cases, but again it would probably not put a great deal of pressure on our population. We have to realise that, as in the instance given by the noble Lord, Lord Avebury, who talked about the pressure in Islamabad, there are sources—it is no use blinking the fact— where the countries are poor and the standard of living is low and from where, if they could, many people would come to this country. In the face of that one has to remember that this is a crowded island. The noble Lord, Lord Avebury, talked about the net flow of people in and out, but he will also remember that the occupancy ratio of housing goes down year by year; so that even if people stay at the same number they take more
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and more room to live. Their recreations and other activities become more widespread and they need more room, even if the same numbers remain; and it is a small island which is fairly crowded now.
In fact, my Lords, we have an adequate labour force. To judge by the unemployment troubles, perhaps they are almost too many. We want to cure that unemployment and not do anything to make the situation worse. We have to take acount of the fact that we have a continuing responsibility for United Kingdom passport holders, to allow them in in an orderly fashion. It is no use denying—I do not think that anything said by the noble Lord, Lord Brockway, contrary to this—that there are areas of strain. It may not he the fault of the immigrants; it may be that they have congregated in certain places which would be as bad anyway. But there are places where the fact of their presence, for better or for worse, has caused strain. We have seen the symptoms of this in some few places in recent months where the Ugandans have gone in large numbers. I think it wonderful how they have been absorbed; but one cannot get away from the fact that there are areas of strain.
My Lords, we have, on the contrary, the most cogent pleas put forward that where there are natural ties with the main part of the population in this country we should recognise them. In the circumstances I was very glad to heat the noble Lord, Lord Thurlow, say that he thought these Rules worked out a pretty fair compromise, at least in the short-run. I am grateful to the noble Lord for saying that. I am grateful to him also for saying that they constitute a considerable gesture in at any rate one direction from which we received considerable criticism last time. The question of the two sets of Rules which the noble Lord, Lord Foot, attacked in his diatribe has been explained by the noble Lord, Lord Garner, and I agree with all the four reasons he gave. If I may, I would adopt them as being good reasons, and I note that the noble Lord, Lord O'Hagan, thought there had been an improvement.
As for the question of Commonwealth consultation, I am again indebted to my noble friend, Lord Cork and Orrery, for reading out the relevant pasage from my

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right honourable friend's speech so that I do not have to go over all that again. He read out exactly what my right honourable friend said, and that is the situation. We have been carrying on these consultations. The noble Earl also referred to the question of reciprocity and said he liked the present attitude of the Government, which whether ambivalent or not, is not something which is wholly without difficulty abroad, as well, apparently, as sometimes in this country. I was grateful for what he said. The noble Lord, Lord Porritt, spoke of feelings, and I very much understand what he said, with my own relations in Canada. I understand and take the point he has made about feelings, and we have tried very hard to do something about those feelings. Certainly there is no need for me to repeat again, with all sincerity—I think it was the noble Lord, Lord Gore-Booth, who asked—that there is no question of Canadians, Australians and New Zealanders being in our minds aliens. I will come back to that point in a moment.
We have done one or two things on the question of procedure (which is, of course, entirely outside these Rules) which I think may help on the psychological side, a side which I agree is very important. At a number of important airports and seaports in this country we have introduced the four-channel system and made very certain that if a Commonwealth citizen comes along and the Commonwealth gate is closed, he is sent to the United Kingdom gate and not to some alien gate. We are marking the entry certificates on the working holidaymakers' passports as "working holidaymaker", so we hope that they will have less difficulty when they reach the port of entry. A good deal has been done about the publicity given to the various arrangements for people wanting to come into this country. There has been publicity in the countries from which they come, so that there will be no doubt that they should get their entry certificate if they need one, or their patriality certificate if they are entitled to it, and things of that sort. There are one or two other matters of this nature which I hope, together with the consultations we have been carrying out, will go some way to show that in countries abroad we are really trying to put over this helpful psychological side.
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My Lords, I think I ought to say a little about the grand-parental situation which the noble Lord, Lord Porritt, did not think went far enough. I can assure my noble friend Lord O'Hagan that it is perfectly constitutional under the Act even without amendment. People with grandparents born in this country would have been allowed in as of right with no control at all. Under the Rules, which of course can be changed and tightened up if necessary, they still have to be subjected to a certain amount of control. There is a substantial difference in law in this situation, but we thought that the views expressed, both here and also in another place, ought to lead us to recognise the close family ties that go back over more than one generation and lead us to grant if not complete freedom at least a relaxation. So a person with a grandparent born in this country will be issued with an entry certificate enabling him to come here, either for employment without a work permit, or as the husband of a woman settled in this country or entitled to settle here, and the Commonwealth citizen admitted on this basis will be admitted for settlement. There will be no restrictions on any employment he may take, although there will remain powers to refuse entry in individual cases on personal grounds. There will also be the power remaining to deport anybody in this category who does abuse our hospitality.
LORD AVEBURY: My Lords, the noble Lord said that husbands would be admitted where the wife is here. Could he answer my question about the husband of the Ugandan refugees here, husbands not in resettlement camps of Europe, but at loose, if you like, in places such as Germany or Austria or some other country? Are they going to be admitted?
VISCOUNT COLVILLE OF CULROSS: My Lords, I have had enough difficulty as it is in trying to structure this speech. I promise the noble Lord I will come to that point and will give him an answer. Would he be so kind as to be patient until I get to that particular point?
I wonder whether your Lordships may be interested in this question of patriality, because I have been doing, not exactly research but practical work on it for my own family. I have a brother who wanted a patriality certificate in his passport—it is a Canadian one, like my own. We

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produced the birth certificate of my mother, which was issued in County Kilkenny before Ireland was cut in half. We produced a Canadian marriage certificate in the district of South Saanich, British Colombia, and his birth certificate from the B.C. Department of Vital Statistics; and there now appears in his passport this fine blue, buff and red coloured stamp which lasts as long as his passport. In future he will, without let or hindrance, go through the "United Kingdom" channel in all the ports of this country. Perhaps slightly more interesting still is the case of my cousin, in whose passport there now appears a similar certificate because she is an undergraduate at a university in this country. When she came in under the previous Rules last September she was admitted on condition that she did not remain in the United Kingdom longer than 12 months, because that was the then law. Instead of having to go back and do something about this, she now has the patriality certificate in her passport, and will in future, as I understand it, have no difficulty at all in going to and fro, whether at Prestwick or anywhere else where she may land. It may be interesting to the House to realise that there are practical advantages in this proceeding, that it can actually be done, and that the three documents I have mentioned are the ones needed.
My Lords, the noble Lord, Lord Garner, was grateful for the extension we have made on the grandparents' side, and I am coming back to this subject. I hope that the combination of that extension and the patriality one I have just been explaining will show that we have attempted to make things easier for people who have close connections with this country. There are one or two details with which I ought to deal. I think it was the noble Baroness, Lady White, who mentioned the question of deportation. I was grateful for her recognition that we had here moved, and moved in a direction I think she found welcome. The situation will now be—and it is really the only amendment of substance in the Rules for control after entry—that the ability of a wife to maintain herself and her children, which was not previously in itself a sufficient ground to allow them to remain after the husband's deportation, is now reinstated. It
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is reinstated together with a list of other matters in paragraph 45 of Paper 80 and paragraph 52 of Paper 82, which will be taken into account by the Immigration Appeal Tribunal and my right honourable friend himself. I think it will give considerable extra flexibility to the consideration of these very difficult cases, and I was grateful to the noble Baroness for her welcome at this particular point.
There were some other detailed points about which I was asked, and I will attempt to deal with them. The noble Lord, Lord O'Hagan, asked about the relationship between these Rules and the European Economic Community. Strictly speaking, all that we have to do is to make Rules which fit in with the E.E.C. laws and regulations and the Treaty, but in actual fact there were detailed discussions with the Commission about the contents of these Rules and the application to them of the Community Rules. Our Rules were drafted in the light of those discussions so far as they relate to the E.E.C. We believe they give full effect to our obligations. If there is any conflict about pilots and merchant shipping under the remaining bits of the Aliens Act 1919, then this is something that we shall have to sort out when it arises, but I suspect that if there is a divergence it may be one of those cases where the rules of the European law will prevail over the domestic rules in this country. However, that matter has not been examined in detail to see whether there is in fact discrepancy.
LORD O'HAGAN: My Lords, this is the point I had my finger on. If such a discrepancy is discovered, do we have again to go through all we have gone through to-day because the Rules have to be re-presented to Parliament with one or more additions or amendments?
VISCOUNT COLVILLE or CULROSS: My Lords, I do not think so, because my memory, which has now grown a little dim, of the intricacies of Section 2 of the European Communities Act is that they provide the courts with a duty to consider domestic legislation and European legislation together and to give precedence to European legislation if there is a conflict. It may be that this is one of those cases. I do not think it would require any alteration to the Rules, although as the noble Lord, Lord O'Hagan,

