Sitting of 13 March 1973

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

    Special Schools (Staffing Ratios)
    Mr. Barry Jonesasked the Secretary of State for Education and Science when she proposes to issue her circular on staffing ratios in special schools.
    The Secretary of State for Education and Science (Mrs. Margaret Thatcher): The circular was issued on 6th March. I arranged for a copy to be sent to the hon. Gentleman.
    Mr. Jones: I thank the right hon. Lady for that reply. I regret that it took two years to prepare the circular. Will she guarantee that the money for these improved ratios will be available for the coming financial year? May we have a detailed supplementary circular about the staffing in hospital schools? For example, what guarantees can the Secretary of State give that young handicapped children will get the good nursery education they deserve?
    Mrs. Thatcher: The hon. Gentleman has put three supplementary questions. The new ratios are dealt with in paragraph 29 of the circular, which says that the new standards required
    "…might call for an addition of about 2,000 to the teaching force in special schools…It is envisaged that the build up will be gradual. An appropriate target for 31 March 1975 might be about 1,000 extra teachers drawing the special schools addition, building up thereafter to reach the standards envisaged."
    It will take a little time.
    The hon. Gentleman's second point about hospital schools is dealt with in paragraph 28, where it is stressed that another circular is in preparation.
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    Thirdly, we shall give special attention in the other nursery schools circular to the needs of handicapped children together with deprived children by considering projects which local authorities put forward for the early stages of the programme.
    Mr. Haselhurst: Is not the hon. Member for Flint, East (Mr. Barry Jones) putting the cart slightly before the horse? More important than staffing ratios is the provision of sufficient numbers of schools so that all people who qualify for admission will get places. I think my right hon. Friend will agree that that has not yet been achieved.
    Mrs. Thatcher: There is a waiting list. Many years ago there was a waiting list of about 14,000 for education in special schools. In spite of heavy building programmes, the waiting list remains about the same. It is this kind of consideration which led me to step up once again the capital provision in the White Paper for special schools, and I think that has been widely welcomed.
    Mr. Dormand: In spite of that, is the right hon. Lady aware that not only staffing but all aspects of special education are so serious that no less than a full-scale Plowden type inquiry into special education is warranted? Does she agree that the several unconnected investigations which are presently taking place into special education do not add up to a meaningful whole? Why is the Secretary of State so afraid to institute a major inquiry?
    Mrs. Thatcher: I think the hon. Gentleman has forgotten that I have a standing advisory committee on this matter, which was set up towards the end of the life of the last Government. It does valuable work and it gives me advice. We have accepted its recommendations on a research programme for maladjusted children. That source of advice together with the special reports and other information which I have from the inspectorate and the increased provision which has been made, are, I believe, better than any large inquiry.
    Miss Fookes: Will my right hon. Friend accept my congratulations for the very generous staffing ratios and for the sympathetic way in which the varying handicaps are considered?
    Mrs. Thatcher: I am happy to do so. I agree that the staffing ratios in the circular show how much we appreciate the real needs of these children and how we are prepared to vary the teaching group according to the handicap of the child. Some of the groups will be as small as six. Sometimes, when blind children are being taught, the teaching group will be two or three.

    Teachers (In-Service Training)
    Mr. Sydney Chapmanasked the Secretary of State for Education and Science what is her estimate of the period of time, after the introduction of the release of teachers for in-service training in the 1974–75 school year, before every teacher who has completed seven years' teaching will have had one term's in-service training.
    Mrs. Thatcher: It is not possible to give such an estimate, as it is not intended that in-service training shall be compulsory, although teachers will be strongly encouraged to avail themselves of the greatly increased opportunities for release which will be provided.
    Mr. Chapman: I appreciate the magnitude of my right hon. Friend's proposals, which were mentioned in her speech in this House on 19th February, about in-service training whereby, for example, by 1981 at any one time 3 per cent. of teachers will be on in-service courses. Will my right hon. Friend consider the possibility of giving priority, where special courses are deemed necessary, to teachers in areas of high immigrant concentration?
    Mrs. Thatcher: I accept my hon. Friend's figures. About 3 per cent. of teachers should be released on secondment by 1981. We hope that the first substantial expansion will come in 197475. The determination of priorities, such as the important priority to which my hon. Friend refers, will be one of the matters for negotiation which in the White Paper we suggest should take place between the teachers' associations and the local authorities once the programme is under way. Judging by the representations which I have had from teachers about teaching in areas of this kind, I believe that they will be the first to ask for courses for this kind of work.

    Student Grants
    Mr Frank Allaunasked the Secretary of State for Education and Science how many letters and petitions she has received seeking an increase in students' grants.
    Mr. Roy Hughesasked the Secretary of State for Education and Science what representations she has received calling for an increase in student grants; what action she now proposes in the matter; and if she will make a statement.
    Mr. David Steelasked the Secretary of State for Education and Science whether, as a result of her meeting with the National Union of Students on 1st March, she will undertake a review of student maintenance grants; and if she will make a statement.
    Mr. Croninasked the Secretary of State for Education and Science what further consideration she has given to a general increase in student grants.
    Mr. Juddasked the Secretary of State for Education and Science whether she will make a statement on her discussions with the National Union of Students concerning the future level of student grants and the provision of better facilities for centres of higher education other than universities.
    Mrs. Thatcher: I have received representations from a number of organisations and individuals amounting to about 600 in all. My hon. Friend the Under-Secretary has had meetings with the Vice Chancellors' Committee and the National Union of Students. I am now considering these representations. I have had no discussions with the National Union of Students about facilities in higher education outside the universities.
    Mr. Allaun: Does the Secretary of State accept that the cost of living has risen as fast for students as for anybody else and that they claim they need an extra £65 a year to keep pace with that increase? When will she reply to their proposals which were made to her last October—five months ago?
    Mrs. Thatcher: I do not necessarily accept their figures. The increase in student grants in 1970–71 was 13·2 per

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    cent. During the next year the increase was 3·5 per cent. Students will be getting an increase in September, the third year of the triennium, of a further 4½ per cent. which amounts to £20.
    Sir Gilbert Longden: Has my right hon. Friend received a recommendation, unanimously passed by the Conservative National Advisory Committee on Education, urging that action should be taken in this matter? For example, will it be possible soon to raise the threshold above which parents have to make a contribution?
    Mrs. Thatcher: I have received that memorandum. The committee has taken a great deal of trouble with it. That was one of the main points that were made. We raised the minimum threshold in the last triennium. I agree that this is one of the most important points and we shall be considering it with the other representations.
    Mr. Steel: Surely the right hon. Lady accepts the validity of the figures that her own Department gave to the House on 8th February showing that for students in halls of residence the equivalent grant to keep pace with spending power ought to be £532, not £445. How does she propose to deal with the £87 shortage?
    Mrs. Thatcher: We do not deal separately with grants for students in halls of residence, and never have done. They are part of the grants system for students living away from home. Those living in halls of residence represent a minority of students. Part of the problem is looking at the facilities in halls of residence. The UGC is to survey that matter. I accept, if it is of any help to the hon. Gentleman and my hon. Friends, that the value of the student grant has fallen slightly—perhaps a little more than slightly—because of inflation. However, I should point out that the increases were substantially cut in 1968.
    Mr. Kilfedder: As the majority of students are over 18 years of age and as such are regarded in law as of full adult status, is it not inconsistent to expect their parents to make a contribution towards their upkeep? Are not many hard-pressed students suffering hardship because their parents are unable or, in some cases, unwilling to make the payments which bring the basic scholarship up to the standard level?
    Mrs. Thatcher: The age of majority has never been critical in determining the amount of parental contribution. The critical age has been 25, not 21, so a change in the age of majority from 21 to 18 has no significance in the system of grants that we now operate. To abolish the parental contribution completely would cost about £40 million a year on the existing rate of grants to the present number of students. Of course, the amount would go up year by year. If I had £40 million extra to spend I should not put the whole of it into this particular area.
    Mr. Cronin: Despite what the right hon. lady says, the vast majority of students are now suffering serious financial hardship as a result of runaway inflation. Is it not essential that something be done long before the end of the present triennium? Will she also bear in mind the importance of standardising discretionary grants as far possible and putting an end to the absurd anomaly of married women students being treated so unfairly?
    Mrs. Thatcher: There is a later Question on the Order Paper about discretionary grants. I cannot accept that all students are suffering serious financial hardship. I again point out that students had an increase of 13·2 per cent. in 1970–71 followed by 3·5 per cent. last year, and they are to get another 4·5 per cent this year. I admit that they have fallen a little behind due to inflation, but so have many other groups of people who have demands to make upon the taxpayer.
    Mrs. Kellett-Bowman: Has my right hon. Friend had an opportunity in her busy life of reading the report of the Federation of Conservative Students, sent to her by the Lancaster University Conservative Association, in which, among other things, attention is drawn to the problems in the long vacation faced by students who are not aware of the support that is available to them? There are many who are aware of this assistance and grab with both hands, but many worthy students are not so aware. It would be of great assistance if my right hon. Friend would issue some advice in this regard.
    Mrs. Thatcher: Apart from the element in the grant for help in the vacation,

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    other matters would be for my right hon. Friend the Secretary of State for Social Services, and I believe that he has had Questions put to him on this matter. I know from personal experience in my family that a number of students get jobs in the vacation and that this does both them and their pockets good.
    Mr. Moyle: Does the right hon. Lady agree that as well as the Conservative National Advisory Committee on Education supporting the NUS, the Association of Local Education Committees and the vice-chancellors and principals of universities have called for a review of student grants? Does it not leave the Government in an isolated position if they intend to carry on with their hard line? The crucial fact is not that students are among a number of large groups affected by inflation but that their margins are so much narrower than those of many other groups. Is it not time that the Government took action?
    Mrs. Thatcher: I assure the hon. Gentleman that the line I have taken is nothing like as hard as that taken by the Labour Government in 1968 when they halved the recommended increases. The hon. Gentleman knows this and does not like my mentioning it. A number of other groups are affected by inflation, many of them a lot older than the students who are a good deal younger and perhaps more able to help themselves than some of the older members of our society.
    Mr. Horamasked the Secretary of State for Education and Science what is the income level above which a university student's grant becomes less than 100 per cent.
    The Under-Secretary of State for Education and Science (Mr. Norman St. John-Stevas): For a student who is following a first degree or comparable course, and who is not treated as independent, a parental contribution towards maintenance is payable when the parent's annual income, after allowing certain deductions, is £1,100 or more.
    Mr. Horam: That is an absolutely scandalous figure. How can people on £1,100 a year, considering what they must cope with as regards other price rises, be expected to contribute towards a
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    student son or daughter? Is it not scandalous that many alert middle-class parents exploit the situation and do not begin making contributions until the income level of £2,500 or thereabouts while ordinary working-class families must begin at this appallingly low level?
    Mr. St. John-Stevas: The hon. Gentleman should bear in mind that £1,100 is a residual income figure which is reached after certain deductions have been allowed for dependent children, interest payments, insurance policy premiums and school fees. Therefore, the threshold is higher than he indicated. Nevertheless I agree that, as a result of inflation, parents are carrying a greater share of the total cost of student support than hitherto. However, as money incomes increase we can expect the parental contribution to increase, and there may not be much difference if we look at the contribution as a percentage of the parents' income. It is clear that we need to look carefully at the effect of inflation on the parental contribution scale and, as my right hon. Friend has said, she will shortly be reviewing the whole position.
    Mr. Wilkinson: I thank my hon. Friend for that indication of hope for the children of parents who have to make these contributions. May I particularly direct his attention to the position of married women students who are assessed on the same parental contribution basis as single students?
    Mr. St. John-Stevas: I am well aware of the anomalous position of certain categories of married women students—those who live at home with their husbands and are not subject to particular exemptions. As I have said from the Dispatch Box before, I am more than prepared to look at this position again when the review of the next triennium starts
    Mr. Freeson: Will the hon. Gentleman, when he is undertaking or continuing the review, take note of the fact that whereas owner-occupiers may apply to have their mortgage payments taken into account when establishing their income levels for purposes of grant, people who rent their accommodation are not allowed to do the same with their rent payments? Is not this grossly unfair and is it not about time that this unfairness was ended?
    Mr. St. John-Stevas: I have noted what the hon. Gentleman has said and I will

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    certainly take that point into full consideration.
    Mr. McCrindleasked the Secretary of State for Education and Science whether she will take steps to replace discretionary awards to students by local authorities by awards at a common level.
    Mr. Kilfedderasked the Secretary of State for Education and Science whether she will take steps to ensure that all awards paid to students in attendance at polytechnics are paid at a common level.
    Mrs. Thatcher: No, Sir, the courses covered by local education authority discretionary awards range from school level courses in local further education to degree courses involving foreign institutions and certain postgraduate courses mainly of a vocational nature. Courses in polytechnics may vary considerably from craft courses to courses of degree and postgraduate level. I agree that variations in practice among authorities, and variations in their rates of grant for similar courses are undesirable. My Department has drawn the attention of authorities to the need to reduce such variations.
    Mr. McCrindle: I imagine that my right hon. Friend's attention will have been drawn to a recent survey which showed that grants of the type to which the Question refers range from £110 to £445. She will be aware, particularly in the light of the reply she has just given, of the unsatisfactory nature of this wide disparity and the friction that this might tend to create between similar classes of students who simply happen to come from different local authority areas. Will my right hon. Friend consider reinforcing her request to local authorities to see whether she can eliminate some of the unfairness that this situation reflects?
    Mrs. Thatcher: I shall consider my hon. Friend's latter point. With regard to variations in grants, the reason for the variation is the great variation in courses and in students' needs. It is unlikely that we shall get exactly similar grants unless we have far fewer of them.
    Mr. Kilfedder: I am grateful for what my right hon. Friend has said. Does she not agree that the purpose of the Government's policy is to give equal status to
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    both sides of the binary system of higher education and that, therefore, there is no justification whatever for having a scholarship distinction between students at university and students attending polytechnics, because it introduces discrimination to put students who attend polytechnics at this sort of financial disadvantage?
    Mrs. Thatcher: Many degree level awards would be mandatory unless a person had already had one particular degree level award, in which case the local authority would have a discretion whether to give another. If it exercised that discretion at degree level, it would have to be at the same amount as a university award. But I agree with my hon. Friend that we wish the polytechnics to have equal status.
    Mr. Marks: Is it not largely from poor local authorities, in the sense of rateable value, that the low grants are coming, and does not this add to the handicaps of students who have fought all the other handicaps? Will the right hon. Lady establish minimum grants for these courses?
    Mrs. Thatcher: I cannot confirm what the hon. Gentleman has said. Sometimes I find that it is from the authorities with a very high proportion of the age group going for university or polytechnic degrees that we have more problems with discretionary grants, because they have already put a lot of their resources into the mandatory awards. So I do not think that the point raised by the hon. Gentleman would necessarily bear further examination.

    Nursery Education
    Mr. Thomas Coxasked the Secretary of State for Education and Science what discussions she has had with the Inner London Education Authority regarding her proposals for the development of nursery schools as outlined in her White Paper.
    Mrs. Thatcher: I have asked all local education authorities to submit by 18th May their proposals for building for nursery education in 1974–76. I have had no separate talks with ILEA or any other education authority.
    Mr. Cox: Is the right hon. Lady aware that a report will be submitted tomorrow

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    to the education authority at County Hall which is highly critical of her proposals? In view of that, and in view of the importance of nursery provision to London, is it not time that she sought a meeting, as a matter of urgency, and allowed ILEA to know how much money will be made available? Will she give the House and ILEA an assurance that the bias that she has shown in other aspects of London education in recent months—be it on the minor works programmes or on the London teachers' allowance—is not now to be extended to nursery provision?
    Mrs. Thatcher: If there has been any bias, it has been slightly in favour of the Inner London Education Authority on the primary school improvement programme and on the formula for calculating minor works. The authority has never had as much money for replacing its old primary schools as under this Government. The hon. Gentleman is asking rather much when he asks me to let it know how much it may have before I have received all the bids from other local authorities. That could hardly be a fair basis for proceeding.
    Mr. Haselhurst: Is my right hon. Friend giving guidance to local education authorities about the rôle that pre-school playgroups may play in the expansion of nursery education—guidance going beyond what is given in her White Paper?
    Mrs. Thatcher: We have given some guidance, I believe, in the circular. It will take some time before we can have a full nursery programme over the country as a whole, and the pre-school playgroups have a very important part to play, not only between now and then but also in the longer term because they deal with younger groups of children and are frequently open during the vacation, when the nursery schools are not. So we have given some guidance, and we are very keen that the work of these excellent groups should continue.
    Mr. Spearing: In her White Paper the right hon. Lady said that there was a possibility of nursery education being given some of the surplus space in primary schools. Can she assure us that this surplus will be defined by the teachers and the local education authority and not by her regulations about floor space, about which there is some difference of opinion?
    Mrs. Thatcher: What I can assure the hon. Gentleman is that, where there is space, it will be properly equipped for nursery classes to take place.
    Mr. Kenneth Lewis: Will my right hon. Friend bear in mind that some of us on this side are not anxious to overextend expenditure on nursery education but feel that it should be for special situations and not generally? The reason why we think this is that we believe that the general expenditure on education will not allow of too much expansion and that, for example, student grants can hardly be increased if we spend too much money on things like nursery education.
    Mrs. Thatcher: In nursery education, I believe, we get a lot of value from a comparatively small outlay of money. The reasons why I have embarked on it are strictly educational. I think that many parents would welcome the opportunity for their children to attend nursery schools part time, either morning or afternoon, before they have to go to primary school full time. I think that it is a very good idea at last to embark on a systematic programme.

    Adult Education
    Mr. Carterasked the Secretary of State for Education and Science what percentage of the education budget is now devoted to adult education compared to the figure in 1963.
    Mr. St. John-Stevas: This information is not available. Adult education is provided mainly in schools and colleges maintained by local education authorities primarily for other purposes, and the authorities do not apportion the cost of each such establishment between the different kinds of provision made within it.
    Mr. Carter: That is a very disappointing reply, bearing in mind—[Interruption.] The Minister laughs, but this is a very important subject. I am aware that there is an inquiry—
    Mr. Speaker: Order. The hon. Gentleman must ask a question.
    Mr. Carter: Is the Minister aware that an inquiry is at present being conducted? May I have an assurance from him that, if this inquiry finds that too small a percentage is being spent on adult education,

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    he and his right hon. Friend will give that report most urgent consideration? Does he agree that higher education should not simply be lavished on the young but that all age groups have a justified entitlement and that, furthermore, adult students can at times put rather more back into the economy and society than younger people who might have benefited from higher education?
    Mr. St. John-Stevas: I was not laughing at the hon. Member's remark; I was agreeing with him and thinking what a disappointing reply it was. The difficulty is that it is simply not possible to give other than a disappointing reply, because it is the local authorities which make the main provision for adult education. In doing so they use administrative, teaching and other resources, as well as premises, which are provided primarily for school and further education purposes. The cost of adult education is inextricably bound up with the cost of the main provision because of this shared use of resources.
    With regard to the second point, the Russell Committee has certainly made inquiries of local education authorities about the cost of providing adult education, but we must await the report to see what conclusions it has reached. The report has reached the Department, it is being printed and we hope to publish it as soon as possible. It is only after the report has been published and there has been full discussion of its recommendations that the hon. Gentleman would expect a firm decision to be taken.
    Mr. Marten: Can my hon Friend enlighten me? It would appear from his answer that there is a difference between adult education and the education of adults. Is that so?
    Mr. St. John-Stevas: Adult education is the education of adults: I am sure that my hon. Friend, being essentially a simple person, will understand that.
    Mr. Paget: Does the hon. Gentleman realise that his answer shows that this aspect of education is not being taken seriously'? Would he also agree that the best-educated people are mainly self-educated and that this is just the phase where education is at its most productive? Will the Minister take this subject a little more seriously?
    Mr. St. John-Stevas: I think I have taken it very seriously. I merely made a light passing reference to a question which I took was being asked in a light vein by my hon. Friend the Member for Banbury (Mr. Marten). I could not agree with the hon. and learned Gentleman's thesis about self-education in its entirety. Some self-educated people may indeed be well educated, but I could not possibly agree that the best education is always provided through self-education.
    As for the importance of adult education, I certainly agree with the hon. and learned Gentleman. As a Government we have shown what importance we attach to this by appointing this important committee to make a special investigation into the future of adult education.

