Sitting of 28 February 1973

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  GLAMORGAN COUNTY COUNCIL BILL [Lords]
  As amended, considered.
  Amendments made.
  To be read the Third time.

ORAL ANSWERS TO QUESTIONS
  FREIGN AND COMMONWEALTH OFFICE

    Hong Kong
    Mr. Sillarsasked the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to improve labour conditions in Hong Kong.
    The Minister of State for Foreign and Commonwealth Affairs (Lord Balniel): Labour legislation and enforcement in Hong Kong are primarily matters for the Hong Kong Government and are kept under constant review. Since 1964 no fewer than 83 separate items of legislation have been enacted.
    Mr. Sillars: Does the hon. Gentleman not agree that the British Government have a responsibility in respect of labour laws, since Britain is a constituent member of the ILO? Does he further agree that the British Government could make a major contribution if, as a start, they were to implement ILO Conventions Nos. 24, 32, 94 and 98?
    Lord Balniel: As I have said, these are matters primarily for the Hong Kong Government, but Her Majesty's Government also have a responsibility. I shall look at the long list of resolutions mentioned by the hon. Gentleman to see if they will be helpful.
    Mr. Tilney: Does my hon. Friend agree that, thanks to the actions of the Hong Kong Government and the work of the people of Hong Kong, the improvement in the well-being of the Hong Kong people in recent years has been quite remarkable?
    Lord Balniel: That most certainly is the case. Real wages in Hong Kong have risen by 56 per cent. since 1964 and Hong Kong wages are now the highest in Asia, outside Japan.

    Colonialism and Apartheid (Conference)
    Miss Lestorasked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government will be represented at the Conference sponsored by the United Nations and the Organisation of African Unity on Colonialism and Apartheid in Oslo during the month of April.
    Lord Balniel: No final decision has yet been taken on whether to nominate experts to attend this conference.
    Miss Lestor: May I strongly urge the hon. Gentleman to consider sending somebody to this conference? Is he not aware that if the British Government boycott this conference, which is supported by the OAU and the United Nations—and let us remember that we shall be boycotting it at a time when Britain is celebrating the Anglo-Portuguese alliance—this will confirm the suspicions of many people that Britain is likely to be on the wrong side of the struggle against apartheid in southern Africa?
    Lord Balniel: I am not sure that that would be the conclusion reached by other countries, but we have not yet reached a final decision. We abstained on the resolution to set up the conference because we were doubtful whether it would make a useful contribution to the solution of South Africa's problems. But, as I have said, no final decision has yet been taken.
    Mr. Biggs-Davison: Will the largest example of colonialism that still exists in the world, namely, that of the Soviet Union, be discussed at this conference? That might determine our attitude.
    Lord Balniel: I do not think that the agenda for the conference has yet been settled.

    Pakistani Prisoners-of-War
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs whether, having regard to the Third Geneva Convention of 1949, Her Majesty's Government will offer their good offices to facilitate the repatriation of Pakistani prisoners-of-war from India.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): We have already made known our willingness to help with any of the problems over reaching a settlement in the subcontinent, if the countries themselves seek our help and are agreed on the rôle we should play. But, as my hon. Friend will know, India and Pakistan agreed at Simla last July to settle their differences through bilateral negotiations. This probably holds the best prospect of success for the present.
    Mr. Biggs-Davison: Is not the holding so long after the ending of hostilities of perhaps 90,000 prisoners—if civilians are included—contrary to international convention, contrary to the canons of humanity and something of a Commonwealth scandal?
    Sir Alec Douglas-Home: The subject of prisoners is a great human problem, and I am aware that the Pakistanis feel deeply about it. We want to get results. I do not know whether my hon. Friend is aware that Dr. Waldheim has recently visited India, Pakistan and Bangladesh. He said that he had useful talks in all three capitals and was impressed by the serious intent of all the parties to reach a settlement. I hope that this matter will be pursued trilaterally in the subcontinent.
    Mrs. Castle: Is the Foreign Secretary aware that I made representations to him on this matter as far back as December and that the situation has in no way changed since his reply? Does he appreciate that feeling is running very high among the 4,000-strong Pakistani community in my constituency? Will he renew his efforts to get a solution to this problem?
    Sir Alec Douglas-Home: Yes, the right hon. Lady is quite right. I have already said that this is a great human problem. I have no doubt about the feelings of the Pakistanis. The problem is to
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    get results, and to get them as quickly as we can. I have already told the House that the Secretary-General has recently applied himself to this task in the countries concerned. We must wait a little longer to see whether there is any useful action we can take over and above that.
    Mr. John Hall: Will my right hon. Friend hazard a guess at the reason why the Indian Government are so reluctant to let these prisoners go, since this must be an additional burden on them which they must sustain?
    Sir Alec Douglas-Home: The Indian Government would like to see the prisoners go as fast as they can, but they have a bilateral relationship with Bangladesh.
    Mr. Edward Lyons: I appreciate the complex arguments and the disputes in that part of the world but ought not the right hon. Gentleman to make an approach in respect of the women, children and merchant seamen—the non-combatants—held and classed as prisoners-of-war, and urge his right hon. Friend the Prime Minister at the forthcoming Commonwealth Prime Ministers' Conference to raise with the Indian Prime Minister the possible release of all these prisoners?
    Sir Alec Douglas-Home: Yes, Sir. We are in constant touch with the countries concerned. The Red Cross in India and Bangladesh has made arrangements for the transfer of civilians so that some Bengalis may go back to Bangladesh and others in Bangladesh who wish to go to Pakistan may do so. It is a continuing process. But I should prefer to get in touch with the hon. Gentleman to give him more details, if I may.

    Middle East
    Mr. Roy Hughesasked the Secretary of State for Foreign and Commonwealth Affairs if he intends taking any fresh initiatives to secure the implementation of Her Majesty's Government's sponsored United Nations Resolution 242, November 1967.
    Sir Alec Douglas-Home: The policy of Her Majesty's Government in the Middle East remains to do all they can to help towards a peaceful settlement on the basis of Security Council Resolution 242 of November 1967. If there

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    was any particular step which we thought could assist a settlement we should take it. But that is not the case at the present time.
    Mr. Hughes: Does the right hon. Gentleman agree that the shooting down of the Libyan aircraft and the recent raid on the Lebanon by the Israelis give fresh impetus to the need to implement Resolution 242, especially with regard to withdrawal from occupied territories? Will the right hon. Gentleman assure the House that he will make our viewpoint on this matter crystal clear to the American Government?
    Sir Alec Douglas-Home: I agree that the latest incident—the shooting down of the aircraft—has been a very grave development in a situation which is already bad enough. When the hon. Gentleman says that we ought to make progress on complete withdrawal by the Israeli occupying forces, I agree with him. We ought to. We shall make every effort to get the Israelis to agree. But no one has yet been able to marry a formula for military withdrawal with security for Israel of her frontiers.
    Mr. Fidler: Will my right hon. Friend confirm that it is his view that the only way to achieve a just, viable and lasting peace in the Middle East is to bring the two sides together round the same negotiating table? Will he use his initiative to press upon Israel and her Arab neighbours the importance of getting round that negotiating table to achieve what we all desire?
    Sir Alec Douglas-Home: I do not think that the matter can be settled until there is direct negotiation. But neither party will yet agree on the basis of a meeting. That was the hope of Dr. Jarring. But progress is being made.
    Mr. Goronwy Roberts: Is the right hon. Gentleman in close co-operation and consultation with the Americans in respect of their initiative in this matter?
    Sir Alec Douglas-Home: Yes, Sir. I hope that the Americans have an initiative.

    Ghana (British Companies)
    Mr. Tilneyasked the Secretary of State for Foreign and Commonwealth
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    Affairs whether the Ghanaian Government are making prompt and adequate payments for the 55 per cent. equity in British mining and timber companies compulsorily acquired by degree; and whether appropriate compensation will be paid in respect of the announced compulsory acquisition of shares in other British and foreign-owned business.
    Lord Balniel: Her Majesty's Government have made representations to the Ghanaian Government, reminding them of the need under international law for prompt, adequate and effective compensation for the acquisition of a participating interest in British companies. We have received an assurance that fair compensation will be paid. The Ghanaians are negotiating the terms of participation with the firms concerned.
    Mr. Tilney: Has my right hon. Friend any advice to give to firms at present trading in Ghana which for years have been unable to remit any profits? Does not the recent action by the Government of Ghana militate against any fresh investment of Western capital in Ghana or, for that matter, in any nearby African country?
    Lord Balniel: A refusal to allow a remittance of earnings and any failure to pay prompt and fair compensation for acquisition must adversely affect investment. The World Bank, on behalf of the Western creditors, presented the Ghanaian Government with proposals for a debt settlement in November 1972 and we are awaiting the Ghanaian Government's response to that proposal.

    Falkland Islands (Reindeer)
    Mr. David Jamesasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made over the proposal to introduce reindeer into the Falkland Islands from South Georgia.
    The Minister of State for Foreign and Commonwealth Affairs (Mr. Julian Amery): The feasibility of this scheme is under investigation by the Falkland Islands Company.
    Mr. James: Is my right hon. Friend aware that the handful of reindeer imported into South Georgia from Norway in the early 1900s are now several thousand strong and that they have adapted

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    themselves to converting Tussock grass and therefore do not compete with sheep? Is my right hon. Friend further aware that there is no risk of their introducing disease and that they could be a most valuable export——
    Mr. Speaker: Order. Is the hon. Member for Dorset, North (Mr. David James) asking for information?
    Mr. Amery: My hon. Friend's philoprogenitive record entitles him to a special right to raise questions about the transport traditionally used by Father Christmas. However, he will appreciate that grazing land in the Falklands is limited, that we do not want too much competition for the sheep, and that the introduction of reindeer might upset the present balance of wild life. All these matters are being studied at the moment.

    India
    Mr. Thomas Coxasked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with representatives of the Indian Government on matters of mutual interest.
    Sir Alec Douglas-Home: I am in frequent touch with the Indian Government on a wide range of subjects of mutual interest.
    Mr. Cox: I thank the right hon. Gentleman for that reply. Is he aware that at the moment appalling problems exist in certain States in India as a result of drought and food shortages? In view of our close ties with India, can the right hon. Gentleman say what aid we are offering the Indian Government as a means of minimising the problems and the human suffering that now exists?
    Sir Alec Douglas-Home: We are of course in touch with the Indian Government. If the Indian Government wish to raise the question of additional aid in this context I hope that they will do so. If they do, we shall give the matter very serious consideration. As the hon. Gentleman knows, we have spent a great deal of money in Bangladesh helping with food supplies. I have not yet heard from the Indians on this matter.
    Mr. Wilkinson: Will my right hon. Friend consider inviting representatives of the Indian, Bangladeshi and Pakistani
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    Governments to very high ministerial talks in London, in view of the urgent need to bring the three parties together to talk over their mutual differences?
    Sir Alec Douglas-Home: That offer has been made. It is still open. At the moment the parties wish to talk bilaterally.
    Mr. Frank Allaun: Taking up the question asked by the hon. Member for Bradford, West (Mr. Wilkinson), will the right hon. Gentleman impress upon both sides that the sensible solution to the prisoner-of-war problem is for the release of the prisoners held in India in exchange for those detained in Pakistan? Surely that is the commonsense solution to the problem.
    Sir Alec Douglas-Home: The hon. Gentleman will realise that political considerations are bound up in all this. What we may regard as the sensible solution is a view not necessarily shared in all three countries in the sub-continent. Nevertheless, the exchange of civilians has begun, and I hope that it will be extended to prisoners of war.
    Sir F. Bennett: Is not it a pity to try to drag in one political consideration after another? Is not it the simple fact that according to the Geneva Convention, the amendment to which was signed in 1949 by India, amongst others, all military prisoners of war should be returned to their countries of origin, irrespective of political considerations, at the termination of hostilities? Is not this 14 months overdue?
    Sir Alec Douglas-Home: My hon. Friend knows that the facts are seldom as simple as they are said to be.

    Ugandan Asians (Assets)
    Mr. Sydney Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs what is his estimate, derived from information received by officials of his Department, of the value of assets in Uganda of those Ugandan Asians at present in the United Kingdom.
    Sir Alec Douglas-Home: We are continuing to record information as it is received from United Kingdom nationals, but the returned forms are not yet a sufficient proportion of those issued to allow

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    a useful estimate to be made of the value of assets left in Uganda.
    Mr. Chapman: Will my right hon. Friend confirm that the British Government hold General Amin and his racialist régime personally responsible for the value of those assets, whatever it is? Will my right hon. Friend go a little further and say that he will refuse to treat with, or attend the same conference attended by, the Ugandan Government, unless it is on this specific matter, and then only after a change in the obscene policies of that Government?
    Sir Alec Douglas-Home: We hold the Ugandan Government responsible for paying the compensation. My hon. Friend might like to know that so far more than 8,000 sets of forms have been issued by the Foreign and Commonwealth Office and the Uganda Resettlement Board, and that so far there have been about 2,200 replies. At the moment, we are pursuing with the Ugandan Government the question of compensation. I must reserve what action we take, should that approach fail, for decision later on.
    Mr. Richard: The right hon. Gentleman knows that many British subjects, of Asian or United Kingdom origin, are in considerable difficulties as a result of their expulsion from Uganda. Is he able to say more about the way in which the compensation negotiations are going? Is he able to give some measure of hope to these people who have been expelled, through no fault of their own, and are in great financial straits, again through no fault of their own, that the Government will at least look sympathetically upon their difficulties?
    Sir Alec Douglas-Home: Yes, we shall do that. We are trying our best to help them. It is essential that the Ugandan Government should be held responsible for compensation and, what is more, responsible in currency which is transferable. The last meeting that was held with our representatives in Kampala was on 22nd February.
    Mr. George Cunningham: Is the right hon. Gentleman seriously saying that he is negotiating with the Ugandan Government to try to get compensation before he decides what retribution he will apply
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    if they do not pay it? Is not that a form of diplomacy which is bound to lead to failure?
    Sir Alec Douglas-Home: There is a high chance that it will lead to failure, but we are bound to try. We must try to get compensation. The Government of Uganda have admitted the right to compensation, and we must try to get the actual compensation for the sake of these individuals. Other actions which may follow later may be satisfactory to some people but will not help the individual.

    Greece (Mr. Richard Weeks)
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Greece about their refusal to allow Mr. Richard Weeks of The Firs, Downend, Bristol, to enter Greece.
    Sir Alec Douglas-Home: None, Sir.
    Mr. Adley: Is my right hon. Friend aware that unsubstantiated accusations against my constituent are hardly likely to commend the present Greek Government to moderate opinion in this country?
    Sir Alec Douglas-Home: I have no doubt that what my hon. Friend says is true, but the Greek Government, like any other, have the right to decide whom they take into their country and whom they do not.
    Dr. Miller: Is the right hon. Gentleman aware that last month I was successful in entering Greece to observe a trial there——
    An Hon. Member: And successful in getting out again.
    Dr. Miller: —and also successful in getting out. Is my right hon. Friend aware that during my two days there a small box of cigars which I received——
    Mr. Speaker: Order. This is getting a long way from Mr. Richard Weeks.
    Dr. Miller——
    Mr. Speaker: Order. I call the hon. Member for Middleton and Prestwich (Mr. Haselhurst) to ask the next Question.

    Rhodesia
    Mr. Haselhurstasked the Secretary of State for Foreign and Commonwealth Affairs what discussions he held on the subject of Rhodesia during his African tour; and if he will make a statement.
    Sir Alec Douglas-Home: I had discussions on Rhodesia in all three of the countries which I visited in West Africa. The content of these discussions must, as is customary, remain confidential.
    Mr. Haselhurst: Was my right hon. Friend able to ascertain any sympathy for the point of view that in the light of likely alternatives it might be better for the Africans in Rhodesia that a settlement should be found within the course of this year on the basis of something similar to the proposals which he discussed with Mr. Smith a year ago?
    Sir Alec Douglas-Home: I do not think that the African Governments would as far as that. They would like to see a settlement for the sake of the whole African continent in which the Africans could take part.
    Mr. McBride: Is the right hon. Gentleman aware that Mr. Smith is reported as saying that talks are taking place between Her Majesty's Government and the Rhodesians on the Rhodesian question, as the British Government are more amenable to such discussions than their predecessors were? Can the right hon. Gentleman say whether these talks are taking place, and, if they are, what is the nature and extent of them, and who is speaking to whom?
    Sir Alec Douglas-Home: I do not know about comparisons with our predecessors. Right hon. Gentlemen opposite had many discussions during their term of office. I have followed those up, so far unsuccessfully, but we are in touch with Mr. Smith. We hope that Bishop Muzorewa and the Africans can get in contact with Mr. Smith, and that as a result some proposals may come from Rhodesia. I cannot say that I am very optimistic, because one knows the history of this matter, but that is what we are doing.
    Mr. Callaghan: There can be no objection to discussions with the Government of Mr. Smith, provided that the principles upon which the right hon. Gentleman has
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    hitherto acted are maintained. Has the right hon. Gentleman any information about the arrest of the three members of the African National Council, and does he propose to make any representations to Mr. Smith that this kind of behaviour is unlikely to encourage that council to have serious discussions with him?
    Sir Alec Douglas-Home: Yes, Sir; I am doing that.
    Mr. Callaghan: I thank the right hon. Gentleman.
    Mr. Molloyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement about Rhodesia.
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs what notification he has received of recent developments in Rhodesia conducive to an eventual settlement of the constitutional dispute with the Smith Government.
    Mr. Maclennanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the present position in Rhodesia.
    Sir Alec Douglas-Home: There have been a number of contacts between the régime and various sectors of African opinion. In spite of difficulties reported during the last few days, it is our hope that such contacts will be pursued. But, as the House knows, we cannot directly bring about a dialogue between the races in Rhodesia. This is something which only the Rhodesians can do for themselves.
    Mr. Molloy: Bearing in mind what the right hon. Gentleman said about the grave danger to Southern Africa as a whole, to which the present régime in Rhodesia is contributing, may I ask him whether he can say anything about the report of the imprisonment of Mr. Niesewand, and also the allegation that ships carrying the British flag are conveying Rhodesian chrome to the United States of America?
    Sir Alec Douglas-Home: I should like to make inquiries about that and inform the hon. Gentleman of the result. I do not have the facts.
    I understand that Mr. Niesewand is appealing against his detention, and

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    therefore nothing that I do must cross what he wants to do for himself, but I have again made representations on this matter.
    Sir Robin Turton: Would it not help the situation if my right hon. Friend were to have a representative in Rhodesia so that we could get more accurate information about what is happening in Central Africa?
    Sir Alec Douglas-Home: There is quite a lot to be said for my right hon. Friend's suggestion, but at the moment I do not think that it would be acceptable to Mr. Smith.
    Mr. Whitehead: Mr. Ian Smith is reported to have said, before he re-opened his side of the border with Zambia, that he had received certain undertakings which made him happier. Did those undertakings come from the Government, or is this another example of Mr. Smith trying to save his own face?
    Sir Alec Douglas-Home: The Government gave no undertaking. There may have been other contacts, but they are not to my knowledge.
    Mr. Wallasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Rhodesia-Zambia frontier situation.
    Sir Alec Douglas-Home: A confrontation on the Zambesi is not in the interests of any of the parties or countries involved. I very much hope that tension in the border area will speedily be reduced.
    Mr. Wall: I do not want to get my right hon. Friend confused, but does he not agree that during the past six years Zambia has harboured armed guerrillas who have on a number of occasions invaded Rhodesia, and that this was the justification for the closure of the frontier? Does not he also agree that traffic was returning to normal until two days ago, when the Zambians kidnapped a Rhodesian engine driver?
    Sir Alec Douglas-Home: The facts about the engine driver are not yet sufficiently established for me to take any action on this matter. I can only repeat that the danger of a build-up leading to a military confrontation on the Zambesi is something which we should all con-
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    template with horror. We must do all that we can to avoid it.
    Mr. Molloy: I agree very much with what the right hon. Gentleman has said. It will be an incredibly intolerable situation if an illegal régime which has been treacherous to the British Crown and Parliament should in any way endanger a Commonwealth Government. Will the right hon. Gentleman therefore continue to do his best to ease the situation there?
    Sir Alec Douglas-Home: Yes, Sir. I shall be seeing the Zambian High Commissioner tomorrow, and shall talk over the situation with him. Zambia has decided to free herself of the danger of any interference with her trade. That we can understand. But, returning to the original question, nothing could be more dangerous than an armed frontier on the Zambesi.

    European Economic Community (Asian Countries)
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make it his policy that the Declaration of Intent in the Treaty of Accession to the EEC to safeguard the interests of Asian countries should not be prejudiced as a result of the forthcoming negotiations for Association in Yaoundé III.
    Mr. Amery: Yes, Sir.
    Mr. Deakins: Would not the interests of Asian countries be much better protected by getting the Common Market to adopt our generalised preference scheme rather than by negotiating a series of preferential trade agreements which not only play one poor country off against another and break the rules of GATT but also strengthen protectionist sentiments in the United States?
    Mr. Amery: Asian Commonwealth countries will not only benefit from the generalised preference scheme of the enlarged Community; they have an undertaking that it will be the enlarged Community's continuing objective to expand and reinforce existing trade relations and that the Community will be ready to examine problems which could arise in the future with a view to finding

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    a proper solution. I think that what the Community is offering is better than what the hon. Gentleman is suggesting.
    Sir D. Dodds-Parker: This will be discussed in Zaire towards the end of March by the African Committee of the European Parliament. Will my right hon. Friend give guidance—which I hope hon. Gentlemen opposite will, before long, be present to support—on what the general line should be?
    Mr. Amery: We shall do our best to express our views in the appropriate direction, with which I think my hon. Friend will agree.
    Mr. Shore: The right hon. Gentleman must be aware that the offer of association to the African and Caribbean Commonwealth countries will, by excluding the Asian Commonwealth, have the effect of breaking up the whole Commonwealth trade system. That is one clear effect. That being so, surely the right hon. Gentleman will agree——
    An Hon. Member: Nonsense.
    Mr. Shore: I hear someone saying that that is nonsense, but it is a serious problem. Does the right hon. Gentleman know that the immediate effect will be to deny Indian tobacco preferential access to Britain, while at the same time maintaining a preferential market for East Africa in relation to Britain and the enlarged Community? That is one immediate practicable implication. Is the right hon. Gentleman not aware of this, and does he not agree with my hon. Friend that it would be a far better solution, not only for the Commonwealth but for world trade generally, if we had a generalised preference system rather than any special arrangement for a specialised trade agreement with the Commonwealth Asian countries?
    Mr. Amery: I am sure that the right hon. Gentleman knows that none of the Asian countries concerned has expressed any desire to be associated—in the formal sense of the word—with the Community. He will appreciate—perhaps he slightly overstated the case without meaning to when he talked about the "immediate" result—that the tariff preferences will not be phased out until 1st July 1977.

    Anguilla
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on future proposals for Anguilla.
    Lord Balniel: I have nothing to add to my reply to my hon. Friend on 11th December.—[Vol. 849, c. 6.]
    Mr. Marten: I feared that that might be the reply. Does my hon. Friend not agree that the Anguillans have now amply demonstrated their ability to maintain law and order and political stability in that island, and that no purpose is served in going on with the present situation? Could steps not be taken to bring Anguilla a new constitution more in line with the British Virgin Islands and Montserrat? Can my hon. Friend assure me that he will go out there and discuss the proposed new constitution with Mr. Webster?
    Lord Balniel: It would certainly be enjoyable and interesting, and I hope that an opportunity to go out there will present itself some day. My hon. Friend is right; law and order are being maintained there. But he will recollect that on the Second Reading of the Anguilla Bill the then Minister of State promised a review of the island's status in 1974, taking into account the views of the Anguillans. We have recently written to Mr. Webster, the leader of the Anguilla Council, urging him, in the interests of all parties, to adhere to the timetable which was then set.

    British Citizens Abroad (Assistance)
    Mr. Dempseyasked the Secretary of State for Foreign and Commonwealth Affairs what arrangements exist in Her Majesty's embassies abroad for giving financial assistance to British citizens in cases of emergency.
    Mr. Amery: If a United Kingdom citizen is in difficulties overseas and has funds in the United Kingdom, Her Majesty's missions abroad will assist him in arranging to transfer funds.
    If he has no funds immediately available Her Majesty's missions may, against an undertaking to repay, advance money fawn public funds for repatriation to the United Kingdom.
    Mr. Dempsey: Is the right hon. Gentleman aware that a constituent of mine who was unavoidably stranded in Rome was refused such assistance because the embassy staff said that all they had at their disposal was voluntary funds? In those circumstances, why should not loans, which would assuredly be repaid be made to any citizens in such a distressing situation?
    Mr. Amery: The Under-Secretary of State wrote to the hon. Gentleman about Mrs. Rennie, his constituent. We offered to help to transfer money rapidly through Thomas Cooks to Mrs. Rennie, but she declined the offer.
    Mr. Kilfedder: What assistance—financial or otherwise—was given to Mr. Wyman, who was recently charged and found guilty of espionage in a Dublin court? Can my right hon. Friend help the House on the allegation which was made, and tell us whether he was working as a British agent, and for which Minister?
    Mr. Amery: I should want notice of that question. There is, of course, no difficulty about the transfer of funds between London and Dublin.
    Mr. Kaufman: Will the right hon. Gentleman ensure that I receive as soon as possible a reply to the letter I sent to the Foreign and Commonwealth Office with regard to the situation of a constituent of mine who has been swindled out of all his personal possessions in Venezuela, and on whose behalf I have written to the Foreign and Commonwealth Office asking for the intervention of the British Embassy in Caracas?
    Mr. Amery: I am sorry that the hon. Gentleman has received no reply yet. I will of course do my best to expedite a reply. If the circumstances concern Caracas, the hon. Gentleman may understand that it could be a little time before we know the exact facts.

    European Security and Co-operation
    Mr. Sproatasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the talks at Helsinki to prepare for the Conference on Security and Co-operation in Europe.
    Sir Alec Douglas-Home: The preparatory talks in Helsinki resumed on 26th February after a short break to allow for consultations in capitals. A large number of proposals have been tabled on the work which should be undertaken at the conference. They must now be examined in detail.
    Mr. Sproat: Are the Russians now showing any more concrete evidence of being receptive about proposals for the greater exchange of persons and information among European countries?
    Sir Alec Douglas-Home: The Russians have been co-operative in trying to frame an agenda which will allow these questions to be raised. The questions now being considered cover security, cooperation in the field of economics and the environment and the development of human contacts abroad, new cultural and educational exchanges and the wider flow of information. Under these headings I think that we will be able to raise at the conference what subjects we wish.
    Mr. George Cunningham: Is not this conference an example of something being kept going for no good purpose? Will the right hon. Gentleman say how much money and time has been devoted by officials to the so-called preparations for the conference which is to follow this one?
    Sir Alec Douglas-Home: Not without notice. This conference could be worthwhile. It will, incidentally, be the first time that members of the Warsaw Pact and of NATO, plus non-aligned countries, have met on one platform. That is something. We do not want general declarations of intention to live together in peace—we have got beyond that. We want to develop certain areas where Eastern Europe and Western Europe can identify mutual advantage and perhaps exploit it. I think that it will be worth-while.

    Passports
    Miss Fookesasked the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to end the issue of family passports.
    Mr. Amery: No, Sir. There remains a considerable demand for the family, passport.
    Miss Fookes: May I remind my right hon. Friend that Queen Victoria is dead? Is it not about time that a system was ended whereby the husband but not the wife may travel alone on the passport?
    Mr. Amery: Although Queen Victoria is dead, we still have families.
    Mr. William Hamilton: The right hon. Gentleman should not treat this question so frivolously. There is a serious anomaly here. So long as these family passports are issued they should be freely usable by each person whose name is on the passport. It is humiliating to the wife if the passport is in joint names. Will he undertake to consider that aspect of the problem?
    Mr. Amery: I take the point, but the hon. Gentleman will realise that the limitation at present in force is based on recommendations of an international conference held in 1926. The countries concerned accepted the recommendations. Any change in our practice could be made only after consultation with the other countries. The hon. Gentleman will appreciate that it would not be worth while issuing a passport which was not accepted by recipient countries.
    Mr. Deedes: Will my right hon. Friend undertake to reconsider this matter? Quite apart from the consideration which my hon. Friend the Member for Merton and Morden (Miss Fookes) has in mind, is my right hon. Friend aware that the family passport gives rise to considerable difficulty and abuses in relation to immigration control? For that reason alone, it should be looked at again.
    Mr. Amery: But it is also very much cheaper, and a high proportion of families going abroad for their holidays take advantage of this facility.
    Mr. Callaghan: Is the right hon. Gentleman aware that his replies are both frivolous and irrelevant and, I imagine, command no support anywhere? Would he please take note of the view of the House that, clearly, a convention of 1926 ought to be reviewed by now, that he should initiate the review and report to the House quickly with his recommendations, after an unprejudiced study of the situation?
    Mr. Amery: The right hon. Gentleman's proposal would involve doubling the cost of passports for families taking annual holidays abroad.
    Mr. Callaghan: May I press the Minister on this? He is putting up a series of defensive answers. Is it not possible for a family to choose whether they will pay the new cost or stick to the original passport? Let the right hon. Gentleman show a little flexibility, and have a decent review of this situation.
    Mr. Amery: I really cannot see what the right hon. Gentleman is talking about. There is every flexibility. No one is saying that the family must have a family passport. It is only that they are given a cheap passport if they take a family passport. They can always have a separate passport for the husband and for the wife.
    Mr. Deedes: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Russian Embassy, London (Representation)
    Mr. McCrindleasked the Secretary of State for Foreign and Commonwealth Affairs what is the present level of the trade and similar representation at the Russian Embassy in London; and how this compares with similar representation in February 1970.
    Mr. Amery: There are 44 permanent officials at the Soviet trade delegation, which is separate from the embassy, and 93 in other organisations, mostly of a commercial kind.
    The comparable figures in February 1970 were 66 and 102 respectively.
    Mr. McCrindle: Has my right hon. Friend conveyed to the Soviet Union our pleasure at the improved relations both in diplomatic matters and in a trade sense? Has he further conveyed our feeling that those relations would be put in jeopardy if there were to be a repetition of the over-staffing of the Russian Embassy, which might lead to a repetition of the events of November 1971?
    Mr. Amery: My hon. Friend will accept that the facts speak for themselves.

    1491
    Our exports to the Soviet Union have risen from £89 million to £90 million worth and our imports from £205 million to £227 million worth. So clearly our trade has not be adversely affected; it has somewhat improved.

    Uganda
    Mr. George Cunninghamasked the Secretary of State for Foreign and Commonwealth Affairs whether he will take the initiative in proposing to other Commonwealth Governments that Uganda should be suspended from Commonwealth membership; and what the result is of the review of general policy towards Uganda which he undertook to conduct.
    Sir Alec Douglas-Home: I announced the result of our review of policy towards Uganda in the House on 30th November and amplified this on 19th December. At present we are concentrating on the question of compensation for the United Kingdom passport holders and British subjects who have been evicted.
    There are clearly a number of possible courses of action with regard to Uganda which may be open to us. The proper place to discuss Uganda relations with the Commonwealth would be at the Commonwealth Prime Ministers' meeting in August.
    Mr. Cunningham: Will the Foreign Secretary accept my apologies for having missed the results of his grand review of policy? Will he say whether he is not considering the termination of Commonwealth preferences immediately, and not waiting for the EEC arrangements to take effect? If we are to exercise any pressure upon Amin, does not he agree that we must make clear what consequences will follow on our part? Would not he agree that it is essential, before the Commonwealth Conference, to say that for our part we draw the line at Amin and that other Commonwealth countries should do the same? Have we taken soundings of other Commonwealth Governments to that end?
    Sir Alec Douglas-Home: The hon. Gentleman did not miss this; I remember his commenting on it. We ended all aid to Uganda. Now we are looking at the question of compensation for the sake of individuals. I remind the hon. Gentleman that individuals suffered terrible
    1492
    hardship. We must try to get compensation out of the Ugandan Government.
    The question of expelling a member from the Commonwealth—if that is what is in the hon. Gentleman's mind—must be discussed by the Heads of the Governments of the Commonwealth when they are assembled.
    Mr. Sydney Chapman: Is it not simply a matter of principle that if the Commonwealth means anything the British Government ought to take the lead in trying to expel Uganda so long as it practises its racialist and obscene policies?
    Sir Alec Douglas-Home: Certain conventions and principles guide members of the Commonwealth, and they have to be discussed in the proper forum. Certainly one member cannot take an initiative in expelling another. The proper time to discuss this is undoubtedly when the Commonwealth Prime Ministers meet.
    Mr. Callaghan: There will be a lot of support, despite the emotion, for the right hon. Gentleman's caution in this matter. Is there not a great difference between a country like, for example, South Africa—where the people had a chance of expressing their views in a very limited sense when the decision to leave the Commonwealth was taken—and the position of the people of Uganda, who have had no opportunity of expressing a view?
    Whilst obviously it is right that we should take all action to recover compensation and on other matters, membership of the Commonwealth is a very important thing, and the actions of a single individual unsupported by his people should be thought about very carefully before we take such a decision.
    Sir Alec Douglas-Home: I am obliged to the right hon. Gentleman. What he says is true. Our relations with Uganda were very close, and the people were and still are very friendly. We should not move with haste in this matter.

    Dependent Commonwealth Territories (Finance)
    Sir D. Dodds-Parkerasked the Secretary of State for Foreign and Commonwealth Affairs what action is being taken to ensure that dependent territories of the Commonwealth, which are

    1493
    outside the new sterling area and have not their own currency, have adequate provision for internal and external finance.
    Lord Balniel: Territories within this category already have adequate provision for these purposes and no action is required by Her Majesty's Government.
    Sir D. Dodds-Parker: What help will be given to the dependent territories using the currency of others if they are adversely affected by any moves in the floating of sterling?
    Lord Balniel: If one of these countries is adversely affected by rate fluctuations of that kind it would certainly be one of the factors that we should take into account in determining the appropriate level of aid to the individual territory.

    Pacific Islands (Constitution)
    Mr. Frederick Leeasked the Secretary of State for Foreign and Commonwealth Affairs what progress is being made towards constitutional reform in the Solomons, the Gilbert and Ellice Islands and the Condominium of the New Hebrides.
    Lord Balniel: I would refer the hon. Member to what my hon. Friend the Under-Secretary told the House on 27th November and 11th December. In December the Legislative Council of the Gilbert and Ellice Island set up a Select Committee to make recommendations for constitutional changes there.—[Vol. 847 c. 14–15, 518–19; Vol. 848 c. 4–5.]
    Mr. Lee: While obviously the need for economic aid will be with us for a very long time, now that we see the great changes coming in Papua and Guinea, could it not well be that the need to expedite constitutional change, especially in the Solomons, has arrived?
    Lord Balniel: I am sure that there is a great deal of validity in the point the right hon. Gentleman is making. He will know that the Select Committee on the Constitution of the Solomon Islands has made proposals. It is not, however, for Her Majesty's Government to consider or to comment on the Committee's proposals at this stage. In due
    1494
    course, after the election, a new governing council will decide what recommendations to convey to the High Commissioner, and we shall consider them at that stage.

    European Defence (United States Participation)
    Mr. Juddasked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has held with NATO and EEC partners concerning the future of the United States military presence in Europe.
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has held with NATO and EEC partners concerning the future of the United States military presence in Europe.
    Mr. Amery: The content of ministerial discussions is of course confidential. But I would refer the hon. Gentlemen to the communiqué published after the NATO Ministerial Meeting in Brussels last December.
    In this the United States reaffirmed that, given a similar approach by other countries of the Alliance, the United States would maintain and improve their forces in Europe. They would not reduce them unless there was reciprocal action by the other side.
    Mr. Judd: Will the Minister take every possible opportunity of emphasising that the British Government have their faces firmly set against the principle of an emergence of an independent Western European defence system, perhaps with its own Western European independent deterrent?
    Mr. Amery: I am glad to register the hon. Gentleman's support for a continuing American presence in Europe.
    Mr. Marten: Does my right hon. Friend agree that the attitude which the Common Market countries take towards America in the forthcoming GATT negotiations and, indeed, in relation to America's problems generally, could have a very serious effect upon the American defence presence in Europe?
    Mr. Amery: I would draw my hon. Friend's attention to the statement by Mr. Secretary Rogers at a Press conference on 15th February when he was asked

    1495
    about a possible connection between trade and monetary matters on the one hand and the maintenance of American troops in Europe on the other. He replied. "There is no linkage between the two".
    Mr. Allaun: Does not the American Congress proposal for a withdrawal of troops from Europe present a great opportunity for pressing for the withdrawal of all foreign troops from Europe, including Soviet troops from Eastern Europe and BAOR from Germany? Is this not infinitely preferable to the Government policy of opposing the American proposal and having instead a joint nuclear force, or to an increasing burden on existing European countries, or to having a build-up instead of a reduction of world forces, thereby increasing the arms race?
    Mr. Amery: I do not know of any contradiction between American and European policy in this matter. Soviet defence expenditure has increased by 5 per cent. in each of the last five years, whereas Western expenditure has remained static. Our moderate increase this year is mainly in respect of wages and salaries, and not of equipment.
    I read, of course, with care—as I always do—the hon. Member's contribution to The Times this morning, but he will appreciate that the kind of reduction he proposed would make us more dependent on a nuclear response and not less.
    Mr. Wilkinson: Will the Minister remind our European allies of the importance of maintaining Europe's naval strength, particularly in a fairly fluid political situation from which force level reductions on the mainland of Europe may ensue?
    Mr. Amery: It is essential that all of us in Europe should maintain and, to some extent, increase our contribution to defence. It is only natural that as we grow more prosperous as a result of the European Community we should carry a larger share of the defence burden.
    Mr. Jay: Is there not a real danger that if the EEC continues to be too negative towards the United States' proposals for liberalising trade, the United States' views on defence might begin to change?
    Mr. Amery: That is not my impression. It is certainly not what Mr. Secretary Rogers said in the Press conference to which I referred.

    Developing Nations
    Mr. Pavittasked the Secretary of State for Foreign and Commonwealth Affairs if he will give additional technical assistance to assist in the financing of the required infrastructure of co-operatives as recommended in the resolution adopted at the UNCTAD session on 15th May 1972; and if he will make a statement.
    The Minister for Overseas Development (Mr. Richard Wood): British aid to co-operatives is already substantial. In addition to technical assistance, capital is provided to help establish new co-operatives. We are, for example, contributing £7 millions towards the cost of the fertiliser complex at Kandla which will be run by the Indian Farmers' Fertiliser Co-operative.
    Mr. Pavitt: Does the acceptance of the resolution represent any change of balance for a greater proportion of aid to go to this type of infrastrucure financing? Although I do not expect the Minister to give me an off-the-cuff answer, will he give me in writing a breakdown of the way in which, after the passing of the resolution, there have been policy changes?
    Mr. Wood: I will certainly do that.
    Mr. Douglas-Mannasked the Secretary of State for Foreign and Commonwealth Affairs whether he will give an assurance that in the discussions about a common EEC policy on development cooperation he will seek to ensure that all developing countries are treated on the basis of their needs.
    Mr. Wood: Yes, Sir. We aim to encourage the wider acceptance of the general principle that both the distribution and the terms of aid should be related primarily to the needs of individual developing countries. We also recognise the importance of trade and are discussing with our partners ways of improving these countries' export opportunities.
    Mr. Douglas-Mann: I appreciate the Minister's reply. Will he take note of the

    1497
    fact that because a country is an ex-colony or an ex-member of the Commonwealth it does not necessarily indicate that it is in need of assistance? Is he aware that the test of whether Europe will be an inward-looking or an outward-looking organisation will be in its approach to assistance to developing countries. Is he aware that the continuance of the Yaoundé pattern is unlikely to be encouraging if that is what is contemplated?
    Mr. Wood: I think my agreement to the hon. Member's proposition was implicit in the answer that I gave. Certainly, however, we recognise a need to achieve a balance between the two objectives contained in the communiqué of the Summit last October, one of which spoke of the advantages enjoyed by countries with which the Community has special relations and the other of the need to fulfil the expectations of all developing countries.
    Mr. Body: Does the Minister agree that there is growing concern among developing countries about the list of excluded commodities in the Yaoundé Convention, and is there any hope that the Government will take the lead in shortening that list?
    Mr. Wood: These matters will all be discussed when the negotiations begin, which will be shortly.
    Mr. Callaghan: Is there any prospect of reviewing the servicing of debt by the developing countries, which seems to be eating up more and more of the aid that is being voted every year?
    Mr. Wood: That is an immensely important question. We intend to take every opportunity to discuss both remedial and preventive measures to try to avoid these problems getting completely out of control.

    Sudan
    Mr. Luceasked the Secretary of State for Foreign and Commonwealth Affairs whether Great Britain will provide further aid to the Sudan following the conclusion of its civil war in the South.
    Mr. Wood: I have decided to make a further payment of £250,000 to the South Sudan relief appeal by the United Nations High Commissioner for Refugees. I have
    1498
    also decided to provide £50,000 to be shared among British voluntary societies which have been working for the past 12 months in the south. Parliament will be asked to approve the necessary Supplementary Estimates. Meanwhile, an advance will be sought from the Contingency Fund. The total grants made by Her Majesty's Government for relief work in South Sudan will now be £750,000.
    Mr. Luce: I am grateful to my right hon. Friend for that statement, but is he aware that this is the first anniversary of the peace settlement in the south and that we have strong historical ties with the Sudan? This announcement of further aid, albeit a relatively small sum, will he warmly welcomed by the Sudanese in the south and in the north. But the greatest need is for a sustained flow of cash aid and technical assistance over a long period in the south. Will the Minister ask our allies, particularly in the EEC, to respond to our lead in this?
    Mr. Wood: All this will be taken into account. My hon. Friend the Under-Secretary will be in Khartoum, and later Juba, tomorrow, and will no doubt be considering the matter. As my hon. Friend knows, there is the likelihood of further discussions later this month.
    Mr. James Johnson: I thank the Minister for his announcement about the aid. Is he aware that after 16 years of civil war this is the most magnanimous settlement of any civil war I have known anywhere in the world, and is perhaps an example to us nearer home. But is the Minister further aware that about half a million refugees are due soon, before the wet season, from Uganda and the Congo and what is now needed is cash to set in motion public works of all kinds for the unemployed and under-employed who are coming back? Will the Minister consider a further sum in the near future?
    Mr. Wood: It was for that kind of reason that I decided to make this further contribution. I will certainly take into account what the hon. Member has said.

    New Hebrides (Aid)
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs what aid is being given in the current year to the New Hebrides.
    Mr. Wood: British aid to the New Hebrides in the present financial year will be about £2·3 millions.
    Mr. Dalyell: What measures are we taking to offer technical help to the Pacific Islands to alleviate the effects of pollution as a result of the French nuclear tests?
    Mr. Wood: Whatever explosions do or do not take place in the Pacific Ocean, there will be a considerable need by islands like the New Hebrides for aid of all kinds, which is what we are trying to provide.
    Mr. Frederick Lee: Is it the case that when we increase aid to the New Hebrides the French do the same in proportion?
    Mr. Wood: I do not have the details of the aid given by the French but I believe that it is considerable.
    Sir F. Bennett: We all deplore the French tests that took place, but is there any evidence that pollution has affected the economy of any of these islands?
    Mr. Wood: I cannot give that information in aswer to this Question, which is about aid for the present year to the New Hebrides.

  ENVIRONMENT

    Concessionary Fares
    Mr. Roy Hughesasked the Secretary of State for the Environment how many representations he has received about the proposal to introduce concessionary fares on public transport for young people under the age of 16 years.
    The Under-Secretary of State for the Environment (Mr. Keith Speed): Thirty-four since January 1972, including one petition.
    Mr. Hughes: Does not the Minister feel that it is time that this matter was given more serious attention? The concession was originally given for children at school, but subsequently the school leaving age was raised to 16? Will the Minister have consultations with the transport authorities with a view to issu-
    1500
    ing guidance about giving the concession at the age of 16?
    Mr. Speed: Concessionary fares for children must be a matter for the commercial judgment of the operators. As for schoolchildren travelling to school, my right hon. Friend the Secretary of State for Education has a working party considering this question at the moment.

    Ports (Rochdale Report)
    Mr. David Priceasked the Secretary of State for the Environment what plans he has to implement the two recommendations in paragraph 109 of the recommendations of the Report of the Committee of Inquiry into the Major Ports of Great Britain (Command Paper No. 1824, published in September 1962) about the improvement of communications betwen Southampton and the Midlands and Southampton and the West, respectively.
    Mr. Speed: Road schemes now in preparation or under construction will substantially improve these communications. A study into the need for improvement to the Bristol-Southampton route will be completed next week. The future improvement of rail services is a matter for the British Railways Board.
    Mr. Price: In view of the development of the port of Southampton as a container port, will my hon. Friend bear in mind that the improvement of road links between Southampton and the Midlands is not only right in itself but could contribute to the easing of the road problems around the north of Greater London?
    Mr. Speed: As a Midlands Member I echo those sentiments. The Abingdon bypass is being constructed, and by the early 1980s, subject to the statutory procedures, there will be a first-class trunk route from Southampton to Birmingham.
    Mr. R. C. Mitchell: The Minister said that the improvement of rail communications was a matter for the British Railways Board. Is that good enough? Surely we should have a properly co-ordinated Government transport policy in which Ministers are concerned with both road and rail development. The Minister himself should have views on what constitutes proper rail development around Southampton.
    Mr. Speed: My right hon. Friend the Minister for Transport Industries and I are looking at the whole question of British Rail. My right hon. Friend has assured the House that it and the public will be taken into our confidence as soon as possible.
    Mr. S. James A. Hill: Does my hon. Friend agree that every encouragement should be given to British Rail to increase its services to Southampton, as it seems to be taking quite the opposite view? Could not the date of the opening of the roadway to the Midlands be advanced? The present situation is causing severe traffic congestion for juggernauts.
    Mr. Speed: There are proceedings to go through. Many people object to the construction of such roads. They must have their say, and proper inquiries must be undertaken.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 16th MARCH
Members successful in the Ballot were:

Mr. Tom Pendry.

Mr. John Page.

Mr. Carol Mather.

BILL PRESENTED
  ALKALI INSPECTORATE
  Mr. Neil McBride, supported by Mr. Alan Williams, Mr. George Thomas, Dr. John Cunningham, Mr. Anthony Crosland, Mr. Roy Hughes, Mr. John Morris, Mr. Donald Coleman, Mr. Frank Allaun, Mr. Stanley Orme, Mr. Eric S. Heffer and Mr. Brian Walden presented a Bill to increase the powers of the Alkali Inspectorate in cities in order to reduce or eliminate the emission of all waste or toxic gases which pollute the atmosphere; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11th May and to be printed. [Bill 81.]

PUBLIC OPINION POLLS (DISCLOSURE) BILL
3.33 p.m.
Mr. Dick Douglas: I beg to move,
That leave be given to bring in a Bill to regulate the publication of public opinion polls to ensure a fair and balanced presentation.
Finding fault with the predictions of public opinion polls is a never-out-of-season sport with politicians. We have a tendency to accept their analysis when they show us or our party in a good light. The reverse tends to be the case when they are critical of our stated positions.
The Bill is partly motivated by an examination of the report on public opinion polling in the 1970 General Election produced by the Market Research Society of Great Britain, but more importantly from my own understanding of survey techniques, I realise that although organisations aspire to objectivity in the construction of the questionnaires and the structuring of the survey it is all too easy to get things wrong.
Realising that they are subject to criticism, five of the leading companies that engaged in polling in May 1970 compiled an agreed code of practice. [Interruption.]
Mr. Speaker: Order. I wish that hon. Members who want to conduct conversations would do so outside the Chamber.
Mr. Douglas: So far as it goes, the code of practice is adequate, allowing in particular that the organisations
"will on request make available to a reasonable number of journalists, academics, students, other polling organisations and the political parties"
a substantial amount of information in addition to that which is normally published.
However, a fair and balanced publication of polling results is a matter of concern not only to the pollsters but to the mass media. Both Press and television are equally prone to give statistics about polling results without bothering to quote the questions or give information about the sample size or the number of respondents. There was a glaring
1504
example last week, when the media dealt with the results of a poll conducted for the Law Society by Market and Opinion Research International. The media should have had enough responsibility at least extending to stating in their reports of the results of the poll the question and the number of respondents.
The Bill, while endorsing that all the background sources of information and questions should be made available, would also seek to obtain details of the sponsorship of polls and, where appropriate, the cost of a poll. Sponsoring organisations sometimes have the public benefit in mind, but more often they who pay for the polls can so structure a questionnaire as to obtain the responses they desire. Reputable polling organisations can and do insist on balancing the questionnaire, but more often than not it will be the sponsor's slanted question that obtains the headlines.
In the immediate pre-election period it is very important to create an independent committee with the task of inquiring into the accuracy and meaning of polls. Judging by the Market Research Society's report, the committee should be acceptable to the pollsters. Therefore, I hope that such a committee can be established before legislation is passed.
We who admire the United Kingdom practice recognise that the absence of a fixed election date gives added weight to the peculiar alchemy of opinion polls. Some of us realise that to ban such polls would create more difficulties than it would provide solutions.
The Bill is not aimed at those who wish to conduct a poll and to keep the contents for their private use. It is aimed at halting the selective disclosure of opinion poll results, including the results of polls conducted for purposes other than political.
The Bill is an attempt to request that more light be shone on a subject that is important to the working of our democratic process. I trust that the House will give me permission to introduce it.
Question put and agreed to.
Bill ordered to be brought in by Mr. Dick Douglas, Mr. William Hamilton, Mr. Hugh D. Brown, Mr. Tam Dalyell, Dr. J. Dickson Mabon, Mr. John Roper and Mr. John Prescott.

PUBLIC OPINION POLLS (DISCLOSURE) BILL
  PUBLIC OPINION POLLS (DISCLOSURE)
  Bill to regulate the publication of public opinion polls to ensure a fair and balanced presentation presented accordingly, and read the First time; to be read a Second time upon Friday 18th May and to be printed. [Bill 80.]
ORDERS OF THE DAY
  COUNTER-INFLATION BILL
  As amended (in the Standing Committee), further considered.
  COUNTER-INFLATION BILL
    Clause 4

      DURATION AND REACTIVATION OF PART II
      Mr. Speaker: Before I call the first amendment I should like to clear up the position with regard to Amendment No. 59, in page 3, line 37 at end insert
      'being a period ending not later than 31st March 1976'.
      The subject matter of that amendment can be discussed with Government Amendment No. 3. If the Government amendment is agreed to, that amendment falls. Therefore, I shall select it only if the Government amendment is defeated, but it can be discussed with the Government amendment.
      Mr. J. Bruce-Gardyne: I am most grateful for that elucidation, Mr. Speaker, but may I get the position clear? As I understand it, if Government Amendments Nos. 3 and 58 are selected we are faced with two alternative propositions—either the proposition in the Bill as it stands, that the power given shall be renewable by order on an annual basis indefinitely, or the proposition arising from a combination of the Government amendments, that the powers shall last for three years and then stop, unless terminated during that period. We shall not have before us, I understand, the third choice, which it is the purpose of my amendment to introduce, that the powers should last for a maximum of three years but that within those three years there should be annual renewability by Order in Council. In other words, that would give the best of both worlds.
      Mr. Speaker: This is a matter of argument, and I have nothing to add to my ruling at this stage. I shall call Government Amendment No. 3, with which can be discussed Government Amendments Nos. 58 and 16 and Amendment No. 59. Then we shall see how we get on.
      3.40 p.m.
      The Secretary of State for Employment (Mr. Maurice Macmillan): I beg to move Amendment No. 3, in page 3, line 34, leave out 'one year' and insert 'three years'.
      I thank you for your ruling, Mr. Speaker. I think it is for the convenience of the House to discuss with this, and Amendment No. 59, the following amendments:
      No. 58, in page 3, line 36, leave out subsections (2) to (5) and insert—
      '(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.
      (3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.
      (4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.'
      No. 16, in page 17, line 16, leave out Clause 19.
      Amendment No. 58 is complementary to Amendment No. 3 and replaces subsections (2) and (5) of Clause 4 with the version on the Order Paper. Amendment No. 59 is an alternative to the two Government amendments. Amendment No. 16 seeks to delete Clause 19. I should point out to the House that part of the substance of Clause 19 is affected by later amendments to Clauses 12 and 13, which seek to limit the operation of Clause 12 to the duration of Part II of the Bill and the operation of Clause 13 to one year. If the amendments are agreed by the House, Clause 19 will be concerned only with Part I of the Bill. What arises will, in effect, be the continuation of the agencies as a framework for a possible voluntary policy.
      I do not want to dwell on this point, as the arguments for retaining Part I of the Bill are part of my argument for retaining the statutory powers of Part II for a potential period of three years, but, as now drafted on the Order Paper, not renewable thereafter except by fresh legislation, and for retaining the power within that three-year period to stop the statutory powers of Part II and reactivate them by order subject to approval in draft by the House.
      In Committee considerable concern was expressed during the debates on
      1508
      Clause 4 and on other clauses, about the accountability of the agencies and of Ministers to Parliament. That concern about accountability to Parliament for the powers which we are seeking to operate for a statutory policy, and which are either contained in or made operable by Part II of the Bill, was shared by the Government.
      That concern was indicated by the undertakings given in Committee by my hon. Friends and myself, most of which were embodied in amendments on the Order Paper which we shall be discussing later today. I shall remind the House about those undertakings as they are relevant to the discussion upon which we have embarked. The existing powers which are derived from paragraph (4) of Schedule 2 are reinforced by the requirement which is set out later to publish notices and consents as well as orders by Ministers and by the agencies. That was in response to the suggestion, which was a perfectly reasonable one, that it is difficult to question Ministers if those who wish to do so do not have the means of obtaining information.
      In addition, there was the undertaking to arrange for the publication of quarterly reports by the agencies within 30 days. It was undertaken that these should be drafted within 30 days and put in the hands of Ministers within 30 days of the end of the quarter, and that they should be debateable in the House. There is also the undertaking which I gave to debate in draft any new code or any substantial addition or alteration to a code set up under the Bill. I warned the Committee that it would be unlikely that we should draft it in terms which would include it in the Bill because of the difficulty of identifying what would or would not be a substantial addition or alteration to a code.
      I repeat the undertakings which I gave in Committee that the Government will ensure that any new code or any substantial addition or alteration to the code should be debated in draft by this House, as is happening on this occasion. Not only are we debating the consultative document, but we can debate the draft of it from which it is derived. Further concern was expressed in Committee about the duration of the statutory powers in Part II.
      Mr. John Biffen: Before my right hon. Friend passes from the elaboration of the code so that it may be adapted to the changing character of the policy itself, it probably would be helpful for the House during Report to have it made clear that in the autumn stage 3 will be accompanied by a new code rather than by the agencies being told by Ministers to take a somewhat different interpretation of the code from that which they have been taking hitherto.
      Mr. Macmillan: I assure my hon. Friend that it is intended that stage 3 shall be governed by a new code. I am not saying that parts of it will not be familiar or the same as the existing code. The intention is, however, that it should be accompanied by a new code setting out the criteria for stage 3. I cannot give an undertaking now that there will be a consultative document, but of course there can be debates on the reports of the agencies and the conduct of stage 2.
      Further concern was expressed about the duration of the statutory powers in Part II, especially the power to continue indefinitely by order Part II and to reactivate Part II once it had been put into suspension by Order in Council. I indicated in Committee that I would seek during Report to insert again the powers which the Committee removed from the Bill. I also said that I and the Government attached great importance to the initial three-year period and the ability to switch on and off again. The powers of Part II switch off by Order in Council, and they are switched on subject to a draft order being approved by the House.
      I still attach great importance to these considerations. However, on reflection the Government have taken the view that there is no need to have the ability to extend the operation of Part II beyond the initial three years. If any statutory powers are still required then, in practice the situation might well require a different type of legislation. Although originally the Government thought that parliamentary control would be met by a full day's debate on a draft order, subject to an affirmative resolution when made, we now accept that new legislation will be appropriate, if there is any such requirement. So the new version of Clause 4, which I am proposing to insert by Amend-
      1510
      ment No. 3 and Amendment No. 58, recognises the situation. I hope that it allays the fears expressed by some of my hon. Friends and others about the duration of these powers.
      The Government have throughout made two things clear. First, we are not seeking a confrontation with the trade unions. We are willing to reach agreement with them and with the employers on a voluntary policy for controlling inflation, provided that such a policy can be fully effective. We are willing to do this as soon as it seems possible. But, secondly, we have also made it clear that until such an effective voluntary policy can be agreed, we are determined to stand firm on our present policy through the operation of the Bill during phase 2 and phase 3.
      It is for these reasons that I ask the House, first, to restore the initial three-year period for Part II of the Bill; secondly, to maintain the capacity to stop the powers by simple Order in Council; and, thirdly, to restore the ability to reactivate them, if once they have been stopped within the three-year period, by order, which again would be placed in draft form before the House and be subject to affirmative resolution.
      By Amendment No. 3 and Amendment No. 58, Part II of the Bill would operate for the initial three years without an annual order to keep it going. Otherwise these debates would have to take place effectively in March 1974 and again in March 1975. I am seeking to make Part II operate for the initial three years without the need for such an annual order, but only for those three years, ending definitely on 31st March 1976. So, the Clause 4 arrangements, with the powers in Part II, can be stopped and, if necessary, restored as I have described.
      I believe that this process is necessary in order to make our two points clear—our determination to stand firm on our policy and our willingness to agree an effective voluntary policy as soon as that is possible. I am sure that many members of trade unions, as well as my hon. Friends and others outside the House, would prefer a voluntary system. That is why I see the necessity to keep the capacity to switch off the statutory powers of Part II. But I hope that we have all learnt the lesson of the past—the fact that

      1511
      voluntary policies and declarations of intent have frequently ended in an ineffective control of inflation. So I think that it is necessary to keep the power to switch on and return to the statutory powers of Part II, subject to parliamentary approval by draft order. I hope, too, that, remembering the lessons of 1968, 1969 and 1970, the House will agree to show the country that the Government and the House will carry through the necessary policies.
      That is the reason why I cannot accept Amendment No. 59. I agree that it, too, would limit Part II to three years, but it would make it subject to annual affirmative resolution. I believe that that would demonstrate to the country not so much our concern for parliamentary control as fears for the success of our policy and lack of will by the Conservative Party in supporting a firm stance by the Government. I believe those of my hon. Friends and others outside the House who tell me that the country expects the Government to stand firm. But I am also convinced that the firm stance they are demanding requires a base of a firm three years to be effective and to be seen by all concerned to be effective. That is why I ask the House to reject Amendment No. 59 and support the Government amendments.
      Mr. Bruce-Gardyne: Before he sits down, will my right hon. Friend deal with one important point? He said that to have annual renewability by order might be interpreted as showing a lack of will. Would he argue that the fact that we have, for instance, annual renewability by order of the Rhodesian sanctions has shown lack of will?
      Mr. Macmillan: I want to avoid being too derogatory, but the circumstances in which we find ourselves, where there is, if not an organised movement, then at least a clear determination on the part of a number of people within the trade union movement to use industrial action because of their dislike—I put it no higher—of the Government's policy, create an entirely different situation in which a three-year period is required to give a firm demonstration of the will not only of the Government but of the Conservative Party in backing the Government.
      Mr. Anthony Wedgwood Benn: I suppose that after some of the recent speeches by Ministers the Secretary of State's reference to his desire to get an understanding with the trade union movement should be welcomed. But the amendment is very much more important than the right hon. Gentleman seems to realise. In the Bill the Government originally proposed three years plus annual renewals in perpetuity. Indeed, the Bill provided that members of the Pay Board and the Price Commission could remain in office for five years, renewable by a further five years. This indicated that the Government's original intention was that this legislation should be permanent. Then, in Committee, as a result of the efforts by the hon. Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley), the proposal for three years plus one, plus one renewal, was replaced by one year plus one, plus one renewal.
      The Government now say that they want three years with a definite stop. Indeed, they say that they might go even further and stop before the three years period is up, in which case they could renew one plus one up to three but would then stop. This is evidence of the Government's determination to stand firm, we are told.
      The proposal to some extent cuts across party lines—one of the few occasions on this measure when that happens. What we are discussing is the proper time and place for parliamentary intervention in a new departure of policy in the relationships between Government and industry. I want now to put our reasons why, if we have to have this Bill, the process should be on a one plus one basis.
      First, the Bill represents a total reversal of the Government's original policy. When I heard the right hon. Gentleman say how important it was for the Government to stand firm, I could not but remember that the Prime Minister in 1970 warned the nation that the Conservative Government would not vary their policy. I therefore have some doubts whether this or any other current Government policy has the permanence that the right hon. Gentleman hopes for.
      Secondly, there is not only no mandate for the Government's present policy but, in so far as the public voted for the

      1513
      Conservatives believing them to be against a statutory prices and incomes policy, there is a positive mandate against it.
      The third reason why Parliament should intervene more regularly in the consideration of the policy is that the Government have reached a very solemn judgment about the mixed enterprise system which is in many ways the most important part of the Bill. They have concluded that we cannot rely upon a mixed enterprise economy to produce the necessary social and economic results.
      4.0 p.m.
      Coupled with that, the Bill introduces methods of control the effects of which upon industry are wholly unknown. Anyone trying to read the pay and prices code, which we shall be debating on Monday, must recognise that this code will introduce a high degree of uncertainty into business planning on the management side. First, it is an advisory code. It has no statutory backing. Second, we do not know for how long phase 2 will last. Sometimes it is pushed back to the autumn, sometimes, under the pressure of industrial unrest, it is brought forward to July.
      We do not know the length of phase 2. We do not know whether it will be a statutory or voluntary phase. We do not know whether the Price Commission and Pay Board will be two separate bodies in the autumn or the summer or one body under another provision of the Bill. We do not know what interventions there will be. We do not know, and nor does management, whether the attitude of the Government towards profits is still that profits are to be the main engine for investment or whether profits are, as we on this side have often been accused of saying, something slightly immoral to be kept back, at any rate during the period when statutory wage control is in effect.
      We do not know, with insurance for example—to take yesterday's amendment, which is highly relevant—the extent to which the Government are serious in moving into a large area of business enterprise with a view to keeping premiums up for profitability and down for counter-inflationary purposes. This is a wholly experimental policy. Where we have such a policy there is an overwhelming case for regular parliamentary scrutiny, review and even fresh legislation.
      1514
      The second area into which the Bill moves is that of industrial relations. I do not have to stress to the House, nor even to the Minister, who may have been affected in his Department by yesterday's dispute, the effects of this legislation on industrial relations. What is important about the Bill, and what will be seen to be even more important in the months ahead, is that whereas up to now industrial relations have been a subject in which the Minister had a direct responsibility, this Bill pushes the conflict into one between a union and an appointed Pay Board with no direct ministerial responsibility.
      If we exclude from those engaged in industrial negotiations both the possibility that their argument may be settled by collective bargaining and the possibility of hon. Members raising their case in the House, then we are diverting the greatest argument in British economic policy at the moment away from Parliament into an appointed agency. These are other reasons why there should be regular parliamentary scrutiny of and debate on this policy whatever view may be taken of it.
      I go further and say that in the excellent debates we had in Committee—and, speaking personally, I found it the most interesting Committee of which I have ever been a member—a number of different views began to emerge. There was the Government view, joined very largely by the Liberal Party, the post-capitalist party as the hon. Member for Cornwall, North (Mr. Pardoe) described it—[Interruption.] The Government are post-capitalist in the sense that they no longer believe in free enterprise as the means of solving these problems. There was the Government and the Liberal view emerging strongly, very much united, as one would expect. Then there were the monetarists, the school of economics from Oswestry and Cirencester and Tewkesbury, taking the view which was the view on which the Government were elected and therefore highly respectable in its ancestry, that the Government should stick to their programme and beliefs and let these forces work their way out.
      Today the Labour movement has published its own view about tackling inflation. This view, a joint statement from the Labour Party and the TUC, represents a third alternative solution to these problems. If this measure remains on the

      1515
      statute book in such a way as to exclude effective parliamentary debate among these three views then we are heading for trouble. Why? Because we are diverting one of the central conflicts in our society outside Parliament, to be resolved by agencies dealing directly on the one hand with trade unions and on the other with business.
      This is the danger to the House of Commons. Whatever one may think about the rôle of Parliament and its relative success in handling economic problems—and there are many who have doubts about our capacity to solve these problems—at any rate we do debate and discuss them here. We decide them here. The question that has been very much in the headlines recently, "Who Governs Britain?" is what this place is about. Who governs Britain is the argument we are always having in the House and, at proper intervals, through the ballot box.
      If we divert this argument from the House of Commons either to the courts, as under the Industrial Relations Act, or to Pay Boards or Price Commissions which are not accountable to Parliament, operating under codes at which we are allowed to look only at periodic intervals but operating under statute which has a three-year period, then it amounts to the abdication by the Government and, I must say at the Government's insistence, by Parliament of their central responsibility to resolve these matters. It is because this statute is an abdication of ministerial and parliamentary responsibility for issues which everyone knows are in the forefront of debate in every advanced society that we believe that this Bill, if we have to have it at all, should operate for one year and then Parliament should look at it. If in its wisdom it chooses to renew the measure, that is a matter for Parliament.
      If the Government insist, against the wishes of the Committee—and there was an all-party vote on this amendment—on taking this outside the arena of parliamentary responsibility and accountability for the next three years, then the responsibility for the failure of their policy will be one which rests peculiarly upon them. For that reason I suggest that we reject the amendment.
      Mr. Bruce-Gardyne: I have a great deal of sympathy with the earlier remarks of the right hon. Member for Bristol, South-East (Mr. Benn). In his later remarks he was edging on to his rather hyperbolic participatory views. There are other arguments which must lead us to have considerable reservations about the proposals which my right hon. Friend is putting before the House. Before I refer to them I want to mention Amendment No. 59, standing in my name and the name of my hon. Friend the Member for Oswestry (Mr. Biffen).
      As my right hon. Friend rightly pointed out, the amendment is designed to incorporate what in the view of some of us will be the best combination of the situation which emerged from the Committee, whereby these powers would require to be renewed by Order in Council on an annual basis, and the situation emerging from Amendment No. 58, by which the renewal could occur only for a maximum of three years. Acceptance of Amendment No. 59 would provide for a combination of these two features and it is on that basis that I commend it to the House.
      I was not a member of the admirable Committee which studied this Bill. Everyone who has studied its debates has been deeply impressed by the care with which it dealt with the Bill and the high standard of argument. I have carefully read what my right hon. Friend said and I think he would agree that he gave the Committee a rather fuller argument than he has given us today as to why the Government seek to rebut the proposition put forward by my hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and Oswestry on the three-year—one-year argument.
      Basically my right hon. Friend made three propositions in Committee. The first was that by retaining the period of three years we would avoid an undesirable degree of uncertainty. He referred to
      "…where a period of short, sharp restraint designed…to administer a shock to the economy, has been followed by a massive inflation when the provisions have been suddenly removed'.—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 622.]
      He was referring to what had happened in the past. We have all recognised in the past that this is the great problem

      1517
      about this sort of legislation. We used to describe it as trying to build a dam of ice which led to an embarrassing flood when the spring came. Today's proposition, presumably, is that we have devised something which will take the place of the block of ice when the spring comes. I am not totally convinced about this.
      My right hon. Friend's second argument, which he repeated today, was that a three-year span for this legislation would make it easier to achieve agreement on a voluntary policy. Some of us, on both sides of the House, who regard a statutory policy as being objectionable, believe a voluntary policy to be even more so. Therefore, for those of us who take that view, this argument does not carry a great deal of weight.
      I found rather fascinating the third argument which my right hon. Friend advanced in Committee. He did not advance it today. He argued that by having a three-year period for the legislation the Government would be absolved from the temptation to misbehave in an electoral period. I am not totally convinced of the power of this argument. If Governments are in a mood to misbehave in a pre-electoral period, they will misbehave, and the span of the legislation which they have put through will have very little to do with that propensity to misbehave.
      Therefore, I was not totally convinced by the arguments of my right hon. Friend the Secretary of State in Committee. However, since then a number of things have changed. First, we have the draft code before us. Secondly, my right hon. Friend has provided for a considerably increased degree of accountability, and he has agreed to limit the action of the Bill to a maximum period of three years. It is only reasonable that we should pay tribute to the consideration which the Ministers gave to the views expressed in Committee. Also, it would perhaps not be remiss to congratulate my hon. Friends the Members for Oswestry and Cirencester and Tewkesbury on the powerful arguments which they advanced with a view to achieving this objective.
      The third distinction which has arisen since the discussion in Committee is that substantial doubts have been thrown externally on one of the important strands of argument which ran through the dis-
      1518
      cussions in Committee, about the compatibility of the Bill with our obligations to the European Economic Community.
      I find the three-year limit which has been introduced a little difficult to assess. My inclination is to feel that in matters of this kind three years is about as long as eternity. If this legislation remains on the Statute Book for three years without the Government being obliged to submit it for renewal by Order in Council subject to the affirmative procedure we are imposing what might be regarded as a life sentence for the free enterprise economy. Three years may not sound like a life sentence, but, in reality, if we retain the legislation for three years it will be very difficult to return to the sort of economy in which most of us on these benches believe and in which, I like to hope, many of my colleagues on the Government Front Bench, in their hearts, also continue to believe.
      4.15 p.m.
      The second argument on which I wish to touch is the question of the possibility of conflict between this legislation and our obligations under the European Economic Community. If we authorise the Government to maintain the legislation for three years, and if it is in conflict with our EEC obligations, we are putting ourselves and the Government in a very unfortunate and undesirable predicament. I read very carefully what my hon. Friend the Chief Secretary said in columns 734–6 and 760 of the OFFICIAL REPORT of the Committee proceedings when Clause 12 was being discussed. The crucial point which he made was the assurance which he gave that
      "The Government's intention…is that during phase 2 we should comply with our Community obligations, that we should not take the power to override them."—[OFFICIAL REPORT, Standing Committee H, 15th February 1973, c. 736.]
      He insisted that the Community understood what was happening.
      That was on 15th February. On 16th February an interesting article appeared in the Financial Times by Mr. A. H. Hermann headed
      "UK Anti-inflation laws may conflict with EEC rules".
      It stated:
      "The U.K. anti-inflation legislation might bring large companies who can be said to be in a market dominating position into conflict