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knows, we can make minor alterations of these Rules without any undue difficulty.
The noble Lord, Lord O'Hagan, asked me about certain discrepancies that he appeared to have found. I think the one about the visitor not being authorised to take employment, which the noble Lord found in paragraph 14 of Paper 81 but not in Paper 97, arises because Commonwealth citizens who are here as visitors remain free to take employment which is merely incidental to their holiday—they are working holiday-makers, and they can do this. The same scheme for working holiday-makers does not apply to people from non-Commonwealth countries. As to the other point, that matter is slightly involved. May I write to the noble Lord about it, rather than take up time in the House?
The noble Baroness, Lady White, asked about some of the points relating to work permits. So far as the Filipino lady is concerned, I may tell the noble Baroness that the new work permit scheme does not allow for permits to be granted for the employment of semi-skilled machinists, so I think we have already put an end to that particular matter. The noble Baroness asked me a rather wider question, about working holiday-makers. We have extended the period during which, first of all, they have their initial admission for 12 months, as various speakers mentioned, and the maximum of five years which the noble Lord, Lord Gore-Booth, was a little concerned about. I assure him that this is not a back door to registration, because, unlike the previous system whereby one automatically was entitled to registration if one had been here for five years, there is no automatic entitlement any more. Since there is no longer an automatic entitlement, the mere fact that you have been here for this length of time as a working holidaymaker does not give you any more entitlement than any other reason for being here. So there is no difficulty here, and no loophole.
The noble Baroness asked whether in these cases there was a restriction on the type of work. The answer is that there is not, so long as it is incidental to the holiday. This is, after all, a scheme which has worked extremely successfully for a long time and of which altogether many
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thousands, if not millions, of people have taken advantage. I am not certain that I have ever been told of any reason why there should be restriction on the type of work. Certainly if the noble Baroness has any particular point in mind, I should be glad to look at it, but I have never heard of a problem of this kind. Equally, we have purposely not defined "young". Perhaps this is always an invidious thing to do, but in this case the overriding requirement is that it should be a holiday with the idea that in the end that person is going back to settle in his or her own country. I suppose one can have this sort of holiday when one is not all that young, but the whole point of the exercise, and the whole machinery of getting in as a working holidaymaker—and this is part of the entry certificate machinery—is that you have to convince the High Commission, or whoever is concerned, that this is what you are going to do and that you are in fact going to return. We think it better not to try to lay down a maximum age here, but rather to judge each case on its merits.
BARONESS WHITE: My Lords, I am sure that the noble Viscount can qualify almost indefinitely.
VISCOUNT COLVILLE OF CULROSS: My Lords, I will look at what I said in the OFFICIAL REPORT. I want just to mention the question of the Stateless Ugandans, and to thank the noble Lords, Lord O'Hagan, Lord Brockway and Lord Avebury, for their recognition of what we have done. I think they will appreciate that this was a difficult matter that had to be discussed and sorted out with the United Nations High Commissioner, and that there was no instant solution to it. I know that noble Lords have been impatient, but I thank them now for the gratitude which they have expressed on the decision we have made.
The noble Lord, Lord Avebury, in particular, asked me the question he repeated just now: Were all those who were going to benefit in the camps? The answer is, No. Some of them, though not a large number, are outside the camps, in various places in Europe, and they, too, will be coming to this country under the arrangement.
LORD AVEBURY: My Lords, apart from those in Europe, there were one or two others. For example, there was a

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man who went on a pilgrimage to Mecca, and was caught in Mecca at the time of General Amin's announcement. Is there no restriction whatever on the right of these husbands to enter the United Kingdom, whether they be in Mecca, Aden, Pakistan or in one of the refugee camps in Europe?
VISCOUNT COLVILLE OF CULROSS: Yes, my Lords; I think there are certain restrictions. But this is being done really on the basis of case by case. I think, in fact, that people who have been admitted have been in Europe. I just do not know the answer about the gentleman who went to Mecca at that particularly crucial juncture. The noble Lord always has the names of everybody, and if he will kindly tell me who it is, I will try to get my colleague to answer that question. I am afraid I was not prepared to deal with the students who had been at Makerere University. The noble Lord will readily admit that he did not give me notice of that one. It is not a matter that my Department would deal with, in any event, so perhaps again I can write to the noble Lord about it.
The third matter raised by the noble Lord I have already mentioned, namely, the question of the pressure on the Embassy in Islamabad. I do know about that. I have already commented on the degree of pressure on the Embassy there, and these are dependants who are exerting pressure. It shows that the pressure there still exists for dependants to come into this country. Numbers were slightly up last year over the previous year, and we still have quite a steady flow of dependants, which nobody would wish to resist, but which shows that we have to be careful of the extent to which we make any relaxation in our entry control. I will tell my right honourable friend the Foreign and Commonwealth Secretary what the noble Lord has said, but I know from conversations that I have had preparatory to this debate that the situation about the pressure in Islamabad is well known.
Although I cannot say whether it is necessary to interview every single person, I think there is, as the noble Lord recognised, a certain dubiety in the case of some of the documents that are presented
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for what is really a valuable privilege, that of coming to this country as a dependant. One has to be careful that people are not being let in under some false pretence. I am sure that the vast majority are perfectly genuine; but there is a good living to be made, I believe, in producing credentials which do not necessarily in the end stand up to scrutiny. It is for that sort of reason that I believe the Embassy staff are being rather careful. They also have, of course, the necessary appeal procedure in Islamabad. This, on account of the thoroughness with which it is done, does take a certain length of time, which may account for some of the delay to which the noble Lord referred. I am sure he would rather have a proper and thorough appeal procedure and have it take a little longer than have a terrible one which churns out injustice very quickly.
LORD AVEBURY: My Lords, I apologise to the noble Viscount for intervening once again, but in the particular case that I mentioned the Foreign and Commonwealth Secretary himself wrote to one of the right reverend Prelates opposite saying that he agreed that the lady in question was married to the husband who was living in this country, that the children were the children of the marriage, but nevertheless she still had to go for an interview which could not take place until June 4, 1973. All I was suggesting was that in his conversations with the Foreign and Commonwealth Secretary the noble Viscount might suggest that as many as possible of these cases are processed by documentary evidence, thus eliminating the need for interviews which cause hold-up.
VISCOUNT COLVILLE OF CULROSS: My Lords, the noble Lord is bowling me some very fast and unexpected balls, as I think he will appreciate. I simply cannot comment on this case, because I do not know about it. The only thing that I can do—on his own words it was the Foreign and Commonwealth Secretary who wrote—is to say that I will pass on what he has said to my right honourable friend.
My Lords, I think I should close on what has been one of the main themes of this debate. Practically everybody who has spoken has asked that we should