    Deprived Areas
    Mr. Deakinsasked the Secretary of State for Education and Science if she is satisfied that sufficient additional resources are being made available to the education service in areas of great social deprivation.
    Mrs. Thatcher: A start has been made on the replacement of old primary schools in deprived areas and there has been an increase in the provision of nursery education under the urban programme. The continuing improvement in national staffing standards in schools, the further expansion of nursery education and the improvement of old secondary schools, all announced in the White Paper, and the continuation of the urban programme will all bring further benefits to deprived areas.
    Mr. Deakins: Is it not a fact that we are still only playing around with the problems of education and social deprivation, which are both linked? Will the Minister provide, for example, additional resources over and above those already in the urban aid programme for the next four years so that we can improve the pay of teachers in areas such as mine, in Walthamstow, where we have a very high turnover of young teachers and the effects of this are educationally damaging to children who are already suffering from social deprivation?
    Mrs. Thatcher: Regarding the education contribution, we are doing a lot more than tinkering with the problem. We are making a start on nursery education. We have made a big start on primary education. We have raised the school leaving

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    age. We are starting on improving the old buildings in secondary schools. We are switching our urban programme from nursery education to other sectors.
    Concerning teachers in deprived areas, as the hon. Member will know there is a special increase for teachers in education priority area schools, which at the beginning certainly helped to keep more teachers in those schools for a longer period.
    Mr. Wilkinson: I congratulate my right hon. Friend on the good work she is doing in EPA areas, particularly in the West Riding, which I know especially well. May I also bring to her attention the fact that more needs to be done for similar areas outside the West Riding for the provision of special language tuition facilities for immigrant children?
    Mrs. Thatcher: I am grateful to my hon. Friend. I know that the West Riding has had a particularly big primary school improvement programme because it had a lot of old schools. There has been some active research there, too, on how best to bring help to deprived areas.
    Mr. Armstrong: Is not the real need in EPAs to persuade dedicated and able teachers to stay on and to follow their careers in those areas? Apart from that, the replacement of old buildings is nothing like enough. We need more ancillary helpers, a better staffing ratio and so on. Would the right hon. Lady consider doing a project in the north of England so that we can see exactly what is required and can direct the resources there? This is a very urgent matter indeed.
    Mrs. Thatcher: There have been one or two projects in the north of England, which are referred to in Dr. Halsey's report. I have the impression that, certainly in primary schools, a number of teachers are making a point of staying longer in those schools. But we still have problems in dealing with secondary schools. Altogether, the contribution of the education service in this area is very considerable indeed.
    Miss Lestor: I accept what the right hon. Lady has said about some of the moves that have been made in EPAs and I welcome them. Does she not agree
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    with what the Halsey report said, as was pointed out by my hon. Friend the Member for Walthamstow, West (Mr. Deakins), that we are still only tinkering about with these priority areas, that what is needed is a massive expansion of resources directed towards those areas and that unless we embark upon a policy of positive discrimination we shall not meet the needs of children in socially deprived areas who are rapidly losing out on any expansion in education that is taking place?
    Mrs. Thatcher: I understand what the hon. Lady is saying, but if she thinks of all the resources that have been deployed together—new nursery provision into deprived areas especially, primary provision into deprived areas especially because they have a lot of old schools, the raising of the school leaving age which applies particularly in deprived areas, and more secondary school improvements—she will realise that a quite massive increase has been going into those areas. But we cannot do it alone in the education service.

    Secondary Reorganisation (Harrow)
    Mr. Dykesasked the Secretary of State for Education and Science whether she will now announce her decision regarding Harrow Council's submissions on secondary reorganisation.
    Mr. St. John-Stevas: This is a very complex scheme involving 72 schools Furthermore, some 34,000 objections have been received. My right hon. Friend hopes to announce her decision by Easter.
    Mr. Dykes: I appreciate that reply and the setting of a target date for the announcement. Does not my hon. Friend agree that the continued delay, which is somewhat longer than many people were expecting, has caused grave difficulties for the boroughs in reaching decisions because much forward planning needs to be done for the autumn term?
    Mr. St. John-Stevas: I cannot accept that there have been unjustified delays in this case. The detailed consideration of these very complex proposals required additional information from the local education authority. The Department's officers also visited the authority's area.

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    We had to consider the 34,000 objections. My hon. Friend will agree that the most important thing is not so much a swift decision as a right decision in this case.

    Resources (Allocation)
    Mr. Meacherasked the Secretary of State for Education and Science if she is satisfied with the results so far achieved by policies of positive discrimination in allocating resources in education.
    Mrs. Thatcher: A great deal still remains to be done but a useful start has been made. There are a number of research projects to devise and evaluate new approaches.
    Mr. Meacher: Is the Minister aware that positive discrimination programmes were seen originally as massively expanding in the early 1970s in order to produce greater equality of opportunity? Why has the right hon. Lady, therefore, kept down such expenditure to a pathetically minuscule 1 per cent. or so of the educational budget, which cannot possibly seriously influence educational standards in the deprived areas and at present offers no more than a mere political shop window facade of concern about these areas?
    Mrs. Thatcher: That is nonsense. What is involved in the raising of the school leaving age cannot be called petty cash in either capital or revenue expenditure. We are discussing £50 million a year on improved primary schools. That cannot be called petty cash. Nor can the nursery school programme be called petty cash. None of them was able to be undertaken by the hon. Gentleman's own Government.
    Mr. Hattersley: Has the right hon. Lady thought of using her Department's resources to establish objective criteria for education priority areas to ensure that resources are allocated to areas with a general national need rather than leaving it in part to the decision of local authorities?
    Mrs. Thatcher: The criteria are those for the urban programme. But they would inevitably be comparatively crude criteria, and for our nursery programme we must leave some element to local education authorities.

    South-East England (Teachers' Allowance)
    Mr. Madelasked the Secretary of State for Education and Science whether she will consider introducing a South-East teacher's allowance, similar to the London allowance, in those counties around London absorbing London overspill; and if she will make a statement.
    Mrs. Thatcher: Such an allowance would be part of pay, and therefore a matter in the first place for the Burnham Committee. Separate scales for service in different parts of the country were abandoned by the Burnham Committee in 1945 and since then only a London allowance has been paid.
    Mr. Madel: Will my right hon. Friend reconsider this matter since the cost of living in these counties is now at London levels? Could not the Pay Board be asked to look into the London teachers' allowance so that teachers in the South-East immediately outside London could have a better deal when stage 3 comes into effect?
    Mrs. Thatcher: I agree with my hon. Friend that problems like increasing house prices have affected areas way beyond the London area. This factor has also entered into the other side of the balance sheet and reduced the differential between those areas and the London area. But teachers would be at liberty to ask for a case to be put to the Pay Board under stage 3 if they felt that anomalies had arisen in the period of stage 1 and stage 2. My hon. Friend's suggestion would, however, have wider repercussions than for teachers.
    Mr. Atkinson: The right hon. Lady has just made a very important statement. She has changed the whole basis of the method of wage bargaining for the teaching profession. Is she now saying that the London allowance is linked in the sense that it is part of the wage structure and therefore can be referred to for some adjustment during the next period of the wage arrangements? How will this affect the Burnham Committee? Is the right hon. Lady saying that the Burnham Committee is to become redundant?
    Mrs. Thatcher: The hon. Gentleman did not listen to my answer. Such an

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    allowance would be part of pay and therefore a matter in the first instance for the Burnham Committee. That stands. I went on to say that if teachers wished to ask to have a case put to the Pay Board in stage 3 they would be at liberty to do so. But in stage 2 it would be covered by the limits already announced.

    Brent Teachers' Association
    Mr. Pavittasked the Secretary of State for Education and Science what answer she has sent to the Brent Teachers' Association on its representations concerning the cost of housing accommodation in the London borough of Brent, and London weighting.
    Mr. St. John-Stevas: The Department has replied that on 3rd November last the teachers rejected the offer of £133; since then any increase has been ruled out by the standstill and must now count against the stage 2 pay limit; housing costs are no doubt one reason for the high rate of turnover of teaching staff, but this is a problem not confined to Brent or, indeed, to London.
    Mr. Pavitt: Is the hon. Gentleman aware that in my constituency the cost of a three-bedroom flat is £16,000, that rented accommodation does not exist and that the price of furnished accommodation is astronomical? The hon. Gentleman has referred to turnover. The turnover of teachers in the last two years makes education in one of the finest education authorities in the country virtually impossible. Will the hon. Gentleman budge from the rigid freeze position that he has adopted in London and get our schools open again?
    Mr. St. John-Stevas: I am sympathetic to the housing problems facing teachers in the London area. As the hon. Gentleman knows, there are powers to get mortgages for teachers through local authorities and for local authorities to give teachers priority on their housing lists and even to build and acquire houses for teachers. I hope that local authorities will use their powers much more widely.
    Mr. Spearing: Is the hon. Gentleman aware that the management side of the Burnham Panel has said for its part that the London allowance should not be part of any national wage award under the
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    £1 plus 4 per cent. formula? Does his right hon. Friend the Secretary of State agree with that interpretation? If not, will he and the right hon. Lady give their views about the matter?
    Mr. St. John-Stevas: The London allowance is taxable, superannuable and negotiated in the same forum as salaries and therefore has to be treated as pay. It is not a matter of opinion. It is a matter of fact.

    INDUSTRIAL RELATIONS (MINISTER'S SPEECH)
    Mr. Norman Lamontasked the Prime Minister whether the public speech of the Home Secretary at Croydon on 26th February on industrial relations represents Government policy.
    Sir Gilbert Longdenasked the Prime Minister whether the public speech of the Home Secretary at Croydon about industrial relations on Monday 26th February represents Government policy.
    The Prime Minister (Mr. Edward Heath): Yes, Sir.
    Mr. Lamont: Referring to the Price and Pay Code, may I ask whether there is not a point to be taken into account in the offer to the gas workers, namely, that under the code the trade unions are still able to negotiate increases in occupational and industrial pensions? Is not this one way that the trade unions can benefit their members and the elderly and act within the framework of the Government's policy?
    The Prime Minister: Yes, Sir, and I hope that it will lead to an improvement in the pensions situation.
    Sir Gilbert Longden: Referring to the wholly unjustified criticism that the Government's taxation policy has helped only the better off, is it not true that 80 per cent. of the vast personal reductions in taxation made by this Government since 1970 have gone to people who get less than one-and-a-half times the national average wage? Can it be discovered how much more than the present 90 per cent. of the highest incomes the Opposition consider should be taken by the Chancellor of the Exchequer?
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer dealt with this matter in some detail when he wound up the debate last night as well as in his presentation of the Budget when he said that even so, after these arrangements, the highest rate of taxation would still be 75 per cent. for earned income and 90 per cent. for investment income, and there was little opposition from the Opposition.
    Mr. James Lamond: In that speech the right hon. Gentleman admitted that there must be unfairness in a wage freeze and he went on to outline how the Government were prepared to accommodate the manufacturers who were feeling the effect of the freeze on their profits, but maintained that the Government would go on stubbornly opposing any trade union which asked for fairness of treatment. How does the Prime Minister expect trade unionists to accept this policy if he shows such unfairness towards them?
    The Prime Minister: Exactly the reverse is the case. My right hon. Friend the Home Secretary pointed out that when a standstill is imposed unfairness may be caused, and the objective of the Pay Board, and especially of the deputy chairman responsible, is to ensure that unfairnesses are tackled in stage 3.
    Mr. Paget: Does not the Prime Minister realise that during his regime the rich have got richer quicker than at any time in our history and that a very large number of relatively rich men—and I include myself—have seen their fortunes more than doubled in two years?
    The Prime Minister: The hon. and learned Gentleman is thinking of his own party's record.

    UNEMPLOYED PERSONS (BENEFIT)
    Mr. Wyn Robertsasked the Prime Minister if he is satisfied with the co-ordination between the Department of Employment and the Department of Health and Social Security regarding benefits to the unemployed.
    The Prime Minister: Yes, Sir. There is close co-operation between the two Departments at both local office and headquarters levels.
    Mr. Roberts: Does my right hon. Friend agree that the recent heartening downward trend in unemployment and the recent upward trend in unfilled vacancies show that we are rapidly approaching the condition of full employment? Does not my right hon. Friend think that this heartening trend could be encouraged further by the discouragement of strike action possibly by the non-payment of strike benefits to strikers, as I believe is the case in most EEC countries?
    The Prime Minister: I agree with my hon. Friend that it is a heartening movement in unemployment to see a decrease of more than 200,000 in the past year. But my hon. Friend referred to strike pay. That is a matter for the unions concerned. If my hon. Friend was thinking of supplementary benefits and the European Community, very broadly none of the EEC countries which we have surveyed provides for the payment of social assistance to strikers' families comparable to that paid here.
    Mr. Frank Allaun: What does the Prime Minister consider to be a reasonable level of unemployment? Is he aware that many of us think that it should not be more than 250,000, which was the figure up to July 1966 when the first economy cuts were introduced?
    The Prime Minister: The House will be interested to know that for four years the hon. Gentleman's own Government broke his rule.

    SECRETARY OF STATE FOR NORTHERN IRELAND (SPEECH)
    Mr. Adleyasked the Prime Minister whether the public speech of the Secretary of State for Northern Ireland at Penrith on Sunday 25th February on militancy represents Government policy.
    Mr. Peter Archerasked the Prime Minister, if the public speech of the Secretary of State for Northern Ireland at Penrith on trade unions on 25th February 1973 represents the policy of Her Majesty's Government.
    Mr. Carterasked the Prime Minister if the public speech made by the Secretary of State for Northern Ireland on Sunday 25th February in Penrith on

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    prices and incomes policy represents Government policy.
    Mr. Clinton Davisasked the Prime Minister if the public speech of the Secretary of State for Northern Ireland made to Conservative Party workers at Cumberland on 25th February 1973 on the question of prices and incomes represented the policy of the Government.
    Mr. Skinnerasked the Prime Minister if the public speech made by the Secretary of State for Northern Ireland at Penrith on 25th February on trade unions and terrorists represents Government policy.
    Mr. Duffyasked the Prime Minister if the public speech on the Government's pay policy by the Secretary of State for Northern Ireland at Cumberland on 25th February represents Government policy.
    Mr. William Hamiltonasked the Prime Minister if the public speech made by the Secretary of State for Northern Ireland at Penrith on 25th February on the activities of trade unions represented the policy of Her Majesty's Government.
    Mr. Atkinsonasked the Prime Minister if the public speech made by the Secretary of State for Northern Ireland on Sunday 25th February 1973 on industrial relations represents the policy of Her Majesty's Government.
    Mr. Eadieasked the Prime Minister if the public speech of the Secretary of State for Northern Ireland on industrial relations at Penrith on Sunday 25th February represents the policy of the Government.
    Mr. Dalyellasked the Prime Minister if the public speech by the Secretary of State for Northern Ireland at Penrith on 25th February on industrial relations represents the policy of the Government.
    The Prime Minister: Yes, Sir.
    Mr. Speaker: Order. I must tell the House that I propose to act upon the advice given me in paragraph 25 of the Report of the Select Committee on Questions, with regard to this kind of situation. Mr. Adley.
    Mr. Adley: In his speech my right hon. Friend the Secretary of State referred to the actions of militant minorities. Is it not clear that on the railways, taking all the trade unions into account—the NUR and the TSSA and not just ASLEF—there is a clear majority in favour of staying at work and that the guerrilla warfare presently being perpetrated on people in and around the London area by ASLEF does more damage to the relationship between the railways and their customers than anything that has occurred in the past 50 years?
    The Prime Minister: Industrial action everywhere does damage to the relationship between an industry and its customers. This is one of the deplorable aspects of it. I hope that the railway unions will be able to sort out their differences.
    Mr. Archer: Is the Prime Minister aware that there can be a solution to our industrial problems only when the unions are assured that restraint on their part will not be reflected in equivalent benefits to management and shareholders? Is he aware, further, that speeches of this kind by Ministers whose chief responsibilities lie elsewhere will result in their being taken less seriously in other contexts?
    The Prime Minister: Anyone who has studied the code on prices will be aware of the limitations laid on industry by the present policy. What industry has said most loudly is that it must have greater facilities for increased profitability in order to allow for investment. My right hon. Friend the Secretary of State said that the duty of the Government was to protect those in society who were not equipped to protect themselves, whether it be from intimidation in Northern Ireland or from inflation in the United Kingdom. The Government must endeavour to protect all against the dangers facing society.
    Mr. Carter: Does the Prime Minister agree that, whatever the context those remarks were placed in, they nevertheless had the effect of inflaming opinion in the country? Will the right hon. Gentleman and his Ministers now go about their job, instead of bashing people on their heads and inflaming people, of creating, a climate in which both sides of industry can resolve their disputes? Does the

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    Prime Minister agree that the remarks of the Secretary of State for Northern Ireland were in any way connected with his view that we should in the lifetime of this Parliament build one nation?
    The Prime Minister: I see no evidence that my right hon. Friend's speech has inflamed opinion in this country. The House knows my right hon. Friend well enough to recognise that he has spent a very dangerous year of his life doing quite the reverse in Northern Ireland. It is only those who have misread the speech who are trying to make political capital out of it.
    Mr. Stratton Mills: Has not there been an unduly narrow interpretation of the speech? Is my right hon. Friend the Prime Minister aware of the very close relationship between the Secretary of State and the trade union movement in Northern Ireland? Far from bashing trade unionism, my right hon. Friend the Secretary of State has readily paid tribute to the high sense of responsibility of trade unionists.
    The Prime Minister: My hon. Friend is quite right. I have already, in this House and in Belfast, expressed my own appreciation of the wise support which the trade union movement there has given my right hon. Friend the Secretary of State.
    Mr. Davis: Whatever gloss the Prime Minister seeks to put on that speech, does he not know that wide sections of the British Press, including Tory newspapers, consider those remarks to be grossly provocative and irresponsible? Does he not realise that if that interpretation was put on that speech by his own supporting newspapers, the trade unions have also formed the view that it was a grossly provocative attack on trade unionists to equate them with murderous lawbreakers in Ulster? Will he give a direction to his Ministers that this sort of speech will not be repeated?
    The Prime Minister: My right hon. Friend did no such thing, and if the hon. Gentleman looks at the speech he will see that the part which I quoted emphasises the duty of Government to protect those in society who are not equipped to protect themselves. That was the theme of my right hon. Friend's speech
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    and I am glad that much of the Press supported it.
    Mr. Harold Wilson: In view of the Prime Minister's fair tribute to the trade unionists in Northern Ireland, is it not regrettable that the Secretary of State—no doubt he regrets it now—should have drawn an analogy between murderers in Northern Ireland and trade unionists generally? Is there any group in Northern Ireland which has done more than trade unionists to bring about a solution by reconciliation, and is it right that that speech could be read as an attempt to kick them in the teeth as well as trade unionists on this side of the Irish Channel?
    The Prime Minister: I do not believe that my right hon. Friend's speech could be read in that way. He was not comparing trade unionists to terrorists. My right hon. Friend was comparing the responsibility of Government in both instances, first to protect people throughout the United Kingdom from inflation and to do what is necessary, and secondly his particular responsibilities in protecting people as far as he possibly could from terrorism in Northern Ireland.