      1519
      with EEC competition rules. At least one large group will be advised by its legal staff that the anti-inflation Bill can never become fully applicable law in as far as it would run contrary to directly applicable provisions of the Treaty of Rome."
      The discussion in Committee was concentrated on the essential issue of steel pricing, but a wider issue was introduced by the article in the Financial Times—a newspaper whose comments, as my right hon. and hon. Friends will agree, have to be taken with a certain degree of seriousness.
      In Committee, the Chief Secretary drew attention to the letter which the Commission was reported to have written to the British Government and the Press statement it made about it. The important phrase in that statement, which my hon. Friend quoted in Committee, was:
      "It"—
      that is, the Commission—
      "has, however, reminded the British Government that Government measures to control prices set by coal and steel producers are incompatible with certain obligations under the Treaty".—[OFFICIAL REPORT, Standing Committee H, 15th February 1973; c. 760.]
      The Chief Secretary's argument was, "Yes, but these controls are for phase 1 only and thereafter ECS steel and coal recover their freedom".
      I hope that my colleagues have studied carefully an article in today's Financial Times—I apologise for quoting the newspaper so frequently, but I think we all read it from time to time—which stated:
      "In theory, the steel industry will move away from Government control on prices from May 1. It hopes to persuade the Government to accept a 10 per cent. price rise, although customer industries believe that not much more than 6 per cent. will be allowed in view of the Government's counter-inflationary policy'.
      Is that in conformity with the European Coal and Steel Community Treaty? I doubt it very much. I do not believe that we have any serious intention of releasing the British Steel Corporation from the steel bands of Government interfere lee and control over their pricing policies in phase 2. If we have not, the patience which the European Economic Community has shown with our behaviour to date will soon begin to wear thin.
      Mr. Benn: The hon. Member will have noticed that Clause 8 gives the
      1520
      Government power to override the European Communities Act, for that clause says specifically that
      "any provision of any Act, whether passed before this Act or later"
      —and that includes the European Communities Act—
      "…shall…have effect subject to such exceptions, modifications or adaptations as may be specified …"
      That means any action taken or to be taken by the Government. Therefore, were there to be a conflict of policy, Clause 8 would take precedence over our obligations under the European Community.
      Mr. Bruce-Gardyne: This has been discussed on numerous occasions and was discussed in Committee. It is a rather deep legal point. Being no lawyer myself I am hesitant to get involved in it, but in any case I do not think it is strictly germane to my argument because my basic argument is that, not merely in the steel sector but in other respects, if we give the Government this authority for three years, then long before those three years are up we shall be in dead trouble with the European Community. I do not take the same view as the right hon. Member for Bristol, South-East on the question of the European Community, nor do I take the same view as my hon. Friend the Member for Oswestry. One of the reasons why for years I have been an enthusiastic supporter of British entry into the European Community is precisely that I have hoped and believed that once we were inside the European Community we would escape the temptation to succumb to the pipe dreams of people like Sir Frank Figgures and Sir William Armstrong and Mr. Campbell Adamson. What worries me about what we are doing at the moment is that we appear to be giving greater priority to the Figgures and Armstrongs and Campbell Adamsons than we are prepared to give to our obligations under the European Community Treaty.
      After all, I put it to my right hon. Friend the Secretary of State, one of the prime objectives and purposes of this Government has been to bring this country into its rightful place in an enlarged European Community. What folly it would be if we passed legislation this afternoon which would lead us into an intolerable conflict

      1521
      with the Community of which we are a new member. This, I submit, is a weighty consideration which we cannot afford to ignore, because if we give the Government three years today then, long before those three years have been concluded, we shall be facing this dilemma in a very acute form, and this in itself is to me a major argument for deep concern about the desirability of giving my right hon. Friend the amendment which he seeks.
      I turn to one more consideration. We now know, as I said, that a further distinction between our debate today and our debate in Committee is that we now have the draft code. Let us hope and pray that it is a draft, because I think we have seen already that it is less than word perfect in one or two important respects. We have this remarkable document, and my right hon. Friend told us today that stage 3 will be accompanied by a new code. The right hon. Member for Bristol, South-East pointed out that the date of stage 3 is as yet unknown. I cannot help wondering whether perhaps we may not find stage 3 is a little late coming this year. I cannot help wondering whether we may conceivably find that the progress which my right hon. Friends hope to make with stage 2 is somewhat long drawn out, and as a result stage 3 gets held back.
      The important point for us to consider this afternoon is that if we give my right hon. Friend his substantive amendment on this clause we are in principle allocating to my right hon. Friend the right to operate on this document—we have no certainty that this document will be amended or substantially changed—for three years. I hope that my hon. and right hon. Friends will give very serious consideration to what that implies. After all, this document is one which has even made the CBI turn. I am not sure one need say very much more about it than that.
      I come now to what is to me the most important argument against the course which my right hon. Friend has suggested and also the most important consideration which we have to bear in mind in making up our minds how we are to deal with this group of amendments. My right hon. Friend said that for the House to require the Government to seek renewal of this legislation on a yearly basis by
      1522
      Order in Council subject to the affirmative procedure would demonstrate, on the part of this side of the House at any rate, a lack of will. What worries me is that, as I have explained at earlier stages of our discussions on this Bill, I do not accept—I have never accepted; I do not think I can accept—that a statutory control of prices and incomes as such is the answer to inflation.
      I can accept it on the assumption that it may have some impact in abating inflationary expectations, and thereby make it less painful for the Government to tackle inflation at source by abatement of their own expenditure policy and curtailment of their own deficit financing. But—and this is the crucial point for me—I put it to my right hon. Friend that to date we have not had very much in the way of clear evidence that the Government are indeed determined to tackle inflation at source. The cutting out of the hover train hardly adds up to a massive attack on public expenditure, particularly when it follows by only one week the decision to proceed with Maplin and the decision to provide another £350 million for Concorde, and so on.
      We have very little evidence of a determined assault upon what to many of us is the fundamental generator of inflation at the present time; and what concerns me most of all is that if today we give my right hon. Friends the three-year provision of these powers, then these powers, which should be and can only be a top dressing added to the application of counter-inflation policies, will be taken as a substitute for those policies themselves; we shall find ourselves in a position where the cosmetics have become the substance.
      If we are to rely exclusively on this legislation I do not believe we shall see much progress in the battle with inflation, and, indeed, it would appear to me that if that is to be the course we are to pursue it can only be said that we have no serious intention of abating inflation but only an intention to abate anxieties about it. Of course, we cannot abate those anxieties very long so long as inflation itself persists.
      It may be that my anxieties are unfounded; it may be that my right hon. Friend the Chancellor of the Exchequer next week and my right hon. Friends in

      1523
      the months ahead will demonstrate determination to get on top of the rising wave of public expenditure and will demonstrate determination to bring back to tolerable proportions the enormous public sector borrowing which faces us in the year ahead. If so, this House will have no hesitation in giving to them the renewal of this legislation in a year's time when they come to ask for it. If, on the other hand, the anxieties which I have sought to express turn out—alas—to be well founded, then I do not imagine that my right hon. Friend would be seeking a renewal of this legislation in a year's time anyway.
      4.30 p.m.
      Mr. Robert Sheldon: In one respect I agree with the hon. Member for South Angus (Mr. Bruce-Gardyne). He got the equation right. One year equals temporary, three years equals permanent. In so far as the amendment deals with that aspect of the legislation, it is crucial to the future involvement of Government. It is clear that one cannot have a policy of intervention on prices and on the basic fundamentals with which industry is concerned which goes on for three years without the issue of permanent control being raised during that period. Because of that, it is not the incomes policy that is the important part of the legislation. I fully understand the pernicious nature of the legislation, which my hon. Friends have rightly opposed, but we have been through it before and we may perhaps go through it again without achieving a resolution of the problem. The innovation in this legislation is the likelihood of permanent control, permanent involvement by the Government in prices and perhaps in the most intimate areas of industry.
      One problem that the Opposition have had to face following the nationalisation measures of the 1945 to 1951 Labour Government is to find ways of continuing the progress that was initiated in those years. It is no secret that many proposals have been put forward from time to time. Sometimes those proposals lacked a credible coherent intellectual base. They contained no basis of argument that certain industries should be nationalised for certain reasons. But that was not always so.
      1524
      The industries that were taken into public ownership between 1945 and 1951 were not taken haphazardly. In the words of Nye Bevan, they formed the commanding heights of the economy. They were the basic industries on which others depended—steel and coal, and the transport industries—the railways, roads and, to a limited extent, aircraft. They were the industries—coal, gas and electricity—which provided the energy requirements for other industry. That was a coherent policy that found ready implementation.
      Subsequently, people have looked for a coherent attitude to take in assessing the industries in which the Government should become involved in a greater degree, either through take-over or through more intimate forms of control. Attempts to find such a coherent attitude have always been unsuccessful.
      In the legislation before us the Government are selecting the areas in which Government involvement will increase. The criteria for that level of involvement—or by a future Labour Government conceivably nationalisation or public ownership—are laid down both in the Bill and in the draft code. There are certain industries which because of their size—category I—are considered to be sufficiently important to require certain Government intervention.
      It would be foolish to assume that at the end of three years a Government who are in favour of greater intervention will readily dismantle controls once they are in working order. I draw an analogy between the war-time controls, which enabled nationalisation to be put into effect with ease, and these controls brought in by a Conservative Government which will force private industry into a closer relationship with the Government.
      It has been said that private industry can be left on its own if it delivers the goods. But when the Government involve themselves in prices, profitability and the crucial decisions taken within industry, how much remains for industry itself to operate in the interest of the country? The whole spur of private industry is its profitability, leading to investment, which past socialist and Labour Governments have tended to accept as of special value. Once that profitability is taken

      1525
      away, once the element of competition that might benefit the country are reduced, what is left will not remain in private hands for all time.
      By introducing the code the Government will bluff small industry. The Government can control large industry, but the effect of the code on small industry is a nonsense and everyone knows it. It is an attempt to import from the United States a system that worked quite well there because it was a novelty. The United States had not been round the treadmill of prices and incomes, as we have time and again. The policy had a drastic effect. It took the Americans a year or two to respond, by which time they were able to reduce the inflationary expectations. No one can conceivably say that that is so in Britain today. We are punch drunk with prices and incomes policies. This is just another one which we all know will fail. The only question is, what comes after it?
      Mr. Bruce-Gardyne: The hon. Gentleman said that the Government can control large firms but that the idea of controlling small firms is nonsense. I take it that he means that there will be no control over small firms. It is not inconceivable that the situation will be far more painful for small firms. Many large firms controlled by the Government will be the price leaders in their industries and will be able to operate on a much narrower margin than will the small firms which are not controlled. Yet in practice the small firms will have to abide by the prices dictated by the Government through the large firms.
      Mr. Sheldon: The point was put very well yesterday by my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) when he spoke of certain nonsensical attitudes in the draft code and pointed out its uselessness. The danger will occur when some over-officious person in the agency tries to assert an authority which he is not entitled to assert. As a result there will be bitterness rather than anything which is beneficial either to the present policy or to the country.
      The implications of the Government's certain failure in this area over the next few years will give way to a much greater control of industry than any we have known before. What will happen
      1526
      is that civil servants do not apply themselves to problems and, having failed, leave the matter there. They turn to new methods for solution.
      Anybody who looks at these new methods must appreciate that we shall see more rather than less Government intervention as the Government try to make up what has been lost in a policy which surely will fail. In three years' time we shall have a very different prices and incomes policy from that which we see today. There will be certain areas which the new Labour Government will want to reject out of hand and there will be other areas which they will want to take over and develop. If the present Government insist on giving us a faulty tool, they will not be surprised if the next Government improve it and use it.
      Mr. Peter Hordern: The hon. Member for Ashton-under-Lyne (Mr. Sheldon) is the Chairman of the General Sub-Committee of the Committee on Expenditure whose report more closely reveals the real reason for inflation than does the Bill which we are discussing today. I thought that some of his remarks could well have been made from the Conservative benches, but I will embarrass him no further on that subject.
      I was not a member of the Standing Committee that considered this Bill, but I have had the privilege of reading the debates on Clause 4. It struck me that the arguments were very much concerned with the position of Parliament and the constitutional position, which was referred to earlier in this debate by the right hon. Member for Bristol, South-East (Mr. Benn). I do not wish to add to those arguments, although I hold them to be perfectly true. What I wish to say relates to the three-year period proposed in the amendment, compared with the one year proposed by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), in the context of the value of this Bill at all. It seems to me that although it is called the Counter-Inflation Bill, it has a limited value in terms of inflation but a great deal of importance in its concern with industry and the economy.
      One of the points put forward by my right hon. Friend the Secretary of State for Employment was that the statutory

      1527
      part of the proposal could be suspended at any time and a voluntary provision could be brought in. I do not know what the circumstances will be for the introduction of this voluntary agreement. I hope that first there will be clear evidence that inflation has been completely controlled and mastered before any voluntary arrangements are brought in.
      There has been a great deal of experience in the last few years of attempts at voluntary agreements between the Government and the TUC and CBI. We have had what have been called "solemn and binding" agreements, we have had treaties drawn up at Lancaster House and all the rest of it. But in my opinion these voluntary arrangements are of no purpose if they seek to control inflation unless other means are provided for that control—in which case the voluntary arrangement will hardly be necessary.
      The problem of controlling inflation is a universal one in every free country in the world. Various countries from time to time have applied themselves to a prices and incomes control policy, sometimes voluntary and sometimes statutory. I do not know why we in this country believe that we are unique in facing this problem, but this is how we seem to regard ourselves when seeking to deal with it. I believe that we are the only country that places such importance on control of prices and incomes by legislative means and such little importance on proper monetary and fiscal control.
      4.45 p.m.
      It must be observed that the countries which have placed less reliance on prices and incomes control, for example West Germany, which has yet to produce any form of prices and incomes control, over a long period of years have had the best record in containing inflation. It is also noticeable that the most recent country to introduce prices and incomes control, the United States, has discarded controls at the earliest opportunity. It is also evident that the reason the United States was able to do so was that it had a close control of money supply in the United States economy and has had, if not an absolute achievement, certainly the intention of controlling the rate of public expenditure.
      1528
      President Nixon in his New Year message referred to this topic and said that it was essential that public expenditure should be kept within the growth of GNP. Our recent debate on public expenditure showed that there is no such intention in this country in the forseeable future. Whether we look at the Dutch economy with their efforts at controlling prices and incomes by legislative action and their continued failure to control inflation, or whether we look at the French economy where there has been a similar experience, we can only arrive at the conclusion that to seek to control the system by statutory action and by legislative means is only to invite disaster.
      On the question whether this should be a three-year or one-year programme, it is important to examine what is in the Green Paper because of its effects on the economy. This is not only a question whether the provisions in that document will have any effect in controlling inflation but a question of the real damage that can be caused by sticking to the prices and pay provisions.
      Paragraph 36 of the Green Paper says:
      "In addition prices should be reduced where other factors (such as an increase in the volume of sales since the last price increase) lead to a significant fall in allowable costs per unit".
      That can mean only that if a company by being efficient increases its productivity by better methods and has been able to attract a higher volume of sales, it will have to reduce its prices. That is the effect of the proposition contained in paragraph 36. But a further paragraph appears to state that it is perfectly all right if that company wishes to say to the Prices Commission that some of its profits could be devoted to investment.
      I hope the House recognises the distinction to be drawn between profits and investment as if each were entirely unrelated to the other. In the one case profits, if gained by whatever efficient means, are something of a dubious kind to be returned to the Government or to whoever they have to be returned to in the form of lower prices. The other is that investment is highly desirable and socially good and should be undertaken no matter what little prospect of profit

      1529
      there is before it. That is the proposition, and I must say that it is an extraordinary notion. I hope that my right hon. Friend will be able to put my fears at rest. To separate profit from investment and the pursuit of profit out of investment seems to be an extraordinary move and it is one which I hope will not last.
      The level of investment generally has been very low in this country for many years past. But so also has the level of company profits for many years past. That is the reason for the low level of investment. My right hon. Friend the Secretary of State for Trade and Industry is very conscious of this and he is doing his best, quite rightly, to revive confidence in industry. Sometimes I feel that he is striving to plumb the commanding depths of the economy and that the sectors which he feels worthy of support are not those which some of us or the market would feel worthy of support. But at least it appears a genuine effort to revive investment.
      However, my right hon. Friend's efforts like many others in other Government Departments are all very expensive. This is the point which the hon. Member for Ashton-under-Lyne mentioned in his excellent report—the very large and substantial increase in public expenditure occasioned just over a year ago, with which one must put the large deficit which will be revealed in next week's Budget and the borrowing requirement which will become necessary. It is that borrowing requirement and the difficulty of fulfilling it which are the real causes and will continue to be the real causes of inflation for the next year or two.
      If we are talking about counter-inflation, the solution now is in reducing the growth in public expenditure. It does not lie in trying to impose statutory control over the conduct of business and industry in the way that this consultative paper does.
      I hope that the one-year argument as compared with the three-year argument will not prove necessary. I like to be optimistic about these matters. I like to feel that as events unfold we shall get better control of public expenditure, and it will not be for the want of trying from some of my right hon. and hon. Friends and myself if that is not the case. If that
      1530
      is so and the borrowing requirement is not so large and if proper monetary policy is carried through, of which there is a possibility, the necessity for statutory prices and incomes policies and voluntary prices and incomes policies will disappear. But it may be some time in coming. It may even need more than one year for this situation to arise. It may even need three years. Provided that the Government follow proper measures to reduce inflation and do not depend upon this absurd document to do so, I shall be happy to support them.
      Mr. Eric S. Heffer: If I were a leading capitalist in this country I should undoubtedly be in favour of one year as against three years and even more in favour of no such policy at all.
      We are in a remarkable situation. The Green Paper says:
      "Where an enterprise is making a loss, it may increase prices to cover its costs."
      It goes on to prices and profit margins, saying:
      "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.…"
      We all know that profits in this country have been falling for some time. The explanation for it which I put forward is not the same as that of some right hon. and hon. Gentlemen on the Government benches. But if I had been in a situation where my rate of profit was falling and I was then told that I had to determine the level on the basis of the best two of the last five years, I should not be very enthusiastic about this code.
      We are not debating the code at the moment. That will come on Monday. But it has a certain relevance to this debate. We know that a falling rate of profit leads to a falling rate of investment. But from where are those who are in capitalist industry to get their investment?
      Mr. Biffen: The DTI.
      Mr. Heffer: Exactly. But there are problems about that which I shall not dwell on at this stage. I may have a chance to do so on Monday.
      This Government have got themselves into a dilemma. The prices and incomes policy of the Labour Government, despite all the arguments about helping low-paid

      1531
      workers and so on, was designed only to hold down wages. That is why some Labour Members had the traumatic experience of sitting on the Government benches and arguing day and night about the various orders coming before the House. Prices were not held down.
      This Government want to hold down wages. But they know, because of what went on during the time of the Labour Government, that no one has any confidence that wages will be held down and that prices will not go up. For that reason they feel that they have to do something about prices, and by doing something in these terms they are hitting at the very heart of the nature of the capitalist society in which we live——
      Mr. Biffen: Hear, hear.
      Mr. Heffer: One does not have to be a genius to understand that. One has only to have left school at 14, as I did. It is understood very easily. But that is the problem, and it is here that the Government are getting themselves into difficulty.
      I do not believe that we are living in any post-capitalist situation. I have heard these arguments before. I remember a book written by one of my right hon. Friends called, "The Future of Socialism", in which he argued that we were not living in a capitalist society any more and that we were in a post-capitalist society. That is a lot of rubbish.
      The argument is about uncontrolled capitalism or controlled capitalism——
      Mr. Benn: My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) did not serve on the Standing Committee. I was quoting the hon. Member for Cornwall, North (Mr. Pardoe), who described himself as a post-capitalist. I share my hon. Friend's view.
      Mr. Heffer: I apologise to my right hon. Friend. I misunderstood his point.
      Mr. John Pardoe: It is true—and it is becoming a great phrase which is regularly thrown round in this House—that I described the Liberal Party as "the post-capitalist party". I did not suggest that we were living in a post-capitalist society. If we were, we might be in a Liberal society, and certainly we are not there yet.
      Mr. Heffer: I do not know what a Liberal society is, other than a capitalist society writ large. However, I do not feel that we ought to get involved in an argument about what a Liberal society is.
      The Government are in a dilemma, as would be any other Government who succeeded them. The dilemma is that in order to appear to be fair, they must control wages, which they intend to do anyway, and at the same time they must endeavour to control prices. That is the heart of the problem. That is an attempt to control the capitalist system. To follow that road is to end up with continuous legislation of a repressive kind. Hon. Gentlemen opposite do not want that, and nor do I. But nor do I want a capitalist society, and that is the fundamental divide between us.
      5.0 p.m.
      Where exactly are we going? That is the question that we have to ask ourselves. We have been all through this before. My hon. Friend is right. It is like a recurring nightmare. It goes on and on. There is a break for about a year, and then the whole process starts up again and gets worse. That is the trouble. It is a terrible situation for us in the House, and what the Government are proposing will not solve any of the basic problems.
      I warn hon. Gentlemen opposite that if they follow this line of controlling prices, controlling 100 companies, getting information, and so on, it will be that much easier for us eventually to take over these companies. What hon. Gentlemen opposite have to ask themselves is where all this is going to end. If there is controlled capitalism to begin with, the next stage is the elimination of capital, with a controlled economy on the basis of a Socialist plan. That is what I want, but I want it done democratically. Into such a plan I should introduce democratic management and control, which is what we are not getting here.
      Hon. Gentlemen opposite should be prepared today, like some of us were on earlier occasions, to say to their right hon. Friends on the Front Bench that this time they will not go along with them that they are not going to support them. We had to say that. It took a lot of courage. It is not easy for someone to get up and tell his own side that he is not prepared to go along with what it is

      1533
      doing. Such action is always misrepresented in the country. People who take that line are called a bunch of loony rebels. But if one feels strongly about an issue one has to say so, and I hope that this proposal to reverse a democratically arrived at decision of the Committee will be defeated this afternoon.
      Mr. R. B. Cant: In the Lobby there are a number of members of the Press who have a memorandum giving information about the agreement reached between the Labour Party and the TUC. The embargo is lifted at five o'clock. Can my hon. Friend say whether there is anything in that document that is likely to help us?
      Mr. Heffer: With respect to my hon. Friend, I was not a member of the committee which drew up the document and I am as anxious to read it as he is. I have seen only the brief document given to the Press a few weeks ago. If Members of the Liberal Party have received this memorandum before I have been given it I shall be very annoyed. I do not know the full details. All I know is that a future Labour Government must have the full support and agreement of the trade union movement. That is the lesson that we learned during our six years in office. The document sets out the alternative economic strategy that will be required to deal with the problems of inflation and advance us towards a Socialist society, but that has nothing to do with this amendment.
      Sooner or later there will be a vote on the Government's proposal. I hope that as a result of that vote the position will be as it is set out in the Bill now. If we have this provision for one year, we can have another look at the situation at the end of that time and if necessary extend the period for a further year. At each stage we can decide what we want to do. We shall not be able to do that if we are saddled with this policy for three years.
      Every Government who begin something on a temporary basis say that it is to run for only a short period, for two or three years, but we then find that the temporary period becomes permanent and we are saddled with the provisions for ever more. That is the situation that we have
      1534
      to face, and that is why I hope the Government will be defeated this afternoon.
      Mr. Hugh Fraser: It falls to me on this occasion—something which does not happen very often—to congratulate the hon. Member for Liverpool, Walton (Mr. Heffer) most warmly. His imperishable words should be inscribed in some Conservative Central Office pamphlet. Seldom has there been a better analysis of the problems facing the House than that given by the hon. Gentleman.
      To his words should be added a few from The Times this morning, where the right hon. Member for Coventry, East (Mr. Crossman) described the great advantages which could lie in store for some future Labour Government in having readily to hand the necessary instruments for carrying out massive nationalisation. I hope that all those present from the Press will take these remarks down and rush them off in a cleft stick, or with a flaming torch, to Smith Square.
      As the hon. Member for Walton said, there is nothing more certain in legislation than that the provisional becomes the permanent. There is a French phrase, with which I shall not weary the House, which bears that out precisely. The so-called provisional becomes permanent. We see the provisional steel houses put up 30 years ago mucking up the country, but still being inhabited by unfortunate people. The so called provisional rapidly becomes permanent.
      We are dealing with what is called emergency legislation. I gave the hon. Member for Walton my attention, and perhaps I may have his now. I see a great deal of economic confusion, not only in the House but in the Treasury itself, about what should be done, Occasionally, the best guidelines for Parliament are the guidelines of what is in the democratic interest without bringing in special pleading, one way or another, for one's pet solution to the financial problems.
      There are still some points that are worth making about economic theory. To imagine for a moment that the cure to inflation is enshrined in cost-push inflation engendered by higher prices or higher costs is not true. There are far wider and more fundamental matters

      1535
      involved, including the money supply, the budgetary deficit, and many other matters which are not, and cannot be, dealt with in these papers.
      There is a grave danger that if we use these instruments as the main and central point of Conservative policy, round them will be built a whole series of economic myths which will become central to the whole of the fiscal and budgetary policy of the Government, and that would be extremely dangerous.
      The Government have many attributes, but one of their attributes is not merely inflexibility but, when certain situations have been achieved, of total stubbornness and refusal to move. There is a grave danger that, having adopted this policy, they will think it right to stick to it, whether it is working or not.
      I back the idea of this policy for a limited period before it is reviewed by the House, but that period should be precisely one year—and it is on that one year that we shall vote tonight. My right hon. Friend has made some concessions for which I am sure the House is grateful. For instance, the House will be permitted to review annually the workings of the Price Commission and the Pay Board. The Italian Grand Council of Corporations was permitted annually to review the detailed reports of some of its concomitant Darts but never to review general Government policy. It is precisely this right, once a year, on which the House must insist.
      Some confusion exists, which one sees in Government proposals at the moment, about fighting inflation when we have a Budget deficit—that is a more accurate description than "net borrowing requirement"—running into several thousands of millions of pounds. There is also VAT and the new proposals on company taxation, to encourage companies, quite rightly, to distribute more. All these things are moving us into an era of some economic confusion. If any hon. Members think that they know all the answers to these problems, they should be immediately promoted to another place.
      We blunder on with a worsening economic situation. In these circumstances, it is the duty of Members of Parliament to see that their rôle is pro-
      1536
      perly fulfilled. That rôle is to control the executive and study emergency legislation once a year.
      Mr. Stanley Orme: The major point that the Government have to answer is the fact that, in Committee, all their arguments were thoroughly defeated by hon. Members on both sides on the questions of parliamentary accountability and the length of time that this legislation should be on the statute book before it is reviewed.
      The central argument, about parliamentary accountability is sharpened by the loss of sovereignty that we have suffered in recent times, not least in regard to the EEC. It would be a very weak Parliament that allowed other measures to be taken to remove further powers from this House. I was an opponent of the Labour Government's prices and incomes policy, but at least that policy was accountable to Parliament. Hon Members opposite, especially the present Secretary of State for Employment, deployed their arguments and talents in opposing orders on this subject between 1966 and 1970. They could do that because the legislation provided for parliamentary accountability and for those orders to be prayed against.
      The Pay Board will be able to operate independently, outside the House, in conclave, not answerable to the publicly-elected representatives, except perhaps when we have an annual omnibus report on which we shall be able to raise all sorts of conflicting issues. What we would prefer to do is deal with specific issues as they arise—the restriction of a firm's price increase or the holding up of a wage claim. In a democracy, we should be able to argue these issues, and if necessary vote on them.
      5.15 p.m.
      My experience of voting is that one does not often win, but after a tough debate, when the pressure has been put on the Government, the Government often respond. If the only pressure comes from outside, from a corporate body, we have no means of influencing the Government. So the restriction to one year is an important democratic safeguard. The Government are flying in the face of majority opinion on this matter.
      After one year, if they want to renew the legislation, they will be able to come

      1537
      forward in a proper parliamentary way and seek to convince the House that a year's extension is necessary. The amendment in the Secretary of State's name means that, for three years, the Government will be completely free from scrutiny.
      Three years does not sound a long time, but I remember a right hon. Friend of mine saying that seven days was a long time in politics. Three years is a considerable time in politics, particularly if we consider the change which has taken place, in less than three years, in this Government's policies. God knows what they will be like in three more years. At least an election will intervene.
      This is a point that I feel passionately about. I believe in parliamentary accountability. I do not care whether we are talking about publicly-owned industries or anything else. We have a right to debate such matters in this Chamber. The hon. Member for South Angus (Mr. Bruce-Gardyne) mentioned the distinguished gentlemen who will be appointed to head these boards, and one thinks also of people like the General Secretary of the TUC. I do not denigrate these people, who are leading people in our society, but they are not elected representatives of the people, directly responsible and answerable to this Parliament.
      A three-year period would represent a basic erosion in this system. I only hope that the House has the courage tonight to maintain the position that we insisted upon in Committee.
      Mr. Nicholas Ridley: So far, from back benchers on both sides I have not heard one word with which I would disagree. It is extraordinary that unanimity can come upon people who hold such disparate views on the substance of a prices and incomes policy or upon economic theory itself. But what we are talking about is parliamentary accountability, and that is what I want to say something about.
      There are two separate points. The first is the duration of a prices and incomes policy and the second is whether the Government should come back to Parliament for annual powers to carry on. Although those issues are closely linked, they are in fact different. On the question of duration, I for one am extremely grateful and very much impressed
      1538
      by the Government's listening to our pleas in Committee to put a time limit of three years on the whole of this operation. This must be registered as a major improvement and it would be quite wrong and churlish of me not to acknowledge that.
      I must also tell the House, however, that in my opinion three years is a pipe dream. The real world will intervene before this summer's leaves have left the trees, perhaps even before they have grown. When the world of business, of economics and of economic crises takes over again as soon as the Bill has left this House, the idea that we even spent time debating whether the duration of the operation should be three years or one year will seem totally unrealistic.
      One has only to study the code and to look at the effect upon investment of the prices section of the code. One has already heard what leading industrialists say about it. One has heard the opinions of those who are in business and concerned with investment of the effects that this legislation will have on investment. Yet it is one of the Government's main worries and priorities to raise the level of investment.
      One remembers that in a capitalist economy, about which the hon. Member for Ashton-under-Lyne (Mr. Sheldon) so rightly talked, it is the free decisions to invest, to manufacture goods and to sell them, and to offer one's labour for reward which produce the dynamics in society. If people think that it is not worth their while to invest, to produce and to labour, they cease to do those things. That leads to an immediate requirement for more Draconian and stringent powers and interventions than even hon. Members on the Opposition benches of the most Leftist persuasion could ask for. Perhaps the House will listen to one short sentence from Adam Smith. I believe that is as true today as it was true then.
      "It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our dinner, but from their regard to their own self-interest."
      That is the force which will overtake this policy.
      On the wages side, it may be that the policy will last even less long. The Government are already invoking stage 3

      1539
      to solve particular problems even before stage 1 has been completed. The pressures of strikes and industrial disputes which will build up—they are building up already—will force the flexibility of the system to be used before the Bill is even law. It will not be long before it is discredited.
      I turn to the question of the annual renewal of the powers. Those of us who believe that the powers should be renewed annually have argued that it is not very much to ask the Government to come back to Parliament for an hour and a half for an affirmative order. If the present Parliament is to last for another three years, that would be twice. There would be two occasions when the Government would come back to Parliament for a debate lasting an hour and a half. We do not think that that is asking a great lot.
      There are those outside Parliament, however, who are cynics of this House, who say that it is a myth that an hour and a half of debate twice a year in some curious way will change the course of policy or the control of the executive. They say that we are in any case like a lot of sheep when we troop through the Lobbies, and the fact that we have talked about the matter in a debate does not mean that that is real parliamentary control.
      Then there is the Government's argument that they do not want to have a 1½-hour debate because it is possible that it would in some way show a weakness of resolve if they were to submit to it. I do not believe that the great trade union leaders are sitting quivering as to whether the amendment is accepted or whether they should proceed on their own to decide whether they will have the authority to push over this policy, or that the great companies are waiting to hear whether the clause is carried before deciding whether to comply with the price code.
      This is not the real world. The people who make the decisions will not be influenced one way or the other by whether or not there is a debate after a year. But the Government are no doubt slightly frightened. The only precedent that has been mentioned has been that of the Rhodesia sanctions and their
      1540
      annual renewal. I detect each year, year after year, a slight quivering, a slight intensification of activity in the Whips' offices, as we near Christmas and the annual renewal of Rhodesia sanctions. But the occasion always passes by, and the Government get their way.
      This argument is largely academic. It does not matter which amendment is accepted tonight. We kid ourselves if we believe that our scrutiny and control will in some way hold down a tyrannical Government. Nor do I believe that the Government's protestations that they do not sound convincing if they do not get their way mean anything. The debate has a deeper, more symbolic meaning. It is not about the arguments which have been put forward recently and just now by myself. The debate is about where this House stands in relation to the executive and to the growing and changing troubles in our economic system.
      Parliament first sat with the sole object of controlling the executive and stopping it from raising too many taxes to pursue causes which the people did not want to back. But lately Parliament has sat to force the Government, on occasion after occasion, to spend more money, to give way on this, that and the other wage claim, to start new programmes to provide the facilities required in the constituency of each hon. Member. Parliamentary control was devised as a means of limiting the Government's expenditure but has now become the engine for increasing it. That is why we have the problem of inflation.
      I shall not go over the arguments of my hon. Friend the Member for Horsham (Mr. Hordern) and my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser). They said that we are spending too much money. What lies at the back of this is that the Government have found that they are unable to resist the pressures of Parliament. If Parliament is in disrepute in the public eye, it is not because it is futile but because it has exerted its pressure over the years towards increasing the demands upon the public purse instead of limiting them.
      There are those who say "Let us set up these agencies. Let us take the decisions away from Parliament and keep them for three years in these agencies, so that the agencies can be immune from political pressures and can control the economy in this way." That is the wrong way

      1541
      to defeat inflation. It is merely hiding from ourselves the reality of what is happening.
      All hon. Members are guilty of having found it convenient to press the Government, and the Government are guilty of having always given way. Until we as a Parliament can command respect through our ability not just to press each good cause which arises, each industry in trouble, each constituency needing a new bypass and each wage claim, there will always be the tendency to try to take the power away from us, to give it to the agencies or, later still, to the CBI and the TUC in stage 3—if, God forbid, that should ever come to pass. That is why I believe that the debate is more deeply symbolic than just the mere question of parliamentary control.
      5.30 p.m.
      There is a stench of decay about the British economy, about our position as a great trading nation, as a nation earning its living in the world and as a nation which is growing and prospering. Until we face up to the realities which have caused us to slide into this position, all legislation will be of no avail and this Parliament itself will be of no avail. It is not only a question of the Parliament having control of the executive for one, three or any number of years; it is a question of Parliament taking an attitude to its responsibility so that when people entrust it to control the executive it does so in a way which will cure the problems of inflation instead of in a way which will increase them.
      I for one am content to follow the majority on whether the term should be one or three years. But if my right hon. Friends on the Front Bench can learn anything from this little incident, let it be that, in the absence of Parliament controlling them properly, they have to control their own expenditure properly. There is no short cut to defeating inflation and the economic problems which bedevil us.
      Mr. Frederick Lee: I have been provoked to rise to my feet by the fact that so far there has been unanimity throughout the House among those who are opposed to a prices and incomes policy. I am an unrepentant supporter of it. This has been a most remarkable debate in that on the Labour side I have
      1542
      heard arguments urging the Government "Please do not proceed; you might make it easier for a Labour Government to take over industry"—which is passing strange to me.
      Mr. Heffer: If my right hon. Friend does not understand what we are saying, that is too bad.
      Mr. Lee: I understand what my hon. Friends are saying. I have been here a few years longer than my hon. Friend the Member for Liverpool, Walton (Mr. Heffer).
      For those on the Government side of the House this may be a matter of conscience because every one of them came to the House avowing complete animosity to a statutory prices and incomes policy and now the Government, which consists of men who have done more to discredit a prices and incomes policy than any other men in Britain, are asking the House to reverse the position and to provide for a three-year period instead of a one-year term.
      For my part I hope that the House will defeat the Government because I believe that the reformation that we have seen is not a sincere one. I believe, and here I agree with my hon. Friend the Member for Salford, West (Mr. Orme), that now to try to take out of the control of Parliament an annual scrutiny of where we are going on these vastly important issues is wrong. It robs Parliament of its role, function and purpose. The Labour Government never tried to do that. The Conservatives took full advantage of the fact that we asked Parliament's permission on every occasion when we laid an Order in Council. My feeling of sorrow about all this is that the true purpose of a prices and incomes policy has nothing to do with whether the period is three years or one year.
      Recently the right hon. Member for Barnet (Mr. Maudling) was saying that we are suffering from a monopoly of trade union power. But the Government of which he was a member have been forced to bring into operation the family income supplement because the breadwinner in many families, who is engaged in full-time employment, cannot earn enough money to keep his family in existence. Is that proof of trade union monopoly power? I recall making a few comments at the Labour Party conference some

      1543
      years ago in which I pointed out that we had had 25 years of full employment—ideal conditions for the trade union negotiator. Everyone was worried sick about the millions of low-paid workers. Yet that is the system which everyone apparently wishes to perpetuate.
      Of course, respective Governments have used a prices and incomes policy for the wrong purposes. It is not merely a creature for economic crises; whether the House examines it every three years or one, it can never be that. I understand that members of my party are committed to the idea of evolving a better and fuller life, and yet they really believe in the stupid nonsense of so-called free collective bargaining, which is using any economic power one has and God help the bloke who does not have it. That cannot evolve into something which is fuller and better. That is why I do not understand the speeches made by some of my hon. Friends. They, like me are rightly indignant at the conditions under which millions of people have to live, and like me they assert that they want a planned economy. But they want it in every other sense because they say "By God, you must not interfere with free collective bargaining"—the golden calf to which we must all bow down.
      I remember the arguments between the TUC and the Government a few weeks ago about whether incomes took 61 per cent. or 62 per cent. of gross national product. Whichever of those figures it is, it is a large part of the economy which some of us want to plan. I am not calling anyone a 38 per cent. Socialist because he does not want to plan 62 per cent. of the economy. But we are in a situation in which a Tory Government are driven to contradict everything they have said or done for six or seven years and it does not become us to begin to try to get them out of that jam by saying "Do not proceed with this, because if you plan the economy you make it easier for us to take over industry."
      I know that there is now a belief throughout the nation that a prices and incomes policy is synonymous with restriction. It is nothing of the sort, or it should not be if properly used. It should ensure that without resorting to the frauds of inflation we pay every man and woman
      1544
      the highest possible amount we can, consistent with carrying out other policies such as an increase in the social services, housing and all the other amenities which our economy should increase. These are the objectives of a properly constituted prices and incomes policy.
      I listened to my hon. Friend the Member for Walton telling us about the failure of the Labour Government's policy because prices were going ahead of incomes. I challenge him to tell me of one period between 1966 and mid-1968 when incomes did not go ahead of prices. I know that we ratted on the policy in the end, not because it was an economic failure but because of the political consequences which the Conservatives forced upon us for purely party political reasons. They won the election, but then they faced precisely the same problems as we faced.
      I agree with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that it is wrong to try to get out of problems by emasculating the House of Commons, which is the body that should have the say-so. I think that there were 25 occasions on which the Conservative Opposition divided on Prayers. They had every right to do so. The principle behind what they were doing was wrong, because they had a purely party political purpose, but we were right to give them the opportunity.
      The Government, having discredited the whole conception of an incomes policy, have been driven to use it as an emergency measure in a crisis. For them then to try to rob the House of the opportunity to criticise them on it is the last refuge of cowardice.
      Sir Robin Turton: The right hon. Member for Newton (Mr. Frederick Lee) is a strong and compelling advocate of the principle of the Bill, but he overlooks the Bill's origin. It was because the Government failed to obtain agreement with the trade unions on a voluntary scheme that it was necessary to have this Bill of an emergency character.
      I want to speak for just a few minutes on the parliamentary angle. After the last war, in 1945, the then Labour Government introduced the Supplies and Services (Transitional Powers) Bill, giving emergency control of the economy, with a time limit of five years. My party

      1545
      bitterly opposed that, because we said that emergency control of the economy could not be taken from the House for longer than one year. Eventually both sides agreed about that, and the emergency controls that remained were embodied in the Expiring Laws Continuance Bill.
      What worries me about the present situation is that we are handing over the control of the economy, under my right hon. Friend's proposal, for a period outside the lifetime of this Parliament. That is contrary to everything my party has argued for and contrary to the practice and procedures of Parliament.
      My right hon. Friend the Secretary of State is obviously trying to meet the point by his other amendments, but I ask him to try to deal with the problem of providing some form of annual renewal. I cannot see that the insertion of such a provision would cause any degree of uncertainty about the policy. With all the other examples that I could give, including the Supplies and Services Act and immigration controls, all for annual renewal, there was never any belief that the Government were hesitating. The reason for annual renewal was the question whether the need for the controls would last more than 12 months.
      That is exactly the position now. We all support my right hon. Friend in the psychological drive to make the nation realise how essential a prices and incomes policy is, as the right hon. Member for Newton said. Our doubt arises because we wonder whether in two years or one year we may have moved on to stage 3 and may well want different legislation for the House to consider.
      My right hon. Friend would not lose any of the support of the country for his policy by making an annual review to Parliament, within the three years' basis in Part II. If he does not, I do not think that he can find any precedent, outside wartime or the immediate post-war period, for the House handing over to the executive the control of the economy for such a long period.
      5.45 p.m.
      Dame Irene Ward: I am in a quite peculiar situation, because I seem to be the first Conservative Member to speak in great support of the Government. I have often been described
      1546
      as a troublesome rebel. I only wish that all my hon. Friends who have spoken today had given me a little support in the past on some of the matters that I thought important for the country.
      I shall not pursue that point. I intend just to say what I want to say, as I always try to do. We have not so much been discussing the Government's amendment today as slipping over into a discussion about matters that should be discussed at the time of the Budget.
      I support the Government amendment, but I want also to say something about the speeches made by a number of my hon. Friends about Government expenditure. The time has come when my right hon. Friend the Chancellor of the Exchequer, whom I support generally in almost everything he does, might point out to all his hon. Friends that the vast bulk of Government expenditure, which I agree is very large, has been spent to make the country modern and competitive, which it will be, to support the policies that must be pursued in the world.
      I am staggered that so many of my hon. Friends, who are just as entitled to their views as I am to mine, do not seem to have realised that a great deal of Government expenditure has been allocated entirely with the objective of making us an up-to-date Power. For example, when the massive capital sum to be spent on the steel industry was announced, my right hon. Friend the Secretary of State for Trade and Industry rightly said that when that money had been spent to modernise the industry we should have the most important steel-producing industry in the world. Most of my hon. Friends who have spoken today, who have been much more in support of the Government's theories, should have been delighted.
      I find it odd that my hon. Friends should be so critical. Do they all now say that it was not right to build new hospitals, to build and modernise schools to increase educational opportunities and to do all the things that will help create a first-class future for our country?
      Mr. John Hall: I think my hon. Friend will agree that my hon. Friends have shown some doubt about the wisdom of the extent of Government spending. They have not been questioning the objectives or the subjects of that

      1547
      spending. They have been pointing out that Government expenditure of that size is bound to add to the inflationary pressure. We must take that into account when deciding what our political programme will be.
      Dante Irene Ward: With great respect to my hon. Friend, I have listened carefully to all my hon. Friends' speeches today. Not one of them referred to inflationary expenditure. They were criticising general expenditure. Maybe they think that Government expenditure at the present level will add to the inflationary pressure, but they did not say so. If we modernise our steel industry to the extent that is proposed, that will be economically beneficial to the country. I cannot understand how anybody could argue that that is inflationary. If it is inflationary, it means that we cannot do anything to bring industry up to date and that we cannot spend money on industry or technological education. However, my hon. Friends have not argued that; they have simply said that the Government have been spending too much.
      I am a fairly regular attender at this House and I notice that my hon. Friends, who are entitled to their views, do not go into the Lobby against the Government. If I feel strongly about a matter, I go into the Lobby against the Government. It seems that I am the only Member on the Government benches who supports the Government on this occasion. That causes me some pleasure and some amusement. I do not gain pleasure from hearing some of the comments that have been made, although most of them were not related to the amendments which we are discussing.
      My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) made a most interesting, comprehensive and reasonable speech. I have a limited knowledge of finance and of the problems of joining the EEC, although I am a great supporter of entry. However, I happen to have faith in what my Government are doing and how the Bill fits in with the policies which are essential now that we have become a member of the EEC.
      I try not to talk about things that I do not think I know anything about. I am not sufficiently politically motivated to do so. Perhaps that sounds arrogant,
      1548
      but I do not mean to be arrogant. Whether people agree with me or not, I always feel when I am speaking that I am speaking about something of which I have some knowledge. I do not get myself involved in matters about which I have no knowledge to contribute. I accept exactly what the Government have said about the Bill in relation to Europe. I say that because I believe that it is necessary to say it.
      I have noticed that most hon. Members who made the criticisms and who spoke in Committee and won the battle about whether there should be powers for three years or one year have not had the experience that I have had in representing an industrial area. I am sure that they are all financial wizards. I am sure that they all have very good brains and can argue about financial matters. However, different attitudes exist in an industrial area. I am devoted to most of my opponents in my part of the country and we have a very good relationship. However, most hon. Members who have spoken today have no idea about the problems of representing a highly industrial area. It is very much easier to put forward financial wizardry when one does not represent an industrial area. Probably in other types of area there are more people with financial knowledge who are not committed to trying to destroy the capitalist system and the present Government by strikes and demands for wages which would be almost impossible to accept.
      My policy is simple. I want the Government to make as much money as they possibly can and then to divide it fairly. When that has been achieved, and when we are a modernised country—and I doubt whether so many of my hon. Friends who have spoken today will support me as much as I would wish—I shall want to see the money more evenly divided and given to people who have had much harder times in life than those experienced by most of my hon. Friends who have spoken today.
      Mr. J. D. Concannon: Come over to this side of the House, love.
      Dame Irene Ward: When the time comes, and if I still happen to be here before the next General Election, I shall produce a list to the Treasury setting out

      1549
      what I want to see provided for the community. It will be better than the lists of my hon. Friends who have spoken today or the lists put forward by the Opposition. I know that they too have hearts, but sometimes their hearts do not agree with policies which will produce the money and satisfy people's hearts.
      We have listened to all the blah about being able to have a debate in a year's time. If those hon. Members have taken an active interest in what has gone on recently they will realise that there are many people on the Labour benches as well as in the country who want to destroy not only the present Government but Parliament as well. I do not wish that to happen. I do not wish there to be a row every year in an attempt to reduce inflation. That would create a feeling among the public that they have no security. That would be an unwise position in which to place Parliament.
      6.0 p.m.
      I speak with the only thing I have to contribute to the debate—my experience in industrial constituencies—when I say that it is very much better to have the three-year period because then the general public, who are very interested in the Bill and support the Government wholeheartedly, will feel much more secure against the operations of militants. Even militants get bored, but if they have only a year in which to work they will not settle down but will continue to stir the pot, as they have been doing in the North East and in other industrial areas.
      The country is longing for a time of peace during which we can get on top of inflation, as I am sure we will. The Government are right to stand by their three-year period. I would not give an inch of ground to any of the militants either in the House of Commons or in the country. I am speaking politically but from the country's point of view. If hon. Members opposite are on the Left wing of their party or on a more even keel it makes no difference to our personal relationships, but it makes a difference politically. In the same way, a lot of the Right-wingers on this side of the House are delightful people, but I would like them to come to the North East and stand up for their views in my area. I do not think they had penknives or even
      1550
      chairs thrown at them, as I have, or that anyone has tried to drown them, as happened to me on one occasion. If that had happened to them, they would really know what the militants within industry and the trade union movement mean.
      I hope that the Government will get an overwhelming vote in support of the amendment. The members of the present Government have some first-class knowledge compared with members of the Government in office when I first entered the House of Commons. I believe that members of the present Government are modern, up-to-date and likeable and I propose to support them. But I shall not do so solely because I like them. I shall do so because I believe that, in the struggle to deal with inflation, we have to ensure that the militants in the trade unions do not continue to try to destroy our capitalist system by making the goods we sell after we have modernised industry too expensive for our customers overseas to buy.
      I do not want to talk for very long. I could talk for a long time, but I shall not. I will only say that, having listened to the speeches of my hon. Friends, I think, "My goodness! I would like them all to come and struggle with the militant industrial workers."
      Mr. Ridley: I came and spoke for my hon. Friend at the last election, and we had an audience of three between the two of us.
      Dame Irene Ward: I am delighted that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has intervened, because when he used to live in my part of the country he was very much on the Left—much more on the Left than I was. It was only when he went to Cirencester and Tewkesbury that he became such a Right-winger. I am sorry to have to say that it was very rude of people not to come and listen to him, but the fact is that they did not want to listen to him because they had made up their minds to vote for me and what he had to contribute would not have made any difference one way or the other. So all I have to say to him is that he would be better advised not to take me on, because I can deal with him.

      1551
      We should support the Government's amendment in the interests of the vast majority of the people in the country, who are behind the Government, and in order to offset the many militants in the trade union movement in my part of the country. I get on well with the militants. They are awfully nice. [Laughter.] They are awfully nice. My hon. Friend the Member for Cirencester and Tewkesbury talked about heart, and his heart and blossom and things. The militants in my part of the country are awfully nice because, at the bottom of their hearts, I am glad to say, they know that when I think the Government are on the wrong track I jolly well say so.
      Today I think that the Government are on the right track, and I am delighted that they are trying to restore the three-year period. I hope that they will have an overwhelming majority for doing so. I am delighted for once in a while to be on their side and—the only hon. Member on this side who has done so,—to have spoken in their favour.
      Mr. Biffen: One of the sadnesses of the prospective Parliament is that we shall be deprived of the continuing, public and special relationship between my hon. Friends the Members for Tynemouth (Dame Irene Ward) and Cirencester and Tewkesbury (Mr. Ridley). I think that doubtless there is a very responsible case to be made for the views expressed by the Government today, and I hope that my hon. Friend the Member for Tynemouth will not take it amiss when I say that she, having said that she does not talk about subjects of which she has little or no knowledge, wisely desisted from arguing the merits of the amendment. Although the House enjoyed her closely-argued economic and social observations, they did not address themselves to what is essentially a constitutional issue. This is an issue of some substance and would have been seen as such in any previous Parliament. We would be betraying the trust and the traditions of this House if we shied away from the debate because of some of the present economic and social considerations referred to by my hon. Friend.
      I thank my right hon. Friend the Secretary of State for the considerable altera-
      1552
      tions he proposes in Clause 4. The debate has proceeded in a much more relaxed and good-natured atmosphere than it did upstairs. The atmosphere in Committee was always good-natured but it took on a certain degree of high drama when we were discussing the amendments to make Part II of the Bill annually renewable. At that point it seemed to me that the whole policy was being invested with an unfairly important significance.
      Last night the hon. Member for Plymouth, Sutton (Dr. David Owen) said it was a recurring characteristic of Governments to place on prices and incomes policies loads that they could not reasonably bear. After all, my right hon. Friend said in Committee:
      "for it is the belief in our will to continue our policies that will make them acceptable."
      Referring to Parliament, he added:
      "It has the responsibility of ensuring that continuation of the Government …"—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 627–8.]
      I think that we have moved measurably and sensibly away from those considerations. What we are now confronted with is a policy which proposes that Part II of the Bill shall last for three years and then end. It is almost as though my right hon. Friend, with suitable apologies to St. Augustine, has said "Lord, make me perfect within three years."
      There is a respectable case to be made for the 12-month annual renewal period without the terminal point of three years because this introduces a degree of rigidity into the whole voluntary character of the policy which one would not have expected to come from the lips of Treasury spokesmen during the proceedings in Committee. The House must still return to the constitutional aspects of this debate because of the nature of the agencies.
      Clause 6 says that
      "The Price Commission shall exercise the powers conferred by this section in such a way as appears to them appropriate".
      If the Committee had had before it the consultative document dealing with the guidance that is likely to be given to the agencies, I believe that the wide-ranging power conferred upon this somewhat extra-parliamentary body would have excited even more adverse comment than that which we then entertained. Leaving aside that constitutional aspect, there is

      1553
      a point about the sheer practicality of our annual economic debates.
      This was a point to which I referred in Committee and I make no apology for returning to it now before a wider audience. My right hon. Friend said that the amendment successfully moved in Committee by my hon. Friend the Member for Cirencester and Tewkesbury and myself ensured that the order renewing the powers under Part II of the Bill would come forward every March. We would be presented every spring with the prospect of a three-pronged economic debate.
      The first prong would be the debate on the report of the Expenditure Committee. I must say that having the report of that Committee debated does not immediately, noticeably and necessarily have a direct impact upon the levels of public expenditure. There is, however, a growing understanding of the importance of public expenditure for the way in which the economy behaves but this takes no view at all of the desirability or otherwise of those levels of public expenditure. I say that for the benefit of my hon. Friend the Member for Tyne-mouth. The second prong is the Budget. Surely it must be wholly appropriate that once a year, when we are talking about public expenditure and taxation, we should have at least one debate dealing with the renewal of the wide-ranging powers conferred upon the executive and the agencies it uses for pay and prices.
      Against this narrow but, I believe, highly respectable constitutional argument there have been set a number of other arguments that are somewhat extraneous in character. There is a sort of nursery food which is served up by the Whips' office for those whose diet lies in that direction. One of the arguments I have had come back to me is that it would be undesirable to have an annual debate because it would lead to an annual wrangle and we all know the difficulties created by the necessity annually to renew the Rhodesia sanctions order.
      If anyone believes that it is the existence of Parliament's authority annually to renew Part II of the Bill which would result in prices and incomes legislation obtruding on to our political affairs, he lives in a world of complete and utter innocence. Prices and incomes policies
      1554
      will be with us in a large measure from this moment onwards. Almost every action of the Government will be measured against what is believed to be one of the central features of their economic policy. So central a feature is it that it was launched in the most dramatic and novel fashion by my right hon. Friend the Prime Minister at Lancaster House.
      6.15 p.m.
      If we needed evidence of that we have only to think of the Private Notice Question on Monday dealing with the price of processed meats. This kind of constant and continual debate will run through our proceedings. Do not let anyone believe that somehow or other the subject will go away and we will thereby be disembarrassed if we can be excused having the right once a year to renew this order which is of such a fundamental economic and political character.
      The second argument put around to counter the militant and disruptive arguments of my hon. Friends the Members for Cirencester and Tewkesbury and South Angus (Mr. Bruce-Gardyne) is that we need the three-year period to reach some kind of longer-term arrangement with the unions so that we can return to some form of tripartite arrangement involving the TUC and the CBI. This is the long march back to Downing Street. Vital to this proposition is the argument that we must somehow woo the moderates away from the militants.
      These two propositions are closely interwined. They are not too publicly stated but I am certain that the argument is that if Parliament had to debate the order every year it would make it that degree more difficult for the Government to conduct their policies because in some way the militants would be encouraged. It is felt that Parliament and the Government would, presumably in the way in which they conducted the debate in March, create some uncertainty. There is the feeling that the trumpet would sound an uncertain note, encouraging militants to think that given one more push the policy would collapse.
      We will discover that the search for trade union leaders who are willing to become subcontractors for Government policy is predestined to fail. Once trade

      1555
      union leaders become subcontractors for Government policy they will in that process lose a great deal of the support of their members. Indeed, that was precisely the argument that we elaborated when we were sitting on the opposite side of the House. We have to ask ourselves whether the early experience of phase 2 has enhanced the moderate status of Mr. Alan Fisher or Mr. David Basnett. That is one early and simply test to apply.
      Mr. Kenneth Lewis: Is not my hon. Friend making out the case for the present policy? "Subcontracting" is a powerful term. Is it not because of the lack of cooperation with a voluntary policy that we need this one?
      Mr. Biffen: I will gladly deal with that point because, within the discipline set by this debate, when I come to my peroration I will state exactly what I believe to be the appropriate form of Clause 4 and relate that to the economic policy against which it could operate in my opinion. My hon. Friends must address themselves with immense caution to the proposition that we are engaged on a series of policies in which in our hearts we disbelieve because in the process we will woo away the moderate trade union leadership. In that direction ultimately lies food subsidies, control over interest rates and further concessions, as concessions they are, which will infringe those areas of economic freedom which are left after the application of the policy as it stands.
      Notwithstanding those concessions, we cannot get away from the basic proposition that trade union leaders, particularly in today's social climate, are not expected by their members to become agents of the Government. If the CBI membership eventually begins to turn in its tracks, it will be merely the most mild and modest indication to us that many others will do likewise in respect of organised labour. I know that what I propose to say is immensely disagreeable to many of my hon. Friends, but there is a mood abroad which challenges traditional patterns of social order and traditional economic and social relationships.
      The House must see how best society can bend, adjust and cope with the turbulence of the social change which is
      1556
      self-evident in society today. We shall not be doing a service to this House or to society outside if we try to institutionalise trade union leadership, trade association leadership—that is really what the CBI is—and the Government into some kind of tripartite organising body for the economy. Yet that is the philosophy which lies behind the request for a three-year period uncluttered by annual parliamentary renewability.
      I wish to bring my remarks to a conclusion and, in so doing, to deal with the point raised by my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), although not, I suppose, to his satisfaction. The condition on which this legislation can recommend itself to hon. Members on this side of the House, and possibly even to hon. Members opposite, is that it is to be seen as essentially short-term legislation. I am not setting any terminal date on its operation, but all the experience of prices and incomes legislation leads us to believe that it has the psychological effect of a short-term period.
      That was certainly the view of the hon. Member for Ashton-under-Lyne (Mr. Sheldon), who said that repeated use of it had blunted even its effectiveness as a psychological instrument. But psychological instrument I believe it to be, and it will enable my right hon. and hon. Friends to contrive a Budget by which, in both their expenditure and taxation polices, it will be possible to have a net-borrowing requirement which is more related to the Government's genuine ability to borrow from the non-banking public. In those circumstances, the economic climate against which this legislation will have to operate will be altered to advantage. There would still remain Part I of the legislation—the institutions.
      I point out to my hon. Friend the Member for Rutland and Stamford that the Conservative Government established the National Incomes Commission. In its reasoned amendment to the 1966 prices and incomes legislation the Conservative Party specifically avoided direct opposition to the establishment of the National Board for Prices and Incomes. As my hon. Friend will know, because he was with me in the Standing Committee which debated that legislation, we did not vote against Part I of that Bill which

      1557
      established the board. The bodies set up by this Bill would still be in existence. The Pay Board may well prove to be a useful addition to the institutional arrangements available to the Government and, above all, help to determine the public sector levels of wages. That was the use made of the National Board for Prices and Incomes, particularly in connection with the pay of the Armed Forces.
      All this adds up to a much more realistic assessment of what we can do with this legislation. It is a much more modest assessment than has been claimed for it by some of the more enthusiastic evangelists. I suppose that their recent conversion underlines their evangelism. But the danger of evangelism is that one decries those who have not suffered instant conversion. The remarks of my right hon. Friend the Secretary of State for Northern Ireland were probably incautious, but at least they were deliberate to the extent that they were contained in a Press release issued by the Conservative Central Office.
      There is a danger that in our anxiety to promote the new policy we shall exacerbate perhaps just as much as mollify the social tensions and discords in society. I therefore hope that my right hon. and hon. Friends will retain annual renewability, not merely because it is what the constitutional situation requires and is wholly appropriate to a Parliament which retains some shred of self-respect but, above all, because it invests in the policy that element of modesty which is essential if it is to have any success.
      Mr. John Page: In order not to allow the House to forget the distinctive flavour of the distinguished speech of my hon. Friend the Member for Oswestry (Mr. Biffen), I shall speak in shorthand and be very quick.
      It is sad and embarrassing that the Government have found it necessary to introduce Amendment No. 3 and again to bring in the three-year period. However, we must be thankful that the Government have introduced Amendment No. 58, which means that at the end of the three years the legislation will die. As the Government have gone half way to meeting me in my dislike, I shall go half way to meeting them and abstain in
      1558
      the vote instead of voting against them, as it was my original intention to do.
      As I said on Second Reading, these measures can be effective, and the Government will do their best to ensure that they are effective, only if they last not more than about a year. If they last more than a year, if they last for two years or for the full period of three years, they will kill the freedom and enterprise which the Government say it is their purpose to defend. The detail and sophistication of the Green Paper are such, and their effect will embrace so many aspects of our business and industrial life, that if the Government try to block up loophole after loophole and screw down loose plank after loose plank for more than a year it will be very difficult for a Conservative Government or any other Government to release the controls. That is the greatest danger.
      Apart from some control of investment and the appointment of the chairman, the new regulations give the Government more control over private industry, commerce, business and the professions than they have at ordinary times over the nationalised industries. That is extremely dangerous. It is said that phase 2 will last only until the autumn of this year. If that is so, what is the point of building up this great edifice of sophisticated bureaucrats, producing unbelievably complicated measures which will probably take three or four months to work through the system so that if a question is asked of one of the agencies it will probably be three or four months before an answer is given? It seems extremely hollow for the Government to say that this is only a temporary measure. That, again, is one of the things that cause dissatisfaction with allowing more than one year at a time before it comes back to the House for renewal.
      6.30 p.m.
      On a previous occasion, when the Labour Government were in office, my noble Friend the Lord Chancellor described that Government, who were spending a lot of money and also imposing restraints, as being like someone who turns on the gas under the kettle and then sits on the lid to ensure that it does not get blown off. That, he said, was a painful and undignified position. I regret to say that that seems to be the

      1559
      position which the Government are now showing themselves to be in.
      My right hon. Friend at the end of his speech said—I think I got his words down correctly—"it is the clear intention of a group of people inside the trade union movement to oppose Government policy by industrial action". He said that clearly, and he is right. But I would ask him: what real defence is there in the Counter-Inflation (Temporary Provisions) Act and what real defence is there in this Bill against trade union militancy? The present Act has done nothing except cause discomfort and bewilderment to my constituents, who are bewildered at the very packed underground trains this morning. What have those provisions done to renew the gas supply to their houses? What has the existing Act done which is going to open their places of work closed either by lack of power or by industrial action? What will it do to ensure that proper transport facilities are provided for them? My constituents and other people in the country will not be impressed when it appears that the Government are holding most fast to a proposition to change that part of the Bill which now says that the Bill should cease to have effect after a year and to replace it with a period three years long? It will be three years before it can be examined again by the House, which is a very unsatisfactory situation.
      Mr. Benn: By leave of the House, I would say that this has been a very remarkable debate and, whatever may happen in the Division Lobbies, it should not pass without notice that with the exception of the hon. Lady the Member for Tynemouth (Dame Irene Ward) the Minister has really had no enthusiastic support from any one of the many speakers who have spoken since we entered upon this business at half-past three.
      I wanted to appeal to the right hon. Gentleman, to ask him whether he would consider withdrawing his amendment, considering the arguments that have been put forward from both sides of the House, and, if necessary, have a further amendment introduced in another place, when he will have had time to take account of what has been said. I appeal to him that he should do that rather than persist
      1560
      with an amendment which clearly does not command the support of those who have been present at and listened to the debate.
      Mr. Maurice Macmillan: I am not at all sure that the right hon. Member for Bristol, South-East (Mr. Benn) is correct in saying that a number of my hon. Friends who have spoken in this debate, using the terms they did, are necessarily representative of the views of others of my hon. Friends who have not spoken in this debate.
      The hon. Member for Liverpool, Walton (Mr. Heffer) I think summarised the debate, or some parts of it, in referring to the problem of the Government as being what he called an attempt to control the capitalist system. This was expressed in the debate as an argument, on the one hand, between liberalism and repression, or Socialism and capitalism, on the other hand. I think that to some extent on this side it was an argument whether the Conservative Party is Whig or Tory.
      I was very glad to have the far from silent support of my hon. Friend the Member for Tynemouth (Dame Irene Ward) on the Tory side. I think she was quite right in saying that a great deal of the debate went on to fields not primarily concerned with or relevant to this amendment or the duration of stage 2 but dealt with matters which will be raised, as she said, in the Budget debate.
      In this context I would assure my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) that this Bill does not seek by any means to hand over control of the whole economy to the Government or to the agencies.
      Again in this context I would say first of all to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) that we have never considered that these policies should be alone in the control of inflation, and, although it would be out of place for me to go into that now, I would accept the importance of the control of public expenditure and the role of monetary policy in the control of public expenditure. However, I do not think that that line of argument is relevant to the difference between a one-year or three-year duration of the Bill.
      The second point made by my hon. Friend was about the stringency of the

      1561
      Bill in relation to profits, and my hon. Friend the Member for Horsham (Mr. Hordern) made the same point. I must point out, though I shall return to this question of profits later, that my hon. Friend was referring to the code for stage 2 only rather than to the powers contained in the Bill itself. He implied that stage 2 would go on for three years. This is one of the major arguments against the three-year period. I can assure him that the Government have not changed their position or their concept at all on stage 2. The whole point of it and the reason for this debate is that the policy in stage 2 is to move to stage 3. From the very beginning—it is nothing new—we have made it plain that we are prepared to consider some of the anomalies which may—which obviously will—arise from the standstill and in stage 2.
      Mr. Joel Barnett: Is the right hon. Gentleman telling us that the code for phase 3 will be very different from the present one before us?
      Mr. Macmillan: No. I am not saying anything of the sort. I was merely pointing out that this consultative document, this draft, is for stage 2 only.
      I would say to my hon. Friend the Member for Harrow, West (Mr. John Page) that I am grateful for his sort of modified lack of support. [Laughter.] I was not quite sure which way round to put it. I would tell him that there is not going to be any vast bureaucracy. We have already said that the number of people on the agencies will be some 700. The point is that these are agencies and their object is to act.
      Quickly to deal with the third point which my hon. Friend the Member for South Angus made when he was referring to Europe—so far as his arguments were relevant, they were relevant to the code rather than the Bill—European Coal and Steel Community products as defined in the Treaty of Paris are excluded from price control in the code, and the appendix in the White Paper also exempts goods and services where prices are regulated as a result of international agreement or arrangement. I hope that that makes the position clear to my hon. Friend.
      Article 85 of the treaty relates to agreements and concerted practices by under-
      1562
      takings affecting trade between member States and distorting competition within the Common Market. Firms complying with any general price restriction made by the Price Commission would not be doing anything prohibited by Article 85. Article 86 is concerned only with actions of large monopolies, and, like Article 85, it refers to the improper exploitation by the undertakings themselves rather than to anything done by a national regulatory body such as the Price Commission. So the conflict my hon. Friend was afraid of does not arise.
      There have been three main arguments. First, there is the argument of accountability, to which my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) and the hon. Member for Salford, West (Mr. Orme) referred. My right hon. Friend implied that the termination of the Bill on 31st March 1976 made no difference. His argument in favour of an annual order took no account of the considerable improvements which were made in Committee, partly by my hon. Friends and partly by hon. Gentlemen on the Labour benches. In Committee it was made clear that it would be possible to answer parliamentary questions on individual cases. The publication of orders, notices and consents, and the institution of quarterly debates on reports of the agencies more than meet the case made by my right hon. Friend, especially in the light of the wise remark made by the hon. Member for Salford, West that the effect of a debate is frequently not on the issues immediately debated but on the future conduct of the Government. I agree with him. A quarterly debate on an agency's report to Ministers which is available to the House is likely to be as effective an instrument of parliamentary control and accountability as a debate once a year on an order renewing the powers.
      My hon. Friend the Member for Oswestry (Mr. Biffen), who has strong and justifiable feelings on the constitutional issue, suggested that a debate once a year on an order to renew stage 2 achieves closer constitutional control than can he achieved by debating the quarterly report and the draft code. Hon. Members who have spoken in this way have not taken account of the full effect of the arrangements that have already been made to

      1563
      improve parliamentary control accountability.
      Mr. Orme: Does not the right hon. Gentleman agree that there is a great deal of difference between quarterly debates on a report on which Parliament will have no sanction, and a yearly debate in which the House, if necessary, can vote either to reverse or continue the policy?
      Mr. Macmillan: I do not think there is—certainly not in the terms of my hon. Friend's argument. The rejection by the House of an agency's report would have as profound an effect on the Government of the day as the rejection of any other measure.
      Mr. Heffer: Can the right hon. Gentleman guarantee a quarterly debate?
      Mr. Macmillan: The agencies will report quarterly. That has not yet been written into the Bill; it is the subject of a future amendment. I gave an undertaking that the Bill would be amended to include provision for a quarterly report.
      Mr. Heffer: And a quarterly debate?
      Mr. Macmillan: That will be arranged through the usual channels. Ministers will be susceptible to the ordinary pressures of the House.
      I do not think that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) fully believes that the agencies are immune from parliamentary influence or control, or that the three-year period will somehow increase their degree of immunity. The suggestion he made would not add to the degree of accountability of the agencies to Parliament. He appealed as much to Parliament as to the Government to face the realities of public expenditure. My hon. Friend the Member for Tynemouth pointed the dilemma which he put to the House.
      6.45 p.m.
      The second main criticism of the three-year period was that it would lead inevitably to Socialism. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the involvement of Government in industry; but all Governments since the war in some degree have had to involve themselves in industry and to accept the limitations of a mixed economy. It is
      1564
      nonsense to suggest that intervention of this kind equates with Socialism.
      My hon. Friend the Member for South Angus goes too far in calling three years a life sentence for the market economy and in saying that it involves an irreversible degree of market distortion. As the hon. Member for Ashton-under-Lyne said, before setting up our system we consulted the United States and other countries and took into account the lessons they had learnt. Those countries also took into account the lessons they had learnt from other countries and the lessons of the Second World War and the Korean War. The decision to concentrate on the major companies was designed to lessen the degree of bureaucracy, and there is no question that the adoption of this feature of the United States system will allow future Governments to command the heights of Socialism.
      The Government are not despairing of the free enterprise system. I am sure that all my right hon. and hon. Friends are convinced that whatever deficiencies it may have in some aspects—and no system is perfect—free enterprise and the profit motive bring success in generating economic growth and prosperity for the people.
      I have not had time to see the full version of the Opposition's alternative, but one has heard stories. It is the Opposition's alternative which despairs of free enterprise and which, if put into effect, would cripple the private sector.
      Although, admittedly, our means have altered, our objectives have been consistent over the last two-and-a-half years. Our objectives are the achievement of a sustained level of growth and a higher prosperity in real terms. To attain those objectives we have reduced taxation to an unprecedented degree and raised the level of social benefits. We have passed the Industry Act and we are trying to develop regional policies and regional regeneration on an unprecedented scale. I place the whole counter-inflation programme and the formulation of the code in the context of growth. I recognise the importance of profit for expansion and investment and in securing full employment. The code does not prevent increase in profit deriving from expansion. The code is framed not to distort the

      1565
      market but to ensure the maximum degree of flexibility for enterprise in determining a prices control policy which is consistent with the overriding need to reduce the rate of inflation.
      Of course there is less flexibility in stage 2. That is why it lasts only until the autumn. My right hon. Friend the Member for Thirsk and Malton asked for an annual renewal, but it is the code that will be the effective instrument of the agencies, and the draft code will come before the House and be debated before the affirmative resolution procedure.
      Mr. Peter Trew: Will my right hon. Friend tell us what form the debate on the code will take? Will it be on a motion to take note of the code? If the House voted against the motion, would the result be that the Government's prices and incomes policy would be in suspense until such time as the code was again submitted to the House and approved?
      Mr. Macmillan: I should not like to be precise about the form the debate would take. All that the Government and I have done has been to give an undertaking that a future code will always be debated in draft before it is the subject of a debate on the affirmative resolution. That is to give an occasion for noting the
      opinion of the House and for the possibility of alteration. It is the debate on the affirmative resolution which, if the code were to act, the Government would have to carry.
      Those who have opposed these amendments have been fundamentally opposed to or deeply sceptical about the policy as a whole, and that is why they wish to limit the period to one year. But it is because I believe that, however regrettable some may find it, we must be seen to be firm that I ask the House to accept the amendments.
      Unlike my hon. Friend the Member for Oswestry, I do not despair of resuming a dialogue with the unions, nor do I believe that in the absence of such dialogue we should refrain from action ourselves. I remind my hon. Friend that even in the Standing Committee I placed greater emphasis on the three-year period than on any other aspect. In doing so I quoted him, and I quote him again, as saying that inflation is not only about experience but about expectation. There is a strong psychological element involved in it.
      Question put, That the amendment be made:—
      The House divided: Ayes 276, Noes 218.