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do something about the law of nationality. As a matter of fact, the idea of a Select Committee has already been raised in another place, I think by the honourable and learned gentleman the Member for Northampton, and in reply to him my right honourable friend the Home Secretary said that this was certainly something that he would like to bear in mind at a rather later stage. I cannot remember which noble Lord it was—or it may have been the noble Baroness—who said that we rather tended in these affairs to wait until there was a crisis, and then act. That is not happening here. Nobody supposes that the review of the law of nationality will be a panacea. I think everybody appreciates that, because there are limitations to what one can do. As one noble Lord with a diplomatic background told us—I think it was the noble Lord, Lord Thurlow—we must have the proper technical information. But I also agree with him that that alone is not enough. We must get the very complicated state of the law sorted out, and we must also find out what is the state of the law about citizenship in a large number of other countries whose citizens, or people living within their territory, could be severely affected by anything we did in the way of change of our citizenship law.
Then, I entirely agree with the noble Lord, Lord Brockway, that in this connection we need to consult the Commonwealth fully. Whether one does that at a conference or in a rather more technical atmosphere where one can get down, at any rate to start with, to some of the nuts and bolts of the matter, so that we can see what the possible policy decisions might be, I do not know. One thing is perfectly plain: the noble Lord is quite right in thinking that we shall need to have wide consultations inside the Commonwealth before anything is done. Whether these can take place in time for the Prime Ministers' Meeting in Ottawa I do not know, but I take his point and I agree with him. So we must proceed quickly, and when we have the necessary information and some ideas on the necessary policy it may well be, as has already been suggested, that the matter could be examined by a Select Committee. Exactly whether this would be the right way to do things, I do not know, but I am sure that the words of
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my right honourable friend—he has already said that he will bear this in mind—will be given considerable impetus by the views expressed in your Lordships' House this afternoon. Certainly if (as, for example, occurred with the Army Act of 1955) the House could assist in framing a measure, I am sure this would greatly assist the passage of that measure when it came to be legislated upon. We could also draw upon the experience of so many Members of your Lordships' House and of another place.
I thank the House for a useful and constructive debate except, I regret, in the case of the noble Lord, Lord Foot. I do not know whether the House wishes to "take note", as the Motion suggests. I frankly do not mind very much whether or not the noble Lord, Lord O'Hagan, withdraws his Motion, because the fact of the matter is that the House has taken note of the Rules and has debated them very fully. I thank the noble Lord for having given us the opportunity to do so.
6.2 p.m.
LORD O'HAGAN: My Lords, I shall not keep you for very long. We have been discussing this subject on an appropriate day—the first day that immigration officials have ever gone on strike—and on their behalf I should like to thank everyone who has spoken to-day, in the hope that what has been said collectively here will help to make their task easier in the long run. I should like to thank the two maiden speakers in particular. I much admired the clarity and foresight of the noble Lord, Lord Porritt, though I hope I shall not be thought impertinent in saying so. The noble Lord, Lord Thurlow, got up and sat down again so quickly that I missed him, because I was correcting my speech in Hansard; but I have been told from all quarters of the powerful contribution that he made.
I have run out of classical allusions, and all that I have down on this piece of paper are two phrases: "No room for complacency" and, "Trapped by history". I do not believe there is any room for complacency, and I believe this debate has shown the Government that there are many Members of your Lordships' House who feel that the situation is by no means perfect. But I do not think that we are trapped by history. We are in the middle of two very powerful forces—there is history on one side,

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represented by our links with the Commonwealth, and economics on the other side, represented by the pull of migrant labour from all parts of the world to this country in order to do the jobs that we do not want to do ourselves. I believe we must make really determined efforts to resolve the conflict in a spirit of humanity and that one of the first steps in doing this would be to have a thorough look at our law of nationality.
I wish to thank all noble Lords who have supported and, in part, welcomed my ideas on this topic. As I feel that your Lordships' House ought to be a positive place, I believe that we ought to take note of these Immigration Rules.
On Question, Motion agreed to.

MUSEUMS (NORTHERN IRELAND) ORDER 1973
6.5 p.m.
THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM)THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM) rose to move, That the Draft Museums (Northern Ireland) Order 1973, laid before the House on January 24 be approved. The noble Lord said: My Lords, I beg to move that the Museums (Northern Ireland) Order 1973, a draft of which was laid before Parliament on January 24, be approved.
The need for this Order, as for many others we have discussed recently, arises from the reorganisation of local government in Northern Ireland. The present position is that Northern Ireland has two national museums—the Ulster Museum and the Ulster Folk Museum—both of which are mainly financed by grants from the Ministry of Finance. Each, however, also receives grants from local authorities. The Ulster Museum is assisted by the Belfast Corporation and Londonderry Development Commission. After reorganisation later this year, the new district councils will only bear the cost of those functions for which they are directly responsible and it would have been unreasonable to expect them to contribute to the increasingly heavy burden of financing the two national museums. The Order therefore provides for the ending of these contributions at September 30, 1973. The district councils will, however, have powers to run local museums. There are already one or two local
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museums in Northern Ireland, one of which is of a particularly high standard—that is, the Armagh County Museum, which is financed by the Armagh County Council. Local interests fear that the cost of maintaining this at its present standard would be too great for the new Armagh District Council, when it comes into existence, and so this Order empowers Armagh County Council to transfer the County Museum to the Trustees of the Ulster Museum. The cost of the museum will consequently be met as part of the Government grant to the Ulster Museum. Discussions on the proposed transfer are already under way.
The shortfall in the income of the museums will be made good by an increase in Ministry grants. In the case of the Folk Museum there is at present an obstacle to this, as a statutory limit of £45,000 is placed on the grant. In practice, this limit has already proved too low and additional extra-statutory payments are already being given. The Order removes this limit, and also that of £70,000 on grant from the Ulster Land Fund at present at the level of 50 per cent., on the most of minor development at the Folk Museum. In future these grants will be 100 per cent. without any statutory maximum. These changes put the Folk Museum in the same position as the Ulster Museum.
In both museums, local authorities are represented on the Boards of Trustees and even though their financial contributions will cease we want to encourage them to maintain their links so far as possible. The opportunity has been taken, however, to revise the composition of the Boards. At the Ulster Museum, a Trustee will be nominated from the New University of Ulster (that is the new University at Coleraine) in parallel with the Trustee already nominated by the Queen's University of Belfast, while three persons appointed by the Council of the City of Belfast will join the nine nominations by the Minister, bringing the total to 14 in all. I might add that the Chairman of the Trustees of the Ulster Museum for the ten years between 1962 and 1972 was a Member of your Lordships' House—the noble Duke, the Duke of Abercorn. I think it would be right to put on Record the Government's appreciation of the very significant contribution the noble Duke made to the

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Museum in terms of great expansion and re-modelling. On the Ulster Folk Museum Board at the moment several associations of local authorities are represented. As these associations will disappear, provision is being made for the nomination of four trustees by the proposed association of the newly-formed district councils. In all, the Minister will appoint seven Trustees, the Council of the City of Belfast two and the two universities one each, giving a total of 15.
There are other changes in the Order. To indicate the scope of its interests, the Folk Museum will become the Ulster Folk and Transport Museum, while the Trustees will be able to lend moveable property for up to 12 months without the approval of the Ministry. The Order also provides power for the Trustees of the Ulster Museum to impose charges for admission. At present there are legal impediments to their doing so full-time. The Order not only removes these, but clarifies their right to charge. Admission charges are already made at the Folk Museum—at present 15p for adults, 5p for children; with pre-arranged groups at half-price.
The Order also provides that at April 1, 1973, responsibility for the grants to the museums, and also to Armagh Observatory (to be distinguished from the museum at Armagh), will transfer from the Ministry of Finance to the Ministry of Education. This was recommended by the Macrory Report and is in line with Great Britain where the Treasury handed over its responsibilities in this field to the Department of Education and Science some years ago.
In this brief introduction I have, inevitably I am afraid, had to concentrate on the organisation and financing of the two national museums in Northern Ireland. But I do not want to end without saying a few words about the contents and resources of these two splendid collections; both of which I have been able to visit for myself. The Ulster Museum is now a major regional museum, multidisciplinary in its approach, which compares well with any in the United Kingdom outside London. An ambitious expansion programme over the past decade has been completed which has had the effect of almost doubling the amount of display space. I am particularly pleased
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to see in his place the noble Lord, Lord O'Neill of the Maine, because I have heard what a very important part he played in this expansion programme, first as Minister of Finance in Northern Ireland, and latterly as the Prime Minister of the Northern Ireland Government. I believe that now the noble Lord has the pleasure of acting as President of the Friends of the Ulster Museum, so he has maintained his connection with the museum right up to the present time.
In addition to an architecturally distinguished new building opened as recently as last autumn, the greater part of the galleries in the original building have been renovated and remodelled at the same time. The director has a staff of about 130 people, and departments cover: antiquities; art, botany and zoology; geology; and technology and local history. The treasure from the Armada galleon, the "Girona", is now permanently on display at the museum.
The Ulster Folk Museum is much newer, although I understand that it, too, acknowledges its debt to the noble Lord, Lord O'Neill of the Maine. It dates back only about fifteen years, but in that time a superb site has been acquired at Cultra in County Down, and a highly original folk museum developed which takes the form of a composite picture of the social and cultural life of Ulster. A number of smaller representative buildings from different parts of the Province (such as farm houses, a weaver's cottage, a spade-maker's mill, a Blacksmith's forge, and so on) have been acquired and moved brick by brick in a most conscientious way to the Folk Museum where they have been restored to what they were in the past, in some cases even to the extent of having contemporary exponents of the old crafts of hand weaving, spade-making and forging iron work, actually working in the original buildings when transferred to their new site. These are backed up by exhibitions at Cultra Manor.
My Lords, I must not go on too long, although there is much more that could be said. Let me simply affirm that both museums are an admirable example of enterprise and artistic endeavour and, what is more, in a field that by broadening the knowledge and interests of those who visit the collections, or who benefit from the various educational activities carried out by both institutions, can only help to