    PRICE AND PAY CODE
    Mr. Meacherasked the Prime Minister what recent talks he has had with the TUC and CBI regarding the Price and Pay Code.
    The Prime Minister: I have not yet met either the TUC or CBI to discuss the consultative document on the Price and Pay Code. I expect to have a meeting with the CBI on 15th March.
    Mr. Meacher: Since The Grocer shows that food prices have risen since the freeze by an annual rate of 28 per cent.—[Hon. MEMBERS: "Oh."] That is the figure given in The Grocer magazine. Why was it that the Government pointedly refused to increase family allowances in the Budget, since it is clear that the Price and Pay Code is largely an instrument of wage restraint, and how can the Government seriously expect co-operation when they stand idly by as low wage earners are made poorer?
    The Prime Minister: I do not accept the hon. Gentleman's figures—indeed, as

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    yet nobody has ever accepted any figures from the hon. Gentleman.
    Mr. Meacher: They come from The Grocer.
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer dealt with family allowances last night and the hon. Member for Oldham, West (Mr. Meacher), who pretends to study these matters, should know that increasing family allowances is not a solution to the question of the low paid.
    Mr. Tom King: When my right hon. Friend meets the CBI, will he pay particular attention to the genuine representations on the problems of investment—namely, that while the Government recognise the need for investment, it does not seem possible under the present criteria for the present encouraging increase in investment to continue?
    The Prime Minister: Yes, Sir. The purpose of the consultations is to take account of representations made by the CBI and other bodies. At the same time, since emphasis is placed on the need for facilities for investment, one must take into account the other factors, such as improvements in productivity, which come from an expanding economy and much greater turnover.
    Mr. Harold Wilson: I deplore the Prime Minister's offensive reference to my hon. Friend the Member for Oldham, West (Mr. Meacher). Will he now answer a question which I have put to him twice before and which I also asked the Chancellor of the Exchequer in the Budget debate? Will he now tackle the question of leapfrogging interest rates in the City due to the right hon. Gentleman's policies? Will he agree that the building societies are now almost forced to put up lending rates to the highest level in history, whatever arm-twisting may be carried out by Ministers between now and Friday? This is due not to Russian harvests or to trade unionists in building societies or any other of the right hon. Gentleman's alibis, but to the Government's own policies which allow a free market to operate in the City.
    The Prime Minister: I do not accept the right hon. Gentleman's usual exhibition of his opposition to the City and all that it does. On interest rates we are
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    doing the same as the right hon. Gentleman did, which is to keep the freedom to change interest rates to deal with the money supply and the economy.
    Mr. Wilson: Is the right hon. Gentleman aware that there is as much criticism of this policy in the City as anywhere else? Is he also aware that he is not following the old tradition of using Bank Rate in monetary management? There is no control in the City now and the Government cannot influence things unless they change their policy of having a free market in the City—a policy under which base rates and inter-bank lending rates leapfrog over one another and destroy liquidity in the building societies. Has not the Prime Minister understood that yet?
    The Prime Minister: I do not know where the right hon. Gentleman gets his views from the City because I do not know where he lunches and dines. [HON. MEMBERS: "Cheap".] From the point of view of monetary control, there is of course monetary control by the Treasury and by the Bank.
    Sir Harmar Nicholls: To return to the Question, when eventually my right hon. Friend meets the trade unions can he impress on them that the traditional British way of settling an honest difference of opinion is to accept the decision of an arbitrator or umpire? Could he not impress on them the merit of following such a course, and does he not agree that the greatest slander circulating in the country is the Opposition's suggestion that we do not have in this nation men who are qualified to be umpires in such matters as these?
    The Prime Minister: In the context of the policy laid down by Parliament, whether in the Act or the code, arbitration and conciliation are available. I agree with my hon. Friend's remarks. I have already emphasised that all the means of conciliation available in the Department of Employment are open to trade unions, but it must be in the context of what Parliament approves either in the Act or in the code.
    Mr. Atkinson: Does the Prime Minister agree that the basis of the Government's policy at present is to reduce the share that goes to wage earners? Does he accept that most of

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    the disputes now taking place are in relation to 1972 wage arrangements? Will he also accept that the cost of living, as reflected in retail prices, rose by 8 per cent. during 1972? If it is necessary to add a further 4 per cent. to that figure to allow for the difference in take-home pay and gross earnings, does the right hon. Gentleman recognise that the minimum now needed by a wage earner to keep pace with the rise in prices is 12 per cent.? If the Government are allowing only £1 plus 4 per cent., does not this mean that wage earners will receive a smaller share?
    The Prime Minister: No, Sir. It is not the Government's policy to reduce the amount taken as a share of GNP by the wage earner. If we look back to 1972, a year to which the hon. Gentleman refers, we see that there was an increase of 16 per cent. in earnings and 7½ per cent. in prices. It is difficult to put any credence on the figure produced by the hon. Gentleman. In the tripartite talks it was precisely the point of how one could deal with the share going to investment, to wage earners and to others concerned—management and so on—which we asked the trade unions to discuss with us and to reach agreement with us. It is unfortunate that we failed.

EUROPEAN COMMUNITY (SECONDARY LEGISLATION)
The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): The thanks of the House are due to my hon. and learned Friend, the Member for Northwich (Sir J. Foster) and the members of his Select Committee on European Secondary Legislation for the speed with which they have been able to make the interim report. The Government agree broadly with the proposals made by the committee.
The first recommendation relates to proposals for regulations, directives and relevant decisions by the Council of Ministers, and is that the relevant documents should be followed by explanatory memoranda. The Government accept that a memorandum of the kind illustrated in the report should normally be produced for each of these documents by the Department primarily responsible. They may amount to about 300 a year.
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The committee also asked for a monthly statement to accompany a forecast of the agenda of the Council of Ministers. Since items are sometimes inscribed on the agenda at short notice, and some are treated as confidential, in the circumstances the Government belive that the most appropriate way of meeting the committee's objective would be for the Government to lodge each month in the Vote Office their estimate of the subject headings likely to come up for discussion in that month. This would, in accordance with the practice of the House, enable Questions to be put down or debates to be arranged.
The committee also recommends that regular statements should be made after each meeting of the Council of Ministers. Taken literally this might give rise to an excess of statements, many of them on matters that do not warrant the time of the House at 3.30 p.m. As in the past, the appropriate Minister will make a statement to the House whenever the substance of the meeting warrants it.
Mr. Michael Foot: The Leader of the House will appreciate that in presenting this statement he is dealing with matters which Labour Members argued during the passage of the European Communities Bill should have been dealt with in that legislation and settled before we ever entered the Common Market. Does this not make it all the more regrettable that he and the Government have not been ready to accept completely the unanimous recommendation made by the Select Committee in its interim report? Will he take account of the fact that on the second recommendation there may be all the difference in the world between a statement deposited in the Vote Office and a statement which a Minister is required to make to the House of Commons and on which he can be immediately questioned and which can lead to further investigation?
When the right hon. Gentleman suggests that there may be an excess of statements, will he bear in mind that there has been no excess of statements, for example, on the subject of the dismantling of the agricultural deficiency payments system, with all the consequences for increases in food prices which have been going on for some weeks and which will continue for some weeks ahead?

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It is difficult for the House of Commons to discover from the present arrangements whether these increases in food prices are due to unilateral action by the Government, to decisions in Brussels, or to a combination of the two—[Interruption.] The Prime Minister did not have the advantage of serving on that Select Committee and is as ignorant on these matters as he was during the passage of the European Communities Bill. But since I believe that the Leader of the House has applied his mind to these matters, and since the Select Committee recommended that there should be statements, in view of the serious differences which exist over this matter would not the proper way to settle it be by having an early debate on this subject so that we may ascertain the view of the House of Commons?
Mr. Prior: If I may answer the hon. Gentleman's last point first, namely whether there should be an early debate, I explained in reply to business questions on Thursday that I did not see an early opportunity for a debate on this matter. I thought that it was for the convenience of the House, and that it was being courteous to the committee—a committee which has worked very quickly—that the Government should make known their views as soon as possible. Those views broadly conform to the Committee's proposals.
We do not agree with the hon. Member that a ministerial statement should be made on every instrument and regulation, because there are at least 300 draft regulations every year. I do not believe that it would be in the interests of hon. Members in all parts of the House for such statements to be made. On the other hand, explanatory memoranda will be available in the Vote Office setting out all the details required in terms of the "dummy" written statement to which reference was made by the Select Committee.
It has never been the wish of the House that we should have too many ministerial statements on matters that are not of great significance to the House, and I would have thought that the arrangements which have operated over the past three months have been satisfactory to hon. Members in all parts of the House. [HON. MEMBERS: "No."] When the hon. Gentleman suggests that we should have
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statements to see whether it is the effect of our joining the Community which has pushed up food prices or whether it is the effect of our own policies, the answer might prove to be that it was neither of those reasons but due to rising world prices.
Mr. Foot: The question of world prices can be debated at any time but what the House has the right to discover concerns the unanimous recommendation of the Select Committee. The Leader of the House has apparently misconstrued what the Select Committee recommended about the monthly statement. It is not suggested that there should be a statement on every regulation. The committee says nothing of the sort. The right hon. Gentleman should have studied that aspect of the matter before committing himself.
Surely the right hon. Gentleman understands that we are considering a matter which concerns the power that this House can still retain over decisions made by legislative bodies outside this country—a very important question on which the committee has made a unanimous recommendation. When the Government differ from such a Select Committee on such a matter, while I do not suggest that the Government or the House must accept the recommendation of any Select Committee, at least the House has a right to debate the issue. Surely the right hon. Gentleman is asking for a great deal of trouble if he says that he will not allow a debate on a matter of this importance.
Mr. Prior: I have not said that I will not allow a debate on a matter of this importance but the hon. Member has not yet explained where the proposals put forward by the Government in my statement this afternoon differ so markedly from the report of the Select Committee.
Sir J. Foster: I thank my right hon. Friend for his thanks to the committee. I am sure that he realises that this is only an interim report. I am sure that the Select Committee will wish to see how the procedure proposed by the Government works. It is a useful addition to the debate which is going on between the two Front Benches about the nature and number of statements which there should be. Considerable time will be taken up as yet in taking evidence before the committee can make

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any final report, but I do not think that the result of our report is to require a statement on every regulation. The statements concern purely the agenda of the Council of Ministers. I suggest to the hon. Member for Ebbw Vale (Mr. Michael Foot) that it might be that a lesser number of statements would comply with the requirements of business. Before the hon. Member makes his criticism I suggest that he sees how it works. It might be a successful procedure.
Mr. Prior: I am grateful for the comments by my hon. and learned Friend the Member for Northwich and I am also extremely grateful for the work that he put into the report. Of course, I confirm what he said—that this is an interim report—and I have no doubt that, in the light of the recommendations which the Government have accepted and in the light of the further consideration of the matter by the Select Committee, we shall have to return to the subject and have a debate. We had better wait and have a further report from the Select Committee. [HON. MEMBERS: "No."]
My reply to the hon. Member for Ebbw Vale dealt with ministerial responsibility for statements. There are approximately 300 regulations in the course of a year. The Minister and the Department responsible for each of these regulations will place in the Vote Office an explanatory memorandum along the lines of the "dummy" written statement. That will give the House a great deal of the information it requires. In addition, there will be a monthly agenda in the Vote Office of those items which it is considered are likely to be raised during the following month either by the Commission or in the Council of Ministers. Again, that will provide the House with an opportunity of seeing those items which are coming forward and will give an opportunity to debate them or to ask Questions in the usual way.
Mr. Milne: If, as the right hon. Gentleman suggests, there is to be an excess of statements, what control will the House have over what these statements will be about? Shall we be able to press a Minister to give us a statement on a particular matter? Will the Leader of the House give us a guarantee that these
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statements will not be slipped through under the guise of Written Answers, as was done recently by the Minister of Agriculture, Fisheries and Food?
Mr. Prior: We are considering two types of statements. We are considering statements which are made by a Minister and his Department on a particular regulation which will be placed in the Vote Office. We are also considering oral statements which are, if necessary, made to the House consequent upon a meeting of the Council of Ministers in Brussels.
On the latter point, we have to consider how much time of the House should be taken up by this sort of statement. We felt that the Select Committee went too far in suggesting that after all meetings of the Council of Ministers there should be statements. I do not believe that that was the desire of the Select Committee, nor would it meet the convenience of the House. In the interests of the House, we have to consider what statements should he made.
Mr. Maude: Is my right hon. Friend aware that the Select Committee never envisaged that there should be statements on every conceivable regulation? Is he also aware that the recommendations of the Select Committee in its interim report are quite circumscribed? They are, first, that the Chancellor of the Duchy should make a monthly statement in which he gives a kind of agenda for what is about to arise so that the House may know what is happening; secondly, that the Chancellor of the Duchy or a particular Minister should make a regular report to the House on the progress of negotiations, and that need only be, I suggest, once a month, as the Secretary of State for the Environment did during his negotiations; finally, that the Minister who is engaged in negotiations on Community institutions should report regularly to the House of Commons if the negotiations are of sufficient importance. Surely this rules out any possibility that the practice could he abused by innumerable statements on minor questions. Will my right hon. Friend say quite clearly that he accepts these limited recommendations?
Mr. Prior: Of course I accept those limited proposals, which have been the practice up to now and from which there is no intention to depart. Whenever there is an important meeting of the Council of

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Ministers attended by the Chancellor of the Duchy, the Minister of Agriculture, the Foreign Secretary or, as sometimes happens, the Chancellor of the Exchequer, a statement should be made. All I am concerned with, as I think is the House, is that it should not become the general rule that statements are made on minor issues, but I accept what my hon. Friend said.
Mr. Shore: The Leader of the House appears to be misunderstanding the issue, perhaps deliberately, although I hope not. What the Select Committee asked for was that there should be a regular procedure whereby we could question Ministers about what goes on in Europe both before the Council of Ministers meets and afterwards. The matter should not be left as it has been in the past, most unsatisfactorily in respect of individual wishes and, at times, the not altogether understandable decisions of Ministers whether they wished to make a statement. That is the least the House can do to begin to take a grip on what is happening in its name in Brussels.
Mr. Prior: The other point I wanted to make was that each month, if possible at least a week in advance of the beginning of the month, an agenda should he placed in the Vote Office showing what is then expected to happen in the various meetings of the Council of Ministers during the following month. Of course, there is absolutely no reason why a Minister—the Chancellor of the Duchy, for example—should not make a statement each month setting out what is to happen. But it may be for the convenience of the House if other Ministers also make statements.
Mr. Marten: Is my right hon. Friend aware that it will probably be about three or four months before the final report of this committee comes before the House and that in the meantime much very important draft legislation is sculling around in Brussels? What we want is to have debates on those matters in this House—and anywhere else where decisions can be taken in this House—as to the attitude which our Ministers should take towards those draft directives or regulations. Can my right hon. Friend address himself to this important matter? Time is going by and nothing is being done.
Mr. Prior: The sooner the ad hoc committee comes to a decision on this, the better it will be for the House as a whole. But in the meanwhile we should find an opportunity for debating draft regulations and draft instruments and I am prepared to consult my hon. Friends and others to see how best that can be achieved.
Mr. Fry: Is the Leader of the House aware that an important point arises here concerning decisions arrived at by the Council of Ministers in relation to the way in which these matters will be presented to the House? Will he say, if the House discusses these matters in decision making, what powers reside in the House to halt the operation of, or completely to rescind, decisions arrived at by the Council of Ministers?
Mr. Prior: The hon. Gentleman will be aware of the European Communities Act which we passed in the last Session. The purpose of the Select Committee's discussion and proposals is to give an opportunity to the House to discuss regulations and directives in draft before the decisions are taken. The House also wanted to have notice of the regulations or directives in draft and to consider what were the policy implications in which we were involved. This is the purpose of the statement which I have made today. The document will be made available in the Vote Office.
Miss Quennell: Would my right hon. Friend define to the House what the minor matters would be on which he would consider it not worth while for the House to hear a statement from the Government?
Hon. Members: Beef prices.
Mr. Prior: As there have never been any directives or regulations on beef prices, I do not think that that point would arise. One has to take a judgment every day of the week on which matters are of sufficient importance for the House to have a statement on them and which should not be the subject of a statement. A day does not pass when Ministers fail to put forward proposals for statements to the House, and it is up to the Leader of the House and other Ministers to decide whether a statement should be

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given the time of the House on any afternoon.
Mr. Jay: After the Minister's statement, apparently referring only to decisions on regulations and directives of the Council of Ministers, are we at least to have similar machinery for decisions and regulations of the Commission, which are much more numerous and have equal legislative force in this country?
Mr. Prior: There are about 3,000 commission regulations in the course of a year. The average length of time for which they are in operation is nine days. They are very similar to the enormous number of statutory instruments which pass through this House, such as changes in minimum price for grain and so on. Over 95 per cent. of these particular regulations refer to matters arising out of the Common Agricultural Policy. Again, the House must take a decision on how it would like these to be dealt with, but I would have thought that the House would become incredibly bored at having to deal with all 3,000 of these very mundane matters each year.
Mr. Kenneth Lewis: Is my right hon. Friend aware that many of us, while hoping, of course, that he will get a balance on this, do not wish that the House should spend its time constantly listening to statements from Europe and having constant discussions on these, which have to take their turn within the business of the House? Secondly, is he aware that some of us find it quite extraordinary that the Labour Party should be pressing for constant discussion on Europe when it will not even send Members of Parliament to the European Parliament?
Mr. Prior: Certainly, if the Labour Party sent Members to the European Parliament it would at least have a better opportunity of knowing what was coming forward in the way of draft instruments and draft directives. What my hon. Friend said in the first part of his question is true. Over a period of time, we have to try to find which matters are of great interest to Members of Parliament and should be discussed in this House and which should be taken perhaps by some other form of parliamentary committee which can meet and sift
1124
these instruments. This is something to which the committee, I hope and suspect, is turning its attention and, the sooner it gives advice to the House, the better.
Mr. Foot: Will the right hon. Gentleman accept that we on this side of the House, and I believe many in other parts of the House as well, now believe that the only way we can clear up the confusion, to which his statement has added, is by having a debate? That is the only proper way to do it. For example, in his last reply he said, I am sure inadvertently, that those who attend the European Assembly might be able to find out what are the draft proposals earlier than those who happen to be Members elected to the British House of Commons. I am sure the right hon. Gentleman did not mean that, because the whole point of his Select Committee is to ensure that the British House of Commons has the information at least as soon as anybody else. I am sure he would wish to withdraw that statement.
May I ask him a further question? Pending the debate, to which I am sure he will be eager to agree now that representations have been made on so many sides, will he give an undertaking that the Chancellor of the Duchy of Lancaster, who is the Minister responsible, will make no statement of policy on any of these matters to the unelected European Assembly which is withheld from the elected British House of Commons?
Mr. Prior: That last matter does not arise and I see no earthly reason why it should. As to the hon. Gentleman's earlier remarks, of course one of the ways in which it is easy to find out which regulations and directives of the Commission are controversial is for Members to attend the European Parliament and to see exactly what is going on. It seems to me quite extraordinary that certain hon. Members opposite can waste the time of this House in the way they are at the moment without having any regard at all to the opportunities that are open at Strasbourg for a proper discussion of some of these matters. I must say to the hon. Gentleman that I feel that the statement I made this afternoon goes a very long way indeed to meet the views of the Select Committee. I would have thought that it was greatly to the convenience of the House to have an early statement on

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this matter so that we can get on straight away in having these procedures put into operation. Then, of course, we can have a debate.
Mr. Russell Kerr: Have a debate.
Mr. Prior: The hon. Gentleman keeps shouting "Have a debate", but I have pointed out time and time again that the opportunities for debate over the next few weeks are very limited. The hon. Gentleman knows that only too well. That is one of the reasons why, for the convenience of the House, I have brought forward this statement at the earliest possible moment.
Mr. Fernyhough: Does the right hon. Gentleman think that it is reasonable and fair that the 36 Members who went to the European Parliament—if 36 went—should have a right to more information than any other hon. Member? When he replied to his hon. Friend the Member for Petersfield (Miss Quennell), the Leader of the House said that we had had no instructions about meat, but we have had instructions about butter. It will go up by £86 a ton next month. Shall we be allowed to discuss the increase in the House? Can the right hon. Gentleman say what the £86 a ton increase in the wholesale price will mean on the retail price?
Mr. Prior: Opportunities are already available to discuss a matter such as an increase in the price of butter, either by Question or by debate in the House. To that extent there is no difference between the situation before we joined the Common Market and the situation now. The Opposition find plenty of opportunities to raise all those problems.