      Division No. 71.]

      AYES

      [6.52 p.m.

      Adley, Robert

      Butler, Adam (Bosworth)

      Elliot, Capt. Walter (Carshalton)

      Alison, Michael (Barkston Ash)

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

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

      Allason, James (Hemel Hempstead)

      Carlisle, Mark

      Emery, Peter

      Amery, Rt. Hn. Julian

      Carr, Rt. Hn. Robert

      Eyre, Reginald

      Archer, Jeffrey (Louth)

      Channon, Paul

      Farr, John

      Astor, John

      Chapman, Sydney

      Fenner, Mrs. Peggy

      Atkins, Humphrey

      Chataway, Rt. Hn. Christopher

      Fidler, Michael

      Awdry, Daniel

      Chichester-Clark, R.

      Finsberg, Geoffrey (Hampstead)

      Baker, Kenneth (St. Marylebone)

      Churchill, W. S.

      Fisher, Nigel (Surbiton)

      Baker, W. H. K. (Banff)

      Clark, William (Surrey, E.)

      Fletcher-Cooke, Charles

      Balniel, Rt. Hn. Lord

      Clarke, Kenneth (Rushcliffe)

      Fookes, Miss Janet

      Batsford, Brian

      Clegg, Walter

      Fortescue, Tim

      Beamish, Col. Sir Tufton

      Cockeram, Eric

      Foster, Sir John

      Bennett, Dr. Reginald (Gosport)

      Cooke, Robert

      Fowler, Norman

      Benyon, W.

      Coombs, Derek

      Fox, Marcus

      Berry, Hn. Anthony

      Cooper, A. E.

      Fry, Peter

      Biggs-Davison, John

      Cormack, Patrick

      Galbraith, Hn. T. G. D.

      Blaker, Peter

      Costain, A. P.

      Gardner, Edward

      Boardman, Tom (Leicester, S.W.)

      Critchley, Julian

      Gibson-Watt, David

      Boscawen, Hn. Robert

      Crouch, David

      Gilmour, Ian (Norfolk, C.)

      Bossom, Sir Clive

      Crowder, F. P.

      Gilmour, Sir John (File, E.)

      Bowden, Andrew

      Davies, Rt. Hn. John (Knutsford)

      Glyn, Dr. Alan

      Braine, Sir Bernard

      d'Avigdor-Goldsmid, Sir Henry

      Godber, Rt. Hn. J. B.

      Bray, Ronald

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

      Goodhart, Philip

      Brewis, John

      Dean, Paul

      Goodhew, Victor

      Brinton, Sir Tatton

      Deedes, Rt. Hn. W. F.

      Gorst, John

      Brocklebank-Fowler, Christopher

      Dixon, Piers

      Gower, Raymond

      Brown, Sir Edward (Bath)

      Dodds-Parker, Sir Douglas

      Grant, Anthony (Harrow, C.)

      Bryan, Sir Paul

      Drayson, G. B.

      Gray, Hamish

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

      du Cann, Rt. Hn. Edward

      Green, Alan

      Buck, Antony

      Dykes, Hugh

      Grieve, Percy

      Bullus, Sir Eric

      Eden, Rt. Hn. Sir John

      Griffiths, Eldon (Bury St. Edmunds)

      Burden, F. A.

      Edwards, Nicholas (Pembroke)

      Grylls, Michael

      Gummer, J. Selwyn

      McMaster, Stanley

      St. John-Stevas, Norman

      Gurden, Harold

      Macmillan, Rt. Hn. Maurice (Farnham)

      Sandys, Rt. Hn. D.

      Hall, Miss Joan (Keighley)

      McNair-Wilson, Michael

      Scott, Nicholas

      Hall, John (Wycombe)

      McNair-Wilson, Patrick (New Forest)

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

      Hall-Davis, A. G. F.

      Maddan, Martin

      Shelton, William (Clapham)

      Hamilton, Michael (Salisbury)

      Madel, David

      Shersby, Michael

      Hannam, John (Exeter)

      Maginnis, John E.

      Simeons, Charles

      Harrison, Brian (Maldon)

      Marples, Rt. Hn. Ernest

      Sinclair, Sir George

      Harrison, Col. Sir Harwood (Eye)

      Marten, Neil

      Skeet, T. H. H.

      Haselhurst, Alan

      Mather, Carol

      Soref, Harold

      Hastings, Stephen

      Maudling, Rt. Hn. Reginald

      Speed, Keith

      Havers, Sir Michael

      Mawby, Ray

      Spence, John

      Hayhoe, Barney

      Maxwell-Hyslop, R. J.

      Sproat, Iain

      Heath, Rt. Hn. Edward

      Miscampbell, Norman

      Stainton, Keith

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

      Heseltine, Michael

      Stanbrook, Ivor

      Hicks, Robert

      Moate, Roger

      Stewart-Smith, Geoffrey (Belper)

      Higgins, Terence L.

      Molyneaux, James

      Stodart, Antnony (Edinburgh, W.)

      Hiley, Joseph

      Money, Ernie

      Stoddart-Scott, Col. Sir M.

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

      Monks, Mrs. Connie

      Stuttaford, Dr. Tom

      Hill, James (Southampton, Test)

      Sutcliffe, John

      Holland, Philip

      Montgomery, Fergus

      Tapsell, Peter

      Holt, Miss Mary

      More, Jasper

      Taylor, Sir Charles (Eastbourne)

      Morgan-Giles, Rear-Adm.

      Hornby, Richard

      Morrison, Charles

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

      Hornsby-Smith, Rt. Hn. Dame Patricia

      Mudd, David

      Taylor, Frank (Moss Side)

      Howe, Rt. Hn. Sir Geoffrey

      Nabarro, Sir Gerald

      Tebbit, Norman

      Howell, David (Guildford)

      Neave, Airey

      Temple, John M.

      Hunt, John

      Nicholls, Sir Harmar

      Thatcher, Rt. Hn. Mrs. Margaret

      Hutchison, Michael Clark

      Noble, Rt. Hn. Michael

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

      Iremonger, T. L.

      Normanton, Tom

      Thompson, Sir Richard (Croydon, S.)

      Irvine, Bryant Godman (Rye)

      Nott, John

      Tilney, John

      James, David

      Onslow, Cranley

      Trafford, Dr. Anthony

      Jenkin, Patrick (Woodford)

      Oppenheim, Mrs. Sally

      Trew, Peter

      Jennings, J. C. (Burton)

      Orr. Capt. L. P. S.

      Tugendhat, Christopher

      Jessel, Toby

      Osborn, John

      van Straubenzee, W. R.

      Johnson Smith, G. (E. Grinstead)

      Owen, Idris (Stockport, N.)

      Vaughan, Dr. Gerard

      Jones, Arthur (Northants, S.)

      Page, Rt. Hn. Graham (Crosby)

      Vickers, Dame Joan

      Jopling, Michael

      Parkinson, Cecil

      Waddington, David

      Kaberry, Sir Donald

      Peel, Sir John

      Walder, David (Clitheroe)

      Kellett-Bowman, Mrs. Elaine

      Percival, Ian

      Walker, Rt. Hn. Peter (Worcester)

      Kilfedder, James

      Peyton, Rt. Hn. John

      Walker-Smith, Rt. Hn. Sir Derek

      Kimball, Marcus

      Pink, R. Bonner

      Wall, Patrick

      King, Tom (Bridgwater)

      Price, David (Eastleigh)

      Walters, Dennis

      Kinsey, J. R.

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

      Ward, Dame Irene

      Kitson, Timothy

      Proudfoot, Wilfred

      Warren, Kenneth

      Knight, Mrs. Jill

      Pym, Rt. Hn. Francis

      Weatherill, Bernard

      Knox, David

      Raison, Timothy

      Wells, John (Maidstone)

      Lambton, Lord

      Ramsden, Rt. Hn. James

      White, Roger (Gravesend)

      Lamont, Norman

      Rawlinson, Rt. Hn. Sir Peter

      Wiggin, Jerry

      Lane, David

      Redmond, Robert

      Wilkinson, John

      Langford-Holt, Sir John

      Reed, Laurance (Bolton, E.)

      Winterton, Nicholas

      Le Marchant, Spencer

      Rees, Peter (Dover)

      Wolrige-Gordon, Patrick

      Lewis, Kenneth (Rutland)

      Rees-Davies, W. R.

      Wood, Rt. Hn. Richard

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

      Renton, Rt. Hn. Sir David

      Woodnutt, Mark

      Longden, Sir Gilbert

      Rhys Williams, Sir Brandon

      Worsley, Marcus

      Loveridge, John

      Ridsdale, Julian

      Wylie, Rt. Hn. N. R.

      Luce, R. N.

      Roberts, Michael (Cardiff, N.)

      Younger, Hn. George

      McAdden, Sir Stephen

      Rodgers, Sir John (Sevenoaks)

      McCrindle, R. A.

      Rossi, Hugh (Hornsey)

      TELLERS FOR THE AYES:

      McLaren, Martin

      Rost, Peter

      Mr. Paul Hawkins and

      Maclean, Sir Fitzroy

      Russell, Sir Ronald

      Mr. Oscar Murton.

      NOES

      Abse, Leo

      Brown, Ronald (Shoreditch & F'bury)

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

      Allaun, Frank (Salford, E.)

      Bruce-Gardyne, J.

      Dalyell, Tam

      Archer, Peter (Rowley Regis)

      Buchan, Norman

      Davies, Denzil (Llanelly)

      Ashley, Jack

      Butler, Mrs. Joyce (Wood Green)

      Davis, Clinton (Hackney, C.)

      Atkinson, Norman

      Callaghan, Rt. Hn. James

      Davis, Terry (Bromsgrove)

      Barnes, Michael

      Cant, R. B.

      Deakins, Eric

      Barnett, Guy (Greenwich)

      Carmichael, Neil

      de Freitas, Rt. Hn. Sir Geoffrey

      Barnett, Joel (Heywood and Royton)

      Carter, Ray (Birmingh'm, Northfield)

      Delargy, Hugh

      Beaney, Alan

      Carter-Jones, Lewis (Eccles)

      Dell, Rt. Hn. Edmund

      Benn, Rt. Hn. Anthony Wedgwood

      Castle, Rt. Hn. Barbara

      Dempsey, James

      Bidwell, Sydney

      Clark, David (Colne Valley)

      Douglas, Dick (Stirlingshire, E.)

      Biffen, John

      Cocks, Michael (Bristol, S.)

      Douglas-Mann, Bruce

      Blenkinsop, Arthur

      Cohen, Stanley

      Driberg, Tom

      Boardman, H. (Leigh)

      Coleman, Donald

      Duffy, A. E. P.

      Body, Richard

      Concannon, J. D.

      Dunn, James A.

      Booth, Albert

      Corbet, Mrs. Freda

      Eadie, Alex

      Bottomley, Rt. Hn. Arthur

      Cox, Thomas (Wandsworth, C.)

      Edeiman, Maurice

      Boyden, James (Bishop Auckland)

      Crawshaw, Richard

      Edwards, Robert (Bilston)

      Bradley, Tom

      Cronin, John

      Edwards, William (Merioneth)

      Broughton, Sir Alfred

      Crosland, Rt. Hn. Anthony

      Ellis, Tom

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

      Crossman, Rt. Hn. Richard

      English, Michael

      1568

      1569

      Evans, Fred

      Lestor, Miss Joan

      Roberts, Albert (Normanton)

      Faulds, Andrew

      Lewis, Arthur (W. Ham, N.)

      Roberts, Rt. Hn. Goronwy (Caernarvon)

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

      Lewis, Ron (Carlisle)

      Robertson, John (Paisley)

      Filch, Alan (Wigan)

      Lipton, Marcus

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

      Fletcher, Raymond (Ilkeston)

      Lomas, Kenneth

      Roper, John

      Foot, Michael

      Lyon, Alexander W. (York)

      Rose, Paul B.

      Ford, Ben

      Lyons, Edward (Bradford, E.)

      Rowlands, Ted

      Forrester, John

      Mabon, Dr. J. Dickson

      Sheldon, Robert (Ashton-under-Lyne)

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

      McBride, Neil

      Shore, Rt. Hn. Peter (Stepney)

      Fraser, John (Norwood)

      McGuire, Michael

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

      Freeson, Reginald

      Mahon, Simon (Bootle)

      Silkin, Rt. Hn. John (Deptford)

      Galpern, Sir Myer

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

      Silkin, Hn. S. C. (Dulwich)

      Gilbert, Dr. John

      Marks, Kenneth

      Sillars, James

      Ginsburg, David (Dewsbury)

      Marquand, David

      Silverman, Julius

      Grant, John D. (Islington, E.)

      Marshall, Dr. Edmund

      Skinner, Dennis

      Mason, Rt. Hn. Roy

      Griffiths, Eddie (Brightside)

      small, William

      Griffiths, Will (Exchange)

      Meacher, Michael

      Smith, John (Lanarkshire N.)

      Grimond, Rt. Hn. J.

      Mellish, Rt. Hn. Robert

      Spearing, Nigel

      Hamilton, James (Bothwell)

      Mendelson, John

      Spriggs, Leslie

      Hamilton, William (Fife, W.)

      Mikardo, Ian

      Stallard, A. W.

      Millan Bruce

      Hardy, Peter

      Miller, Dr. M. S.

      Steel, David

      Hattersley, Roy

      Milne, Edward

      Stewart, Rt. Hn. Michael (Fulham)

      Healey, Rt. Hn. Denis

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

      Stoddart, David (Swindon)

      Heffer, Erie S.

      Molloy, William

      Stonehouse, Rt. Hn. John

      Hooson, Emlyn

      Morgan, Elystan (Cardiganshire)

      Strauss, Rt. Hn. G. R.

      Houghton, Rt. Hn. Douglas

      Morris, Alfred (Wythenshawe)

      Summerskill, Hn. Dr. Shirley

      Howell, Denis (Small Heath)

      Morris, Charles R. (Openshaw)

      Swain, Thomas

      Huckfield, Leslie

      Morris, Rt. Hn. John (Aberavon)

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

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Mulley, Rt. Hn. Frederick

      Thomas, Jeffrey (Abertillery)

      Hughes, Roy (Newport)

      Murray, Ronald King

      Thorpe, Rt. Hn. Jeremy

      Hunter, Adam

      Oakes, Gordon

      Tomney, Frank

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

      Ogden, Eric

      Tope, Graham

      Janner, Greville

      O'Halloran, Michael

      Torney, Tom

      Jay, Rt. Hn. Douglas

      O'Malley, Brian

      Tuck, Raphael

      Jeger, Mrs. Lena

      Oram, Bert

      Varley, Eric G.

      Jenkins, Hugh (Putney)

      Orbach, Maurice

      Wainwright, Edwin

      John, Brynmor

      Orme, Stanley

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

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

      Owen, Dr. David (Plymouth, Sutton)

      Walker, Harold (Doncaster)

      Johnson, Walter (Derby, S.)

      Padley, Walter

      Wallace, George

      Jones, Barry (Flint, E.)

      Palmer, Arthur

      Weitzman, David

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

      Pardoe, John

      Wells, William (Walsall, N.)

      Jones, Gwynoro (Carmarthen)

      Parker, John (Dagenham)

      Whitehead, Phillip

      Jones, T. Alec (Rhondda, W.)

      Parry, Robert (Liverpool, Exchange)

      Whitlock, William

      Judd, Frank

      Pavitt, Laurie

      Willey, Rt. Hn. Frederick

      Kaufman, Gerald

      Peart, Rt. Hn. Fred

      Williams, Alan (Swansea, W.)

      Kelley, Richard

      Perry, Ernest G.

      Williams, Mrs. Shirley (Hitchin)

      Kerr, Russell

      Powell, Rt. Hn. J. Enoch

      Wilson, Alexander (Hamilton)

      Kinnock, Neil

      Prentice, Rt. Hn. Reg.

      Wilson, William (Coventry, S.)

      Lambie, David

      Probert, Arthur

      Lamborn, Harry

      Rankin, John

      TELLERS FOR THE NOES:

      Latham, Arthur

      Rees, Merlyn (Leeds, S.)

      Mr. Tom Pendry and

      Lawson, George

      Rhodes, Geoffrey

      Mr. Walter Harrison.

      Lee, Rt. Hn. Frederick

      Richard, Ivor

      Question accordingly agreed to.
      Amendment made: No. 58, in line 36, leave out subsections (2) to (5) and insert:
      '(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.
      (3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.
      (4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.'—[Mr. Kenneth Baker.]

    Clause 6

      POWERS OF PRICE COMMISSION
      Mr. Pardoe: I beg to move Amendment No. 27, in page 4, line 39, at end insert:
      ?and shall publish at intervals of not less than one month reports showing why their exercise of these powers appeared to them appropriate for such purposes'.
      Mr. Speaker: I suggest that we also discuss Amendments No. 28, in line 39, at end insert:
      'and shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers',
      No. 30, in Clause 7, page 5, line 29, at end insert:
      'and shall publish at intervals of not less than one month reports showing why the exercise of these powers appears to them appropriate for such purposes',
      No. 37, in line 29, at end add:
      'and shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers',

      1571
      and Government Amendment No. 17 to Schedule 1.
      Mr. Pardoe: Yesterday we debated suggestions of how to get the aims and achievements of the policy into the shops, how to get shops to co-operate in achieving those aims, and how to gain the public's co-operation at the point of sale. The Government refused what both Liberal and Labour Members thought was a reasonable proposal for public participation. The Government offered unconvincing reasons for refusing this request. But the matter does not end there.
      The public have still to be won over to whatever prices and incomes policy is in operation. Whatever Government introduce the policy, whatever kind of policy it may be, it must still be acceptable to the public if the public as a whole and industry are to co-operate in its aims.
      The hon. Member for Oswestry (Mr. Biffen) last night rejected the idea that the nation was in a state of crisis, and I agree with him. We may not be there yet, but that does not mean to say that we shall not get there. The only way to ensure that we do not reach that situation is to analyse public support for democratic means of dealing with inflation, rather than wait for public frustration to build up to a point at which people begin to demand strong men to take strong actions and bring in anti-democratic measures.
      The agencies which the Government are to create under this Bill are very powerful bodies, and among their powers they have the power of discretion. Now that we have seen the code we know just how much discretion they will have. It is inevitable that, unless a prices and incomes policy is extremely rigid, there will be built into it this kind of flexibility. The policy advocated by the Labour Party in a document issued today jointly with the TUC emphasises that price control under Labour would be flexible. Inevitably, there will be great discretion with the Minister or with the body which Parliament sets up to do his dirty work for him.
      Clause 6(1) spells out the matter clearly. It says:
      "The Price Commission shall exercise the powers conferred by this section in such ways as appear to them appropriate for the purpose
      1572
      of ensuring that the provisions of the code which concern prices and charges are implemented."
      We must note that it is not Parliament or the courts which are being asked to exercise these powers in such a way as appears to them to be appropriate, but an ad hoc body. Therefore, it is absolutely essential that as this body goes along making these discretionary decisions—decisions of interpretation which in the past we would normally have left to the courts—it must come to the public and tell them how the powers are being exercised. There is plenty of scope for an infinite number of discretionary decisions about what it means in each and every case.
      The whole purpose of Amendment No. 27 is to ensure that the Pay Board and Price Commission report regularly. It does not matter whether they report to the Secretary of State and he then places the report before Parliament, so long as the public, the Press and Parliament are able to comment upon it. In Committee the Minister gave us some reassurances on this matter of reports. But I did not feel that those reassurances went far enough, were wide enough or were satisfactory. What I want to know is just how often these agencies will report to the public, exactly how they will report and what kind of reports they will make.
      The Price and Pay Code says, for instance, that price reductions must fully reflect any fall in costs. Clearly, we need to know in the early stages of the policy how far the Price Commission has been able to fulfil that instruction, what it has done to achieve it, and how far it has been achieved.
      One of the Pay Board's instructions is to facilitate a relative improvement of the low paid. That is an aim for any prices and incomes policy that we will all share. But again we need to know how the board is carrying out that instruction, how far it has been successful in doing it, and whether it has succeeded during the working of this part of the policy in ensuring that there is a relative improvement of the low paid. We shall also need to know what steps the board is taking to ensure that it happens in the future.
      We need regular reports, to Parliament, of course, because the agencies have to

      1573
      be made accountable to us, and also to the public, because the public has to be brought into the working of the policy and into participating in it. I want reports not just on the general aspects of the policy, though it will be essential in the early stages to have monthly reports on the general aspects. But we also need specific reports on individual aspects of it such as the two to which I have referred dealing with price reductions in relation to falling costs and the relative improvement of the low paid.
      Amendment No. 27 simply calls for regular reports from the Price Commission. One of the other amendments linked with it calls for similar reports to be published by the Pay Board at monthly intervals. But two of the other amendments linked with it refer to public hearings. Amendment No. 28, for example, says:
      "The Price Commission … shall hold public hearings at intervals of not less than three months at which they shall answer to the public for the exercise of these powers."
      There is a certain parallel here in the setting up of the Income Tax Commissioners.
      It seems to me right that there should be some appeal procedure which is not exactly a full court of law. This possibility was raised in Committee by the hon. Member for Horncastle (Mr. Tapsell). But before even getting to that appeal procedure it is essential that the principles of the policy should be heard in public and that the board should have to answer in public any arguments put to it.
      Public hearings were a major part of the early stages of the American policy. We heard last night from the Chief Secretary that what was in the early stages of the American policy did not necessarily have to be enshrined in our policy. I accept that. In some senses there is too much Americanisation of our prices and incomes policy. But in this case there is substantial evidence to show that the public hearings brought the public into the whole business of policing prices and participating in those aspects of the policy referring to pay and dividends.
      7.15 p.m.
      We had the instance of the Wilberforce Committee which sat in public. The Press and the public were able to attend. There was room for them. It would have been
      1574
      possible, and I hope it will be in the future, to hold meetings of this sort, rather than in the sense of Congressional hearings in America, and to have the full panoply of Press and television brought to bear on them.
      If we are to have the Ford workers arguing their detailed, carefully worked out and sophisticated case to the Pay Board, why not have those arguments put in public? They may be put in writing, of course. But shall we be able to see it happening and see the cross-questioning between the so-called guardians of the public interest and the specific interests of the group making the application or the company which is making the application to increase its profits or put up its prices?
      I have said that these meetings would be a considerable part of the policy, and I hope that the Government will be able to say that they intend that at least some meetings of the board will be held in public even if they cannot go the whole way with me and insist that these meetings should be held at three-monthly intervals. I suggest that they should not all he in London. They should be around the country. This again was a feature of the American policy, where there was almost a touring road show of public hearings by the various agencies set up under the Nixon policy. I should prefer to see none of these hearings in London. I should be delighted to see them all around the country. This again would bring the focus of public attention to bear on the way to fight inflation and defeat it.
      The board and the commission are being given very substantial powers of discretion. We are entitled to ask how they are to exercise that discretion. If the public are to participate in the working of the policy—and it will not work without public participation—we need also to know exactly how it is being done, how the Price Commission thinks it is fighting price increases and how the Pay Board thinks it is fighting pay increases.
      I view this policy not as one who is unsympathetic to the idea of a statutory prices and incomes policy. I was amazed to see that the Conservative candidate in the Lincoln by-election was arguing yesterday, if this morning's Press is to be believed, that the Government of a party

      1575
      which did not hold in principle with a prices and incomes policy had a better chance of succeeding with one than one which did. I seem to represent the only party in this House which accepts the principle of a statutory prices and incomes policy.
      I believe that these proposals are important to the working of this policy. Unless we get it to work we shall have to fall back on the views of the right hon. Member for Coventry, East (Mr. Cross-man) in his extraordinary article in The Times this morning, where he said that it was all hopeless and that there was nothing we could do about it. He was virtually implying that the unions were too tough for a Labour Government and too tough for a Conservative Government, so what help could we get from a policy of this kind. He went on:
      "And if it doesn't work? Well, then the inflation must proceed until it hurts so much that we all insist on it being stopped. West German inflation is now within bounds because a sufficient number of Germans have seen the Deutsche Mark lose its value twice in a lifetime and don't want to see it happen again. It is quite possible that we shall have to accept something like the German experience."
      I hope that we do not have to accept anything like the German experience which came as a result of the pre-war inflation.
      It is for those reasons that I support a prices and incomes policy, and a statutory one. I want to see this policy work whether it is implemented by a Conservative or a Labour Government. The Government did not accept my proposals for improvement yesterday. I hope that the Minister will be able to come some way towards us today and accept at least the spirit enshrined in these two parallel amendments.
      Mr. Michael English: I have not hitherto spoken in these debates, for the simple reason that I knew that many of my colleagues on both sides of the House were deeply interested in the matter and wanted to take part in them.
      I congratulate the hon. Member for Cornwall, North (Mr. Pardoe) on putting forward what is obviously a desirable amendment to the clause, under which the Price Commission is given vast powers. This is setting a precedent for any party which in the future wishes to interfere with the workings of private enterprise,
      1576
      and I am grateful to hon. Gentlemen opposite for having brought in this provision. It may be useful in the future.
      Subsection (2) says:
      "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, where the relevant transaction is effected at a time when this part of this Act is in force."
      That is arrant nonsense. It is a stark, staring, raving untruth. The Government are purporting to give to the Price Commission a power which they do not have the authority to give and which the House has no authority to give so long as the European Communities Act is in force.
      There was a long discussion in Committee under Clause 8 on the relationship between the Bill and the European Communities Act. The Chief Secretary said:
      "It is questionable—and here I must leave it as a question, because it is not one which admits of a categorical answer—whether merely to take the power, even if it were not to be used, would not of itself amount to a breach of Community obligations. Certainly to use the power, if it were contrary to our Community obligations, would obviously ipso facto contravene those obligations."
      The hon. Gentleman went on to say that it was not his intention to break the European Communities Act and the Treaties of Rome, Paris and Luxembourg, and he believed that the Bill, so far as it could constitutionally be achieved, did not do that, but he then said:
      "I am bound to tell the right hon. Gentleman that those qualifying words must go in".—[OFFICIAL REPORT, Standing Committee H, 15th February 1973; c. 736.]
      I realise that this may seem to be not relevant to the clause, but I think I am leading my argument into it. The reason why the Chief Secretary cannot say that is that ultimately the courts must decide whether the Bill conflicts with the European Communities Act. The hon. Member for Cornwall, North seeks to make the Price Commission publish its exercise of this power, when it has been clearly stated that we are not even certain whether giving it a power of so wide an ambit is an illegality and when it has been clearly said by the Chief Secretary that any use of such a power might be illegal, and certainly would be illegal if it conflicted with——
      Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. I am having great

      1577
      difficulty in finding out how this could be relevant.
      Mr. English: I am sorry, Mr. Deputy Speaker, but I am having great difficulty in understanding how, if all the matters leading up to a decision of the Price Commission were not published, the courts could decide whether the action was legal. We were told in Committee by the Chief Secretary that to take a power may be illegal, and this is apparently such a power, because the provision is that any price or any charge can be altered by the Price Commission. That is one such power, and to take such a power may be illegal. We have been told that to use it would be illegal if it contravenes the Treaty of Rome. How will courts be able to decide the issue if the matters leading up to it are not published?
      Mr. Deputy Speaker: Order. This is a matter of publication of reports.
      Mr. English: Precisely.
      Mr. Macmillan: Perhaps I may help the hon. Gentleman. The points that he is raising about the European Communities Act do not arise under Clauses 6 and 7, but they could arise on Clause 8. Clauses 6 and 7 give the agencies power to operate under a code. The code as expressed in the consultative document excludes the products of the European Coal and Steel Community as defined in the Treaty of Paris. It also exempts goods and services where prices are regulated as a result of international agreements or arrangements.
      In a previous debate I said that general price restrictions of the kind about which the hon. Gentleman is thinking do not contravene either Article 85 or Article 86 of the EEC competition policy. Therefore, as these clauses operate a code, and as the code either is designed to exempt goods or is not affected by European policy, I think that the point being made by the hon. Gentleman is covered.
      Mr. English: I shall not press the point further, but, in my view, to say that the Price Commission can restrict "any prices" is a matter of slovenly drafting. The butter subsidy provided an example of Ministers not having been told something by their Department. They appeared surprised that they could do
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      something which hitherto they had been forbidden to do. By law they cannot reduce food prices, but they were allowed to reduce the price of butter if they wished to do so. But they did not know, for the simple reason that, although there was a Community decision applying to the original member States, a corresponding decision slightly varying that in relation to the new member States was in draft in Brussels but had not been published and Ministers' civil servants in Brussels had not told them about it. Ministers did not know because it was a decision of the Commission. We have here a specific example of publication and how important it is.
      The hon. Member for Cornwall, North asked how one could conduct these discussions in private and simply produce a fiat that a price must be reduced or restricted. We are already aware, with this slovenly piece of drafting, which is here merely because draftsmen have not altered their form of words to cope with the fact that we have another legislature elsewhere as well as this one here, that hon. Gentlemen opposite no longer know of legislative decisions which will affect and change the Bill after it is passed. Although we decide on this matter, it may be altered by other means in the future. Hon. Gentlemen opposite must brush themselves up and publish things that will affect the Bill.
      I support the hon. Member for Cornwall, North in suggesting that the two agencies should publish their decisions so that we can see whether they are operating legally under the code and also whether they are operating legally under Community law.
      Mr. Harold Walker: My hon. Friend the Member for Nottingham, West (Mr. English) made a valid point. I do not wish to pursue it. I propose instead to draw attention to the fact that there is a difference between paragraph 10(ii) of the code, which exempts
      "prices of goods and services where the application of the control would be inconsistent with an international agreement or arrangement"
      and so on, and what my hon. Friend is asking for: that notwithstanding that provision the Price Commission and the Pay Board should have the power to investigate and make reports upon circumstances which necessitate increases.

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      My hon. Friend gave the good and valid example of the increase in butter prices flowing from European Community policy.
      7.30 p.m.
      These amendments are obviously a logical continuation of the interesting and useful debate that we have had today. We are talking essentially about the same subject—namely parliamentary, and hence public, accountability and control. We are considering another aspect of the same theme. The amendments tabled by the hon. Member for Cornwall, North (Mr. Pardoe) are a useful and constructive set of amendments towards that end. They go right to the root of the objections, expressed not only from this side but by hon. Members on the Government side, to the extraordinary powers of the two new creatures, the two new Government watchdogs, and the question of who will hold the leads on those watchdogs and whether they will be let loose to create havoc and destruction.
      We were told in Standing Committee—although it has been repeated so often, it bears repetition—that these bodies are to have unprecedented powers. They will exercise, in the words of the Chief Secretary, a more pervasive influence in these fields than anything that has preceded them, and they are to have quasi-judicial powers. The alarm which has been repeatedly expressed cannot be over-emphasised, nor can our concern about the transfer of so much power on a dramatic scale, so much control, from Parliament to extra-governmental agencies over which we shall have precious little or no control.
      We are giving a licence to govern to people who will not be publicly accountable, and at the same time we are diminishing the powers of this House. In 12 months the Mother of Parliaments, as we are pleased to call ourselves, the fount of democracy in the modern era, will have handed over power—passively, the Government hope—to the EEC and now to these two new agencies. In short, over great areas of our economic, commercial and industrial life these two new bodies will be given a licence to govern.
      The House should try to impose on them some public accountability and control, certainly in much greater measure
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      than has been proposed by the Government so far, notwithstanding the minor concession that the original proposal of an annual general report has now been modified to a quarterly report of a general character. In spite of the way in which the Secretary of State keeps teetering on the brink, there is no commitment that the House will be able to debate or reach any conclusions about the content of those reports.
      I was pleased that the hon. Member for Cornwall, North should have referred to the importance of specific reports as opposed to what we are offered—general reports. It is important that we not only consider the generality of the influence of these two bodies on the economy and the pattern of pay and prices but also give them the opportunity to repeat some of the valuable and constructive work of the National Board for Prices and Incomes. One of the most useful things that that board did was to build up a quarry of information about pay structures and methods of determining prices.
      I was very disturbed by the intemperate and ill-informed speech of the hon. Member for Enfield, West (Mr. Parkinson). I regret that he is not present and I apologise for not having given him prior notice that I intended to refer to him. He followed up a series of criticisms and attacks that we have heard of late, primarily from the Government side, on productivity deals. It seems to me—[Interruption.] The Secretary of State is muttering from a sedentary position. I do not know whether he is agreeing with his hon. Friend or not. It appears that he is. Those who attack productivity deals are damaging industry and not helping industrial relations or the development of productivity in industry.
      This matter was the subject of two references to the old National Board for Prices and Incomes. I cite them as two examples of the kind of report which could usefully be produced by governmental agencies. In its report No. 36, the board set out what were accepted and applied as the guidelines for productivity deals, in so far as the productivity stemmed from a more efficient and effective utilisation of labour. Because of the criticisms and allegations of bogus and sham productivity deals, the board instituted an inquiry which resulted in its report No. 123, which found them

      1581
      to be without substance and pointed out the useful role that productivity deals had played in increasing industrial efficiency and raising the levels of production and productivity.
      There will in future be a range of matters into which the House might reasonably expect the Price Commission in particular to inquire. One thinks, for example, of the monitoring and policing of VAT, which is embodied in the Bill—very ineffectively, as we said in Committee. One would hope that the Price Commission would be given a remit and an opportunity to produce a report for Parliament on the way in which VAT will have been applied by retailers and distributors.
      Not all of us share the Chief Secretary's naïve and touching belief that traders will behave fairly, particularly, as we reminded him in Committee, in the light of the way, as he himself acknowledged, they had abused decimalisation.
      The Chief Secretary of the Treasury (Mr. Patrick Jenkin): I did not say that. What I said was that decimalisation was changing to a different type of currency and that, as a result, shoppers lost their bearings and found themselves prepared to pay prices which, in the old money, they would have resisted. That is what I said; I did not say that anyone cheated.
      Mr. Walker: I hope I am not doing the Chief Secretary an injustice. I share his recollection of his words, but the conclusion one draws from them is that, because the shopper was bemused and confused, she was exposed to exploitation and was exploited. It was not the housewife who put up the price but the retailer or the distributor who took advantage of her.
      What I am saying—I am sure that my view is shared by many people not only here but outside—is that the shopper will be similarly confused by VAT and similarly unable to make the calculations. I cannot make the calculations, so I do not know how my wife will be able to. She will be exploited in the same way. It is interesting to see the Chief Secretary smiling cynically. I only wish that those who will be suffering that exploitation could have seen the expression on his face just then.
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      One final example is brought to my attention from our debate late on Monday evening, when we debated the Bacon Curing Industry Stabilisation Scheme. The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, repudiated suggestions about possible increases in bacon prices, and said:
      "I must say … that I am a little concerned at the rather loose talk of prices going up 2p and 3p a lb. I should be interested to know where that comes from. My hon. Friend pointed out that the overall effect on bacon prices would be rather less than ½p a lb."—[OFFICIAL REPORT, 27th February 1973; Vol. 851, c. 1225.]
      The Times today carries the words of the spokesman of the industry, Sir John Stratton, Chairman of the British Federation of Bacon Curers. It says that he
      "yesterday predicted a wholesale price increase of at least 5p a lb. on British bacon"—
      not a retail increase of 2p or 3p—
      "if the Phase Two proposals were implemented."
      Within two days, therefore, we have had an extraordinary contrast between what a Government spokesman apparently genuinely believes to be the case in an important area of food distribution and retailing and what the trade is saying. One would have thought that this was the kind of thing into which the Price Commission should be given a remit to inquire and to produce a report and make recommendations. The spokesman of the British Federation of Bacon Curers went on to castigate the Government for an apparent denial of their stated bacon policy in phase 1.
      I find it extraordinarily difficult to follow why bacon is not classed as a processed food in phase 1 but is treated as such so that its price can be controlled. What is the difference?
      Mr. English: We are all fascinated by my hon. Friend's argument. Will he accept that what is even worse is that because it is a food price and comes under Community law, the Government have no power to reduce the increase? They might reduce the increase in the price of butter, but they can reduce the increase in prices of other foods only with the commission's permission, and the commission has not given its permission for a reduction in the price of bacon.
      Mr. Walker: My hon. Friend has expertise in these matters. He has studied the EEC, the treaty, the legislation flowing from it and the work of the Commission. I am prepared to accept his word.
      The dilemma confronting the Government in this area is that on the one hand they are confronted with price increases which arise from purely indigenous factors, and on the other hand they can have grafted on to those the decisions and developments within the Community. I am not sure to what extent the increases are within the Government's control, if at all, in the case of a processed food which is, presumably, subject to control. Here we have the difficulty of whether bacon is a processed food. I am not sure whether it is a fresh food or a processed food, and apparently neither the Government nor the industry are clear about it.
      Finally, I draw another point from the same article in The Times today. There is reference to the fact that
      "Some retailers want the Government to adopt a far more active rôle in explaining food price increases to the public."
      One would have thought that when the Price Commission is eventually established it will, for example, when we have another fiasco about beef and meat prices, tell us who is making the lolly. That is the kind of thing we shall expect the Price Commission to be able to tell us. Clearly many people have made a lot of money out of these increases and their income has not been restricted in phase 1. In the absence of a report from the Price Commission—as that body has not yet been created—perhaps the Government will tell us that if there is any repetition of that kind of ramp the commission will say exactly who has been making what out of whom, that information not being buried in the details of a general report but clearly stated in a specific report.
      I stress the importance and value of having reports about specific matters sufficiently early to have topicality and relevance rather than having these things lost in the blur and confused detail of a general report. I hope that the Secretary of State will see the good sense and democratic appeal of our arguments. I hope he will show a sympathetic response to our arguments and give us a reply on the specific point I have raised.
      7.45 p.m.
      Mr. Maurice Macmillan: For once there is not very much dividing the House on this issue, except perhaps the frequency of the report which the hon. Member for Cornwall, North (Mr. Pardoe) would like to see, and the statutory obligation to have a national television programme once a week or so.
      Mr. Pardoe: Every three months.
      Mr. Macmillan: I deal first with one or two particular points raised during the debate.
      The Price Commission will be able to keep under review the prices of fresh foods and to issue regular information and advice about them. That applies whether or not the products are subject to the Community's common agricultural policy. That was what the hon. Member for Doncaster (Mr. Harold Walker) was asking—that the agency should be able to report on what it was not able to do as well as what it was able to do. That is possible. It will be able to do that and report on it.
      Similarly, the Price Commission will be able to keep under review the effect of other prices that it cannot control, such as prices of raw materials, and that can form part of the report.
      The hon. Member for Cornwall, North mentioned appeals. He referred to the question of an appeal against a decision of the agency to the courts as if that were in all circumstances impossible. I think that he was referring to this matter in relation to the need for publicity, but it would be wrong to give a mistaken impression. It is always possible to have recourse to the courts on the ground that an agency has acted ultra vires. That would normally happen only after the agency had made an order or given a notice, because only then could there be any question of a challenge against the agency's action.
      There may be other ways in which the agency could be challenged, such as by an action for a declaration, and there could be an appeal if anyone were convicted of contravening an order of the agency. Again, on the question of an appeal against a conviction under an order, the question of vires could arise.
      I want to make it plain that the agencies are not, as has been unintentionally implied, apart from action in

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      the courts. I entirely agree with the hon. Member for Cornwall, North and the hon. Member for Doncaster that one of the main objectives the agencies must have is to get the maximum amount of publicity and information to the public, for the general reason of making the policy work, and to the House for the reasons given by the hon. Member for Doncaster, so that we here can fulfil our proper rôle of being accountable to our constituents and for what happens to them.
      If the House would direct its attention to Amendment No. 17 to Schedule 1, it will be seen that this requires the agency to make reports to the Secretary of State. That applies to whichever Secretary of State is responsible to whichever agency. The Daily Telegraph has implied that I would be responsible for insurance, but I think that that was due to a technical error in not understanding that Secretaries of State are interchangeable. In this case the Minister for Trade and Consumer Affairs will be responsible for the Price Commission, and the Secretary of State for Employment will be responsible for the Pay Board. The phrase "Secretary of State" in any piece of legislation can apply to the relevant Secretary of State, regardless of which one he happens to be. Sometimes it can be confusing.
      Each report has to be submitted to the Secretary of State within 30 days of the end of the period which it covers. It is a quarterly report. The third paragraph of the amendment to Schedule 1 states
      "The first two months during which Part II of this Act is in force shall be covered by a separate report."
      The object of that is simply so that the first report does not come after the House would normally have risen for the Summer Recess. That paragraph of the amendment also covers the question of a terminal report if the agencies should cease to operate their statutory powers.
      The last paragraph of the amendment deals with the Minister responsible for seeing that the agencies make a report, and in relation to the Price Commission it includes the Minister of Agriculture, Fisheries and Food with the Secretary of State. That is just to make sure that there is no mistake there. This requirement for the agency to make a monthly
      1586
      report would be too big a burden, particularly if it were to be as detailed as the hon. Member for Cornwall, North wants. Although it is right to leave the form in which the agencies should report as a matter for them in the first instance, I have powers of direction, as does the Secretary of State for Trade and Industry, and we can ensure that the report meets the needs of the House. But it is difficult to dictate the precise form of the report that an agency of this sort will make in advance of its coming into action.
      Later amendments ensure that for every order the agency makes, warning notices, notices of restriction and consent, and all such matters of considerable detail, have to be published. That will make an impact, bearing in mind that contravention of the code is not itself an offence, of the functions of the agencies clearly on the public. It is important to notice, and we referred to this in Committee not completely——
      Mr. English: I am grateful to the right hon. Gentleman for the soft tone of his answer. He mentioned that my hon. Friend the Member for Doncaster (Mr. Harold Walker) wanted the Price Commission to report on what it could not do as well as what it could do and had done. Will he undertake that he will ask it, at least in the most general terms, to do that, because, as I think we have illustrated, it is a very important matter now?
      Mr. Macmillan: I think we could get on more quickly if I went on with my arguments, I was about to come to that point. I was referring to the point about general publicity. In Schedule 1(16) to which Amendment No. 17 refers, the agency has the power to arrange for publication, and the instruction is deliberately drawn in wide terms—
      "in such form and in such manner as they may consider appropriate, of such information …"
      and so on so as to enable the agencies to get on with the sort of publicity which hon. Members opposite and the Government want, and which the agencies want for their own purposes.
      Paragraph 17 enables the Secretary of State to give directions in this respect, and he can, therefore, give directions about any general matters of publicity.

      1587
      The other general point raised by the hon. Member for Doncaster concerned the agency making specific reports in depth on specific problems. That it is empowered to do in Schedule 1(1) and (2). I have the power to direct it so to do. That comes under its advisory capacity, and it is not dependent on the statutory obligations, as are the other powers which have been discussed.
      I hope that the hon. Member for Cornwall, North and other hon. Members will feel that all these provisions must be taken together. The question of the publication of notices, of orders and of consents, the capacity of the agency to act in an advisory role by making specific reports on specific problems, the obligation of the agency to make a quarterly report—which I hope will be in detail—covering its activities, and its power to go in for publicity beyond its statutory obligation—which is extremely important—cannot be taken in isolation. I should not like it to be thought that the agencies were confined to the sort of report which is made mandatory on them in the Bill, but I would hope that they would be able to enlist public support for their actions in the way suggested by the hon. Members.
      Mr. David Clark: We accept with approval the Secretary of State's emphasis on publicity and the support of the public. But I wonder meanwhile whether or not the Government will undertake that responsibility. For example, let us take the point raised by my hon. Friend the Member for Doncaster (Mr. Harold Walker) on bacon prices. On the one hand the Government are saying that bacon prices will rise by ½p a lb. and on the other hand wholesalers are saying they will rise by 5p a lb. Will the right hon. Gentleman give us an assurance that he will do everything he can to clear this up and to clear up other points in order to allay the fears of the general public?
      Mr. Macmillan: That is outside the terms of the amendment, which relates to the agency and not to the Minister. But I can assure the hon. Member that it is in the interests neither of the public nor of the Government that there should be room for doubt about these matters at this phase of the standstill.
      1588
      I hope that the House will feel that the provisions not only in Amendment No. 17, which we are discussing, but linked with those which we are to discuss later go as far as is reasonable to expect the Government to go in meeting the point raised by the hon. Member.
      Amendment negatived.

    Clause 9

      RESTRICTIONS ON DIVIDENDS
      Mr. David Steel: I beg to move Amendment No. 39, in page 6, line 34 after 'dividends', insert:
      'other than dividends paid to employees of those companies under a profit sharing scheme'.
      I need not detain the House long in moving what is a straightforward and simple amendment. The clause gives the Treasury power to restrict the declaration or payment of ordinary dividends by a company. The simple point that I and my colleagues wish to make is that while accepting the general principle we should wish to exempt from that power the payment of dividends to employee shareholders.
      It will not surprise the Treasury Bench that we take this opportunity yet again of raising the whole question of the lack of Government encouragement for profit-sharing. In this case we are not actually asking the Government to do something as we have frequently done before; we are merely asking them to refrain from doing something. It would be easy and simple for them to exempt profit-sharing schemes from the effect of the clause.
      In our view profit-sharing is certainly no substitute for good wages or for works councils and genuine participation. But we believe that it is an incentive in an area of industrial relations and in the spreading of wealth where the Government could use their influence for the general good. It is some time since we had any figures but according to a Ministry survey in 1954 there were at that time only about 500 companies operating profit-sharing schemes. I should be interested to know whether the Government have had information since that date. I suspect that the number has not risen a great deal.
      The fact is that of the major industrial nations we are perhaps the least generous

      1589
      and the least conscious of the advantages of profit-sharing schemes in industry. In America about 20 per cent. of the public companies quoted on the New York Stock Exchange operate general schemes. I do not say that they are specific schemes, but they are generally schemes which could be described as encouraging employee savings and investment. In West Germany there is an entirely different attitude, a more constructive attitude of co-operation and partnership in industrial relations. The law allows tax freedom on sums up to 312 deutschemarks per worker per annum in approved schemes. There is, therefore, a precedent in other industrialised nations among our competitors for direct Government financial incentive for profit-sharing schemes. All we are asking is that the Government should take this opportunity to give a minor encouragement to such schemes by exempting them from the dividend control set out in the Bill.
      8.0 p.m.
      If anyone had any doubts about the need for a constructive attitude towards profit-sharing schemes and the encouragement of industrial partnership, he probably had them removed if he noted yesterday's speech by the hon. Member for Tottenham (Mr. Atkinson), who said:
      "the argument is between the control of wages on the one hand and the control of prices on the other. It depends to which side of the House hon. Members belong whether they support capital or labour … 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."—[OFFICIAL REPORT, 27th February 1973; Vol. 851, c. 1365–66.]
      There is no doubt that in the public mind the Government are identified with the policy of a fairly severe clampdown on increases in wages and the Opposition are identified with wanting a severe clampdown on prices. What I believe most people will accept as fair is a balanced view of the need to restrain both prices and incomes. That is what the Government say they are taking power to do in the present legislation. Their protestations of good will would be much more widely believed if they accepted a simple and straightforward amendment of the kind that I now move.
      Mr. Peter Rees: Ever since I have applied my mind to the kind of
      1590
      problem that we now face I have been much in favour of worker participation, whether by a loose partnership, as in the John Lewis Partnership, by share option schemes, or by the straight issue of shares to workers. I am not certain that in the present state of our industrial democracy all workers fully appreciate what they are being offered. Many ICI shares find their way on to the market quite soon after Fridays.
      But I am entirely in sympathy with the principle, for two reasons. First, I want to see work people associate themselves as closely as possible with the prosperity of the companies for which they work. Secondly—I hope that this does not sound too patronising—I want to see them exposed to the economic risks that the business community faces, to see them made more aware of the facts of economic life.
      People too often claim a kind of equity participation, in that they want their wages to move up in line with the company's prosperity, but they also want a preferential position, because, whatever the company's fortunes may be, they expect their wages to be paid. I should prefer a closer correlation between the employee's fortunes and those of his company. I realise that if a company goes into liquidation the workers suffer as much as anyone, or more, but the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) will see the trend of my thinking.
      I am against the amendment, because it will work exactly against the principle I have stated, at least in one respect. I appreciate that the amount of the dividend must still depend on the availability of profits, but the hon. Gentleman is asking my hon. Friend the Chief Secretary to say that the workers in question must be put in a special category above that of any other shareholder and immunised from the prevailing economic situation. In other words, although the ordinary shareholders will have their dividends limited in the precise and rather onerous way that the pay code lays down, the workers, although they will have their wages limited must, so far as they have a direct shareholding or partnership interest in their employer, be exempt. That must be a bad principle. I do not say that it will encourage irresponsibility, but it will take the workers away from the climate to which everyone else is exposed.

      1591
      Although I am entirely in favour of worker participation, in whatever form it is devised, the amendment does not advance the principles to which I adhere.
      Sir Henry d'Avigdor-Goldsmid: I speak as one who has the responsibility for administering schemes of the kind with which the amendment deals. By their essence, the shares allotted to executives, in what are usually called incentive schemes, or to workers are limited to a proportion of the capital—about 5 per cent. in present conditions. Therefore, under the amendment practically every company would be in a position to make a vastly increased payment on its workers' shares as a form of remuneration to the workers, wholly divorcing it from the dividend which is the revenue going to the shareholders.
      It is not an artificial difficulty that I am stating. As the chairman of a company I should find myself up against it if the amendment were made. My employees are not now entitled to the sort of increase that I should like them to have and that most well-conducted businesses would like to give. What could be easier than to given them an extra 10 per cent. on their shares? That would be entirely contrary to the spirit of the Bill, and would cause great problems.
      I hope that the hon. Member for Rox-burgh, Selkirk and Peebles (Mr. David Steel), for whose abilities I have great regard, will not press the amendment.
      Mr. Patrick Jenkin: I hope that the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) will not regard it as a discourtesy if I do not reply at great length. Like my hon. Friends and the hon. Gentleman, I support the broad objectives of the kind of schemes the hon. Gentleman talked about. They have a part to play in creating a closer identity of interest between management and employees. Like the hon. Gentleman, I often feel disappointed that more companies do not think it worth while to try to help relations with employees by the introduction of such schemes.
      I say that with a certain amount of chagrin, because I once worked for a company which had a profit-sharing arrangement. It did not involve a distribution of shares. A proportion of the profits
      1592
      was distributed to the employees. By the general wish of the employees, that payment was eventually converted into a straight addition to wages and salaries, and the scheme was brought to an end.
      Such schemes have difficulties. They are not always understood. When there is a variation in the amount of profit and people have come to rely on receiving a certain amount, ill will can be created. But the schemes have a part to play, and I hope that they will be encouraged.
      That is not to say that the amendment would necessarily be the right way in which to encourage profit-sharing schemes. I am sure that the hon. Gentleman realises that in hanging his argument on the amendment he is confining himself to that type of profit-sharing scheme which involves the distribution of shares to employees, a particular kind of scheme which is by no means the only kind that can exist.
      The hon. Gentleman is asking that any such shares happening for the time being to be in the ownership of an employee to whom they have been distributed should be exempt from the dividend control. If the shares so issued were of the same class as shares available in the market or available to ordinary shareholders in the company, it would be of exceedingly doubtful propriety that the dividend should be restricted for one category of shareholder while not being similarly restricted for the category covered by the amendment.
      Therefore, apart from the argument of principle that my hon. and learned Friend the Member for Dover (Mr. Peter Rees) and my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) advanced against the amendment, I doubt whether it would succeed in achieving its objective. It could work only if a special class of shares had been issued, so that they could be subject to a different identifiable regime from that applicable to the shares in the company as a whole.
      Another and more general objection is that a pattern of dividend restraint such as we seek in phase 2, slightly less strict than has been applied during the standstill, is not an appropriate environment in which to seek to offer incentives to profit-sharing schemes.
      The amendment would involve discrimination in favour of a particular type of

      1593
      scheme, but the policy is intended to be of pretty well universal application. The only exceptions—and I explored this matter with the hon. Member for Dudley (Dr. Gilbert) in Committee—are investment trust companies and close companies, which have to distribute because of the tax laws. To create an additional category of share because it happens to be in the form of a shareholding with employee benefits would be inappropriate. It is not that the policy discriminates against the profit-sharing schemes but that the amendment seeks to discriminate actively in their favour. In the general context of pay and price restraint which we are introducing, with comparable dividend restraint, that would hardly be regarded as consistent with the policy.
      While I appreciate the hon. Gentleman's motives in moving the amendment and endorse a great deal of what he said about the value of these schemes for promoting and encouraging better employee-employer relations, I must advise the House that the method of implementation which he is seeking to urge on the Government is not one that I can endorse.
      Mr. Pardoe: The Chief Secretary has said that the principle enshrined in the amendment is one which he hopes will be encouraged further. Of course, it will not be encouraged unless a Government encourage it. Liberals have been moving amendments to all sorts of Bills on profit-sharing over the years and Governments have never encouraged the principle.
      There are a whole host of reasons for wanting profit sharing, but I do not suggest that profit sharing is the most important part of forming a new industrial partnership between capital and labour. There may be all sorts of reasons for wanting a profit-sharing scheme, but it is not with that that I am concerned. I do not want to go into the distribution of wealth, which is mentioned at some length in the Labour Party's paper which was issued today.
      In answer to the hon. Gentleman, and in answer to the points raised by his hon. Friends about the incomes policy element, the Green Paper twice makes reference to profit-sharing schemes. Paragraph 103 states that
      "The following count against the pay limit and against the individual limit of £250".
      1594
      part(ii)says:
      "any element in personal increments which relates to factors not personal to the individual concerned, such as the cost of living increases or company profits (other than under a profit sharing scheme as it existed before 6th November 1972)."
      Paragraph 111 says:
      "Payments under the terms of profit-sharing schemes as they stood before 6th November 1972 will not count against the pay limit. Any other payments or benefits under such schemes must be counted against the pay limit."
      In other words, profit-sharing schemes entered into after 6th November will not be allowed to be set off against the pay limit.
      The Financial Secretary and his hon. Friends have indicated that the amendment drives a hole or a coach and horses through the prices and incomes policy. As the hon. Gentleman knows, I am a supporter of the prices and incomes policy and I do not want to drive a hole through it. However, there is no reason why we should not use the policy to encourage profit sharing. I accept that there may be opportunities, as the hon. Gentleman has said, to create a gap or a leak in the policy. However, I happen to believe that there are benefits in future for our economy as a whole, and not just for individual workers, which are worth that price.
      8.15 p.m.
      I accept immediately that profits are not the ideal measure of efficiency and performance, but they are no worse than any other measure. They are no worse than most productivity agreements and no worse than piece work. I draw the hon. Gentleman's attention to a most interesting pamphlet by Professor Hayek, "The Outlook for the 1970s—Open or Repressed Inflation?", which was published not so long ago. In the pamphlet Professor Hayek says:
      "… that determination of wages by collective bargaining which is the ultimate cause of the inflationary trend".
      He goes on to deal with the problem by advocating profit-sharing schemes as an integral part of any sensible, rational and effective prices and incomes policy. He said that to persuade the unions to accept an alternative method of wage determination, while offering the workers as a result a better chance of material advance and, at the same time, restoring

      1595
      the flexibility of the relative wages of a particular group.
      Professor Hayek says that the only solution which he can see to the problem is to offer remuneration not in the form of a fixed wage but as a participation in the profits of the enterprise by which the people are employed. He saw it as an essential part of a prices and incomes policy. He was by no means the only person to do so. I do not wish to go through a long list, but I quote the words of Mr. Aubery Jones in the January issue of the Lloyds Bank Review. He went through various ways of getting a relationship between incomes and output. He said:
      "It would be injudicious of a Government not to recognise that workers, in struggling for earnings, see themselves as struggling for them at the expense of profits. … A possible reconciliation might be found in a scheme whereby companies lodged part of their retained earnings, in the name of their employees, in a capital fund managed, with the help of investment exerts, by the TUC."
      That is one form of profit sharing which would be a part of a prices and incomes policy. That is why I do not see it as either/or—either allowing profit sharing to go through or a prices and incomes policy. I believe that we can have both. An exchange took place in Committee when the hon. Member for Salford, West (Mr. Orme) referred to the sophisticated claim put forward by the Ford workers. I interrupted and said that I thought the case they were making was that Ford had had a splendid year and made a lot of profits and that the workers should have some of them. He referred to the idea which I put forward as nineteenth century laissez-faire. I do not believe that profit sharing is something for the nineteenth century. I believe that it is something for the latter half of the twentieth century. We should use every effort we can to encourage profit sharing not just as a means of distribution of wealth, which I favour, which I hope the Government favour and which I am sure the Opposition favour, but as an essential part of an effective prices and incomes policy.
      Having said that, and realising the views of the Treasury, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 12

      POWER TO OBTAIN INFORMATION
      Mr. Maurice Macmillan: I beg to move Amendment No. 10, in page 9, line 31, at end insert:
      '(6) This section shall have effect only during any period in which Part II of this Act is in force; but the power conferred by subsection (1) above shall continue to be exercisable, at any time when Part II has ceased to be in force, for the purpose of acquiring information or documents in relation to the bringing of proceedings for an offence under Part II or the doing of anything preparatory, or with a view, to the bringing of such proceedings'.
      I need not detain the House long in explaining the purpose of the amendment. It is an extra subsection to Clause 12. It limits the operation of Clause 12 to the period in which the statutory powers of Part II are in force. The clause deals with the powers of Ministers and the agencies to obtain information and to do so, if necessary, by compulsion. The amendment limits the use of these powers to the period when Part II of the Bill is in force. There is a carryover provision to ensure that the agencies can continue after the end of the statutory policy to receive information about anything which is done during that period. That is to ensure, for example, that in the last stages of the statutory period there is no deliberate evasion in the knowledge that information need not be given about activities during the statutory period once the statutory period has expired.
      I understand that this is a common provision in regulations of this nature. We have debated the clause very fully in Committee. All I need say in moving the amendment is that its simple purpose is to limit the operation of Clause 12 to the period during which the statutory powers of Part II are in force.
      Mr. Benn: I am grateful to the right hon. Gentleman for the amendment. I have a feeling that I had something to do with it because I made a speech in Committee about information and its value. I had a feeling then that some of the Secretary of State's hon. Friends were somewhat frightened to reflect on what it meant.
      Information is the key to all effective planning by the Government, and this

      1597
      was recognised in any case by the introduction of Clause 12. It leads to a change in the relationship between the Government and industry, because if the Government know what industry is doing they are better able to influence industry's decisions, and since the object of the policy is to allow the Government to influence industrial decisions the Government cannot operate without such information.
      The Government themselves, as a political party, are very sensitive about information. When I read the amendment the other day, I came across a moving pamphlet called "Free Enterprise or Socialism". It was issued at the last General Election by the Conservative Central Office. In it was one of the great dire warnings by the Conservative Party. It said that if Labour were re-elected there would be ever-increasing direction of the economy by the Government with all the demands for detailed information thereby entailed. That is true. Even the present Government cannot run their policy without a great deal of information.
      The solution adopted by the right hon. Gentleman is simple. It is to say that
      when the statutory period of the policy comes to an end the policy is to be followed thereafter without any information required by law. This is nonsense, and the right hon. Gentleman knows it. If he wants to run a voluntary policy—and I must give him credit for trying to want to run one—he can do so only if he has information available to him to let him know whether it is succeeding or failing and whether statutory back-up powers might be needed.
      However, since the right hon. Gentleman himself moved Amendment No. 3 earlier, providing that statutory powers can run for three years, it is clear that they will run for three years and that over that three-year period there will be a statutory requirement for information to be made available. Even so, this is an important enough point for us to insist on the original wording of the Bill, and I invite my right hon. and hon. Friends to vote against the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 269, Noes 206.s

      Division No. 72.]

      AYES

      [8.23 p.m.

      Adley, Robert

      Carr, Rt. Hn. Robert

      Fry, Peter

      Alison, Michael (Barkslon Ash)

      Channon, Paul

      Galbralth, Hn. T. G. D.

      Allason, James (Hemel Hempstead)

      Chapman, Sydney

      Gibson-Watt, David

      Archer, Jeffrey (Louth)

      Chataway, Rt. Hn. Christopher

      Gilmour, Ian (Norfolk, C.)

      Astor, John

      Chichester-Clark, R.

      Gilmour, Sir John (Fife, E.)

      Atkins, Humphrey

      Clark, William (Surrey, E.)

      Glyn, Dr. Alan

      Awdry, Daniel

      Clarke, Kenneth (Rushcliffe)

      Godber, Rt. Hn J. E.

      Baker, Kenneth (St. Marylebone)

      Clegg, Walter

      Goodhart, Philip

      Baker, W. H. K. (Banff)

      Cockeram, Eric

      Goodhew, Victor

      Batsford, Brian

      Cooke, Robert

      Gorst, John

      Beamish, Col. Sir Tufton

      Coombs, Derek

      Gower, Raymond

      Bell, Ronald

      Cooper, A. E.

      Grant, Anthony (Harrow, C.)

      Bennett, Sir Frederic (Torquay)

      Corfield, Rt. Hn. Sir Frederick

      Gray, Hamish

      Bennett, Dr. Reginald (Gosport)

      Costain, A. P.

      Green, Alan

      Benyon, W.

      Critchley, Julian

      Grieve, Percy

      Berry, Hn. Anthony

      Crowder, F. P.

      Griffiths, Eldon (Bury St. Edmunds)

      Biffen, John

      d'Avigdor-Goldsmid, Sir Henry

      Grylls, Michael

      Biggs-Davison, John

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

      Gummer, J. Selwyn

      Blaker, Peter

      Dean, Paul

      Hall, Miss Joan (Keighley)

      Boardman, Tom (Leicester, S.W.)

      Deedes, Rt. Hn. W. F.

      Hall, John (Wycombe)

      Body, Richard

      Dixon, Piers

      Hall-Davis, A. G. F.

      Boscawen, Hn. Robert

      Dodds-Parker, Douglas

      Hamilton, Michael (Salisbury)

      Bossom, Sir Clive

      Drayson, G. B.

      Hannam, John (Exeter)

      Bowden, Andrew

      Dykes, Hugh

      Harrison, Brian (Maldon)

      Braine, Sir Bernard

      Edwards, Nicholas (Pembroke)

      Harrison, Col. Sir Harwood (Eye)

      Bray, Ronald

      Elliot, Capt. Walter (Carshalton)

      Haselhurst, Alan

      Brewis, John

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

      Hastings, Stephen

      Brinton, Sir Tatton

      Emery, Peter

      Havers, Michael

      Brocklebank-Fowler, Christopher

      Eyre, Reginald

      Hawkins, Paul

      Brown, Sir Edward (Bath)

      Farr, John

      Hayhoe, Barney

      Bruce-Gardyne, J.

      Fenner, Mrs. Peggy

      Heath, Rt. Hn. Edward

      Bryan, Sir Paul

      Finsberg, Geoffrey (Hampstead)

      Heseltine, Michael

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

      Fletcher-Cooke, Charles

      Hicks, Robert

      Buck, Antony

      Fookes, Miss Janet

      Higgins, Terence L.

      Bullus, Sir Eric

      Fortescue, Tim

      Hiley, Joseph

      Burden, F. A.

      Foster, Sir John

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

      Butler, Adam (Bosworth)

      Fowler, Norman

      Hill, James (Southampton, Test)

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

      Fox, Marcus

      Holland, Philip

      Carlisle, Mark

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

      Holt, Miss Mary

      Hordern, Peter

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

      Skeet, T. H. H.

      Hornby, Richard

      Mitchell, David (Basingstoke)

      Soref, Harold

      Hornsby-Smith,Rt.Hn.Dame Patricia

      Moate, Roger

      Speed, Keith

      Howe, Hn. Sir Geoffrey (Reigate)

      Molyneaux, James

      Spence, John

      Howell, David (Guildford)

      Money, Ernie

      Sproat, Iain

      Hunt, John

      Monks, Mrs. Connie

      Stainton, Keith

      Hutchison, Michael Clark

      Montgomery, Fergus

      Stanbrook, Ivor

      Iremonger, T. L.

      More, Jasper

      Stewart-Smith, Geoffrey (Belper)

      Irvine, Bryant Godman (Rye)

      Morgan-Giles, Rear-Adm.

      Stodart, Anthony (Edinburgh, W.)

      James, David

      Morrison, Charles

      Stoddart-Scott, Col. Sir M.

      Jenkin, Patrick (Woodford)

      Mudd, David

      Stokes, John

      Jennings, J. C. (Burton)

      Nabarro, Sir Gerald

      Stuttaford, Dr. Tom

      Jessel, Toby

      Neave, Airey

      Sutcliffe, John

      Johnson Smith, G. (E. Grinstead)

      Nicholls, Sir Harmar

      Tapsell, Peter

      Jones, Arthur (Northants, S.)

      Noble, Rt. Hn. Michael

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

      Jopling, Michael

      Normanton, Tom

      Taylor, Robert (Croydon, N.W.)

      Keberry, Sir Donald

      Nott, John

      Tebbit, Norman

      Keilett-Bowman, Mrs. Elaine

      Onslow, Cranley

      Temple, John M.

      Kilfedder, James

      Oppenheim, Mrs. Sally

      Thatcher, Rt. Hn. Mrs. Margaret

      Kimball, Marcus

      Orr, Capt. L. P. S.

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

      King, Tom (Bridgwater)

      Osborn, John

      Thompson, Sir Richard (Croydon, S.)

      Kinsey, J. R.

      Owen, Idris (Stockport, N.)

      Kitson, Timothy

      Page, Rt. Hn. Graham (Crosby)

      Tilney, John

      Knight, Mrs. Jill

      Parkinson, Cecil

      Trafford, Dr. Anthony

      Knox, David

      Peel, John

      Trew, Peter

      Lambton, Lord

      Percival, Ian

      Tugendhat, Christopher

      Lamont, Norman

      Peyton, Rt. Hn. John

      Turton, Rt. Hn. Sir Robin

      Langford-Holt, Sir John

      Pink, R. Bonner

      Vaughan, Dr. Gerard

      Le Marchant, Spencer

      Price, David (Eastleigh)

      Vickers, Dame Joan

      Lewis, Kenneth (Rutland)

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

      Waddington, David

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

      Proudfoot, Wilfred

      Walder, David (Clitheroe)

      Longden, Sir Gilbert

      Pym, Rt. Hn. Francis

      Walker, Rt. Hn. Peter (Worcester)

      Loveridge, John

      Raison, Timothy

      Walker-Smith, Rt. Hn. Sir Derek

      Luce, R. N.

      Ramsden, Rt. Hn. James

      Wall, Patrick

      McAdden, Sir Stephen

      Rawlinson, Rt. Hn. Sir Peter

      Ward, Dame Irene

      MacArthur, Ian

      Redmond, Robert

      Warren, Kenneth

      McCrindle, R. A.

      Reed, Laurance (Bolton, E.)

      Weatherill, Bernard

      McLaren, Martin

      Rees, Peter (Dover)

      Wells, John (Maidstone)

      Maclean, Sir Fitzroy

      Rees-Davies, W. R.

      White, Roger (Gravesend)

      McMaster, Stanley

      Renton, Rt. Hn. Sir David

      Wiggin, Jerry

      Macmiltan,Rt.Hn.Maurice (Farnham)

      Rhys Williams, Sir Brandon

      Winterton, Nicholas

      McNair-Wilson, Michael

      Ridsdale, Julian

      Wolrige-Gordon, Patrick

      McNair-Wilson, Patrick (New Forest)

      Roberts, Michael (Cardiff, N.)

      Wood, Rt. Hn. Richard

      Maddan, Martin

      Roberts, Wyn (Conway)

      Woodnutt, Mark

      Madel, David

      Rodgers, Sir John (Sevenoaks)

      Worsley, Marcus

      Maginnis, John E.

      Rost, Peter

      Wylie, Rt. Hn. N. R.

      Marten, Neil

      Russell, Sir Ronald

      Younger, Hn. George

      Mather, Carol

      Scott, Nicholas

      Maude, Angus

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

      TELLERS FOR THE AYES:

      Maudling, Rt. Hn. Reginald

      Shelton, William (Clapham)

      Mr. Hugh Rossi and

      Mawby, Ray

      Shersby, Michael

      Mr. Oscar Murton.

      Maxwell-Hyslop, R. J.

      Simeons, Charles

      Miscampbell, Norman

      Sinclair, Sir George

      NOES

      Abse, Leo

      Clark, David (Colne Valley)

      Edwards, Robert (Bilston)

      Allaun, Frank (Salford, E.)

      Cocks, Michael (Bristol, S.)

      Edwards, William (Merioneth)

      Archer, Peter (Rowley Regis)

      Cohen, Stanley

      Ellis, Tom

      Ashley, Jack

      Coleman, Donald

      English, Michael

      Atkinson, Norman

      Concannon, J. D.

      Evans, Fred

      Barnes, Michael

      Corbet, Mrs. Freda

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

      Barnett, Guy (Greenwich)

      Cox, Thomas (Wandsworlh, C.)

      Fitch, Alan (Wigan)

      Barnett, Joel (Heywood and Royton)

      Crawshaw, Richard

      Fletcher, Raymond (Ilkeston)

      Beaney, Alan

      Cronin, John

      Fletcher, Ted (Darlington)

      Benn, Rt. Hn. Anthony Wedgwood

      Crosland, Rt. Hn. Anthony

      Foot, Michael

      Bidwell, Sydney

      Crossman, Rt. Hn. Richard

      Ford, Ben

      Blenkinsop, Arthur

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

      Forrester, John

      Boardman, H. (Leigh)

      Dalyell, Tam

      Fraser, John (Norwood)

      Booth, Albert

      Davies, Denzil (Llanelly)

      Freeson, Reginald

      Bottomley, Rt. Hn. Arthur

      Davies, Ifor (Gower)

      Galpern, Sir Myer

      Boyden, James (Bishop Auckland)

      Davis, Clinton (Hackney, C.)