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bridge the sectarian and cultural divide in Northern Ireland. I beg to move.
Moved, That the Draft Museums (Northern Ireland) Order 1973, laid before the House on January 24, approved.—(Lord Windlesham.)
6.15 p.m.
BARONESS LEE OF ASHERIDGE: My Lords, this ought to be an entirely happy occasion on which we need do little more than give our thanks to the noble Duke, the Duke of Abercorn, to the noble Lord, Lord O'Neill of the Maine, and a very distinguished company of Trustees who have obviously worked so hard and with such distinction in giving to poor, strife-torn Northern Ireland and, in particular, Belfast, something in the case of the Ulster Museum which is not only a treasure house but, situated as it is in the botanical gardens, a sanctuary. I was fascinated by the figures of attendance in the past few years, when the Ulster Museum was being so adventurously expanded. In 1969 the attendance figures were 66,400, and by 1972 they had risen to 185,200, almost a 300 per cent. increase. The big upward jump came after June 1971, when one of the main expansions was taking place.
I speak with the disadvantage that I have not had the privilege of seeing either of the two great museums that we are discussing. I know that the noble Lord has seen them very recently, and therefore I should have been only too happy if all that we were required to do from this side of the House was simply to congratulate everyone concerned, and he thankful that in the circumstances of Northern Ireland the flag of civilisation was still flying. But in the debate in the other place a number of matters were left in some doubt, although they have been clarified more recently by Questions and Answers. Just to make quite sure, I would ask the noble Lord whether lie would confirm that in certain instances we have the correct picture.
For example, there was some alarm in case the appointment of the chairman of the Trustees should be a Ministerial decision rather than as a result of the selection of the fellow Trustees. I hope I am right in saying that the whole matter has now been cleared up. When the Trustees body was being reconstituted the
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noble Duke, the Duke of Abercorn, was appointed by the Minister. But his successor has now been appointed, and it is firmly established that the chairman will be selected by fellow Trustees. This point is important because the trustees of our great national galleries here and in Ireland have been knocked about a great deal from the political end. For instance, they have had to swallow the imposition of charges, although it is quite clear that the trustees of the Irish galleries are just as hostile to them as our own trustees. We want to be quite sure that those who are responsible for running the museum, and who ought to know one another's calibre, have the privilege and responsibility of appointing their chairman.
We should like to be quite clear that there will be no imposition of charges during the present period of price controls. I have in my hand an Answer which has come from the other place to-day, but the matter is still a little ambiguous. The Member for Smethwick asked the Secretary of State for the Environment whether he intends to increase any admission charges at public buildings or monuments under his control during the period of price restraint. The answer that was given to him was:
"This matter is under consideration in the light of the Government's programme for controlling inflation, but admission prices will be held at present levels during Stage 1 of that programme."
What about Stage 2 of the programme? We should like to be absolutely certain that, so far as the immediate issue before us is concerned—that is, the future of the museums in Northern Ireland—there will be no charges whatsoever while we are in a period of attempted price controls. I think it ought to be clear to everyone that we cannot possibly expect the trade union movement to co-operate with Ministers and to feel that there is fair play all round if, on an issue such as this, they feel that the Government are insisting on going ahead with charges—and I am speaking about both the period while the freeze is on and the period beyond the freeze.
The argument in relation to Belfast is in many respects the same as the argument we have tried to put before the Government about charges in our own great national museums and galleries; with

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this difference, that there is something, even more ignoble. Here is Belfast, with its unemployment, with sectors with very low wages; here is a great museum in the park, and here is the Folk Museum on the outskirts, a contemporary concept that interests and excites a younger public because it is dealing with crafts, with industry, with transport and all kinds of things. Surely, what we want to do is to attract the maximum number of young and old into civilised environments. It took us a long time to convince some Members on the Benches opposite that education for all children ought to include a knowledge of the Arts. But that battle has been won and now it is a benediction to go into most of our primary schools, where it is no longer a case of austere teaching of rudimentary facts that would help the children to become good machine minders, good factory workers, good bus drivers and the rest; our children now have a sense of colour and design, of painting, dancing and music.
We are giving the younger generation those opportunities. It is not uniform all round, but this is the spirit of contemporary education. So how can we justify not giving the maximum encouragement to the young who follow on from the schools to the great centres of culture? In my judgment—and I hope I have the support here of all Members of your Lordships' House—our great museums and galleries are a most important part of schooling. They are part of the school. There is no justification at all for imposing charges if we really want to follow the logic of trying to give to our children a civilised education. We hear a great deal about automation meaning that there is going to be more leisure in the future, and if we want the children to be saved from rowdyism, from despair and boredom, then of course we must help them in every way we can.
I know that some Members of your Lordships' House may say, "What a lot of fuss to make about £11,000"—because from the answers given in the other place I gather that the revenue which is expected from the charges will be in the region of £11,000. I shall be corrected if I am wrong, but from the questions and answers in the other place I believe the figure is between £10,000 and £12,000.
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At present no money is being raised from this source and we should like to be clear that so long as the freeze lasts no charges will be imposed. But is it the case that, although there is no revenue from this source, at present additional expenditure is being undertaken? Is it the case that in Ireland, as here at home, the poor trustees have been obliged to spend money, to go ahead engaging extra staff, putting up turnstiles and all the rest of the squalor? should like to know about that because this seems to make the situation madder than ever.
So this is the big thing that divides us. We are in agreement that the changes made are good and necessary, but I still have a certain sympathy with some of those who are a little afraid of the transfer from the Ministry of Finance to the Ministry of Education. We had to discuss this in the last Parliament and the way we settled the matter was to transfer responsibility for the Arts, museums and galleries from the Treasury to the Ministry of Education, but at the same time a Minister for the Arts was appointed, and although the Treasury officials detested the arrangements we made nevertheless we stuck to them. The arrangements were that the Minister for the Arts negotiated separately with the Treasury the grants for the Arts and for the museums and galleries. This was necessary, because if you have a Minister of Education who has to find financial support for primary schools, nursery schools, universities, and so on, he already has so many mouths to feed that if an extra, such as museums and galleries, is imposed on him then the Minister regards it as a kind of cuckoo in the nest—one more mouth to feed.
One way out of the dilemma—and if there is any optimism in future developments this may come—in England, is to have a separate Ministry for the Arts, but we decided that we were not yet ready for that because we know the fate of small Ministries. Very often they cannot attract the best of the Civil Service; they have to have a most expensive administrative machinery and often small Ministries are apt to come a cropper. So I think we made the right decision in appointing a Minister for the Arts, including the museums and galleries, and if you have a Minister who is really the