PARLIAMENTARY PAPERS (INDUSTRIAL DISPUTE)
The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker): With permission, Mr. Speaker, I should like to make a statement.
I regret that the OFFICIAL REPORT and most of the other parliamentary papers which we receive in the normal course of events are not available in their usual form because of industrial action by some of the staff affecting the Parliamentary Press.
1126
Special steps have been taken to produce today's Order Paper, and limited quantities of the OFFICIAL REPORT of yesterday's proceedings were made available at the Vote Office and the Library.
I very much regret any inconvenience to hon. Members, which I shall naturally do what I can to reduce.
Mr. Sheldon: The House will understand the reason for the statement the Parliamentary Secretary has just made, but will he bear in mind the particular problem concerned with the delay in publishing the OFFICIAL REPORT? The last time this happened the HANSARD for the day in question was held over for some weeks after the settlement of the dispute. Yesterday's HANSARD is particularly important, because it includes the last day of the Budget debate, and a particularly important speech of the Chancellor of the Exchequer. Will the hon. Gentleman make sure that there will be no excessive delay of yesterday's OFFICIAL REPORT?
Mr. Baker: I will do what I can to meet the hon. Gentleman's point, which is very important. I hope to produce up to 50 copies of HANSARD each day.
Mr. Michael Hamilton: Each time my hon. Friend makes the same statement, I ask him why we do not have our own printing press on the premises. How many more such statements does he intend to make before giving the matter careful consideration?
Mr. Baker: I understand the disquiet expressed by my hon. Friend, and know that it is not felt by him alone. But it is up to the Services Committee to decide how Parliament's printing requirements are satisfied. I am merely its servant in the matter, and the will of the House must prevail.
Mr. Skinner: Is not the strike due principally to the pay research problem that besets the Civil Service? If so, cannot it be said that this thing, this Order Paper that I am holding, has been produced by blacklegs?
Mr. Baker: The emergency arrangements were made under the aegis of the House. It is correct that those who are on strike today are members of the Civil and Public Services Association, members

1127
of a Civil Service union and not a printing union. I very much regret that they have taken this action, because I do not believe that it helps the CPSA case at all. Their action is damaging not only to the efficiency of government but to the standing of the Civil Service in the country.
Mr. Biggs-Davison: Are not there printing establishments with good industrial relations, and should not the Services Committee now consider making a change? Is not the present state of affairs becoming a contempt of the House?
Mr. Baker: I shall draw my hon. Friend's remarks to the attention of the Chairman of the Services Committee.
Mr. Orme: Have not industrial relations in the department concerned been extremely bad in recent years? First there was trouble with the print workers and now there is trouble with the civil servants, arising out of the Government's policy. The Government are responsible for what is happening today. When will the Minister do something about it?
Mr. Baker: I refute that allegation entirely. The Government are not responsible. They have made their position absolutely clear on the application of Priestley, but the very first time we had an opportunity to negotiate with the Civil Service unions at Easter 1971 we made the acceptance of Priestley subject to any overriding national policy. That is what the Government are asking the country to follow.

RAIL COMMUTER SERVICES (DISLOCATION)
Sir Bernard Braine: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and
1128
important matter that should have urgent consideration, namely,
"the continuing dislocation of rail commuter services and the real hardship this is causing to many thousands of travellers who depend on the railways to get to work".
The matter is important not only because of the injury being done to the future of the railways but because the vast majority of commuters, certainly those in my constituency and South Essex, have no alternative way of getting to work. They are being denied a reliable service and yet are being refused any refund on their season tickets.
The matter is urgent because tens of thousands of people are being left daily in complete uncertainty about whether they will get to work or, if they get there, whether they can return home. Many have been left stranded on railway stations, and others have expressed fears to me and to other hon. Members—on both sides of the House, I imagine—that their jobs are in some jeopardy.
Because of the disgraceful and steadily worsening situation, which touches so closely the interests and livelihood of many tens of thousands of people, the matter is undeniably important and urgent, and I respectfully hope, Mr. Speaker, that you will look favourably upon my request.
Mr. Speaker: The hon. Member for Essex, South-East (Sir Bernard Braine) was good enough to give me notice of his application, which I have considered carefully. I also listened carefully to what the hon. Gentleman said.
Once again I tell the House that it is not for me to express an opinion on the merits or importance of the matter which the hon. Gentleman wishes to have discussed. I have simply to decide whether it should have precedence over the business for today or tomorrow.
I cannot accede to the hon. Gentleman's application.

IMPROVEMENT GRANTS (RESTRICTIONS ON ELIGIBILITY) BILL
4.8 p.m.
Mr. A. W. Stallard: I beg to move,
That leave be given to bring in a Bill to restrict the eligibility for improvement grants to local authorities, owner-occupiers and housing associations, and for certain other approved schemes: to make provision for the repayment of any grants so made in the event of the property being re-sold; and for purposes connected therewith.
The Bill is not an attempt to prevent improvements. It tries to return to the position outlined by the then Minister of Health, Aneurin Bevan, when introducing the Housing Act of 1949, which included provisions for improvement grants, when he said:
"The purpose of the grant is to enable the occupant of the house to enjoy modern amenities, and therefore there are strict conditions under which the grant is given."
He had earlier said:
"If the house is sold, the remaining portion of the grant must be returned to the local authority because there is no justification in taking money from one citizen merely in order to make another citizen richer."—[OFFICIAL REPORT, 16th March 1949; Vol. 462, c. 2131.]
That Bill was passed without opposition.
My Bill seeks to legalise the restrictions that many local authorities urgently need, particularly in inner London, to enable them to try to prevent the exploitation of grants by greedy landlords and speculators, whilst encouraging and assisting applications for grant.
A recent conference of the Association of Public Health Inspectors drew attention to some of the exploitation of the improvement grant scheme. A warning was given that
"Landlords are forcing tenants out of their houses so that properties can be improved and sold."
Those of us who live in the inner London area know the tragic stories that lie behind that warning. The Bill will contain a clause allowing local authorities powers to safeguard existing tenants and will enable authorities to recoup the grant in full with interest if the owner wishes to sell within a specified period.
An analysis in my local borough showed that last year almost 65 per cent.
1130
of discretionary grants were going to companies or non-resident owners. When we consider that in that year over £1 million was paid out by that borough in grants, we begin to see the size of the problems facing inner London boroughs, and certainly the amount of public money which is involved in this exercise, quite apart from the repercussive effects of this kind of speculation.
Hon. Members will recall that I recently mentioned in this Chamber the example of a house in my constituency which had risen in value in less than 18 months by just under £100,000. The developer had obtained a grant of just over £9,000. That example was seized upon as though it were the exception. I want to say that it is by no means an isolated case. I could spend some hours this afternoon, if I had the time, giving detailed examples of similar cases, but I hope there will be other opportunities.
I would just like to mention, however, the most recent case that has come to my notice. Again, it is a house in the London Borough of Camden—a semidetached, four-storey house, purchased in January 1972 for £13,500. It was sold in June of the same year for £64,000 and the profit on that deal was £51,500 —and for what? All the new owner did, at best, was to empty the property before reselling with vacant possession. After being resold for £64,000, this house is being converted into as many self-contained units as can be crammed into the space—in this case it is eight self-contained flats. The estimated cost of conversion is just over £40,000 and a grant of £9,600 has been made from public funds. The total estimated cost of the house after conversion is approximately £150,000. Therefore the new owner, after all expenses, makes another £50,000. So the price of this property has risen in just over 12 months from £13,500 to £150,000, and nearly £10,000 of that was public money. I cannot justify that kind of expenditure and I doubt whether anyone else can.
This Bill, by safeguarding existing tenants, as well as by its other provisions, will help to stop this scandalous, obscene, speculative process.
I should like to make one other quotation from another publication which has come into my possession. It is a

1131
"Property Letter" which is apparently sent to potential investors, one of whom was so disgusted that he passed it to me. It is dated February 1973—last month. It says, after its introductory blurb:
"For the first time since the early sixties it's possible to make real money out of property. Both for the expert developer and for the small man who wants to get in now and produce a useful private income for himself."
It goes on with some glee:
"Since the Tories returned to power:

1. House prices have boomed as never before, giving dealers a rising market to profit from. What's more, loans for once are readily forthcoming.

2. Office development restrictions have been shot away. Birmingham has become a capital place to operate in. … And Leeds and Bristol are following fast.

3. Landlords have started to cash in on the new bedsitter boom.

4. Converting properties of every type to flats for sale has become a big business. The Government is exceedingly generous with improvement grants, which makes this operation very profitable."

Someone is going to make a killing out of all this, and it might as well be you. Thousands of investors did so in the last property boom —most of them were armed with the shrewd inside information provided by the … Property Letter.'
And it says, of course, that the information in the letter is confidential to subscribers or it might lose part of its value —in case anyone is getting bothered—and it is therefore not available except on subscription terms.
Mr. Stanley Orme: Name the firm.
Mr. Stallard: My Bill is intended to make that kind of speculation less attractive by taking away the public contribu-
1132
tion, which will go to owner-occupiers, local authorities, housing associations and those landlords—and there are some —who are genuinely trying to improve their properties, with the help and encouragement of local authorities, for the benefit of their tenants, so that properties for rent can be retained in areas such as inner London where there is a serious shortage of and an ever-increasing demand for rented accommodation.
Finally, this Bill will help all genuine applicants to make a valuable contribution to the solution of the housing problems of areas like mine and will help to stabilise houses and rents in the process. I therefore seek the leave of the House to bring in this Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. A. W. Stallard, Mr. Thomas Cox, Mr. Robert Hughes, Mr. Ronald Brown, Mr. Brynmor John, Mr. John Grant, Mr. Phillip Whitehead, Mr. Stanley Orme, Mrs. Lena Jeger, Mr. Michael O'Halloran, Mr. Norman Atkinson and Mr. Richard Kelley.

IMPROVEMENT GRANTS (RESTRICTIONS ON ELIGIBILITY) BILL
  IMPROVEMENT GRANTS (RESTRICTIONS ON ELIGIBILITY)
  Bill to restrict the eligibility for improvement grants to local authorities, owner-occupiers and housing associations, and for certain other approved schemes. to make provision for the repayment of any grants so made in the event of the property being re-sold; and for purposes connected therewith, presented accordingly and read the First time; to be read a Second time upon Friday 16th March and to be printed. [Bill 89.]
ORDERS OF THE DAY

  EMPLOYMENT AND TRAINING BILL
  Order for Second Reading read.
  4.18 p.m.
  The Secretary of State for Employment (Mr. Maurice Macmillan): I beg to move, That the Bill be now read a Second time.
  The object of this legislation is to reform arrangements for promoting and to promote a more efficient working of the labour market, with fuller opportunities for individuals to develop and use their own capabilities. It includes the legislative requirement for the changes we have already proposed in the organisation of training.
  The main purpose of the legislation is to set up a Manpower Services Commission to run the employment and training services at present provided directly by my Department, and the proposal is that it should do so through two agencies—the Employment Service Agency, which is already set up within the Department, and a Training Services Agency, which we are now in the process of setting up.
  The origin of these two concepts is contained in the two publications put out by my predecessor, my right hon. Friend the present Home Secretary, entitled "People and Jobs" and "Training for the Future". The policies which this Bill is designed to promote stem from the ideas which those publications contain, although they have, as the House will know, been very much modified by the extensive consultations which have been taking place with those most closely concerned with these matters. I believe that the House will generally welcome these proposals.
  As regards the Employment Service Agency, it has been working within the Department for some time and the new system has proved a considerable success. As far as the Training Services Agency is concerned, I made a statement to the House on 8th August last announcing the changes we proposed to make in the organisation of training following the very extensive consultations we have had on the consultative document. At that time
  1134
  I referred to the concern that had been expressed by the TUC, the CBI and others about the separation of any new training agency from the new Employment Service Agency. At that time I undertook to have further consultations about the ultimate form of the new organisations and about methods of involving employers and employees in them.
  As a result of those consultations I was able to make a further statement to the House on 22nd November last in which I outlined our proposals for a Manpower Services Commission to achieve the co-ordination which the TUC and the CBI wanted and which the Government, too, felt was right and necessary. Again I explained to the House that there were still some very important matters which needed further discussion and that we were carrying out urgent consultations with those concerned. I also explained to the House that legislation would be required to give effect to the proposals.
  The Bill and the policies which it puts forward have had what one might call a long period of gestation, and in detail are the result of much hard work by the many organisations and individuals whom the Government consulted in their various consultative processes. I should like to take this opportunity of paying tribute to those concerned on the training boards, the TUC, the CBI, and others who materially added to the success of the ideas put forward in the Bill.
  I propose to deal first with training. The main proposals in the Bill about the industrial training board system are contained in Schedule 2 which amends the Industrial Training Act 1964 in order to make the necessary changes. I think the House will recognise that the industrial training boards have had a major impact on training over the last eight years and that there is some evidence that as a consequence the amount of training has been increased. I have no doubt that the boards have secured a considerable improvement in the quality and efficiency of training. Perhaps most important of all, because of their influence on management I think that industry today has a greater awareness of what training means and the need for good training.
  Nevertheless, I think it has been generally agreed that some changes in the 1964 framework are necessary. Experience has

  1135
  shown that the complications of the levy / grant system make it difficult to work simply and equitably and have the effect of making all concerned think rather too much in terms of money and not enough in terms of the type of training carried out.
  I think that small firms in particular have found the system extremely burdensome. The Bolton Committee concluded that the levy/grant system could do more harm than good to small firms, but for employers who believe in good training and practice it became clear that the levy/ grant was becoming more and more irrelevant. There was a great deal of paper work and expense, and not much benefit to be got in return.
  As a result of the discussions which have taken place—and much of what I am saying is in amplification and repetition of the discussions that we have had following the statement to the House—we are making three major changes. First, the levy will be subject to an upper limit of 1 per cent. of payroll. The Bill provides that any levy orders going beyond 1 per cent. will be subject to affirmative resolution, so that no order can be made without having been debated and approved by the House.
  There are some who think that 1 per cent. is too low. I do not agree. Most of the boards' levies are already below the 1 per cent. level. On the other hand, there are equally those who feel that there should be an absolute ban in the Bill on levies above 1 per cent. Both views have been expressed, and I must make it plain that in normal circumstances I should not consider making a levy order of above 1 per cent. I hope that no one will seek to encourage boards to try to work on a regular basis of going higher, because experience of the most effective boards has shown that 1 per cent. is enough. But the unexpected does happen, and so I felt it necessary for the Secretary of State to be able to come to the House and ask for approval of a levy order beyond 1 per cent. if quite unexpected circumstances seem to make it necessary.
  Mr. Reg Prentice: Does the right hon. Gentleman expect the Engineering Training Board, which is the largest in the country to move straight down to a levy of 1 per cent. when the Bill becomes an Act?
  Mr. Macmillan: No, Sir. There are provisions for an additional period which we can discuss at a later stage in the legislation.
  I hope that I shall not be asked to give way too often. I have a long speech to make, for which I apologise to the House, but I was asked to explain what we were trying to do, and there is a lot in the Bill.
  On small firms, the schedule specifically provides that levy proposals must include provision for exempting small employers, and we are consulting individual boards concerned about what the exemption level should be in each industry. I think it will be clear to the House that it will not necessarily be the same right across the board.
  Thirdly, the Bill provides that where a board judges an employer's training requirements to be adequate the board must give a levy exemption certificate, so that employers with adequate training arrangements will be relieved of the whole complications of the levy/grant system. The criteria for judging "adequacy" will be laid down by each board and will have to be approved by the Manpower Services Commission and the Secretary of State for Employment.
  These changes will not weaken the power of the boards to get adequate training. There is no point in giving grants to employers for their own training if it is going well enough already. And if it is not being properly done, then firms will still pay the levy. However, since many firms which are doing proper training will no longer be paying any levy at all, the new arrangements provide that the board's administrative expenses will be met by the Manpower Services Commission out of its grant in aid.
  There will be additional financial help to the boards from the commission. We mean to provide funds of up to £35 million in a full year, not only to meet the boards' expenses, but also to enable them to encourage key training methods in their industries and to enable the Training Services Agency to promote adequate training in sectors of employment not covered by the boards.
  The original idea which we put forward in the context of this reform was for the initial grant to be for sums in the range of £25 million to £40 million a year, but that bracket was given on

  1137
  the assumption, set out in the original document, that there would be no levy at all following the abolition of the levy/ grant system. Now the proposed £35 million a year from the commission, and provided by public money, will be in addition to the yield from any levy that is maintained by the boards in the process of keeping up the standards of training and providing the stimulus to improvement.
  In addition, there will be the commission itself, a body of people drawn from both sides of industry, from local authorities and from education, with the task of co-ordinating the work of training boards and using as its executive arm the Training Services Agency. I want to make it clear to the House that in this context co-ordination does not mean dictation. If it did, the legislation would have to do away with the boards because there would be no point in having them. There would be no role for them.
  But it will be up to the training boards to identify the training needs and priorities of their own industries and in the light of that to develop methods which will promote adequate training. The commission and the Training Services Agency will be able to back them up by supplying the resources where they are most needed, and I should like to emphasise that we still need first-class people to lead the training boards. We shall now, I hope, be able to give them more effective support than before.
  The commission and the Training Services Agency will be able to take a national view of training needs, which no industrial training board can do, will be able to give boards help in taking account of their needs as well as acting themselves, and will be able to promote training in sectors which are not covered by training boards, which is about one-third of the working population. The commission and the agency will be able to give a lead to joint efforts to promote training in occupations covered by more than one board.
  I repeat the emphasis that I have given in the past to the good work which has been done by group training schemes. It will be able to provide a focus for research and manpower planning activities. That will be of increasing importance in future if we are to put our
  1138
  training effort to the best effect, and train not only for the present but, as far as possible, and as far as research can develop it, for the future as well.
  The second element of training is in those activities which come broadly under the Training Opportunities Scheme. We have already embarked on a large expansion for men and women who wish to acquire new skills. Already there are many and wider opportunities. In 1971, under the old Vocational Training Scheme, we trained fewer than 20,000 people. This year the Training Opportunities Scheme aims to train 40,000 men and women. By 1975 we expect to be training between 60,000 and 70,000. The success of the way in which the scheme has been applied is shown by the fact that we are now placing well over 90 per cent. of the trainees from the scheme in the trades for which they trained. That is a reasonably high take-up level.
  We are also widening the range of courses available. In the past they were mainly courses at craft level carried out in Government training centres or in the residential training colleges for the disabled. Training is now becoming more available in employment establishments and increasingly in colleges of further education. The courses range from semiskilled to technician and management levels. Expansion in the number of places and in the range of courses is creating new opportunities for individuals.
  I am glad to say that we are training more women. We would like to train women in every course under the scheme, and training is available for them in every course. However, we find that most women want clerical and secretarial skills. Therefore, we have increased the number of those courses. There are now about 5,000 women under training in the scheme compared with about 500 at the end of 1970.
  There is a considerable increase in the number of disabled people training under the scheme. The Manpower Services Commission will take over, through the Training Services Agency, the operation of the Training Opportunities Scheme, together with the plans for its expansion. There are now some 52 Government training centres with 19 annexes providing about 12,000 places. The plans which have been started provide that there will

  1139
  be 63 centres, about 30 annexes and about 18,000 places by 1975.
  We are trying to concentrate on trades where demand is high. For example, there were 2,800 places for construction in January 1972, and by May of this year we shall increase the number to 4,000 places.
  The commission and the Training Services Agency will continue with the close co-operation which my Department has always had. I pay tribute to the fine work that is done in training severely disabled people. However, even at the new higher level, the Training Opportunities Scheme is not intended to be and cannot be the main source of skilled manpower for the economy. The main sources of skilled manpower for the economy must be and are the young people coming into the labour force, men and women who are trained by employers to meet their special needs.
  The Training Opportunities Scheme has a valuable contribution to make in fulfilling the needs of individuals, as well as making a significant contribution towards the requirements for skilled manpower. The most important social role of the scheme is to give a second chance to those who started work as late developers and to those who have not developed their potential capacity to the full. We must pay great attention to developing the abilities of people in such positions.
  The second major change which requires legislation under the Bill is in the Youth Employment Service. At present the service looks after young people under the age of 18 or those still at school. It is provided mainly by local education authorities. The Employment Department provides services in a few areas where local education authorities have decided not to do so. The proposals in the Bill embody the proposal set out in "People and Jobs", which left out whether the Youth Employment Service was to be mandatory on local authorities. The hon. Member for Wolverhampton, North-East (Mrs. Renee Short) knows this well. The hon. Lady was a member of the committee which thought that that should be so.
  After full consultation with the local education authorities and with others we decided that it would be right to impose on the authorities the burden of a man-
  1140
  datory service. Therefore, the Youth Employment Service will be carried out by local education authorities. That accords with the Expenditure Committee's recommendation which was published in its report last week on youth employment services generally. I hope that it will be welcomed by all concerned. It replaces what has been rather a patchwork of services, some being provided by local authorities and some by the Employment Department, with a general pattern of careers services provided by the education authorities.
  There is another power in the Bill which has given rise—and wrongly, in my opinion—to some anxiety. That is the power that enables education authorities to make arrangements with the commission for the commission to perform some or all of their mandatory functions. If the commission does so, it must charge the authority for the services provided, unless it is specifically authorised by the Secretary of State for Employment not to do so. It seems that there has been some misunderstanding of the purpose of including this power in the Bill. It is not to enable local education authorities to opt out of providing a service which is mandatory upon them or to hand over their responsibility to the commission. It is provided mainly for transitional purposes.
  The House will note that local authorities which do not now provide the service may find it difficult to recruit and train staff which will be needed to provide the full service from the day on which the local government reorganisation starts to operate. Therefore, arrangements can be made with my Department or the Manpower Services Commission, after it has taken over, to continue to provide the service during the transitional period so that there can be an orderly transition to an authority which has been building up the capacity to take over from the Department or the commission.
  An additional valid point is that some local authorities may have a need to concentrate on some special aspect of the services which they provide, such as giving a priority to careers guidance in schools or helping disadvantaged young people, and may wish to work in partnership with the commission in other aspects of that nature, or to use the commission