      Gilbert, Dr. John

      Bradley, Tom

      Davis, Terry (Bromsgrove)

      Ginsburg, David (Dewsbury)

      Broughton, Sir Alfred

      Deakins, Eric

      Grant, John D. (Islington, E.)

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

      Delargy, Hugh

      Griffiths, Eddie (Brightside)

      Brown, Ronald (Shoreditch & F'bury)

      Dell, Rt. Hn. Edmund

      Griffiths, Will (Exchange)

      Buchan, Norman

      Dempsey, James

      Hamilton, William (Fife, W.)

      Butler, Mrs. Joyce (Wood Green)

      Douglas, Dick (Stirlingshire, E.)

      Hardy, Peter

      Callaghan, Rt. Hn. James

      Douglas-Mann, Bruce

      Harrison, Walter (Wakefield)

      Cant, R. B.

      Driberg, Tom

      Hattersley, Roy

      Carmichael, Neil

      Duffy, A. E. P.

      Healey, Rt. Hn. Denis

      Carter, Ray (Birmingh'm, Northfield)

      Dunn, James A.

      Heffer, Eric S.

      Carter-Jones, Lewis (Eccles)

      Eadie, Alex

      Hooson, Emlyn

      Castle, Rt. Hn. Barbara

      Edelman, Maurice

      Houghton, Rt. Hn. Douglas

      1600

      1601

      Howell, Denis (Small Heath)

      Mendelson, John

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

      Huckfield, Leslie

      Mikardo, Ian

      Silkin, Rt. Hn. John (Deptford)

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Millan, Bruce

      Silkin, Hn. S. C. (Dulwich)

      Hughes, Roy (Newport)

      Miller, Dr. M. S.

      Sillars, James

      Hunter, Adam

      Milne, Edward

      Silverman, Julius

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

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

      Skinner, Dennis

      Janner, Greville

      Molloy, William

      Small, William

      Jay, Rt. Hn. Douglas

      Morgan, Elystan (Cardiganshire)

      Smith, John (Lanarkshire, N.)

      Jeger, Mrs. Lena

      Morris, Alfred (Wythenshawe)

      Spearing, Nigel

      Jenkins, Hugh (Putney)

      Morris, Charles R. (Openshaw)

      Spriggs, Leslie

      John, Brynmor

      Morris, Rt. Hn. John (Aberavon)

      Stallard, A. W.

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

      Mulley, Rt. Hn. Frederick

      Stewart, Rt. Hn. Michael (Fulham)

      Johnson, Walter (Derby, S.)

      Murray, Ronald King

      Stoddart, David (Swindon)

      Jones, Barry (Flint, E.)

      Oakes, Gordon

      Stonehouse, Rt. Hn. John

      Jones, Dan (Burnley)

      Ogden, Eric

      Strauss, Rt. Hn. G. R.

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

      O'Halloran, Michael

      Summerskill, Hn. Dr. Shirley

      Jones, Gwynoro (Carmarthen)

      O'Malley, Brian

      Swain, Thomas

      Jones, T. Alec (Rhondda, W.)

      Oram, Bert

      Judd, Frank

      Orbach, Maurice

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

      Kaufman, Gerald

      Orme, Stanley

      Thomas, Jeffrey (Abertillery)

      Kelley, Richard

      Owen, Dr. David (Plymouth, Sutton)

      Tomney, Frank

      Kerr, Russell

      Palmer, Arthur

      Tope, Graham

      Kinnock, Neil

      Pardoe, John

      Torney, Tom

      Lambie, David

      Parker, John (Dagenham)

      Tuck, Raphael

      Lamborn, Harry

      Parry, Robert (Liverpool, Exchange)

      Varley, Eric G.

      Latham, Arthur

      Pavitt, Laurie

      Wainwright, Edwin

      Lawson, George

      Peart, Rt. Hn. Fred

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

      Lewis, Arthur (W. Ham, N.)

      Perry, Ernest G.

      Walker, Harold (Doncaster)

      Lewis, Ron (Carlisle)

      Prentice, Rt. Hn. Reg.

      Wallace, George

      Lipton, Marcus

      Probert, Arthur

      Weitzman, David

      Lomas, Kenneth

      Rankin, John

      Wells, William (Walsall, N.)

      Lyon, Alexander W. (York)

      Rees, Merlyn (Leeds, S.)

      Whitehead, Phillip

      Lyons, Edward (Bradford, E.)

      Rhodes, Geoffrey

      Whitlock, William

      Mabon, Dr. J. Dickson

      Richard, Ivor

      Willey, Rt. Hn. Frederick

      McBride, Neil

      Roberts, Albert (Normanton)

      Williams, Alan (Swansea, W.)

      Mahon, Simon (Bootle)

      Roberts, Rt. Hn. Goronwy (Caernarvon)

      Wilson, Alexander (Hamilton)

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

      Robertson, John (Paisley)

      Wilson, Rt. Hn. Harold (Huyton)

      Marks, Kenneth

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

      Wilson, William (Coventry, S.)

      Marquand, David

      Roper, John

      Marshall, Dr. Edmund

      Rose, Paul B.

      TELLERS FOR THE NOES:

      Mason, Rt. Hn. Roy

      Rowlands, Ted

      Mr. James Hamilton and

      Meacher, Michael

      Sheldon, Robert (Ashton-under-Lyne)

      Mr. Tom Pendry.

      Mellish, Rt. Hn. Robert

      Shore, Rt. Hn. Peter (Stepney)

      Question accordingly agreed to.

    Clause 13

      POWER TO OBTAIN INFORMATION ABOUT RATES FROM RATING AND OTHER AUTHORITIES
      8.30 p.m.
      The Minister for Local Government and Development (Mr. Graham Page): I beg to move Amendment No. 11, in page 9, line 32 after 'order', insert 'made before 1st April 1974'.
      Mr. Deputy Speaker (Miss Harvie Anderson): With this we can also discuss Government Amendments Nos. 12 and 13, and Amendment No. 44, in page 10, line 43 leave out subsections (6) and (7) and Government Amendment No. 53.
      Mr. Page: These are amendments providing for a rating authority or precepting authority to furnish the Secretary of State, in this case the Secretary of State for the Environment, with information relative to a rate or precept recently
      1602
      made or issued or proposed to be made or issued.
      The purpose of the Government amendments is to limit the operation of Clause 13 to approximately one year except for matters arising from the operation of the clause within that period. This will enable the rates and precepts for the financial year 1973–74 and the following financial year to be monitored. This monitoring procedure is not being brought into operation by the Bill when it becomes an Act. It has to be activated by an order under Clause 13, although it can be done, and indeed is being done, by voluntary arrangements.
      I make it absolutely clear that neither Clause 13 nor any of the amendments gives the Secretary of State the power to fix a rate or precept or to tell a local authority what rate or precept it should require. An order made tinder the clause will be merely an order to provide information, To have any validity, it will, if the amendments are accepted, have to be made before 1st April, 1974. If it is made and the information is not

      1603
      forthcoming, the follow-up is a default order under subsection (8), which can be made before or after 1st April, 1974, and is enforceable under subsection (9).
      Those are the ultimate legal sanctions attached to the monitoring process. The more the 99·9 per cent. of the 1,400 rating and precepting authorities co-operate, as I have good proof that they will, the more is it fair and just to have teeth in the clause so that it may bite on the 0·1 per cent. of the defaulters, if there are any.
      I did not have the privilege of hearing the interesting debate on Clause 13 in Committee, but I have studied the OFFICIAL REPORT and it is evident that the permanent character of the clause as originally drafted caused great apprehension. It certainly caused me great apprehension when I read to what villainous uses right hon. and hon. Members in Committee thought the Government might put the powers in the clause. I had visions of the Minister for Local Government and Development in the dual rôle of a Machiavellian Mussolini with a bit of Dracula thrown in. I was not impressed by such visions.
      The Government have no intention by the clause of creating either a permanent or a temporary relationship of "Big Brother" and "Little Brother" between central Government and local government.
      Mr. Julian Ridsdale: Did my hon. Friend say that it is the Government's intention to monitor the rate for 1974–75?
      Mr. Page: Yes. The Secretary of State will be able to take power under the clause, with the amendments, to monitor the rate for 1974–75.
      As I say, we have no intention of acting as "Big Brother" over the local authorities. Although we frequently argue ferociously, there is a spirit of co-operation between my Department and the local authority associations. Because of that, it did not occur to me that the clause, as drafted, could be interpreted as such a vicious or mischievous clause as some hon. and right hon. Members thought in Committee.
      In the debate in Committee my hon. Friend the Parliamentary Secretary to the
      1604
      Civil Service Department sought to give an assurance as to the intended co-operative and temporary use of Clause 13, and he hinted that the powers in Clause 13 might not need to remain in perpetuity or until repealed and might march in step with the powers in Part II of the Bill.
      In the amendment we have gone further than that in toning down the clause. We have restricted the powers under the clause to two rating years by allowing only one order-making year. In other words, if the orders made under the clause are to have validity, they must be made before 1st April 1974.
      I think that that is as far as we can go or should go, for two reasons. One is set out in the White Paper, in paragraph 22, where it is pointed out that rates take such a large amount of household expenditure that they are an item which, if we have a counter-inflation policy as set out in this Bill, we should not leave out of that altogether. The other reason is that in local government finance central Government are a partner with local government, and not merely a sleeping partner: central Government contribute 60 per cent. of the expenditure of local government. In normal times we trust our partners, the local authorities, to spend it wisely. In times such as the present we have a duty to have a closer partnership in considering the expenditure. So this system of monitoring has been adopted.
      Fortunately, we shall not, under the Bill when it becomes an Act, start off with no experience of monitoring. The actual operation has already started—since the announcement in the White Paper that we would be doing it.
      Mr. Gordon Oakes: Under what authority is this being done at the moment?
      Mr. Page: I would not have thought that any central Government needs authority to discuss matters with or obtain information from local authorities. This, indeed, is the whole basis of the relationship between central Government and local authorities. We are continually meeting the local authority associations. They provide information; we provide information. As I said just now, we sometimes argue furiously. I think the phrase used in Standing Committee was that the Government would be twisting

      1605
      the arm of the local authorities. I can assure the House that the local authorities frequently twist the arm of the Government, and this so-called arm twisting is done in a spirit of co-operation between central Government and local government. It is in order for information to be given from each to each.
      As I was saying, we have started monitoring. The White Paper was published on 17th January and on the same day a letter was written to the local authority associations by my Department pointing out the paragraph in the White Paper which related to the local authorities. On 22nd January we sent the local authority associations a draft of the circular and the form which might be used and be appropriate for the monitoring procedure. The Bill was published on 23rd January. We had a further long conference with the local authority associations on 24th January. Then was settled the circular and form on which information would be collected. As a result of that consultation on 24th January we redrafted the circular and the form, and showed it again to the local authority associations on 26th January. So there was continuous consultation with them during that period of time. The circular was finally dispatched to them on 2nd February. A letter and the form for collection of the information were dispatched on 7th February.
      I can assure the House that it is a very simple form—a short letter on the form and about half a dozen notes—but it will enable us to be provided with the necessary information. Within three weeks of their receipt of that form 1,000 local authorities out of the 1,400 have replied. We have had only about a dozen staff working on this. Written replies have been given to 650 of those whose forms have been received. Where their finance committees were about to meet, answers were made by telephone. One hundred and ten have been asked to review their expenditure proposals, and as a result, so far, 16 authorities have responded by a reduction of the rate which they were intending to charge, those including one county and one London borough. In that short period reductions have emerged of £1½ million. That is a reasonable figure over that short period and shows that monitoring is worth while. How many more local authorities have
      1606
      made a reduction before sending in the form, having been made to think twice before completing the form, I cannot say. I saw reported in the newspapers today that another county had reduced its rate by about £1 million.
      8.45 p.m.
      It is fair to ask: if the system is going well voluntarily, why put it in a statute? It is fair upon those who co-operate voluntarily that those who are bloody-minded and do not provide the information should be obliged to comply. The more local authorities there are which co-operate, the more reason there is to apply statutory force to those which do not.
      It might be asked why we should have this system for only two rate-fixing periods. The need to counter inflation has come at a time when rate-fixing is of considerable complexity. This year there is revaluation, and the local authorities are looking forward in the coming year to reorganisation. In the next rate-fixing year 1974–75, local authorities will be in the throes of reorganisation, with the transfer of assets and liabilities, and so on. These are two complex years for rate-fixing. When that situation is coupled with inflation, central Government owe a duty to the public, who subsidise local authority expenditure by 60 per cent., to exercise a restraining influence.
      When those situations are passed, we shall have sufficient co-operation and opportunity for discussion with local authorities under the rate support grant procedure to rely on the democratically elected local authorities to take such voluntary action as seems best in whatever inflationary circumstances may then exist.
      It is right to take these powers, although the statutory force behind the present voluntary arrangement with the local authorities is exercised only by an order on an individual authority which must do what all the others are doing. The order does not apply over the whole local government area but applies specifically to one authority which fails to do what the others are doing.
      In those general statements I have covered Amendments Nos. 11, 12 and 13. Amendment No. 53 is consequential on Amendment No. 13. Having set out

      1607
      in the amendments those two rating years, 1973–74 and 1974–75, it was necessary to make the proviso concerning Scotland which appears at the end of subsection (6).
      The Opposition Amendment No. 44 seeks to remove subsections (6) and (7), which are largely machinery subsections. When a rate is made there is power in law to make and issue a supplementary rate, but no such power to reduce it. It may well be that between the time of making a rate, which is the passing of the resolution and publishing the amount of the rate, to 1st April when it conies into operation, monitoring may have had the result of the local authority deciding that it wishes to reduce the rate. Without the present power it could not do so.
      Subsection (6) provides the power to reduce the rate even after 1st April, and then subsection (7) comes into operation, dealing with the announcing and making certain that people know that there is that reduction in the rate. I look on these subsections as machinery which I trust will never need to be used. I am quite sure that the whole arrangement of monitoring can be carried out on a voluntary basis, and that the statutory power behind it is needed only as a longstop.
      Mr. R. C. Mitchell: Where local authorities have been asked to reduce their expenditure and have found it very difficult to do so, would the Minister be prepared to meet delegations from those local authorities and advise them on how they should cut expenditure?
      Mr. Page: The officials of the Department are always available to discuss that sort of thing with officials of a local authority. I cannot give an undertaking to see every local authority which might wish to discuss this subject, but if an hon. Member wished to see me and brought with him a member of the local authority I would not refuse to see him.
      Mr. Denis Howell: The Minister will know that it is to this clause that local authorities and we on this side take the greatest possible objection. Even though the Government amendments represent a step backwards from the even more objectionable pro-
      1608
      posals contained in the Bill as drafted, they still remain thoroughly objectionable to us all.
      The whole of the right hon. Gentleman's speech proved positively that the clause is not necessary at all and that there is no reason whatever for this indignity being imposed on local authorities. We can only compare this monstrous interference with the freedom of our local authorities with everything the Government said at the last election about that same complete freedom of local authorities—"We shall remove the hand of Whitehall from local authorities", and so on. This present step demonstrates the measure of the deterioration of the Government's position, and I do not need to weary the House by reading large chunks of extracts from the Conservative Party manifesto at the last election and from speeches made in support of it.
      The essence is that for the first time in the history of local government the Government propose to take powers to intervene directly in the making of the rate. That is a most serious matter. Such powers have not been taken by the central Government even in times of war and should not be taken except in circumstances of national calamity or dire emergency. What we now have presented to us is the measure of the economic difficulties which the Government have got themselves into and the crisis that presumably faces us.
      As the Minister has said, these are powers to demand information, but the Government step back, having got the information, from directing authorities about what they should then do. The Government do not wish to take that responsibility. It could be argued that if the Government want this information in order to make a judgment about the rate to be levied in an area, they should accept the responsibility of saying what rate should properly be levied—and, indeed, how such a rate can effectively be levied. The powers amount to intimidation of certain local authorities.
      Local authorities have conflicting duties during a period of inflation. On the one hand no local authority of the kind on which I have ever served wishes to levy a rate greater than that which is necessary to enable it to carry out its functions. On the other hand, however, it has a

      1609
      duty to provide adequate services. A local authority has to provide for welfare services, the old and the sick, police services, education, housing and the rest. Each local authority is answerable to the electorate and it is the electors who have the final sanction, but a local authority must balance the need for the services demanded by residents against what it believes local residents can afford to pay to provide those services.
      No judgment can be made about the rate to be levied by a local authority unless four questions are examined: first, the standard of services already provided by the local authority; secondly, the standard of services desired to be provided in future; thirdly, the question of national wage negotiations, which for all practical purposes are outside a local authority's control; and, fourthly, the consequences of cutting back on any service. Those four criteria need to be examined before we can make any judgment about the rate to be levied by a local authority.
      It follows that certain questions must he asked about these powers. First, what Government machinery exists to conduct these examinations? Does the Ministry intend in detail to go through the estimates of every local authority and the information supplied to it? How does it propose to examine them and to relate what a local authority asks for this year as against what it asked for last year? Finally, how do the Government propose to relate both those matters to the standard of service provided? We have had no information whatever at any stage about any of these questions.
      Even more important is the question whether the Government intend to accept public responsibility for the advice given to local authorities. In other words, if a local authority intends to proceed with its original proposals—and some Tory local authorities intend to proceed with their plans—where do the Government stand? Will they spell out what authority exists for what they propose? These are serious questions which must be answered.
      I should like to illustrate how a local authority arrives at its rate and to show that when a local authority determines the rate that is to be levied, 99 per cent. of the amount which it asks ratepayers
      1610
      to provide is totally outside the control of the local authority. It is almost totally determined by Government policy. If the Government wish to control the amount being levied, they have the power in their hands in terms of interest rates, wages, negotiations and standards of services and unless they involve themselves in these matters our local authorities are quite unable to control the situation on behalf of their ratepayers.
      9.0 p.m.
      To illustrate what I mean, I hope I may be allowed to cite the city of Birmingham which I represent and know very well. I have today gone in detail through its estimates to prove my point. In any event, I am sure that the illustration applies to most other local authorities.
      The great city of Birmingham has decided that next year, after the most severe pruning, it must have an additional £18·5 million if it is to maintain existing services. That sum is made up largely of items which are wholly within the Government's control. The first item and one of the most important is interest rates. On debt charges alone, as a result of the increase in interest rates and the inescapable additions for matters which Birmingham is already committed, next year it has to find an additional £3 million.
      The second item concerns pay awards, including the salaries of teachers, which are almost completely in the control of the Government since they have the casting vote on the Burnham Committee, and pay awards to policemen, firemen and other local authority employees as a result of salary increases already granted. Next year the Birmingham authority will have to find an additional £10·75 million here.
      The Housing Finance Act is imposing additional administrative burdens on every local authority. If the Government really wanted to cut down the rates they would scrap the Housing Finance Act tomorrow and thereby make substantial savings. The cost to Birmingham of administering the Housing Finance Act will be £1 million. That is the size of the imposition upon Birmingham's ratepayers.
      There are other inflationary increases. In terms of education, apart from salaries, there is an additional £500,000. On aid

      1611
      to pupils in schools and grants to people going to universities and technical colleges, there is another £500,000. New superannuation regulations have been approved by the Government affecting local authority employees. They have come into force and represent an additional £370,000 which is totally inescapable to Birmingham and to every other local authority.
      Urban renewal is a matter of great importance which has been urged upon the city by the appropriate Ministers. Next year that represents another £350,000.
      Every one of those items is inescapable and necessary. Adding the lot up, the total comes to £18·25 million. Out of £18·5 million extra which Birmingham has to find next year, £18·25 million is totally inescapable and attributable to matters directly in the control of the Government.
      The local authorities will take it badly from the Minister when he says that in normal times we trust our partners to spend wisely. Whether times are normal or abnormal, local authorities always spend very responsibly. Local councillors have to seek re-election. Every single one of them is up for re-election this year. That is the great saving grace of democracy in this country. They are not wasteful spenders of public money. This is not the year in which local authorities will spend unwisely. The case for Government intervention has not been made out.
      I now turn to what the Government are doing. The Minister said that he was sending out a simple letter. How right he is. It could not be more simple. The letter tells local authorities that the Secretary of State does not like what they are proposing to do. It is a duplicated circular in which there are two empty spaces. In the first space will be filled in the percentage increase of rate expenditure, excluding housing, of the local authority to which it is sent. In the second space some genius in the Department, after a process which we know not but which we hope to learn today, will fill in an amount by which he expects that local authority to cut its estimates.
      1612
      This letter is being sent to a number of selected authorities. Perhaps the Minister will tell us how many.
      Mr. Graham Page: I told the hon. Gentleman that 110 local authorities have been asked to reconsider their rates.
      Mr. Howell: I am grateful to the right hon. Gentleman for that information. Compared with the number of local authorities in the country as a whole, 110 is a very small proportion indeed, and immediately the point is conceded that the overwhelming number of local authorities are responsible people who cannot be reproached by the Government about their rate fixing.
      I now turn to the 110 unfortunate recipients of this letter. We know of one or two of them from leaks in newspapers—Derbyshire, Hampshire, Teesside, Southampton, Bournemouth, Wirral and Denbighshire. They are not all great Labour authorities. The first question that I have to ask is on what authority the letter was sent out. The Minister is acting totally outside the law. His action is ultra vires. There is no authority for the Minister to make such an imposition on any responsible local authority. The power to act in this way will be available only when the Bill is passed, yet here we have the Minister taking administrative action on a Bill which has not gone through the House and which, when it reaches the other place, if the Law Lords are up to the standard of performance that we expect of them, might be there for a long time.
      After the Bill has left this House, and while it is being discussed in detail in another place, it will be too late for it to have any effect on any rate levied by any local authority. The practicality of the situation is that even now treasurers are doing their work and finance committees are deciding what rate to levy. Indeed, the letter cannot be sent out until decisions have been taken on what rates to levy.
      The Minister is behaving totally outside the law. If a trade union were to behave half as illegally as the right hon. Gentleman is doing, one can imagine the howl that would go up from the Conservative benches.
      Mr. Graham Page: Come off it!
      Mr. Howell: It is no good the Minister laughing and saying "Come off it". He is the great constitutional lawyer of the Conservative Party when it comes to matters of local government. On many occasions we have heard the right lion. Gentleman say that local authorities should obey the law and how trade unions were behaving disgracefully by acting illegally. Yet here we have an illegal action by the Minister on the basis of a power which does not exist. This is an extraordinary and ludicrous procedure.
      The Government do not need this power, because the Minister has conceded that every local authority has already voluntarily sent him the information lie wants. Will the Minister tell us one authority which has refused? I do not believe that there is one authority which would not voluntarily provide this information. That being so, the clause is an impertinence and an unwarranted reflection upon the good quality and the spirit of co-operation which exists in local authorities.
      Not only will local authorities want the sort of information contained in the letter about how much they should chop off their estimates: they will pin back on the Government the responsibility for telling them how this is to be achieved. Which services are to be cut back? Who are the people to be sacked in order to produce savings of this magnitude? Such savings as are specified in the letter cannot be achieved without a cutback on local authority staffs. In the case of Birmingham and the other authorities, the Government will have to say whether it is policemen or local authority doctors, for example, who will be sacked. Which section of employees is to be disposed of to bring about these substantial savings?
      Hampshire County Council, which has a Conservative majority—the county is overflowing with Socialists—has received about £12 million extra from the Government this year. It is an extraordinary commentary on our present rating and financial aid system that such a situation has been developed. The large towns, which have all the difficulties and problems, are getting far less than the counties. I do not blame that entirely on the Government, but if it is a matter which concerns them they should deal with it this year and not in any future year. The
      1614
      problem is now; the economic crisis, inflation and the prices and incomes policy are now. They are not in the future, but now.
      When told that Hampshire proposed to transfer £3 million of this money to a contingency fund, the Government wrote to tell the council that it should not do so. The Conservative council has written back to tell the Minister—if I may express myself in polite parliamentary terms—that he should take more parsley and thyme with the turkey he eats. I do not blame Hampshire for expressing itself like that. What the Minister is proposing is a gross interference with Hampshire's autonomy and its local government obligations.
      As I have said, the present formula for assistance to local government is totally obsolete. The Government have made much of the fact that they are giving 60 per cent. of the money required this year to each local authority, but we all know that there is a tremendous maldistribution in that 60 per cent., that some authorities are getting far more than 60 per cent. and that others, largely the big cities, are getting far less—in the 40 per cent. to 50 per cent. bracket. Birmingham, for example, will get 51 per cent. The difference for Birmingham alone between that 51 per cent. of Government help towards the rates next year and the 60 per cent. on which Ministers take their stand is £10 million. That is the hard cash difference for Birmingham alone.
      9.15 p.m.
      This is not a question that we can discuss in isolation. There are other matters. There is the question of revaluation, on which I should be out of order to proceed this evening—although perhaps I am entitled, as the Minister mentioned it, to ask when we shall have the promised statement on revaluation. Three or four weeks have passed since the Prime Minister met representatives of the large cities. We have had three or four weeks of Government inertia at a time when treasurers and finance committees have to make up their minds what rate should be levied. They cannot do that until they know what help the Government are to give them.
      Mr. Dennis Skinner: The Cabinet have spat on them.
      Mr. Howell: My hon. Friend may be right. The Government recognise the problem and they want to do something about it. But they do not have any money. They have got themselves into a financial jam. The ludicrous thing is that from this Dispatch Box we have repeatedly told the Government how to help and we have offered them help in order to solve the problem. But we have been totally rejected.
      The whole of this exercise of Clause 13 is a piece of meaningless window dressing. In terms of aid to ratepayers it will be virtually useless. The clause is designed to camouflage the bankruptcy of Government policy and to transfer the responsibility for the increased burdens which ratepayers will have to face away from the Government, where it ought to lie, on to the backs of local authorities which are totally innocent in this matter. It is because this is a piece of political deception that we shall divide the House on the amendment.
      Mr. Ridsdale: I have previously asked my right hon. Friend the Minister whether the monitoring would take place in the year 1974–75. I had hoped that that might give an indication of the Government's policy and intention to reform local government finance, and to do that in the way that I had hoped and not to continue with the policy of subsidy which is disguising so much the real cost of education and national charges and, because of the disguising of costs, causing us not to face up to the reality of Government spending.
      It is for that reason and because of the urgency of the problem that I hope that my right hon. Friend will be able to give a promise soon, or give some indication of when we can expect something more in the reform of local government finance particularly in the form of taking some of the education burden off some of the authorities. I am sure that the Government could help on this matter.
      The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) spoke about the problems of Birmingham. I can assure him that the problems of the county of Essex, where we face an increased rate of 24 per cent., are very considerable, particularly when one knows that the increase will have to be paid by 25,000 old-age pensioners in my con-
      1616
      stituency in a total of 100,000 constituents.
      Mr. Arthur Lewis: And by others.
      Mr. Ridsdale: And by others on small fixed incomes and low wages. That is why I challenge whether the direction in which the Government are moving in subsidisation, although it will help them in the short term, is right in the long term, for which we need to see something more. That is why I find the clause such a disappointment. It shows nothing of the willingness to reform local government finance, but rather to continue along the lines on which we have been moving during the last five or six years, which has led us to the present extent of spending and the present burdens placed on so many people.
      Therefore, I hope to hear from the Minister that something much more concrete in the long term will be done, although in the immediate future I realise that further help will have to be given through the rate subsidy if an unbearable burden is not to be placed on many of the people about whom I have spoken.
      Mr. Geoffrey Rhodes: I certainly agree with the major point raised by the hon. Member for Harwich (Mr. Ridsdale). For a brief time I worked in a humble capacity in the Ministry of Housing and Local Government, as it then was, and I constantly urged upon the Minister the need for a radical transformation of the way in which we financed local government. I had spent the previous 10 years lecturing on the subject urging the same thing and I suspect that 20 years from now, if God is willing and I am still here, and I suppose if the electorate is willing, I will still be arguing the same principle. But I do not think that this argument is particularly relevant or useful in discussion of the amendment.
      The Minister will know perfectly well that under Section 11, I think, of the Transport Act, which created the passenger transport authorities, these authorities have the power to levy a precept on the local authorities in their area. I think that was in 1968 and the unanimous decision was taken, including Conservative representatives from Newcastle-upon-Tyne, to accept the principle of free fares

      1617
      during certain periods of the day and on certain days of the week for the elderly and the disabled of that city. The number of people who would benefit can be judged from the fact that in my constituency of 47,000 people there are nearly 14,000 who are over 60.
      It was a unanimous decision but before very long the Conservatives on the Newcastle Council—I am sorry I am being parochial but the principle will emerge in a minute—decided to fight the scheme because the precept would cause too big a levy to be put on the local authority. They were also accompanied by representatives of the Castle ward of the rural district council, which is in the constituency of the Secretary of State for the Environment. They thought it was a burden that the working classes of the city could carry. Probably they in Castle ward could carry it because they are quite wealthy in that particular area.
      The Secretary of State on his own initiative then wrote to the Tyneside Passenger Transport Authority requesting that the precept be reduced or abandoned for at least a year because of the rising cost of local government during the present financial year. This was interference with local government and it was interfering with the right of the mass of the local representatives of the area to determine what was socially desirable in their area. On Monday evening the Tyneside Passenger Transport Authority wrote back and told him, in its own local government style of language, "to get lost". It told him that it was going ahead with the scheme.
      I should like to ask the Minister whether before 1st April it is the intention, under the clause, for the Secretary of State to interfere even further with local government in the area and order the Tyneside Passenger Transport Authority to succumb to the minority of the Conservatives who are opposed to the scheme. In Newcastle there are more Labour councillors than Conservative councillors but it merely happens that all 20 aldermen are members of the Conservative Party.
      What will the Secretary of State do now? Will he beat a hasty retreat having done his duty by his local constituents? I spoke about cuts in local government expenditure in the House a fortnight ago
      1618
      when I mentioned the other cut that it was rumoured was to be made. I am sorry that the Under-Secretary of State for the Environment is not in his place because I intend to refer to a letter he sent me today. I refer to the rumour that the smoke control scheme in the city of Newcastle, where the air is filthy and the rate of bronchitis stands among the highest in the country, was to be cut back as one of the cuts to be made in local government.
      I told the Under-Secretary that I had organised 200 people, some of them members of his own party, who were prepared to go into the ward represented by the chairman of the finance committee and put him in his place in a few months' time if he went ahead with such a scheme. I am told that this morning Newcastle changed its mind. I am told that it no longer intends to abandon its smoke-control scheme, that it does not intend to leave the air on the eastern side of the city, which I represent, in its present filthy condition. Again, the Conservatives retreat.
      As my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) said, every time we return to the question of over-spending we have a right to ask what the Conservatives will cut back. They will not cut back on smoke control. Are they going to cut back on concessionary fares for the aged? If not, what will they do? If they will not do anything, why do they want the amendment?
      During the 1970 General Election campaign we heard a great deal about interfering with local government and the rights of local people to make their own decisions. Nearly all the local authorities were then controlled by the Conservatives. Now, when nearly ail of them are controlled by the Labour Party and even more will be so controlled after April and May, the local authorities' freedom to spend suddenly becomes a sin that is ruining the national economy. I have put this simple question in parochial terms, because it is in that way that the principles can be seen.
      The other tactic was to blame everything on the council tenants. A blazing headline in the Newcastle Evening Chronicle the other night said:
      "Massive Blow to Ratepayers—Subsidies to Council Tenants to Spiral".

      1619
      That made it look as though the Labour Party had forced upon the Conservative Council the abominable sin of making the owner-occupiers subsidise the council tenants, but it was an Act of the present Government that forced the situation upon the Newcastle-upon-Tyne City Council.
      The Conservatives' tactics are simple. They blow up a storm over cutting back on smoke control and then say "We shall not do that. We are too kind". Next there is the fuss over concessionary fares for the old people. I think that the Conservatives will crawl down on that and say that they are helping the old people, but I should like to know the answer. Then they create a stir about council tenants, saying that rates must increase because the owner-occupiers have been made to finance people worse off than themselves.
      As my hon. Friend the Member for Small Heath said, the increased cost of local government has little to do with the three points I have mentioned. It is a reflection of the breakdown of the Government's ability to carry out their pledge in 1970 to cut prices and hold back inflation. Having failed to cut back the cost of local government, they are using diversionary tactics to impress upon the public that it is not that they are bad but that they have so many wonderful services to pay for and that it is the Labour Party that is out to spend the ratepayers' money. That is a dirty tactic that has rightly been exposed by the Opposition.
      I again pose my question. It has been said that 100,000 old and disabled people on Tyneside will gain free fares under the present legislation. Will the Secretary of State before 1st April force the Tyneside Passenger Transport Authority to cut back on that? Let him come clean before polling day. Let us have a bit of honesty in local government politics.
      9.30 p.m.
      Mr. Cant: I agree with those who hope that before too long we shall have a discussion of local government finance reform. In my 21 years as a member of a local authority I have never been more reminded of the dictum of Lord Keynes that it is the short run that matters because in the long run we are all dead. Local government is in a state of crisis.
      1620
      If my Deputy Chief Whip had not just entered the Chamber, I should have liked to become involved in a long ideological discussion with the Minister. In all the years I have been a member of a local authority I have never felt so affronted by a Government. Yet the Government were supposed to be giving freedom to local authorites. But they did the same sort of thing in 1958 when the then Conservative Government introduced the new financial system, although they had previously said that they would dismantle all controls. This time the Conservative Party said that it would give local authorities a new freedom. But now the Government have the audacity to monitor local government finance. This is a consequence not of local government extravagance but of the Government's own massive incompetence. In fact, they have put us in such a mess that they must, I suppose, resort to almost any expedient.
      It all reminds me of the Brazilian dictator who, when he came to office, said "We found the country on the edge of an abyss. Since then we have moved forward." No wonder the Government are monitoring local government finance. I have the greatest respect for the right hon. Gentleman, and had any other member of the Government come here to try to defend this situation I suspect that, lacking the respect we hold for the right hon. Gentleman, that Minister would have been hounded out of the Chamber.
      We have had a brilliant analysis of the cause of the increases in local government spending. Of course some local authorities spend more per head than others. Some spend a good deal less. The crux of local government financial problems is simple—that many local authorities are spending more because of the reasons mentioned by my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell). But what is producing the crisis is not local government expenditure; that is just something seen in the context of the Bill.
      The real crisis in local government expenditure is that two geographically contiguous local authorities can be faced with the same inflation, with the same growth in services, and yet one can have no increase in the rates and the other can have a 25 per cent. increase. I would like to develop this point, although the Deputy Chief Whip wants me to sit down.

      1621
      Many cities are losing a great deal of their central Government rate support grant to the counties. That is the first problem. The second is our old friend, revaluation. I merely ask the right hon. Gentleman when he will make a statement to the House about how much he is going to give local authorities like Stoke-on-Trent and Birmingham which are in difficulty because they have been adversely affected by these factors.
      Mr. Kenneth Marks: It was significant that when the Secretary of State for Employment moved the Second Reading of the Bill he went from Clause 12 to Clause 14 and had to be reminded that there was also a Clause 13. We have heard a great deal of what the clause is not. We are told that it is not to cut local authority rates, not to tell local authorities what to do. What, then, is Clause 13 supposed to do?
      Local authorities are only too pleased to tell the Government about their problems with rates and how much will be needed to tackle those problems. The big city representatives have been trying for 10 weeks to tell the Prime Minister, the Secretary of State for the Environment and other Ministers precisely what the problems are. They have still had no repily. Treasiurers and councillors have worked for months preparing their estimates, knowing what inflation was taking place, knowing what they would have to tackle the next year. Now a staff of 12 in the Department of the Environment is to tell 1,400 local authorities what it thinks their rates ought to be. Will they understand the problems or will they just think of a number?
      Liverpool was criticised by one Minister because it did not take account in last year's estimates of the likely inflation. What inflation has Liverpool to take account of next year? What about the duty which Ministers of Education, the Social Services and the Home Office have placed upon local authorities in the last 12 months? Are they not to go ahead with their nursery school plans? Manchester was criticised because last year it increased its social services budget by 37 per cent. Will the Government say that it is too much and that it should not be any more this year? Is Manchester to cut its police and fire service expenditure?
      1622
      What about revaluation? We have argued about it for weeks in this House. Will the Government do anything about the imposition on many domestic ratepayers which will be caused by revaluation? If they do, who will pay? Will the Government or the ratepayers pay? When will the Prime Minister make the statement that he said he would make after consulting the big cities? The clause is quite unnecessary. The local authorities are prepared to give the information and they want to know what the Government think about it.
      Mr. Gerald Kaufman: Will my hon. Friend emphasise the point that the big cities are in terrible trouble at the moment? Bristol has had to abandon fixing its rate because the Government have not told it what it will be. Manchester is fixing its rate on Friday without any information from the Government. Will my hon. Friend emphasise that speed is essential?
      Mr. Marks: We have had six debates on this matter since December. If the Minister does not know, he has not been listening very hard. The fact is that Ministers have not been listening very hard. They have been trying to think of a political way out that will help their party.
      Mr. John Roper: My hon. Friend the Member for Manchester, Gorton (Mr. Marks) referred to the problem of the big cities. It is sometimes misleading if it is assumed that the problems of rating are confined to the big cities. Urban district councils in my constituency and throughout the country are facing considerable difficulties. They are getting no information to give them an idea of when they may get some assistance. The Minister has given us no indication of the sort of help that can he given. It is no use producing a Counter-Inflation Bill unless something is clearly brought forward to deal with the substantial inflation which will be caused by the increase in rates in the near future.
      One of the authorities in my constituency is now in a desperate position because, in spite of having written to the Secretary of State for the Environment on 9th February, it has still had no clear reply about its position. The Kearsley Urban District Council is not increasing

      1623
      its expenditure by any extravagant amount. Its increase in net expenditure this year will be less than 2 per cent., yet I was told in a Written Answer yesterday that the average increase for domestic ratepayers in the Kearsley urban district on the proposals which have been returned by the council on the form FLA2 RM1 will mean an increase for the domestic ratepayers on average of 22 per cent.
      That is a serious situation because the ratepayers of Kearsley do not understand the reason for the increase. They think that it is the fault of the Kearsley Urban District Council, which has increased its expenditure by only 2 per cent. The ratepayers, however, will be faced with a rate bill which will go up by 22 per cent. I hope that before we vote we will be given a clear indication of what the Minister intends to do to assist not only the big cities but the small authorities like the Kearsley Urban District Council.
      Mr. Oakes: We have heard tonight from my hon. Friends that local authorities and local authority associations regard this clause, rightly, as an insult. The speech by the Minister for Local Government and Development, in which he said that even without statutory authority of any kind over 1,000 authorities out of 1,400 had already replied with the information required is proof positive that this clause is not needed. We have heard of the level of the insult from speeches on both sides of the House, in particular from my hon. Friends the Members for Newcastle-upon-Tyne, East (Mr. Rhodes), Manchester, Gorton (Mr. Marks), Stoke-on-Trent, Central (Mr. Cant) and Farnworth (Mr. Roper). The attitude of local authorities to this clause goes right across the board.
      I want to speak not just about the insults of this clause but about the injury added to it by subsections (6) and (7). In opening the debate the right hon. Gentleman gave no indication why these subsections were needed. They remain in the Bill only as a result of the casting vote of the Chairman in Committee. Why do the Government insist upon them remaining in the Bill? Our Amendment No. 44, on which we will divide the House, is designed to
      1624
      remove these injurious subsections. As the right hon. Gentleman has not explained why they are in the Bill I can only assume that they are in some way designed to facilitate some policy envisaged by the Prime Minister in connection with revaluation and helping local authorities. If this is so the right hon. Gentleman, who has vast experience of local government, must know that this is the worst possible way in which to attempt to deal with the problem.
      What these subsections say is that where a local authority has struck a precept or rate it can subsequently change its mind, and, having done so, must repay to the ratepayers or the authority which paid the original sum the amount of the excess charged. This is in contradiction of what happens under the General Rate Act 1967. I can see no reason for these two subsections unless the Government intend to intervene, once a local authority has struck a rate, to twist the arm of that authority and demand that it in some way repays the ratepayer. If the Government wish to help local authorities they should do so by direct grant either to them or to the ratepayers. This method is the worst possible way of intervening and bears no relation to local government practice.
      How can this clause work? Local authorities depend not only upon Government grants and rates but upon the investment of the public. That investment depends on the amount of the rate that is struck, so that investors know what the rate is. This clause allows a local authority to strike a rate and then change its mind. It must then repay the ratepayers. Do the Government realise the difficulties involved? Suppose a county council or a transport authority issues a precept. It then finds that too much money has been collected; but instead of putting that into a balance for the benefit of future ratepayers it has to repay that money. To whom is it repaid? To the ratepayers or the rating authority? On this the clause is silent. It merely says in subsection (7):
      "to ensure that any resulting overpayment made to the authority is refunded".
      It does not say to whom. But we presume that it means that it is refunded to the ratepayers. Do the Government realise how difficult a job that will be for the

      1625
      accounting departments of local authorities, which are already hopelessly overburdened with the work of local government reorganisation as well as water reorganisation and the many other functions they must undertake?
      9.45 p.m.
      Under the clause the authorities must find the ratepayer who has paid the rate and repay him so many pennies because, according to the clause, or the Government's arm-twisting, they had overestimated the rate. As the Minister more than anyone else in the House knows, the difficulty is accentuated by the fact that the repaying authorities may well not be the authorities which levied the rate, because we are at the crucial time of local government reorganisation and the new authority might involve several of the rating authorities which made the original rate.
      Clearly, the clause cannot work, and I am at a loss to know why the Government have put it in the Bill, unless it is designed to deal with a future scheme for helping local authorities designed by the Prime Minister for which local authorities have been waiting for three weeks or a month. No decision has yet been made by the Government at this crucial time for local authorities.
      This has been an interesting debate. I note, and I think hon. Members on both sides of the House will note, that the much-vaunted attention of members of the Liberal Party to local government problems has been evidenced by the fact that not one Liberal Member has been present throughout this debate.
      The Minister said, perhaps in some sense of shame in view of his experience of local government matters, that the clause is a machinery clause. We hope to have subsections (6) and (7) deleted from what the Minister euphemistically described as a machinery clause. It will do tremendous injury to the future of local government. If it is a machinery clause, we seek, by our amendment, to remove the spanner from the works. I ask not only my right hon. and hon. Friends but hon. Members opposite who respect their colleagues in local government to reject the stupid subsections of this unnecessary clause.
      Mr. Graham Page: With your leave, Mr. Speaker, and that of the House, may
      1626
      I answer the points which have been made, particularly on the amendment proposing the removal of subsections (6) and (7) to which the hon. Member for Widnes (Mr. Oakes) addressed his remarks?
      I still say that this is mainly a machinery clause. There is no impossibility about the return of part of a rate paid. It is done by claims for voids every day. There is provision in subsection (7) for those who are entitled to reclaim to make their claims. If the central Government and local government get together to consider the amount of the rate and the discussions take place at the eleventh hour before the rate is fixed, or even after the rate is made and before it is levied after 1st April, it is necessary that there should be opportunity to reconsider the rate fixed.
      I repeat that the Government do not intend to deprive local authorities of the right to fix and levy a rate. The clause and the amendment do not give the Government the right to fix a rate or to tell a local authority what rate should be fixed. Nor does it give them any right to examine or cross-examine local authorities in the way described by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell). The hon. Gentleman asked: would the Government take public responsibility for the advice given to local authorities? Of course. They always do. He asked: where is the authority in this matter for asking these questions of local authorities? In fact, he waxed very warm on the question of my carrying out some illegal operation. Perhaps that is not quite the right phrase to use, but to use his own words, it was an extraordinary and ludicrous speech—to accuse a Minister of some illegal operation by writing a letter to a local authority asking about the rates which the local authority was fixing. Is he really suggesting that a Minister needs the authority of Parliament to write a letter such as that? It really is ludicrous.
      Mr. Denis Howell: If the Minister does not need the authority of Parliament to do it, what is this clause here for? What is it all about? What we were objecting to was the writing to local authorities telling them by how much to reduce their rates. What the Government are seeking is power without responsibility—as a former Tory Prime Minister once said,

      1627
      the prerogative of the harlot down the ages.
      Mr. Page: I am sure the hon. Gentleman would object strongly if we took the responsibility of fixing the local authorities' rates. That is exactly what we are not doing. If I may read the phrase in that letter which the hon. Gentleman says I was issuing illegally, I will quote it:
      "The council are accordingly asked to review their proposals with the objective of reducing expenditure by an amount—"
      and the figure is given in the letter. Is it really an illegal act to write a letter like that to a council? The hon. Gentleman might have got a better case than that on which to base his argument, instead of spending at least 10 minutes accusing of me of an illegal act.
      The hon. Gentleman then recited various items of expenditure by Birmingham, and, quite rightly, pointed out that for much of this Birmingham is not directly responsible and that it arises from financial obligations placed on local authorities by the central Government, and for which a local authority has little discretion in fixing the amounts. Of course, in any local authority's rate bill one finds those items, but in the circular relating to the form on which information was to be collected we made a specific point of this fact, that what we were concerned with in the completion of the form were factors over which the local authorities themselves have "direct control"—that phrase comes into the circular which was sent out—making it perfectly clear to a local authority that it could come back and say to us "You, the central Government, are responsible for these items, we are responsible for expenditure on those items, and now let us discuss the latter"—because it is on those that there might be some saving. The very fact that there has been a saving out of this process already, in the first three weeks, of £1½ million shows that discussion in this way with the local authorities and co-operation between the central Government and local government are capable of saving the ratepayers money.
      My hon. Friend the Member for Harwich (Mr. Ridsdale) asked about local government finance reform and when it would be announced. We
      1628
      announced that we would in due course be bringing in a local government finance Bill and that if it were delayed there would be a White Paper describing the intentions of the Bill.
      The hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes) asked whether it was our intention under this Bill to interfere with the precept of the PTA in Newcastle. My answer is that there is no power in this Bill to make any such order or interference in a case of that sort.
      Mr. Rhodes: The right hon. Gentleman knows perfectly well that under the Transport Act 1968 he has power to instruct a local authority to reduce the precept upon the local authority if he considers it to be excessive, or to delay the precept if he considers it to be bad in that year. That may not come under this clause, but it would be honest if he were to explain to the local authorities whether his right hon. Friend is intending to use that power and will tell them before the local elections.
      Mr. Page: I am not discussing the Transport Act. If I branched off into a debate on the Transport Act I should be ruled out of order.
      The hon. Member for Stoke-on-Trent, Central (Mr. Cant) made the valid point that under the present rate support grant formula where there are two towns with the same sort of growth one town may recover a great deal from the resources element and the other may not. With revaluation this has shown up more than previously. For example, Bristol has had a resources element grant for the first time. Sheffield and Leeds have had their resources element grant increased. It is not one-sided.
      The hon. Member for Small Heath did not address his mind to Clause 13. It does not allow the Secretary of State to make an order fixing a rate. It allows him to make a specific order if a local authority fails to provide information for which it is asked. I hope that orders will not be necessary. I do not mind hon. Gentlemen on the Opposition benches saying that this provision may be unnecessary. It may well be unnecessary, but for the sake of the local authorities which co-operate it is right to have statutory backing.
      There has been criticism of the central Government for failing to provide money

      1629
      for local government. I remind the House that in the rate support grant this year the Government contributed to local government expenditure £400 million more than last year. The domestic element was increased by 50 per cent. and next year, by reason of Bills going through Parliament, £350 million will be removed from rate expenditure. I have said that we shall be carrying the reform of local government finance further in a future Bill dealing with that subject.
      I hope that the House will accept the Government amendments and reject Amendment No. 44.
      Amendment agreed to.
      Amendment made: No. 12, in page 9, line 36, leave out from beginning to end of line 39 and insert:

      '(a) any rate made, or precept or requisition issued, by the authority for the financial year 1973–74 or any part of that year, or

      (b) any rate, precept or requisition which they propose to make or issue for the financial year 1973–74 or 1974–75 or any part of either of those years'.—[Mr. Graham Page.]

      Amendment proposed: No. 44, in page 10, line 43, leave out subsections (6) and (7).—[Mr. Denis Howell.]
      Question put, That the amendment made:—
      The House divided: Ayes 205, Noes 274.

      Division No. 73.]

      AYES

      [9.58 p.m.

      Abse, Leo

      Ellis, Tom

      Lyon, Alexander W. (York)

      Allaun, Frank (Saltord, E.)

      English, Michael

      Lyons, Edward (Bradford, E.)

      Archer, Peter (Rowley Regis)

      Evans, Fred

      Mabon, Dr. J. Dickson

      Ashley, Jack

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

      McBride, Neil

      Atkinson, Norman

      Fitch, Alan (Wigan)

      McGuire, Michael

      Barnett, Guy (Greenwich)

      Fletcher, Raymond (Ilkeston)

      Mahon, Simon (Bootle)

      Barnett, Joel (Heywood and Royton)

      Fletcher, Ted (Darlington)

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

      Beaney, Alan

      Foot, Michael

      Marks, Kenneth

      Benn, Rt. Hn. Anthony Wedgwood

      Ford, Ben

      Marquand, David

      Bidwell, Sydney

      Forrester, John

      Marshall, Dr. Edmund

      Blenkinsop, Arthur

      Fraser, John (Norwood)

      Mason, Rt. Hn. Roy

      Boardman, H. (Leigh)

      Freeson, Reginald

      Meacher, Michael

      Booth, Albert

      Galpern, Sir Myer

      Mellish, Rt. Hn. Robert

      Bottomley, Rt. Hn. Arthur

      Gilbert, Dr. John

      Mendelson, John

      Boyden, James (Bishop Auckland)

      Ginsburg, David (Dewsbury)

      Mikardo, Ian

      Bradley, Tom

      Millan, Bruce

      Broughton, Sir Alfred

      Grant, John D. (Islington, E.)

      Miller, Dr. M. S.

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

      Griffiths, Eddie (Brightside)

      Milne, Edward

      Brown, Ronald (Shoreditch & F'bury)

      Griffiths, Will (Exchange)

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

      Buchan, Norman

      Hamilton, James (Bothwell)

      Molloy, William

      Butler, Mrs. Joyce (Wood Green)

      Hamilton, William (Fife, W.)

      Morgan, Elystan (Cardiganshire)

      Callaghan, Rt. Hn. James

      Hardy, Peter

      Morris, Alfred (Wythenshawe)

      Cant, R. B.

      Harrison, Walter (Wakefield)

      Morris, Charles R. (Openshaw)

      Carmichael, Nell

      Hattersley, Roy

      Morris, Rt. Hn. John (Aberavon)

      Carter, Ray (Birmingh'm, Northfield)

      Healey, Rt. Hn. Denis

      Mulley, Rt. Hn. Frederick

      Carter-Jones, Lewis (Eccles)

      Heifer, Eric S.

      Murray, Ronald King

      Castle, Rt. Hn. Barbara

      Hooson, Emlyn

      Oakes, Gordon

      Clark, David (Colne Valley)

      Houghton, Rt. Hn. Douglas

      Ogden, Eric

      Cohen, Stanley

      Howell, Denis (Small Heath)

      O'Halloran, Michael

      Coleman, Donald

      Huckfield, Leslie

      O'Malley, Brian

      Concannon, J. D.

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Oram, Bert

      Corbet, Mrs. Freda

      Hughes, Roy (Newport)

      Orbach, Maurice

      Cox, Thomas (Wandsworth, C.)

      Hunter, Adam

      Orme, Stanley

      Crawshaw, Richard

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

      Owen, Dr. David (Plymouth, Sulton)

      Cronin, John

      Janner, Greville

      Palmer, Arthur

      Crosland, Rt. Hn. Anthony

      Jay, Rt. Hn. Douglas

      Pardoe, John

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

      Jenkins, Hugh (putney)

      Parker, John (Dagenham)

      Dalyell, Tarn

      John, Brynmor

      Parry, Robert (Liverpool, Exchange)

      Davies, Denzll (Llaneliy)

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

      Pavitt, Laurie

      Davies, Ifor (Gower)

      Johnson, Walter (Derby, S.)

      Peart, Rt. Hn. Fred

      Davis, Clinton (Hackney, C.)

      Jones, Barry (Flint, E.)

      Perry, Ernest G.

      Davis, Terry (Bromsgrove)

      Jones, Dan (Burnley)

      Prentice, Rt. Hn. Reg.

      Deakins, Eric

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

      Probert, Arthur

      de Freltas, Rt. Hn. Sir Geoftrey

      Jones, Gwynoro (Carmarthen)

      Rees, Merlyn (Leeds, S.)

      Jones, T. Alec (Rhondda, W.)

      Rhodes, Geoffrey

      Judd, Frank

      Richard, Ivor

      Delargy, Hugh

      Kaufman, Gerald

      Roberts, Albert (Normanton)

      Dell, Rt. Hn. Edmund

      Kelley, Richard

      Roberts, Rt. Hn. Goronwy (Caernarvon)

      Dempsey, James

      Kerr, Russell

      Robertson, John (Paisley)

      Douglas, Dick (Stirlingshire, E.)

      Kinnock, Neil

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

      Douglas-Mann, Bruce

      Lambie, David

      Roper, John

      Driberg, Tom

      Lamborn, Harry

      Rose, Paul B.

      Duffy, A. E. P.

      Latham, Arthur

      Rowlands, Ted

      Dunn, James A.

      Lawson, George

      Sheldon. Robert (Ashton-under-Lyne)

      Eadie, Alex

      Lewis, Arthur (W. Ham, N.)

      Shore, Rt. Hn. Peter (Stepney)

      Edelman, Maurice

      Lewis, Ron (Carlisle)

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

      Edwards, Robert (Bllston)

      Lipton, Marcus

      Silkin, Rt. Hn. John (Deptford)

      Edwards, William (Merioneth)

      Lomas, Kenneth

      Silkin. Hn. S. C. (Dulwich)

      Sillars, James

      Swain, Thomas

      Wells, William (Walsall, N.)

      Silverman, Julius

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

      Whitehead, Phillip

      Skinner, Dennis

      Thomas, Jeffrey (Abertillery)

      Whitlock, William

      Small, William

      Tomney, Frank

      Willey, Rt. Hn. Frederick

      Smith, John (Lanarkshire, N.)

      Tope, Graham

      Williams, Alan (Swansea, W.)

      Spearing, Nigel

      Torney, Tom

      Wilson, Alexander (Hamilton)

      Spriggs, Leslie

      Tuck, Raphael

      Wilson, Rt. Hn. Harold (Huyton)

      Stallard, A. W.

      Varley, Eric G.

      Wilson, William (Coventry, S.)

      Stewart, Rt. Hn. Michael (Fulham)

      Wainwright, Edwin

      Stoddart, David (Swindon)

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

      TELLERS FOR THE AYES:

      Stonehouse, Rt. Hn. John

      Walker, Harold (Doncaster)

      Mr. Michael Cocks and

      Strauss, Rt. Hn. G. R.

      Wallace, George

      Mr. Tom Pendry

      Summerskill, Hn. Dr. Shirley

      Weitzman, David

      NOES

      Adley, Robert

      Fidler, Michael

      Kimball, Marcus

      Alison, Michael (Barkston Ash)

      Finsberg, Geoffrey (Hampstead)

      King, Tom (Bridgwater)

      Allason, James (Hemel Hempstead)

      Fisher, Nigel (Surbiton)

      Kinsey, J. R.

      Archer, Jeffrey (Louth)

      Fletcher-Cooke, Charles

      Kitson, Timothy

      Astor, John

      Fookes, Miss Janet

      Knight, Mrs. Jill

      Atkins, Humphrey

      Fortescue, Tim

      Knox, David

      Awdry, Daniel

      Foster, Sir John

      Lamont, Norman

      Baker, Kenneth (St. Marylebone)

      Fowler, Norman

      Langford-Holt, Sir John

      Baker, W. H. K. (Banff)

      Fox, Marcus

      Le Marchant, Spencer

      Batsford, Brian

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

      Lewis, Kenneth (Rutland)

      Beamish, Col. Sir Tufton

      Fry, Peter

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

      Bennett, Sir Frederic (Torquay)

      Galbraith, Hn. T. G. D.

      Longden, Sir Gilbert

      Bennett, Dr. Reginald (Gosport)

      Gardner, Edward

      Loveridge, John

      Benyon, W.

      Gibson-Watt, David

      Luce, R. N.

      Berry, Hn. Anthony

      Gilmour, Ian (Norfolk, C.)

      McAdden, Sir Stephen

      Biffen, John

      Gilmour, Sir John (Fife, E.)

      MacArthur, Ian

      Biggs-Davison, John

      Glyn, Dr. Alan

      McCrindle, R. A.

      Blaker, Peter

      Godber, Rt. Hn. J. B.

      McLaren, Martin

      Boardman, Tom (Leicester, S.W.)

      Goodh t, Philip

      Maclean, Sir Fitzroy

      Body, Richard

      Goodhew, Victor

      McMaster, Stanley

      Boscawen, Hn. Robert

      Gorst, John

      Macmillan, Rt.Hn.Maurice (Farnham)

      Bossom, Sir Clive

      Gower, Raymond

      McNair-Wilson, Michael

      Braine, Sir Bernard

      Grant, Anthony (Harrow, C.)

      McNair-Wilson, Patrick (New Forest)

      Maddan, Martin

      Bray, Ronald

      Gray, Hamish

      Madel, David

      Brewis, John

      Green, Alan

      Maginnis, John E.

      Brinton, Sir Tatton

      Grieve,Percy

      Marten Neil

      Brockiebank-Fowler, Christopher

      Griffiths, Eldon (Bury St. Edmunds)

      Mather, Carol

      Brown, Sir Edward (Bath)

      Grylls, Michael

      Maude, Angus

      Bruce-Gardyne, J.

      Gummer, J. Selwyn

      Maudling, Rt. Hn. Reginald

      Bryan, Sir Paul

      Gurden, Harold

      Mawby, Ray

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

      Hall, Miss Joan (Keighley)

      Maxwell-Hyslop, R. J.

      Buck, Antony

      Hall, John (Wycombe)

      Miscampbell, Norman

      Bullus, Sir Eric

      Hall-Davis, A. G. F.

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

      Burden, F. A.

      Hamilton, Michael (Salisbury)

      Mitchell, David (Basingstoke)

      Butler, Adam (Bosworth)

      Hannam, John (Exeter)

      Moate, Roger

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

      Harrison, Brian (Maldon)

      Molyneaux, James

      Carlisle, Mark

      Harrison, Col. Sir Harwood (Eye)

      Money, Ernie

      Carr, Rt. Hn. Robert

      Haselhurst, Alan

      Monks, Mrs. Connie

      Channon, Paul

      Hastings, Stephen

      Montgomery, Fergus

      Chapman, Sydney

      Havers, Sir Michael

      More, Jasper

      Chataway, Rt. Hn. Christopher

      Hawkins, Paul

      Morgan-Giles, Rear-Adm.

      Clark, William (Surrey, E.)

      Hayhoe, Barney

      Morrison, Charles

      Clarke, Kenneth (Rushcliffe)

      Heseltine, Michael

      Mudd, David

      Clegg, Walter

      Hicks, Robert

      Nabarro, Sir Gerald

      Cockeram, Eric

      Higgins, Terence L.

      Neave, Airey

      Cooke, Robert

      Hiley, Joseph

      Nicholls, Sir Harmar

      Coombs, Derek

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

      Noble, Rt. Hn. Michael

      Corfleld, Rt. Hn. Sir Frederick

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

      Normanton, Tom

      Costain, A. P.

      Holland, Philip

      Nott, John

      Critchley, Julian

      Holt, Miss Mary

      Onslow, Cranley

      Crowder, F. P.

      Hordern, Peter

      Oppenheim, Mrs. Sally

      Davies, Rt. Hn. John (Knutsford)

      Hornby, Richard

      Orr, Capt. L. P. S.

      d'Avigdor-Goldsmid, Sir Henry

      Hornsby-Smith,Rt.Hn.Dame Patricia

      Osborn, John

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

      Howe, Rt. Hn. Sir Geoffrey

      Owen, Idris (Stockport, N.)

      Dean, Paul

      Howell, David (Guildford)

      Page, Rt. Hn. Graham (Crosby)

      Deedes, Rt. Hn. W. F.

      Hunt, John

      Parkinson, Cecil

      Dixon, Piers

      Hutchison, Michael Clark

      Peel, Sir John

      Dodds-Parker, Sir Douglas

      Iremonger, T. L.

      Percival, Ian

      Drayson, G. B.

      Irvine, Bryant Godman (Rye)

      Peyton, Rt. Hn. John

      du Cann, Rt. Hn. Edward

      James, David

      Pink, R. Bonner

      Dykes, Hugh

      Jenkin, Patrick (Woodford)

      Price, David (Eastleigh)

      Edwards, Nicholas (Pembroke)

      Jennings, J. C. (Burton)

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

      Elliot, Capt. Walter (Carshalton)

      Jessel, Toby

      Proudfoot, Wilfred

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

      Johnson Smith, G. (E. Grinstead)

      Pym, Rt. Hn. Francis

      Emery, Peter

      Jones, Arthur (Northants, S.)

      Raison, Timothy

      Eyre, Reginald

      Kaberry, Sir Donald

      Ramsden, Rt. Hn. James

      Farr, John

      Keilett-Bowman, Mrs. Elaine

      Rawlinson, Rt. Hn. Sir Peter

      Fenner, Mrs. Peggy

      Kilfedder, James

      Redmond, Robert

      1632

      1633

      Reed, Laurence (Bolton, E.)

      Stainton, Keith

      Waddington, David

      Rees, Peter (Dover)

      Stanbrook, Ivor

      Walder, David (Clitheroe)

      Rees-Davies, W. R.

      Stewart-Smith, Geoffrey (Belper)

      Walker, Rt. Hn. Peter (Worcester)

      Renton, Rt. Hn. Sir David

      Stodart, Anthony (Edinburgh, W.)

      Walker-Smith, Rt. Hn. Sir Derek

      Rhys Williams, Sir Brandon

      Stoddart-Scott, Col. Sir M.

      Wall, Patrick

      Ridley, Hn. Nicholas

      Stokes, John

      Ward, Dame Irene

      Ridsdale, Julian

      Stuttaford, Dr. Tom

      Warren, Kenneth

      Roberts, Michael (Cardiff, N.)

      Sutcliffe, John

      Weatherill, Bernard

      Roberts, Wyn (Conway)

      Tapsell, Peter

      Wells, John (Maldstone)

      Rodgers, Sir John (Sevenoaks)

      Taylor, Sir Charles (Eastbourne)

      White, Roger (Gravesend)

      Rossi, Hugh (Hornsey)

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

      Wiggin, Jerry

      Rost, Peter

      Taylor, Frank (Moss Side)

      Wilkinson, John

      Russell, Sir Ronald

      Taylor, Robert (Croydon, N.W.)

      Winterton, Nicholas

      Sandys, Rt. Hn. D.

      Tebbit, Norman

      Wolrige-Gordon, Patrick

      Scott, Nicholas

      Temple, John M.

      Wood, Rt. Hn. Richard

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

      Thatcher, Rt. Hn. Mrs. Margaret

      Woodnutt, Mark

      Shelton, William (Clapham)

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

      Worsley, Marcus

      Shersby, Michael

      Thompson, Sir Richard (Croydon, S.)

      Wylie, Rt. Hn. N. R.

      Simeons, Charles

      Tilney, John

      Younger, Hn. George

      Sinclair, Sir George

      Trew, Peter

      Skeet, T. H. H.

      Tugendhat, Christopher

      TELLERS FOR THE NOES

      Soref, Harold

      Turton, Rt. Hn. Sir Robin

      Mr. Michael Jopling and

      Speed, Keith

      van Straubenzee, W. R.

      Mr. Oscar Murton.

      Spence, John

      Vaughan, Dr. Gerard

      Sproat, Iain

      Vickers, Dame Joan

      Question accordingly negatived.

      It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That the Counter-Inflation Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Weatherill.]

COUNTER-INFLATION BILL
As amended in the Standing Committee, further considered.
Amendments made: No. 13, in line 45, leave out from beginning to end of line 46 and insert—

'(a) made a rate for the financial year 1973–74 or 1974–75 or any part of either of those years, or

(b) issued a precept or requisition in respect of any such period,'.—[Mr. Graham Page.]

No. 53, in page 11, line 5, leave out from beginning to end of line 7.—[Mr. Graham Page.]

COUNTER-INFLATION BILL
  Clause 14

    OFFENCES
    Mr. Bruce-Gardyne: I beg to move Amendment No. 45, in page 11, line 44, after 'Act', insert
    "or to secure the establishment of an independent inquiry into terms and conditions of employment under which that organisation or person is employed".
    I should perhaps make it clear that this is basically a probing amendment. I am anxious to ascertain how the Government interpret the legal provisions in this legislation governing industrial action.
    The sensible purpose of the amendment is to lay down that, just as it is stated to be illegal in Clause 14 for a person or group of persons to organise industrial action in pursuit of a wage claim which has been found to be in excess of the diktat of the Pay Board, so it would be against the letter of the law for a group of employees to take industrial action to secure the establishment of an independent inquiry into terms and conditions of employment which in turn was designed to achieve a settlement over and above the limits which my right hon. and hon. Friends have chosen.
    1636
    This is not an entirely academic proposition. Certainly it is not if one is to judge from the pages of New Statesman, which I confess is not my normal bedtime reading but which occasionally I dip into, the current issue of which carries a report from its industrial correspondent, Mr. Peter Patterson, who writes:
    "Obviously the Government is taking a serious step in making strikes over pay illegal."
    As I understand it, the Government are not doing that. What they are doing is to make provision whereby if a strike occurs against a settlement which has received the blessing of the very aptly named Sir Frank Figgures and his Pay Board, my right hon. and hon. Friends may seek legal powers to prevent this action being pursued.
    Mr. Patterson writes:
    "Obviously the government is taking a serious step in making strikes over pay illegal. However, even its most totalitarian mood is relieved by incompetence. …"
    Let me hasten to say that those are Mr. Patterson's words and not mine.
    "… for the Counter-Inflation Bill seems to be so narrowly drawn that, provided the union declares that the purpose of its strike is to secure a court of inquiry into the grievances of its members rather than to force the employer to raise wages above the norm, the government might well fail to get a conviction. That, at least, is what several union leaders are hoping."
    It might be as well before we complete the Report stage to know from the Government whether the hopes which are attributed in that article to union leaders are justified. If they are not, I submit that a slightly worrying conclusion has to be drawn.
    We must recognise that if industrial action is taken on a basis which is in no way illegal under this legislation but where the rejection of the Pay Board's decision on the demands of the employees involved would itself be illegal, the company which is struck against will find itself in an unfortunate position.
    10.15 p.m.
    Let us assume for the sake of argument that in the recent dispute—which I understand is now concluded—between BRS and BLMC the union members had been striking for an independent court of inquiry under phase 2 into their claim in order to achieve a settlement in excess of the guidelines which

    1637
    my hon. Friends have laid down for phase 2. If British Leyland were prepared to give them a settlement in excess of the guidelines, presumably my right hon. Friends would proceed against it by order and it could find itself having the increases disallowed.
    If, on the other hand, British Leyland, were to resist such a strike—in other words, a strike designed to secure the establishment of an independent court of inquiry which in turn was intended to provide a settlement in excess of the guidelines laid down for phase 2—presumably it—or any company in a similar situation—could find itself driven into bankruptcy by the operation of this legislation.
    In other words, by resisting a strike which was not itself illegal to the point at which its liquid resources were exhausted the company could be driven into bankruptcy, at which point, I suppose, my right hon. Friends would bring before us the British Leyland Public Ownership Bill. I have to tell my right hon. Friends that there are some of us—certainly myself—who would look upon such legislation with precious little favour, although one would hardly be able to deny the carrying through of such legislation since the House of Commons had willed the means and could hardly complain at the end.
    I think that we should have a clear indication from my right hon. Friends about the precise legal position of industrial disputes under phase 2. If it be the case that it will be in order for any union to go on strike in order to achieve a better settlement than that which is available to it under the guidelines of phase 2 provided it says that the purpose of the strike is simply to secure the establishment of an independent inquiry to achieve its ends, the House should know that that is the case before we complete the Report stage of the Bill.
    Mr. Maurice Macmillan: I think it is fairly clear what the legal position will be once the Bill has received the Royal Assent and become an Act. Strikes over pay will not be illegal. Strikes against settlements will not be illegal. Strikes against an order or notice under the Bill will not be illegal. What will be illegal is action in calling, organizing, procuring or financing a strike, or threat-
    1638
    ening to do so, organising, procuring or financing any irregular industrial action short of a strike, or threatening to do so, against an order made under Clause 5 or against an order or notice made by the Pay Board under Clause 7.
    I think that the situation which my hon. Friend described is a factor of a transitional situation where the purpose of the industrial action is to secure in stage 2 of the counter-inflation policies a settlement which is contrary to those policies. The situation envisaged by my hon. Friend could not happen after the passage of the Bill, because it would be regarded as threatening to do so once a notice or order had been made.
    I will, however, look at the situation which my hon. Friend has exposed. I understand that it is improbable that it will arise, but if there is a loophole I will certainly consider it. There is no intention to make striking itself illegal, but only the calling, procuring, or financing of a strike or irregular industrial action short of a strike——
    Mr. Russell Kerr: There is no difference.
    Mr. Macmillan: There is a considerable difference. We debated this in Committee. The difference is that it is the union which is liable rather than the individual. The powers are admittedly rather less strong than they have been before, but they are adequate to deal with the situation in which action is taken against an order made under Clause 5 or an order or notice of the Pay Commission under Clause 7, which are the only offences under those clauses.
    Mr. Biffen: The House is indebted to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) for raising this point. What one wishes to avoid in this legislation is providing some kind of martyr's charter for some activist or other whose motivation in industrial disputes may be somewhat wider than merely the securing of enhanced remuneration for those involved in the disputes.
    Although my right hon. Friend seemed to preclude the possibility of there being a strike to secure the establishment of an independent inquiry and said that the offence could arise only as a result of industrial action to prevent the implementation of an order or notice, the fact

    1639
    remains that the Secretary of State himself has the right to overrule and disagree with an order or notice served by one of the agencies. What certain sophisticated militants will be looking at when considering this legislation is whether or not they can call a dispute the purpose of which is to induce my right hon. Friend to override a judgment of the agency, to overrule an order or notice served by the Pay Commission.
    I hope that this point, in addition to that mentioned by my hon. Friend, will exercise the minds of the Government. If it cannot be answered tonight I fully understand, but I hope it will be taken into account when the legislation proceeds to another place. Those of us who faithfully, unanimously and through the night, on the recurring three-line Whips, voted for the Industrial Relations Act did not precisely foresee the consequences which were to flow from it.
    We are therefore entitled to try to spot the "Pentonville Five" of the next generation. If we do not, we shall be failing in an elementary duty laid upon us by recent experience. I hope that my right hon. Friend will bear these points in mind and will ensure that before the Bill receives the Royal Assent we shall be spared some of the embarrassments that we received under the Industrial Relations Act.
    Mr. Bruce-Gardyne: I understand that my right hon. Friend is giving an assurance that he will investigate the position and let us know the precise legal situation of a strike called after the passage of a notice or order in order to obtain an independent court of inquiry, presumably to arrive at another solution than that contained in the notice or order. On that understanding, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 16

    APPLICATION TO SCOTLAND
    The Lord Advocate (Mr. Norman Wylie): I beg to move Amendment No. 14, in page 14, line 18, leave out first 'made' and insert 'having effect'.
    I explained in Committee that Clause 16(2)(b) sought to re-enact for the pur-
    1640
    poses of Scotland the provisions of Clause 14(7), for certain reasons which I explained. There was one respect in which the subsection did not comply with the provisions of Clause 14(7); namely the opening words
    "Nothing contained in or having effect under this Act".
    This is more than a drafting amendment. It goes further than simply bringing Clause 16(2)(b) into line with the provisions of Clause 14(7). It is necessary to cover the situation not only of what is done under the Bill but in respect of orders and directions given under powers conferred by the Bill when it becomes an Act.
    Amendment agreed to.