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champion of those interests he can save them from being thrust aside by the counter, and equally essential, claims in other fields of Government expenditure.
But our problem is that while our concept of a Minister for the Arts was someone who would be the champion of the museums and galleries, who would defend their rights and privileges and fight for our musicians and our theatres, instead of that, unfortunately, at the present moment we have a Minister for the Arts who is leading the battle, not on the side of his own trustees but on the side of the charges. This is the basis of the divisions between us. If I may respectfully say so, I think the Government have got themselves into quite unnecessary ill-repute and difficulty over what is a paltry sum. It is pouring salt into the wound of people who are concerned about rising prices; it is adding bitterness, because of course paying 5p or 50p means nothing if you are well-to-do, so this is discrimination against the poor.
There was a revealing sentence in one of the contributions in the other place, to the effect that if charges were imposed there could be more control over admission. I wonder what that means—whether too many people tried to go in; whether old-age pensioners who simply wanted to sit down in pleasant surroundings went in. Would the Government rather that they did not go in? Were there children from the back streets of Belfast playing in the park who thought they would have a look, too? What is interesting is that if there is that kind of objection, it does not come from the trustees. The trustees are opposed to charges. It comes from the Government. What are the Government trying to do? With one hand they accept the civilised attitude that the Arts are part of the heritage and the education of the children of the nation; but at the same time we have this indefensible situation in which the poorest of the children will have an unnecessary hurdle put in their way.
My Lords, I now conclude this speech because I do not think there is any reason why we should cover the entire ground that was covered in the other place. This is a measure in which there is Party agreement. There is no dissension among us about the necessity for transferring the controls in the way that has been done—
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the reorganisation of local government; all that is agreed territory. But we shall have to be careful because the size of Northern Ireland means, I am assuming, that one cannot have a special Minister who is responsible for the museums, galleries and the Arts, I am assuming that that means that the Minister of Education will have to establish the priorities. We have been given an assurance in the other place that this will not be in any way damaging to the future interests of the museums and galleries. All we can hope for is that that will in fact be so. But, even at this late hour, may I say to Government Ministers: "Your Government have had to turn a great many somersaults." I am not raising this point in malice. With changing economic circumstances, Governments often have to amend and change their course, but could not a Government who have turned so many somersaults on major issues—wages, working conditions, price control, trade unionism, and the rest—do just one more little somersault and stop this crude, unworthy attempt to penalise the poorest of the people in our communities by these foolish charges that cause so much trouble to all of us? As I said, I wish that my congratulations could have been unequivocal, but I am afraid that they cannot be that between the two sides of this House so long as we have to go on fighting, as we intend to go on fighting, to get rid of charges.
6.33 p.m.
LORD WADE: My Lords, I should like to join in thanking the noble Lord, Lord Windlesham, for explaining this Order. The noble Baroness has spoken very forcibly on the subject of museum charges and I shall not, therefore, go over all that ground, but I should be interested to hear from the noble Lord, Lord Windlesham, what effect the price restraint policy will have on the proposal to authorise charges for admission to the Ulster Museum. There seems to me to be a case for deferring these charges during the period of price restraint. On the general subject of museum charges, I remember the noble Viscount, Lord Eccles, answering a number of supplementary questions in this House. It seemed to me that it was getting so very complicated that I was inclined to suggest that we might adopt the policy of simply having collecting boxes. I was not quick enough on my feet to put forward that proposal, and I

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realise that that is a little wide of this particular Order.
The point I should like to raise relates once again to the constitutional position. I know that we have had several discussions about the constitutional position so far as the Northern Ireland Orders are concerned, and I apologise if I am going over the same ground. But there is just one point. On one other occasion I mentioned the value of the Special Orders Committee. On this occasion, if we read the Seventh Report of the Special Orders Committee we see:
"The Committee have no doubt about the vires of any of these Orders nor is there any other matter in these Orders or in the enactments under which they are made to which they think it expedient to call the attention of the House."
At first sight it may seem that that implies there is nothing to discuss. But it is clear already that there are matters to discuss and of course the Special Orders Committee are not concerned with the merits; they are concerned with technical aspects. But it is right that this should be mentioned because it may be that some noble Lord in reading this Order will assume from it that there is nothing to discuss. This is of special importance in the case of these Northern Ireland Orders, because, as the noble Lord, Lord Windlesham, has pointed out on other occasions, they are in the nature of Bills coming before this House, and the merits of these Bills have to be considered by the House. It is perfectly proper that these points should have been raised which have already been raised, for example, by the noble Baroness. I conclude by simply adding my tribute to the trustees to whom reference has already been made.
6.37 p.m.
LORD AUCKLAND: My Lords, I intervene only for a moment because my family and I have paid two visits to the Ulster Folk Museum at Cultra while we have been holidaying there with a very good friend of ours who was a member of the Ulster Unionist Party over here. I should like to pay my own tribute to the trustees of that museum and to those who run it. It is a unique place and I hope that my noble friend is able to give an assurance that at least during the period of "freeze" no additional charges, over and above the charges which have, as I understand it, always
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been made in this particular museum, take place. I should hope also, though this is perhaps outside the scope of the Order, that even during the present troubles in Northern Ireland, as many people as are able who are visiting Northern Ireland from other parts should visit this marvellous museum if only, so to speak, to help swell the exchequer. Anything that can be done to promote the survival and the beauty of museums of this kind is to be actively encouraged, and inasmuch as this Order does that, I very much welcome it.
6.38 p.m.
LORD O'NEILL OF THE MAINE: My Lords, I must apologise to the Minister for arriving halfway through his remarks, but unfortunately in time to hear him piling pæons of praise upon my shoulders and therefore making it all the more difficult for me—as he doubtless intended—to criticise this Order. But I should like to make a few remarks. First of all, on the national front, I am absolutely against charges for entry into museums. That is a remnant of the "lame duck" days which were quickly killed when Rolls-Royce went "bust" and I should like to think, like the noble Baroness, Lady Lee of Ashridge, that before the term of the Government's office comes to an end they might be able to make a tiny backward somersault on this problem, which would be nothing compared to somersaults that they have already been able to carry out.
Historically, the Minister is extremely well informed and does his homework on Northern Ireland very well, but many noble Lords may not know the small fact which I should like to give you. When I became Minister of Finance in 1956 there were no national institutions whatsoever in Northern Ireland. I believe I am right in saying that under the Government of Ireland Act 1920 certain finances were set aside for cultural institutions. But, whatever other qualities Ulster Governments may have had, they were not particularly interested in that sort of thing. I think this sum of money—very large at that date; about a quarter of a million pounds—was spent on more mundane matters. It was a difficult thing to turn what had been a municipal institution in Belfast into a national institution. It required great tact, as I relate in the

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book that I wrote before Christmas, and but for the charm of the chairman, who was a lady, of the Museums and Libraries Committee of the Belfast Corporation we should never have had a national institution at all. She was the first to realise that if I tried to "pinch" this municipal institution, all the members of the Belfast Corporation would rise on their hind legs; so she very cleverly came and asked me whether I would take it over, which, of course, simplified everything. Later on we were able to spend a large sum of money on the magnificent extension which the noble Lord visited, and now we have a national institution in the Botanic Gardens of which we can be proud.
The history of the Folk Museum is rather different. That came into existence only with the assistance of the local authorities, and that, I think, is probably why a charge was instituted. It is a national institution and a very fine one, as the noble Lord has just said—a magnificent site. In fact we were much praised by the Swedes, who are experts in folk museums and who came over and said that this site was far better than theirs. Nevertheless the origins of the Folk Museum, under its excellent director George Thomson, are different from the origins of the Ulster Museum. That is why it was thought necessary to make a slight charge for entry, and, like the noble Lord who has just spoken, I very much hope that the charge will not be increased in any way.
I am in rather a strange position, in that the Prime Minister of Southern Ireland, Jack Lynch, made me a governor of the National Institute in Dublin, and I am president of the Friends of the Ulster Museum, so to that extent I straddle the Border, on a purely cultural basis. So far as I know, there is no intention whatever to create a charge for entry into the magnificent National Gallery of Dublin. Of course, chickens always come home to roost. In the excellently drafted Green Paper, which we all read, there was that enigmatic phrase "the Irish dimension". Past Ulster Governments may be criticised for their unreasonable attitudes to the South of Ireland and all that kind of thing, but if we are discussing this "Irish dimension"
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—I do not know quite what it meant; it was thought to mean Irish unity in Dublin, and statements were hastily issued from Whitehall to say it meant nothing of the kind—it seems rather strange to me that Westminster should raise a barrier between the cultural situation in Belfast and the cultural situation in Dublin. For however many charges the Government in London intend to put on museums in any part of the United Kingdom, so far as I understand there will still be free entry to the magnificent National Gallery in Dublin. If we are talking about the Irish dimension, either in the Green Paper or even (if this name is going to be dropped) in the White Paper, this point should be borne in mind.
Like the noble Baroness, Lady Lee, I would ask whether a charge for entry into the Ulster Museum, which is being made against the wishes of the Trustees, would be against the provisions of the Counter-Inflation Bill; and if, in fact, it is against the provisions of the Counter-Inflation Bill, then I should like an undertaking that in no circumstances will any charge be imposed until after the provisions of that Bill have lapsed. I would also ask whether this Order removes a legal stipulation that the Ulster Museum should have some free days, because if there are going to be free days in other national institutions, is it right that the power to have free days of entry into the Ulster Museum should be abolished by this Order? I question that very much indeed.
Next, I would say this—and this may apply to other museums in England; therefore I should not like to suggest that it is in any way unique. The Minister quite rightly mentioned the magnificent Armada treasure which was found by a Belgian underwater diver in a spot where somebody else ought to have found it years ago, called Point L'Espagna, next door to the Giants' Causeway. This magnificent treasure, as the noble Lord knows, has now found a home, very rightly, in the Ulster Museum, While it is perfectly true that the Ministry of Finance are going to be faced with some financial assistance for that, it is nevertheless also true that the Friends of the Ulster Museum have, on their own account, raised quite a lot of money in order to make it possible for that Spanish Armada treasure to stay in the Ulster