  1141
  as an agent for some particular or perhaps short-term purpose so as to husband its own staff resources and to maintain a degree of flexibility. Provided that the Secretary of State of the day makes certain that the local education authorities cannot escape the main duty which the Bill imposes on them to run a youth employment service, such a partnership is to be encouraged. It is in the interests of the young people concerned to keep a close link between the local authority careers services and the general employment services of the commission.
  Otherwise, the Bill simply reflects decisions which have already been announced, but there is one further point on which I should comment. That is that under this legislation we get away from the present rigid demarcation between the Youth Employment Service and the general employment services, including what one might call the "age barrier" of 18. The proposals now are that the education authorities will have the duty to make arrangements for providing vocational guidance services to people attending educational institutions, not merely schools, and an employment service for people leaving them.
  This does not apply to universities, although local education authorities are required to make their services available to individual university students who wish to use them. They also have power to provide a careers service for those young people who have left education.
  None of this, of course, affects the commission's duty to provide a comprehensive employment service. As to the division between the two, one would normally expect that people who have taken their first job will turn to the general employment service for help and guidance. But if they wish to return to the careers service provided by the local education authority, they will be free to do so.
  The Expenditure Committee's report recommended the age of 21 as the point of division between the local authority service and the general employment service. I agree that, if one has to have a specific age gap, 21 is probably more suitable than 18. The report pointed particularly to the difficulties of coloured voting people, the handicapped and the disadvantaged young school leavers and
  1142
  to the need for young people with these difficulties to continue contact with their careers officers. I entirely agree, but there is nothing in our proposals to prevent that. Indeed, having an age limit, even at 21, could operate the other way round and could in itself provide a difficulty of continued contact for these young people.
  An age barrier even at 21 is unrealistic, when so many young people are continuing into higher education. It is unrealistic also to deny to all workers under 21 access to the services which will be provided by the commission. Many of these young people, men and women alike, will have been at work for some four years or so and they will rightly and naturally expect to be able to use the placing and guidance services which are available to adults generally.
  I hope that the House will agree that, in making these changes, we have been right to view the moment of change as one which will make it possible to meet the particular needs of the particular young person concerned.
  There is, of course, the theoretical danger, which the Expenditure Committee mentioned, that this could lead to confusion. I do not think that young people will be confused by having a choice between the local education careers service and the general employment service. Even now, they have a choice of a sort—whether to use the Youth Employment Service or not to use it at all.
  There is a danger that some young people would not want to go to the youth service at all, and I would not wish them to be cut off, because of their age, from any guidance whatever. We are offering young people, once they have entered the labour market, the opportunity to use whatever service best suits their needs. I do not think that employers will he confused, but we must of course have efficient arrangements for the circulation of vacancies between the two services.
  In general, we are well ahead with our plans for reorganising the employment services as a whole, and the changes are beginning to show on the ground. We are giving a service which I believe to offer much more than in the past both to those seeking jobs and to employers. We are also beginning to discharge more effectively the social responsibility to help

  1143
  those who have a difficulty in getting and keeping jobs. There is a great deal going on. which will be continued after the change over by the Employment Service Agency, now operating within my Department, and which, if the House give the Bill a Second Reading, will then operate under the Manpower Services Commission.
  The internal operation of the Employment Service Agency is not directly concerned with this legislation, but I should say that I believe that special services will be better developed under the new system. The special services which have to be improved provide advice and guidance about jobs and careers to men and women who are not clear what they want to do or about what opportunities are open to them.
  In the last few years, we have developed the occupational guidance service for this purpose, and also a system of giving advice to people through the Employment Service Agency about training and training opportunities. In future, we shall need to do more than this work, and I believe that the link between training services and the employment services through the Manpower Services Commission will enable it to be done more effectively.
  There are, of course, other special roles of the employment services in helping those who, for one reason or another, have special problems in getting or keeping employment. For many years, we have rightly put substantial resources into helping disabled people to find jobs. Under the new set-up, the commission will have the power to provide employment and training services for the disabled. It will be responsible, within the general policy framework agreed with the Secretary of State for Employment, for running the specialist resettlement service, including industrial rehabilitation, and in providing training for disabled people.
  The National Advisory Council on the employment of the disabled will continue to advise me on all these matters. The Bill will not affect the Secretary of State's responsibility for wider employment for severely disabled people, or for the quota scheme, or for the register, although the commission will act as the Secretary of State's agent in operating the scheme and maintaining the register.
  1144
  The general improvement in employment and training services will benefit disabled people by itself, but I still think that we have to improve the specialist and training services provided for the disabled. My Department has recently made a comprehensive review, and we are now engaged on a consultative programme with the National Advisory Council and others on how best to make improvements. As soon as it is established, the commission will be associated with these consultations.
  I have described the two changes of policy—the organisation of training boards and the reorganisation of the youth service—which require legislation. The other changes which have been carried out within this framework do not in themselves involve legislation.
  I turn now to what might be called the headquarters organisation—the Manpower Services Commission itself. It is a new concept, a new kind of organisation.
  First, it shows the importance that the Government and others have attached to the involvement of those most concerned, management and unions, in providing these management and employment services for industry. The Government attach great importance to what has become known as the tripartite approach —that is not quite an accurate description in this instance—as is shown by the proposed membership. We propose that there should be 10 members in all with a full-time chairman, the other members being part-time. Three members will be appointed after consultation with the TUC, three after consultation with the CBI, two after consultation with the local authority associations—one for England and Wales and one for Scotland—and one after consultation with professional and educational interests.
  Secondly, this is a new kind of organisation in that it is both representative and operational. There are plenty of other committees and boards representative of different interests which advise Ministers but do not operate any particular organisation. They are purely advisory. There are also committees and boards which run important activities on which industrialists and trade unionists sit, but in a purely personal capacity. We are hoping that members of the commission will remain responsible to those

  1145
  bodies which proposed them. I am not suggesting that they are mandated or delegates who must refer back on every major point, but they must carry the confidence of the organisations which helped them to be appointed in carrying out their own daily functions. So, in forming judgments about what policy to follow, the members of the commission must keep in mind the general views and interests of those who helped to put them there.
  In this way the CBI, the TUC, and the local authorities, all of which are interested in the successful operation of manpower services, will have an indirect joint responsibility through their members on the commission for developing those services and seeing that they meet the real needs of the people who use them.
  I think that, combined with the ability of the training boards on their side to see and meet the needs of industry—the training boards have similar representation: the TUC, employers, and education —the Manpower Services Commission, in its wider sphere of both employment and training and the co-ordination of the two, will be able to bring to bear the experience and knowledge to deal competently and successfully with one of its major concerns—forward planning and thinking. It will act in general as the main board of a large organisation with the two agencies operating like operational subsidiaries. The actual running of the organisation will be carried out by these two statutory agencies—the Employment Service Agency and the Training Services Agency. This will enable the commission to concentrate on major issues, particularly on the forward programme of work and budgets, which will have to be prepared for my approval each year and for which I shall be responsible to Parliament.
  Mr. Ronald Brown: Do I understand that the agencies are executive within themselves and will have powers over the industrial training boards and that the boards will not be able to go above them to the commission itself?
  Mr. Macmillan: The precise form in which these agencies will operate will have to be worked out to some extent when the commission and the agencies are operative. The agencies will be the
  1146
  executive agents in charge and will be responsible to the commission for the money they spend, the Commission will be responsible to me, and I shall be responsible to Parliament. That is roughly the chain of command that will be developed.
  The commission will have to work closely with my Department. Nearly all the money to finance its activities will come from the departmental Vote. Therefore, the Secretary of State must retain general responsibility for manpower policies, and the work of the commission must clearly fit into these. The Secretary of State will continue to be responsible to Parliament for general manpower policies and for the amount of resources allocated to the commission. I hope that the House will agree that it is essential to the new establishment that the Secretary of State should not be continually intervening on matters of detail within the Commission's responsibility.
  Mr. Tom King: My right hon. Friend described the make-up of the commission as not being exactly tripartite. What is missing from the commission at the moment is the element of Government. He has explained that the other bodies will be well represented by members, if not exactly delegated, very much representative of the bodies from whence they came. My right hon. Friend now says that the Secretary of State must not interfere in the detail of the commission's activities. How will the Government's views be transmitted into the commission's policy?
  Mr. Macmillan: I hope that will become clear to my hon. Friend. The Secretary of State and the Government will be responsible to Parliament for the money spent. The commission will be responsible indirectly through its accounting officer to the Public Accounts Committee and will be examinable by the Public Expenditure Committee.
  I turn now to budgeting. The programmes will have to be costed in detail for the year immediately ahead. Obviously there will have to be room for adjustment within the total to meet unexpected changes in the labour market. There will also have to be a rolling five-year programme—the first two or three years in greater detail and firmer than the last two years. This is where the ultimate

  1147
  responsibility and control of the Government can be applied. The Government, through the Secretary of State of the day, will be wholly responsible to Parliament for the allocation of these resources and, through the ordinary methods of accountability, for seeing that they are spent in the way that was intended.
  There is no greater problem of my Department and the Minister in charge of it retaining this vital responsibility than there is now when we have a Training Services Agency of an executive nature and are changing the Employment Service into an executive agency, too. It puts a certain extra requirement on the agencies in their form of budgeting and methods of management, but I hope that will lead to a more effective use of resources by the use of a more manageable type of accounting. This is an internal matter which in no way lessens the Government's obligations or capacity, through their control of funds, to influence the major policies of the agencies and therefore of the Commission. The Commission will have very close contact with my Department and I hope will be able to help as an adviser on the general responsibilities of my Department's work.
  I come now to the timing. I am glad to say that the TUC and the CBI have welcomed the idea of a commission and assured me of their willingness to cooperate in its work. I believe that this co-operation of employers, unions and other interests in taking responsibility for the services they need is a step forward. If Parliament gives assent to the Bill I propose to press ahead with the commission as quickly as possible, to bring prospective members into consultation on an informal basis as soon as we can, and to bring the commission into existence at the beginning of 1974.
  It will be a little longer before we shall be ready to hand over to it the two executive agencies. I hope that the Training Services Agency will be ready in the spring of 1974. With the Employment Service Agency, on the other hand, it is obviously essential first of all to separate the administration of unemployment benefit. That means that probably the transfer will not take place before late 1974. We should have a fully operational commission with both
  1148
  agencies in action by the beginning of 1975.
  The ideas underlying the changes made by the Bill and the organisations set up under it—this particularly applies to the concept of the Manpower Services Commission—represent a new initiative in tackling some of the major economic and social problems we face. There are obvious implications for manpower planning intelligence and regional policy. I believe that it will help in the difficult task of improving the operation of the labour market and of creating an efficient employment service able to help employers and individuals seeking jobs. I think it will help in the hardest task of all, that of trying to anticipate, and as far as possible eliminate, shortages of skilled manpower which hold un the economic progress and sometimes effectively prevent a fall in unemployment simply because of the scarcity of special skills at the right place at the right time. It will help our efforts to give individuals the training opportunities they need to improve their prospects of making full use of their skill.
  In doing so I hope that we shall continue our improved help to the disabled and the disadvantaged and, very important, operate flexible and effective arrangements enabling young people to obtain help and advice when entering employment. This Bill and the concepts which go with it provide a real opportunity to make the manpower services in all their aspects more efficient and responsive to the needs of those who use them. It is as such that I commend it to the House.
  5.3 p.m.
  Mr. Reg Prentice: This is an important Bill with implications for the future of all people in this country on a scale much larger than some items on our agenda which attract greater publicity because of their day-to-day sensationalism. The Opposition welcome the Bill, on balance. By that I mean that we have a number of criticisms of it, some of which I shall develop and others of which will be developed by my hon. Friends, but we see the Bill as containing a great deal that is useful.
  In particular we welcome the central proposal to establish a Manpower Services Commission. We believe that such

  1149
  a commission in the hands of a Labour Government would make a substantial contribution to solving our manpower problems. In the hands of a Conservative Government we are bound to say that it would provide no substitute at all for the dynamic policies currently lacking in employment and training.
  If I had to make one major criticism of the Secretary of State's speech, it would be that he did not acknowledge the serious manpower problems facing us. Above all he made no mention of the fact that we still have 750,000 unemployed. We cannot have an intelligent discussion of these measures without asking whether they will be useful in fighting this appalling total of unemployment. In passing, may I say that a year ago, when unemployment was of the order of 1 million or just under, Ministers were at least acknowledging that the unemployment level was unacceptable. They said so frequently.
  What worries me about recent statements by Ministers is that they either ignore the problem or else content themselves with a lot of self-congratulation about the fact that unemployment has fallen. Of course it has come down and we welcome that fact. Let us recognise as a House that a figure of 750,000 unemployed is totally unacceptable and that further drastic steps are needed to deal with it.
  The first question therefore is whether the Bill will be helpful in seeking to return to full employment. I believe that it can be, but this will depend on other policies.
  Mr. Ronald Brown: It helped the Government to bring the unemployment figures down by changing the basis on which they were calculated.
  Mr. Prentice: Yes. The figures have not come down by quite as much as Ministers would have us believe, because they have left out the number of those temporarily stopped. Nevertheless they have come down and we welcome that. The main point is that a figure of 750,000 is unacceptable.
  Let me deal now with some of the things in the Bill with which we agree. We agree with the proposal to establish a Manpower Services Commission. The Secretary of State will forgive me if I remind him that this was Labour Party
  1150
  policy long before it was Conservative Party policy. We agree that the administration of employment services and the co-ordination of training should come under the same authority and should be planned and co-ordinated together. We agree too that the Manpower Services Commission should include representatives of the TUC, the CBI, the local authorities and educational interests. We want to see educational interests being brought into contact with industrial problems more frequently. The more this happens the better it is for both. Both have much to learn from each other and can help one another.
  I agreed with the last part of the Secretary of State's speech in which he described his relationship with the commission. In some ways the Government are undertaking something which is new. They are going in for what is in some senses a small constitutional experiment. This seems to be absolutely right. We need not think of units of administration as being either completely in the Civil Service or hived off in such a way that there is no direction from the Minister. In many areas we may need to develop something in between in which some body is able to pursue day-by-day policies without interference but is subject to certain strategic directives from the Minister.
  I understand that that will be possible in this case. It seems to be correct in this case. It is correct for a reason which the Secretary of State did not, perhaps, bring out: that the Government of the day cannot hive off ultimate responsibility for these matters. The Government of the day will be held responsibe for the level of unemployment and, in broad terms, for the degree of training and the adequacy or otherwise of the employment services. They will be held responsible for that by Parliament and the country. Therefore, the Secretary of State must keep in his hands sufficient powers to be able to discharge that responsibility in an ultimate sense. From what he has just said and the terms of the Bill, I believe that he has done this. This seems to be right.
  I turn straight away to the major omission in the White Paper. There is hardly any reference to the central problem of manpower planning. Indeed, there is a curious reference in paragraph 25 of the White Paper, in which it is said that

  1151
  the Secretary of State will remain responsible for manpower studies. In other words, they will not be transferred to the commission. That seems curious. I should have thought that if the Manpower Services Commission is to do the job which the Secretary of State has described, it ought to be in charge of manpower studies and he ought to develop them on a very big scale.
  We are told later, in paragraph 47, that the commission can conduct or support research. I am glad of that. What I am really asking for, however, is that a major part of this work should be to take charge of a continuing exercise of manpower planning and forecasting.
  The Secretary of State said that he thought the commission could help to produce a situation in which we had people with the right skill in the right place at the right time. But if we are to achieve that vital objective in a period when technology is moving forward faster and faster all the time, in which the whole pace of change becomes faster all the time, we need at the centre of affairs a really sophisticated research and forecasting operation by which the picture can be worked out not just in general terms but by industries and by regions. We want to be able to know as far as possible what are the likely areas of redundancy and of shortage of skill throughout the country in order that the necessary plans can be made.
  A full employment policy at this stage of the twentieth century is surely incomplete without some operation of that kind. Are we not seeing, not simply in Britain but in countries throughout the world, and countries at different stages of development, that the traditional techniques for a full employment policy are no longer producing the results expected of them or the results that they would have produced perhaps even 10 years ago, and that new and more sophisticated techniques are needed in order to have a successful full employment policy?
  Similarly with regional policy, which is almost but not quite the same question, surely the missing factor in the policies of successive Governments has been that we have not had sufficient manpower intelligence to tell us about the local pattern which will emerge if things
  1152
  are not changed and about the likely effect of certain changes on the regions of this country.
  I add another point which is not sufficiently discussed. A successful prices and incomes policy cannot be pursued without some understanding of the manpower effects of that policy. This is not a matter to develop this afternoon, perhaps, at any length. But one thing that the Government are doing through their prices and incomes policy is to lessen ordinary market forces. An employer cannot put up the wages of people whom he wants to retain on his books. Therefore, in that situation many changes are taking place that ought to be monitored and understood by a unit studying manpower trends in this country.
  Mr. Christopher Woodhouse: I entirely agree with the desirability of what the right hon. Gentleman is describing, but he will recall that during the period of office of the Government of which he was a member a manpower research unit, as I think it was called, was operated by the Department of Employment and Productivity. It was found extremely difficult to overcome the problems of manpower forecasting. It is only fair to recognise that this is an extremely intractable problem.
  Mr. Prentice: I was about to say that I recognise that this cannot be an exact science. I realise that attempts have been made and that the results have not always come up to expectations. When I led the British delegation to a UNESCO conference in 1968, we had some international discussion on this theme. We were told that many countries had tried operations of this kind and had found them in some degree disappointing. But it is too easy to conclude from that the operation should not be attempted on a big scale. I believe that it should.
  The essential point is that thousands of decisions about manpower are made every week. They are made by employers, by those running Government training centres, by technical colleges and universities, by careers teachers trying to advise children on what to go in for and by all kinds of people. All these decisions have to be made on certain assumptions. We have to try to create a framework in which the decisions can be made more intelligently

  1153
  and with more data on what is likely to happen.
  Although a forecasting unit of that kind would sometimes get the answer wrong—experience suggests that that would happen quite often—nevertheless it is better to make the attempt than not to make it, because if we do not make the attempt more of the decisions will be wrong. People will be wasting time in doing certain things and studying the wrong things. Resources will be wasted, as they are now, on an enormous scale. We need to develop this unit as a matter of urgency.
  I should like briefly to look a little further ahead, to ride off on a sort of magic carpet into the future. What we want to see is the availability of manpower advice to the Government in relation to all kinds of decisions that have to be made by the Government from time to time. Last week the Chancellor of the Exchequer, in presenting his Budget, said that the Government's objective was to have a 5 per cent. growth rate. This was a previous objective which the Chancellor reiterated last week. Let us suppose, however, that he had said 6 per cent. instead or had gone down to 4 per cent. What would have been the effect of plus or minus 1 per cent. on employment in Merseyside or in South Wales? Does anyone know? Does anyone try to work this out? If not, should not someone be trying to work it out? Should not advice of that sort be available to the Government in making major economic decisions or decisions on education planning? How far do the Government of the day have available to them advice on the manpower implications of what they are doing?
  Let us take, for example, the raising of the school leaving age to 16. My view is that it should have been raised to 16 a long time ago. The postponement of the raising of the school leaving age by the Labour Government was a bad mistake, even in the economic context in which it was done. I say that partly because I believe that the kind of unemployment problems which will be faced in the future by young people who are at school now will be such that they will be badly handicapped if they have not been in full-time education until at least the age of 16. I should like to see that
  1154
  belief tested by some kind of forward projection of employment and manpower trends, so that a decision of that kind is made in relation to the future manpower needs of the country. The same thing applies to decisions on the number of students in full-time higher education in 1980. That sort of decision should be made with manpower intelligence available.
  In making a whole range of decisions the Cabinet of the day ought to have available from the Secretary of State for Employment manpower advice which it would take just as seriously as, or more seriously than, the financial advice it receives from the Chancellor of the Exchequer.
  This is not merely a question of Government decisions. There ought to be available to people in industry, the universities, polytechnics and other institutions of education bulletins of manpower information which would enable their decisions to relate more closely to what was likely to happen in the years ahead.
  I turn to some other aspects of the Bill. On the future of the employment exchanges, the Secretary of State said that provision had already been made for the changes of policy and that not much of this Bill related directly to the exchanges except in the sense that the agencies' relationship to the Commission is spelt out. I say in passing that I am sure we all want to see the fastest possible progress towards the objectives set out in "People in Jobs" and the later document "Into Action". A new look in our employment exchanges was long overdue and the country owes a great debt to successive Secretaries of State, especially my right hon. Friend the Member for Blackburn (Mrs. Castle), for the work done to initiate the changes in the employment exchange system which are now coming into effect.
  The aspect that I stress is the occupational guidance service. I understand that it is now available in about 44 different cities and towns and is due to be extended. This should be regarded as the most important growth point in the employment exchange service. Our objective should be to translate the service from a job placement service more into a counselling service from which a man or woman or young person of any