  Clause 18

    INTERPRETATION
    Mr. Maurice Macmillan: I beg to move Amendment No. 15 in page 16, line 20, at end insert 'or by a Minister'.
    This is a purely consequential amendment following the passage of new Clause 1, which gives powers to the Secretary of State for Trade and Industry to control insurance premiums. It is also needed if the House is to pass, as I hope it will, Amendments Nos. 22 and 54 to enable Ministers as well as agencies to deal with the question of publication on price matters, pay matters and insurance matters. The amendment is consequential on those matters.
    Mr. Bean: I greatly welcome what the Secretary of State has said. This amendment giving the Secretary of State for Trade and Industry much greater power over the insurance industry moves us closer to the day when there will be greater public control and, indeed, public ownership of the insurance industry. Therefore, I support the amendment.
    Amendment agreed to.

  Clause 19
    DURATION
    Amendment made: No. 16, in page 17, line 16, leave out Clause 19.—[Mr. Maurice Macmillan.]
  Schedule 1
    THE AGENCIES
    Amendment made: No. 17, in page 18, line 3, at end insert—
  'PART I

    AGENCIES' FUNCTIONS UNDER PART II
    1.—(1) Each Agency shall in accordance with this paragraph make reports to the Secretary of State on the way they have discharged their functions under Part II of this Act.
    (2) Each report shall be submitted to the Secretary of State not later than thirty days after the end of the period covered by the report, and the Secretary of State shall lay the report before Parliament.
    (3) The first two months during which Part II of this Act is in force shall be covered by a separate report, and separate reports shall be made covering each subsequent period of three months during which Part II of this Act is in force (on the first or any subsequent occasion); and a separate report shall be made covering any terminal period short of three months.
    (4) This paragraph shall have effect in relation to the Price Commission as if references to the Secretary of State were references to the Secretary of State and the Minister of Agriculture, Fisheries and Food, acting jointly'.—[Mr. Maurice Macmillan.]
    Mr. Bruce-Gardyne: I beg to move Amendment No. 46, in page 21, line 35, after '(1)', insert
    ?Subject to the provisions of sub-paragraph (6) below'.
    Mr. Deputy Speaker: With this amendment it will be convenient for the House to discuss Amendment No. 47, in page 22, line 25, at end insert—
    '(6) Any inquiry under the terms of this paragraph shall be conducted by full-time members or employees of the agency and may not be delegated to other organisations or persons'.
    Mr. Bruce-Gardyne: The substantive amendment is Amendment No. 47. The purpose of these amendments is to make sure that the Pay Board and the Price Commission, to put it crudely, do their own dirty work.
    The situation under the late lamented National Board for Prices and Incomes, as the House may remember—and none better than my hon. Friend the Member for Oswestry (Mr. Biffen), for whose expertise in these archaic matters the entire House is indebted—was that the board farmed out its activities to a wide range
    1642
    of consultancy organisations. We were never told which organisations they were or, indeed, told much about them at all, except that occasionally they reared their heads.
    In moving a Ten-Minutes Rule Bill in April 1967 my hon. Friend the Member for Oswestry said——
    Dr. Alan Glyn: I hope that my hon. Friend will be only a few minutes.
    Mr. Bruce-Gardyne: I shall be longer than that, if my hon. Friend the Member for Windsor (Dr. Glyn) will forgive me. These are important matters.
    I was about to say that my hon. Friend's Ten-Minutes Rule Bill was designed to ferret out more information about the consultancy services which the Prices and Incomes Board used, and I commend those who are interested in these matters to read that debate on 5th April 1967. The broad point that he was making, and I apologise for plagiarising on his industry of a previous incarnation in these matters, was that we knew nothing about the consultancy firms which were used. We were told from time to time people like the eminent Mr. Jarratt, who I imagine will figure prominently in one of the organisations we are appointing under the Bill, that the board had enlisted the support of various consultancy services for the purposes of its investigations, including in some cases foreign—for example, American—consultancy firms. My hon. Friend quoted Mr. Jarratt as saying:
    "We have a very full record of 200 consultancy firms, their field experience and so on."—[OFFICIAL REPORT, 5th April 1967; Vol. 744, c. 157.]
    My hon. Friend conjured up a vision of these consultancy firms queueing up at the door—or was that on the Committee stage of the Bill? [Interruption.] My hon. Friend corrects me. That was on the Committee stage of the Bill. He raised the question of consultancy work in relation to Clause 12, I think. He obtained the following assurance from the Secretary of State:
    "First of all there is the question of management consultants. The Prices and Incomes Board tried to do studies in depth with efficiency audits and needed management consultant services. The agencies are only required to look at cases in the light of the code. They will not, therefore, require the

    1643
    same type of consultant advice as did the Prices and Incomes Board."—[OFFICIAL REPORT, Standing Committee H, 19th February 1973; c. 973.]
    We know that these bodies will apparently have 700 employees and, as my hon. Friend pointed out in Committee it will presumably take them some little time to acquire those employees. Meantime my right hon. and hon. Friends are hoping that the gasmen and others will be queueing up at their boards' doors for service. We must, therefore, assume that there will be a certain pressure on these boards in the early stages when, perhaps, their 700 employees have not been collected.
    But in any case, even if the boards are up to full strength, we need to have some elucidation about the precise wording my hon. Friend used in Committee. He said
    "They—
    meaning the boards—
    "will not, therefore, require the same type of consultant advice as did the Prices and Incomes Board."—[OFFICIAL REPORT, Standing Committee H, 19th February, 1973; c. 973.]
    That may be, but what advice will they obtain? Now we have seen the code—and when these matters were discussed in Committee the code had not emerged —and we can see that the lengthy investigations which these eminent boards are to pursue are clearly far-reaching and wide-ranging.
    In paragraph 54 of the Green Paper, in the part dealing with distribution, we read:
    "In order to assist enterprises to arrive at an appropriate reduction of percentage margins under paragraph 53, the Price Commission will, if satisfied that the sharp rises in costs referred to have taken place:—

    (i) consult any body which they regard as representative of enterprises affected by the rise in costs and take into account information supplied by them; and

    (ii) calculate an adjustment to gross margins designed to prevent net profit margins from rising substantially on those products, provided they are satisfied that:—

    (a) these cost increases are likely to be broadly similar for a substantial number of such enterprises; and

    (b) the maintenance of existing gross percentage margins would disproportionately increase the profit margin on those goods …".

    Who is to do all the donkey work? Are the 700 employees of the Pay Board
    1644
    and the Price Commission to do the work once they are recruited? Is nobody else to do it? Are no outside consultants to be used for any purpose? May we have that assurance? We did not receive it in Committee.
    Of the many unattractive features of the Prices and Incomes Board, its habit of providing lucrative employment for outside consultancy agencies was not the least. The independent private agencies that it was using, in a sense bringing them under the umbrella of its statutory powers and privileges, were also commercial agencies that might well be dealing in a commercial capacity with firms whose affairs they were required to investigate.
    Before we complete the Report stage we need a clearer and more specific undertaking than that which my right hon. Friend gave in Committee. If we receive the assurance that when he said that the Pay Board and Price Commission would not require the same type of consultant advice as did the Prices and Incomes Board he meant that the two bodies would rely entirely and exclusively on their own members and employees, the Government will, clearly, have no embarrassment in accepting the amendment. I shall then be entirely satisfied, as I hope the House in general will.
    Mr. Deputy Speaker: Mr. Biffen——
    Hon. Members: Oh no.
    Mr. Biffen: The amendment merits the serious attention of the House, even at this hour of 10.40 in the evening, which I do not regard as absurdly late. It touches upon a principle of significance but, above all, of sheer practicality, in terms that I am sure will engage the interest of my hon. Friends the Members for Kingston-upon-Thames (Mr. Norman Lamont) and Kensington, South (Sir B. Rhys Williams), not to mention the hon. member for West Ham, North (Mr. Arthur Lewis), who would probably wish to take part in the debate but for the all-pervasive influence of the Opposition Deputy Chief Whip.
    The amendment touches upon the question of just how the Government's policy will be put into effect if, as we are assured, the Price Commission will depend entirely on its own resources. Here I repeat a declaration of interest that I

    1645
    made in Committee, that I am an unremunerated member of the board of a firm of management consultants, which I do not expect to be a beneficiary of the Bill.
    We understand that the Price Commission will have a staff of between 450 and 500. That much emerged from the discussions in Committee. Presumably we must be in the process of recruitment at this moment. What kind of people are required in the Price Commission to carry out the investigations under the guidance of something which cannot be much dissimilar from the consultative document? The answer is self-evident. Accountants will be needed to work for the commission. We must inquire whether there is any prospect of the commission being able to recruit 500 accountants.
    Mr. Joel Barnett: Not a hope.
    Mr. Biffen: There we are. Who more expert and able to answer my question than the hon. Member for Heywood and Royton (Mr. Joel Barnett)? The fact is that phase 2 will be over and done with by the autumn. If we cannot recruit accountants——
    Mr. Norman Lamont Mr. Norman Lamont (Kingston-upon-Thames) indicated assent.
    Mr. Biffen: My hon. Friend agrees with me. If we cannot recruit accountants in substance and in scale in the immediate future to deal with phase 2 of the policy, our credibility becomes that much more suspect.
    I return to the words with which I opened my remarks. This is a matter not only of substance but of sheer practicality. I do not care if the debate is proceeding at a point mildly inappropriate for some hon. Members. If they do not wish to partake they can spectate For those of us who are concerned about the way in which the policy will work—the degree to which it will be random the degree to which it will be highly selective—the amendment goes to the heart of the matter. When my hon Friend the Chief Secretary replies, I shall be grateful if he will indicate in broad terms how many of the 400 to 500 staff who will serve in the Price Commission will be expected to have an accountancy background and accountancy experience,
    1646
    and the scale of remuneration that they will receive to attract them into this aspect of Government.
    Those of us with some experience of the Public Accounts Committee will recollect that the old Ministry of Aviation could not attract the right calibre of technical cost accountant on the Civil Service scales of pay. It is a germane point. Will the going rate attract accountants out of private industry and into the commission on a career basis? Presumably it cannot be on the basis of a short-term secondment, because an accountant taken from one company might have the opportunity to examine the practices of a competitive company. That point was raised in Standing Committe, and my hon. Friend the Parliamentary Secretary to the Civil Service Department was anxious to allay anxieties that were expressed.
    I draw the attention of my hon. Friend the Member for Bromley (Mr. Hunt) and my hon. Friend the Member for Kingston-upon-Thames, who both have interests in the City of London, to the seeming contradiction in paragraphs 36 and 38 of the consultative document, which under the rubric "Price Reductions" says:
    "Where there is a fall in raw material prices or in other allowable costs, this should be fully reflected in price reduction. In addition prices should be reduced where other factors (such as an increase in the volume of sales since the last price increase) lead to a significant fall in allowable costs per unit."
    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 of account of the enterpise concerned preceding 1 April 1973 (the reference level)."
    The reconciliation of the seeming contradiction is something that lies fully within the competence of my right hon. Friend the Secretary of State for Employment, the agencies and the accountants who will have to operate this policy. What I am saying is that we cannot just whistle up any spare office boys to do this task. It requires people of qualification.
    10.45 p.m.
    It may be thought that I am making slightly heavy weather of this point, but I am not, because when I went to my place of work this morning, by such means as I could, the first question put to me was: could I reconcile the seeming

    1647
    contradiction between paragraphs 36 and 38? That seemed to be a thoroughly unfair burden to put on me, to be an exponent and defender of this policy. None the less, people engaged in industry and commerce are doing precisely this kind of exercise and saying "If we want to operate, broadly speaking, within the social parameter of behaviour set by the code"—whether or not it has legal sanction is another matter—"how do we set about it?"
    But how much more should we in this House ask what will be the staff of the agencies who have to interpret the policy? What will be their qualification, if the work is not to be sub-contracted to outside organisations—and I welcome that decision. How are my hon. Friends to proceed to recruit the kind of staff to operate this policy with the speed that is seemingly indicated by the short-term limitation of phase 2?
    Mr. Patrick Jenkin: Amendment No. 46 is a paving amendment and comes at the beginning of paragraph 14 of Schedule 1, while Amendment No. 47, which we are also discussing, would insert a new sub-paragraph (6) at the end of paragraph 15 of that schedule. But I take the point that the one is intended to refer to the other notwithstanding that they deal with different paragraphs, and on that assumption I will deal with the points my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has made.
    My first point is that a distinction has to be drawn between what are referred to in the paragraphs as "inquiries" and what one might describe as, perhaps, investigations. The inquiries to which the two paragraphs are related are, clearly, formal inquiries, involving formal hearings. For instance, the question of the person who is to preside over the inquiry is relevant, and the next Government amendment deals with whether the inquiry should be in private or in public. Paragraph 15 goes on to deal with various other powers which the chairman of the agency, or any other member of the agency authorised by the chairman, may have in relation to the conduct of what I think are clearly envisaged as formal inquiries.
    1648
    Part of my hon. Friend's amendment suggests that such an inquiry should be chaired only by a full-time member of the board or commission, but I suggest that that is perhaps an unreasonable requirement. I made it clear in Committee that in order to recruit people of the required calibre and experience we would wish to feel free to appoint members part time, and it may very well be that for a particular field a part-time member of the board would be the most appropriate person to chair the kind of formal inquiry with which these paragraphs are concerned. I could not advise the House to accept the limitation which my hon. Friend proposes, which would confine the chairmanship of these inquiries and the conduct of them solely to full-time members.
    Mr. Bruce-Gardyne: Can my hon. Friend enlighten the House about the sort of activities in which he imagines part-time members of the board might be engaged when they are not engaged in Government business of this kind?
    Mr. Jenkin: I will resist the temptation to be drawn into matters of that kind. The appointments will be announced in due course. It is frequent in public service for part-time members to be appointed to a variety of different boards, and we do not envisage any unusual characteristics being necessary for the appointment of part-time members here.
    I turn to the point which formed the substance of the speeches made by my hon. Friends the Members for Oswestry (Mr. Biffen) and South Angus (Mr. Bruce-Gardyne). That was the problem of investigation as opposed to the formal inquiries at which these paragraphs are primarily aimed. Their point can be stated simply. They hope that the investigations which will be carried out by the Price Commission or the Pay Board will be carried out solely by members or employees of those bodies and not in any way sub-contracted out to professional firms or other outside bodies.
    I am not sure I fully understand the objection which is offered to this practice. I have reminded myself, during the debate, of the point made by my hon. Friend the Member for Oswestry when he introduced a Ten-Minute Bill in

    1649
    1967. He has already indicated in Committee that he thought the universities were stuffed with sociologists only too anxious to come and tell industry how it should organise itself.
    Any public board of this sort which appoints outside firms of accountants, management consultants or such bodies will, naturally enough, choose people of the highest reputation and integrity to carry out the work. It would be unrealistic to imagine that in what are comparatively small bodies, 300 to 400 staff all told, there would be a sufficient range of expertise to cover the whole area. Certainly it is envisaged that outside firms of accountants would be employed to carry out some of the investigations.
    It may well be that under the more general matters referred to the agencies under paragraph 1 of the schedule consultants will be appointed. What my right hon. Friend was referring to in column 973 was the question of implementing the code—that part of the functions of the agencies. As he said, this is not the same sort of inquiry as was carried out by the Prices and Incomes Board, which was an advisory body only. He was quite right to say that the agencies would not require the same type of advice.
    Mr. Bruce-Gardyne: I cannot in all conscience see what difference there is between the type of external consultancy services which my hon. Friend is saying these new bodies will require and the type of consultancy services which the Prices and Incomes Board recruited. I submit that what he is saying makes nonsense of what my right hon. Friend said in Committee.
    Mr. Jenkin: I do not think my hon. Friend follows what I am saying. I am saying that there is a distinction to be drawn between the two functions of the agencies——
    Mr. Bruce-Gardyne: We are not talking about functions.
    Mr. Jenkin: With great respect, I am. My hon. Friend may be talking about ambushes, but I am talking about gorse bushes. I am sure he knows the quotation. In the case of the executive function of the agencies—my right hon. Friend made it clear that that is what he was
    1650
    talking about—it is not envisaged that substantial use would be made of consultants' advice. My right hon. Friend said:
    "agencies are only required to look at cases in the light of the code."—[OFFICIAL REPORT, Standing Committee H, 19th February 1973; c. 973.]
    Agencies have the separate function of making advisory reports to Ministers. In those circumstances, we would envisage that such bodies as accountants and consultants would be used because the commission and board would not have the full range of expertise available to them. If the amendment were intended to preclude that kind of activity, I must advise the House that the Government would feel unable to accept it and I hope that hon. Members would resist it.
    I should like to say a few words on the subject of confidentiality because I believe that it lies at the heart of my hon. Friends' anxieties on the use of outside bodies. Successive Governments have been concerned to ensure that confidential information secured by the Government or Government agencies should not be misused or disclosed without permission. Great trouble is taken and a double check approach is adopted. First, there is the protection of selection. Before anyone is chosen to serve on these bodies he has to pass through a careful selection process which should ensure that no one likely to divulge confidential information is chosen. Secondly, there is the strong back-up power which specifically bans disclosure and provides criminal penalties to deter anyone tempted to disclose information unlawfully, whether he is still employed by the agency or not. They are contained in paragraph 4 of the Fourth Schedule. These methods have been used successfully in the past by the Prices and Incomes Board, the Monopolies Commission and similar bodies.
    I realise that this is a sensitive point, but I assure the House that it will be very much in the minds of my right hon. Friends when appointments to the Price Commission and the Pay Board are made. To emphasise our concern, we have decided to arrange that the provisions of paragraph 4 of the Fourth Schedule are drawn to the attention of those appointed to the agencies in their letters of appointment. I hope that hon. Members will

    1651
    think that those are strong and effective safeguards.
    Mr. Bruce-Gardyne: Can my hon. Friend assure the House that when the bodies use external consultancy services the details of the services used will be published in the reports made to the House?
    Mr. Jenkin: That is not an unreasonable request and, without wishing to give any commitment, I shall ensure that it is examined. It is something which might reasonably be required. It may be appropriate, if a suitable occasion offers, for an announcement to be made in another place about it.
    I hope that my hon. Friends will not feel it necessary to press the amendments.
    Mr. Nicholas Ridley: It was almost the last remark of my hon. Friend the Chief Secretary which brought me to my feet.
    I am a little worried about the use of management consultants who will obtain information from companies for non-formal inquiries and will, or may be, requested to publish it. It is quite wrong that there should be so many people whose job it will be to go over and over industrial situations, obtaining confidential information and publishing it either in full or in a half-digested form. The formal inquiries will be hard enough on their own because it will be necessary to ascertain complicated matters such as the ratio of depreciation, and the amount of profits and losses made in past years, which will in themselves require the exercise of considerable expertise.
    When it comes to the informal inquiries, it seems to me that the range of information required can be extremely wide and confidential.
    Mr. Bruce-Gardyne: There may be a slight misunderstanding. The assurance for which I asked the Chief Secretary was that the names of external consultancy services used should be published in the reports made to the House on the work of the Pay Board and the Prices Commission, not that the details of their inquiries should be published.
    11.0 p.m.
    Mr. Ridley: Yes. I think that that is a great help. I must have misheard my
    1652
    hon. Friend. I entirely agree that that should be done.
    However, there is for me still some anxiety over these outside consultants who will be asked to make inquiries into various industrial situations and be armed with powers of investigation under the Bill. They may obtain very confidential information. They will not be subject to the powers in the schedule which my hon. Friend read out, and they will not be subject to the Official Secrets Act, but they will, as employees of the commission, be in a very privileged position to discover confidential information while being under no more than a moral obligation not to divulge the information they obtain and not to use it for personal advantage. It is quite wrong that powers for seeking information should not be coupled with some obligation to respect secret information when it has been unearthed. It is this aspect—of the outside inquiry, rather than by a member of the commission—which worries me.
    Mr. Bruce-Gardyne: I must say that the reply by my hon. Friend the Chief Secretary to this brief debate hardly silences all my anxieties on this subject. Indeed, to be honest, it rather arouses them. Above all, I confess to him, it arouses some doubt about the entire accuracy of the undertaking given by my right hon. Friend in Committee, and to which I have already referred. I think we have established that these two bodies—alas—will draw in external consultants' services as the late lamented Prices and Incomes Board used to do.
    We have at least obtained from my hon. Friend one sop of appeasement in the shape of the undertaking to examine the possibility of at least informing the House in the quarterly reports of the details of the external consultancy services used. That is of significant importance, and I hope my hon. Friend will find it possible to honour that undertaking.
    On that basis, and with very much reluctance, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Patrick Jenkin: I beg to move Amendment No. 19, in page 21, line 45, after 'hearing', insert 'the Agency may direct that'.

    1653
    This amendment is proposed to meet a point raised in Committee—I think by the hon. Member for Islington, East (Mr. John Grant)—suggesting that the agency should have some discretion to accede or not to accede to an application to exclude the public from an inquiry and that the inquiry should be in private. We thought that that was a good point, and we believe that these words give the agency that discretion.
    Amendment agreed to.

  Schedule 2

    APPROVALS AND CONSENTS
    The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): I beg to move Amendment No. 20, in page 23, line 12 leave out from 'to' to end of line 18 and insert:
    "restrict any price or charge, or any kind of remuneration, where the price or charge or remuneration is duly authorised by the approval".
    Mr. Speaker: We can take this amendment and the Government's next Amendment, No. 21, together.
    Sir G. Howe: I was going to suggest that, Mr. Speaker.
    Originally, paragraph 1 (2) of the schedule was designed, as it is drawn, to say that if an agency approved an increase in a price it could not thereafter prevent that increase unless a fall occurred in the costs and outgoings which justified the increase. The purpose was to secure a degree of certainty after that point.
    It is apparent, however, that the proviso to sub-paragraph (2) is too restrictive, because there are other circumstances in which a price, once it has been increased, may later need to be reduced. This may arise, for example, as a result of paragraph 16 of the code, where the costs originally justifying the increase have fallen, as a result of paragraphs 40 or 55 where profits are too high and beyond the permitted limit and paragraphs 53 and 54 where the margin turns out to be too high. That situation is provided for by the change proposed in paragraph 1(2) of the schedule so as to exclude the power to reduce prices where
    1654
    the increase has been duly authorised by approval.
    If that is read with new sub-paragraph (5) it shows that in the course of due authorisation the approval may be formulated in such a way as to secure that the rest of the code is observed—for example, the matters to which I have just referred. This means that the agency will be enabled to grant an approval, subject to conditions, for example, requiring a reduction in price, if costs fall or if profits exceed the expectation and so the limit. In other words, power is given to attach conditions to the approval. The power deriving from such a condition would be exercised only if circumstances had changed so as to justify or require it, and the object is to secure the most effective restraint in prices.
    Amendment agreed to.
    Amendment made: No. 21 in page 23, line 37, at end insert—
    '(5) In exercising their powers under an order under this paragraph, an Agency may frame an approval of proposals for an increase in such way as appears to them appropriate for the purpose of ensuring that the provisions of the code are implemented'.—[Sir G. Howe.]
    Mr. Maurice Macmillan: I beg to move Amendment No. 22, in page 24, line 30, at end insert—
    '(3) Where an Agency or a Minister, grant a consent under this Act, particulars of the consent shall be published in the Gazette, and in such other ways as may be prescribed'.
    Mr. Speaker: With this amendment we can discuss Government Amendments Nos. 54 and 55.
    Mr. Macmillan: These three amendmenst meet the undertaking I gave in Committee that the agency or a Minister in granting a consent or issuing an order or notice under the Bill would see that it was published. Amendment No. 22 provides that particulars of the consent shall be published in the Gazette and in such other ways as may be prescribed.
    Amendment No. 54 provides that where notice is given by an agency or a Minister under various provisions of the Bill dealing with prices, pay, insurance premiums, dividends or value added tax, particulars of the notice shall be published in the Gazette and in such other ways as may be prescribed.

    1655
    Amendment No. 55 enables the Minister by regulations to lay down the way in which such an order, notice or consent shall be published.
    The amendments meet points raised in Committee.
    Amendment agreed to.

  Schedule 3

    SUPPLEMENTAL PROVISIONS
    Amendment made: No. 54, in page 25, line 23, at end insert—
    (10) Where a notice is given by an Agency or a Minister under any of the following provisions of this Act, that is—

    section 6(3),

    section 7(3),

    subsection (2) of section (restriction of insurance premiums),

    section 9, or

    section 11,

    particulars of the notice shall be published in the Gazette, and in such other ways as may be prescribed.—[Mr. Maurice Macmillan.]
    Mr. Ronald Bell: I beg to move Amendment No. 49, in page 25, line 36, leave out 'modify' and insert 'restrict'.
    When my amendment to remove from the Bill the power to interpret any phrase or expression occurring in Part II was not accepted by the Government early this morning I wondered whether it was still worth moving this amendment, inasmuch as the power to interpret any expression in Part II is so wide. Then I remembered the assurances I was given by the Chief Secretary about the innocuous nature of this power to interpret any expression in Part II, and I decided in the light of his assurances that the wording to which the amendment refers perhaps had its dangers after all.
    Paragraph 2(1) of Schedule 3 says:
    "For the purposes of sections 5 to 7 of this Act … the following shall be treated as one person …"
    and then lists a number of combinations, such as

    "(a) all the persons who successively carry on any business;

    (b) the person having control of any company …"

    and so on. Then, sub-paragraph (2) says:
    "An order or notice under sections 5 to 7 of this Act may exclude or modify the provisions of sub-paragraph (1) …"
    1656
    In other words, the Minister or one of the boards may by order exclude one of these categories of person who are deemed to be the person in charge of the operation—that is all right—but can also "modify", which could mean enlarging the definition of the category of person deemed to have made the transaction or to have made the charge or whatever it may be.
    I realise that my hon. Friend the Chief Secretary and other Ministers have defended this kind of wide drafting by saying that the Bill must be made to cover everything, to sweep up all the possibilities, and to ensure that there can be no evasion. I do not find that a very satisfactory justification of drafting of this kind. What it really means is that the Minister or one of these boards can define the person in charge of the business as virtually anybody he or the boards want to define as a person in charge of the business, the person who is responsible for the act or the transaction being impugned.
    I think it wrong that there should be this total lack of certainty. The person should be what the Minister says is the person, and I invite my hon. Friend to accept the amendment, thus making it clear that the only sort of modification which could be made in an order or notice would be a narrowing of the definition and not widening it beyond the already very wide—wide to the point of arbitrary—definitions which are in the Bill.
    Mr. Patrick Jenkin: I wanted to hear what my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) had to say before deciding what would be the right thing to do here. He has explained the purpose of the paragraph and the effect of the amendment clearly. I assure him that the paragraph is necessary.
    Experience under the Temporary Provisions Act has shown that confusion can arise when businesses change hands or when firms amalgamate in circumstances where an order or notice has been made making a price restriction or some other direction under the Act. But I see the justification of what my hon. and learned Friend says when he argues that, whereas sub-paragraph (2) might quite reasonably exclude any of the provisions of sub-paragraph (1), or restrict

    1657
    them, it should not be able to enlarge them, and that there appears to be no limit, on the face of it, to the extent to which it could enlarge them. That would be bound to be so within the term "modify".
    I accept the substance of the amendment, therefore, but I want to consider carefully whether its language is right. I accept that it is not right that the provisions of sub-paragraph (1) should be allowed to be enlarged upwards but that there should be power only to enlarge them downwards, as it were. I hope that in these circumstances my hon. and learned Friend will withdraw the Amendment.
    Mr. Bell: I thank my hon. Friend, and I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    11.15 p.m.
    Mr. Ronald Bell: I beg to move Amendment No. 50, in line 43, leave out sub-paragraph (2).
    The sub-paragraph which I desire to be left out reads:
    "This paragraph applies both at a time when Part II of this Act is in force, and later."
    That refers to the paragraph above, which says:
    "The Minister may by order prescribe the degree to which anything made illegal by any order or notice under Part II of this Act, or anything otherwise affected by any such provision, is to be valid or invalid."
    I assume that the purpose of the provision which I desire to be left out is to enable a Minister or board to say that a transaction at which they have struck by an order or notice shall be not merely illegal but invalid, and shall remain invalid even after Part II of the Act has ceased to be in force. I do not think one could object to that, because it might be embarrassing if something which has been made invalid during the currency of the Act, some arrangement which is contrary to the Act, were to revive as soon as Part II went out of force.
    It would appear that the way in which it is put would empower the Minister, after Part II of the Act had lapsed and at any period of time after Part II was no longer in force, to make an order
    1658
    regulating the validity or invalidity of something done during the period when Part II was in full force and effect. That seems to me to be objectionable. It may be that I have misunderstood the intention or purport, and I should like to hear what my hon. Friend has to say about it.
    Mr. Patrick Jenkin: I assure my hon. and learned Friend that it is not the intention that the Minister should be able to make an order after Part II has expired so as to affect the period when Part II is in force. The purpose is to make sure that an order made during the currency of Part II should remain in force after that period after Part II has come to an end. If there is any doubt about it, I shall want to look at it. But, having stated the intention, I hope my hon. and learned Friend will not press the amendment.
    Mr. Bell: On the understanding that my hon. Friend will look at the matter, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendment made: No. 55, in page 26, line 26, leave out sub-paragraph (2) and insert—
    '(2) The Minister may by regulations—

    (a) prescribe the manner in which any order, notice or consent under this Act is to be published, or the manner in which particulars of any such order, notice or consent are to be published, and

    (b) in the case of an order made under this Act by either Agency, prescribed the evidence which is to be sufficient evidence of its having been published, and of its contents and authenticity'.—[Mr Maurice Macmillan.]

    11.18 p.m.
    Mr. Maurice Macmillan: I beg to move, That the Bill be now read the Third time.
    We have debated the Government's counter-inflation policy very fully. We began on 24th January, we took the Second Reading on 29th January, we had 10 sittings in the Standing Committee and we now had two full days on Report. On Monday we shall be debating the consultative document containing the draft code. Therefore, I shall be extremely brief.
    The Bill has been improved by our discussions both upstairs and in the House, and that is as it should be. This

    1659
    legislation will set up a Price Commission and a Pay Board and there will be two agencies which will enable them to operate the code, the first draft of which we shall be debating on Monday. I hope that I have made clear that the Government regard the Bill as an essential part of the counter-inflationary policy. I commend the Bill to the House.
    11.20 p.m.
    Mr. Benn: The Secretary of State has been very conciliatory to the Opposition throughout the passage of the Bill because he has not been allowed to be conciliatory to anyone else.
    I, too, intend to be brief in putting on record our objection to the Bill. We think it unfair. It leaves out certain key prices. It will not work on the incomes side. It will operate arbitrarily under the cloak of artificial legality. It abdicates ministerial responsibility and derogates from our parliamentary rôle.
    Having said that, it is a watershed of a Bill because it marks the end of a connection between the Conservative Party and its commitment to free enterprise upon which it won the General Election. We now know that Selsdon Man, like the Piltdown Man, was a hoax. The Bill opens up a great new era to which we shall return in our debate on the code on Monday.
    Since many hon. Members on both sides of the House have little confidence in the Bill or in the Ministers who promote it, I invite my right hon. and hon. Friends to oppose it.
    11.21 p.m.
    Mr. Bruce-Gardyne: I do not intend to delay the House for very long, but I submit that we are discussing a piece of legislation which gives the Government very wide-ranging powers, and it is not totally unreasonable to spend a few minutes on the Third Reading.
    My chief reason for intervening in the debate is to draw attention to two matters. I shall not pursue the argument of the right hon. Member for Bristol, South-East (Mr. Benn), because I believe that this is not a divorce from the free enterprise ethic. I believe, hope and trust that it is a brief separation.
    The first matter which concerns me is the code. Enough has been said about
    1660
    that tonight, and we shall discuss it in detail on Monday. But since the Second Reading of this legislation we have now seen the code, and it does not enhance my enthusiasm for the legislation in any way.
    The second matter concerns me most on this Third Reading. It is that the legislation makes provision for a situation under phase 2 which is extremely disturbing in its implications for the private sector of the economy. We shall put companies in the private sector in a position where, if they do not observe the pay guidelines laid down by my right hon. Friends, whether they are subject to legal restraints or not they will be placed in a pillory before public opinion. If they observe the guidelines and find that they are the object of industrial action against the guidelines, judging by what has happened up till now, the attitude of my right hon. and hon. Friends will be that private employers must see the situation through and face the financial consequences. Potentially, this is very dangerous.
    I referred earlier to the potential implications of the BRS strike for the finances of British-Leyland. I believe that we shall find that private companies are forced under the pay provisions of phase 2 to face a very embarrassing choice between the public pillory for flouting the guidelines which in themselves do not have legal force, and resisting strikes where they will face the financial consequences although they themselves are not directly masters of the situation.
    This is very dangerous. Furthermore, we are likely to find ourselves landed with a queue of bankruptcies in the private sector induced by this legislation. I cannot believe that that is what my right hon. and hon. Friends desire at a time when they say that they wish to encourage private manufacturing investment.
    It is with a heavy heart and considerable anxiety that I watch the House giving a Third Reading to this legislation.
    11.25 p.m.
    Mr. William Molloy: I do not believe that it is right and proper for the Bill to be given a Third Reading without putting it on record not only that what my right hon. Friend the

    1661
    Member for Bristol, South-East (Mr. Benn) said about it is true but that, in addition, it is a fundamentally wrong, unjust and unfair measure.
    I can understand the anguish of the hon. Member for South Angus (Mr. Bruce-Gardyne), because he is almost qualified to be the keeper of the soul of the Tory Party.
    The most grievous thing about the Bill is that it adds to the ever-increasing list of examples of the Government's betrayal of the nation following its shabby treatment at the last General Election. The House has never before seen the equal of it. The Bill is one of the most massive betrayals that the country has had to endure from the Conservative Party, or from any other.
    11.26 p.m.
    Mr. Ridley: Whatever one thinks about the Bill and the policy that it contains, I still believe it to be right to pay a tribute to my right hon. Friend the Secretary of State, to my hon. Friend the Chief Secretary and to my hon. Friend the Parliamentary Secretary to the Civil Service Department for the courteous and painstaking way in which they handled the debates in Committee and on Report and for the efforts that they made to meet the valid and reasonable objections of hon. Members on both sides of the House.
    Question put, That the Bill be now read the Third time:—
    The House divided: Ayes 276, Noes 197.

    Division No. 74.]

    AYES

    [11.27 p.m.

    Adley, Robert

    Crouch, David

    Harrison, Col. Sir Harwood (Eye)

    Alison, Michael (Barkston Ash)

    Crowder, F. P.

    Haselhurst, Alan

    Allason, James (Hemel Hempstead)

    Davies, Rt. Hn. John (Knutsford)

    Hastings, Stephen

    Archer, Jeffrey (Louth)

    d'Avigdor-Goldsmid, Sir Henry

    Havers, Sir Michael

    Astor, John

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

    Hawkins, Paul

    Atkins, Humphrey

    Dean, Paul

    Hayhoe, Barney

    Awdry, Daniel

    Deedes, Rt. Hn. W. F.

    Hicks, Robert

    Baker, Kenneth (St. Marylebone)

    Dixon, Piers

    Higgins, Terence L.

    Baker, W. H. K. (Banff)

    Dodds-Parker, Sir Douglas

    Hiley, Joseph

    Batsford, Brian

    Drayson, G. B.

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

    Beamish, Col. Sir Tufton

    Dykes, Hugh

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

    Bennett, Sir Frederic (Torquay)

    Edwards, Nicholas (Pembroke)

    Holland, Philip

    Bennett, Dr. Reginald (Gosport)

    Elliot, Capt. Walter (Carshalton)

    Holt, Miss Mary

    Benyon, W.

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

    Hooson, Emlyn

    Berry, Hn. Anthony

    Emery, Peter

    Hordern, Peter

    Biffen, John

    Eyre, Reginald

    Hornby, Richard

    Biggs-Davison, John

    Farr, John

    Hornsby-Smith, Rt.Hn.Dame Patricia

    Blaker, Peter

    Fenner, Mrs. Peggy

    Howe, Hn. Sir Geoffrey (Reigate)

    Boardman, Tom (Leicester, S.W.)

    Fidier, Michael

    Howell, David (Guildford)

    Boscawen, Hn. Robert

    Finsberg, Geoffrey (Hampstead)

    Hunt, John

    Bossom, Sir Clive

    Fisher, Nigel (Surblton)

    Hutchison, Michael Clark

    Braine, Sir Bernard

    Flelcher-Cooke, Charles

    Iremonger, T. L.

    Bray, Ronald

    Fookes, Miss Janet

    Irvine, Bryant Godman (Rye)

    Brewis, John

    Fortescue, Tim

    James, David

    Brinton, Sir Tatton

    Foster, Sir John

    Jenkin, Patrick (Woodford)

    Brocklebank-Fowler, Christopher

    Fowler, Norman

    Jennings, J. C. (Burton)

    Brown, Sir Edward (Bath)

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

    Jessel, Toby

    Bryan, Sir Paul

    Fry, Peter

    Johnson Smith, G. (E. Grinstead)

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

    Galbraith, Hn. T. G. D.

    Jones, Arthur (Northants, S.)

    Buck, Antony

    Gardner, Edward

    Jopling, Michael

    Bullus, Sir Eric

    Gibson-Watt, David

    Kaberry, Sir Donald

    Burden, F. A.

    Gllmour, Ian (Norfolk, C.)

    Kellett-Bowman, Mrs. Elaine

    Butler, Adam (Bosworth)

    Gilmour, Sir John (Fife, E.)

    Kilfedder, James

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

    Glyn, Dr. Alan

    Kimball, Marcus

    Carlisle, Mark

    Godber, Rt. Hn. J. B.

    King, Tom (Bridgwater)

    Carr, Rt. Hn. Robert

    Goodhart, Philip

    Kinsey, J. R.

    Channon, Paul

    Goodhew, Victor

    Kitson, Timothy

    Chapman, Sydney

    Gorst, John

    Knight, Mrs. Jill

    Chataway, Rt. Hn. Christopher

    Gower, Raymond

    Knox, David

    Chichester-Clark, R.

    Grant, Anthony (Harrow, C.)

    Lamont, Norman

    Churchill, W. S.

    Gray, Hamlsh

    Lane, David

    Clark, William (Surrey, E.)

    Green, Alan

    Langford-Holt, Sir John

    Clarke, Kenneth (Rushcliffe)

    Grieve, Percy

    Le Marchant, Spencer

    Clegg, Walter

    Griffiths, Eldon (Bury St. Edmunds)

    Lewis, Kenneth (Rutland)

    Cockeram, Eric

    Grylls, Michael

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

    Cooke, Robert

    Gummer, J. Sekvyn

    Longden, Sir Gilbert

    Coombs, Derek

    Hall, Miss Joan (Keighley)

    Loveridge, John

    Cooper, A. E.

    Hall, John (Wycombe)

    Luce, R. N.

    Corfield, Rt. Hn. Sir Frederick

    Hall-Davis, A. G. F.

    MacArthur, Ian

    Cormack, Patrick

    Hamilton, Michael (Salisbury)

    McCrindle, R. A.

    Costain, A. P.

    Hannam, John (Exeter)

    McLaren, Martin

    Critchley, Julian

    Harrison, Brian (Maldon)

    Maclean, Sir Fitzroy

    McMaster, Stanley

    Price, David (Eastleigh)

    Taylor, Sir Charles (Eastbourne)

    Macmillan,Rt.Hn.Maurice(Farnham)

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

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

    McNair-Wilson, Michael

    Proudfoot, Wilfred

    Taylor, Frank (Moss Side)

    McNair-Wilson, Patrick (New Forest)

    Pym, Rt. Hn. Francis

    Taylor, Robert (Croydon, N.W.)

    Maddan, Martin

    Raison, Timothy

    Tebbit, Norman

    Madel, David

    Ramsden, Rt. Hn. James

    Temple, John M.

    Maginnis, John E.

    Rawlinson, Rt. Hn. Sir Peter

    Thatcher, Rt. Hn. Mrs. Margaret

    Marten, Neil

    Redmond, Robert

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

    Mather, Carol

    Reed, Laurance (Bolton, E.)

    Thompson, Sir Richard (Croydon, S.)

    Maude, Angus

    Rees, Peter (Dover)

    Thorpe, Rt. Hn. Jeremy

    Maudling, Rt. Hn. Reginald

    Rees-Davies, W. R.

    Tilney, John

    Mawby, Ray

    Renton, Rt. Hn. Sir David

    Tope, Graham

    Maxwell-Hyslop, R. J.

    Rhys Williams, Sir Brandon

    Trew, Peter

    Miscampbell, Norman

    Ridley, Hn. Nicholas

    Tugendhat, Christopher

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

    Ridsdale, Julian

    Turton, Rt. Hn. Sir Robin

    Mitchell, David (Basingstoke)

    Roberts, Michael (Cardiff, N.)

    van Straubenzee, W. R.

    Moate, Roger

    Roberts, Wyn (Conway)

    Vaughan, Dr. Gerard

    Molyneaux, James

    Rossi, Hugh (Hornsey)

    Vickers, Dame Joan

    Money, Ernie

    Rost, Peter

    Waddington, David

    Monks, Mrs. Connie

    Russell, Sir Ronald

    Walder, David (Clitheroe)

    Montgomery, Fergus

    Scott, Nicholas

    Walker, Rt. Hn. Peter (Worcester)

    More, Jasper

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

    Walker-Smith Rt. Hn. Sir Derek

    Morgan-Giles, Rear-Adm.

    Shelton, William (Clapham)

    Wall, Patrick

    Morrison, Charles

    Shersby, Michael

    Ward, Dame Irene

    Mudd, David

    Simeons, Charles

    Warren, Kenneth

    Nabarro, Sir Gerald

    Sinclair, Sir George

    Weatherill, Bernard

    Neave, Airey

    Skeet, T. H. H

    Wells, John (Maidstone)

    Nicholls, Sir Harmar

    Soref, Harold

    White, Roger (Gravesend)

    Noble, Rt. Hn. Michael

    Speed, Keith

    Wiggin, Jerry

    Normanton, Tom

    Spence, John

    Wilkinson, John

    Nott, John

    Sproat, Iain

    Winterton, Nicholas

    Onslow, Cranley

    Stainton, Keith

    Wolrige-Gordon, Patrick

    Oppenheimm, Mrs. sally

    Stanbrook, Ivor

    Wood, Rt. Hn. Richard

    Osborn, John

    Steel, David

    Woodnutt, Mark

    Owen, Idris (Stockport, N)

    Stewart-Smith, Geoffrey (Belper)

    Worsley, Marcus

    Page, Rt. Hn. Graham (Crosby)

    Stodart, Anthony (Edinburgh, W.)

    Wylie, Rt. Hn. N. R.

    Pardoe John

    Stoddart-Scott, Col. Sir M.

    Younger, Hn. George

    Parkinson, Cecil

    Peel, Sir John

    Stokes, John

    Percival, Ian

    Stuttaford, Dr. Tom

    TELLERS FOR THE AYES:

    Peyton, Rt. Hn. John

    Sutcliffe, John

    Mr. Oscar Murton and

    Pink, R. Bonner

    Tapsell, Peter

    Mr. Marcus Fox.

    NOES

    Abse, Leo

    Davis, Terry (Bromsgrove)

    Houghton, Rt. Hn. Douglas

    Allaun, Frank (Salford, E.)

    Deakins, Eric

    Howell, Denis (Small Heath)

    Archer, Peter (Rowley Regis)

    de Freitas, Rt. Hn. Sir Geoffrey

    Huckfield, Leslie

    Ashley, Jack

    Dell, Rt. Hn. Edmund

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Atkinson, Norman

    Dempsey, James

    Hughes, Roy (Newport)

    Barnes, Michael

    Douglas, Dick (Stirlingshire, E.)

    Hunter, Adam

    Barnett, Guy (Greenwich)

    Douglas-Mann, Bruce

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

    Barnett, Joel (Heywood and Royton)

    Driberg, Tom

    Janner, Greville

    Benn, Rt. Hn. Anthony Wedgwood

    Duffy, A. E. P.

    Jay, Rt. Hn. Douglas

    Bidwell, Sydney

    Dunn, James A.

    Jenkins, Hugh (Putney)

    Blenkinsop, Arthur

    Eadie, Alex

    John, Brynmor

    Boardman, H. (Leigh)

    Edelman, Maurice

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

    Booth, Albert

    Edwards, Robert (Bilston)

    Johnson, Walter (Derby, S.)

    Bottomley, Rt. Hn. Arthur

    Edwards, William (Merioneth)

    Jones, Barry (Flint, E.)

    Boyden, James (Bishop Auckland)

    Ellis, Tom

    Jones, Dan (Burnley)

    Bradley, Tom

    English, Michael

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

    Broughton, Sir Alfred

    Evans, Fred

    Jones, Gwynoro (Carmarthen)

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

    Faulds, Andrew

    Jones, T. Alec (Rhondda, W.)

    Brown, Ronald (Shoreditch & F'bury)

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

    Judd, Frank

    Buchan, Norman

    Fitch, Alan (Wigan)

    Kaufman, Gerald

    Butler, Mrs. Joyce (Wood Green)

    Fletcher, Raymond (Ilkeston)

    Kerr, Russell

    Cant, R. B.

    Fletcher, Ted (Darlington)

    Kinnock, Neil

    Carmichael, Neil

    Foot, Michael

    Lambie, David

    Carter, Ray (Birmingh'm, Northfield)

    Ford, Ben

    Lamborn, Harry

    Carter-Jones, Lewis (Eccies)

    Forrester, John

    Latham, Arthur

    Castle, Rt. Hn. Barbara

    Fraser, John (Norwood)

    Lawson, George

    Clark, David (Colne Valley)

    Freeson, Reginald

    Lestor, Miss Joan

    Cocks, Michael (Bristol, S.)

    Galpern, Sir Myer

    Lewis, Arthur (W. Ham, N.)

    Cohen, Stanley

    Gilbert, Dr. John

    Lewis, Ron (Carlisle)

    Concannon, J. D.

    Ginsburg, David (Dewsbury)

    Lipton, Marcus

    Corbet, Mrs. Freda

    Grant, John D. (Islington, E.)

    Lomas, Kenneth

    Cox, Thomas (Wandsworth, C.)

    Griffiths, Eddie (Brightside)

    Lyon, Alexander W. (York)

    Crawshaw, Richard

    Griffiths, Will (Exchange)

    Lyons, Edward (Bradford, E.)

    Cronin, John

    Hamilton, James (Bothwell)

    Mabon, Dr. J. Dickson

    Crosland, Rt. Hn. Anthony

    Hamilton, William (File, W.)

    McBride, Neil

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

    Hardy, Peter

    McGuire, Michael

    Dalyell, Tarn

    Harrison, Walter (Wakefield)

    Mahon, Simon (Bootle)

    Davies, Denzil (Llanelly)

    Hattersley, Roy

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

    Davies, Ifor (Gower)

    Healey, Rt. Hn. Denis

    Marks, Kenneth

    Davis, Clinton (Hackney, C.)

    Heifer, Eric S.

    Marquand, David

    1664

    1665

    Marshall, Dr. Edmund

    Peart, Rt. Hn. Fred

    Stoddart, David (Swindon)

    Mason, Rt. Hn. Roy

    Perry, Ernest G.

    Stonehouse, Rt. Hn. John

    Meacher, Michael

    Prentice, Rt. Hn. Reg.

    Strauss, Rt. Hn. G. R.

    Mellish, Rt. Hn. Robert

    Probert, Arthur

    Summerskill, Hn. Dr. Shirley

    Mendelson, John

    Rees, Merlyn (Leeds, S.)

    Swain, Thomas

    Mikardo, Ian

    Rhodes, Geoffrey

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

    Millan, Bruce

    Richard, Ivor

    Thomas, Jeffrey (Abertillery)

    Miller, Dr. M. S.

    Roberts, Albert (Normanton)

    Torney, Tom

    Milne, Edward

    Roberts,Rt.Hn.Goronwy (Caernarvon)

    Tuck, Raphael

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

    Robertson, John (Paisley)

    Varley, Eric G.

    Molloy, William

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

    Wainwright, Edwin

    Morgan, Elystan (Cardiganshire)

    Roper, John

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

    Morris, Alfred (Wythenshawe)

    Rose, Paul B.

    Walker, Harold (Doncaster)

    Morris, Charles R. (Openshaw)

    Rowlands, Ted

    Weitzman, David

    Morris, Rt. Hn. John (Aberavon)

    Sheldon, Robert (Ashton-under-Lyne)

    Wells, William (Walsall, N.)

    Mulley, Rt. Hn. Frederick

    Shore, Rt. Hn. Peter (Stepney)

    Whitehead, Phillip

    Murray, Ronald King

    Silkin, Rt. Hn. John (Deptford)

    Whitlock, William

    Oakes, Gordon

    Ogden, Eric

    Silkin, Hn. S. C. (Dulwich)

    Williams, Alan (Swansea, W.)

    O'Halloran, Michael

    Sillars, James

    Williams, Mrs. Shirley (Hitchin)

    O'Malley, Brian

    Silverman, Julius

    Wilson, Alexander (Hamilton)

    Oram, Bert

    Skinner, Dennis

    Wilson, Rt. Hn. Harold (Huyton)

    Orbach, Maurice

    Small, William

    Wilson, William (Coventry, S.)

    Orme, Stanley

    Smith, John (Lanarkshire, N.)

    Owen, Or. David (Plymouth, Sutton)

    Spearing, Nigel

    TELLERS FOR THE NOES

    Palmer, Arthur

    Spriggs, Leslie

    Mr. Donald Coleman and

    Parry, Robert (Liverpool, Exchange)

    Stallard, A. W.

    Mr. Tom Pendry

    Pavitt, Laurie

    Stewart, Rt. Hn. Michael (Fulham)

    Question accordingly agreed to
    Bill read the Third time and passed.

ANTI-DISCRIMINATION (No. 2) BILL
Motion made, and Question proposed.
That Mrs. Joyce Butler, Mr. Patrick Cormack, Mr. W. W. Hamilton, Mr. Richard Hornby, Mr. Douglas Houghton, Mrs. Sally Oppenheim, and Mr. Rees-Davies be members of the Select Committee on the Anti-Discrimination (No. 2) Bill.—[Mr. Kenneth Clarke.]
Hon. Members: Object.
Debate to be resumed tomorrow.

ANTI-DISCRIMINATION (No. 2) BILL
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Clarke.]

WRITTEN-OFF MOTOR VEHICLES (LOG BOOKS)
11.37 pm.
Mr. Ted Fletcher: In introducing this Adjournment debate I wish to draw attention to the question of cancellation of log books of written-off motor vehicles.
In 1971, according to police files, 721 cars in the county of Durham were rebuilt and put on the road again after being so extensively damaged in accidents that they were completely written off by insurance companies. On this basis I estimate that about 15,000 cars a year
1666
are written off by insurance companies and subsequently rebuilt and sold. The figure given by the Vehicle Builders and Repairers Association is higher. That body suggests that 35,000 vehicles which have been involved in major accidents and have been repaired are put on the road again every year.
The rebuilding of a wrecked car is not illegal, and many of the repairs are carried out by reputable garage owners and the vehicles are then safe and roadworthy. These reputable people are behind me in the campaign to ensure that the disreputable dealer is put out of business
The real problem about which we are concerned is that many of these wrecked cars are patched up in back-street garages by dealers who are more interested in making a fast buck than in gaining satisfied customers. These shady traders cannot afford the expensive equipment which is necessary, the jigs and tools, to make car rebuilding safe. For example, they are unable to reline a badly buckled car, and the axles and steering will probably he out of true. Corroded bodywork is sometimes patched up with glass fibre, and this looks fine for about three weeks and then drops out.
In some cases when the dealer has a car with a smashed front he will cut the front off a similar model that has been damaged at the rear and weld one half to the other. When these cars are sold, often at inflated prices, they are a danger not only to the driver but to all road users. There must be protection against these practices.

1667
About two years ago an intending purchaser of one of these cars knew whether the vehicle had been involved in a major accident because the words
"This vehicle has been completely written off by an insurance company"
were stamped on the log book. The system was discontinued about 18 months ago, and, as far as I am aware, no reasons have been given to the House. I understand from a Press statement that was issued by the Department that the system was ended because it was felt that the damaged cars which had been repaired were not a road hazard. So, at the moment no one can know from the log book whether the car has been rebuilt from a write-off or not.
My first question to the Minister, therefore, is: why was the scheme for stamping log books discontinued and why can it not be reintroduced? I realise that this would be only an interim solution to cover the period until the new licensing computer at Swansea is in full operation. In the meantime some consideration will have to be given to a more comprehensive scheme. For example, I should like to see the log book for this type of vehicle withdrawn and reissued only when the office in Swansea had received a satisfactory inspection report from the Ministry's inspectors. That, however, would require amendments to existing legislation, or new legislation, and I cannot pursue that in the course of an Adjournment debate.
The Department is being much too complacent about what I regard as a very serious problem. The Minister informed me in December 1971 that he was setting up a departmental committee to consider the whole problem. On 5th December 1972, I received a letter from him, after submitting one or two questions and corresponding with him, advising me that the Department had come to the conclusion that these reconstituted wrecked cars were only a minor factor in road safety. He admitted in the letter that there were few statistics available to support this view, and he realised, too, that the study of the West Yorkshire police had reported that 2·5 per cent. of the accidents in that area involving personal injury were attributed to cars that had previously been wrecked and put back on the road.
1668
I do not know what 2·5 per cent. of the present level of road accidents is, but it must run into several thousands. But one sample is unreliable, and it seems to me that the Minister has arrived at his decision on inadequate information. He certainly consulted the chief constables, but, because of the absence of the stamp on the log book, reliable statistics are not available.
My request to the Minister, therefore, is to revert to the old system of stamping the log books of write-offs as an interim measure, pending the introduction of legislation that will take away the licence of a write-off until it is certified to the Department's satisfaction to be roadworthy.
There is widespread concern about the present situation. The Vehicle Builders and Repairers Association, the Motor Agents Association and the Institute of Automobile Assessors have been pressing the Department about the matter for many months. They are reputable organisations representing competent garage proprietors with nothing to lose from the inspection of written-off vehicles. They are just as anxious as I am, and as anxious as the Department should be, to put the disreputable backstreet dealers out of business.
When I made a BBC radio broadcast on the problem about a year ago I received letters from all parts of the country. Some of them were heartbreaking. For example, a man in Manchester withdrew his life savings of £900 to buy a Cortina, only 12 months old, to take his invalid wife out into the country. He thought it was a bargain, but after a few weeks it began to drop to pieces. He then discovered that it was a write-off, extensively damaged in an accident.
It is all very well for the Minister to say, as he did in a letter to me, that people should take precautions when they buy a car and should have it examined by a competent examiner. Many people meet fast-talking, plausible salesmen and it is very difficult for them to resist their blandishments.
In the short term we must return to the practice of stamping the log book when a car is written off, and in the long term we must consider how the law can be changed. My whole purpose is to ensure that no sub-standard restorations

1669
are allowed to reach the hands of unsuspecting drivers who would be a danger not only to themselves but to other road users. Many thousands of people, particularly those who have bought reconstituted vehicles, will be interested in the Minister's reply to this short debate.
The problem will grow, because the motor trade will have to absorb VAT in the near future. That will mean that the costs of repairs and spares will increase, and, as a result, insurance companies will be writing off even more cars.
I urge on the Minister the policy that I have suggested, but I also draw his attention to the lapse of time since I first raised the matter. It was raised in my local newspaper, the Darlington Evening Gazette, about 15 months ago, as a result of which I received a number of letters from constituents. Having tackled the problem, I was advised that the matter was under consideration by a departmental committee. In response to Questions, I was assured that a report would be available shortly. In fact, we have a report saying that there is nothing to investigate, that there is no problem. I am certain from the letters I have received that there is a problem and that it will continue.
The question is one not only of road safety but of consumer protection. People are entitled to know when they are purchasing a second-hand car whether it has been involved in an accident and been completely written off by an insurance company, and whether it is roadworthy. The Department owes them to duty not only to consider re-introducing the stamping of the log book but to give long-term consideration to changing the law so that all such cars can be inspected by competent people before a licence is issued.
11.50 p.m.
Dr. Reginald Bennett: I am sure that the hon. Member for Darlington (Mr. Ted Fletcher) is performing a most valuable function in bringing this matter before the House. It is unduly long in coming before the House because the change in procedure dates from 15 months ago or more. At that time I made some representations to the Department.
I must confess an interest as a member of the Council of the Institute of Motor
1670
Auctioneers. I think that the hon. Member for Darlington will probably agree that it is probably the auctioneers who are most at risk in handling cars. They take them as found, and it is only after the cars have been processed and disposed of that investigation may find that the customer has bought something which is not safe and about which nobody knew anything. The whole motor trade, every part of it, is at risk, to say nothing of the public who are destined to be hurt or even killed in these dangerous vehicles that are at present allowed to return to the roads without any apparent sign of their unworthiness.
I would quote rather than paraphrase an inter-office memorandum of one of the motor auction firms of over a year ago. It says:
"The effect of this new instruction is that it is not possible for anyone to find out for themselves whether the vehicle has been written off or not. The licensing authorities will not tell us when we ask, but when a member of the public or other person applies to tax the vehicle, the licensing authority still send the 'pink form' to the police. The police then simply turn up on the new owner's doorstep and calmly announce to them that the vehicle has been involved in a major accident and has been 'written-off'. They then proceed to inspect the vehicle in case it has been repaired with stolen parts, that is, 'rung'. The new owner throws up his hands in horror and takes the vehicle back to his seller for redress, thus starting a chain reaction in reverse.
I have proof of one such vehicle, the salvage of which was purchased by a dealer in Ashby-de-la-Zouch from the Royal Insurance Group with a clean log book. The dealer rebuilt the vehicle and entered it at Measham, stating 'No' to out question, 'Has the vehicle been an insurance total loss?' It was only when a member of the public, the final purchaser, applied to tax it and the licensing authority notified the police on the pink form' that it all came to light. The police are going to visit the present owner. The auction purchaser was in fact a dealer and will obviously lose his profit when his customer rejects the vehicle."
I know that it is true that the log book is no document of title. That is a plausible and good argument. But surely we must have some check, before the last minute of the licensing, on the reconditioning of rubbish that is put on the road. The Government are responsible entirely for the deaths of people killed in such vehicles if they do not become more strict. Certainly the insurance companies should carry liability

1671
indefinitely for any written-off vehicle. This is a murderous practice, and it is incredible that it should have been allowed, and I implore the Government to do something about it.
11.53 p.m.
Mr. Ernle Money: I hope that my hon. Friend will be able to reassure those members of the public who have been worried by the suggestion that it might be the intention of his Department to abandon the traditional log book and use some form of yearly certificate.
The Under-Secretary of State for the Environment (Mr. Keith Speed): I thank the hon. Member for Darlington (Mr. Ted Fletcher) for raising a matter about which he has broadcast and about which I contributed to Motoring and the Motorist some weeks ago
I am sure that every hon. Member and certainly my Department will support the object of keeping dangerously defective vehicles off our roads. It is a problem which is certainly in the forefront of my right hon. Friend's mind and of my mind, and in the Department we are constantly looking for ways and spending a great deal of money in trying to ensure that road safety is advanced, but we must spend money and do things in an effective way, as I am sure the hon. Gentleman would be the first to agree.
The basic problem in considering the whole question of written-off vehicles is that the phrase, unfortunately in practice does not mean what might seem to be implied. In insurance company terms, a written-off vehicle means one on which the insurer has made a total loss payment; but this is not a satisfactory way of defining potentially dangerous vehicles, and that for two main reasons. The first is that the insurer's decision to make a total loss payment now depends on economic factors as well as on engineering factors, and must depend a great deal on the value of the vehicle at the time of the accident; its age, general condition, cost of repair, and so on.
Let me give a simple illustration. If the hon. Gentleman had a 1959 Austin A30 which was involved in an accident, where perhaps the cost of repairs would be £100 and the car was worth only £60, that would be a total loss. But if he had
1672
10-year old Rolls-Royce on which the repairs might be £3,000, the cost of the repairs would be substantially below the then value of the vehicle and there would not be a total loss.
Secondly, total loss payments do not adequately identify all vehicles that have suffered serious damage in accidents, because many of these vehicles are insured only for third party and, therefore, no payment would be made to the owner for total loss——
Mr. Fletcher: I understand that 80 per cent. of insured vehicles are comprehensively insured.
Mr. Speed: The figure that was mentioned earlier was 25 per cent. for third party, but, even so, 25 per cent. is 25 per cent. of about 15 million vehicles, which is an awful lot of vehicles, and I am sure the hon. Gentleman will agree that we are still talking in terms of millions of vehicles.
Some badly damaged vehicles which are comprehensively insured may not be taken in by the insurance company but may be left with the owner with a corresponding reduction in monetary compensation. The hon. Member will know that that has happened to a considerable extent in the past. Therefore, there is really no guarantee if we revert to the system applicable in 1971. Apart from this, it is perfectly possible to make some vehicles fully roadworthy again even after serious damage. It is, as I have already outlined, a question of how much it is worth while spending on the vehicle to get it fit for the road rather than whether it is technically possible to repair it adequately.
For all these reasons, to endorse the log book of a vehicle on which a total loss payment has been made, or cancel it in order to prevent the vehicle being used on the road again, is, as a long-term answer, not a satisfactory means of dealing with the problem from a road safety point of view.
Perhaps I can answer the first question by recalling that a scheme was tried in 1967 under which, when they took in a seriously damaged vehicle which was subject to an insurance claim and on which a total loss payment was made, the insurers notified the local taxation office, which then endorsed the registration book with the words "Seriously damaged vehicle. Insurance total loss payment

1673
made." The scheme was suspended in 1971 because of the reasons I have given, and because the insurers told us that it was causing some reputable insurance companies severe financial loss, while it appeared that less reputable companies were faced with the temptation to which they sometimes gave way of leaving the vehicle with the owner rather than taking it in as a total loss in circumstances where failure to notify the local taxation office might be justified by straining at the interpretation of "seriously damaged."
I can tell my hon. Friend the Member for Ipswich, (Mr. Money) that a new form of log book will be coming in with centralised licensing at Swansea. There will be a log book for each vehicle and owner, and when the ownership changes the log book will change with it, providing a particular document for a vehicle and the owner. We shall be advising the House and the public in more detail in due course.
Eventually there will be substantial advantages which will enable us to licence a vehicle from day to day rather than month to month. In consultation with the Home Office and chief constables, my Department has concluded that this issue, while it may be a problem in regard to consumer and other matters, is not a major road safety problem. When I have gone into the figures I hope to carry the hon. Gentleman with me on this.
Various studies in different parts of the world have shown that mechanical defects are responsible for only a small proportion of personal injury accidents. We asked the chief constables and they reported that in only a few isolated instances would the relevant defects have been caused by inadequate repairs to seriously damaged vehicles.
The hon. Gentleman rightly said that there are few statistics available showing the precise extent of the problem. Perhaps I can expand a little upon the answers which the West Yorkshire police gave, because, with respect to the hon. Gentleman, he did not quite interpret my right hon. Friend's letter of December correctly. The West Yorkshire police made a special study and said that in 1971 there were 9,612 accidents in their area involving personal injury. Everyone will agree that is a large number for a reasonable statistical sample. If
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the hon. Gentleman reads HANSARD tomorrow he will see that he perhaps did not get it quite right. Mechanical defects were reported as a contributory factor in 2·5 per cent. of these accidents.
Mr. Fletcher: The letter actually says:
"2·5 per cent. of the accidents in that area in 1971 involved personal injury and in no case was the accident attributable to a vehicle being in an unsatisfactory condition due to a previous accident in which it had suffered serious damage."
Mr. Speed: That is just what I am saying. In no case was it found that the accidents were attributable to a vehicle being in an unsatisfactory condition due to a previous accident in which it had suffered serious damage. This was a thorough investigation. This is the main burden of the evidence that we have when discussing these problems. We must take real cognisance of this study.
It seems that special, complicated measures to tackle this problem cannot be justified on road safety grounds. We deal with the wider problem of checking cars for mechanical defects by making an annual inspection of all cars over three years old compulsory. We very much encourage prospective buyers of secondhand cars to have the vehicle tested before purchasing. The hon. Member mentioned the glib salesman and how a person making a purchase involving £900 can be carried away. Unless a person buying a car is doing so through a highly reputable dealer, giving a cast-iron guarantee, he ought to have the vehicle tested before purchasing.
It is sometimes suggested that garages should be prevented by law from repairing or rebuilding seriously damaged vehicles. This is not a reasonable proposition because with modern equipment and skilled staff it is feasible to restore many such vehicles to a roadworthy condition. In my radio broadcast I said that if anyone can produce substantial evidence that written-off vehicles present a significant accident danger I am prepared to look carefully at that evidence and re-consider our policy. I give hon. Members that assurance. So far no such evidence has come in. On the evidence we cannot see reasons, on road safety grounds, for changing the present policy.
Question put and agreed.
Adjourned accordingly at five minutes past Twelve o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia
  Rhodesia
  Universal Declaration of Human Rights (Seminar)
  Universal Declaration of Human Rights (Seminar)
  Portugal and West Africa (Visit)
  Portugal and West Africa (Visit)
  Middle East
  Middle East
  Zambia
  Zambia
  Vietnam
  Vietnam
  Ugandan Asians (Assets)
  Ugandan Asians (Assets)
  Uganda (Returned British Nationals)
  Uganda (Returned British Nationals)
  Colonialism and Apartheid (Conference)
  Colonialism and Apartheid (Conference)
  Botswana
  Botswana
ENVIRONMENT
  Road Programme (Yorkshire)
  Road Programme (Yorkshire)
  Motorways (Heavy Vehicles)
  Motorways (Heavy Vehicles)
  Housing (Speculative Buying)
  Housing (Speculative Buying)
  Higher Education Activities (London)
  Higher Education Activities (London)
  Chichester (Preservation Study)
  Chichester (Preservation Study)
  Traffic Lights (Stanmore)
  Traffic Lights (Stanmore)
  Local Authorities (Publicity)
  Local Authorities (Publicity)
  Foreign Lorries
  Foreign Lorries
  Motorways (Windsocks)
  Motorways (Windsocks)
  A30 and A38 (Devon and Cornwall)
  A30 and A38 (Devon and Cornwall)
  Alkali Inspectorate
  Alkali Inspectorate
  Transport Policy (London)
  Transport Policy (London)
  Caravan Sites (Rentals and Fees)
  Caravan Sites (Rentals and Fees)
  Road Accidents
  Road Accidents
  Primary Road Programme (London)
  Primary Road Programme (London)
  New Palace Yard
  New Palace Yard
  Touring Caravans (Speed Limit)
  Touring Caravans (Speed Limit)
  Motor Vehicles (Exhaust Pollutants)
  Motor Vehicles (Exhaust Pollutants)
  Inland Waterways (Commercial Use)
  Inland Waterways (Commercial Use)
  Rating Revaluation
  Rating Revaluation
  Rent Allowances
  Rent Allowances
SCOTLAND
  Rheumatoid Arthritis (Treatment Facilities)
  Rheumatoid Arthritis (Treatment Facilities)
  Hawick Working Party Report
  Hawick Working Party Report
  Liquor Licensing (Report)
  Liquor Licensing (Report)
AGRICULTURE, FISHERIES AND FOOD
  Butter Consumption
  Butter Consumption
  Milk (Wholesale Prices)
  Milk (Wholesale Prices)
  Hill Cow Subsidies (Northern Ireland)
  Hill Cow Subsidies (Northern Ireland)
  Swine Vesicular Disease
  Swine Vesicular Disease
CIVIL SERVICE
  Business Administration
  Business Administration
  Pay and Conditions of Service
  Pay and Conditions of Service
  Dispute (22nd February)
  Dispute (22nd February)
EDUCATION AND SCIENCE
  Youth Service
  Youth Service
  Primary and Secondary Schools
  Primary and Secondary Schools
  School Building (Staffordshire)
  School Building (Staffordshire)
EMPLOYMENT
  Industrial Rehabilitation Unit, Dundee
  Industrial Rehabilitation Unit, Dundee
HOME DEPARTMENT
  Brodrick Committee
  Brodrick Committee
  Deer Poaching (Penalties)
  Deer Poaching (Penalties)
  Paroled Prisoners
  Paroled Prisoners
  Dangerous Driving (Convictions)
  Dangerous Driving (Convictions)
  Polyurethane Furnishings (Fire Hazard)
  Polyurethane Furnishings (Fire Hazard)
  Parliamentary Constituencies (London)
  Parliamentary Constituencies (London)
  Bomb Scares
  Bomb Scares
  Commonwealth Immigrants (Repatriation)
  Commonwealth Immigrants (Repatriation)
NATIONAL FINANCE
  Value Added Tax
  Value Added Tax
  Unclaimed Deposits
  Unclaimed Deposits
  Money Supply
  Money Supply
  Married Women (Separate Taxation)
  Married Women (Separate Taxation)
  Gross Domestic Product
  Gross Domestic Product
  Personal Incomes
  Personal Incomes
  Family Allowance
  Family Allowance
  Gilt-edged Securities
  Gilt-edged Securities
  Incomes (International Comparisons)
  Incomes (International Comparisons)
  Overseas Investment
  Overseas Investment
  Travel Account (Receipts)
  Travel Account (Receipts)
  Occupational Pension Contributions (Tax Relief)
  Occupational Pension Contributions (Tax Relief)
  War Widows
  War Widows
NORTHERN IRELAND
  Royal Ulster Constabulary (Removal Allowance)
  Royal Ulster Constabulary (Removal Allowance)
  Housing Executive
  Housing Executive
  Farm Incomes
  Farm Incomes
  Feeding Stuffs
  Feeding Stuffs
  Bacon
  Bacon
  Schooner "Result"
  Schooner "Result"
  Community Rights (Safeguards)
  Community Rights (Safeguards)
  Border Poll
  Border Poll
  Budget
  Budget
POSTS AND TELECOMMUNICATIONS
  Engineering Productivity
  Engineering Productivity
SOCIAL SERVICES
  Family Planning
  Family Planning
  Tiverton Office (Telephone Number)
  Tiverton Office (Telephone Number)
  Hospital Beds (Staffordshire)
  Hospital Beds (Staffordshire)
  Hospitals (Labour Supply)
  Hospitals (Labour Supply)
  Supplementary Benefits (Pension Disregards)
  Supplementary Benefits (Pension Disregards)
  Reserve Pension Scheme
  Reserve Pension Scheme
  Medical Services (EEC Countries)
  Medical Services (EEC Countries)
TRADE AND INDUSTRY
  Centre for the Study of Industrial Innovation
  Centre for the Study of Industrial Innovation
  Counter-Inflation (Temporary Provisions) Act
  Counter-Inflation (Temporary Provisions) Act
  Airports (Capital Investment)
  Airports (Capital Investment)
  Works of Art and Antiques (Export)
  Works of Art and Antiques (Export)
  Concorde
  Concorde

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.