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Museum. This also ought to be borne in mind. If the Friends of the Ulster Museum have gone out of their way to raise money, thousands of pounds, in order to ensure that the Girona treasure stays in Northern Ireland, then we have in effect made a contribution to the expenses of the museum.
Finally, I would ask this question. Am I right in thinking that 41.6 per cent. of this small sum of money which is going to be collected by imposing charges will be spent in the actual cost of collection? In normal circumstances this kind of thing would be frowned on by the Treasury, but of course I realise we are not living in normal times. As a last postscript, I would say, as a former Minister of Finance, that while I am perhaps one of the only Ulster Protestants to be in favour of direct rule, had I been Minister of Finance in Northern Ireland to-day I would have come over to the Treasury and seen William Armstrong, then in charge of Home Finance, and I have no doubt whatsoever that this ridiculous charge would have been waived in view of the fact that Northern Ireland is in a far worse financial position than the rest of this country. Therefore I regret very much that these charges have been imposed on this national institution, of such recent date and of such a difficult birth. I would express the hope that the Minister will consider very seriously what I have had to say. May I finally say to your Lordships that anything I have to say, or have said, to-night in no way detracts from the great admiration I have both for the Minister and for the Secretary of State.
6.50 p.m.
LORD SHACKLETON: My Lords, this has been a very interesting debate. The Irish dimension has very firmly come into your Lordships' House, and it is quite right that it should. I am now using "the Irish dimension" in terms of England in relation to Northern Ireland; I realise the context is different elsewhere. I particularly welcome the fact that on this occasion we should be debating an Order that is concerned with cultural matters that are so far removed from the hard day-to-day business of Government administration and some of the more difficult Orders concerned with law and order.
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This has been a notable debate. My noble friend Lady Lee, whose personal contribution to the Arts has been so widely recognised as quite tremendous, and the noble Lord, Lord O'Neill of the Maine, whose own work in this field as well as in Ireland generally is so valuable and so valuable to your Lordships' House when we come to consider what the Government are doing, have both taken part in this debate. A further reason why I welcome this debate is that was well aware, as a B.B.C. producer in Northern Ireland many years ago, of the vitality and urge for cultural life there. It was interesting to hear the noble Lord, Lord O'Neill, pointing out the absence of national institutions, because we were well aware how important the B.B.C. was in Northern Ireland as providing a focus for a tremendously strong spirit for the Arts among Ulster people. Therefore, it is interesting that we should now be debating an Order to which the House has given a general welcome except in one respect, and I want to say a few words about that before I close.
I should like to refer to an institution that I have not visited but which the noble Lord, Lord Windlesham, with characteristic thoroughness, has visited. It is typical of him that among all his other duties he should have paid a visit to the two principal institutions. We recognise that characteristic. I am referring here to the Folk Museum. I am bound to echo the tributes that were paid by the Member for Down North in another place to Professor Estyn Evans. If I may change my hat once again, as President of the Royal Geographical Society I recognise that he is a most distinguished geographer, who has made a tremendously important contribution in the cultural field. I could continue at greater length, because we know so well how important his work has been.
It was interesting to hear the noble Lord, Lord O'Neill, reporting the reaction of a Swedish delegation to this institution. I was interested in the remarks of the noble Lord, Lord Windlesham, about Armagh Observatory. Looking at the national position, I take it that in this country the observatories receive their financing—and I am not sure of this, because there have been so many changes in these institutions—from the Department of Education and Science. The

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institution is a valuable, historic one, and I assume that this matter is in some way linked with the transfer of the Armagh County Museum to the Trustees.
LORD O'NEILL OF THE MAINE: My Lords, the origin of the Armagh Observatory, curiously enough, is ecclesiastical. The Church of Ireland Archbishop, Archbishop Robinson, established it in about 1790. In recent years we have built a wonderful planetarium there which is a great success, and so, in a sense, the Observatory has become not only nationalised but more interesting.
LORD SHACKLETON: My Lords, I am interested to hear that. I ought to have known that because in my B.B.C. days in Northern Ireland I not only visited the Observatory but also produced a talk programme on the subject. I remember that it was the then curator of the museum who explained to me the mysteries of the expanding universe and the shape of the galaxy, and I remember his demonstrating it. I am grateful to the noble Lord.
There are one or two points that I should like to raise in relation to the subject of charges. I would ask the Minister to take very seriously the matters that have been put before your Lordships, and particularly the remarks of the noble Lord, Lord Wade. Once again here is virtually an Act of Parliament, and all we know about it under the Special Orders Committee procedure is that it is intra vires, and all right for us to pass. The Special Orders Committee have done precisely what they are required to do. We are getting all too inclined to accept the fact that anything that the Government bring forward in regard to Northern Ireland, because it is an Order and it is Northern Ireland, somehow or other we have to let through. In fact this is the position that we are in to-day. If this was a Bill I have no doubt that in the present atmosphere—and noble Lords have shown a good deal of independence on many matters lately—this particular item would be struck out of the Bill. It was a miracle that that wretched charges Bill ever got through in the first place; I do not believe that it would now.
Although we have talked about trying to improve procedure, we have done
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nothing about it. This may be just as much the fault of the Opposition as of the Government, but I should have liked to ask the Government to take this Order back and re-lay it without this particular paragraph, for the reasons that have been given by my noble friend Lady Lee and by other noble Lords. That is what we ought to be doing if we are taking this sort of legislation seriously. We know that it had gone so far as having a Second Reading at Stormont when the clouds were getting thicker on the horizon, and that it did not receive the full consideration that it should have done. None the less, it was presumably considered by the Advisory Committee. I find it difficult to believe that the Advisory Committee that vets Northern Ireland legislation can have welcomed this particular paragraph.
I wonder how far the noble Lord is aware that some of the arguments, particularly those used in another place, do not really stand up at all. We may have one of those arguments again to-day—and while the noble Lord is now an expert on so many things, he cannot be an expert on everything—for consistency with the rest of the United Kingdom, even though it produces an inconsistency with the Republic of Ireland. But the Army Museum in Britain does not have to charge, and the Folk Museum already makes charges, for reasons that have been fully explained, because of special circumstances. The Ulster Museum, I understand, can make charges if it wants to do so. Mr. van Straubenzee, in another place, said that the Trustees of the Ulster Museum are not yet empowered to make charges. I do not know whether that is correct. I have been informed that they are empowered to make charges but on not more than 4 days in the week. Will they now be empowered to keep to that number if necessary, and make charges on 4 days but have 3 free days? We should like clarification as to whether Mr. van Straubenzee's remark on February 23 was correct.
I hope the noble Lord will not dismiss this matter as something unimportant, because it is a matter on which a number of people feel very strongly. Furthermore, the de minimis argument does not carry much weight against the opposition: rather, it is against putting this