  1155
  age with any kind of employment problem should be able to get sophisticated advice from a trained person about the opportunities available.
  On youth employment we welcome the statutory obligation on local education authorities to provide this service. Clearly the split between the local education authorities and the Department is unsatisfactory and a change is overdue.
  In some ways we are afraid that the Bill does not go far enough, and it is fortunate that the House and the Committee have the benefit of the Report of the Public Expenditure Committee. My hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) was Chairman of the Sub-Committee which produced this report. If my hon. Friend succeeds in catching the eye of Mr. Deputy Speaker, I am sure that she will have something to say about it.
  I underline one point. The Secretary of State spoke about the benefit to a young person in being able to choose whether to obtain advice from the careers service of the local authority or from the employment exchange. As I read the Bill the option is given not only to the young person but to the local authority. As I read the Bill the statutory duty is to provide a service for those in an institution of education and for the obtaining of their first jobs and not necessarily to continue to provide that service up to any specified age. My hon. Friends and I will argue in Committee that there should be a complete statutory duty to provide a service up to the age of 18, 21 or whatever is the appropriate age. A first job could last a very short time. It might only last a week. For a young person after a week at work having just left school, one would want to have available the same sort of service that he had a week previously. That is an important point, and there are others on which my hon. Friends and I will seek assurances in Committee.
  It is essential that we see that aspect of the problem in this context. For many years the country has made relatively generous provisions for those who stay in full-time higher education after leaving school and up to their early 20s. This has been right. But in comparison we have made very poor provision for those
  1156
  young people who leave school at the statutory school leaving age or shortly afterwards. This is a big gap in our society and it has many aspects, some of which are outside our debate, such as the provision of playing fields and the like. A young 18-year-old at work has as much need of opportunities for sport as a student of the same age in an institution of full-time education.
  Looking at the content of the Bill, I suggest that we want to see what I would describe as a charter for the non-student teenager. I emphasise five points especially. The first is the absolute necessity for the provision of more jobs for young people in areas of heavy local employment. The second need is to make a real success of the final year at school and to make it a year which will be a relevant experience from the point of view not only of those planning these matters but of those undergoing the experience.
  The third need is the expansion of further education for those who have left school up to the age of 18 and in certain circumstances beyond it, but recognising that the provision of day and block release, although it has been expanded in recent years, is totally inadequate for boys and disgracefully inadequate for girls. Part of what we are thinking about should involve the expansion of further education for young people.
  The fourth need is a greatly improved careers advice service. It is right to acknowledge that there is already an excellent service in some areas. We are concerned primarily with spreading the high standards which exist in some areas over the country as a whole.
  The fifth need is for an improvement in occupational training. When we think about training, we think too readily and obviously in terms of industries such as engineering, construction and those with traditional craft apprenticeships, whereas perhaps we should be thinking more often of the training opportunities for young people in offices, shops, working on farms and in many other categories of employment where training hitherto has been on a much poorer scale.
  That brings me to a brief reference to the part of the Bill dealing with training which from the Opposition's point of view is the least satisfactory part. It is not as bad as it might have been.

  1157
  It is not as bad as it would have been if the Government had persisted in the policy set out in the consultative document issued early last year. The House will remember that the proposals in that document included one to abolish the levy/ grant system by the financial year 1972–73. However, the Bill involves a weakening of the impact of the levy/ grant system and this is disturbing.
  There are many other aspects of this new machinery for training which we shall want to discuss in Committee. One is the extent to which the industrial training boards will retain important powers. The Secretary of State said something about that and pointed out that the role of the commission as he saw it would be one of co-ordination and not dictation. I was glad to hear that, as I was to hear the right hon. Gentleman speak of the need for high-powered people to remain on the industrial training boards. This is of great importance.
  The industrial training boards have been a very important if not a revolutionary development in industrial relations. They have been unique in a sense that employers' leaders and trade union leaders have sat down together not simply to consult each other as they do in many other different forums but to make joint decisions affecting their industries. The people who make those joint decisions have to go away from board meetings and implement those decisions. That is very important not only for training but for what it is hoped will be a better atmosphere in industrial relations in the future. This will work out only if the top people on the employers' and trade union sides are willing to give their time to the job, and they will do that only if the powers left to them are worth while. It is very important to bear this in mind.
  Another aspect that we shall want to explore is the financial one. It is left very vague. Clearly the money raised by the levy is likely to be reduced. We are told that a sum of up to £35 million will be available for key training activities. How that £35 million relates to what is likely to be lost by the reductions in levy, who has done the sum and what it is are questions which need to be explored in our debates in Committee.
  On the levy and the grant, the Government have reached an unhappy com-
  1158
  promise. Quite rightly they rejected their original proposal in the consultative document to abolish the levy system. But the choice should then have been made to keep the existing system which, I suggest, has been the main reason why since 1964 the industrial training boards have on the whole succeeded in improving the quantity and quality of training.
  The system is to be weakened in four ways. The Secretary of State said three ways but I think there are four. It is to be weakened first by the exclusion of small firms, that being an expression which still has not been properly defined. We need a definition. If it means the exclusion of very many firms, in some industries it can mean excluding the employers of most of the work force and it will have an extremely damaging effect on group training schemes because the involvement of small firms in paying the levy and their wish to qualify for rebate has been one of the motive forces, though not the only one, behind the healthy growth of group training schemes among small firms in the past few years. It would be very serious if this trend were reversed.
  Then there is the other limit proposed for the levy of 1 per cent. We are told that it will be a normal upper limit, and we are told in the White Paper that it can be exceeded only in quite exceptional circumstances. This is a very grave mistake. The training costs of industries vary enormously. The Secretary of State has said that most training boards make do with a levy of 1 per cent. or less. But in an industry with heavy training costs surely a training board should be able to propose, as has happened in recent years, a levy agreed by the members of the board in the light of their knowledge of the industry. The Secretary of State will still have his powers to approve or to decline to approve an order. If he thinks that a proposal is excessive he can send it back, as he has done in the past.
  Why do we need to have the doctrinaire insistence that only in quite exceptional circumstances will the levy be more than 1 per cent.? When the Secretary of State was speaking, I interrupted to ask him about the Engineering Industry Training Board. It is the largest

  1159
  training board and it has had a great success story. Since 1964 the improvements that it has initiated have played a vital part in the country's economy. That has been done on the basis of a levy which has varied over the years but which consistently has been much higher than the 1 per cent. limit. It would have a very serious, possibly disastrous, effect on training in the engineering industry if it were forced down to a 1 per cent. levy.
  I also have doubts about two other aspects. The first is the proposal that large numbers of firms should be exempted from paying the levy by means of an exemption system. The second concerns a provision which was not mentioned by the Secretary of State that in future industrial training boards will not have the duty to impose a levy. I object to those two provisions because it seems to me that the payment of the levy itself is the important motive power in training. The provision of grants from the commission or whoever proposes them can be an incentive but not nearly such a powerful one. The levy has to be paid on certain dates. It is there in the balance sheet. It has to be brought to the attention of the board of the company, which cannot shuffle it off on to someone lower down in the hierarchy. The board of the company must be aware of it. It must be aware of the origin of the need to train on a scale and at a level which qualifies for rebate.
  In moving away from that concept we enter a more permissive society in training. We encourage procrastination and the sort of situation in which it may be said at a board meeting "Mr. X will not be going for new training schemes, but Mr. Y has other ideas. Therefore we shall postpone both matters for further study." This would remove the urgency which is imported into the situation by the fact that the levy must be paid on a certain date, that training must reach a certain standard and that the compensating finance must be obtained by the board. The old carrot-and-stick argument behind the 1964 Act was valid and remains valid today. Training will suffer if there is any movement to reduce the impact of that Act.
  1160
  We are today dealing with a subject which is of vital importance. It is a cliché but nevertheless it is profoundly true to say that manpower is the most precious resource possessed by this country. If we fail in our manpower policies, we fail in a number of senses. We fail because people's working lives will be less satisfying to them and less rewarding than they might have been, and we fail in the sense that in any loss of productivity society as a whole loses the essential economic growth which we ought to achieve.
  We are failing at the moment. We are failing in the sense that we have 750,000 people unemployed. We are failing in the sense that too many people are in dead-end jobs. We are failing in the sense that too many people are working at less than their capacity and in the sense that our policies are reacting too slowly to rapid changes in a technological society. Whether we can succeed today or in the future will depend partly on the machinery that is provided in the Bill and by those who are appointed to the commission and to the agencies. It will depend much more on the Government of the day pursuing dynamic policies in employment, training and education—and much more dynamic policies than we have seen or are likely to see from the present Government.
  5.40 p.m.
  Sir Paul Bryan: I congratulate my right hon. Friend the Secretary of State for Employment both on the Bill and on his speech. I am sure that he will join me in welcoming the interesting and well-informed speech—at least as to most of it—made by the right hon. Member for East Ham, North (Mr. Prentice).
  The Manpower Services Commission is an objective towards which some of us have been working for many years, and this applies to hon. Members on both sides of the House. Progress has been slow, not to say laborious. Now suddenly, with a belated spurt, it seems to be with us.
  When I was at the Department of Employment I understood that there was nothing to prevent the establishment of a training agency or an employment agency but that a manpower commission would

  1161
  have to wait until such time as the Department of Health and Social Security took over the payment of benefit. However, the Secretary of State seems to have overcome this hurdle by first setting up the commission and the training agency leaving the employment agency to join them once unemployment and benefit payments are separated. This process is already under way.
  Today's debate will attract no great headlines in tomorrow's newspapers. Nevertheless the setting up of the Manpower Services Commission is a momentous event in our social, industrial and educational history. I do not agree with the right hon. Member for East Ham, North that it is a small constitutional experiment. I should like to have seen its birth marked with rather more panache and certainly with a more explanatory White Paper.
  I thought that the description given by my right hon. Friend the Secretary of State of the objectives of the Manpower Services Commission and the thought behind it was the sort of thing which we should have seen in the White Paper. The title Manpower Services Commission conveys absolutely nothing to 99 industrialists out of 100. Indeed I doubt whether the majority of trade unionists would know what its objectives were. Yet the White Paper does not give an explanation of what the commission is trying to achieve. There are many paragraphs describing its functions, composition and so on, but nothing is said to justify the radical transformation of the present arrangements. This is a pity because the objectives are worthy objectives. The concept of representatives of industry in the form of a commission being made responsible for industry's own training and employment services is exciting and, as far as I know, unique.
  The closer linking—indeed, interdependence—of the training and employment services through the commission may not be unique but is certainly an advance on present practice. I have always thought that the third leg of a manpower commission consisted of manpower planning and long-term forecasting. This whole element has been understated. It is not absolutely clear to me where the responsibility lies. I do not sail away as high on the magic carpet as does the
  1162
  right hon. Member for East Ham, North, who reached a very high castle in the air. I tend to agree with my hon. Friend the Member for Oxford (Mr. Woodhouse) who saw some limitations in this operation. Nevertheless, these matters are very much in people's minds with the advent of so many unexpected redundancies—I emphasise the word "unexpected"—and the public expect to see forward planning of manpower.
  These objectives should have been highlighted. I understand that the White Paper has been introduced on this rather "piano" note to prevent excessive expectations. My fear is in the other direction, that it will not appear important enough to attract big men to the commission. The composition planned for the board looks right, but it will be ineffective unless the men who fill those 10 places have the stamp of authority and are well known and respected personalities. On this brief I do not believe that we will get them.
  I agree entirely on the inclusion of an educational member of the commission. In my time at the Department I always thought that the co-operation between the Department of Employment and the Department of Education and Science was never as close as it should have been, although we depended on each other in so many ways. There was, for example, the training opportunities scheme which depended for its expansion on the help given by the technical colleges, as indeed it still does.
  I should like to discuss the relationship between the commission and the two agencies and training boards. The explanatory memorandum of the Bill states that
  "The Commission will thus be responsible for planning, developing and operating employment and training services other than those provided by local authorities and for coordinating the work of industrial training boards. Its executive functions will be carried out by the two Agencies."
  This is an accurate definition of the commission's relation to the Employment Service Agency but not of its relation to the Training Services Agency. Once policies and programmes have been agreed, the commission presumably will let the Employment Service Agency get on with the job. In the case of the Training Services Agency the same will

  1163
  apply with regard to the training opportunities scheme and the Government training centres but apparently not in relation to the industrial training boards.
  Paragraph 11 of the White Paper states that the agency will co-ordinate the work of the boards subject to the directions of the commission, which itself will have only a very small staff. But according to paragraph 63 of the White Paper and subsequent paragraphs, it seems that the commission will deal direct with the boards over the head of the agency in many important matters. It is the commission that will direct the boards to submit levy proposals. The commission will provide grant-in-aid for administrative expenses and for the key training activities. Although paragraph 11 tells us that the agency is to co-ordinate the work of the industrial training boards, paragraph 68 states that
  "The Commission will have a co-ordinating role…"
  The boards will
  "discuss and agree their forward plans and budgets with the Commission."
  We then see in paragraph 69 of the White Paper that
  "It will be for the Commission to approve boards' proposals under section 2 of the 1964 Act, e.g. proposals or grant schemes and training recommendations."
  We see in paragraph 71 that
  "The Commission will have the right to appoint assessors to attend meetings of boards and board committees …"
  Paragraph 72 says that
  "A board will submit to the Commission, and not to the Secretary of State, proposals to delegate functions formally to a committee of its own —"
  And we see in paragraph 73 that
  "The Commission will be able to give directions to a board in respect of the use of the funds which it makes available to it."
  That may be understandable to us in this House, but I have found that the training boards conclude from those statements that, whatever paragraph 11 may say, they will normally be dealing with the commission direct and not with the training agency. This is a matter of great interest to the boards and I hope that my hon. Friend the Minister of State will be able to clarify this matter in his reply.
  I shall not be sorry if the conclusions of the boards are correct, or correct to a
  1164
  certain extent, and I shall explain why. There has always been in Britain an astonishingly large number of high-grade men and women willing to do certain work for little or nothing provided that they are convinced of the real value of that work. The ITBs comprise many such people. I was constantly impressed by the calibre of members of the boards, whether they were trade unionists employers or educationists. There was also a high proportion of excellent chairmen, many of whom had retired early from posts of great responsibility in industry.
  The quality of these largely voluntary boards has given them a status and they expect to be listened to. When they functioned under the Department of Employment, there was an obvious channel of communication—when necessary, direct to the Minister. This access to the Minister stemmed naturally from the appointment of board members by the Minister. If they were to be completely under the agency, however good that agency may be, with little direct contact with the commission or the Minister, the boards would tend to feel downgraded. The past two years of uncertainty has already put a heavy load not only on the boards but on their staffs. Anything we can do to maintain their status and their morale should be done.
  I wish to ask my right hon. Friend the Secretary of State for some information about training on employers' premises, a subject on which he touched in his speech. We started that idea when I was at the Ministry but it got off to a disappointing start. It seemed a hopeful proposition 18 months ago when there was spare capacity in industry and it was thought that employers would welcome the idea and that it would not cost them much, but, as I have said, we did not get very far. I should like my right hon. Friend to say to what extent that scheme has prospered.
  I conclude by wishing the commission well. It has a task which is inspiring and difficult but perfectly feasible. It has the positive support of the trade unions, the CBI and hon. Members on both sides of the House. The climate for its success is favourable. In the short term one sees a shortage of skilled management and skilled labour which must increase interest in the improved employment and

  1165
  training services. In the longer term the commission will benefit from the philosophy which is increasingly being accepted that an individual has a right to training and retraining and that he should be helped, and generously helped, to exercise that right.
  The modern employee in industry is better educated, better informed better travelled, is more choosy about his job and will be looking for the more sophisticated employment service and guidance envisaged in the Bill. The massive redundancies which new technology has brought to such industries as steel and the docks have stimulated a public demand for better manpower planning, and the need for the commission is clear. The Bill brings real hope that that need will be met.
  5.50 p.m.
  Mrs. Renée Short: Unlike the hon. Member for Howden (Sir P. Bryan) I intend to concentrate on one part of the Bill and one part of the White Paper which came out at the same time, namely that concerning the Youth Employment Service. It is 25 years since we had legislation of this sort and it is interesting that we should now have an opportunity to discuss many aspects of the whole question of manpower planning and training, and the redeployment of workers in industry.
  By great good fortune my Expenditure Committee has been looking at all employment services since a year last February. Last Thursday we published our report on the Youth Employment Service and in a fortnight's time we shall be publishing our second report in the series which will deal with women's career opportunities and training. This will come out in time for the Committee stage. We are aiming to produce by Easter the remainder of the report which will deal with the whole sphere of the Minister's responsibilities for Government training centres, the training of the disabled and their employment, and so on. It appears that the Expenditure Committee has managed to time the production of its reports to good purpose.
  As the Secretary of State indicated, since 1944 the majority of local education authorities-132 out of 163 in England and Wales and 11 out of 35 in Scotland—have urged that the Youth
  1166
  Employment Service needs strengthening and that it should be the mandatory responsibility of the local education authorities. The Scots are apparently a little more bashful about running these services, but I hope that they will mend their ways from now on.
  I am very glad that the Secretary of State has come into line with our proposal, but the White Paper is confusing about the point that he mentioned, and I am glad he clarified it. The White Paper says that it should be a mandatory service on local education authorities, but paragraph 56 indicates that local authorities can make arrangements with the Manpower Commission for the commission to perform some or all of their mandatory functions. It says, in practice, that this will he only from the transitional period and that such arrangements with the commission will be confined to a small number of authorities. But that is not necessarily what the Minister said. I am glad he said that this would be for a transitional period only and did not mean that a small number of authorities might escape their mandatory functions under the Bill. I am glad that, ultimately, all education authorities will carry out this service.
  The Youth Employment Service, ideally must be part of a strong team, the other part being the careers teachers in our secondary schools. This means that they will back up the correct guidance given in schools about the courses and options open to young people. This needs to stem from the broadest possible curriculum allowing a choice to be made as late as possible in the school career. At the beginning of the debate the Under-Secretary of State for Education and Science was with us. I am sorry that he has now left, because much that is in the Bill, and much that will stem from it, depends on the Secretary of State for Education and Science.
  The Secretary of State will, of course, be responsible for the careers teachers, their training, their career structure, and so on. I hope that in his concluding speech the Minister will tell us what discussions he intends having with the right hon. Lady, and what progress they hope to see. If career choice is not to be jeopardised there must be expert guidance, and it must come early in the school career. It is too late at the age of 14 or 15, after choices have been made