HOURS AT SEA: IMPLEMENTATION OF AGREEMENT
LORD SHINWELL: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when it is proposed to implement the agreement on limitation of hours at sea reached between the Navigating Officers Association and the shipowners in June, 1972.
THE EARL OF GOWRIE: My Lords, the agreement was made before the standstill for implementation on January 1, 1973, and under the proposals in Cmnd. 5205 the operative date may now be April 1 or the end of the standstill, whichever is sooner.
LORD SHINWELL: My Lords, I am grateful for that reply because it is much more satisfactory than I had expected, and that is very unusual. Is the noble Earl aware that the navigating officers have been very disappointed because of the delay, and particularly because junior officers serving on ocean-going ships are working excessively long hours, which militates against safety?
THE EARL OF GOWRIE: My Lords, may I thank the noble Lord for the kind words that he has had to say to me, especially since I am somewhat wanting in support from my own side. The officers' case was of course viewed with sympathy, but the noble Lord will be aware that there was an agreement to improve terms and conditions of employment during, the standstill and no exceptions could be made.
LORD SHINWELL: My Lords, since the Government Front Bench opposite is denuded of Peers, may I ask the noble
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Earl whether it would be of any advantage if some of my noble friends on these Benches went to sit on the opposite side? We should get the same answers anyway.
LORD SHACKLETON: My Lords, before the noble Earl replies, I wonder whether we ought in fact to consider adjourning the House. We have four Members of the Government, and I think I detected one or two more Conservatives, present. It is of course a great satisfaction that the Prime Minister is addressing the Independent Unionist Peers, and I am sure we all welcome him from another place, but I must say that I think the situation here is quite unprecedented. The only reason we have any Ministers here is that they are having to answer Questions and because the noble and learned Lord the Lord Chancellor shows his usual courtesy. But when I look at the serried ranks of the Labour Party, the Liberal Party, and the Cross-Benches, I wonder whether we can be told when the Conservative Party are likely to join us. Or have they decided that they so dislike the Government's new Green Paper that they had better keep away until the Prime Minister has persuaded them that it is right to support it? Who, in fact, is now leading for the Government? Apart from the Lord Chancellor, I think the noble Baroness, Lady Tweedsmuir of Belhelvie, is the senior Minister.
LORD BYERS: My Lords, may I ask the noble Earl whether this is some new form of industrial action?
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, perhaps I should answer the noble Lord, Lord Shackleton, as at the moment I appear to be the most senior Minister on the Front Bench. I would only say to the noble Lord that he will be aware that my noble friends are always the most assiduous attenders in this House, and he will observe from the number of speakers for the debate on the need for a national energy plan how many will be present. No doubt they feel that the Answers to the Questions before the debate will be so satisfactory that there is no need to attend.
LORD SHACKLETON: My Lords, after a while this ceases to be just a joke,

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unless noble Lords opposite regard this House as a joke. Question Time is important and contributions come from the other side of the House. There are many issues on which we do not take a Party line. I find it quite inconceivable that a distinguished visitor to our House should come at a time when the House ought to be sitting. One can imagine the reaction in another place if something like this happened. Although we do not wish to make personal remarks, I am bound to say—and this is no reflection on the Prime Minister; I am sure it is very delightful for us to have him with us and, as I said, he may persuade some noble Lords to be sensible on occasion and stop voting against the Government—that it really is not good enough, and noble Lords ought not to think that this is purely a demonstration for fun.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I hope I did not in any way imply—and I am sure I did not—that there is any question of a joke in this matter. The fact remains that there is a very important meeting and there are three Questions down, and if my noble friends feel confident that they will be satisfactorily answered they are quite entitled not to enter this Chamber until the debate on the national energy plan. I would say once again, on their behalf, that they are the most assiduous attenders in this House.
LORD SHACKLETON: My Lords, I would only ask the noble Baroness to read the Writ and the Summons that applies to all noble Lords.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, it also remains a fact, does it not, as the noble Lord, Lord Shackleton, will realise, that there are occasions when many Members of the noble Lord's own Party cannot, for one reason or another, attend the House and no one questions that fact?
LORD SHACKLETON: My Lords, we do not, however, absent ourselves en masse.
LORD BLYTON: My Lords, is the Minister aware that perhaps the Back-Bench Lords of the Conservative Party who are missing will knock some sense into the Prime Minister, in order to try
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to get some credibility and some peace with the trade unions?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am sure it will be a most useful meeting for everybody concerned.
LORD SHINWELL: My Lords, is the noble Baroness aware (this was said to me in confidence but I had to take note of it) that the noble Lord the Leader suggested that, as the Front Bench opposite is denuded of its senior Members, I might go and sit there, and I assured him that I did not think I should be of very much help?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I must thank the noble Lord for his offer. I am sure we would much welcome him.

MERCHANT SHIPPING ACT REGULATIONS
2.43 p.m.
LORD SHINWELL: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the regulations contained in the Merchant Shipping Act have been submitted to the National Seamen's Union and with what result.
EARL OF GOWRIE: My Lords, the National Union of Seamen were fully consulted about all the regulations which have been made under the Merchant Shipping Act 1970. Their comments were received and considered and taken into account in the drafting of the regulations.
LORD SHINWELL: My Lords, is the noble Earl aware that the Act which is under review in this Question came into operation nearly three years ago; that it has taken all that time for consultation to take place, and as yet no decisions have been reached? As the regulations are of the utmost importance, will he advise his right honourable friend to expedite the matter so that the National Union of Seamen, on behalf of its members, may be made aware of the position?
THE EARL OF GOWRIE: Yes, my Lords, I will so undertake.
LORD MAYBRAY-KING: My Lords, is the noble Earl aware that the noble Lord, Lord Shinwell, speaks from experience after a lifetime of devotion to the cause of the merchant seamen; that he was largely responsible over many years for securing this Act and that the criticism he makes ought to be taken as a very serious one?
THE EARL OF GOWRIE: Yes, my Lords, I am so aware.

RHODESIA: DETENTION OF MR. NIESEWAND
2.45 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will officially protest against the detention of Mr. Niesewand, the B.B.C. and Guardian correspondent in Rhodesia.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, we have been in touch with the Rhodesian authorities about the arrest of Mr. Niesewand. They have told us that he has been detained on security grounds. I understand that Mr. Niesewand has appealed against his detention.
LORD BROCKWAY: My Lords, I thank the noble Baroness for that Answer and I congratulate her on her attendance here, which I am sure is much more interesting than the other meeting. May I ask her this question? Is it not an outrage that this correspondent of the B.B.C., the Guardian and the Observer, whose objective reports have informed many of us about the conditions in Rhodesia, should now be detained by this illegal Government? Although he is a Rhodesian citizen, is it not the responsibility of Her Majesty's Government to recognise that Mr. Niesewand is also a British citizen of the United Kingdom and of the Commonwealth, and to act very energetically on his behalf?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I think I said in my original reply in other words, we have drawn to Mr. Smith's attention the very serious concern felt in this country over Mr. Niesewand's detention. So
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far as British responsibility is concerned, I understand that Mr. Niesewand was born in South Africa and has lived in Rhodesia for some time. Although he has taken out Rhodesian citizenship it is not clear whether he did so before U.D.I. If he did so after U.D.I. his exact national status may be in doubt. However, as I said earlier, he has appealed and therefore I cannot go more into the merits of the case.
LORD WADE: My Lords, I may not have heard correctly what the noble Baroness said. May I ask whether any representations or protests have been made by Her Majesty's Government, officially or unofficially?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I said in my original reply that we had been in touch with the Rhodesian authorities about the arrest of Mr. Niesewand. They told us that he has been detained on security grounds. We did, of course, at the same time point out the great concern felt in this country and I understand that he has appealed against his detention.
2.48 p.m.
LORD SHACKLETON: My Lords, before we go on to the next Motion ought not the Government now to consider—at least the noble Lord, Lord Drumalbyn has arrived! It really is not fair to the noble Lord, Lord Tanlaw, that he should have to start a very important debate in a House which is still, so far as the Conservative Party is concerned, occupied elsewhere. I would not object to 5 or 10 minutes adjournment.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SHACKLETON: I particularly do not want to propose that the House should adjourn because the Government would almost certainly think that that was an attempt to wreck their meeting upstairs, and that I do not want to do. This is the Liberals' day, but we need to look at this matter as a House. It is now nearly ten minutes to 3 and we still do not have the Conservative Party present, although we have now a splendid lot of Front-Benchers and the Deputy Leader.
LORD BYERS: My Lords, this really is a most remarkable situation. I should have thought that this was one of the most important Motions that the House

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has had to deal with so far this Session. As I observe very few of the people who are going to speak are in the Chamber at this time. May we be told what is the estimated duration of this meeting which is going on elsewhere? Would it not be better to adjourn?
SEVERAL NOBLE LORDS: Hear, hear!
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I find myself in some difficulty. It is not usual to require the attendance of noble Lords at a debate, and as your Lordships are aware, there is another event occurring at the moment. But if it is your Lordships' feeling that it would be better to postpone the debate I should have thought that in another ten minutes we should find that we had a fuller House. Otherwise, perhaps we might go ahead and I will see what arrangements I can make.
LORD CHORLEY: My Lords, may we pass a message to that other place? I do not mean the usual "other place", I mean another place where a meeting is going on.
LORD SHACKLETON: My Lords, I am grateful to the noble Lord the Deputy Leader for his sensitivity in this matter. It is, I think we all agree, an unprecedented occasion. Of course, noble Lords are absent on occasion; but I believe that this House, and attendance in it, is the first requirement. I think it looks as if we do not bother about our proceedings if a lot of people are absent. We acknowledge that the Prime Minister is a very busy man, and I intend no discourtesy to him, but I think that if the noble Lord would himself take the initiative of (I cannot remember the exact terms of the Motion) adjourning during pleasure until a certain hour—and when I say "a certain hour", I would hope it would not be more than ten minutes—I think this would be the easiest way out. We do not waste much time, and I think it would look very bad if we went on.
LORD MAELOR: My Lords, may we be assured that the Tories have not gone on strike to-day?
LORD ABERDARE: Yes, my Lords, I can give the noble Lord that assurance.
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I should like to fall in with the proposal of the noble Lord the Leader of the Opposition, and propose that we adjourn for ten minutes until three o'clock, if that is the feeling of the House. Meanwhile, I will ensure that a message is conveyed to noble Lords in the "other place".
[The Sitting was suspended at eight minutes before three o'clock and resumed at three o'clock.]

ENERGY POLICY AND WORLD SUPPLIES
LORD TANLAW LORD TANLAW rose to call attention to the urgent need for a National Energy Plan in relation to Britain's entry into the European Economic Community and the increasing inadequacy of world energy supplies; and to move for Papers. The noble Lord said: My Lords, I rise to move the Motion standing in my name on the Order Paper. If ever I reached the Halls of Fame, I think it would be for one reason only: I shall have been the only speaker in your Lordships' House who managed to clear the House before uttering a single word. I am grateful for the 10 minutes' adjournment and particularly pleased to see the speakers who are to take part later in the debate.
I shall need help in introducing a wider Motion than I originally thought, so I intend to start by calling on St. Matthew, Chapter XXV, verse 8, which some noble Lords may find appropriate:
"And the foolish (virgins) said unto the wise, give us of your oil, for our lamps have gone out."
My Lords, experts and amateurs alike have throughout history underestimated future demand for fuel ever since those foolish innocents failed to fill their lamps with oil. Noble Lords will recall the advice given to them at the time, which was, "to go and buy from them that sell". This is precisely the position the industrial nations are in to-day. They have gobbled up their indigenous energy reserves without thought for the morrow, and in the mistaken belief that they were virtually unlimited. Let us look at the position in more detail. I shall try to keep spoken statistics to a minimum as they can be misleading in a debate of this kind. I shall, however, mention my sources wherever possible. First, Britain. The White Paper of 1967 was a genuine attempt at a fuel policy but unfortunately,

629
through no fault of its authors, its extrapolations became quickly outdated by the new oil discoveries off the Scottish coast, I shall not refer to it again, but it is the last official word from the Government on energy; since then there has been a deafening silence.
This may be explained partly by complacency, in the mistaken belief that the newly-found oil and gas discoveries will take care of all Britain's future energy requirements. Alternatively, perhaps, the civil servants cannot bear the thought of their extrapolations going wrong again. But an energy policy is not about extrapolations, or resources at the bottom of the sea; it is about guaranteed supplies. The Suez crisis and the miners' strike made this point all too clearly. I do not subscribe to the view of an impending raw-energy famine, and am therefore directing this debate towards supplies and not resources.
If we look at Table 3 of the Report by the British Coal Industry entitled Coal and Energy Policy in Europe, it clearly shows that Britain's dependence on imported energy supplies has risen from 25 per cent. in 1960 to 45 per cent. in 1970. The E.E.C.'s dependence on imported energy rose to 63 per cent. in 1970—it more than doubled within the same period. The object of quoting from this table is to try to temper the Government's apparent euphoria by emphasising that Britain has not yet landed one barrel of crude oil from its own oilfields, and will be dependent upon importing heavy crude at a competitive price from the OPEC countries for at least another ten years before it can reach theoretical self-sufficiency. Shell estimate that by 1985 Western Europe's consumption of oil will be running at 25 million barrels a day, and if by then North Sea production achieves 2 million to 3 million barrels a day, it will account for only 10 per cent. of the total demand.
When the barrels start to roll out from the North Sea fields, the quality of oil will be high and with a low sulphur content. These oils are most suited for breaking down into expensive petroleum products and justify their expensive extraction costs. If maximum fiscal benefits are to be gained, North Sea oil and gas should not be used to fire power stations or for bulk industrial purposes, but reserved for premium use. The surpluses
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should then be sold on the international markets. But sole dependence on the OPEC countries for domestic supply of bulk generating and industrial energy requirements is dangerous. It is dangerous for two reasons: first, because supply could be interrupted through the political instability of the area—and last week's events do not augur well for the future—and, secondly, because of the strong bargaining position of the OPEC countries over the price per barrel. This could rise rapidly because of a switch from a buyers' situation to a straight sellers' market. Earnings could even rise to an incredible thousand billion dollars a year by 1985. It is naïve to imagine that these large surpluses will not be spent on the most sophisticated weapons money can buy.
If the enlarged Community and, more particularly, the U.S.A. and Japan are to maintain any kind of economic autonomy in the next decade, much more efficient use muse be made of indigenous sources for generation energy. Tables clearly illustrating these points are shown in the B.P. Statistical Review, the Coal Board document to which I have referred, the Shell Briefing Service and the pamphlet, Energy and Europe produced by the European Commission. Britain's first contribution would be to lay down a national energy policy of its own. No country in the world has so far produced one, because the urgency of the situation has not been recognised by Western Governments, who seem mainly obsessed with short-term political considerations and nothing else. Britain is particularly well placed to give a lead at this time. The experience gained in all sections of the energy market, from production to exploration and exploitation, will be especially valuable. However, the Government's response so far has been discouraging.
The Minister of State for Trade and Industry had only this to say on December 11, 1972:
"There is real uncertainty about future prices of fuels and an increasing awareness throughout the world of the danger of a shortage of energy. We in the United Kingdom must ensure that our national energy assets are wisely used."
This is a well-intentioned statement; but it says remarkably little about an energy policy. Perhaps the Minister was

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referring to coal. If so, let us take the Coal Industry Bill, which comes before noble Lords on March 6. It is all very well for this Bill to sort out the Coal Board's huge losses and wage increases brought about by the miners' strike in 1972, but it looks to me like a sop, and cannot be taken for anything else without a statement of intent on the size of the industry as a whole. No mention is made of this in the Bill, because there is no national energy policy in which the coal industry can be given its rightful place. I believe the Government have a duty to the mining community to declare their intentions. If they negate this duty, then they belittle the intelligence, the courage and the integrity of brave men who are naturally worried about their future.
The effects of the last industrial action taken by the miners in 1972 were far-reaching. The Central Electricity Generating Board altered their reliance on coal to oil and natural gas, which in turn accelerated the rundown of the British coal industry at just the wrong time. An excellent article in the National Westminster Bank Review of May, 1972, by Richard Bailey, warns of the serious consequences of this switch in policy by the C.E.G.B. I would only add that if the Government had had an energy policy at the time, those short-term considerations would have been overridden. The C.E.G.B. would also not have been allowed to use natural gas, a premium fuel, for generating purposes.
I am sure other noble Lords will have more to say about the coal industry, including the question of coal imports, so I shall turn now to other indigenous sources of energy supply. Before doing so I would remind the House that in spite of these sources, the future price of electricity must depend primarily upon the oil companies obtaining favourable terms from the OPEC countries, as well as a continuous source of supply; that is, until there is a breakthrough in nuclear power plant design and operation. My noble friend Lord Avebury will, I hope, give us the up-to-date position and prospects for this source of energy.
There is also natural gas, which I mentioned earlier is a premium fuel. It should not be dissipated in firing power stations or for bulk industrial use. Its
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proper role in a national energy policy should be reserved for the valuable premium markets. Supplies of cheap natural gas from the North Sea may be limited and therefore cease to be cheap. This was intimated by the noble Earl, Lord Gowrie, in the road traffic debate on June 14.
All that I have said so far adds up to one inescapable fact—the days of cheap energy are over; the laws of supply and demand have seen to that. In future, I hope, all tables showing the cost of living index will have beside them a relative scale showing base energy costs. Again, this cannot be done without a national energy policy. Why have we not got one? I think the noble Lord, Lord Robens, who is unable to be here this afternoon, put his finger on the main reason, in his powerful Potterton Lecture entitled "Towards An Energy Policy For Britain", I hope, incidentally, the noble Lord will see that his lecture goes into print, as it is a major contribution in laying down a national energy policy for this country. The noble Lord pinpointed a serious weakness in the present system of managing our energy needs, which is the constant change-about of Ministers and top civil servants in this field. This undermines the requirement of consistency in any energy policy, because of the time spans involved. The noble Lord recommended as a solution an Energy Commission, which would be a continuing authority, staffed by experts in fuel economics and the specialist technologies. The Commission would advise the Government and undertake comprehensive studies. Such a plan would be welcomed most warmly from these Benches and would receive our active support. I trust the noble Lord the Minister will have something to say about this suggestion when he makes his intervention later on in this debate.
I turn now to the enlarged E.E.C. where the problems I have outlined so far are intrinsically the same. A European energy policy is under intense discussion at the moment, and the principles behind it are laid out in the Commission pamphlet. I believe they are worth repeating—
"Cheapness of supplies to the Community, though the fundamental consideration here must be the lowest long-term cost to the Community rather than the lowest market price at a given time;

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"Security and continuity of supplies as regards both price and quantity;
"Free choice of energy sources for the consumer;
"Fair competition between the various sources of energy;
"Avoidance of disruptions of social and regional structures due to the substitution of one energy source or another for reasons of economic necessity."
These principles point the way to our own national energy policy which must not only have the same objectives as that of an enlarged E.E.C. policy, but must be part of it. For instance, I understand the Chairman of the Coal Board was in Europe last week to try to establish new markets for his industry. I feel his position could have been greatly weakened by not having behind him a firm commitment from the Government, on a British energy policy, in which coal was shown to have a definite role as supplier to the generating industry.
My second point with regard to Europe is in the form of a question to the noble Lord the Minister. It is simply this: How can Britain play its part in the formation of an energy policy for the enlarged E.E.C., when it is quite clear that the Government have not yet developed a policy of their own? Thirdly, there is a pressing need for the enlarged E.E.C. to speak with one voice when it comes to negotiate imported crude oil prices from the Middle East. The United States and Japan will be round the table as competitors; and it goes without saying that it will be in their interests, as it will be for the OPEC countries, to negotiate with a disunited Europe on this vital issue. This must not be allowed to happen.
The Community has rightly based its energy thinking so far on a trade and supply policy. This is especially noticeable in the coal sector, where much has been done in granting assistance to an ailing industry. The well-known Decision No. 3/65 of the High Authority to the E.C.S.C. on Subsidies, was replaced in January, 1971, by Decision 3/71, which is operative until December 31, 1975. Although this gives encouragement to the industry, the policy is based primarily on mitigating social difficulties in the regions, and does not as yet give coal a long-term future. The Community is not as advanced in the oil and natural gas sectors, but the concept is nevertheless still based on a
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trade and supply policy. Member States are now obliged to supply the Commission with data every six months of all oil and natural gas imports. The Community also recognises that in the nuclear energy sector it will be reliant on the United States for its single source of supply of enriched uranium until the 1980s, when its own plant comes on stream.
So far, my Lords, the various energy sources of the Community continue to be governed by separate legal provisions—coal by the E.S.C. Treaty, oil and natural gas by the E.E.C. Treaty and nuclear energy by the Euratom Treaty. Until all three European Treaties are merged into one E.E.C. Energy Treaty, it will be impossible to create a Community energy policy. The concept of the Energy Commission mentioned earlier as a starting point for a British energy policy, might also find an application in Europe, where the problems with the administration and diversification of fuel responsibilities have many similarities.
My last point on Europe will, I hope, prove to be unnecessary. I made reference earlier to the theoretical possibility of Britain becoming self-sufficient in energy supplies through its own resources by 1985. This could, I submit, only happen for reasons of national security. In case it is suggested from some part of the Chamber that this should be one of the objectives of a national energy policy, let me repeat a point I made earlier. Unless Britain plays its part in supplying petroleum products and, I hope, coal, to the Community, the economic foundation of our relationship with the enlarged Community will fall apart. Energy supplies must be seen as an international issue, not a national one. An energy policy is as important as the international monetary policy, and is in many ways closely linked to it. The current weakness of the dollar and the energy crisis in the U.S.A. is hardly a coincidence.
I wish now to make a general point on energy conversion, which has direct links with an environmental policy. Noble Lords are no doubt aware that inefficient conversion of energy creates both waste heat and pollution. The latest Liberal pamphlet Strategy 2000 makes the point that half the total world energy consumed is wasted, mainly through power generation by poor conversion of primary fuels

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into electricity, and through transportation. One possible remedy mentioned in Strategy 2000 worth pursuing with more research is to raise the efficiency of a modern power station from 40 per cent. to 70 per cent. through more use of gas turbines. There are other ways, too, such as heat storage in base salts at the site of generation, the use of geothermal and tidal energy, and magnetohydrodynamics—to name but a few. Unfortunately, there is still a long way to go before any of these promising methods can be made practical to bridge the energy gap between now and 1985.
However, there are at least two areas where the Government can take direct action now, by implementing a policy of energy conservation without reducing the quality of life. Britain is wasting fuel to the tune of £6 million a year, rising to £14 million by 1979, at 1969 fuel prices, by having the lowest thermal insulation standards in Western Europe, thanks to the abysmal standards laid down in the British Building Regulations 1965, Part F. It is not surprising to learn, therefore, that Britain's domestic heating bill is double that of Germany, which has a colder winter. Figures from the insulation industry show there is a 20 per cent. heat loss through the roof, and 30 per cent. through the walls of British housing. The Regulations require only 1 inch of insulation, but a minimum requirement of 2 to 3 inches is the economic minimum for Europe. The Government have turned a deaf ear to all representations from the industry, who have asked for a revision of this outdated provision. In human terms this waste is criminally irresponsible. Organisations such as Task Force and Shelter have pinpointed the high cost of keeping pensioners warm in winter. I suspect that 99 per cent. of the recorded cases of death through hypothermia have been caused through inadequate insulation. The non-recurring extra capital cost per house to provide adequate insulation need only be in the region of £35. I am sure the Minister will agree that this is a smaller price to pay than doubling the pensioners' inadequate heating allowance of 75p per week. It is also more efficient. A proper energy conservation policy would not only make a material contribution to keeping energy prices
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steady but relieve hardship in large sections of the British community.
To continue this theme, the development of fuel cells, the Stirling engine, and other systems of electro-chemical storage and propulsion, should all be part of an efficient energy conservation policy. The increase in research grants for these new sources could be met perhaps out of tax penalties for using the motor car in city centres, where its efficiency drops below 10 per cent. and its pollution is at its maximum. There are so many other ideas and new methods to discuss, but time is against me. It is tantalising only to mention the promising developments in recycling of waste and district heating as other methods of energy conservation. I commend the article in New Scientist by Soviet academician, Igor Petryanov-Sokolov to those noble Lords who are interested and who may take up this line later in the debate: it is a brilliant article.
My Lords, I cannot leave my introduction to this Motion without taking a peep into the future. I have concentrated on the critical period between now and 1985, when nuclear reactors will start to make a significant contribution to world energy supplies. We should then see a gradual shift away from an oil-based economy. But to what? To what end will nuclear technology be directed? Again, the response from the Government is discouraging in the apparent low priority given to this section of the energy industry. On August 8 last year the Minister of State outlined in another place the Government's intention to set up a Nuclear Power Board. Five months later I made inquiries as to progress from Lord Limerick's Office. The answer was that preliminary discussions were still taking place, and no date could be given for the setting up of this Board. Perhaps this delay is due to disillusionment. The early hopes that nuclear generation held all the answers to future energy supplies have been dashed. Research slowed down with the advent of North Sea oil and gas and the figures also showed nuclear reactors were not as efficient as first thought. There were also potential dangers of excess pollution and serious accidents. So Britain's lead in this field passed to the United States when the Government switched their attention to the North Sea developments. Attention is now returning, albeit late in the day, back to

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nuclear reactors. I have already given reasons for this. The question for the future I pose now is: To what end will nuclear reactors be directed by the year 2000? Towards an all-electric economy? Or to a hydrogen-based economy?
I have already focused on the inefficiency of heat loss in electric power generation. Add to this transmission losses and the shocking waste of an all-electric household, and the result is a very poor system of energy conversion. Surely we cannot accept electricity as the sole basis of our economy for the future. Personally I am most attracted instead to the theory of using nuclear power for the electrolysis of hydrogen. Arguments for this have been put forward by Francis Bacon, inventor of the Bacon fuel cell, in New Scientist of August 10 last year. Derek Gregory, Director at the Institute of Gas Technology in Chicago, also made a strong case for hydrogen economy in the January issue of The Scientific American. The basis of this theory is simple. Hydrogen is a most efficient clean gas; it can be transmitted through existing gas lines, and the generation process is reversible. The waste element is water, which is the raw material from which the process begins. Of course, there are problems. Problems of storage, transportation, and of acceptance of this form of energy. Much research has yet to be done on finding suitable electrolysers. Euratom are working now on the problems of thermal electrolysis of hydrogen as a more economical alternative. What is Britain doing? Can the noble Lord say whether or not funds have been allocated to this promising line of research? Also, can he say whether the manufacture of hydrogen as an energy source is part of the nuclear reactor programme? The answers to these questions are needed now, because they must form the long-term objectives of a national energy policy.
In conclusion, my Lords, I am deeply conscious of my amateur status in this subject and the number of omissions and over-simplifications that I have made in moving this Motion. However, in spite of its complexity, I believe it possible for any Government to formulate an energy policy, if they care to choose their priorities, make the necessary decisions and then stick to them. By forming a permanent Energy Commission comprised of Ministers of the day, civil
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servants and energy experts from the public and private sectors, a start will have been made towards this goal. No country, as I said earlier, is better placed than Britain to show a lead by forming such a Commission, and, what is more, to make it work. Noble Lords are aware of many new ideas and policies that originate from the Liberal Benches in both Houses. They are also aware of the long digestive process that takes place before they are absorbed into their own Party Manifestos. My Lords, there is no longer time for these tactics. The Government must declare their intention to formulate an energy plan for Britain now. If they do not act our lamps will go out and we shall be left waiting in the dark outside the bridegroom's door. I beg to move for Papers.
3.30 p.m.
LORD KENNET: My Lords, I feel sure that the whole House will agree in being grateful to the noble Lord, Lord Tanlaw, for opening the debate with such a wide and highly informed tour d'horizon and we on these Benches endorse the choice of the Liberal Party in putting forward energy policy for one of their days. When we say "energy" we are all aware that we need it to get around, we need it to warm ourselves, we need it to make everything that we need to use. But we do not realise that we eat it. We eat it in the form of refrigeration. The entire food supply in this country is directly dependent on energy in the form of electricity. During the dreadful coal strike of 1972 the last reserves of energy went on avoiding starvation of the people by avoiding the wholesale breakdown of the refrigeration industry. It is starvation which faces us in the short run if there is a real energy catastrophe.
This winter, and indeed, for all I know, at this very moment, aeroplanes taking off from New York to fly across the United States to San Francisco and Los Angeles can no longer get there in one hop; they have to land in the Middle West to refuel because the oil crisis in the United States is such that that economy has not been able to arrange to have enough fuel available at all times at the New York airports. I have not seen this fact in the British Press, but if we, as we should, always watch the United States first to see where economic

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trends are going to hit us, this is the striking example of how far things have gone there already: that that country already cannot organise a trans-continental flight without refuelling because of this crisis.
It is true to say that in the short run the American energy crisis is partly due to the environment crisis. The environmentalists in the United States have over the last two or three years been allowed virtually to stop investment in the energy industries. This is a failure of the American political mechanism which we profoundly hope we shall avoid in this country, but the environmental lobby there is one which has its own reasons, and its existence is justified. There is a world situation of very great gravity which has made it not only likely but necessary that there should be such a lobby, and that it should have its effect.
If I start with oil it is because it is uppermost in all our minds. By 1980, projecting the trends, the United States will have to import half its oil. It was self-sufficient traditionally until only a few years ago. By 1980, in only 7 years, American oil imports will equal in total volume all the oil imports of Western Europe to-day. A dramatic message from President Nixon is expected at any moment about this. The gravity of the situation in American eyes can be judged by the fact that Dr. Kissinger has been asked to take a hand in formulating new policy. One can see why the Middle East must be at the centre of all our thoughts.
The fact about oil is the same as we have known for many years. Proved reserves go up, consumption goes up, but the curve that concerns us—that is, the ratio between reserves and consumption —goes remorselessly down. There were 80 years' reserves in 1950; now there are only 30 years' proved reserves. That is a steady decline. Each year the ratio has gone down and down. Moreover, the cost of the oil goes up and up, and here we have to think about something that is called the "host government take per barrel"—the amount of money the Government of the country where the oil is gets for it, wrapping everything together. That was constant from 1955 to 1970, constant in real prices, and the
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improving technology brought the real price of oil down during that 15-year period. In 1970 to 1971 that "host government take" increased by 46 per cent., in one year. It is still increasing. Those of your Lordships who are in touch with the oil industry will know this. The increases are not publicised. I do not know what the present figure is, but it is certainly way above 46 per cent. over what it was in 1970. It will go further; in time we shall be forced, if we still use oil, to get it from low grade shales and sands where the capital expense is absolutely colossal so much so as to bring out the running price a great deal higher than for the oil which comes naturally from a well. If we do not reach our own balance on oil consumption, nature will reach it for us, and we may not like it.
In the meantime, what do we do? We build larger and larger tankers; of course, the larger the tanker the fewer, and therefore the less the risk of collision; but with each collision there is, the more catastrophic the damage. The United States Navy has asked for more money for destroyers to protect these great floppy bladders of oil as they chunter round the oceans of the world in a sea where a mixture of backward-looking nationalism and a vague pointless commerce-orientated internationalism succeeds in getting us the worst of all worlds, where anyone is free to lay a pipeline in any direction —there is no law about it—outside territorial waters, where nobody knows what territorial waters are and where the Government apparently have no idea how to allot mineral rights under the ocean floor.
There is at the moment a perfectly serious proposal to build a tank in the sea seven miles from Harwich which would handle 200 million tons of oil a year; accommodate 10,000 persons on top; with a golf course as well, and would be able to harbour 1-million-ton tankers. The half-million-ton tanker is here already, and there is no technical difficulty about building a 1-million-ton tanker. Meanwhile, oil pollution of our coasts continues to get worse. This is what the returns show, but public protest diminishes, because we have got used to it. That, I think, is a sad and startling fact.
What is the future of the energy scene in this country? Electricity is one-third

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of all our energy and looks like being a half by the end of the century. The Atomic Energy Authority estimates that nuclear power stations will be providing 90 per cent. of that electricity by the end of the century. The scene is affected by North Sea oil and gas. I will not say much about that because my noble friend Lord Balogh will do so later, I believe. I should only like to say how striking I think this operation in this House has been where he has succeeded, by dint of relentless and rational questioning, in bringing out the total confusion in which the Government were found to be about the question of North Sea oil licences. That has been brought out, and a sorry picture it makes. I do not know what more bombshells he has in store for the Government this afternoon.
Meanwhile, given we have this increase of North Sea oil, which will still be only one-seventh of Europe's oil demand by the end of this decade, 1980, what do we do? We seem to try to sell it as fast and as cheap as we can, and to keep on running down the coal industry. So far as the North Sea gas is concerned, I do not know how widely understood it is, but that appears to be tax free—not one penny paid to the British Exchequer by any operator taking the gas. Cannot the Government tell us whether the oil exploiters are going to operate tax free? One would not have expected them to pay tax yet; they have not begun. Will they contribute to the national Exchequer or will they too get away scot free?
Is it the right way round to run down the oil we have, in view of the catastrophic shortage which is coming, and to let the coal industry continue to run down? In the past few years depreciation and the sale of assets in the coal industry have exceeded investment, and that is a picture of an industry which is absolutely running down. Some 400,000 miners have been made redundant. It was a matter of pride to the Coal Board for some time that this had been done without a single official strike. My goodness! that record has been broken with a vengeance last year. It is true enough to say, "Exploit the oil now, the coal will still be there". But will the miners? It is easy to think that if we put off the exploitation of oil by raising the price a little we shall be able to get and train oil workers easily enough later on, when it is a better time
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to do it. But if there are no miners left, can we imagine re-training a generation of people who have no experience, no background, in mining to agree to go underground again? I doubt this. I believe that the coal industry, and deep mining, must be kept, because we are going to need it.
The nuclear industry will take up what it will; I do not know what that will be. The horizon here is full of hope. We have been told that the fast breeder reactors will use uranium 40 times more efficiently than do the Magnox reactors. It has also been estimated that uranium can be obtained from sea water at a cost only 10 times what it costs to get it out of mines. If these facts are true, we see—and one can do the sum for oneself—that fast breeder reactors are going to be extremely advantageous so far as fuel is concerned.
Beyond that lies fusion, limitless fuel resources, no pollution problem, but a high capital cost to be sure. It is difficult to know what is right to do by way of investment in research and development in this field because in their field, as in others, all the forecasts have so far been wrong, including the White Paper produced by the Labour Government in 1967. I was glad to hear the noble Lord, Lord Tanlaw, say that it was no fault of the officials or Ministers of the day.
I agree with the noble Lord that we must reduce the waste of energy. This could be done with double-glazing, the proper insulation of houses. This would save four to five per cent. of all the energy consumed in this country. Some 87 per cent. of energy goes out of the exhaust pipes of motor cars. The Americans are talking about banning half-empty flights. I do not know whether we should do that; it would be a pretty heroic measure. We should certainly try to put a stop to the development of that ridiculous phenomenon, air conditioning. Air conditioning is ridiculous in a British climate, you only need it for about three days of the year.
To come to the main point, what about the conservation of oil resources? Why do we not consider that? Already Iraq, Kuwait and Canada have limited the output of oil. The Canadians have simply been refusing to sell more than a certain amount to the Americans, because they

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know they are going to need it later. Can we really afford not to consider that with our own oil fields in the North Sea?
In this terribly confused field I am going to have recourse to a traditional solution, and I am going to suggest two new bodies, one Governmental and one non-Governmental. The Governmental body is the National Energy Commission around which I hope much of our debate this afternoon will centre. The noble Lord, Lord Tanlaw, called for it. A version of it was proposed by the Labour Party—as opposed to the Labour Government—in 1967. A version of it has been proposed by the National Union of Mineworkers quite recently, and another version has been proposed over a period of years now by the noble Lord, Lord Robens. I will not define it; but what it ought to do is relate all branches of the energy producing and energy converting industry in this country. It should be responsible to Parliament through a Minister, and it should be set up now, even while oil and so on are still being privately exploited. When a future Labour Government nationalises oil and all mineral rights that will only thicken up the texture of the Commission and make its job easier to carry out.
The National Energy Commission must introduce some order into the self-serving optimism which pervades the forecasts of each separate sector of our energy industry at the moment; it must give an independent opinion, a check, on the figures produced. For instance, we all know that the limiting factor on uranium reactors, of whatever sort, is going to be the storage of the hideous, poisonous wastes. British Nuclear Fuels Limited have extrapolated to say that they are only going to need between 5·6 and 7·5 hectares of land to store the highy active wastes in the year 2,000. The price of that is going to be only £2 million or £3 million a year, which is peanuts given the whole generating budget. This is only an example; I do not say they are wrong, but there is no independent authoritative check on that forecast.
I should like the Commission to look into the so-called merit order of the power stations. Nuclear generation looks very cheap at the moment. Is this not because it always takes up the base load, that is to say, it is always operating? If one
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were arbitrarily to swap the positions of nuclear and coal on the load duration curve, how would costs look then? The House will know that some power stations have to work all day and others only get switched on when everybody turns on the electric kettle during the commercial T.V. breaks. I quote an example given by Mr. Michael Posner in a recent book: somewhere in darkest Yorkshire there is an antediluvian generating set cared for by three devoted caretakers who run to answer the call of duty for four or five-minute periods each year. Naturally it is coal-fired, and that gives a very high cost for coal generation.
I should like to have an independent body which is combing through this so-called merit order to see that "merit" is rightly defined, and going through the arbitrary swaps on the load distribution curve which might produce rather different results, and lead to a more economic policy. Who can we ask about this at the moment? Not the Coal Board, not the Atomic Energy Authority. The Energy Commission could also forward joint uses of energy: district heating from power stations, the combustion of town waste, desalination of sea water for water supplies. I should like to tell the House an experience of my own on this matter. I thought it would be a good idea if we could imagine a nuclear generating station which would also produce fresh water from the sea. I fell down completely, as a Minister, in the attempt to get it put into effect because it is a statutory duty of the C.E.G.B. to produce electricity as cheaply as it can. If anybody wanted the bath water after it had been finished with—tepid, very low grade heat—they could have it at a high price.
But the thought of producing both electricity and fresh water at the optimum price, at the best intersecting point on the price curve for both, was absolute anathema. I could have been talking Chinese in asking for it. There was a statutory difficulty there; the Statutes should be overhauled. They are not going to be overhauled by the C.E.G.B. Ministers are busy; therefore let us have an independent National Energy Commission under Ministerial control to do it.
The second body there is need for, the non-Governmental body, would be something broader than that, something one

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might call a British Environment Institute. I include in the word "environment" mineral resources and the rate of exploitation of all resources. In the energy field there will be problems also left over which will not be for a National Energy Commission. The Royal Commission on Environmental Pollution will not do, it is limited to pollution. If we could have this non-Governmental overall institute which could look at resources in a wider context, and look especially at the side effects on which those concerned with industrial promotion so often find it hard to focus in their minds, especially the atmospheric and climatic effects of hydrocarbon combustion, it would be a safer world when we begin to get reports from that institute.
A few months ago, Mr. Peter Walker (then Secretary of State for the Environment), after some well-publicised interviews with the conservation lobby, referred the Club of Rome document The Limits of Growth to a study group inside the Government. Ministers and officials have been most helpful to me in my attempt to obtain news of that study. But I cannot honestly say that I find any evidence of a level of activity much above hibernation. Is any report to be published? Is any report even to be made to Mr. Rippon, as the new Secretary of State? I am sure the House would like to know. The months go by and, as so often seems to be the case, nothing happens.
We have in the Motion the idea of relating all this to the E.E.C. It is rather hard to find out what the European Commission's energy policy is. In fact—let us make no bones about it—if we have not got one in this country (and I am sure that Lord Tanlaw agrees with me that we have not) then the E.E.C. have a minus quantity of one. They have a rule which was made by the Council in 1968 which says that all member States must stockpile 65 days' supply of oil. I do not know whether that rule is kept or whether we ourselves keep it; perhaps the Government could tell us. That is about all there is in the way of rules. It is really very primitive. We know that the Commission is worried about the fact that the whole of the original Community is bound to get its enriched uranium for many years yet from a single source—that is, from the United States. What do
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we in Britain think about this? I ask this question in all ignorance. Would the Government give us their opinion on this —do they think it is O.K. or is it thought that we should try to change it now that we are a member of the Community?
The noble Lord, Lord Tanlaw, has already quoted from an undated document on the energy policy issued by the Commission. I should now like to quote from the same document:
"Trade and supply policy is the be-all and end-all of any energy policy."
My Lords, I think not. I believe conservation policy is another leg of the tripod which is just as necessary as the other two. I do not know whether you can include the concept of conservation of resources under the word "supply". It seems to me stretching it a bit. The point I am making is that they are very backward—they have been trying and it is not their fault, but the Governments have not allowed them to get ahead in getting a Community energy policy. In this country we produce half Europe's coal; we have just found a colossal new oil and gas field of our very own and we are way ahead on nuclear generation. Perhaps we can help them to get a meaningful policy for the Nine as a whole. I would hope that our own National Energy Commission, if the Government are wise enough to set it up, would be the finch-pin of the policy. I hope that both it and the British Environment Institute—that is the non-Governmental one I have proposed—will be able by a process of lateral osmosis to create round them Community institutions of a parallel nature.
I want to end by touching very briefly upon an economic and financial point, which seems to me one of extreme danger. If there is one factor overhanging this whole field it is that we are going to continue to squander, or at least to use, oil for the next thirty years. The price will continue to rise and the amount of money to be transferred from the developed world to the OPEC countries is going to become perfectly astronomical. The noble Lord, Lord Tanlaw, has mentioned this. This is something in which I have lived since early childhood, as a matter of fact, because my father was chairman of the Kuwait Investment Board. It seems to me that the Kuwait Investment Board will turn out to have

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been the forerunner of something that gets bigger, bigger and bigger. The OPEC countries are not going to be able to use that money in the quantities in which it comes to them. They are going to buy up the West; they are going to buy into industry and financial institutions of the United States, Western Europe and Japan. Maybe there is a kind of poetic justice in that. We seize from them the oil we do not really need and we shower on them the money they cannot really use. This I think should be looked at within the rich industrial world: it is a job for the O.E.C.D. and the European Economic Community. If, as is so often the case, these international bodies are too late and too vague, we may find that the poetic justice will come to pass, and that we shall all belong to the Arab world, as surely as a hundred years ago the Arab world belonged to us.
3.55 p.m.
EARL FERRERS: My Lords, the House will be very grateful to the noble Lord, Lord Tanlaw, for putting down this Motion and for giving your Lordships the opportunity of debating this very important and quite fundamental subject. The Government are grateful for the opportunity of hearing your Lordships' views, and I can assure the House that these will be studied. Indeed, the two noble Lords who have spoken already have produced a whole range of extraordinarily interesting points, some of overall interest and some dealing with technical detail. But, like so many things which are basic human requirements, energy is so vital and so universal, so relatively freely available and in so many different forms, that it tends to be taken for granted. The noble Lord's Motion gives us the opportunity of moving a few heavy and well-encrusted stones to look and see what the bugs are like underneath.
I thought that it might be useful, before discussing the concept of an energy plan, if I were first to describe to your Lordships, albeit in a necessarily cursory fashion, how the Government see the nature of the subject with which we are dealing. This should help to elucidate what kind of "planning", if any, would be most appropriate. United Kingdom consumption of energy has risen steadily over the last two decades. This is, for the sake of simplicity, often shown in
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million tons of coal equivalent. In 1950 the total consumed was 226 million tons of coal equivalent. By 1960 this had risen to 265 million tons, and by 1971 to 323 million. Within these totals, coal itself sank from 201 million tons to 139, whilst oil rose from 22 to 147. Two completely new energy sources also appeared—natural gas and nuclear energy. In 1971 gas represented nearly 26 million tons of coal equivalent and nuclear energy nearly 10 million.
These are rather hard, cold statistics, but within them are concealed vast industries, each with its own distinctive traditions and its own specialised technology. If we look at coal first, as the noble Lord, Lord Kennet, said, this has been reduced in size, but it is still—and let us not forget it—a vital component in the overall picture. It is a labour-intensive industry and it is crucially dependent on productivity; and since the strike last year I am glad to say that productivity has picked up well. If this is maintained, and with the assistance which is envisaged in the Coal Bill which comes before your Lordships next week for Second Reading, there is no reason why the industry should not once more achieve commercial viability.
Oil is an industry for which the 1970s are likely to prove very different from the 1960s. Although the demand for oil will almost certainly continue to grow, the conditions under which the companies will be able to obtain their product are changing. Of course, in the Middle East the reserves are very large and physically easily accessible, but the Governments of the countries in which this oil is being found and exploited are anxious to increase their own participation in the companies' activities and their share of the profits. In other parts of the world, though, the industry is developing oil fields under very different conditions and in circumstances which are adverse both physically and climatically—such as in the North Sea, Northern Alaska and so on. This entails the development of entirely new equipment and new skills and the industry's investment requirements rise accordingly. In the longer term, oil may need to be recovered from even more unconventional sources, such as oil shales, tar sands, coal or even the deep sea. Although these sources may not have been shown so far to be

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economic, the growing world demand for oil may make them so in the medium or long term. The overall picture with regard to oil, therefore, is of an industry which is dominated by large multinational companies with immense reserves of experience and skill, but which faces a rapidly-changing physical, financial and political background.
Gas is an industry which has also recently experienced a change in circumstances nearly as comprehensive as that which is currently being experienced by the oil companies. The discovery of natural gas in the North Sea in 1965 completely revolutionised prospects overnight. Any plan which might have been written before that date would have been an uncharacteristic example of unique prophecy, had it been forecast that the British Gas Corporation would now be well on the way to converting more than 13 million consumers to natural gas. Your Lordships will know that this programme has had, not unnaturally, its own local difficulties, but the task has, on the whole, been accomplished with a standard of efficiency which I suggest has been the envy of many other countries. If one looks to the future, there are good prospects for further gas finds, some of which may well be in association with oil rather than in the "pure" gas fields which were found in the 1960s.
Turning to nuclear energy, I should like to draw your Lordships' attention to what my right honourable friend the Secretary of State for Trade and Industry said in another place on August 8 of last year. He said:
"The Government are resolved to build upon the major achievements of the Atomic Energy Authority in the past and to ensure the development of a powerful capability for the future …"
He went on to explain that:
"We have decided, therefore, to intensify the installation of nuclear plants as far as technological progress, environmental constraints, industrial capability and generating plant requirements permit."—[OFFICIAL REPORT, Commons; 8/8/72; col. 1491.]
LORD TANLAW: My Lords, I am sorry to interrupt the noble Earl, but as I understand it he has not yet got as far as forming a board. I cannot see how he can do all this without having first formed a board.
EARL FERRERS: My Lords, I was going on to say that in order to achieve this, two major streams of action were set in hand. The first was to establish a stronger design and construction capacity in the industry, and the second was to set in motion various studies so as to enable an order for nuclear plant to be placed within the next eighteen months. Work on both these fronts is proceeding rapidly.
With regard to electricity, each year the electricity industry makes a forecast of the likely demand which can be expected six winters ahead. This forms the basis for its power-station ordering programme and it is subject to Ministerial approval for the capital investment involved. Ministerial approval is also required on the siting of individual stations, but it is the Boards' clear responsibility to make the initial proposals. Your Lordships might be interested to know the breakdown of current generating capacity, which is roughly as follows: coal accounts for about 63 per cent.; oil for 24 per cent.; nuclear energy for 10 per cent.; hydroelectricity for 2 per cent. and gas for 1 per cent.
Having very briefly sketched some aspects of the industries concerned, I should now like to point to some general characteristics of the energy sector which I think are especially relevant to the idea of a national plan. The first of these, although it is obvious, is often forgotten. It is the way in which energy costs, as the noble Lord, Lord Kennet, reminded us, seep through the entire economy and affect literally everything. The amount of controlled energy, for instance, which is embodied in many of the most familiar products is considerable, and yet seldom considered. The motor car, quite apart from consuming petrol, represents the application, through machine tools, presses and sprays, of a very substantial quantity of power. So also does the saucepan, the television set and almost every other type of everyday article of which one can think. To us, therefore, as a nation which depends upon trade, it is vital that we should not let our energy costs get substantially out of line with those of other countries with whom we have to compete in international markets. Of course, the impact of those costs is uneven—if one takes an average, direct fuel costs represent only about 3½ per

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cent. of the gross value of industrial output—but it is significant that some of the industries that consume the most energy per unit of output are in fact those which occupy key sections of the economy. For instance, in the iron and steel industry the corresponding percentage figure is not 3½ but 15, and in the cement industry it is 25.
The second point, which is different but nevertheless related, is that, taken together, the energy industries are large enough to constitute a recognisable element in the overall management of the economy. They contribute about £1,000 million per year to domestic fixed capital expenditure in this country. As a nation, we spend rather more than £100 per person each year on purchasing different types of energy. These are large sums, and these two statistics alone go far to explain the legitimate public and Government interest in the sector.
The third characteristic which I should like to draw to your Lordships' attention is the international nature of many energy problems. This has immediate consequences for planners and for policy makers. It means—and to be realistic we must recognize this—that at least some of the factors which affect the United Kingdom energy prospects are beyond the direct control of the Government. They may be affected by our influence as a major trading nation, or we may attempt to make them the subject of international law, or treaties, or contracts or other forms of agreement. But we cannot order these factors according to our own wishes, nor are we able to predict their precise behaviour with any degree of certainty.
I should like to look for a moment at some of the key features of the world energy scene and the effect which these have upon the United Kingdom. The first is clearly the continuing growth of world demand. In 1951 consumption stood at roughly 2,700 million metric tons of coal equivalent. By 1961 this had risen from 2,700 to 4,200 and by 1970 it had risen again to 6,700. So in 19 years world consumption has risen no less than 2½ times, and this represents a growth rate of about 5 per cent. per annum. Of course, within this total, the consumption of each fuel has grown
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at a different rate. When one sees growth of this nature in a prime commodity such as energy (if, indeed, one can call energy a prime commodity) one is bound to ask the question, "If this continues shall we run out of energy?". I do not believe that I should be a competent person, still less a sensible one, if I were to try to answer that question—and I doubt if there is anyone who can. This has not, however, inhibited, nor should it inhibit, many detailed investigations of the problems involved from being undertaken; nor has it prevented, nor should it prevent, extensive and continuing public debate on the subject. It is right that this should be so, for the problem is clearly one of such fundamental importance that any understanding of its nature, however limited that may be, is to be welcomed.
In this world context I think it is well to bear in mind some important factors. First, the total world reserves of fuels are still massive. It is easy to be misled here, since many published estimates have their origins in the assessments which are made by oil companies of known sources which are suitable for early exploitation. Some of these tend to understate the overall long-term position. One also needs to take into account what one might describe as the "unconventional" sources of oil and gas which I referred to earlier, such as deep water off-shore fields, oil shales, tar sands and coal. But of course these unconventional reserves will be expensive to exploit; new technologies may be required, the environment will need proper protection and the whole process will take many years.
LORD KENNET: My Lords, I wonder whether I might ask the noble Earl whether he is aware that as regards deep water technology Shell is already winning oil at a depth of 4,000 feet in one place, which is about 800 fathoms?
THE EARL OF LAUDERDALE: My Lords, where?
LORD KENNET: I do not remember.
LORD AVEBURY: My Lords, I do not believe it.
LORD KENNET: My Lords, I will try to produce chapter and verse later.
THE EARL OF LAUDERDALE: My Lords, is the noble Lord not somewhat

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mistaken? They are winning oil at a depth of 400 or 500 feet at this moment. They are seeking to develop techniques for the sea bed at 2,000 feet. They are not yet winning oil at anything like the depth which the noble Lord opposite is suggesting.
LORD KENNET: My Lords, I am very likely wrong, but at any rate it is going down rapidly.
EARL FERRERS: My Lords, if the noble Lord is very likely wrong I should be grateful if he would not interrupt me and so confuse my own level of thought on what I previously thought was right. The point about this, as the noble Lord, Lord Kennet, knows, is that drilling in the North Sea is a relatively new undertaking and the possibilities for drilling further and deeper are there but, like the North Sea drilling, they require a new and different technology. But, my Lords, we as a civilised nation are remarkably flexible in our processes both in our requirements and in our ability to meet change, and indeed to create it. We merely have to look back over the last forty years to see ample evidence of that. I would only say that if pressure on the more conventional sources becomes too great, we may expect to see the energy industries turn towards these other, as yet untapped sources.
Nor, should we forget the new types of energy which have recently become available or which are in prospect. The most promising of these is probably nuclear power. Ten per cent. of the United Kingdom's electricity is already generated by nuclear fission. Here is a virtually unlimited source of energy, especially if, in the very long term, nuclear fusion becomes practicable. Of course there are problems with nuclear power, but I should like to stress that the basic technology is now widely and firmly established. In addition to nuclear power there are a number of other possibilities, including solar energy, tidal and wave power and fuel cells. My Lords, I am bound to say here that when I have been in the West Country, I have listened to the constant and continuing roar of the sea, and thought back to one's elementary physics lessons at school when one was told that any noise or explosion involved the burning up of energy. I could not help but reflect that this noise, which has gone on since time
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immemorial, constantly and continuously, represents a huge expenditure of natural energy. If this energy can be harnessed in some way, it could well add to the supply of our energy requirements. And there are signs that this can be done. But I do not see ally of these new sources being of major importance in the United Kingdom during the immediately foreseeable future, but they serve to remind us that science and technology do not stand still, and views of the future which do not recognise this are incomplete.
I should like to stress that our awareness of the possibilities does not in any way induce—nor I hope reflect—an aura of complacency. Considerable difficulties could lie ahead. World figures may conceal local and vital problems. Delays in research or inadequate planning could produce temporary imbalance between supply and demand for particular countries or regions. The real price of energy may rise. The problem of the world population explosion could make a mockery of any reasonable forecasts of demand. At the other end of the scale, the widespread use of birth control could put substantial limitations on any anticipated requirements. The Government are, therefore, studying carefully long-term world trends and ways of predicting them. We are doing that both internally and through international organisations and contacts.
My Lords, I do not think there is any reason to believe that the future—even the near future—will be free of the surprises and the disappointments, the new departures and the constant anxieties which have characterised the recent past. This must surely encourage one to treat visions of the future, which are based mainly on projections of existing trends, with extreme caution. Of course, such projections are undoubtedly useful and important—and indeed necessary—but we should not believe that even the best of them are so wholly reliable as to serve as the basis for really detailed plans running many years ahead. Yet it is equally true that the long periods of time which are inevitable between the expenditure of capital and the supply of commercial, usable energy make it imperative to take some view of the future.
That brings me squarely back to the question of a national energy plan which the noble Lord, Lord Tanlaw, raised in

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his original Motion. I suggest that the conclusion which might be drawn from the facts which I have ventured to put before your Lordships so far is that, while to plan is of extreme importance, the policies which are subsequently adopted must incorporate considerable flexibility. A rigid plan which is tied to detailed forecasts of prices and output is almost certainly doomed to failure. It is the Government's responsibility to make the best assessment of future circumstances which they can and then to discuss this with the industries concerned in the light of national objectives as well as of their own commercial priorities. This discussion is not carried on in any dictatorial spirit, but more in an attempt to identify broad strategic options and to ensure that there are no gross inconsistencies in the way in which the principal firms and public corporations are moving forwards. It is—and must necessarily be—a process of continuous review and reassessment.
What is it that the Government want and where do their responsibilities lie? First, we require energy supplies which are adequate for the foreseen needs of the economy, and which are secure and at the lowest attainable cost over a period. In this connection it is imperative that we should make the best use of our indigenous resources, which are, fortunately, extensive. Secondly, we wish to ensure that, once obtained, energy supplies are used economically. This means, as the noble Lord, Lord Tanlaw, rightly raised, concern for minimizing energy losses in distribution and use, and it includes also questions of thermal insulation and the efficiency of industrial and domestic appliances. Thirdly, we need to make sure that, in getting and using energy, we do not make unreasonable demands on our natural environment. Fourthly, we must guard against developing a pattern of energy supply which places an insupportable burden on the balance of payments. And in this connection, fifthly, we must see that, in the pursuit of these other objectives, we do not overlook the impact which they may make on the community whether from a social or an employment point of view.
The Motion of the noble Lord, Lord Tanlaw, refers to the need for a national
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energy plan in relation to our joining the European Economic Community. Our joining the Community and its consequent enlargement, has given a whole new dimension to United Kingdom policy formulation in the field of energy. I should not wish, and I do not believe your Lordships would wish me, to go into the many detailed energy issues which are currently under discussion within the Community institutions. But there is a growing awareness that energy problems often need to be examined on a world scale and that accentuates the importance of the European Community co-ordinating its policies in this area. The Government were fully behind the reference to energy in the Summit Communiqué last October and are actively participating in the work which has been set in hand since. Anyone who is familiar (and even most of those who are not) with the vastness of this subject would hardly expect common policies to spring into being overnight, but we hope for solid progress in this direction and we shall certainly keep Parliament fully informed as matters develop.
My Lords, I have tried to touch on most of the principal points of current interest in the energy field and relate them to the concept of a national plan. I hope that I have shown that much depends on what one considers "planning" should mean. If it means detailed output targets which are backed up by Government inducements or controls, then I suggest that this would not work in practice. If, however, it means that policies should be based on an up-to-date co-ordinated view of prospects, and that individual decisions should be taken in relation to this broad view rather than on a narrow consideration of local factors, then I am wholly in favour of this approach, and indeed it is the one which the Government are attempting to pursue.
4.20 p.m.
LORD AVEBURY: My Lords, the noble Earl, Lord Ferrers, in a masterly review of Government policy lasting some 30 minutes, has managed to review all the factors which should determine a national energy policy without at any point specifying what such a policy ought to contain. He began with some historical allusions, after having posed the question as to how the Government see the nature of the subject, purely in terms of the

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change in the fuel mix which has occurred since the year 1950. I must emphasise at the outset that there is a big difference, as indeed my noble friend Lord Tanlaw said in introducing the Motion, between a fuel policy and an energy policy. What we have always had in this country in the past, and what I think the Americans and other nations who have considered this subject have also had, is a policy for determining what is the relative mix of the various fuels which make up the energy policy, rather than considering how one should view the total consumption of energy resources. That is what is lacking here.
That is why my noble friend said that no country has had an energy policy; and we are in a position to be in the vanguard of the movement towards one if we start off by asking ourselves the question, which the noble Earl did not pose: what should be the level of energy consumption in this country at any point in the future? The noble Earl did not answer that question; he simply assumed all the way through his remarks that this was the given position and it was simply a matter for the Government, having been told how much energy the domestic and industrial and commercial consumers were likely to want, say, in 1985, to ensure, as he put it at the end of his remarks, that there would be security of supplies, economic use of the energy that was necessary, safeguarding of the environment, regard to balance-of-payments considerations, to the social impact on the community—which mainly affects the contribution of coal and is therefore a matter of fuel policy rather than energy policy—and then, finally, in a masterly generalisation, he said that our entry into the E.E.C. brought a new dimension to the problem without saying what that dimension was.
Of course, there is an element of uncertainty in any projection we may make. As the noble Earl quite rightly said, when we look towards the future we do not know whether measures affecting population growth in this country or in other highly industrialised countries are going to be effective, and if so whether a given rate of energy consumption per capita or a decline in population would alter the projections which have been made, particularly by the oil companies which have looked furthest into the future.
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I think we have to start with what Herman Kahn would call surprise-free projection into the future, which means that the rate of growth of energy consumption will be much the same as it has been in the past per capita, and that the rate of growth of population will be the same, so that we can extrapolate from the figures the noble Earl has quoted of the consumption in this country, or indeed in the world, from 1950 onwards and can see what the position would look like in 1980 or 1985 and beyond; although I must say that I think my noble friend Lord Tanlaw in his remarks limited his time horizon to 1985. It is probably sensible for us to do that in this debate, because, as the noble Earl has said, beyond that period there are so many uncertainties.
To what extent can we expect fusion power to make a contribution in the latter years of this century? I do not think anyone, even the scientists in your Lordships' House, would be prepared to lay down a time scale for this development, or even say whether it is practicable within this century. But if we limit our time horizon to 1985, we are able to formulate some kind of picture which is going to be meaningful if we are to have an energy policy, as my noble friend says, because within this period of 13 years we are, I must emphasise, primarily dependent on fossil fuels. The development of nuclear technologies in particular, which have been referred to by my noble friend and the noble Lord, Lord Kennet, and the noble Earl, are not really going to have much impact—let us be quite plain about that—within that time horizon.
We talk glibly about the benefits that the fast reactor is going to bring to this country and to Europe. But we have not even got a prototype fast reactor in operation yet. We are talking about ordering the first commercial fast reactor in about the year 1976, and perhaps one per annum after that. If the C.E.G.B.'s present delay between the placing of orders and the commissioning of a station continues, as it is most likely to do in the case of a brand new technology such as fast reactors, we might possibly have a one thousand megawatt fast reactor in operation in 1983 and another one in 1984; so one is talking about 2,000 megawatts of fast reactors in commission by

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the year 1985 out of an installed capacity by then of 100,000 or 120,000 megawatts. So this is an insignificant contribution towards meeting the energy needs of Great Britain within the time horizon we are talking about.
We must, therefore, consider most carefully what are the implications of some of the constraints which my noble friend mentioned, so far as hydrocarbon fuels are concerned, in meeting the energy requirements of Great Britain. I think that he was quite right to start off his speech by a reference to the foolish virgins in St. Matthew. We are glibly assuming that we can go on using up fossil fuels at the rate we have done in the past and can get away with it; that that is going to have no serious adverse effect on our economy; that it will simply be a matter of some minor difficulties in our negotiations with the OPEC countries; that whatever may be our difficulties in that respect we shall make up for them by this wonderful bonanza in the North Sea about which the Government have given us an account in the recent Report to Parliament issued by the Department of Trade and Industry in January 1973.
I must criticise that Report, and I must do so in the same terms as I have done the noble Earl's speech. This is primarily an historical account of what has happened so far: the 1965 legislation; the development of techniques for exploring on the Continental Shelf; a very small amount on the benefits to the United Kingdom economy—nothing specific at all; and very little about the present controversy concerning the degree of benefits to United Kingdom industry, the engineering industry in particular, where there are such enormous differences between us and the Norwegians. I am sure the noble Lord, Lord Balogh, will have more to say about that in a moment. I should have wanted to explore the subject myself if the IMEG Report which has been issued by the Department of Trade and Industry had been available to your Lordships' House. I went into the Printed Paper Office for a copy of the Report. I mentioned to the private office of the Secretary of State for Trade and Industry that it was not available. I raised this matter last week at Question Time, and I am sorry to say that, in spite of the fact that this important
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debate was pending and everyone knew about it well in advance, the D.T.I. were not able to make available copies of this essential Report so that we could discuss the effects of North Sea oil exploration on our United Kingdom engineering industry.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I took steps to see that a hundred copies of the Report were made available two days after the noble Lord had raised this matter in the House.
LORD AVEBURY: My Lords, I am sorry to say that prior to raising this matter in the House I had asked in the Secretary of State's office whether I could be sent a copy, because there were not any in the Printed Paper Office, and they assured me that that would be done. It did not arrive, and as I was not able to come into the Printed Paper Office on the day after my Question I am afraid I have not been able to study this matter. It is quite unreasonable to expect people to look at a report a couple of days before an important debate like this, and to take advice on it from those who are in a position to say what the effect has been on their own industries. In future, perhaps the noble Lord will make sure that important reports of this kind are available well in advance, and not just a couple of days before the debate takes place. I know that the noble Lord, Lord Balogh, will have much to say on this subject, and I will not pursue it further.
I want to come back to some points made by the noble Lord, Lord Kennet, at the beginning of his speech. He said —and I quite agree with him—that if one wants to know what is going to happen in this country in a few years' time one can do worse than look at the situation in the United States to-day. The situation regarding oil supplies there has become quite critical. This is not because they are going to run out. The noble Earl, Lord Ferrers, said that nobody was in a position to make predictions on this —and of course they are not, except in a purely arithmetical sense. Exponential increases in the consumption of any goods or services are a physical impossibility—but what tends to happen if one takes the consumption of energy, aluminium, or of any other natural resource, is that as one approaches a smaller and smaller ratio

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of reserves to annual consumption the price begins to rise and the effect of the market forces is to reduce consumption. I do not take the Madoxian view which the noble Earl, Lord Ferrers, expressed, that in the end technology will solve everything; that some new development, which we cannot forsee at the moment, will enable us to overcome these shortages and to substitute some alternative technology to the one we are using now. It is all very well to talk about solar energy, tidal energy, the use of fuel cells and such-like, but none of those things in the end will be able to safeguard us from the effects of energy shortages at the prices that we are paying at the moment if we continue to depend on exponential increases of the kind that have been experienced since the 1950s according to the figures that the noble Earl quoted.
The noble Lord, Lord Kennet, referred to the shortage of aviation fuel in the United States as one particular instance of the crisis which has hit them over there. I want to ask some fundamental questions which I think we should be posing to ourselves as we look at the developments over that side of the Atlantic, and which have particular relevance to this country and to Europe in general. We have been discussing the development of the third London airport. If it is going to become more expensive to fly, as the Americans may discover as aviation fuel increases in cost—and I understand that it has increased in cost at a faster rate than crude oil or other oil products in general—then perhaps all the extrapolations of the growth of air traffic have been wrong. We do not need a third London airport at all, and we must re-examine the estimates on which it has been justified in the past.
What estimates have we made of the rate of growth of motor traffic and of freight traffic on our roads if motor fuels are going to become more expensive? Let us assume that motor fuels increase at a rate of 30 per cent. every decade in real terms. Is this going to make a tremendous difference to the relative shares of road and rail? Should we not now be thinking how we can shift freight traffic on to the railways and away from the roads in anticipation of a trend of increasing fuel costs, which in any case are going to cause this effect, but after we have made an enormous investment
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in motor vehicles which would then no longer be required? Should we take steps now to restrict direct electric space heating? I agree that this would be an extremely interventionist step for any Tory Government to take.
LORD BALOGH: My Lords, does the noble Lord realise that in the fuel cost raw material is a small fraction, so that all these very interesting considerations that he is putting forward to us are really quite beside the point?
LORD AVEBURY: My Lords, I am not sure that the noble Lord is correct. If we are going to build more power stations to produce the direct electric space heating I was talking about, then one of the materials that goes into the power stations is cement, and, as I think either the noble Lord, Lord Kennet, or the noble Earl, Lord Ferrers, told us, something like 25 per cent. of the cost of the manufacture of cement is accounted for by energy. Therefore, it is not the direct consumption of fuel in the power stations that is the only component.
LORD BALOGH: My Lords, I was referring especially to motor traffic, which takes, after all, half the consumption of hydrocarbons.
LORD AVEBURY: My Lords, I think that we could pursue that point at another stage; perhaps in a transport debate. What one would need to look at is the input/output tables which tell us how much of the output of the motor car industry is accounted for by an input of energy. It is not merely the fuel which is consumed in the vehicles they produce, but the cost of the energy which goes into their manufacture that we must consider in determining what are the relative volumes of road and rail traffic appropriate for this country.
May I put one final question on these examples (and they are only intended to be examples), which might be considered by some kind of national energy commission such as my noble friend has suggested. We have heard that one of the difficulties of the electricity supply industry is that at the end of a popular television programme when the commercials begin, a vast number of people leave their television sets and turn on electric appliances—particularly kettles to make tea during the commercial break—and

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this causes an enormous surge in the demand for electricity at that instance which the C.E.G.B. assume they have to meet. Are we going to say that because the independent television companies happen to choose a particular instance to finish Their programmes, and as this happens at the same time all over the country, that we are going to invest hundreds of millions of pounds in electricity supply facilities to meet that particular demand which has occurred because of commercial decisions?
My noble friend—and this is my final point—referred to the question of E.E.C. policy. He was talking about the components cheapness of supply, security and continuity, free choice, fair competition, and avoidance of regional difficulties. These were much the same as the criteria which were laid down by the noble Earl, Lord Ferrers. However, there was not one word in that list of components of an energy policy, as they call it, which talked about conserving energy. As my noble friend pointed out, there was not one word about the importance of insulation; not a single word about the possibility of higher taxes on energy consumption in order to discourage use; not a single word about the importance of district heating as a method of reducing the cost to the householder in total of the energy that he consumes to keep himself warm. These are the components of an energy policy, and if we do not start now and have some kind of national body in order to reconcile the competing interests of our fuel industries, instead of merely having a Government which, every 10 years, produces a White Paper holding the ring between them, then I am afraid that we are storing up very serious trouble for ourselves in the future. We are simply misleading ourselves if we think that the discovery of natural gas and oil in the North Sea is going to make very much difference.
I will put this in perspective—and these are the last figures I will give. By 1985 the total amount of oil that we shall be producing from the North Sea will amount to 250 million tons per annum—and that means the Norwegian, the Dutch, and the German sectors as well as our own. By that time, according to the forecast of the Shell Oil Company, Western Europe, the enlarged Community,
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will be importing no less than 900 million tons of oil. So that whatever happens, however marvellous these discoveries may be and however successful the oil companies are in their development of these natural resources, we shall still in Western Europe be needing to import 65 per cent. of our oil requirements from politically sensitive areas, such as the North African littoral, the Middle East and Nigeria. I feel that this is a situation which we ought to take account of now, before it is too late. We should attempt by Government policy, through a national energy commission, to reduce our energy consumption and so make certain that our descendants have the energy which we enjoy to-day.
4.41 p.m.
THE EARL OF BESSBOROUGH: My Lords, we must all be most grateful to the noble Lord, Lord Tanlaw, for having raised this great question of the world's energy needs and its vast ramifications before your Lordships this afternoon. I have recently been giving some attention to these problems as a member of the European Parliament's Energy Committee, and I must admit that it is with some trepidation that I venture into this field after having attended only two meetings of that Committee and taking part in odd exchanges in the full Parliament in Strasbourg and Luxembourg. Perhaps I should say at the outset that this is the first occasion on which I have had an opportunity of exercising what is described as the "dual mandate" and addressing your Lordships as a Member not only of this House but also of another place across the Channel. In that sense I feel that, in a way, I am making a kind of second maiden speech, and in view of that, and also because of the great complexity of this subject, I should perhaps crave your Lordships' indulgence in the time-honoured way.
I agree with the noble Lord, Lord Tanlaw, that the White Paper of 1967 is out-of-date owing to the new Scottish oil discoveries, and I also agree with him on the necessity of devising a European energy policy to maintain price stability of all fuels and to maximise the use of indigenous resources. On the whole, my view—and it has some support in industry itself—is that the right approach is not to attempt to produce separate proposals