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item into the Order. Again, if the figures of the noble Lord, Lord O'Neill, are correct and these charges will produce only £10,000 (I think my noble friend said £11,000), and 43 per cent. will be spent on administration, it becomes a nonsense. We do not expect the noble Lord to be willing to take the Order back to-day, but I hope he will see that his right honourable and other friends realise that this is a mistake, particularly in the Northern Irish context. Otherwise, my Lords, we welcome the Order.
7.1 p.m.
LORD WINDLESHAM: My Lords, one of the subjects I thought I had escaped from when I went to Belfast was museum charges. But now, several months later, I find myself, somewhat surprisingly, the target in this particular controversy. What I can say is that I shall certainly bring to the attention of my noble friend the Paymaster General, who has overall responsibility for national policy in this respect, the very well-informed debate we have had on this matter this evening. I shall also bring it to the attention of the Secretary of State for Northern Ireland.
Noble Lords will accept that an Act of Parliament—the Museums and Galleries Admission Charges Act 1972—has been passed by your Lordships' House and by another place and is on the Statute Book. The noble Baroness, Lady Lee, played a major and active part in the debates on that Bill. What is being done now is to bring the two national collections in Northern Ireland into line with the national museums elsewhere in the United Kingdom.
I shall say something in a moment or two about the question of museum charges and how they affect Ulster, and I am grateful to the noble Lord the Leader of the Opposition for informing me in advance that this was a matter which was concerning Members of the Opposition Front Bench. I accept that this concern is not just confined to the Front Bench opposite, since the noble Lord, Lord Wade, and the noble Lord, Lord O'Neill of the Maine, spoke in similar terms. Therefore, I have prepared myself to make a short statement on this matter. I hope it will be interesting and useful to the House to have some additional information, even
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though I fear it may not satisfy absolutely everybody. However, before I do so, let me deal with one or two of the other points raised.
The noble Baroness, Lady Lee, asked about the chairmanship of the Trustees of the Ulster Museum. A misunderstanding arose—I do not know how—but the position is quite clear and is fundamentally as she stated it. The first chairman of the newly-constituted Trustees of the Ulster Museum in 1961–62 was the Duke of Abercorn. He was appointed in the first instance, but was re-elected on a number of occasions and served over a 10-year period. He retired last year and his successor, Dr. Mayne Reid, the new chairman, was elected. I had the pleasure of meeting Dr. Mayne Reid on Saturday last when I visited the museum. Future chairmen of the Trustees will be elected. I think that clears up that point.
The noble Baroness also asked about the transfer from the Ministry of Finance to the Ministry of Education. I agree with her in what she said when she remarked that it is the personal interest of the Minister with responsibility for the Department which is of paramount importance. In our case, this means that Ministerial responsibility transfers from one Minister of State who is responsible for finance to another who is responsible for education. It happens that education is the responsibility of my honourable friend, Mr. van Straubenzee, who handled museum charges in another place on behalf of the Paymaster General. He has already visited the Ulster Museum and the Ulster Folk Museum, and I know that he intends to take just as close an interest in these two Museums in the future as others have done before him.
I was pleased to hear from the noble Lord, Lord Auckland, that he has some personal experience of the Ulster Folk Museum and I hope he will come back and see it again soon. There are some new additions to the museum which I think he will find interesting. I can give him the assurance for which he asked, which was also asked for by the noble Lord, Lord O'Neill of the Maine. I understand there is no intention by the board of the Ulster Folk Museum to increase the level of charges at the present time, subject to any adjustments that may be necessary for value added tax. The noble

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Lord, Lord O'Neill, spoke most interestingly about the origin of these two museums. I had heard some of that information on my visits to both museums, but to have it from the horse's mouth, as it were, is particularly valuable and interesting for those Members of your Lordships' House who have not had the opportunity of seeing the museums at first-hand for themselves. As to the Girona treasure, this was purchased by the Ulster Museum. A grant of, I think from memory, £88,000, was made available from Government funds and the balance, of the order of £50.000, has been raised by public subscription and, I may say, by charges. Charges are made for special collections and for the Girona exhibition at the Ulster Museum at the present moment. It will form part of the permanent collection so it will be located in the Ulster Museum, except when it is out on loan.
LORD O'NEILL OF THE MAINE: My Lords, is it not a fact that when there has been a special exhibition at the Victoria and Albert, for instance, we have been charged to go to it since long before the Government ever thought of making charges for a museum? It is quite true that there are charges for the Girona treasure, but has this not been an established fact in London for years?
LORD WINDLESHAM: My Lords, I am on thin ice already, and I do not think I should stray on to other museums outside those for which I have any responsibility. The noble Lord, Lord Shackleton, paid a tribute to Professor Estyn Evans, the distinguished geographer, who can claim to be regarded as the father of the Folk Museum. Professor Evans, as it happens, is also a Trustee of the Ulster Museum representing the Queen's University of Belfast, and we hope that, with the advent under the new Order of a second university representative from the New University of Ulster, a contribution will be made by both of the national universities in the future. The noble Lord also asked about the Armagh Observatory. This is separate from the Armagh County Museum and is not directly affected by the Order, except that its funds, at the present time running at the level of a £22,800 Government grant, will in future
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come from the Ministry of Education rather than from the Ministry of Finance. The noble Lord, Lord O'Neill of the Maine, explained that the Observatory has its origins in the Church of Ireland and was set up by an Archbishop of Armagh in 1791. I have a historical note on the Observatory, but perhaps it would be in the interests of the House if I sent it direct to the noble Lord rather than read it out at this moment. Let me turn now—
LORD SHACKLETON: My Lords, will it be too long for a reply to a Written Question?
LORD WINDLESHAM: No, my Lords. That is a very happy suggestion. I should be delighted if the noble Lord would put down a Question to enable me to supplement that body of knowledge which he started to acquire when he was a B.B.C. talks producer in Northern Ireland. I was pleased to hear that the noble Lord's interest in astronomy began at that time. Let me move on now to the central question—the only question—which has divided noble Lords in considering this Order; that is, the question of charges. The Order is, of course, enabling legislation. That is the first point I should like to make. The Order itself does not impose any charges.
The policy of Her Majesty's Government, as explained by my noble friend the Paymaster General on a number of occasions, is to introduce charges at national museums. The date when such charges are to be introduced is still under consideration, and it is not for me to add to what was said in another place to-day. What I can say, however, is that no charges will be made at the Ulster Museum if they are not introduced in Great Britain. The scale of charges, the provision of free days and so on is a matter to be settled by the trustees with the approval of the Ministry of Education, again in line with general United Kingdom policy. As noble Lords are aware, the Northern Ireland Folk Museum already charges for admission; the Ulster Museum does not.
The noble Lord, Lord Shackleton, asked about the legal powers of the Trustees of the Ulster Museum in relation to charges, and referred to the fact that there was an obligation to open free on three days. I have studied a note from

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the lawyers, and find that this particular situation is exceptionally complicated. As I understand it, and subject to correction, the position is that at the Ulster Museum there has been, as the noble Lord correctly said, a long-standing obligation to open free on three days a week. The museum was originally a municipal museum—it came under an Act of 1891—and the trustees, therefore, it might be said, had a right to charge on certain occasions, but not on the three free days. There are, however, I understand, other ambiguities—by-laws are involved; and there is also the change in status from a local museum to a national museum in 1961. What the legal opinion says, in a nutshell, as often happens with opinions of this sort, is that the position is obscure. There is ambiguity; there is the point I mentioned about three free days. It was decided that a provision of this sort was needed to make the position clear.
LORD SHACKLETON: My Lords, may I interrupt the noble Lord? I am grateful to him. I take it that his colleague, Mr. van Straubenzee, will now correct his statement in another place. This has caused some uncertainty. This statement simply says:
"The Trustees of the Ulster Museum are not yet empowered to make such charges."
It is at least an ambiguous statement. However, I leave it there.
LORD WINDLESHAM: My Lords, am grateful to the noble Lord for drawing my attention to this, and for giving me notice of the Answer to which he has referred. I believe it really turns on what is meant by "such charges". The Question by Mr. Money was to ask
"the Secretary of State for Northern Ireland whether he intends to request the trustees of the Ulster Museum to impose admission charges."
Most people, both in another place and here, would understand that what the honourable Member was referring to in his Question was the overall scheme of museum charges which has been the subject of controversy for so many months. The Answer was that there is no power at the present time, because the Order in Council has not yet been passed and does not come into effect until April. But, as the noble Lord says, one can look at these things in different ways.
LORD SHACKLETON: My Lords, I will not press it. The noble Lord of course quoted the Question asked by Mr. Money rather than the Question asked by Mr. Kilfedder, which would suggest that this Answer is not entirely satisfactory. But I leave it to another place to deal with that.
LORD O'NEILL OF THE MAINE: My Lords, I wonder whether, before the noble Lord gets up again, he would answer the question I put to him. I appreciate from what he has said that the legal position is very obscure, but I wonder whether the noble Lord would be willing to answer the question I asked, despite that fact. Does this Order in fact remove the legal stipulation that the Ulster Museum—even though its origin was municipal—must have certain free days? That, surely, is a fairly simple question, despite the fact that the legal position is obscure.
LORD WINDLESHAM: My Lords, it is usually unwise to give an unqualified reply to a question of that sort, but I think the answer is, "Yes".
LORD O'NEILL OF THE MAINE: It does remove that stipulation?
LORD WINDLESHAM: I believe it does, my Lords. If I am wrong on that, I will write to the noble Lord and qualify my answer, but I think he is correct in saying that it does remove it.
My Lords, let me give a few further details, because they cover some of the points which have been raised. The Trustees of the Ulster Museum have not had any formal discussions with the Ministry of Finance about the level of charges, but it is anticipated that they will be kept in line with the charges in Great Britain that is, 10p for adults and 5p for children and old-age pensioners. As in Great Britain, there would be free admission for organised school parties and students on pre-arranged visits. It is unlikely that the rate for adults will be doubled in July and August, as is proposed in Great Britain. Season tickets would be available. Any proposals put forward by the Trustees for free hours of opening would be considered in the light of the policy in Great Britain. So that touches on the answer I have just given to the noble Lord, Lord O'Neill of the Maine. I understand the Paymaster General has said that he envisages some free opening provided that the total