  1167
  which are largely dependent upon inadequate advice or inadequate staffing in schools.
  Our committee recommends that there should be much more career guidance for girls to turn their eyes and ambitions to jobs and careers that are not now normally followed by girls. There is an enormous need for good counselling services throughout the school system, but especially for girls. One can ask where are the girls who become engineers and eventually go on to become bridge designers? Where are the girls who go in for electrical engineering? Where are the girls who become airline pilots, or heads of mixed comprehensive schools? All these are thin on the ground. It is extraordinary that we waste so much potential, that so much talent is lost to the nation, and that so much ability is not developed.
  We were disturbed to find that career guidance in schools is a haphazard affair. We were alarmed at how little the Department of Education and Science knew about its provision. For example, there are no accurate figures of the number of career teachers in schools, and ILEA, which is a very advanced education authority on matters of career guidance generally, told us that over 20 per cent. of its secondary schools had no career posts. There is no guarantee that teachers who are doing careers work in our secondary schools have had the necessary training. We heard evidence from one group of witnesses that a headmaster summoned a teacher into his study one day and said, "You have a bit of spare time, so you are doing careers from now on." That is not the way to get a fully comprehensive, well-based careers service which will eliminate all the waste of talent and ability which occurs right through the education system up to university.
  We are very concerned about this matter. We learned that the inspectorate has been running short courses on careers guidance since 1967 but that only 100 careers teachers and 20 heads have received such training to date. We therefore recommend a rapid expansion of training for careers teachers, that there should be a careers teacher for every secondary school, and that a proper careers structure should be developed by the Department.
  1168
  The local education authority's careers work, which has been carried out so successfully, is based on many years' experience, and it is professional. The Secretary of State does not understand the difference between what is provided by the Youth Employment Service now and what the Department will provide for young people under the Bill, as explained in the White Paper. The Secretary of State says that a young person who leaves school at the age of 16, after his first job, will go to the Department for further guidance, counsel and placement. I do not know whether he understands that this could be very soon after the young person leaves school—it could be a matter of weeks or months.
  As the right hon. Gentleman has indicated, at that age and at that stage of experience a young person needs precisely the same guidance as he or she had on leaving school. The whole point is that there is not that resource of experience and training in his Department and in the employment exchanges that now exist in the youth education careers service, whether it is dealing with a handicapped young person, a disadvantaged youngster, a disturbed youngster or young coloured people—who were indicated to us as groups who need most attention, often needing many weeks of counselling and being sent for many interviews with employers before placement is achieved. The difference is not just one of placing young people in jobs. Many young people need a great deal of attention and very skilled care from the careers officers in youth employment offices. I do not believe that the officers in the Secretary of State's Department can supply this expertise and experience. Their whole experience in the past, and the orientation to their job, has been different.
  I remember in my own constituency, for example, when we were at the height of our problems with unemployed youngsters and had about 1,000 young people unable to get jobs, the Youth Employment Service provided daily work which was based on the youth centres throughout the area. I do not believe that this could have been done with officers attending every day and with counselling being carried on in the youth centres and activities being provided to keep the young persons off the streets by

  1169
  the Secretary of State's Department, but it was done by the local education authority.
  Looking at the enormous number of changes of jobs that have occurred with young people from the age of 15—as the school leaving age then was—one finds, for example, that 94 per cent. of boys of 15, about 82 per cent. of boys of 16 and about 80 per cent. of boys of 17 had had up to 10 jobs after leaving school. The figures for girls are comparable. This requires an enormous amount of attention, care and counselling from the Youth Employment Service.
  Mr. John Page: I have been listening to the hon. Lady's account of her study over many years, and I am delighted to say that I agree—but can she tell us over how long a period these 10 jobs were held? Was it between the ages of 15 and 17, or up to 20?
  Mrs. Short: The figure of 94 per cent. having had up to 10 jobs was for boys up to 15-plus—before their 16th birthday—and the percentage just over 80 was at 16. We got the same figure right through for girls as well. Almost 11 per cent. of the boys between 16 and 17 had had up to 15 jobs since leaving school. The general public do not realise what an immense turnover there is and how much experimentation goes on in job finding. Of course, a certain amount of this movement is necessary; young people need to look around to see what jobs are on offer. But I am absolutely certain that with the more concentrated counselling service that the Youth Employment Service could provide much of this could be cut out. There is the same turnover in numbers with girls. Far to many girls regard jobs as filling the gap between leaving school and getting married, and take a job without being greatly concerned about it. Only 10 per cent. of girls get day release, against 40 per cent. of boys.
  One of our recommendations was that day release should be compulsory for all school leavers, boys and girls. I wonder what the Minister will have to say about that? It is part of his scheme. Does he intend to do it?—because until it is done there will certainly be serious discrepancies and inadequacies between boys and girls. Too few girls go into full-time further education—the figure was only about 23 per cent. in 1969. Again, this
  1170
  stems directly from career guidance in the schools. In 1970 only 7 per cent. were apprenticed to a skilled craft, and three-quarters of those were in hairdressing, while 42 per cent. went into clerical work. There is a deadly pattern of the same old thing, decade after decade, with an enormous waste of potential which indicates that a proper full-time trained career service is absolutely essential.
  At university level the same thing happens. A number of students drop out completely from their courses, change courses after the first two terms or the first year and qualify in other subjects, or leave without qualifying at all. This provides further proof of poor careers guidance at school and the errors of early specialisation which arise from this. There is an enormous amount of very constructive work to be done. As the Minister has indicated, the present age of separation between the Youth Employment Service and the adult employment service is 18, but we believe the age of 21 is better, because then we have continuity right through from school leaving age to 21, when one can assume the end of apprenticeship, or the end of the first degree if young people go to polytechnic or university. Thus, one service is providing for all young people up to the age of 21.
  We also felt that the paying out of money should be done at the same centre as the job counselling work, and that young people should not go to the employment exchange to collect money if they are unemployed. We felt that there is no point in dividing this work and creating difficulties of access. It could all be done at one centre.
  Finally, the financial recommendation is far from clear. I understand from what the Minister said that this service is to be financed from funds provided by his Department. We were concerned that the continuity of the work should remain with the present arrangement, whereby 75 per cent. of the approved expenditure on the service is paid to the local authorities directly. We believe it is essential for this to continue, and our witnesses felt the same, otherwise this service is likely to be rather lost sight of. We feel that money channelled to this service for that purpose, because of its great importance to the careers and

  1171
  opportunities of young people, should be by way of a specific grant, and that this should continue. I hope the Minister will be able to answer these points when he replies to the debate.
  6.9 p.m.
  Mr. Robert Redmond: I am most grateful for the opportunity to follow the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) because for the first time since I came into the House I find myself in broad agreement with a great deal of what she has been saying, particularly on the question of careers guidance. This country suffers from a lack of training of careers masters and mistresses in schools. Not many years ago, when I was in the engineering industry, I had a letter from a mother asking me to give an apprenticeship in the firm's drawing office to her little Johnnie. She said "He is top in art and his careers master said he should be in a drawing office". That story is quite true, and it shows just how much knowledge that careers master had of what is needed in a draughtsman.
  Today people are going to university for the sake of going there; they do not know why they go. They obtain the requisite number of A levels and then seek a university course. If they fail to obtain it, they seek a technical college course, or something like that, if only to put off the evil day when they must choose a career.
  I particularly want to speak about the training aspects of the Bill, because I have done a great deal of homework on the subject in the last few months. When the booklet "Training for the Future" was published Members on the Government side of the House accepted that it was a discussion booklet. I have a feeling that in the country and on the Opposition benches it was looked upon as a policy document, which it was not. I received some representations from younger members of the engineering union who seemed to think, because there was a suggestion that small firms could be exempted from the levy, that those firms would stop training. I was able to show that when the engineering industry talks about a small firm it is referring to what is often quite a large firm in the context of the whole of industry.
  1172
  As a result of the discussions that have gone on we seem to have come fairly close to a consensus. The right hon. Member for East Ham, North (Mr. Prentice) missed a rather important point on the question of levy. There is already a hidden levy, in the size of the apprentice's pay packet. It is no longer possible for the employer to think of using a can lad, because he cannot afford it. He takes on apprentices and must offer them first-year training off the job to the point where they will quickly become useful to him, otherwise it is not an economic proposition to employ them at all.
  The present level of apprentices' wages is itself a levy, and a stick towards training. That factor has become increasingly important in the minds of the people I have consulted in the last six or eight months. A great deal of opposition to the withdrawal of levy from people who ran the engineering small firms training groups has disappeared on that ground alone.
  The Government must make it understood that when they say they are issuing a consultative document they mean it. We have had a number of Green Papers which seem to be regarded as White Papers. I have received many letters from people in the Women's Lib organisation about family allowances, and even now demonstrations are going on although my right hon. Friend the Chancellor of the Exchequer has said that he has accepted the representations.
  There has been a genuine misunderstanding in the engineering industry about what is meant by small firms. Last summer one branch of the engineering union wrote asking me to oppose the Government's policy on training. I replied that I could not oppose a policy if I did not know what it was, but that it could help by making representations to me. It did, and I find some of its views interesting.
  My right hon. Friend the Secretary of State thanked the training boards and others for the time they had given to consultations. I want to thank the people in my constituency and other parts of Lancashire for the trouble they took during the Summer Recess in giving me their valuable advice, which I passed on to my hon. Friend the Minister of State. I hope that he has taken it on board. I see some of it appearing in the Bill.

  1173
  An interesting suggestion was put to me by a training group of small firms, none of which employs more than 10 people. The group—the West Pennine Training Group, connected with the Distributive Industry Training Board—asked to be exempted. Its members said, "Take us right away from the board. We shall look after the training. We can be exempted completely, on the condition that the group employs a training officer". The group is now making a levy upon the firms of £2 a head per employee per year. That was a very interesting reaction to "Training for the Future" from the distributive industry.
  From discussions last weekend I found that the people to whom I talked last summer are very glad to see the levy/ grant exemption arrangements and are happy, as I am, that a Manpower Services Commission is to be established. But I am a little concerned about something that my right hon. Friend said today. I hope that we are not setting up a new nationalised board. I hope that there was nothing in his speech—as I thought there was—to suggest that we shall not be able to ask him questions about the detailed operation of the commission and training boards. It would be a disaster if we were not allowed to interfere in the day-to-day running of the commission.
  We on the Government benches do not expect the commission to work miracles, but I hope that it will iron out the bumps. That was the main point I kept putting to the Government during the consultative process—that we have bumps, leads and lags. There are areas of both high unemployment and shortages of particular types of labour. I hope that the commission can do a great deal to discover what training is needed and to some extent to carry out the suggestion of the right hon. Member for East Ham, North.
  My right hon. Friend said something about the training and retraining of women. May we know at some time exactly what is happening about their retraining? There are already shortages of female labour in the weaving industry in Lancashire textiles, in an area of high unemployment. My right hon. Friend and my hon. Friends at the Department know the interest that I have shown in what is called the "female activity rate"—the statistics kept in the Department of Em-
  1174
  ployment. I know what they are, but I have not found out what they are for. I hope that we can use them to show that the retraining of women for new jobs is going ahead. I have asked many questions about that matter.
  I was glad to learn recently that my right hon. Friend is winding-up superfluous training boards. It was crazy to have training boards for the electricity and gas supply industries, because with virtually one concern in each industry each could be its own training board. The banks do not have a training board, but they are doing some remarkably good training.
  What about training people to be self-employed? It may be principally a matter for the Department of Trade and Industry but the raw material for the self-employed comes to the Department of Employment—the redundant executive, the redundant anybody, who says that he wants a job. Should not the Department sow in that man's mind the seed of the idea that he might work for himself? I am very keen to see more people self-employed, starting small business. Great oaks come from little acorns. But many people fail in their self-employment.
  Mr. James Hamilton: The hon. Gentleman has raised an important point, and to some extent I agree with him. But where is the capital to come from?
  Mr. Redmond: It is a matter more for the Department of Trade and Industry than for the Department of Employment. My point is that to sow the seed in someone's mind may start him thinking on the right lines.
  There is then the need for training, not in the trade concerned but in administration. Admittedly, a man starting a business needs some capital, but the principal thing is to make him think about what he can do. I know many small businesses that started with virtually no capital and have become quite successful. Such ventures often fail because the man who started them does not realise the snags he will meet. A man who sets up in business as a window cleaner does not necessarily fail because he is a bad window cleaner; he probably fails because he does not have the necessary training in cash flow, credit control,

  1175
  depreciation and marketing. I am not suggesting that to start off in business as a window cleaner a man should be sent to a business school for three months or go to Harvard, but it should be possible, within the purview of retraining, training opportunities, and so on, to give a man some instruction on how to keep a cash book and how to make reserves for depreciation: something short and sharp and interesting. The Department of Trade and Industry may well be catering for this through the small firm centres, but I urge all my hon. Friends in the Department of Employment to think in terms of sowing the seed and then offering the right form of training and the right advice as to where to go for capital. That is a very important point, and I hope it can be borne in mind.
  6.21 p.m.
  Mr. Frank Tomney: I followed the amusing and interrogative speech of the hon. Member for Bolton, West (Mr. Redmond) with interest. One reason is that I happen to be a Boltonian.
  I was rather interested in something the hon. Member said at the beginning of his speech concerning universities and university training. When I was first asked to lecture at Berkeley University in California I was a bit afraid of the assignment, but when I got there I found that I need not have been. The place was crowded to the doors by literally thousands of students. Nobody was teaching anything to anybody or listening to anybody else. This proved conclusively to me that once one departs from making university education a privilege and makes it a right, one runs into trouble. When one departs from absolute selectivity on academic achievement, one encounters trouble. We are running into that sort of trouble a great deal in this country, but I do not intend to deal with that tonight.
  I shall not go into great detail because I do not think there is anything seriously to quarrel about in the Bill; it is a framework or structure and is to be welcomed as such because it deals with a problem which will grow daily more intractable.
  I speak as one who has been on the receiving end both of unemployment and of a training centre. There is nothing
  1176
  on earth more demeaning or demoralising than being willing to work but denied the opportunity; nothing creates such a sense of sheer hopelessness. I speak as one who was thrown out at 18 because of the collapse of an industry. I was training as a textile engineer, and new opportunities and new jobs were simply not available. What was available was the humping of vacuum cleaners up and down Lancashire, throughout Manchester and Wythenshawe, trying to find people who had electricity and, when one found them, trying to sell them a vacuum cleaner. When one does that, and it is raining and snowing as it can only in Lancashire, one realises how hard the world can be, especially when one is aged 18 or 19.
  It was through that experience that I drifted to a training centre and learned a new trade. From that, by a series of stages, I eventually landed in this place and began to learn another trade—but in this place one never gets the right answers because one is mixing with people who change policies every day, like chameleons changing their colour. Sometimes one gets different speeches on the same subject from the same person cm the same day, but one has to reckon with these things.
  We must welcome the Bill. It is not perfect, but we are dealing with a subject that is not perfect. Economic man is not in charge of his own destiny, either in this country or anywhere else. I stated in a debate on economics about two years ago that I believed that by the end of the present century this country would be overpopulated by 20 million people in comparison with our resources. I see no reason to change that philosophy or statement now. Twenty million is a lot of people; it means a lot of jobs, a lot of frustration and a lot of lost opportunities.
  One has to look at the way in which industry is drifting. That is why the Bill can at best be only a palliative. But we cannot afford to be without it, because the problem with which it has to grapple is an increasing one, whether it concerns the youth employment or careers service or merely providing job opportunities. I am not concerned with how the service is financed or where the finance comes

  1177
  from. I am concerned to see it in being and given every opportunity to operate and to grow, because the situation cannot be resolved entirely within these shores. We are dependent to a large degree on the economic climate, which can be generated against us at any moment in European or world politics, with the position of our currency and its value as against other currencies.
  We have witnessed recently the almighty dollar being thrown into a turmoil with the deutschemark supreme. Germany was defeated, and look what that has led to. It led first to a streamlining of trade unions in Germany—one of the finest jobs that Ernest Bevin, as Foreign Secretary, ever did. From that grew a long period of industrial peace and the resurgence of Germany's capital industries.
  What happened here? In the last century and at the beginning of the present century our capital industries appeared to be supreme, but how much capital industry have we got left today? We do not have a lot. We have much highly specialised technical industry. That is why the Government, confronted with the situation a few months ago, had to nationalise Rolls-Royce. Fifty-one per cent. of the technical and scientific skill of England was concentrated in that industry, but when the chips were down it had to be nationalised and rescued.
  This is what we have got. We have fewer skilled job opportunities today in the ordinary terms of fitters and turners than we ever had before. The position has changed completely into electronics, computers and mechanisation. Alongside that there has been another change in the capital structure of industry—amalgamations, conglomerations, international companies, all of whose future is based on the sacred doctrine of the balance sheet and the profit and loss account. This is efficiency. No man who has attended a business school can deny that it is the way that industry should operate. But in doing so one operates against the possibilities of a nation suffering from over-population and with job opportunities declining.
  In this situation, what can we do? What can we be expected to do? We now have a Manpower Services Commission. We have heard arguments ad-
  1178
  vanced on both sides of the House as to advantages and disadvantages and forecasting what it eventually hopes to achieve. But it cannot achieve anything unless it is planned differently. I shall refer to one aspect of this. When the war started we in this country found ourselves entirely without scientific glassblowers. We had been buying consistently from Germany for 60 years and not training our own people. There was an upsurge of the training of young glass-blowers, of whom I was one, to be scientific glass-blowers.
  How do we make a survey of where industry is going, what manpower it may need and in what volume? One cannot do it, for the simple reason that company formations, Stock Exchange flotations and amalgamations, must by the very nature of their operations be conducted in such secrecy that no manpower board can be informed. What is really required is an investigation commission working alongside and in conjunction with the manpower commission.
  North Sea gas is a tremendous capital industry for which we never thought we would have to provide. All the valuable contracts went to the United States, but we managed to make provision for the piping of North Sea gas. We trained hundreds of pipe-fitters in a very short time and let them loose on the British public. There has been a hell of a row in some cases about the quality of workmanship, but we had to let them loose in order to capitalise on the discovery of North Sea oil and gas.
  Here is a case in point where we have to look at the capital structure of industry, at its market prospects and at the prospects of its competitors, world-wide and otherwise. We have to look at its manpower commitment, and on all these factors advice should be given by an investment board. If I were asked how this would be created I should have to answer frankly that I do not know. Such is the operation that I could not say how it would work.
  We saw the amalgamation of GEC, English Electric and AEI. Everybody thought that that operation should have been done the other way around, but such was the genius of Mr. Weinstock that, with a small company, and small resources, he swallowed the other two. When one looks at the operation that he

  1179
  is performing, with a daily stocktaking commitment, one realises that he is operating on much the same basis as Marks and Spencer. It is necessary to know at the end of the day what has been sold, the stock position and what next week's commitments are. This is marketing par excellence.
  If Mr. Weinstock can carry out that kind of operation, we should be able to do it with manpower and investment planning. That is the kind of operation that is required but, as I said earlier, we are not in charge of our own economic destiny. We are living not on borrowed time, but on industrial time which has been loaned to us, and I want for a few moments to deal with job opportunities and political philosophies.
  I think that in the few minutes I have been speaking I have proved how serious the position is with regard to the provision of jobs. I take the view that we should lose few opportunities, wherever they arise, to take any order of any volume or quality which benefits British industry. I see that just a month ago, for strategic considerations—whether international or otherwise I do not know—we turned down a huge order from China for the remarkable vertical take-off jet aircraft that has been developed by the Royal Air Force. Because of the thousands of miles which separate us from China I can see no strategic threat to Great Britain, but I can see a market of perhaps £200 million going begging. But not so the French. They have supplied markets all over the world. In my view, when one is talking about highly complex capital-intensive industries one has to take orders where one can find them.
  I know that the pacifists will object, but to my mind job opportunities, job consolidation, capital consolidation and build-up are paramount. I see no reason to change my philosophy about the position of Great Britain by the end of this century. It is a frightening prospect, and unless and until we get concentric thinking and political themes which match up with each other we shall be in difficulty.
  For better or for worse, for ill or for good, we have in this country a high percentage of capital-intensive industry. We were reared on that. We have a large number of diminishing middle status concerns. Firms which in the past employed
  1180
  20,000 people have either amalgamated or disappeared. We have a new race of entrepreneurial financiers who take over shell companies with vicious greed and shut them down regardless of the job structure involved. The whole of this complex should be looked at, shell companies included. The shutting down of factories in areas of high unemployment must be looked at.
  Those are some of the things which I should like the Manpower Services Commission to take into consideration in its higher strategic thinking. The quality of the men recruited to the commission will be vital. If they take the view that we still have a wonderful industrial contribution to offer to world trade, the whole aspect of development will have to be taken into consideration. Invention after invention has gone from this country to the United States because finance has not been immediately available for its development, because the research and development programme ran for too long and investigators could not see the dividend reward quickly enough. That kind of nonsense has to cease completely if the engineering industry is to survive.
  I welcome the structure of the Bill. It is not perfect, it is not intended to be, but it can be a powerful palliative. If it brings hope to the people who cannot get jobs or who have lost their jobs, it will achieve its purpose.
  6.38 p.m.
  Mr. Christopher Woodhouse: It is always a pleasure to listen to the common sense of the hon. Member for Hammersmith (Mr. Tomney). If there had been training boards in his youth he might never have come to the House. At any rate, I find myself in agreement with a great deal of what he said, and I particularly welcome the atmosphere that he has brought to this debate, if I may so put it, straight from the shop floor—something which not everyone is able to do.
  With one small exception I also agree with what was said by the hon. Member for Wolverhampton, North-East (Mrs. Renee Short), particularly about the importance of training for girls. A fact of which we should never lose sight, paradoxical though it may seem, is that by far the largest untapped source of skilled manpower today is women. It is shaming to my mind that, for example, even