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for a purely United Kingdom energy policy, since such a policy must at least harmonise with a larger E.E.C. policy. Here I think I differ a little from the noble Lords, Lord Tanlaw, Lord Kennet and indeed, Lord Avebury. I want to look at this problem on a European basis and not, in the first instance, purely as a national problem. Indeed, I think that any national policy should emerge after we have broadly agreed on an E.E.C. policy. It is essential—and this I should like to emphasise—that the United Kingdom should now make its voice really heard on energy policy matters.
It seems to me that there are two distinct lines along which a Community policy could develop. The first line might be termed negative integration. This would consist of what we all want—the removal of barriers to trade, the harmonisation of taxes and State aids, the control of abuse of monopoly power and, perhaps, the publication of rolling forecasts. The second line, which I might call positive integration, would involve the member States working within centrally determined guidelines, with the Commission eventually assuming some executive control. I should not at this stage, after only a preliminary examination of these problems, wish to favour one particular line against the other, although I note that some elements in industry favour the first—negative integration—with certain qualifications.
I regret in some ways that this debate is not taking place later this year, for, in answer to a question which I recently put to M. Simonet, who is the Commissioner responsible in Brussels, it appears that the E.E.C. Commission will be putting forward proposals covering this whole question to the Council of Ministers, probably in April. The European Parliament should therefore be holding a debate in depth on the subject, either in Luxembourg in the middle of April, or in Strasbourg in May. It seems likely that the Council will, as is usual, be referring the Commission's draft proposals both to the European Parliament and to national Parliaments at about the same time. I think that a debate at about that time would have been more appropriate in your Lordships' House, and, indeed, in both Houses at Westminster. However, the debate to-day may prove to be a useful
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preliminary canter around this question, and perhaps the usual channels will he able to arrange for us to have another debate on the Commission's proposals when they are available. I do not know precisely when that will be, but I have given some indication of what the intentions of the Commission are. I do not doubt that it will take the Council and its working parties a good deal of time to make up their minds on a concerted and co-ordinated plan of action, and that the Parliaments should have a considerable time to review, consider and debate the proposals before final decisions are taken on an E.E.C. basis.
The Six made their first move towards a common energy policy, as your Lordships probably know, in April, 1964—that is, nearly nine years ago—and progress has not been exactly dramatic since then. Your Lordships will recall that the European Coal and Steel Community Treaty was signed in 1951—over 22 years ago. Then European coal was by far the main source of energy within the E.E.C., and the founders of the Treaty were concerned to ensure that there were fair shares for all. But, before long, imported crude oil began to change the situation with increasing speed, and with the change there disappeared this main object of the Treaty so far as coal was concerned. However, I have no doubt that the British coal industry now has a very important part to play in helping to meet Europe's energy needs, for, as we know, the United Kingdom's coal industry is almost as large as the combined coal industries of the Six put together.
In the Summit communiqué which was mentioned by the noble Earl, Lord Ferrers, the necessity was stressed of formulating as soon as possible an energy policy guaranteeing lasting supplies under satisfactory economic conditions. What has been holding up an overall Community policy? We must have the political will if it is to be achieved, but the fact is that at present there are major differences in national energy positions within the E.E.C. Italy, as your Lordships know, has no coal, and before the postwar discovery of gas in the Po Valley was in a very poor situation. Italy now has an active, nationally-owned, hydrocarbons company, E.N.I., which has, however, somewhat of a history of going its own way. Germany had a massive coal

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industry after the war and seemed excellently placed. But coal has faded, and Germany, to its present regret, has never had any real stake in oil production overseas. Holland has Royal Dutch Shell and a large quantity of indigenous natural gas, much of which is exported to other E.E.C. countries. Yet Holland is beginning to be worried about its gas reserves, and has recently caused a considerable Community flutter by declining to allow a new source to be exported to Germany. France, of course, has traditionally operated its own tightly-knit energy policy, and seemed to be in an exemplary energy position until Algeria nationalised French oil production there. This, my Lords, is a sort of broad impressionist picture of Europe.
I may add that when Norway was still a candidate country, just before their referendum, M. Fernand Spaak, who is the Director General for energy policy, caused a commotion in Oslo when he said that it would be in the interests of the Community as a whole, and perhaps also consistent with the rules of the Common Market, that if pre-emption rights were to exist they should be in favour of the Community rather than in favour of any national State. Of course, the Norwegian Foreign Minister took this very badly indeed, and said that it was totally wrong to say that North Sea oil was a Community asset. The non-discriminatory right of establishment was valid all over. In the Ruhr coalmines, for instance, no one would deny that the coal resources belonged to West Germany. This same vein of thought, in the British context, ran through a recent article in the Daily Telegraph which stated that
"with the reserves of oil and natural gas in the North Sea, Britain"—
not Europe, but Britain—
"was in a much better position to face a world energy crisis than any other country in Europe."
"I'm all right, Jack" may be a line which can be taken in Britain. Do we need a common energy policy? Yet in my view the need for common thought about energy would nowadays seem to be essential.
Even leaving aside mutual concern about the attitude of the Middle Eastern producing countries, one reads increasingly that the three main oil-consuming
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areas in the free world—the United States, Japan and Europe—must either get together or they will find themselves competing for the same sources of Middle Eastern oil. The United States and Japan exist: Europe does not yet exist in this context—and it cannot exist, except as rival European nations, until it thinks on common lines. I personally should like to think that Europe would be able to get itself into a position to deal with these problems on a unified basis, like the United States and Japan are able to do. The United States, as I think has already been stated—it may not have been, but it is true—is no longer self-sufficient. The United States is already importing 12 per cent. of its consumer needs. During previous crises in the Middle East—indeed, right up to 1967—the United States had supplies to offer others, but, according to the estimates which I have now seen, by 1980 the United States will be importing at least one-third of its needs; and I think the noble Lord, Lord Avebury—I see him nodding—agrees with me that that is a very fair estimate. Japan, of course, now depends on imports for 90 per cent. of its requirements.
As far as Europe's energy consumption is concerned, it is thought that it is bound to continue to grow at the average rate which the noble Earl, Lord Ferrers, mentioned of, I think, something over 5 per cent. a year; and by 1980 Europe's dependence on imports could, as again the noble Lord, Lord Avebury, stated, be in the region of 65 per cent. I do not see, therefore, that we can fail to conclude that there is likely to be a world energy crisis; and it is clear, I think, from what M. Simonet, the Commissioner in Brussels, has said, that he, too, thinks the situation is serious. Having worked out a common E.E.C. policy, or at least some overall E.E.C. guidelines, these would then have to be discussed with the United States, and no doubt with President Nixon himself and Dr. Kissinger, as the noble Lord, Lord Kennet, said, within the next few months. M. Simonet said as much in answer to a supplementary question that I put to him in Luxembourg only a fortnight ago.
Apart from safeguarding the environment, which I am not going to go into but which is a major subject discussed in its committee in the European Parliament,

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the main questions which seem to be concerning members revolve around the extent to which central Commission intervention will be necessary to achieve a common policy. How much dirigism (as they call it) will be necessary? In the event of war, it is accepted; but even if certain sections of the fuel and power industry in this country are run by State enterprises, this, in peace-time, is by no means accepted right across the energy board. Yet it seems to me that there must be some intervention if a coherent energy policy is to be worked out. Many of us on these Benches, my Lords, in both Houses of Parliament—and I mean both Houses of the British Parliament—may certainly say that a centrally controlled and centrally managed policy of a supranational kind would be undesirable, for we continue to accept that in certain sectors private enterprise should continue to operate.
Even, however, if we do not believe in a centrally controlled and centrally managed policy, there will in my view have to be some form of dirigism or acceptable co-ordination if we are to meet the situation. But, of course, it must not conflict with the E.E.C.'s own competition policy rules. On this question of administrative controls, there are of course fundamental differences of view, particularly between France and Germany. Some may say that the cost of achieving a European policy will be too great, and one of the criticisms of the many Papers which have emerged from the Commission to date—and I said this at the first Energy Committee meeting I attended in Brussels—is that the Commission has so far failed to indicate what internal European priorities should be, and what they are likely to cost. So far, for example, in their Paper COM. 72–1200, which contains 46 points, the overall coherence of what is proposed is not easily discernible. Indeed, one friend of mine described these famous 46 points as "forty-six bites of the cherry without getting at the stone".
Secondly, as I say, there has been little attempt to cost the proposals. This may not perhaps be so important in the case of those dealing with the collection of information, but some of the other proposals have important implications for public and private expenditure, and for prices. So far the Commission has
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not brought out the basic problems with sufficient clarity, although the noble Lord, Lord Tanlaw, did his best to explain their attitude. One might ask the Commission how far the Community should be prepared to buy increased security of supply through higher prices. In the European Parliament's Committee, I have pressed the E.E.C. Commission for a further short Paper picking out the priority points, and I have also pressed that these should deal explicitly with the basic themes of security versus price. M. Simonet has promised to try to meet these points in the Paper which he is at present preparing for submission to the Council of Energy Ministers which he hopes will meet in May. As I say, I assume that these proposals will also be available at that time to the European and national Parliaments. As you see, my Lords—and here I agree with the noble Lord, Lord Kennet—not much progress has yet been made within the E.E.C., but I am sure that M. Simonet and the Commission agree that we must arrive at a concerted European policy despite all our differences, and I know that the Commission will be reading our Hansard today with consideration attention.
I have already mentioned the important contribution which British coal can make within the E.E.C. I put coal first and therefore I hope that when it comes to research and to expenditure on research we should put further effort into the problems of underground gasification, new methods of mining and coal conversion. Then I also think that we must not forget the new sources of energy mentioned by the noble Lord, Lord Tanlaw, and the noble Earl, Lord Ferrers. I will not repeat them but I hope personally that the high temperature gas reactor, the O.E.C.D. project, the "Dragon" at Winfrith, will continue to fill the gap in atomic needs between now and the exploitation of fast reactors, which is still very much in the future. We must think about research on the other new sources mentioned by other noble Lords: solar energy and the recycling of atomic waste. There is a new method of extraction of energy from very small pellets of fissile matter. I am not going into these matters this afternoon but I hope that there will be other opportunities of putting to your Lordships ideas or proposals which emerge from the E.E.C. or its different

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bodies. Meanwhile, I should like again to thank the noble Lord, Lord Tanlaw, for giving me the opportunity of saying this much (or shall I say, this little) to your Lordships this afternoon.
5.2 p.m.
LORD BALOGH: My Lords, I, too, am very grateful to the noble Lord, Lord Tanlaw, for bringing up this Motion in this House. It is very regrettable that the Public Accounts Committee report on fuel, on North Sea oil, is coming out tomorrow. It is embargoed in the Press now; but we have not been able to get copies, because to talk about this particular topic in a balanced and relevant way without that report is obviously quite impossible. It shows that one ought to have perhaps a commission, if one follows the noble Lord, Lord Tanlaw, to co-ordinate business between the two Houses—a commission independent of the Government but responsible to Parliament. That is perhaps nowadays the formula which gives a solution to problems which have not been solved or attempted to be solved.
This particular topic is one which is very awkward from many points of view. It gives rise to the "doom and gloom boys" who say, for instance, that France will have double the national income per head in 1985. I do not know how they get a projection of that kind, but, still, that is the sort of thing they say; and they had a certain reflection of their views in the speech of the noble Lord, Lord Kennet, who is not in his place at the moment. In his speech we had a whiff of the "gloom and doom". Then there is the science fiction aspect of it which we heard from the noble Lord, Lord Tanlaw—hydrogen heating and enormous investment in neighbourhood heating and so on. Well, I do not wish to go into that part of the subject. However, I could not disagree more violently than I do with the noble Earl, Lord Bessborough. In fact, I expected him to walk over to the Liberal Benches at any, moment during his speech. Then I reflected that perhaps he ought not really to join the Liberals in this House but the Liberals of the last century. I, too, was present when M. Spaak talked about European energy plans and I must say—it may be that I am frivolous and a cynical sort of person—that I did not get
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the sort of impression that was gained by the noble Earl, Lord Bessborough. I had the impression that he wanted to get his hands into our pockets and be away with some of the gas which we have not yet given away to the Americans. Perhaps we could give it to the Europeans. Is that what the noble Earl, Lord Bcssborough, meant to imply? In that case, Heaven help us if the Americans and the Europeans combine in fleecing the British people of their natural resources, for then there is little that one can do to preserve the country and its balance of payments.
There is no such thing as a European fuel policy. We have heard that the French are in cahoots with the Iraqis in making our situation in the Iraq Petroleum Company very difficult. I have not heard yet that the E.N.I. has been, so to speak, very respectful of British interests in the Middle East and elsewhere. On the contrary, I thought that the E.N.I. were the first to breach the united front of the oil companies in Iran, for instance—with disastrous consequences to our balance of payments, consequences which have been estimated by the noble Lord, Lord Drumalbyn, who never exaggerates, at £200 million. So I must say that I am absolutely appalled. If you look at the fuel policy statements from the Government, and especially the 1967 policy, you must admit that fuel policy, like defence policy, is a very awkward thing for Ministers and ex-Ministers. When in Opposition they make exaggerated proposals about nationalisation or about free enterprise. We are absolutely bi-partisan in this and have only slight differences in emphasis. I speak strictly as a Cross-Bencher on this topic because I criticise my Party as much as I do the noble Lord's friends in the other place. Often they are plus royaliste que le Roi et plus catholique que le Pape, and equal their ministerial pronouncements in Opposition. The noble Lord, Lord Winter-bottom, was like that the other day when he forgot the correlation between unemployment and recruitment. Perhaps he will remember it tomorrow.
The economists and officials have succumbed to the song of the official advisers—they croak the same melody now in order to preserve their self-confidence, and I say "economists" very humbly in the full knowledge that I have often been

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as foolish and as mistaken as the best of them. Fuel policy seems a cemetery for reputations. For instance, Austin Robinson, a very famous economist in Cambridge, not only mistook the whole fuel provision here, he also mistook it in India which was much more difficult and disagreeable. Obviously the Indians can afford mistakes of this type even less than we can—though I must say that we are nearing a stage where we cannot afford them either.
The 1967 White Paper—which was a sort of Labour White Paper—excelled itself. It had the following assumption. It assumed that oil prices would not go up, and that was very foolish. I hope that the noble Lord, Lord Drumalbyn, will not defend that White Paper. It is not his, though he defends almost anything with his usual amiability and that wit for which he is well renowned. The second thing which they did—and of course the noble Lords, Lord Avebury and Lord Tanlaw, and my noble friend Lord Kennet repeated this—was they assumed that one can extrapolate in the linear way or, even worse, in the parabolic way—one would almost say the paranoic way—and that is not true. If, for instance, there is a great shortage of oil, certain subtle changes take place in the economy. Though I am not a very liberal sort of economist at all, as the noble Baroness obviously will testify, nevertheless I think the price mechanism has certain advantages which one ought to take into account when one goes into these flights of mysterious extrapolation. My Lords, trees do not grow to heaven; they stop after a time. And one ought not to think that phenomena like fuel consumption is exempt from this natural law of modesty in nature.
The other thing they assumed—I do not know why—was that there will be a vigorous and furious further and lineally progressive substitution of oil for coal. That, of course, is absolutely wrong. Indeed, nowadays one can if one has these sort of Kahnian assumptions, which I have not got, forecast at what point oil will be more expensive than coal. Unlike we, who are gentlemen, the Arabs are not; and they are going to press us very hard. And inasmuch as the demand for oil is very inelastic—if I may use this horrid jargon—one can foresee that oil will go up in price.
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Therefore the sort of tactic and strategy which has been outlined by the Petroleum Department of the "monster" Department, the D.T.I., is so wrong. Because they are wanting to burn up our oil as fast as possible. I am not saying that I want artificially to preserve it. I am not one of the à tout prix conservationists; I am moderate in every way. Nevertheless, my Lords, I do not think one wants to kill the North Sea oil reserves as quickly as possible. One wants to have the sort of balanced view of the situation which I fear that the officials in the Petroleum Division simply cannot allow themselves to have. I do not know why that is so, because privately they are good fathers and husbands. But, obviously, they ought not to be in the Department.
There is another thing which the Department did, and this is very interesting because it is really almost Freudian. They forgot about North Sea oil. There is not a single mention of North Sea oil in the 1967 White Paper. And after all, with Ekofisk already in and the Leman Bank almost producing one might have thought there would be an itsy-bitsy little sort of side remark about North Sea oil. But there was not and this is much the most interesting aspect of the affair. I think that we ought to free ourselves first from the ludicrous situation that if the Arabs raise their price, we pay the Americans more. That is really absurd. That situation has to be ended. Apart from that, it seems to me that we ought to protect coal much more, and more openly, than we have. Before we have made quite sure what our our situation is—and we shall not be able to do that for a little time yet—we ought to have any sort of conversation on European fuel policy. In this case we are the people who can give and they are the people who can receive and this is a very good point. There are many things in respect of which they can give and we ought to receive, such as regional policy. So, to give, so to speak, all we can give without receiving anything which they can give is one of those things which only the Department of Trade and Industries Petroleum Division has been able to achieve.
LORD ORR-EWING: My Lords, may I interrupt the noble Lord? Would he not agree that the Ministry of Defence, both

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in the last Government and also in this Government, placed enormous orders for defence equipment overseas without any offset arrangement at all, which was another case of giving away a lot of money and not arranging any offset in recompense?
LORD BALOGH: My Lords, I would not disagree with the noble Lord at all. As I have said, I am speaking entirely as a Cross-Bencher. I feel very much that if we are to have an energy commission such as the noble Lord, Lord Tanlaw, wishes to have, we had better look out. Commissions are no better than the chaps in them, and I must tell your Lordships that if I thought that the sort of people who would be in that commission are those who are now in charge I think that we had better not have a commission.
5.20 p.m.
VISCOUNT HANWORTH: My Lords, I think we are all agreed that there is a need to conserve energy resources. How urgent this may be is perhaps open to debate, but that we should conserve energy where we can is, I think, agreed by everyone. We should also reduce the amount of pollution in the environment which the generation of energy inevitably produces. There is one very easy way of doing this which has already been mentioned in this debate, but I would like to deal with it in rather more detail—that is, by increasing house insulation to an economic level. This measure is almost unique in that it has no disadvantages and virtually nobody has tried to produce a case against doing so. It is simply inertia, the dislike of change and the fact that the Government have hesitated to legislate under the Building Regulations which have to be justified on health grounds, which has prevented anything effective being done as yet. Let us look at some of the facts. Insulation can be stated in terms of what are known as "U" values; the smaller the figure, the better the insulation. A comparison between a widely used Continental standard—incidentally, this term was introduced by the National Building Agency—and our own Building Regulations is as follows: for the roof, "U" value, Continental, 0·1; United Kingdom, 0·25; external walls, Continental, 0·15; United Kingdom, 0·30. It will be appreciated that the Continental standard is at
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least twice as good as our own and results in less than half of the heat losses, but even this Continental standard is in fact lower than the standards in practice in many European countries.
If we take a league table showing the standards of insulation in practice in Europe we find that the United Kingdom, with 1 inch insulation, is, with the exception of Spain, at the foot of the table. The Scandinavian countries head the league with insulation thickness, in practice, in excess of 4 inches. Now, at first sight it might be thought that Continental countries have a harder climate and that higher insulation could be justified on this account. However, if you make a comparison with the days in the year on which the average temperature falls below a level at which heating is necessary and multiply by the number of degrees below this level—in other words, degree days—you get the following table; Bergen (Norway) 4733, Edinburgh 4728, Sheffield 4083, New York 4027, London 3962, and Paris 3631. Thus we see that London and Birmingham are just as cold on the average as New York, and that Edinburgh is virtually as cold as Bergen in Norway.
Looking again at the energy situation, the domestic sector in Britain uses about one-third of the total energy requirement, the majority being for heating. It will readily be seen how, in a properly insulated house, it would be possible to reduce the heating requirements to a half. In fact our present domestic consumption is nearly half that of the original Six members of the E.E.C. whose population is three and a half times our own. Apart from energy conservation, higher values of insulation have enormous economic advantages, and I will deal with these in a minute. There is also the health aspect in reducing condensation risks by improving ventilation of rooms, which would reduce the likelihood of hypothermia, particularly with old people who cannot afford the ever-increasing cost of adequate heating. There is, of course, in general the added benefit of increased comfort.
If we take the existing standard of roof insulation and add only one inch of additional insulation the extra cost for a semi-detached house will be in the region of £5 and could give a saving in fuel bills of about £2·50 per year;

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an amortisation period of only two years. Similarly, improved wall insulation of existing cavity walls would cost about £50 and be amortised by savings in fuel in four years. Looking at it another way round, it would represent an interest rate on capital of just over 25 per cent. A point that should not be overlooked is that even with the last example there ought to be a very worthwhile saving in rented accommodation when you offset the fuel savings against a slight increase in rent. Lower capacity central heating installations will also help to offset the capital cost in many cases.
Let us look for a moment at the history of this insulation question. In 1945 the Egerton Report recommended minimum "U" values for walls which were twice as good as those incorporated in the building regulations. The trend towards lower "U" values has been reflected by every report since this, including reports by the National Building Agency and the Economist Intelligence Unit and even in a Ministry of Public Building and Works advisory leaflet No. 34, published in 1968. The tendency to lower "U" values has become increasingly important with the spread of central heating and the requirements for higher room temperatures. At present the lowest minimum "U" values which should be accepted are: roof 0·08, walls 0·12, floors 0·17; that is, three times the Building Regulations requirements for roof, over double for walls, and about 30 per cent. for floors.
The Government are at last doing something about it. They are consulting with a view to bringing out an advisory instruction to local authorities, but they fight shy of amending the Building Regulations. How they were ever able to include insulation in these Regulations, when they now think that they cannot amend them to adequate levels, is to me rather strange. The proposal is, I understand, that the Government will sooner or later introduce a building Bill, but not before the next Session, and then, of course, only if they can find time to do it among other legislation. They propose then to legislate under that new Bill. My Lords, is that really good enough? If the Opposition will support a new standard now made under the Building Regulations what have the Government to fear?—and surely it is reasonable to think that these new standards are
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required to a great extent on grounds of health.
5.29 p.m.
LORD ORR-EWING: My Lords, I should like to start with congratulations, first to the noble Lord, Lord Tanlaw. I think the whole House enjoyed the very thorough speech and his thorough review of the sources of energy and the potential sources of energy. In the short period that I have been in your Lordships' House, two years, I know how much we appreciate a fellow Member when he has taken infinite pains, as has obviously been the case with Lord Tanlaw's introductory speech. I think it is unfortunate that the Public Accounts Committee will publish their report on North Sea oil tomorrow—24 hours after we are having this debate. My second congratulation, is to D.T.I., which on this occasion, has come in for some small, friendly, poisoned arrows from the noble Lord, Lord Balogh. Perhaps I can throw them a bouquet, because I think the Report to Parliament on North Sea oil and gas which they published in January, 1973, is an extremely well put together and a well presented summary of the position which we have reached over the last six years. I think they deserve warm congratulations.
I thoroughly agree with my colleague on the Cross-Benches, the noble Viscount, Lord Hanworth, about the need for revising our local building laws to bring them up to date. I know that we shall be sharing an inter-Parliamentary visit to Val d'Isere, not on an intellectual exercise, as fellow members of the Lords and Commons Ski Club. Whenever I go to Davos with the Lords and Commons Ski Club to compete against the Swiss Parliamentarians, I am always impressed with the great trouble that they take to have really good and effective insulation in their houses. Even in the most modest house they pay tremendous attention to this. It really is astonishing that fifty years after we have come away from the large supplies of cheap coal which were available in this country we still cling to these archaic laws about the manner in which we insulate our houses. I endorse everything that the noble Viscount said, and I hope that the Government will press forward with reforms in this area. It could make a big difference to the amount

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of energy that we use in heating our 22 million homes.
I believe that the Government should have a broad strategic plan for energy. Whether the National Energy Commission, as advocated by the noble Lord, Lord Kennet, from the Opposition Front Bench, is the right solution, or whether this should be done within the Department, I am not sure. I tend to think that an external body is more open to pressure and influence than a Government Department, particularly a Government Department of such massive size, complexity and width of special interest as the D.T.I. The Department has more responsibilities than any other single Department at the present time. I tend to think that it may be a good idea to have a National Energy Commission.
But I reflect not so much on the 1967 Labour Energy Plan as the 1951 plan, which was put forward in my early days in the other place, when it was forecast that in 1971 (I think it was) the coal industry would supply 200 million tons each year. In fact, as we learned from the Front Bench to-day, the coal industry supplied 139 tons in 1971. It was then said that 100 million tons of coal equivalent would come from oil and we should not be able to get any more because there were no oil reserves in the world which would allow greater supplies. In fact, we are getting nearly 150 million tons, a 50 per cent. increase on that forecast. And, of course, there was not even the smallest asterisk in 1967 against the possibility of oil and gas from the North Sea—there was obviously no reference to it in 1951—that is supplying 26 million tons. I have a feeling that if Government Departments produce an energy plan and if the capital investment plans of the nationalised industries of electricity, gas and coal are drawn up in accordance with that plan, it becomes rather inflexible and does not readily adapt itself to changing circumstances. I urge that, if we are to have a broad energy plan, it should be up-dated at least once a year in accordance with the actual facts, and not put to bed while everybody sits back for five years and forgets that the variables in the particular equation have changed in the intervening years.
My Lords, I wish to concentrate on North Sea oil. I left a blank in my notes
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here, because I felt certain that I should disagree with almost all that the noble Lord, Lord Balogh, was going to say. However, he was in such a convivial and friendly mood in the way that he fired friendly little arrows into the back of his Front Benchers that I have nothing to disagree with him about. In fact, I was glad in one way that the noble Lord was here, because in the opening Opposition speech we learnt that North Sea oil (all oil companies, the noble Lord, Lord Kennet, said) was, under Labour's policy, to be nationalised. I remember one of the many excellent letters that the noble Lord, Lord Balogh, wrote to The Times recently in which he said that he did not think nationalisation was the solution to the problems of North Sea oil. I am glad to see the noble Lord nod. So yet again there is a major difference, and I am glad that he was speaking officially from the Cross-Benches, although he was positioned on a Labour Bench at the time.
As I have said, I want to concentrate on the North Sea (we have had one other short debate on this subject, but much has happened in the meantime) because I feel that there are many noble Lords in this House, on all sides, who would like to see the United Kingdom have a larger stake in what is going on in the exploration for and development and eventually the production of North Sea oil. I would first say to the D.T.I. that it was all right to have one experimental auction for the sites—that may have set a standard for monetary values for those sites—but please do not have another auction. It will not be a Dutch auction, but a United States auction, and the American companies are so immensely rich that they will price our companies out of the market. So I do not think that another auction is the solution for looking after United Kingdom interests in this field. I would have discretionary awards of licences to United Kingdom companies. I would be brutal about that, and say that after these early phases, where so much development has gone to the United States of America, we now have to look after our own interests and make sure that we are producing both the calibre of people and the calibre of equipment to undertake this for ourselves.
I hope that once these licences are given the D.T.I. will monitor more closely

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what is happening. I know of an instance where a company called Siebens Oil and Gas (U.K.), Ltd., did win a licence, and after a short while they "flogged" it for twenty times what they paid for it. That is not the intention of the D.T.I., I feel sure; therefore it is not just a question of the right method of allocating the licences but of monitoring thereafter. After all, if, through the Monopolies Commission, we can forbid the amalgamation of companies, I see no reason why we should not equally veto the sale of these licences outside our own interests, or at least limit external participation in that development.
My Lords, I tend to think that we ought not to encourage the Gas Corporation or the Coal Board to go on taking an interest in the development of North Sea oil and gas. Perhaps my noble friend when he comes to wind up can tell me whether it is true that the Gas Corporation are now applying in the next round of allocations for an exploratory acreage in the Norwegian sector. I feel that the Gas Corporation have enormous problems in this country, and I do not think they should be concerning themselves with ventures of that sort in overseas areas. The same applies to the Coal Board. They have tremendous problems. I welcome the plan (it is an ambitious plan which we have not yet debated) under which the Government are to put (was it not?) £1,200 million into our coal mines to modernise them and to close down the inefficient ones. That is an immense investment and a huge programme to organise and manage. I think the Coal Board would be better concerned looking after all the problems concerned with coal, and not concerning themselves with investment in a rival fuel. After all, is it right that the Coal Board should invest in oil, which would be a rival to their own production?
For other reasons, too, I do not think it is right that these nationalised industries should concern themselves in this way. First, it is a high risk sector, and I do not think it is right that they should go into a high risk sector. Secondly, private enterprise are willing and able to do it; therefore, why not let them? Thirdly, as I have said, these nationalised industries would be interesting themselves in a competitive field to their own production, and I do not think that is desirable.
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Lastly, they are not making profits, so that if they were investing money they would be investing money which they have borrowed from the taxpayers, and that again I do not think is a good thing.
LORD BALOGH: My Lords, do I take it that the noble Lord does not want any sort of public participation, say in carried interest or something like that, or do I understand him to mean that he does not want the Coal Board and the Gas Council to participate? I would agree with that because I do not think they should be mixing it up. But surely some sort of public participation is necessary?
LORD ORR-EWING: My Lords, I should not object to a minor public participation, but I do not think it should come under their management and control. This is why I think it is undesirable, for the reasons I have given.
Many speakers in the last debate and again to-day have wondered how it is possible for us to get greater financial benefit for the United Kingdom out of the development in the North Sea, and after considering all the alternatives, I come down to feeling that a sliding scale licence fee on the lines of the Norwegian arrangement is probably the best. That has the desirable feature that for some small fields you take a small percentage, and if the field is really productive then you have a bigger percentage, and only when it gets into full and stable production do you levy a larger charge. That seems to me the way to do it. I do not think you can rely on taxes.
One noble Lord asked whether the overseas companies were paying taxes. All my information is that they are paying very little, if any, United Kingdom tax. They have the facility of any international company of so arranging their prices that they pay taxes where they are lowest. As every noble Lord knows, the United Kingdom is not a low-tax country; indeed it is a high-tax country and many of the international consortia have offices based in Switzerland. Therefore, I say you cannot rely on the syphoning-off of corporation tax or any other tax from these companies; you can only do it by licence and you will monitor oil output at the well head. This is an easy thing; it is routine. The through-put of the oil at the well head would need

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to be measured in any case for various members of the consortium and for all sorts of data. That is being done, so you can measure accurately how much licence should be paid on how much oil.
LORD KENNET: My Lords, Mr. Boardman answered a Parliamentary Question only the other day to the effect that not one penny of tax had yet been paid for the gas exploitation in the North Sea.
LORD ORR-EWING: My Lords, I am most grateful to the noble Lord for endorsing my view. It was my impression that certainly no tax had been paid, and I go on—
THE EARL OF LAUDERDALE: My Lords, is it not the case none the less the licensees needed to pay licence fees for their licences? There has been a revenue to the Treasury on that account, but there cannot be any royalty until the oil is landed.
LORD ORR-EWING: My Lords, there is a small entry card in the form of a fee; that is true. But it was the licence point I was pressing. One is not likely to be able to change that because of the international tax laws and arrangements. I now turn to getting more United Kingdom personnel both on the exploratory rigs and on the production platforms. I believe it to be a fact that there are virtually no United Kingdom personnel now working on any rigs in the North Sea—there may perhaps be a few; the great majority are overseas personnel.
THE EARL OF LAUDERDALE: My Lords, I do not know how many rigs the noble Lord has visited, but I found that about one-third of the personnel, from drilling superintendents down to roughnecks and roustabouts, were in fact British.
LORD ORR-EWING: My Lords, I am delighted to hear that. The situation is less unfavourable than I had supposed, although I still feel we need to get more United Kingdom-trained personnel because that would lead to the buying of British valves, motors and British ancillary equipment. I am sure my noble friend would agree that the senior personnel
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of the rigs are largely of American origin. They have been trained on the use of United States of America ancillary equipment and tend to take the instrument they have been trained on and know they can rely on. One reason why we are not getting orders for ancillary equipment is because we have not enough of the managerial staff, at any rate on the rigs, during construction.
May I be told whether the D.T.I. have persuaded some really high-grade experienced oil personnel with knowledge in this field to join them on say a dollar a year basis? I am sure they cannot come from within the Civil Service. I do not see why they should be permanent members of the Civil Service; but they could be bought for a special job on a short term basis and would have to be remunerated at the rate at which they are currently remunerated in the companies they are serving. It is no good setting up new departments or offices without people who are really experienced in this special field.
It is sad but the D.T.I. estimate in this Paper is that by next summer there will be 25 rigs operating in the North Sea, and not one will be U.K. built. A Norwegian group is just building its own rig to its own design with Norwegian managers and crew. I am told that the French have decided to rent that rig, and that they, too, are building their own rigs. Perhaps the D.T.I. could tell us why we have failed to grasp these jobs in this country. We have the same expertise in shipbuilding and heavy engineering as the Norwegians and the French. Why are they doing things we are not able to do?
I have one final plea. When the D.T.I. considers these matters, and considers which British companies shoud explore this oil, please let them not look entirely at the giant companies. It is my experience of many years in industry that the bigger the organisation the bigger the moment of inertia. Some small companies may move faster and more adroitly because they have not the world-wide interests of a company like B.P., who must be desperately concerned with whether their Alaska investment will go ahead; with the uncentainties in Nigeria where they have an immense investment, and other such world wide

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problems. Some of the small companies may move more quickly and therefore benefit the national interest with the development of our own North Sea resources by some of our own personnel paying our own taxes and thereby benefiting our economy.
5.47 p.m.
LORD HINTON OF BANKSIDE: My Lords, I should like to join with the other noble Lords who have thanked the noble Lord, Lord Tanlaw, for enabling us to debate this subject this afternoon, and also to congratulate him on the extremely well-balanced and thoughtful speech with which he introduced the debate. Both in the Motion and in his speech he hung his plea for an energy policy on two main arguments. The first was our entry into the enlarged European Community. The second was the increasing impending scarcity of energy supplies. I am not sure that I agree with him that his first peg is very strong. In spite of what the noble Earl, Lord Bessborough, has said, I think that the possibility of an effective form of European energy policy is perhaps a little remote. I know that under the Treaty of Rome member countries undertook to prepare a common energy plan. I know that there are already regulations concerning the movement of coking coal. I know that the matter is still under debate, but it seems to me that the problems of preparing an energy plan even on a national basis are so great that those of preparing an energy plan on a Community basis are bound to be so much greater that any plan which is in fact prepared will be so frail and so flexible that it may be possible to drive a coach and horses through it.
I think I am right in saying that all member countries of the Community have to import energy. I do not believe that in any case (there may be a minor exception to this) their indigenous energy sources are sufficient. I think that all member countries will use their indigenous energy supplies to the extent which is economic, and they will fight on their own for their own interests in buying the offshore supplies of energy and fuel that they require. I should be a little doubtful whether our entry into the European Common Market makes very much difference to the need for an energy plan, and I attach much more importance
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to the second argument that the noble Lord, Lord Tanlaw, put forward. I find that much more compelling.
He and other noble Lords pointed out that there is a growing fear of energy shortages. There are a great many different forecasts to-day. Some are extremely pessimistic. Even though some of those forecasts may be too pessimistic, all wise and thinking men will agree that some of our most convenient fuels are going to be in short supply at an inconveniently early date. I do not believe that this means that there need be a global shortage of total energy because, in spite of the difficulties that are being experienced both in this country and overseas countries in relation to nuclear power, I believe that nuclear power can and will be developed so that it could supply the total energy demands of the world. But this leaves us with an extremely difficult problem of energy conversion. It is easy to say that you can use nuclear power, presumably via the generation of electricity, to evolve a hydrogen fuel economy, but the extent of the technical and technological changes that are involved in this are very great and frightening. Alternatively, you can say that you can use this same power synthesize methanol. The complexity of that change is very great. So I find the second reason which the noble Lord, Lord Tanlaw, gave much more compelling than the first one.
However, I would be prepared to dispense with both the noble Lord's reasons and say that it seems to me to be foolish to imagine that one can run a highly industrialised country like ours economically without having an energy plan. I am entirely in agreement with him that such an energy plan should be prepared; but, on the other hand, when I look back to the past and see the energy forecasts and the energy plans of earlier years, I become a little discouraged. The noble Lord, Lord Orr-Ewing, mentioned the 1950 plan. He pointed out that at that time we were counting on an output of 200 million tons of coal a year. The figure I had in mind was even higher—I thought it was 220 million tons. At that time we had the Ridley Committee which examined the problem in great detail and with great care. They came out with the answer that there was bound to be a fuel

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shortage. The electricity boards were persuaded to convert a number of power stations to oil burning. They put this work in hand and negotiated long-term contracts with the oil companies. Before the work was half complete we had a surplus of coal in the country. The plans were put into reverse, half the stations were put back to coal burning and the contracts with the oil companies, with considerable difficulty and tolerance on the part of the companies, were revised.
In 1955 there was an O.E.E.C. Commission on Energy Supplies which drew up a forecast and a plan. That again proved to be misleading within the course of a year of two. The 1958 nuclear energy White Paper laid down an expanded nuclear programme which I am quite certain was damaging to the industry, and quite probably damaging to the country. Various noble Lords have mentioned the 1967 Paper on fuel. They pointed out that it is in error, and they have attributed this to the development of the North Sea gas and oilfields. But they will find if they examine the Paper that there are other reasons besides that rather unpredictable one for the errors which are at present to be found in that Paper.
I am only giving a few examples; I could certainly go on listing an equal number of energy forecasts and energy plans all of which have one common feature: every one of them within two or three years has proved to be useless. I do not think I would be unduly cynical if I said that we should have been better off without them. But we should not be discouraged by this; rather we should look back on those energy plans and ask ourselves why they have ultimately proved to be misleading. The answer is that in every case they were looked at as a close-ended job, a job for which a committee was appointed which produced an admirably well thought out report bound in neat Stationery Office covers. The report would be put on a shelf and pulled down from time to time for reference. Some two or three years later it would be found to be so inaccurate that it would never be used again, and a year after that another committee would be set up.
In a changing world this is no way to carry out forecasting. Forecasting must be a live, continuing activity. The forecasts
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and plans must be constantly revised. I am quite sure that this is what the noble Lord, Lord Robens, had in mind when he suggested the Energy Commission, which has been mentioned by other noble Lords this afternon. In so far as that suggestion implies a continuous review of energy forecasts and energy plans, I am in agreement with it. But I tend to lean in the direction of the opinion which I believe the noble Lord, Lord Orr-Ewing, was expressing when he said that he doubted whether this was a problem which should be dealt with from outside the Government machine. I have experienced this problem at the grass roots level, and I have found that however much technology was involved in energy decisions, there was so much politics involved that it was a matter which could only be dealt with from within the Government machine.
LORD WYNNE-JONES: My Lords, may I ask the noble Lord this question? He has been referring to the difficulty—in fact he suggests the virtual impossibility—of making a plan because plans are always being changed, and they have always been changed in the past. Would he agree that the estimates of energy consumption have been roughly right, and that the real problem has been the distribution between the different fuels used and the different methods of generating the energy?
LORD HINTON OF BANKSIDE: My Lords, the noble Lord is quite right in saying that. The trend curve for total energy consumption in this country is still following roughly an exponential law, but the different types of fuel used within that total have departed widely from the exponential laws that they were following. It is to accommodate such changes that one needs an energy forecast and an energy policy.
As I was saying, I would personally feel, as the noble Lord, Lord Orr-Ewing, implied, that this matter should be dealt with from within the Government machine. To deal with it, the Government would almost certainly need to recruit outside experts; it may be that the responsible Minister might find it helpful to set up an Advisory Committee. But I believe that the responsibility should be a Ministerial one. Therefore, I should like to support the plea of the noble Lord, Lord

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Tanlaw, for an energy plan, but I would say that if it is to be useful it must be a plan which is flexible, unbiased, constantly under revision and, above all, courageous—because in a realistic energy plan there must he some things which are unpopular with some people, and unless they are honestly stated the plan would be useless.
My Lords, this is what I intended to say when I came here this afternoon; but a number of noble Lords have gone further and have tried to outline—sometimes in a way which I, who have been concerned in the "nuts and bolts" of this industry, thought was a little imaginative—the form which an energy plan should take. I believe it would be going too far to attempt that this afternoon. I would hope that if the Government are able to accept the proposal of the noble Lord, Lord Tanlaw, and if we are able to set in hand a plan of this kind, a Green Paper might be produced for debate later. But since the details of the way in which an energy plan should be evolved have been mentioned, I should like to suggest that, whatever differences of opinion there may be about the different forms of energy which have to be integrated to meet our total energy demand, it is unquestionably true that, before the end of the century, nuclear power must supply a greater part of our energy. If this is true, it is necessary to have a healthy, successful nuclear industry in this country. I know the problem is inevitably a complex one, and that the Government have been considering it for a long time. I do not know, because I am completely uninformed, the difficulties they are experiencing, but I would suggest it is time a decision was made and something was said to the nuclear power industries. I feel that unless something is said quickly there will be only one thing the Government can say to them—and that will be "Good-bye"!
6.5 p.m.
THE EARL OF LAUDERDALE: My Lords, I am sure that noble Lords in all quarters of the House will have appreciated, and listened with great attention, profit and benefit to the words of the noble Lord, Lord Hinton, who speaks with such great authority and, if I may say so with respect, with such helpful moderation on a matter so critical to all of us. Surely we would all agree that
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we need a non-Party approach to something as urgent for civilisation as the nuclear bomb itself. May I, too, join with others in congratulating the noble Lord, Lord Tanlaw, not only on a well-informed introduction to this debate but also on a sophisticated approach. I found myself in agreement with almost everything he said, beginning of course with his Biblical allusion to the wise and foolish virgins. That set me thinking of images of voltages, gas pressures, pipe-lines and power lines, leading me irresistibly to Pope's lines on Dryden—
"Dryden taught to join the varying verse, the full resounding line, the long majestic march and energy divine."
If energy is eternal delight, certainly an energy debate in this House is packed with the imprévu. Alas! the star performer after the noble Lord, Lord Tanlaw, was the noble Lord, Lord Balogh, who is not now in his place—and we had a new, angelic, almost urbane tranquility from one speaking as a non-Party Cross-Bencher, recognising that the price mechanism has advantages, declaring himself not to he a mere conservationist, hostile to the socialisation of oil resources, in contrast to his Front-Bench spokesman—to whom I am sure this came as a bombshell—and finally a balanced approach. None of my reserve points ready for answering him came into play; I was very happy to find that he, too—indeed that is the theme of this debate—and others are moving towards a bipartisan attitude.
If there has been a second slight imprévu contribution to this debate, it is the welcome impression we have had from my noble friend Lord Ferrers that an energy policy may indeed be on the way. My purpose now is to make a few positive points that may be of some help while it is still being gestated. We are talking of a major world resource, and the solution to the problem is as urgent for civilisation as the bomb itself. The geography of energy is ever changing, like the crust of the earth, and one thing which has emerged in recent months is that Britain is one of only four major industrial Powers (the others being Australia, Canada and the United States) which have a theoretical possibility of self-sufficiency in power.
Our energy policy, I suggest to your Lordships, must encompass four factors.

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The first is that its operation must be a balancing operation in the light of many variables. There are the needs of the balance of payments and the external demand for sulphur-free oil—for example, there are pressures in New York to consume sulphur-free oil which could push up the North Sea price and therefore confront us with a choice between its use and its sale. American and Japanese competition could also so raise the OPEC price as both to stimulate extraction of synthetic oil from shale and coal, and maximise the merit of coal use for firing conventional power stations, to say nothing of its use for developing the generation of power, oil, gas and petro-chemicals on the new COALPEX concept. Then of course it could stimulate the fluidisation of coal for peak power generation in highly flexible because relatively small units—even down to 100 megawatts.
A further balancing element is the danger of an absolute natural gas deficit in Western Europe by 1985, which can well be deduced from the figures put out in a recent study by the Common Market Commission, S.E.C.(72)3182 Final, called—if my French pronunciation will be tolerated for a moment—
"Previsions et Orientations a moyen terme pour le Secteur du Gaz".
Embodied in that thick document there is plenty of evidence to forecast an absolute gas shortage in 15 years, and that opinion is shared by experts in the industry here.
A second key factor, once we have said that our problem is one of balancing, is an absolute, categorical imperative requirement for a bipartisan approach, not only about oil but about gas and coal and nuclear power. A third equally critical component was, I am glad to say, endorsed by my noble friend Lord Ferrers when he spoke of the need for the cheapest possible energy as against our industrial competitors. Having only last year reversed the policy of the Corn Laws Repeal for a cheap food economy by our entry to the Common Market with its economy of high food costs, we must counterbalance this by a policy of low energy costs. Fourthly, and this is where I part company with my noble friend Lord Bessborough—there is the strong, compelling need for Britain to confirm beyond the slightest peradventure or possibility
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of question, whether from the E.E.C. Commission or from Germany or from France, our full, total and absolute sovereignty over the United Kingdom Continental Shelf as agreed in the Continental Shelf Convention to which four E.E.C. countries freely consented in the full knowledge at the time (that is in 1964) that we were still aiming at membership of the Community.
THE EARL or BESSBOROUGH: My Lords, if I may interrupt my noble friend for a moment, I did not say that we should relinquish our sovereignty over these resources. What I was advocating was a co-ordinated plan or some guidelines which would be proposed by the Commission for submission to the Council of Ministers. I am not for one moment proposing that the Community should take over these resources. It is true that M. Fernand Spaak, the Director General, perhaps hinted for a moment at its being a Community resource, but this has not been accepted.
LORD SHEPHERD: My Lords, if the noble Earl is going to continue, could he point his remarks in this direction, because we did not have the benefit of them?
THE EARL OF LAUDERDALE: My Lords, I am much obliged to my noble friend and much comforted that in his exercise of the dual mandate and in his maiden speech in that capacity he has been able to clear up what to my listening ears, at any rate, was an ambiguity, and I am much comforted to find that we are on the same side about that.
These four broad principles lead to four distinct implications: first, that the cheapest energy must always be energy put to the best, and not the most extravagant, use. One thinks, for example, of the gas firing of the West Thurrock and Hams Hall power stations, and although that is but one per cent. of the power generation of the whole country, according to the figures given by the noble Earl, Lord Ferrers, this afternoon, one wonders whether the proportion of 28 per cent. of power generation which comes from oil is in fact the ideal balance, and whether 63 per cent., which is the balance he gave as coming from coal, is in fact as high as is to our national advantage. At any rate the cheapest energy is the energy put to the best, and the least extravagant, use, and subsidies may well

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be needed to accomplish this. One certainly cannot develop fluidised coal burning; one certainly cannot develop the COALPEX concept of power and petrochemical operations, unless the best-prospect collieries (and the mining communities belonging to them) are kept going. Here I thought the point made by the noble Lord, Lord Kennet, was sound and timely. Any decision to maintain and to use coal to a certain level, say between 130 and 150 tons per annum, must mean some higher use of coal in power generation and surely this may well require an element of subsidy which has, of course, been an accepted principle of Common Market thinking for some years.
Then a third point is the essential requirement of Government help for research and development in regard to all four fuels. This point scarcely needs labouring. The fourth point is that price stability is needed for the best balance between alternative uses, and if that principle is accepted it could call in question the wisdom of heavy Development Area incentives for capital intensive investment such as oil refineries. I say "could" because there is an argument current which deserves to be examined as to whether the Italian experience has not shown that over-stimulation of capital investment in oil refineries can distort the market, encourage dumping, and create price uncertainties, leading overall to sub-economic use of oil as a source.
Finally, the licence policies with regard to offshore oil must in turn balance a range of considerations. First, maximum exploration cannot be secured without maximum return to the risk takers, and you cannot just encourage exploration, as some would like, and at the same time discourage exploitation. The second consideration is that what is sauce for the goose is not necessarily sauce for the gander: licence terms for one area may need to be totally different by way of incentive, or even disincentive, from those of another area according to the difficulties of the area concerned. To propose, suggest or even imagine a gas price from the Leman field as being a suitable gas price from the Frigg field when the one is obtained at a depth of 120 feet of water and the other at a depth of more than 300 feet is sheer madness.
Then with regard to the needs of a bipartisan policy, there are two demands
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that need to be met and need not, I hope, be brushed aside on this side of the House as being mere political clamour from the other. There is the demand for maximum public sector participation in oil exploitation with minimum risk to taxpayers. I agree with my noble friend Lord Orr-Ewing (who was kind enough to tell me just now that he had to go to another engagement) that this requirement might well be met by a modest application of the carried interest principle. It is not something that the oil companies will welcome but I believe it is something that they would accept if they felt, and could feel certain, that this would be a serious, lasting element in a policy that would survive changes of Government.
On the same bipartisan theme, there is also the political cry that foreign oil companies should not be allowed to come in and export their profits across the exchanges. To that difficulty, surely, there might be an answer in the introduction of depletion allowances, somewhat on the American model, which would encourage the retention of profits in Britain. If that were to be considered, it might be linked perhaps with a proviso that the enjoyment of such allowances should be subject to reinstatement either in exploration or in research. Because the next frontier is not the Continental Shelf the next frontier is the Continental Slope and in fact the deep sea, with water depths not of 300 or 500 feet but of more than 2,000.
There has been general support this afternoon for the call made by the noble Lord, Lord Robens, for an independent Energy Commission to balance the pressures and to obtain the best result for the country. I too support that proposal in general terms, and I couple it, as did my noble friend Lord Orr-Ewing, with a plea for something like an annual or bi-annual energy balance review such as I myself urged in this House almost a year ago in the debate on the collieries. Such an energy commission might very well base its balancing calculations on working the sort of sophisticated mathematical energy models that Professor Deam, seconded by B.P., and his team are currently contriving at Queen Mary's College, London University. But the case of the noble Lord, Lord Robens, is surely most vividly endorsed by the

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situation which now follows the IMEG Report. For several of that Report's recommendations are, so far as we have been able to find out up to date, still only "under study". The term "under study" will be familiar to your Lordships as Whitehall jargon for a situation where Departments are squabbling, and for such a situation even to be possible six months after an urgent Report was compiled—and that Report was compiled in August—can mean only one thing: it can mean only (and I hope I am wrong) that the Ministry of Fuel and Power in the Department of Trade and Industry is simply unsuited by its structure to mastering so complex and politically explosive a subject.
What are these recommendations that are under study? There was the suggestion that there should be finance for research and development; there was the suggestion that there should be special credit terms to help British contractors in the oil business; there was the suggestion that there should be special insurance terms for the same purpose; there was the suggestion that the State should lease heavy capital equipment to contractors; there was the suggestion that the State should obtain and own and train people on a jack-up rig so that we could bring into the industry people qualified to work in it (when I say that the State should do these things, I mean that the State should encourage them to be done by the universities or some other suitable vehicle). Finally, the recommendation was made that there should be a study of a much expanded oil and gas-processing industry in Scotland. If that recommendation has not been supported by two subsequent developments, I cannot think what will! But since that was written, the Piper field has been discovered by Occidental a hundred miles off Wick leading to the very reasonable possibility that oil may well be piped ashore to the far North-East of Scotland with the possibility of refining there and petro-chemical development, particularly since there is the Frigg gas still available and no landing point has yet been determined for it.
Secondly, there is the quite remarkable proposal which was made to me in reply to the Scottish oil debate in December. It was made to me by letter from my noble friend Lord Polwarth. He wrote
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that it would be for the Hydro Board in the Highlands to determine whether there was any need for gas supplies in the North of Scotland and, if so, to approach the Gas Corporation which could then do the necessary costings to see whether it was worth while trying to lure the Frigg gas to the nearest landfall. If that does not build up the case for something far more effective, coherent and realistic than the present operations of the D.T.I., I do not know what does!
We then come to the context of the E.E.C. itself. Of course, Professor Haverkamp's famous 46 points are, most of them, as innocent as the Tables on Mount Sinai but there are at least six critical questions which now lie on the table and have yet to be resolved. The first, of course, is the need for a common attitude among the E.E.C. countries towards exploration licences. After all, the range of activity varies between the extremes of auction at the one end and the heaviest carried interest at the other. Relevant to that is the need for an early delineation of median lines North of the 62nd Parallel—that means with Denmark, Iceland and Norway—and secondly in the Celtic Sea where some of the most promising basins straddle areas that are not yet determined.
Then there is the question of relations with the OPEC countries, although no firm proposals have yet emerged. The suggestion that one reads is that the E.E.C. countries should act on an E.E.C. to OPEC basis; this is, as one group of countries to another, trying to deal with them and trying to offer them all sorts of inducements—like investment of one sort or another, social and technical aid; the very things they do not want since, as the noble Lord, Lord Kennet, so rightly said, the situation is almost exactly the opposite. There are indeed now Middle East Sheikhs fat and rich on oil who are buying into the oil industry in this country, and in at least one case known to me, who are the controlling interest in an offshore supply company. The question to which I direct attention in the OPEC/E.E.C. matter is this: is it prudent, is it sophisticated, to try and deal with the OPEC countries on a Government to Government basis? Might it not be very much better to leave dealings with OPEC to the oil companies concerned?

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Another matter which is, as it were. on the table in the Commission is the proposal for draft directives to limit the excise duty on heavy fuel oils to something like 2 dollars a tonne against, of course, the current British excise duty which converted at 2·40 to the pound works out at nearly 6 dollars. That was proposed in 1970. As of December, 1972, it appears that no discussions of substance had yet taken place on the structure of mineral oil duties. Britain here has a clear interest to see that at any rate her own fuel oil duties are cut to the French zero level. At present we have the highest duties in Europe. Then there is the difference between various Common Market countries over defining the country of origin of imported oil. Crude oil attracts no duty, whereas imported products attract something like 6 per cent. Surely the British interest, as an essentially oil balancing and therefore oil refining country, would match the French interest, which is to secure that the country of refining should be accepted as the country of origin.
Finally, there is the question of the Shelf. My noble friend Lord Bessborough was inclined to describe what I am now going to refer to as a "simple flurry". But, as I understand the matter, Holland is refusing the export of natural gas to Germany from the discoveries made by the Placid Oil Company on the grounds of domestic shortage. Germany, with the backing of the Commission, has been arguing that control of the Shelf is not sovereign, and has been claiming that the Shelf is covered by the E.E.C. Treaties, adhesion to which, so far as I have been able to discover, makes no reference to the matter at all. The Germans have been arguing that any denial of gas exports conflicts with Article 34 of the Treaty forbidding quantitative export restrictions, and one is informed that there is a serious possibility of this going to the European Court. This is a matter of supreme importance to our country, and I hope that the Minister will this evening take an opportunity once again to confirm, and to emphasise, his statement in this House on November 22 last, at column 1019, that:
"Our resources in the North Sea are national assets and will be treated as such."
In these matters let us pray for a common approach. Let us, for Heaven's
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sake, avoid dragging energy into the cauldron of Party politics in the way that steel has been, to the enormous damage of our country and people. For power is a trust—it was Disraeli who said it—and we are accountable for its exercise.
6.32 p.m.
LORD WYNNE-JONES: My Lords, I am sure that the noble Lord, Lord Tan-law, must be gratified with the response that his Motion has received. I must congratulate him on introducing it, because I think the subject of fuel and energy is an extremely important one. He has used only the word "energy". It has become fashionable just to use the word "energy", but, as I suggested when the noble Lord, Lord Hinton, was speaking, actually the planning of energy is not a very difficult problem.
Looking at the consumption of energy over a very long period of time, in a debate I introduced in your Lordships' House six years ago on this very subject of fuel and energy I quoted figures from 1900, with an estimate up to 1975. I notice that the estimate which I quoted then, which came from oil sources, is very close to what we are likely to be consuming in that year. It was 340 million tons of coal equivalent. It is interesting to notice, too, that at the beginning of this century, in the year 1900, we were consuming 162 million tons of coal equivalent. It seems strange that, in spite of the population expansion and in spite of the growth of industry, we are using only just over twice as much coal equivalent as we were in 1900. Of course, the reason is that we are using it much more efficiently, probably something like 2½ or more times as efficiently now as then. Consequently, the ratio is really much bigger than would appear from those figures.
We can fairly easily predict over a shortish period of time what is going to be the energy consumption. The real problem is to deal with fuel. It is very difficult to predict exactly how much coal we are going to use, how much oil we are going to use, how much natural gas and how much nuclear energy; it is in these fields that it is so important for us to have some serious thought given and some planning worked out. As the noble Lord, Lord Hinton, clearly indicated, no plan can be a fixed and definite one in such a field as that, but that does not mean

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that you should not be planning; it means that there ought to be a body which is concerned with planning this the whole time.
I have some figures given me by someone who is acting as chairman of a committee of an impartial outside body which I believe may be advising Government. The figures which he gave for the consequences of the energy requirements for the whole world in the year 2000 were very interesting. The estimate is that by the year 2000 the number of nuclear stations we shall need will require us to build a 1,000 megawatt station per week from now until the year 2000 in order to cope with the world requirements of energy in that year. This is a staggering figure. It means that if these figures have any significance at all—and I am quite sure they have—it is essential that we organise a nuclear power industry that is capable of carrying out that programme.
We have run into great difficulties in this country because we started probably too soon, as the noble Lord, Lord Hinton, said, with the programme of nuclear stations. We were forced into it largely by the Suez crisis. We started off on this programme probably before we should have done. Then we proceeded to slow down. That was fatal, because it meant that the nuclear power industry never got a chance to start developing the stations it was producing and to make better ones. Then people complained that the stations were behind time. This happened everywhere; the Americans have had exactly the same trouble. Even their development has not been rapid enough, and they have found that the handing over of stations to the power companies has fallen behind schedule all the time. This is the inevitable result of a new industry trying to do something which they have never done before, and not being given enough orders, enough authority, to go ahead and do it properly.
In fact I believe it is probably true that in this country we would have done better to stick to the old magnox nuclear station and gone on developing it, instead of saying "No. When we have built this first generation of magnox stations we will try something entirely new", and going off on to the A.G.R.; then saying, "No, we will go on with
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something new, probably steam generating heavy water" or something like that. We have an entirely new technique, a new sort of thing to do. It cannot be done in a short time, and the industry cannot be expected to put the effort into doing this sort of thing if it is only going to turn out one or two or three stations.
All the time we have been obsessed with the idea that we have to sell these stations abroad, but the demand for them has been in this country. It was not necessary to worry whether we could sell them abroad. In fact, we have not sold a single one abroad. We do not sell them because the Americans are better salesmen than we are; they go ahead and use very powerful sales methods and convince anyone that what they are making is better than what we are making. We should not worry about that, if there is a demand in this country, and there has been a demand. According to figures I have been given, the demand will go on increasing; and the noble Lord, Lord Hinton, suggested that the demand will go on increasing.
If we look at the position, we must consider partly what we do with the nuclear industry, which is going to be extremely important, and partly what we do with the other sources of energy, the fossil fuels. We have in this country immense reserves of coal. They could last for about a couple of hundred years. I do not know how much it is, but we have perhaps 40 to 50 years' reserves of gas under the North Sea; certainly not more. In other words, the use of gas will go up and come down again. That has already happened in America. In America they scrapped their old coal gas industry over the whole of the East Coast of America, and there is not an oven making coal gas on the East Coast of America. Why? Because they piped all the gas across from Texas. They brought all the natural gas over, and ran industry on natural gas. Now there is not enough natural gas, and they are beginning to have to use petroleum in order to produce towns' gas on the East Coast. If they had been wise and not closed down their coke ovens originally, they would not have been forced into this position.
We can be forced into the same position if we are so foolish as to think that

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because there is gas to-day there will be gas to-morrow. There will not. That is the one thing that one can predict with absolute certainty. I cannot be certain of the date, but natural gas will run out. The same is true of oil. We do not know when the oil will run out, but we are quite sure that, although we do not know all the world reserves of oil, they are less than the reserves of coal. Therefore we ought to think of gas and oil as being things to be used preciously and not to be squandered. It is ridiculous to use them when something else can be effective. That is the mistake that can be made in our policy.
So far as coal is concerned, we ought to think not only of the immediate future but of the long-term future. When all our other sources of hydrocarbons have disappeared, coal will be our one source of hydrocarbon, This will be important for the petrochemical industry in the future. The American oil industry has, over the last 15 years, been buying up coal mines, because they know that oil is going to run out and they must have coal. We should he considering exactly the same thing. Coal remains for us an extremely important raw material; a fuel, yes, but even more a raw material, and something that we dare not run down. We ought to keep our coal industry going effectively. The noble Lord, Lord Hinton, actually made reference to the estimate of the Ridley Committee. I looked up the debate of six years ago, and the figure that the Ridley Committee gave for coal production was not 210 or 220 million tons a year, but 250 million tons a year was to be the target. It would have been achieved but for the fact that oil came in. All the evidence that there is at the present time is that within a period of time, which may he 10 years, 15 years, 20 years, or perhaps longer, there will be a cross-over of the price of oil and coal, and oil will be more expensive than coal.
Therefore, everything points to the fact that we should have a fuel policy—and I should like to emphasise fuel policy, because I think the energy side of it is, in a sense, easy to decide and determine. It is important to decide the energy side, but it is easy to decide it; the difficult thing is the fuel side. We in this country must, in our own interests and in the interests of the future of this
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country, have a proper fuel policy. This demands that there should be set up some body that is concerned continuously, not just now and again, with this problem of fuel policy. It should be a body which can advise the Minister. It is rather sad to notice the remark that the noble Lord, Lord Robens, made about the number of Ministers to whom he had been responsible while he was chairman of the National Coal Board. I think he said that he was responsible to ten Ministers in ten years. That suggests that the position of Minister of Fuel and Power was treated in far too trivial a way. In other words, it was either a stepping stone for the young politician on the way up, or a convenient graveyard for the old politician on the way out. Neither of these courses is sensible in such an important field of our activity as this. I hope that the Government will revive the Ministry of Fuel and Power, and make it a powerful Ministry.
6.45 p.m.
LORD GISBOROUGH: My Lords, it is interesting that this debate should come at a time when we have news that schools in the United States are closed for lack of heating oil, and that corn cannot be dried for lack of oil. On top of that we hear that the demand in the United States, in spite of their lack of oil at the moment, is to be doubled in 15 years. This is not because of any physical shortage of oil. There are still nine years' proven reserves over there, even though the figure used to be 11. I understand that world wide there are 30 years' proven reserves, and this figure has remained constant year by year, in spite of rising demand and the ever-increasing cost of prospecting in increasingly remote and difficult areas of land or sea.
In addition to the new fields discovered, techniques of extraction improve, and it is becoming possible to raise the 30 per cent. extraction yield to up to 70 per cent., which will thus double the yield of every oil field that is discovered. There is no lack of oil, and I do not believe that there will be for many years to come. There seem to be two reasons for the problem in the States. First, the price of gas was too cheap, it was used too much, and then the multitude of privately owned wells. With cheap oil they have been wasteful of their supplies, and the ageing wells are now in decline.

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Secondly, their environmental lobby has prevented the building of refineries—hence the shortage of aviation fuel—and prevented pipelines being laid to bring oil from Alaska, and prevented the maximum use of coal for generating stations. Were coal, with their 600 year supply, to he fully used for generating, the energy crisis would be imaginary. Therefore, they have decided to double coal production by 1985.
In the short-term the matter is very different; hence, we have seen the States suddenly becoming massive oil importers. This, in turn, has affected the enormous supply required for Europe and Japan, and suddenly created a potential and rather false energy crisis for our own countries and the rest of the world, which will last until such time as the United States has sorted out its own short-term prolems. When it has done this, the rest of the world will breathe again.
We enter, therefore, a period of years of extra high competitive demand from, and reliance upon, the Middle East and other producing countries. This is at a time of very sharply increased, and sharply increasing, prices. Most of these countries can afford to cut off their supplies and bring pressure on the Western developed nations. For example, the Kuwait Parliament voted in January to cut off supplies of oil in the event of a new Middle East war. There exists a situation in which the whole foreign policy of Europe and the West can be, and is likely to be, held to ransom by the small oil States, and where the industry and the very defence of Europe, with its 90 day supply of oil, can be severely threatened.
One could also visualise an oil-starved United States insisting on their companies in the Middle East giving them total priority, at the cost of supplies to Europe and Japan. There could develop a free-for-all dive for oil between Europe, Japan, and the States, sending prices rocketing and creating an explosive international climate. It is a situation that must never be allowed to occur. Far better that they should try to get together and buy as a world block, just as the sellers sell through OPEC. But, first, Europe must learn to work as one unit. To minimise these dangers, it is essential for Europe to maximise the short-term
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supply of alternative sources of oil, such as the North Sea, over the next 20 years, and to develop and rely on the alternatives to oil which, while still plentiful, is eventually finite and will be increasingly expensive, both through royalties to the exporting countries and through the astronomically high and increasing cost of exploration in ever more remote and difficult fields. In the meantime, surely we must learn from America that the price of fuel must be made such as to discourage waste and to encourage adequate insulation, as was described by the noble Lord who opened this debate and by many other noble Lords.
But there are, after all, 10 million square miles of prospective Continental Shelf out of the 25 million still to be drilled, including the North Sea areas North of the 62nd Parallel, in which inhospitable seas many gas and oil fields are likely to be found. Already, the North Sea reserves could by 1985 provide three million barrels a day, which in quantity is equivalent to the needs of this country, though of course the crude is too light for all purposes and, anyhow, has to be shared out around Europe under O.E.C.D. rules. To fill the short-term needs of the next 30 years, every encouragement must be given to these North Sea explorations.
The British policy towards licensing seems to me to be just about right. It was no give-away, but it encouraged oil companies to come and prospect, even in what is the roughest sea in the world with the worst conditions. In the first instance, they were "wild-catting" and that could have involved huge expense, with no returns. Gradually, as certain areas become more promising, oil companies will expect to pay more for their licences. Yet when they start "wild-catting" West of the Shetlands, they will again expect the blocks to be cheap. But one must remember that drilling in the North Sea, with its high winds and waves, is the most difficult and expensive, and despite all the talk of discoveries and the massive investment the first ton of oil will not come ashore till 1974. Furthermore, it takes between 7 and 15 years from the date of survey for a well to get to its five-year peak production, with an investment for an off-shore oilfield of some £300 million, and that is tied up for most of that period before a ton of oil is brought ashore.