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charging arrangements allow for a compensatory effect, or some other resources are used. As I said earlier, the introduction of charges at the Ulster Museum will take place only if charges are introduced in Great Britain.
My Lords, the final point to which I ought to refer—it is one of detail—is the question put by the noble Lord, Lord O'Neill of the Maine, about the cost of collecting charges at the Ulster Museum. The estimated receipts after deduction of value added tax have been correctly quoted in this debate as of the order of £11,000. That is the estimate. But I understand that the first year's running cost as a percentage of receipts are expected to be, not 43 per cent. but 29·6 per cent.
LoRD SHACKLETON: And the second year the same?
LORD WINDLESHAM: We must be careful about this. In the second year, it might perhaps be about the same. In some ways one would expect it to be less, because some part of the costs are costs of installation. On the other hand, we have to remember that, despite the exceptional efforts of Government to restrain them, costs do have a way of rising. So it might be that the two trends would cancel each other out. But the figure I have quoted is the one I have before me at the moment for the first year. My Lords, I quite understand the strength of opinion on this matter but, as I have said, this is an Order which falls within the policy which has been accepted recently by Parliament in the Museums and Galleries Admission Charges Act. I have provided some detail which I hope will be of interest to noble Lords who are concerned about these matters, and, as I say, I can undertake to pass on the opinions which have been expressed to those of my right honourable and noble friends who are mainly concerned.
On Question, Motion agreed to.

BIRTHS, DEATHS AND MAR RIAGES (NORTHERN IRELAND) ORDER 1973
7.19 p.m.
LORD WINDLESHAM LORD WINDLESHAM rose to move, That the Draft Births, Deaths and Marriages
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(Northern Ireland) Order 1973, laid before the House on January 24 be approved. The noble Lord said: My Lords, this Order is a straightforward measure and, I hope, in the light of the previous debate, an uncontentious one. It is concerned with the setting-up of a new registration service for births, deaths and marriages in Northern Ireland. This will be based on the twenty-six new district councils which will result from local government reorganisation later in the year. In operating the service the councils will be acting as agents of the Ministry of Finance, and all expenditure will be borne on central funds. I understand that the expenditure is running at about £66,000 per annum. At present there are 120 registrars' offices in Northern Ireland, the majority of them open for a few hours only each week. The intention is to man the new register offices full-time. There will probably be about 35 to 40 full-time officials. Registration facilities will also be available at maternity hospitals where well over 90 per cent. of all births take place. Even should the birth not be registered there, it can be registered in the district in which the mother of the child lives.
The Order allows for the recording of one change of forename and one change of surname under the age of 18; and thereafter one change of forename and three of surname. This will enable a person to produce a birth certificate in the name by which he is generally known. This follows Scottish practice; there is no English provision at present, but perhaps Scotland and Northern Ireland are ahead here. The methods of changing name (by deed poll, for example) are not affected; we are speaking only of consequent amendments to the birth certificate after the name has been changed by the due process.
In future, the name of the father of an illegitimate child will be entered in the register, provided the mother and father attend together, or the mother attends and produces specified documents. Here again, this is a useful innovation. At the time of registration of a birth, information other than that required for registration may be obtained, but this information together with all information on stillbirths is to be safeguarded and disclosed only in limited circumstances. This Order contains the transitional provisions necessary to ensure that arrangements for

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marriage started under the existing law may be completed under the new system. My Lords, I beg to move.
Moved, That the Draft Births, Deaths and Marriages (Northern Ireland) Order 1973, laid before the House on January January 24, be approved.—(Lord Windlesham.)
LORD SHACKLETON: My Lords, there is little that I can say on an Order the complexity of which only increases my admiration for Parliamentary draftsmen and the officials in Stormont or the Northern Ireland Office. Even though I am fairly accustomed to reading Acts of Parliament, were it not for the Explanatory Memorandum with which the noble Lord was good enough to provide us this would have totally defeated me. Quite clearly, this is a useful measure. Having read the debate in another place I was interested in two points. One is that it appears that the arrangements for the marriage code in Northern Ireland were said to be (I cannot quote directly from a speech by an honourable Member in another place) very complex. In so far as this very complex Order helps in this, I am all for it. But there seems to be some doubt as to whether rationalisation and the reduction in the number of officials could be absorbed. I notice that the Parliamentary Secretary, in replying, undertook on no fewer (than three occasions to write to honourable Members saying that he wanted to make sure he got it right, that he was looking into the situation but that it is complex. Another similar reply was that he would write to the honourable Member.
My Lords, I find this rather unsatisfactory. This is a situation that all Ministers are in. I could now start to ask all the questions which were asked in another place and to which I passionately desire to know the answers. May I suggest to the noble Lord that it could be helpful in these interesting matters—we have never got it quite right; we should have Written Answers on every one—for him to consider whether these Answers could be circulated to the comparatively few Members who are interested. The number of Members in this House who have taken part in these Northern Ireland debates is few. I think it is important (and I am sure the noble Lord thinks this) that, although we are very much a "proxy parent" at the moment
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—we are not really able to do our job as well as we should—those who are prepared to do so should seek to continue to keep an interest and make themselves as fully informed as possible.
One particular point was raised which aroused some interest. It was noteworthy that apparently the death rate in Northern Ireland is lower than anywhere else in the United Kingdom. This may be due to the intrinsically healthy nature of the lives they lead. It may be the strength of the stock; but curiously enough the births trend (as opposed to the death rate) is also contrary to that everywhere else in the British Isles. This point was raised in another place and no explanation was given. There may be no explanation and it may be that the figures (taken, I think, from the Ulster Commentary, a valuable document which some of us read) may have related merely to a single period. If the noble Lord feels like commenting on that I shall be grateful: but it may be it is not important. Perhaps the former Prime Minister of Northern Ireland could explain why the health of the people, or the death rate, is lower there than in the rest of the British Isles and why, since he ceased to be Prime Minister, it seems to be going up.
LORD O'NEILL OF THE MAINE: My Lords, I must rise to that challenge and say to the noble Lord who deals with Northern Ireland affairs in this House that I know very little about this, although I believe it is true that the death rate and the birth rate in Northern Ireland are more favourable than in any other part of the United Kingdom. I will add that I hope that the noble Lord, the Minister who deals with Northern Ireland in this House, realises how fortunate we are to have as Leader of the Opposition someone who has actually lived in Northern Ireland and knows what he is talking about.
LORD WINDLESHAM: My Lords, the arrangements for marriages in Northern Ireland should not be interfered with in any way by this Order. It makes changes only concerning the registration of marriages, not the marriage services or any other aspects of marriage. So far as the point about the death rate is concerned, I believe it is right to say that although the death rate may be lower, it does not necessarily mean that there

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are fewer deaths in Northern Ireland. The death rate is lower; but, as the noble Lord, Lord O'Neill of the Maine, said, the birth rate is higher. One depends on the other—what is known in the pyramid of population as a "broader base". We might perhaps need to think that out.
In concluding the debate on both of these Orders, let me say that I will certainly consider with my colleagues whether there is some way of communicating information which is sent by Ministers in reply to Questions raised in another place to those noble Lords who might be particularly interested in this House. I hesitate to give an outright assurance. I have a feeling that there may be some convention which says that a letter written by a Minister in the House of Commons to a Member of the House of Commons should not be bandied about whether by me or by anyone else. But I take the point of substance. There may be some other way of overcoming this particular problem.
On Question, Motion agreed to.

  ROYAL COMMISSION ON CIVIL LIABILITY AND COMPENSATION FOR PERSONAL INJURY MEMBERSHIP
  ROYAL COMMISSION ON CIVIL LIABILITY AND COMPENSATION FOR PERSONAL INJURY MEMBERSHIP