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I agree with the noble Earl, Lord Lauderdale, that gas prices must vary to give adequate returns to the prospectors; but if gas and oil are found in British sectors of the sea by foreign firms they must either reinvest the money in North Sea exploration, or bring the oil and their profits through this country. One may compare British licensing with that of other countries. Norway, with their hydro-power and no balance of payments problem, were able to charge more for licences. While they have notable successes in their areas, there has been a falling-off in drilling due to the unattractive terms. The Dutch charged so much for licences off Groningen that they had no takers. Even after reducing their demands there was limited interest and no gas is produced in their sectors, and they now have a shortage of gas.
There is talk of nationalising North Sea oil. What talk could be better designed to scare off potential drillers whom we need so urgently to find oil and help free us from the stranglehold of OPEC, and to help our balance of payments? "Wild catting" and drilling is a very high risk venture, becoming higher as the most likely fields are already found. What a horrifying investment for a nation to embark upon! We have already seen some of the ills of politics. With the nationalisation of steel, then de-nationalisation, then the threat and fact of re-nationalisation, the uncertainty delayed adequate research into the supply of non-corrosive large diameter steel tubes for the building of rigs. This is one of the reasons why so few rigs compared with the total, have been built in this country; the other reasons of course are labour troubles and costly late deliveries. It is essential that the North Sea oil industry be kept out of politics and free from political uncertainty. If anything, it must be encouraged to grow by bigger rewards to the companies, to encourage them to prospect here rather than elsewhere in the world. After all, they are not making great profits at the moment, and the supply of local gas or oil is of paramount importance to this country. If they do make big profits, they may prospect more freely or pay more tax.
However, this is all in the short-term. In the long-term, oil is finite and surely must be reserved for chemicals, fertilisers, food and so on, which form the life-blood
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of industry and of the world. Surely, it is too precious to burn. It is therefore vital to think 30 years ahead and to develop new sources of energy. Coal is by far the most plentiful and must be relied upon for electrical generating. We must not be afraid to buy American know-how on extracting oil and gas from coal seams, without mining. The coal industry must be kept strong and healthy. Even though it is the healthiest in Europe, the output per head is still five times worse than in America. The men must be kept, or they will not be there when they are needed. Nuclear power must be made to play its full part; and, again, let us buy any know-how from America if it will get rid of some of the troubles besetting these plants. But it is horrifying to think that we need to build one nuclear power station per week to satisfy our needs. Perhaps the most remote and long-term, but by far the most potentially rewarding, is the development of the fission reactor and the production of petrol from hydrogen. May we hear how far our research has progressed in this very important field?
6.57 p.m.
LORD ENERGLYN: My Lords, too, should like to extend my thanks to the noble Lord, Lord Tanlaw, for introducing this important subject for debate into your Lordships' House. I can think of no other place in the world where a subject like this can be discussed so freely, unfettered by politics; and, as other noble Lords have said, this is a subject which must be looked at in a non-political fashion. As we have heard so many times this afternoon, Britain is endowed with four principal sources of fuel, thanks to geological circumstances, skill, science and technology, and if we set our minds to it we can possibly deploy them more efficiently than anyone else in the world.
May I take a slightly different route from some other noble Lords? We are all pretty convinced that nuclear energy offers one of the most reliable sources of electrical energy in the future, but, bearing in mind the point of the noble Lord, Lord Tanlaw, we must be realistic and look at what is possible before 1985. I would remind your Lordships that we shall need nuclear fuel, and that we shall be using the £50 million grant for deep exploration for non-ferrous minerals in the heart of Britain. It is geologically in-

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conceivable that the roots of this fantastic geological phenomenon do not contain radioactive minerals, and in the next two to five years I think we shall have some very happy surprises and bonanzas in radioactive fuels which are as vital and exciting as North Sea gas.
If I may continue the theme of most noble Lords, which I so strongly applaud—that is, the conservation of energy—I should like to remind your Lordships of the successful experiments in using a high-level reservoir for the production of hydroelectricity to meet peak loads. At first sight it seems rather ludicrous to use electricity to pump water to a high level reservoir and then to let it run out again to obtain hydroelectric power. But in Ffestiniog you can generate 360 megawatts in 55 seconds; and the proposed new use of the high-level reservoir at Dinorwic will produce 1,400 megawatts in 10 seconds. Another important point is that such a station has a well-known life of about 50 years, whereas the life of a fossil-fuel plant is possibly as little as 30 years.
One of the problems in these high-level reservoirs is the amount of water evaporation, which has to be supplemented—and that means use of energy. But I would remind your Lordships that we have vast areas—and I do not exaggerate in using the term "vast areas"—of underground workings in Britain from which, in the past, coal has been taken. These subterranean areas are still available to receive water, and many of them, particularly in South Wales, lie above deep shafts of 1,000 feet in depth; and, if I may remind your Lordships, a 1,000-feet head of water is an enormous potential for driving hydro-electric turbines. So here we have not just a figure of speech but a fact: that within two or three years we can produce underground hydroelectric stations in our coalfields, and I am convinced, having carried out one or two trial exercises, that in South Wales alone the peak loads could be met by these underground coalmine hydro-electric stations. I would further remind your Lordships that these abandoned coalmines lie in the heart of the heavy industries of this country, where peak loads are so troublesome. So I commend this example to your Lordships within the theme of the conservation of energy.
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Perhaps I may take up your Lordships' time further by going on to another important area in which conservation can take place; namely, in the making of iron and steel. In the smelting of low-grade iron ores, the balance between fuel and ore has always been against the low-grade iron ore, so that as the fuel became more expensive it became of necessity important to introduce rich hœmatite from abroad. But I would remind your Lordships that we won the war on home ores, and virtually the whole history of the iron and steel industry is built on the Jurassic iron ore of this country. Now the thing that bedevils the smelting of low-grade iron ores—and these are very widespread throughout the world—is the sedimentary mineral called chamosite, which is an alumino-silicate and which behaves in a rather stupid way. When the heat has destroyed it, as soon as the melt begins to cool down the iron rushes back into the molecule and goes away in the slag, so that you have great losses in that direction. Geologically, these minerals are formed by the excreta of marine organisms, and this means that if they were formed in an organic fashion the way to attack them is to attack them with organic compounds. It has now been found that if you blend these low-grade iron ores with organic compounds—and I am not trying to be amusing when I say that among them is town sewage—you provide that mix with the right type of thermo-chemical fuel which will compete very successfully with metallurgical coke. So I am not trying to be amusing in suggesting to your Lordships that in the immediate future we shall see, either in this country or in the Ruhr, where activity is taking place in this field, the use of sewage plants for the provision of metallurgical fuels.
I hope, my Lords, that this does not sound like a university lecture, but I should like to take one further point to illustrate the various ways in which, in the theme of the noble Lord, Lord Tan-law, we can to-day do something to conserve our energy in the world of metallurgy. At a recent visit to the research association dealing with coke and coal, I was shown a series of coal pellets which had passed through a furnace which ranged up to over 1,000 degrees centigrade. The pellets were completely undisturbed. They came through the furnace,

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and their shape was perfectly preserved; and they still contain hydro-carbons. The moral behind this is that those coal pellets, like all the coal used in furnaces, had not consumed the full potential of organic content, and that is a waste of thermo-chemical energy. If, on the other hand, one then reminds oneself of some of the characteristics of coal, there are two that I should like to present to your Lordships which are relevant. The first is that coals all over the world are not of the same geological age, but the coals that have been found to be of great commercial value were formed about 200 million years ago. These so-called thermo-carboniferous coals were formed at a time when there were no flowering plants on earth, and the significance of that is that these coals contain strange and as yet not completely known organic compounds. When these come into contact with metals, they perform the most miraculous things. In the past we have only been able to observe them empirically, but now we know exactly how they work.
The problem is now simple: it is to bring these coal substances into absolute contact with the mineral. This brings out the next property of the coal, which is that, under pressure, the coal behaves like a plastic. So that if you have a mixture of minerals and coal and pressurise it, you form a hard plastic mass. When this is projected into a furnace and almost instantaneously ignited, these compounds completely react, there is no loss of energy and the metals are excluded in the most dramatic fashion. In fact, it can be shown that nickel can be extracted out of lean nickel ores at temperatures of 400 degrees centigrade lower than the melting point of the nickel. I need not elaborate on that any further, but I make that point rather vigorously, if I may, because what we have in our grasp now—and I repeat "now"—is complete freedom from using coals that can be made into coke. Any coal can now be used, and this means a great opening up of the picture of coal-mining, which has been becoming narrower and narrower because of the increasing demand for industrial coke. Now, this need no longer be the case; and this, I think, alters the whole picture.
My Lords, I have made these three points in an attempt to illustrate two
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things. The first is to support the view that we must conserve energy in every possible way. Then I take the point of the noble Earl, Lord Bessborough, about integration: because we must add to conservation of energy the integration of energy. In order to do that, it seems to me that the first step that one has to take towards the production of an energy policy is to produce a pattern; to integrate, as my noble friend Lord Wynne-Jones said, the policies of industrial life into a pattern. I would recommend to Her Majesty's Government that they consider setting up a Committee of Inquiry—and I hope that the noble Earl, Lord Bessborough, will approve of the title—that will produce a pattern of industrial fuel or, if they please, of energy. In my view this can be done in six months if the Committee is composed of men who have all the information at their command, and it seems to me that the heads of the nationalised industries, a representative of the oil industry and a representative of the T.U.C. would fit into this category. Under a dedicated chairman, I am sure that the Committee (and I hope that the noble Earl, Lord Bessborough, will agree with me) could produce within six months a Green Paper of a pattern of either fuels or energy from which we could then proceed on the next round of an attempt to form a policy for energy.
LORD KENNET: My Lords, before the Minister rises to reply, with the leave of the House I should like to correct a mistake I made earlier. We were on the point of the depth under the sea at which oil could be obtained and how long it was likely to be before that depth was greatly increased. The Russians have a crawler operating at 4,000 feet under the sea, the Americans have one operating at 6,000 feet. It was reported in the Financial Times on September 17, 1971, that Shell had commissioned a ship capable of drilling in 2,000 feet of water. The name of the ship is "Sedco 445". Most important of all is the fact reported in the November, 1972, issue of Ocean Industry that Messrs. Lockheed have developed an overall system for obtaining oil which eliminates the use of divers and is designed to he used at a maximum depth of 3.000 feet of water. It has been tested at 900 feet and is now in the hands of the Shell Company producing

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oil at a depth of 375 feet off the American town of Venice in the Gulf of Mexico. This, I think, is not a picture which suggests that very deep working is a remote prospect in the future. Nevertheless, what I said was wrong and I apologise to the House.
7.15 p.m.
LORD DRUMALBYN: My Lords, I should like to start by congratulating the noble Lord, Lord Tanlaw, on having introduced this debate. I feel sure that he will be happy himself that he has done so because it has certainly justified the very high standard that he set at its outset. We have had speeches from experts and I think that the debate should well maintain the reputation of this House for discussions of this character when so much expertise can be deployed. I think it is true to say that there has been very largely a non-partisan approach to the debate. That is very welcome to me and also, I am sure, to the noble Lord, Lord Tanlaw. A great many questions have been flung at me, as representing the Government, and I do not want to detain your Lordships for a very long time. I will, if I may, deal by correspondence with some of the questions that cannot now answer, but I should like now to deal with those that seem to me to fit in most with the broad pattern of the debate—and "pattern" is a word that has been used often in the course of our discussion. I hope to show the Government's perspective on this subject to the best of my ability.
The debate has certainly served a useful purpose in making us all realise that neither this country nor any other European country, nor indeed any country, can take lightly the problem of providing itself with supplies of energy to meet the rising world demand. The public are becoming more and more aware, often through sad experience, of the massive investment and world-wide operation and the complex industries that stand behind the flicking of a light switch or the turning on of a cooker and the starting and running of a family car. These industries in turn rely on a whole range of natural resources, in exploiting which we must have due regard not only to their individual characteristics but also to the quantities of reserves of them which are known or presumed to exist, the changing
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pattern of supply and demand (so far as that can be foreseen) and the environment.
Governments, companies and individual consumers each have their own point of view in this continuing process of matching demand with supply. Some want plans, targets, contracts of various kinds; others emphasise the need for freedom of choice and the benefits of competition if not only existing sources of energy but new sources are to be developed in the right quantities to meet the demand. Most recognise the need to take account of social considerations and also environmental considerations, but if one thing is certain, it is that the future is uncertain except perhaps in those respects indicated by the noble Lord, Lord Wynne-Jones. Neither the pattern of demand nor the pattern of supply can be determined in advance, even in an authoritarian State virtually self-sufficient in energy resources. Circumstances change, opinions change, indeed the extent of human knowledge, skill and technology changes.
We were fascinated to listen to the speech of the noble Lord, Lord Energlyn. He indicated three areas in which changes are taking place. I was particularly interested in his reference to pump storage because I remember that while I was still at the Scottish Office the pump storage scheme was introduced at Loch Awe. I do not know whether this scheme was before or after the Ffestiniog scheme; but to the extent that this type of system can be developed, it is obviously a very useful source of energy, particularly in its suitability to fill in at peak periods.
LORD WYNNE-JONES: My Lords, on that particular point which I think is very important, has the noble Lord any figures on the efficiency of pump storage? Because at first sight it looks as though it is not likely to be more than 64 per cent.
LORD DRUMALBYN: My Lords, I think the advantages of pump storage are first, as Lord Energlyn said, the length of time it lasts and, secondly, the fact that, in return for the expenditure over those years, it can usefully be brought in to fill in at peak periods, and in that sense it is a very good marginal addition to supplies. I hope the noble Lord, Lord Energlyn, will agree with me.

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My Lords, in addition to these, new political and economic groupings emerge, and the relative position of one source of energy as compared with another varies from time to time. I suppose that the subject which has exercised the minds of your Lordships mostly in this debate has been the proposal for an Energy Commission. This, of course, is not a new idea; it has been well fostered by the noble Lord, Lord Robens, and undoubtedly it has attractions. But it has not found widespread acceptance in the past and I think that there are three reasons for that. First, it is difficult to see what powers such a body could have that are not already available to a Government Minister. Secondly, all the necessary skills and information for the formulation of energy policy are already available to Ministers and their Departments, and it seems doubtful whether interposing an Energy Commission would not complicate the lines of responsibility without necessarily effecting any improvement. Finally, and most important, all that has been said to-day points to the vital national importance of energy, and I took very much the point of the noble Lord, Lord Hinton of Bankside, that inevitably these matters involve political decisions, and it is difficult to see how the Government could step back, so to speak, from their responsibilities in this area by creating a new body that would inevitably stand between the industry and themselves. I agree with the noble Lord, Lord Hinton of Bankside, that this is a matter which should be dealt with within the Government machine, but I take on board also the point that the noble Lord, Lord Energlyn, has just been making about the possibility of some advisory committee being set up. Perhaps I could deal with that point at the end of my speech.
LORD AVEBURY: My Lords, if I may interrupt the noble Lord, the decisions of individual nationalised industries, particularly capital expenditure decisions, involve political factors which have to be taken into account by Ministers and dealt with, if necessary, by Ministerial directions to the industries concerned. What is lacking, as I think my noble friend explained, is any coordination between the gas, coal, oil and nuclear sectors and the C.E.G.B. which would bring all these factors together and propose to the Minister a comprehensive
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set of decisions on which he could make his judgment. He has to make his judgment on a number of individual suggestions put up to him by the heads of the nationalised industries, which must involve very complicated calculations as opposed to the merits of each of them.
LORD DRUMALBYN: My Lords, this is exactly what the Ministry of Fuel and Power, now incorporated within the Department of Trade and Industry, exists to do. It has access to all manner of advice. The question is whether or not that form of advice should be formalised in an advisory council.
LORD KENNET: My Lords, I am sorry to interrupt the noble Lord, but is not the point that some independent commissions are expected by people to analyse and synthesise the situation publicly, and to publish reports? Ministries are not expected to do that. Historically, the two kinds of bodies live up to public expectations. This would be the advantage of a Commission as opposed to a Whitehall Ministry.
LORD DRUMALBYN: My Lords, I propose to come back to this at the end of my speech because I believe that our thinking will emerge from what I have to say. We have seen in the 1950s and 1960s how rapidly the forces of the market can alter the energy scene and re-establish constantly a new balance between supply and demand with a quite different pattern of use of fuel. As my noble friend has said, between 1950 and 1971 coal consumption fell from 201 million tons to less than 140 million tons; whereas oil consumption, in terms of coal equivalent, rose from 22 million to 147 million tons and natural gas from zero to 26 million tons. No matter what Governments may or may not do, we dare not assume that market forces, combined with research and exploration, will not produce far-reaching changes in supply and demand in the future, as they have done in the past two decades. That is not to diminish, or to deny in any way, the responsibilities of Government in the field of employment and the balance of payments as well as other such social and economic factors that the movements of the market may not fully acknowledge.
Let me take the example of coal. The Government took the view that a rapid

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rate of run-down, which present relative costs of production and cost in use in comparison with other fuels could have provoked, would be quite unacceptable because of the social and regional consequences that it would entail. Nor would it be prudent to assume that the relative costs would remain the same for very long; the future price and supply of other fuels are bound to be uncertain. When I say that, one has only to consider estimates of the cost of energy produced by nuclear fuel and the outcome when it comes about. One can expect, and indeed one has come to expect—although I hope we shall curtail it to some extent—a steady rise in cost from year to year. It is therefore prudent and sensible to maintain a somewhat larger coal capacity than short-term economic considerations alone might indicate, provided that the cost of doing so is not exorbitant. Your Lordships will have the opportunity to consider the proposals in the Coal Industry Bill, to which a First Reading has already been given in this House.
The aim for coal must be to re-establish the viability of the National Coal Board. The rate of run-down during the period covered by the Bill will largely depend on how far the industry succeeds in improving productivity and keeping down the cost of production in relation to other fuels. The rate of reduction over the six years from 1964 to 1971 averaged 33,000 in manpower and nearly 8 million tons a year. Since then, the rate of rundown has been lower. Reference has been made to the use of coal for generating electricity. Coal-fuel plant still accounts for 70 per cent. of the C.E.G.B.'s total capacity and 66 per cent. of the units supplied in 1971–72. I got the impression that some of your Lordships thought that the coal-fired plant accounted for much less than this nowadays. The amount of oil-fired and nuclear capacity under construction will reduce the percentage of generation from coal, but I should like to make clear, in response to one thing that was said, that no consents to conversion from coal to oil have been given since 1970. The only outstanding applications are two, one for Padiham, (224 megawatts) and the other for York (38 megawatts) both to oil and both applications were made on clean
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air grounds. After allowing for further conversions the proportion of coal fuel capacity is expected to be 62 per cent., sufficient to burn all coal likely to be produced at acceptable cost. The C.E.G.B. has said it could take up to 75 million tons of coal a year, if the price was right.
In nuclear power we still have the largest installed operational capacity in Europe. In 1971–72 it accounted for about 10 per cent. of the units of electricity supplied by the C.E.G.B. This was provided by the first generation Magnox stations. Of the five advanced gas-cooled reactor stations under construction the first should be on power next year. Although all new technology has involved uncertainties I agree with the noble Lord, Lord Hinton of Bankside, that the nuclear role in the supply of energy can be expected to increase. Last August the Government announced that the installation of nuclear plant would be intensified, so far as technological progress, environmental constraints, industrial capability and general plant requirement permit. In the long term, the Government see the fast breeder reactors as the main element of our nuclear generating capability and no country is more advanced than the United Kingdom in the development of this very promising system. But we shall continue to rely on thermal reactors until well into the 1980s, and they will make a significant contribution beyond that. The prototype fast reactor at Dounreay is due to be commissioned later this year ready for the first full-scale order to be placed in the latter part of the 1970s. The August 1972 statement announced an additional £15 million programme on the fast reactor which has started, and a study programme on four thermal reactor types—the steam generating heavy water reactor, the advanced gas-cooled reactor, the high temperature reactor based on DRAGON to which my noble friend Lord Bess-borough referred, and the light water reactor. These studies are making good progress. The objective of the studies is to assist the Government when the time comes to make a choice for future orders. All this work should next year reach the stage where firm orders can be placed. The timing of further orders depends on the needs of the electricity generating boards.
LORD AVEBURY: My Lords, we understand that a Select Committee in another place has asked for publication of the Vinter Report on future reactor choice. Can the noble Lord say anything about the Government's reaction and whether we shall have the advice of Mr. Vinter to place before the House and before another place?
LORD DRUMALBYN: I am not in a position to say that, my Lords. I do know that the Minister concerned, Mr. Boardman, has offered to appear before the Committee in person. The August statement also announced the Government's intention to encourage the formation of a single strong design and construction unit. It is generally accepted that there is not at present sufficient business for two existing companies, and the Government take the view that in the longer term the consortium structure on which both companies are based will not provide the strength and unity needed to meet the Generating Board's requirements.
My Lords, since August last the Secretary of State and the Minister for Industry have had very wide-ranging exploratory discussions with all the interests concerned including, I may say, the T.U.C. and staff associations, and a statement will be made as soon as possible. As to oil and gas, these have been so fully explored that I should like to study what has been said, as I know the Department will also do. But there are one or two things I would say. First of all, successive Governments have been criticised for failing to ensure that the nation obtains the maximum benefit from North Sea oil and gas which is of course a national asset. This is not so. All aspects of the North Sea, including the amount of Government take, are under review at present and we have already made it clear that a fair return to the nation as a whole is one of our main criteria. If I may make one general comment on the references which have been made to taxation policy at that point, I am sure that no one will expect me to say anything about this at this time of the year.
My Lords, I would just say with regard to the future of production that, whatever production proves to be in the North Sea, it will certainly be a most welcome addition to our energy resources and
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an equally welcome relief to our balance of payments. It will also enable us to become not only an oil producing country but one which specialises in oil technology. Perhaps I might refer at this point to what my noble friend Lord Lauderdale said about IMEG. Of course my noble friend fires off so many questions and covers such an enormous amount of ground that I know he does not really expect anybody to engage in hot pursuit of him in these matters. The Government anticipated one very important IMEG recommendation, that it should get more information about goods and equipment purchased by the North Sea producers, and it has set up a system of periodic reports on actual and prospective purchase. The Government know very well the urgency of taking action on all IMEG's recommendations and they have already set up the offshore supply office whose responsibility it will be to coordinate action, but I say to my noble friends that they must be given time to decide what is the most effective action to take.
My noble friend also asked about the status of the Shelf under the Treaty and I can only confirm what I told him on the last occasion. That still remains very firmly the position of Her Majesty's Government.
THE EARL OF LAUDERDALE: My Lords, since there is a possibility of this Shelf question coming before the European Court, no doubt the Government will watch those proceedings with great care and if necessary be prepared to take up a protective stance before the court should it arise.
LORD DRUMALBYN: My Lords, I have no doubt that if the Government feel that their interests are involved they will be suitably represented before the court.
My Lords, my noble friend Lord Bess-borough made what I thought was a very interesting speech about the consideration that is being given to energy problems in the E.E.C. He has long been making a special study of all the issues and, as he said, he is now himself a member of the European Parliament. For the reasons I have given, I do not entirely share his view that there will necessarily be a major world crisis by 1980. There is undoubtedly growing pressure on world resources and

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we may be facing a difficult period in the next ten to twenty years until nuclear power is more widely available and other new energy extraction and conversion technologies are more fully established. But that there can and should be some acceptable co-ordination among the nine I agree.
So far the main objectives of the Commission—and as the debate refers particularly to the E.E.C. I ought to say this—in the oil sector are secure and sufficient oil supplies and progress towards a single oil market in the Community. The Commission is seeking co-operation between oil importing countries and also seeking links with producer States; seeking research in energy resources and the protection of the environment; information by member states on oil imports, investment programmes, exploration; development of the Continental Shelf; common stock piling policies; Community help for oil projects, furthering the security of supplies; price and fiscal harmonisation and common import policies. There is by no means inaction. I recall that one noble Lord, I think the noble Lord, Lord Kennet, himself, gave the impression that the Commission had not done very much so far.
LORD KENNET: Has not been allowed to, my Lords.
LORD DRUMALBYN: My Lords, some specific measures have been achieved and others put forward for discussion which are aimed at securing these main objectives. Perhaps I should mention one or two. Two regulations have already been agreed and will be binding on the United Kingdom from the middle of this year. One is on imports and requires periodic reports on actual imports of crude oil and natural gas and en programmes for a year ahead. The other is on investments on the oil and gas side and requires reports on plans for the next three years in refining, transport, storage and distribution. There is also a 1968 directive to which I think the noble Lord, Lord Kennet, referred which requires stocks of the three main refined products to be maintained at a level of 65 days' domestic consumption.
A new directive last year extended the cover to ninety days, and may I say in
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passing that the United Kingdom is keeping its stock at that level. The United Kingdom has supported this extension and details are under discussion. There is a draft directive which would lay down maximum level of duties for heavy and light fuel oil, and my noble friend Lord Lauderdale referred to this. This harmonisation of mineral oil duties is still under discussion. A proposal to give fiscal and financial advantages to undertakings of outstanding importance to the Community in the hydrocarbons field is also under discussion, as is the hurmonisition of regulations concerning safety measures for the construction and use of pipe-lines. I think this is a point that was referred to obliquely by the noble Lord, Lord Kennet.
Finally, a draft directive has been prepared calling on member States to take measures to co-ordinate the use of oil in times of supply difficulties together with a draft regulation allowing some measure of control in the interests of the Community, especially in times of crisis. Obviously this regulation will need careful consideration, and it has been having careful consideration on the Continent.
I was asked about the general position of the E.E.C. on oil and on energy as a whole. Perhaps I might remind your Lordships of what the Summit final Communiqué actually said. It said:
"The heads of State and heads of Government invite Community institutions to formulate as soon as possible an energy policy guaranteeing certain and lasting supplies under satisfactory economic conditions."
The present Government have not so far specifically considered any proposal for an energy commission in Europe. As to the Club of Rome document, we are well aware of this document and we are studying it. It is well known that the Club of Rome analysis has both its critics as well as its supporters among the experts.
LORD KENNET: My Lords, the House will be profoundly cheered to know that it is being studied. I did ask whether any report was expected, whether publicly to the world and Parliament, or privately to the Secretary of State.
LORD DRUMALBYN: My Lords, I do not think we have reached the stage yet where it is possible to say whether there will be such a report or not.

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I think this would be an appropriate moment at which to say something about the Government's action on the world situation as a whole. The Government really approach this matter in three ways. First, we study world trends and the means of predicting them. This should give us the necessary basic information in an area where reliable data on some key aspects is hard to come by. Secondly, we believe it is important that there should be increased international consultation about future energy policy, and this is being pursued on a number of fronts. For example, the Prime Minister exchanged views with President Nixon when he was visiting the United States recently; and since the E.E.C. Summit last October, work has been set in hand on concerting European Community policy in this area. Finally, as is evidenced by last year's policy statements on nuclear energy and coal, the Government are determined to make the best possible use of the United Kingdom's indigenous energy resources. But there are obvious limits to the influence that any single country can exert upon the world situation as a whole.
My noble friend Lord Orr-Ewing is not in his place and, as time is getting on, perhaps I might write to him. Lord Orr-Ewing asked about whether the British Gas Corporation had put in a bid for acreage in the Norwegian sector. I would only say that the British Gas Corporation could bid for blocks overseas with the permission of the Secretary of State, but no such application has yet been made.
I should like to say one or two words in order to try to crystallise the Government's attitude to the whole of this matter. Our general position remains that the petroleum resources of the whole of the United Kingdom Continental Shelf will continue to be treated as a national asset for their exploration and exploitation. I again give that assurance to my noble friend. Let me summarise the way in which energy requirements are planned. I do not see the noble Lord, Lord Avebury, in his place. However, in the nationalised sector the Gas Council, the Coal Board and the Electricity Board put forward their programmes for capital development and expenditure for the next year and the ensuing four years for the approval of the Government. Each bases its programme on commercial considerations
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and its forecast of future demand. It is the duty of the Government to evaluate this in the light of their own responsibilities and knowledge. The total capital investment is shown on the Public Expenditure Survey. The December survey indicates estimated capital expenditure for 1973–74 at £809·3 million for these three groups of gas, electricity and coal. This is by any standards a sizeable chunk of public expenditure; and it is due to rise to £874 million, at 1972 survey prices, in 1976–77. Expenditure in the earlier years of the programme largely represents decisions taken two, three or more years ago, when approval was given to starting construction of a major plant, and also in part on entirely new investment.
My Lords, the questions really are these, are they not? How far should the public sector involve itself in expenditure on exploration and exploitation of oil and gas? My noble friend Lord Orr-Ewing went into those points, and, as I have said, they are all being fully considered at the present time. On what terms should the Government license others to explore and produce? To what extent should they seek to conserve oil resources? How fast should they be developed? These are questions that are being carefully examined at the present time, in the knowledge that decisions now do not result in any supplies of oil for five, six or seven years. The decisions are taken by the same people as take the final decisions on the programme of capital expenditure for the nationalised industries. They are taken to meet constantly changing conditions. It follows that as much flexibility as possible to allow for changes in circumstances is needed.
These uncertainties provoke the question of whether any sort of planning is possible in these circumstances. A plan in the sense of a decision to have some particular pattern of energy supply at a particular future date certainly has great disadvantages. The situation can change so rapidly that the adoption of such fixed positions can incur heavy penalties if forecasts prove inaccurate. The underlying objectives are, however, clear. We must seek at an early stage to meet energy requirements fully and securely and at the lowest total cost. We must do so without short-term upheavals in employment, or avoidable damage to the

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environment. The means of achieving these ends, however, do not necessarily remain constant. This is why we keep both the international and the domestic prospects under constant review, enabling us to take the right decisions at the right time, as we are now about to invite Parliament to do in the case of coal. In this sense of a systematic attempt to identify forthcoming difficulties and act accordingly, energy planning is not only desirable but essential. As the noble Lord, Lord Hinton, said, it must be alive. It is alive. It is being done. It is a continuous process, not a single effort at a given point of time. It is flexible and constantly under revision; it is unbiased, and we hope it is courageous. But we shall certainly bear in mind what has been said in the course of this debate, and also what has been said about the possibility of publishing further information in the form of a White or Green Paper, although I can of course give no promise about that.
May I, in conclusion, my Lords, as I see the noble Viscount, Lord Hanworth, in his place, say a word on the environmental side? The noble Lord talked about the insulation of housing. The Government is certainly concerned with the possibilities of improving the efficiency with which energy is generated, distributed and used. In practice, the energy industries themselves play the major part by developing improved equipment and procedures. This is in their commercial interest, but of course, the Government, too, have a role and in this connection some of my noble friends may have noticed that our consultative document on the proposed building Bill mentions the conservation of fuel as a new factor which it may be necesary to take up again in framing new Building Regulations. The new regulations and the revised 1965 regulations are in course of preparation. If they are presented as we contemplate at the present moment, there should be a saving of about 20 per cent. on fuel for heating compared with houses built to the present minimum, at an additional insulating cost of about £50 for an average semidetached house. I hope I have dealt with as many questions as possible in the time given to me. I would say how indebted we are to the noble Lord, Lord
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Tanlaw, for initiating this debate and, indeed, to all who have spoken in it, for the advice they have given, as I have said, in a non-partisan way, which makes it all the easier to listen to and all the better to study.
7.51 p.m.
LORD TANLAW: My Lords, it only remains for me to thank your Lordships very much for your support for this Motion, and for coming here to speak, because I imagine some may have had some difficulty with transport to-day. I should like to make two or three very short comments, the first of which is that I think that in the course of the debate there may have been some difficulty in distinguishing between an energy plan and an energy policy. It was my understanding when I used the word "policy" in this Motion that these were the objectives—ideals if you like—behind a plan, but plans can go right or wrong. They must be based on some form of principle or objective, and this is what I was trying to seek. I was also most pleased to hear the general support given to the idea of an Energy Commission. This has been mentioned before; it is not original. I should like to think that the contributions made this afternoon have taken us one step nearer to the reality of such a commission.
To take up the point that the noble Lord, Lord Drumalbyn, made about the ail-Party approach to this Motion, it was my intention to make an all-Party approach from the start in introducing the Motion; and this point was taken up from all sides of the House. An all-Party approach to an Energy Commission is the only hope of making any such commission work.
The noble Lord did not convince me very clearly on the other two points he made about a commission. For instance, the permanency of the commission is essential, for the same reason that the all-Party approach is essential. There are changes in Civil Service personnel but whether the noble Lord is aware of that I do not know. This was one complaint I had from the oil industry while preparing the Motion. He also omitted to mention the importance I attached to the integration of energy as a whole, both in a commission and in Government thinking. I am sure what the noble Lord

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says is right about having an energy policy, but I cannot see, unless there is a closer integration of the fuel policies under one roof, or at least under one policy-making body—
LORD DRUMALBYN: This was exactly my point, that it is the whole function of the Department of Trade and Industry to do this and keep it under continuous review by co-ordinating all the investment proposals. It is able to do this.
LORD TANLAW: My Lords, yes, I agree, but I think the point made by the noble Earl, Lord Lauderdale, disproves this, for how on earth can a hydroelectricity board start advising people on natural gas power generation? It seems to me that here is a case in point where this co-operation is perhaps not operating, or operating too well—I do not know.
I would mention one or two points made by the noble Lord, Lord Kennet, in a speech which added a great deal to the debate. He used his knowledge of the subject to great effect and introduced some useful and original ideas. One of the more interesting of these ideas referred to mineral rights under the ocean floor, and the noble Lord, Lord Drumalbyn, helped clarify this suggestion. The noble Earl, Lord Ferrers, made the interesting point that energy costs affect everything. This is a phrase that I would have liked to use in my introduction. This is true, and it emerged in the course of the debate.
My Lords, it was excellent to hear in the speech of the noble Earl, Lord Bessborough, a voice from Europe on this subject. I was most grateful to have his contribution and although apparently we disagree in our approach towards the formation of an E.E.C. policy, I do not think that in fact we do. I think we cannot make a real contribution towards the Community energy policy until we ourselves have come to grips with the very same problems that they are facing at this moment. I disagree with the noble Earl, Lord Lauderdale, but agree with the noble Earl, Lord Bessborough, in the emphasis to be placed on the necessity of the Community speaking with one voice when it comes to negotiating with the
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OPEC countries. I also wish to endorse what the noble Lord, Lord Drumalbyn, said to the noble Viscount, Lord Hanworth. There was enough material in his speech, which was taken up by the noble Lord, Lord Orr-Ewing, to be the basis for another debate on another day. I feel we shall hear more of this question of domestic insulation.
My Lords, the noble Lord, Lord Hinton of Bankside, made a very deep contribution to our discussion this afternoon. I was particularly impressed with his practical suggestion of a Green Paper as a start towards what I call a real energy policy. Then, my Lords, I was most interested in hearing the noble Lord, Lord Gisborough. I do not know whether he subscribes to the Christian Science Monitor, but I imagine he got most of the material from there in covering the subject of the fuel shortages in the mid-West. I did not bring it into my own speech because I thought it too dramatic, but it is an important issue in America, the question of the shut-down of schools and departments in the mid-West through lack of adequate heating.
The noble Lord, Lord Energlyn, made a highly technical contribution to what was after all a technical debate. One of the interesting points of a debate in your Lordships' House, is that your Lordships can draw on expertise from all sections, to focus on the Motion. The noble Lord used his expertise in the form of a short lecture to educate us a little more on the variations of the approach to the breakdown of hydrocarbons. I was especially pleased to learn of his suggestions on a committee of inquiry.
I think that we have had a very good debate on this subject. I can say no more now, except that I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

LEAD POLLUTION AND HEALTH
7.59 p.m.
LORD O'HAGAN LORD O'HAGAN rose to ask Her Majesty's Government what action they propose in order to protect children (and also adults) against harm from lead derived from petrol and other sources. The noble Lord said: My Lords, I feel that after such a serious and intensive afternoon and early evening the Unstarred

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Question in my name on the Order Paper is rather a descent, but I hope to prove that there is quite a connection between what we have been talking about earlier and this rather narrower Question.
I should like to give the noble Lord, Lord Sandford, two promises: first, I will attempt to restrict my remarks to under one-third of the length of the speech of his noble friend Lord Drumalbyn; secondly, that I will study all that he says with the greatest of interest because this debate has been organised in cooperation with him and his Ministry, both as to the date and as to terms of the Unstarred Question.
I should like to make two disclaimers. First of all, I should like to make it quite clear—and I am sure it will become clear—that I am not a scientist, a chemist or even a doctor, and if the noble Lord, Lord Sandford, finds faults in the advocacy that I shall be trying to lay before him, I am sure he will not discount the validity of my cause for the weakness of its advocacy. Secondly, there are emotional overtones in the wording of my Motion. It is a subject which arouses emotion, but I shall do my best to keep emotion in its proper place.
We have been talking about energy and the use of energy. This debate is in part about the clash between the interest of human beings and the interest of the great industries such as the oil industry, the lead mining industry and other great international multi-national concerns. So although we must not become romantic or sentimental, we are trying to help the Government decide with more precision and justice whether it is fair that Shell should have greater profits if it means that so many more children will receive an overdose of lead when young and suffer permanent and irredeemable brain damage. This ought to be in the back of our minds when we are thinking about the subject that we are talking about to-night.
Lead is not some new, crazy fad invented by the Friends of the Earth, or some other ecological propaganda pressure group; it is an old, old hazard known to the lead miners who have been in this country since Roman times, and there is an old, old word, "Saturnism" for lead poisoning. As lead builds up in the body it flows around
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the bloodstream and collects, and it is very difficult to get rid of it.
I hope that the Government will be able to give me to-night, or on some other occasion, a breakdown of the figures of the use of lead in industry to-day in this country, how much comes into the country, how much we get from our own resources, and some estimation of whether in all cases it is certain that this lead could not be replaced by something else. This is what we should like to know. I have given an indication of the seriousness of the subject of lead in human beings, but it appears that the noble Lord, Lord Sandford, does not take it quite as seriously as the Lancet. In a letter to me recently, the noble Lord rather pooh-poohed an article which claimed to demonstrate an association between blood lead levels in children and hyper-activity. It may well be that the Government have information available to them that can disprove the collective wisdom of the Lancet, because now this matter has been taken up in editorial form in the Lancet. We should like to know what information the Government have that makes them so confident that the Lancet is not right on this point about an association between hyperactivity and blood lead levels in children. What are the Government doing regarding this, if anything?
One of the magic formulae, which is thrown about when one is discussing lead with people, whether they be chemists, doctors or ordinary members of the public like myself, is the threshold level at which lead becomes dangerous—the threshold beyond which is potential clinical poisoning. The Government stick to the old figure of the World Health Organisation. Why do they believe that that figure is correct? What justification is there for continuing to believe that figure? Some people can keep lead in their bodies, while others who take in just the same amount can get rid of it all. I may be a low lead excreter, while the noble Lord, Lord Sandford, may be very fortunate and dispose of all his lead and therefore not be creating a problem for himself in that way. What views have the Government on the World Health Organisation's figure for the clinical threshold for lead poisoning?
LORD PLATT: My Lords, may I intervene? I am not quite sure which figures

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the noble Lord is referring to. Are these for adults?
LORD O'HAGAN: My Lords, the figure I have heard discussed most is 80 microgrammes per 100 millilitres, which I believe refers only to adults. On the subject of lead in petrol, which is the subject in Government circles that causes such continuous hilarity that the noble Lord, Lord Mowbray and Stourton, is usually asked to answer my Questions on it, can the Government tell me whether there is any need for lead in petrol? Is it not just an excuse for petrol companies to be sloppy in their refining process so that when they have not done their job properly they can just put in an amount of lead to top up the octane, and there they are?
Are the Government aware that in America there is now a commercially successful company making lead-free petrol, which costs only three cents more per gallon? Lead-free petrol is soon going to be compulsory in California; it will be compulsory in Japan by 1975, and has been compulsory in Russia for many years. Are people here more lead resistant than people in those territories? Perhaps the noble Lord can tell me whether he has studied the bad side effects that lead has on engines. I was lucky enough to be given an interesting document recently. We are always told how necessary lead is for engines. But for some reason on September 25, 1972, the Airworthiness Division of the Civil Aviation Authority had to issue an airworthiness notice because the supply of lead-free aviation gasolene was going to be discontinued. It had to warn the people who were responsible for safety of aeroplanes of all the dangers and difficulties that would now be caused because of the lead in petrol.
The possible effects of lead were: inlet valve head burning; exhaust valve erosion; valve sticking; spark plug erosion and fouling by lead deposits; piston rings sticking; and lead deposits in the oil. One of the by-products of lead being there was that chlorine was produced. Chlorine is very corrosive and, under severe conditions, can lead to exhaust valve failures. Not only is lead had for people, it is bad for engines. Lead inhibits combustion. If you are going to have lead in your petrol in order to be lazy about refining it, you have to put in
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something else as well otherwise the engine will not work properly. One of the things you put in petrol in order to make the engine work has a by-product that may be familiar to your Lordships—it is called hydrochloric acid. By having lead in petrol you are creating hydrochloric acid in the car engine, and your car rots much quicker, which is very convenient for the car manufacturers. They are delighted to proclaim the continued need for lead in petrol because it means that they will sell more cars.
What reasons have the Government for retaining any lead in petrol? Are they aware that the air pollution unit of the Medical Research Council, the unit which is held up to so much criticism, has produced figures to show that up to 10 per cent. of the material emitted from the exhausts of cars is in organo-lead form? Organo-lead was one of the materials considered by the Germans and ourselves as an agent of chemical warfare. Does the noble Lord consider that we ought to be subjected to this chemical just because it is convenient for the refiners to be sloppy?
There has been much disagreement about how much lead is floating around in the air, how much of that lead derives from petrol and how much of the lead in the air actually goes into our lungs. I shall not venture into that dangerous territory; but whether or not the lead goes directly into our lungs, it certainly settles on plants, on rubbish, on sewage farms, which are collecting sludge and spreading it so that there is lead all over the countryside. Above all, the lead collects in household dust, where it builds up. Household dust is liable to get into all sorts of places—into cooking pots, washing-up water and, of course, into children's mouths. Certain research the noble Lord knows of has shown that in some houses in Birmingham there are up to 5,000 parts per million of lead. After a number of years that would build up in the body into quite a substantial proportion of lead. I should like to ask the noble Lord how he views this state of affairs, what he is going to do about it and whether the Government intend just to wait until the connection between lead in petrol, lead in air and lead in people is actually established. Would it not be possible for us to deal with

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household dust, for example, which is a question so relevant to children?
We have grounds for concern, because the Government's action so far against lead in petrol represents one of the most blatant of public relations exercises that Mr. Peter Walker has indulged in. It was announced that after a period of years a maximum number of grammes of lead per litre of petrol would be allowed, taking as the starting figure (from which we would descend) the figure of grammes per litre which had not been used in this country since 1966. The final point was given as 0·45 grammes per litre, which was only one pip below the average amount occurring in petrol in 1970, when it was 0·46. So that after the grand fanfare of trumpets and the great unfurling of Government plans, and after many trials and tribulations, we would reach a point which was 0·01 better than we had in 1970. I submit that we really must have proof of the Government's concrete concern on this subject.
I confess to the noble Lord, Lord Sandford, that with the assistance of the intrepid Michael Palmer in the European Parliament I went in for a little guerrilla activity, because I found out there was to be an E.E.C. directive on the subject of lead in petrol. I had hoped to produce this directive to your Lordships' House to-night in order to chastise the noble Lord and the Government. Unfortunately, I can only describe the proposed directive in three words: knock-kneed, feeble and imprecise. If the Government are to be influencing the direction in which the E.E.C. is leading us, I think that would be a bad thing. I should like to ask the Minister whether he would tell us what part his Department played in putting together that directive; whether they shared in its creation, and what the Government's views are on its present state.
My Lords, I have almost finished; but there is one further controversy that concerns me. There are signs that there may be a connection between lead in people and behavioural disorder. This is a wide subject, and the Home Office is already looking at it. Can the noble Lord tell us whether his Department is considering it and, if so, in what way? I have concentrated on lead in petrol, not necessarily because this is the most important part of my Unstarred Question but because it
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illustrates in capsule form so many of the difficulties one comes across when trying to disentangle this subject from the interests of business, and particularly big business. All the heavy metals give one cause for concern, and there are a great many people who are concerned about them.
Before I sit down I should like to mention something to prove to the Minister that he will have to take positive action and go on thinking about this problem, because ever since Avonmouth this is not just a crank's subject or a scientist's subject. All over the country are conservation society groups and local groups interested in this subject, and I have one paper, issued to-day by the Reading and District branch of the Conservation Society, containing a whole series of warnings about various forms of metal, particularly heavy metal, pollution.
I do hope the Minister will take this cue to give us evidence of the Government's research and plans which have been put into operation since Mr. Walker issued his list of research projects last year. I hope I have been neither imprecise nor over-emotional, but I believe this to be a subject which is not only relevant to those people who are interested in lead but also indicative of the complications that the Government must resolve when trying to disentangle the interests of the individual citizen from the commercial interests of big multi-national corporations.
8.17 p.m.
BARONESS SUMMERSKILL: My Lords, I should like to thank the noble Lord, Lord O'Hagan, for raising this very important matter to-night. I ask him not to apologise for feeling emotional. I have been in Parliament long enough to hear serious matters raised late at night by one or two people because they have felt that insufficient attention has been paid to them by various Governments, whether of the Right or the Left. I have lived long enough to see at some subsequent date a spokesman for the Government of the day announcing that the law will be changed to enable the problem, probably raised a few years earlier, to be tackled in an energetic way. That is what I am really asking for to-night.
I suppose I have not felt quite strongly about lead, though, as a doctor, I realised

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its appalling potential dangers. That is why I put down a Question last November, and then I realised that the Government were dragging their feet. I realised that a few miles from this House there was dust on the pavements which was impregnated with lead, and children were playing in that dust. After a lapse of a year when the workers in the factory had been examined, during which time local mothers had been taking their children to the local doctors, suddenly officialdom woke up to the fact that those children must be suffering from lead poisoning. After feet had been dragged for a long period, suddenly the children and their parents were removed from the infected area. The noble Lord need not apologise for being emotional: not at all. It is an emotional matter, and I am going to ask in a moment what information is available about those children and what progress has been made.
We are talking about a subject which, as the noble Lord quite rightly said, has been known for hundreds of years. For all those years lead poisoning has been traced to lead in water and pipes: this has been regarded as a health hazard for hundreds of years. Here we are in the 20th century asking that the Government should be more active in protecting the people against the ingestion and inhalation of lead. There has been a great deal of work on the subject. I am sorry to say that much of it does not stem from this country; nevertheless there has been much work which indicates the serious nature of the problem, for rises in blood lead might be associated with biochemical abnormalities in the developing brain of the human infant. Papers have been written directing attention to a causative role for lead in some cases of mental deficiency in children; and there is no doubt that biochemical changes may manifest themselves in those exposed to lead poisoning in industry, where lead can be absorbed through the lungs or through the alimentary tract.
I do not come here to-night as an expert on lead; I come because, as a doctor and as a politician, I believe that there is a problem which should have been tackled long ago but which at the moment is more or less neglected, although I understand that during, perhaps, the last Year there has been more activity in the Department than there has
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been for many years previously. I understand that the inhalation of dust containing lead is a far more potent cause of poisoning than is the absorption through the digestive tract. It has been recognised for years that lead poisoning in infants has followed the playing with lead toys, the sucking of toys and of cots covered with paint, and that in children—and children are mentioned in this Question—the serious symptoms are mainly neurological and encephalitic. If only some of these things were associated with a rash! I remember in the 'thirties I used to say that I wished malnutrition was associated with a rash and then it would be diagnosed. Similarly, if the effects of lead were associated with a rash in children it would be diagnosed. However, as I have said, the effect is mainly neurological, and therefore it is possible for many of the symptoms to be missed.
I have mentioned the Question that I tabled on November 29 last. I was very disturbed then to hear what was happening a few miles from here in London, in the very heart of Britain. I learned that these deposits of dust which contained lead had been found and that it was believed that they had been there for a very long time. Inevitably they had to be traced. They were traced to H. J. Enthoven—I like to put his name again in Hansard—who was a lead merchant in the neighbourhood. I was shocked at the apparent ignorance of officialdom of the danger to the children, despite the report of the Royal Society on the Birmingham survey, which stated that in individual cases of dust there was as much as 3 per cent. of lead and that this was a hazard to children's health, and particularly a risk of brain damage.
Although that firm had been suspect for a year, during which time the workers in the factory had been examined and subsequently whole families had to he removed from the vicinity, we are told in the report on the matter that the firm had voluntarily closed until filters had been fitted. Voluntarily! There must have been officials, but I am afraid not enough officials were sent there to make an examination. It must have been clear that this was a glaring case of mismanagement. Surely this firm should have been compulsorily closed before it risked permanently damaging the health

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of children. When the Government assume the curious kind of attitude that they have assumed, rather of being contemptuous of those who have written papers on the subject, it must be difficult for them to answer that question. They knew that the workers were being examined, they knew that the level of lead in the blood was high; they knew that all around this factory was dust and that children were playing there; and then, finally, after all that, they did not compulsorily close the factory. I should like to know how many factories there are in the country which are potential poisoners by lead of children in the neighbourhood, as it has been proved is the case of this factory.
The noble Lord, Lord Sandford, was the second Government spokesman to answer questions on lead last November. The first spokesman for the Government treated the whole matter lightly, and I was very glad when, on the second day, the noble Lord, Lord Sandford, arrived and I said I was glad that he was going to deal with the subject in this House. I am equally glad that he is here dealing with the matter to-night. I hope he will appreciate the seriousness of the Question that I tabled on that first day, when I quoted from an American source regarding the hazards of lead poisoning. I recall that the Government spokesman then seemed unimpressed, as though a scientist in the United States of America really could not be taken as seriously as a scientist in this country. I can now feel—I am informed—that perhaps the Government are now taking a little more interest in the subject; but until that happens, in any field of science we must take notice of eminent authorities in other countries, particularly in the United States of America, where they spend colossal sums in scientific research. Whereas I was rather shocked on that first day when, on quoting an American scientist, the spokesman for the Government said, "Well, that comes from an American source", it seems to me that the attitude has now changed. I hope the Government will consider the information concerning the behavioural effects of lead, which has been mostly obtained from animal experiments and from psychological studies in the United States of America of children accidentally poisoned
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by lead in infancy. That is the kind of research we want.
Although it is known that lead is released to the environment from petrol, we are still left in the dark about its real effects, and I should like the Minister to tell the House what warnings are repeatedly given to the public regarding the potential dangers. If we cannot report on scientific research on the subject in any detail in this country, at least we know that lead in petrol is a danger, and I should like to know what warnings are being given. After all, no warnings were being given in the Enthoven factory. Those women who were going to the general practitioners in the neighbourhood of the Enthoven factory for a year or two with sick children were not given warnings, and the general practitioners were not given warnings that there might be lead in the atmosphere. What warnings are now given to the public in the country?
In adults most of the toxic effects disappear on removal from exposure, or by treatment, but in children, particularly those under five, the effect on the central nervous system and on behaviour constitutes a serious hazard. The House I hope will forgive me if I quote Americans, because it seems to me that they are the most important source of information. The outstanding contribution on the subject was made by R. K. Byers and E. E. Lord in the American Journal of Diseases of Children in 1943. They were the first to recognise the serious behavioural and educational abnormalities which can follow lead poisoning in children. Similar findings have been reported by other researchers and it seems agreed that at least 25 per cent. of the survivors of a childhood episode of lead encephalopathy suffer permanent brain damage; with a second episode, the incidence of permanent brain damage approaches 100 per cent. Perhaps it will now be understood by the House why it was necessary hastily to remove the families, particularly the children, bag and baggage from the environment of the Enthoven factory in Southwark last year. If the House will consider that, it will realise that it was near criminal to have left those children in those conditions while it was known that the workers in the factory had a high lead content in their blood.

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I should like to know—and I think that this is very important, because the Government cannot say that they do not have material to examine now—whether the condition of these children is being carefully investigated, whether they are being carefully followed up, and whether we may expect a periodic report on their health. Unwittingly these poor unfortunate children were acting as guineapigs. Now that we know that their blood lead level was high, I should like to know when we can expect a report on the health of those children who have been removed.
Byers and Lord emphasised that the severity of the long-term brain damage was not clearly related to the severity of the original lead poisoning symptoms. The National Academy of Sciences of America pointed out that childhood attacks of symptomatic lead poisoning can produce in a child hostile, aggressive and destructive behaviour patterns. In view of that important research, why have the Government failed to act more vigorously? They have simply proposed to reduce the limit of lead allowed in petrol from 0·84 grams per litre, the present limit, to 0·45 in 1976. One reason why I feel very strongly about this is because Britain has always been regarded as a leader in the field of public health. Smaller countries in the world have looked to Britain for a lead and she has generally given it. Yet the standards I have quoted are the lowest prescribed by any of the six countries which have already declared their intention to reduce the amount of lead in petrol. We are at the bottom of the league and we should be at the top in this matter. We have the highest vehicle density in the world and surely we should he leading, not following, countries with lesser problems than our own in this field.
Of course, I know that the excuse will be that the information available on the subject in this country is limited. If that is so, it is our fault and nobody else's. I would say that the essential information is known; namely, that lead in petrol represents a serious health hazard and that lead can pollute the atmosphere. Furthermore, it is known that a petrol without a lead content is being used in some countries. I believe that it is being used in Western Germany. I should have thought, therefore, that
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the most elementary protection which could be afforded to the public should be to prohibit filling stations from offering petrol which is known to have a high lead content. I should like an answer to the specific question: why are we permitting this? The noble Lord, Lord O'Hagan, has said that there is petrol without lead. That is the ideal. I am not asking the Government why they are not trying to approach the ideal, but why they are allowing petrol with the lead content that they have quoted to be sold. Perhaps, therefore, the Minister will tell me—and I have asked only two or three clear, specific questions—why this precaution is not being taken?
8.36 p.m.
LORD PLATT: My Lords, I do not think that I shall have to speak at any length at all except perhaps to emphasise some of the points that have already been made by the noble Lord, Lord O'Hagan, and by the noble Baroness, Lady Summerskill. Lead poisoning, as has been said, has been known for hundreds of years. When I was a medical student, one used to recognise it occasionally in lead workers and people who, in one way or another, were obviously exposed to lead. Those were adults. One of the earliest recognitions that lead poisoning also occurred in young children was from Brisbane in Australia, I suppose twenty or thirty years ago, where they recognised that young children who, in the hot Queensland summers would lick the raindrops off the paint on the verandahs and suffer from lead poisoning, were particularly prone to develop a kind of chronic kidney disease from which a number of them died. As I was particularly interested in the kidney at that time, I remember that paper very well indeed. We now know, of course, that one of the chief hazards in the child is the effect on the brain. We know that this can be a permanent effect, and we know that it can in certain cases cause permanent interference with vision or even blindness. We know also that it can cause death.
One of the few points that I should like to make that has not already been made, is to point out the very big difference between the adult and the child —which I think is now coming out of recent research. Although it may—and I only say "may"—be still within safety

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limits to have a lead content of the blood in adults of 80 microgrammes—I think that the noble Lord said milligrammes, but it is actually 80 microgrammes—recent papers quite clearly show that this is nothing like a safe proportion in children. Indeed, one of the fatal cases of lead poisoning in children in Birmingham that has recently been reported, in fact in the British Medical Journal of the 17th of this month, had, I believe, a blood level of 90 microgrammes. But they consider that any level of 37 microgrammes or above puts the child in danger of symptoms of lead poisoning affecting the nervous system. From that one paediatric clinic in Birmingham they picked up in the course of a few years thirty-eight cases of serious lead damage. It may be that even to-day, in spite of the amount of lead that gets into the atmosphere, into the soil, into the vegetables, into the food, is inhaled and is ingested, nets on to the hands of people who cat their food, it may be said that this is not numerically an enormous problem. Neither was thalidomide numerically a very big problem, but it has not passed unnoticed. The other point I should like to make, although it is a perfectly obvious one, is that all these cases are in fact preventable. Those are all the points that I wanted to make.
LORD INGLEWOOD: My Lords, I should like to echo only one thing that the noble Baroness opposite referred to. While my noble friend spoke mainly about lead from exhaust and petrol fumes, she also spoke about lead from food and from water in lead pipes. About 10 or 12 years ago in another place about this time in the evening I had to recommend, on behalf of the Government, new Orders controlling the amount of lead allowed in foodstuffs. At that time I believed, perhaps wrongly, that lead in food was the chief hazard to which we were exposed, and I was under the impression when I recommended those Orders to the House that they were very strict. Afterwards, I received a letter from a game pie manufacturer who told me that I had all but put him out of business, because the stain from lead shot—not the shot itself in the pie but the risk of lead stain—would mean that the pies they could be offering, through some
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of the grandest shops in London, would fall outside the tolerance.
But it now seems that I was wrong in thinking that lead in food and water was the chief hazard to which we were exposed; and it is the motor car manufacturers and the petrol manufacturers, not the game pie manufacturers, who are in fact confronting innocent people with these great dangers. When I look round this House on this important occasion I am sorry that none of our Members, leaders of some of the bigger motor manufacturing firms and oil companies, are here, and I should have thought that at least one of them would have thought it right and proper to come here to explain to us how they see this problem, None of us wants to do them an injustice, but if we do them an injustice this evening it is nobody's fault but their own for not being here.
Perhaps I was wrong, as I say, in thinking that the lead from food was the chief hazard, and it may well be that lead from the motor car exhaust is a still greater hazard. Maybe there is a greater hazard still, and that is being knocked down by a motor car rather than being disabled by lead from the exhaust. But joking apart, I feel that the Minister to-night will be doing not only us but the country a very great service if he can clarify this issue and show us, even if at the present time the Government have not got everything under control as they would like, at least how they propose to deal with it in the near future.
8.43 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, we are all grateful to the noble Lord, Lord O'Hagan, for raising among us a subject that is wide in scope, of great importance and of public concern. I welcome this opportunity to set forth the Government's views and actions upon it. I will accept the same restraint that the noble Lord, Lord O'Hagan, did and try to keep my speech within bounds. If, after reading it through afterwards, I find that I have failed to answer some of the many points raised by noble Lords who have taken part in the debate, I will of course write to them.

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This is an important subject. It has many facets. It is important that the matter be held in perspective. Throughout man's history, as the noble Baroness. Lady Summerskill, said, the existence of lead as a natural constituent of mineral soils has resulted in the presence of small amounts of lead in every man's diet and hence in the human body. The body copes naturally with these normal low levels, and indeed accumulation occurs naturally in the body just when the rate of absorption is higher than the rate of excretion. As the noble Baroness and the noble Lord, Lord Platt, both said, the amounts of lead to which people have been exposed has increased as a result of man's industrial activities over many hundreds of years. Lead and its compounds are, and have been for a very long time, vital industrial materials. Lead is smelted, refined, reprocessed from scrap, and used in a variety of products from batteries to paints and from glass to ships.
In the past, in much less enlightened times than those prevailing to-day, there was indeed a considerable human toll taken by the metal of those directly involved in its use in industry. In the year 1900 alone there were over 1,000 reported cases of clinical lead poisoning in industrial workers, and in that year alone there were 35 fatalities. But now, by contrast, we can look back for 20 years, and in that period there has been only one death in British factories listed in the records as being attributable to lead poisoning. I very much agree with my noble friend Lord Inglewood when he invites us to compare that with the toll upon the roads. Compared with the fatalities attributable to lead poisoning, one death in 20 years, on the roads we have 7.000 to 8,000 fatalities every year. This is a figure to bear in mind in holding this matter in perspective.
Fortunately, now the rarity of lead poisoning as an industrial disease is primarily thanks to joint action in the past by industry and Government. Those figures, I think, measure the success, but do not, of course, mean that we can now abandon our concern or our anxieties.
LORD PLATT: My Lords, may I intervene? I am afraid I may have let the moment go. I think the noble Lord is referring to deaths from lead poisoning in industry. We all know that industry has had to take this matter most seriously.
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Some years ago people who worked with lead in batteries, for instance, very frequently got lead poisoning. That, I think, has all been blotted out by factory rules. But I do not think that is quite what we are discussing to-night.
LORD INGLEWOOD: My Lords, if the noble Lord would allow me, quite apart from water there is also lead from beer. In the old public house systems the old beer machines were, I believe, one of the most fruitful sources of lead poisoning.
BARONESS SUMMERSKILL: My Lords, I must add my word, because the noble Lord has so amazed us by getting up and telling us that there has only been one death from lead poisoning and that so many people die on the roads. There is no relationship between those two things. Does he realise that what we are talking about are the potential deaths, the undiagnosed cases? All the noble Lord has told us is that, so far as the doctors know, there was only one diagnosed case.
LORD SANDFORD: My Lords, if noble Lords will allow me to get on, I will attempt to cover the subject. I have only just started on one aspect. I was careful to say that there has been one death in British factories attributable to lead poisoning. I could hardly be more precise than that.
BARONESS SUMMERSKILL: One diagnosed case.
LORD SANDFORD: I certainly give noble Lords the assurance that I am going to try and cover all aspects, as indeed the noble Lord's Question indicated he wanted us to do. In fact I will go rather wider than the debate has already gone.
The dangers of lead in the non-industrial situation is the topic which most noble Lords have so far been speaking about. There is a danger that an excessive intake of lead over a period of time can lead to permanent brain damage, and as the noble Baroness, Lady Summerskill, and the noble Lord, Lord Platt, emphasised in their speeches, children are more susceptible than adults to the effects of lead poisoning. There is therefore an undeniable need to minimise the possibility of children being poisoned by lead.

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We need to keep the subject in perspective and to do this we need to understand, in as much detail as we can, the relative importance of the various possible sources of intake, and I will deal with them all.
The Government's policy is to deal with the problem on two fronts; first, to keep the community intake of lead as low as is practicable, and, secondly, to continue to support and initiate research efforts to that end. I want now to demonstrate how this policy is being translated into positive action, dealing with lead in paint, lead in petrol, lead from industrial processes, lead in food, lead in household articles, and lead in water. First of all, lead in paint. The largest single non-industrial cause of lead poisoning is the chewing of old and decaying paint by young children, resulting in some 200 admissions to hospital every year. The lead content of primers and paint pigments manufactured and applied many decades ago was very much higher than those sold to-day; indeed, some paints contained as much as 40 per cent. of lead. Layers of these dangerous paints still remain in many old houses and other buildings, sometimes covered by new coatings. Children have a proclivity to chew a variety of objects and can gnaw their way through more recent coatings of paint to highly-leaded paint underneath. While modern paints also contain a certain, albeit much lower, amount of lead, paint manufacturers in this country have been voluntarily labelling paint which contains more than 1·5 per cent. of lead with a warning to the effect—and here is the first warning the noble Baroness asked about—that it should not be used on toys, nursery furniture or interior surfaces which may he chewed or sucked by children. Lead in paint on toys is a particular hazard to children. Most young children are inclined to chew or suck their toys, and it is clearly important that any paint or other coating on toys should not contain an excessive amount of lead.
The Toys (Safety) Regulations, 1967, prescribe limits for the amounts of lead and certain other toxic metals which may be present in the paint, or similar coating materials, on toys (whether imported or made in the United Kingdom) offered for sale in this country. In the case of lead,
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the prescribed limit is 0·5 per cent. The Government are carrying out a serious review of present levels of lead in paint, and discussions are taking place between the Home Office and the Paintmakers' Association. It seems likely that agreement will be reached shortly on still lower figures.
On this point the noble Lord, Lord O'Hagan, referred to my correspondence with him and chided me with underating the opinions presented in the Lancet. I think that I must read the relevant paragraph to your Lordships for your consideration of what the Government's attitude is. In reply to the noble Lord I said:
"Naturally the Government are examining this report, but the number of children studied was small, and it is the view of the Government's expert medical advisers that it has not been satisfactorily shown whether the hyperactivity of the children was the result of exposure to lead or whether the raised blood-lead levels were a result of the children's hyperactivity. Further research into this subject is obviously required, and the Government are pursuing this question."
I hope you will agree that that does not indicate any underestimate of the Lancet report, but really that it is a matter that should be pursued.
LORD O'HAGAN: My Lords, the noble Lord is quoting from his letter to me—and I am afraid that I do not have my copy as it is with Hansard. I do not want to enter into a debate of a textual critical nature, nor do I want to bandy expert medical opinion with him, but the point that I was trying to make was that, while there was not a particularly warm commendation of the attitude of the Lancet in what he said I was pressing upon him the need to take the Lancet a bit more seriously, because now there is an editorial endorsement of the view expressed in that article. I was hoping that this would lead him to take it further than he appeared to be doing in his letter. I am sorry to have intervened. I shall not refer to the Minister's letters in debates in future.
LORD SANDFORD: My Lords, we will come back to that in a moment.
I should like to turn to emissions of lead from motor vehicles. This is of course determined by the lead content of the petrol. The position on this matter

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is that until this year the maximum permitted lead content of petrol in the United Kingdom was 0·84 grammes per litre. In 1970 the average level, as opposed to the maximum level, was 0·53. Last August the United Kingdom announced a programme of phased reduction as follows: by the end of 1972 0·64; by the end of 1973, 0·55; by the end of 1975. 0·45. Those are the maxima permitted. The average level in 1970 was 0·53. The noble Lord raised the technical problems of lead in petrol, and those related to reducing the lead limits further, and I should like to expand on that subject a little. The development of high output and specific power in modern engines has been made possible by high compression ratios and high engine speeds. This requires petrol of a high quality, which can only be obtained by the use of antiknock additives. Lead is the basis of the additives most frequently used because of its economic and technical advantages. If petrol has insufficient anti-knock quality, the variation in the pressure of the cylinder causes the engine to become overheated and overloaded mechanically, and prolonged operation under those conditions produces premature failure. So far from being harmful, lead deposit in the cylinder also acts as a lubricant for the valves and is used to meet the needs of present engines whose design assumes that this protection will be available. A certain amount of lead in the petrol is essential.
The oil and motor industries have identified 0·45 grammes per litre as a critical point where difficult technical problems begin to arise and below which it might not be practicable for the majority of oil companies to produce high quality petrol. If low leaded petrol only were permitted, there would be heavy cost in additional refining investment; many engines would have to be redesigned; vehicle users would face higher petrol prices and reduced road performance; and increased imports of oil would be needed, both to produce petrol with a lower lead content and also because of the vehicles' lower mileage per gallon. These are all problems which are being investigated.
LORD O'HAGAN: My Lords, is it fair for the noble Lord to say that he is investigating a problem when he puts only one side of the case that many other
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people would question? I will not continue to intervene, but may I write to him about that?
LORD SANDFORD: My Lords, I think that the noble Lord has put his side of the case. It would be better if I were now left to put mine, but of course we can continue the discussion. The advice the Government have at the highest scientific and medical level available to us is that while it is desirable that present levels of lead emissions should not be exceeded and should be reduced if possible—and I have indicated that there is no evidence that at even their present levels they pose any danger to the health of the community at large—the Government have already taken action to reduce the lead content of petrol. This will reduce total emission of lead from petrol engines in 1976 to 4/5ths of its level in 1971, even allowing for the expected rise in car ownership and vehicle mileage. This, I would stress, is the first step and more is being done.
I turn now to lead pollution from industrial processes, which concerns the noble Baroness, Lady Summerskiil. As she said, it has lately received a good deal of publicity. Within factories using lead, the stringent requirements of Section 63 of the Factories Act for the control of dust and fumes are enforced by the Factory Inspectorate. I have already given an indication at the beginning of my speech of the effectiveness of the measures over the past seventy years. But, as she said, recent events have underlined the possibility that lead from a factory can be carried out on clothing into workers' homes, or can be blown from yards and stockpiles and from transport vehicles and so contaminate the neighbourhood. As a result of these recent incidents, the Government have taken further action on several fronts. The Factory Inspectorate have written to some 1,000 factories which handle lead, alerting management to the risks and emphasising the need for the strictest industrial hygiene. Factory Inspectors have also visited the works for which they are responsible, as have the Alkali and Clean Air Inspectorate, who are responsible for controlling emissions from lead smelting processes. Representatives from the lead industry have had it impressed upon them that every possible precaution must be taken to avoid the

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possibility of lead contaminating the environment.
My own Department has also issued a Circular on Lead and the Environment (Circular 6/73) last month. The circular advises public health departments to carry out systematic checks of the pathways by which lead can reach the environment in all areas where there are factories using lead, in pursuance of their powers and duties under the Public Health Acts. The circular emphasises that the Alkali and Clean Air Inspectorate and the Factory Inspectorate are available to give specialist advice to local authority health departments should this be required. The circular also requests local authorities to inform the Secretary of State if their investigations reveal anything untoward—for example, unduly high lead levels among children resident near a factory, or a high lead content of dust on roads and other surfaces. There has been an encouragingly positive response to this circular by local authorities, and the necessary investigations are being set in hand. The Government, for their part, are now in the process of collating and preparing for issue further technical advice on procedural methods.
These measures are likely to result in the issue of detailed Codes of Practice for local authority action. Although I shall be dealing with the question of research later in my reply, I should perhaps mention here that the Government have been carrying out a programme of monitoring blood-lead levels in children and adults in the vicinity of a number of major lead works. The noble Baroness asked me about follow-up action in the particular case she mentioned. I am glad to say that when the blood-lead level measurements were completed, it was found that though nine children living near the works had high levels of lead in their blood, further tests showed that lead poisoning had not resulted. The local authority there have set action in hand to clean up the area and to re-house the affected children.
I turn now to lead in food. Of all the pathways of lead into people, this is the most common. Yet there is no evidence that we need have any cause for alarm. The Government's Working Party on the Monitoring of Foodstuffs for Heavy Metals issued a Report in June last year
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on the results of its monitoring of foods in the national diet for lead. The Government were advised on the basis of the Report that there was no evidence of harm from present levels of lead in food comprising the diet of an average consumer. Indeed, the average levels were at about half the recommended limit laid down by the World Health Organisation and, in addition, average intakes of lead in food were found not to have increased since 1949. A reduction in the permitted level of lead in food specially prepared for babies and young children has already come into effect on January 1 this year, but this does not mean that the possibility of a further reduction here has been excluded. All maximum levels are to be reviewed yet again and the monitoring for lead in food is continuing.
I come now to another source of lead, mentioned by my noble friend Lord Inglewood; that is, lead in water. About 10 per cent. of our dietary intake of lead comes from water and we cope with that naturally. But statutory water undertakings are under a duty to ensure that the water they supply is pure and wholesome. To that end they carry out regular tests, including tests for lead solvency, to ensure that the lead content of water is kept well within the World Health Organisation's limits. In addition, medical officers of health carry out independent sampling and testing and keep a careful and constant watch for any possible risks to health.
The property of some waters to dissolve lead piping has been known for many years. The degree of risk varies according to the properties of the water and period of contact with lead pipes. Although other forms of piping are superseding lead pipes and the problem is therefore a declining one, water undertakings in general accept that they have a responsibility not only to ensure that the lead content of the water they put into supply does not exceed an acceptable limit, but also that they have a responsibility for treating water to guard against lead solvency. The correction for lead solvency can be effected by the simple process of treating water with hardeners before it is put into supply. Lead in consumer goods is of course a potential danger, especially where children are concerned. Regulations are being prepared by the Home Office which will

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prescribe stringent limits for the lead content of coatings on pencils, pens and brushes, and also for the lead content of crayons and chalks, and of the inner cores of pencils and crayons.
Lead can also be found in tableware and cooking utensils. Regulations are currently being prepared by the Home Office which will impose limits on the amount of soluble lead and soluble cadmium in the glaze and decoration on all ceramic tableware and cookingware offered for sale in this country. These regulations will be based on a recently published British Standard (BS.4860). Heavy metals can also leach out from enamelled cooking utensils. The Government have asked the British Standards Institution to prepare a British Standard for such utensils, so that appropriate regulations may be brought in. Tin-coated cooking utensils are capable of contaminating food with lead if the coating is of poor quality. The Cooking Utensils (Safety) Regulations, made by my right honourable friend the Home Secretary in December, 1972, will come into operation shortly, on April 1 of this year.
My Lords, as I think I have already said in answer to an earlier question by the noble Lord, Lord O'Hagan, there are some 50 Government or Government-sponsored research schemes into lead pollution under way at present. Studies are in hand of airborne lead at roadside sites, in streets and houses, in areas such as service stations and underground garages, on heavily trafficked motorways and around industrial processes using lead; of waterborne lead in streams, reservoirs and the sea; of lead in foods, including edible fish and shellfish; of lead in plants, crops, grass and soil. Medical research, especially of the kind that the noble Baroness, Lady Summer-skill, was asking for, on the possible effects of lead on the mental condition
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of children, on the long-term effects of lead ingestion and on the effects of lead on enzyme systems is also being carried out. In addition, the Government have set up an expert working group to advise on what further research is required. My Lords, I hope my reply has confirmed that we in the Government see lead in the environment as an important, many-sided problem in which the public rightly show a concern. I am grateful to the noble Lord for giving me an opportunity to set out Her Majesty's Government's many-sided approach to the problem.
LORD GARNSWORTHY: My Lords, before the noble Lord sits down, may I say that he has been very careful in trying to answer most of the arguments, but he twice referred to acceptable lead limits in regard to World Health Organisation standards. As I understood the noble Lord, Lord O'Hagan, he specifically challenged the noble Lord to state, when replying, whether the Government accepted the W.H.O. figure and, if they were accepting it, how justified they felt in so doing. I think it would be helpful, for the sake of the record, if the noble Lord could perhaps deal with that point briefly.
LORD SANDFORD: My Lords, as the noble Lord will have realised from my speech, there are standards of an enormous number of different kinds and varieties in the field of lead. I certainly confirm the undertaking I gave at the beginning of my speech to look at the remarks made by the noble Lord, Lord O'Hagan, and at the remarks of everybody else who has spoken in this debate, and where I can see that they have asked me specific questions which I have not answered in my 25-minute reply I will write to them, as I said I would.
House adjourned at ten minutes past nine o'clock.