  1181
  Turkey, which is not a country which we look upon as highly developed, has a higher proportion of women engineers in training than we have.
  One danger of a debate of this kind is that of agreeing too much with what everybody says, and I shall therefore follow the right hon. Member for East Ham, North (Mr. Prentice) in expressing some qualifications of my welcome to the Bill, though not the same qualifications, and perhaps not such severe ones, as those listed by the right hon. Gentleman. It is certainly a much more workmanlike and acceptable Bill, just as the White Paper associated with it is more workmanlike and acceptable than seemed likely from the consultative document that we debated last year.
  In particular, I think that my right hon. Friend was right to preserve the two essential principles of the 1964 Act—first, that each industry should be responsible for its own training, and, secondly, that a system of "stick and carrot" should be established through the levy grant system to encourage industries to carry their training out. On the other hand, it is also right to run down the scale of the levy grant part of the apparatus, which was in danger of becoming elephantine and cumbersome, and distracted attention from the main purpose of promoting good training.
  I knew of a number of firms which were spending far too much of their time thinking about how to increase their grants instead of about whether the so-called training they were doing was any good for their industry. I think it right to provide for exemptions, instead of extracting levy from a firm and paying back an almost identical amount of administrative costs to the same firm. In taking this course my right hon. Friend is really only giving legislative backing to a practice which was already being pursued by the more progressive and enlightened industrial training boards.
  I very much welcome the provision in Clause 12 which gives certain preferential treatment to the disabled, and I hope that attention will be paid by the commission and its agencies to the needs of the disabled.
  While welcoming the Bill, I still have one or two questions and criticisms to voice. Before doing so, I declare my
  1182
  interest in that I am a member of one of the regional councils of the CBI, but I do not think that anyone would accuse me of being hostile to training, especially as I made my living out of it for some years.
  First, perhaps my hon. Friend can clarify one or two of the financial implications. Paragraph 14 of the White Paper says that the commission will be responsible for expenditure in excess of £100 million, and this is made more specific in the Explanatory and Financial Memorandum, which states that the cost to public funds is estimated at about £155 million in a full year, of which about £120 million would have been expended under existing legislation. The difference of £35 million between these two figures is accounted for by items in paragraph 65 of the White Paper. But how is the rest made up? Am I right, for example, in assuming that the £120 million includes the cost of Government training centres? There is one reference to Government training centres in the White Paper—in paragraph 12—but it is concerned only with the possibility of the transfer of ownership of the centres, and it is not clear who will control and administer them, wherever the ownership may lie.
  The Minister of State, Department of Employment (Mr. R. Chichester-Clark): The difference includes a figure of £30 million in respect of vocational training in general, including the Government training centres.
  Mr. Woodhouse: I thank my hon. Friend. He has been very forthcoming in that reply. I hope he will be equally forthcoming in answering my other questions.
  It is obvious that the figures do not include the yield of levies from the industrial training boards, even though the commission is to co-ordinate them. I say that it is obvious because the present aggregate of expenditure of the industrial training boards of itself greatly exceeds £120 million a year. I think that the right hon. Member for East Ham, North was putting essentially the same question. At what point does my hon. Friend expect the future levels of industrial training board levies to become matched?

  1183
  I have one or two relevant figures which I have obtained from the CBI relating to this topic, and I should be grateful for my hon. Friend's comments on them. The CBI estimate, which is only a rough approximation—it can be no other—is that the present total of industrial training board levies aggregates about £215 million a year and that a levy of 1 per cent., which is intended to be the normal maximum in future, would yield in the aggregate about £150 million a year. Allowing for many exemptions, and because there is no reason to suppose that most of the training boards will go for the maximum, the actual yield of the boards' levies should be under half that last figure, according to the CBI estimate.
  In other words, the CBI would expect the total yield of levies in the aggregate not to exceed £60 million or £70 million a year. These are only approximations, but it would be interesting to know whether they accord with my hon. Friend's estimates. If he finds it too difficult a question to answer tonight, perhaps he will invite me to put down some Questions.
  I come now to the question how the commission will work, and how it will reach its decisions. As my right hon. Friend explained, it will inherit some advisory functions, chiefly from the Central Training Council, and some executive functions, especially for the two agencies, together with some powers of co-ordination over the industrial training boards. Its structure will be roughly similar to that of the training boards themselves and of the Central Training Council, in the sense that it will necessarily include representatives of the trade unions, employers' organisations, educational interests and independents.
  The divisions are loosely drawn and will no doubt be flexibly operated with the common sense which has always characterised the whole system since 1964. But no doubt there will also emerge, quite naturally, within the commission a recognisable trade union interest and a recognisable employers' interest, with the other members of the commission holding a kind of balance between them. Paragraph 3 of the White Paper says that the members will not be delegates, but nothing can stop three trade union members from getting
  1184
  together and three employers' members from getting together to consider the agenda before the meeting and to work out a common line in their respective interests. The fact that paragraph 3 envisages the senior staff of the organisations also being involved will tend to promote that trend, as it has done in the Central Training Council.
  But there is a big difference. The Central Training Council does not take executive decisions; it merely advises the Secretary of State. Its advice never involves large sums of money, and on the rare occasions when it takes a vote the final decision still rests with the Secretary of State, who would ignore the minority view at his peril. Therefore, the balance of power in the council matters very little. But in a body with executive powers it could matter a great deal, especially when it comes to financial policy.
  In this respect, the commission will resemble the industrial training boards rather than the Central Training Council, and it will be responsible for large sums of money. Experience in the existing system has shown that, on the whole, educationists and independents tend to the side of the trade unions against the employers. There are obvious and natural reasons for that which I well understand and will not elaborate, but it follows that there needs to be introduced some safeguard in the procedures of the commission, at least in regard to financial policy.
  A particularly important example arises from the provision which empowers my right hon. Friend, in certain circumstances, to require an industrial training board to raise a levy exceeding 1 per cent. of the payroll of its industry. It is only fair that before examining this point I should stress that this provision breaches an express undertaking given by my right hon. Friend explicitly in his statement on 8th August last year, when he said:
  "Other firms above the exemption limit may be required to pay a levy which will not, however, exceed 1 per cent. of the payroll."—[OFFICIAL REPORT, 8th August 1972; Vol. 842, c. 1502.]
  That was not an extempore reply to a supplementary question; it was a formal ministerial statement. I do not wish to argue that it is wrong in principle to

  1185
  exceed a 1 per cent. levy. I say that it is wrong in principle to secure the assent of the employers' organisations to the underlying plan of the White Paper and the Bill on the basis of an undertaking which is breached in the Bill as presented to the House. To say the least, it seems that the Secretary of State is open to severe criticism for misleading the employers on this point.
  Mr. Chichester-Clark: We all know the dangers of interrupting my hon. Friend, but I will take the risk once again. He will have noticed that when introducing the Bill, my right hon. Friend made it clear that if there was a question of raising the levy above 1 per cent. the affirmative resolution of both Houses would be needed. That makes a considerable difference, in the context of what my hon. Friend says.
  Mr. Woodhouse: It makes no difference at all. The Secretary of State made a specific and categoric undertaking, in his discussions with the CBI in preparation for the Bill, that there would not be provision for a levy exceeding 1 per cent. That undertaking was unqualified in the statement which I have read and was unqualified in the discussions which followed, between officials of the Department of Employment and the CBI.
  I am not saying that it is wrong to exceed a 1 per cent. levy; I am saying that it is wrong to breach an undertaking which was fundamental to the acquiescence and co-operation of the employers' organisations in the consultations leading to the Bill. My right hon. Friend gave no reason for breaking his undertaking, nor did he explain in what circumstances he would want to exceed a 1 per cent. maximum. The proper course would be to withdraw this provision and revert to the original undertaking. If he feels that he cannot withdraw the provision, he must at least provide safeguards against the pressures which are bound to occur to abuse the power which he is taking for himself.
  What should be the safeguards? The new clause which is being written into the 1964 Act is not entirely clear in describing how my right hon. Friend would reach a decision to exceed a 1 per cent. levy. For example, it is unclear whether the relevant words in paragraph (2A)(c) in lines 42 and 44 on page 34 are or are
  1186
  not governed by the words "approved by the Commission" which appear twice earlier in the new clause. In any case, it is hard to imagine that my right hon. Friend would ever make such an order without consulting the commission. Here we confront in the accutest form the crucial question: how will the commission reach its own conclusions?
  To expect the commission to be unanimous would probably be unrealistic. There is bound to be a vote, or something like that. It seems that the procedure should at least be bound by two definite rules. First, evidence should be required showing that the levy is desired by a consensus, or a substantial number of the persons engaged in the industry. There is a precedent for that in the Industrial Organisation and Development Act 1947, which I commend to my hon. Friend's attention. Moreover, precisely the same suggestion was put forward by my right hon. Friend in paragraph 89 of "Training for the Future" in connection with the suggestion that there might be voluntary but not compulsory levies. The suggestion has a respectable history.
  The second rule, which I suggest is the same rule that is imposed on industrial training boards by paragraph 5 of the schedule to the 1964 Act, provides that only the employer and trade union member may vote on any matter relating to the imposition of a levy. These safeguards seem to be the minimum requirements, in view of the Secretary of State's breach of his undertaking. Even if he accepts these safeguards he cannot be entirely acquitted of having misled the employers' organisations.
  I now turn to the clauses which lie on the border between training and education. Again, I have some questions and one criticism. First, what is to be the future status of further education in relation to the Industrial Training Act? Hitherto, although boards have not been empowered to provide finance for further education courses, they have been required by Section 2 of the 1964 Act to consider the further education associated with training when assessing grants to firms. I observe that in Schedule 2, page 32, line 17, the relevant subsection of the 1964 Act is to undergo a significant amendment. The word "may" is to be substituted for "shall" in the provision concerning further education. In other

  1187
  words, a mandatory provision is being turned into a discretionary provision. If I were a professional educationist I should be suspicious of the significance of that change, in the absence of any explanation.
  I should be at least bewildered if not suspicious by the provision in Clause 8(1) which states that persons attending universities are excluded from the arrangements for vocational guidance. Fifteen lines later the Bill says that they can be included if they wish. I know that the White Paper attempts to explain that nonsense. I know that the Secretary of State made another attempt to explain it this afternoon. However, it remains plain nonsense. The only logical meaning that could be attributed to the provision is that for all students other than university students—from secondary education to polytechnics—it is to be compulsory to attend the vocational guidance service. Only for university students is it to be voluntary. I suspect that the Secretary of State has merely committed a halfhearted surrender to the prejudices of the university appointments officers. I shall not pursue that matter further.
  I now deal with the most difficult question of all relating to vocational guidance, which was mentioned by my right hon. Friend the Secretary of State, the right hon. Member for East Ham, North and the hon. Member for Wolverhampton, North-East—namely, the division of the Youth Employment Service between a large sector administered by local educational authorities and a much smaller sector administered by the Department of Employment. That, as many hon. Members know, has represented a most intractable problem for a long time. It is clearly undesirable to perpetuate the division of the service in that way, but which part of it should be transferred to the other?
  The Secretary of State has decided to place a duty on all local education authorities and to disband his Department's sector of the Youth Employment Service. I think that he has made the wrong choice. He has taken the line of least resistance. It is clearly harder to force a larger sector to join a smaller one. It is easier to transfer civil servants to other duties than to compel employees of local
  1188
  education authorities to become civil servants.
  I doubt whether this is the best decision, either for the young people who will use the services or for the vocational guidance service as a career. I believe it is much better that the young people should be advised on their choice of employment by people in closer contact with the world of work and industry than professional educationists. Whether those educationists are teachers or administrators they tend to adopt an inward-looking and unduly protective attitude towards young people. They also tend to lack experience of the world outside the education system.
  I know that a good deal is going on to try to correct this weakness. I have taken part in some of the experiments but at the same time I recognise that progress is very slow and on a small scale. Without taking up the time of the House to excess, I put it like this. If one thinks of the vocational guidance service as a kind of bridge between the world of education and the world of employment, it seems to be a mistake to have both ends of the bridge manned by the educational profession. The far end of it ought to be manned by people more in touch with the world of employment.
  I have disagreed with the hon. Member for Wolverhampton, North-East on this point but I entirely agree with her that the age limit ought to be raised from 18 to 21. I also think, and I am perhaps alone here, that it ought to be a national rather than a local service because the national service can provide more varied, flexible and satisfying careers for those working in it and also because it would be better able to accumulate experience and information for the benefit of young people on a nation-wide basis instead of on a purely local basis.
  Nor is there necessarily any reason why, in bringing the two parts of the service together within the purview of the Department of Employment rather than the education service, employees of the service need necessarily become civil servants which I know most of the youth employment officers under the local education authorities would abhor. The service could easily be made a third executive agency under the commission alongside the Employment Service Agency and the Training Services Agency. I hope it

  1189
  is not too late to ask the Secretary of State to think of a modification along these lines.
  I do not intend to quarrel with him over the general intention underlying the Bill and the general principles it embodies. He has done well to plan it as a Bill to amend and improve the 1964 Act rather than planning, as the consultative document seemed to imply, to emasculate and virtually repeal what I have always regarded as one of the most useful measures ever introduced by a Conservative Government.
  7.4 p.m.
  Mr. Edwin Wainwright: I shall not enter into debate with the hon. Member for Oxford (Mr. Woodhouse), who has made an excellent speech. He made one or two points with which I differ but on the whole I agree with him. I noted that my hon. Friend the Member for Hammersmith, North (Mr. Tomney) brought a note of genuine fear into the debate. There is much in what he said. There is a great danger that finance houses may take over and prevent the creation of new jobs. There are also multinational corporations, not responsible to any Government, which must be taken into account.
  The Bill is full of good intentions. What matters is the application of this measure. I welcome the setting up of the Manpower Services Commission. We will watch it keenly to make certain that it carries out its duties and responsibilities and investigates future job possibilities. It is the employment of individuals that matters. The commission has an important job.
  I welcome the suggestions for the kind of representatives who will serve on the commission. I am a little worried, however, about the agencies because we do not know who will serve on them. I hope that they will be people with experience of industry and not exclusively civil servants. I am not criticising civil servants hut it is essential that we have on these agencies men who have industrial and commercial experience. The present boards have done well. Can they do as well in the future? They have developed some authority and have brought forward new ideas. We must always be looking to the future and planning the creation of new jobs.
  1190
  I welcome the important links between the education authorities and the boards. These are essential. It was said that the 1964 Act was meant to bring our vocational training policies up to the requirements of our European competitors. What examination has been made of EEC training methods? Are we fashioning our methods upon theirs or are we looking at things differently? I understand that France and Germany are introducing a levy/grant system. Over a number of years these countries have overtaken us in productivity per man. This is no doubt due to the training methods they have adopted which appear to be superior to ours.
  When the commission and the agencies look at these problems they will need to think deeply about the man aged between 45 and 55. In many instances when redundancies occur it is people like this who are placed on the shelf. Retraining is not easy for them. Even if they are skilled men, their skills relate to a different area. It is essential to have a training system broadly based so that such persons can be more easily retrained. This has been the policy of many of the existing training boards. Here I pay tribute to what they have done and express the hope that they will continue the good work in the future. They have been trying to keep abreast in this ever-changing technological and commercial world.
  Will the Bill be strong enough and firm enough to compel the smaller industrialists to train their incoming work force? We know why the 1964 Act came into operation. I shall probably differ on this point from the hon. Member for Oxford. Some small and some large firms are and always have been very good at training. However, other employers have been only too willing to poach trained men from other industries or employers.
  Mr. Woodhouse: I do not intend to disagree with the hon. Gentleman. He might be interested to know that under the operation of the Industrial Training Act the proportion of small firms—those with fewer than 200 employees—which received back more in grant than they paid out in levy was on the whole much higher than in the case of large firms.
  Mr. Wainwright: It may be that because they have to pay the levy they are more interested in training than in

  1191
  the past. When they failed to train personnel they were harming the country as a whole. Because small firm often poached trained employees, the good firms were more careful about the people they trained and this had repercussions throughout industry.
  The levy has brought about a wonderful change in the attitude of management. I do not think that 1 per cent. is high enough. However, if the levy were to be discontinued and we were to go back to the lethargic methods of the past, there would be a great danger to the maintenance of our skilled work force. I hope that from time to time there will be further examination of the whole problem to ensure that we have a successful, trained work force.
  I refer now to young people, especially those who are unemployed. It is no use training people unless there are jobs for them. There is a high rate of unemployment in my constituency. We have an advance factory which has been untenanted since June last year. There are many applications by young men and boys for training, but there are not sufficient jobs available and there is no hope for them. I do not think that the Bill will provide any hope for these young people, even though all hon. Members wish it success.
  What will happen to the school leavers who will be coming on to the market soon? Not enough is being done for the non-student. We seem to forget about that category of young person. There is a great deal of dissatisfaction among students today and we shall have to consider their problems. The non-student, the boy or girl who often goes into a dead-end job, should be trained. We should have a broadly-based education system tied to future training. It is better to educate young people to the age of 18 than to allow them to leave school at 15 or 16 when there are no jobs for them. America has a tremendous advantage over Britain. Whether we like it or not, America has a better education system for young people.
  Mr. James Hamilton: No.
  Mr. Wainwright: My hon. Friend disagrees. The facts are evident. Whether we dispute them is another matter. I am suggesting, not that we should adopt the
  1192
  American system but that we should look more deeply into the problem.
  We should look more closely at sandwich and day release courses. There is a wide gap between them. There is room for a system between them which would enable young people to get training as well as education. I think that university students should work in industry for a time to make them realise what it is like. I hope that the Manpower Services Commission will go into the problem. I hope we can convince students that they have a part to play in industry and that they can obtain their education and qualifications at the same time. We should make sandwich courses more attractive. We must get industry keenly interested. It is a disgrace that the sandwich courses are so limited compared with other courses of education. It is a pity that industrialists are not concerned about educating their work forces, especially the young people; but there it is.
  Education should be broadly based and the system of training at different levels of qualification should take account of the kind of industry and society that is likely to exist when we have trained people. I mentioned earlier that the Manpower Services Commission should look into this important problem. It is surprising that in some parts of the country we are short of trained people, whereas in other regions trained, skilled people are unemployed.
  Right hon. and hon. Gentlemen on the Government side have not shown much interest in the effect that the "lump" has had on trained personnel in the building industry. The self-employed man is not interested in training our future bricklayers, joiners, carpenters and other skilled people. Therefore trained personnel in the building industry are in short supply. I realise that many people think that in the not-too-distant future we shall probably be going in for the kind of house that arrives on two tractors and is put up in a couple of hours. However, there is a tremendous demand for ordinary brick-built houses. We should consider why we allow the lump to operate. It is not only that the self-employed person has no apprentice with him; there are other motives behind it, of which the Government are fully aware. I suggest that this problem should be examined closely.

  1193
  The Secretary of State will have great control over the Manpower Services Commission. According to the Bill the commission must report to the Secretary of State, and that will give him considerable power, but the right hon. Gentleman said that he did not want to interfere too much with the commission. He has the power but I hope he will not use it. I hope he will give the commission more freedom and that the commission will give the agencies freedom to work as they should without feeling that they are being overridden.
  The Secretary of State said several times that he must consult the Treasury. I am afraid of the dead hand of the Treasury falling on anything of this importance. When a firm becomes less viable, training facilities are the first things to be attacked. If the country becomes less profitable, if we do not get 5 per cent. growth or even 3 per cent., I fear that the Treasury might interfere with the Secretary of State.
  I welcome the Bill. I am sorry that it interferes with the levy system. That is a move which will have to be closely watched. I pay tribute to the training boards. I have met members of several of them and have been delighted with their efficiency. They might have some fear themselves that the small firms have had too big an influence on the Government. We shall have to wait and see. We might try to improve the Bill in Committee.
  The country has to depend more and more on its highly-skilled people. The better our training system and the higher our productivity, the more viable the country will be. This country should pull its socks up. It is time that we started thinking about production more than we have done in the past. We have been so often surpassed by other nations that one becomes disturbed. When the Bill have been improved by the Opposition, I hope that it will be a big success and will benefit the nation.
  7.22 p.m.
  Mr. Michael Grylls: I have listened with great interest to what the hon. Member for Dearne Valley (Mr. Edwin Wainwright) has said about the Manpower Services Commission. I was glad that he made a particular point of the younger unemployed, because they
  1194
  are a particular worry. What he said on that subject was very thoughtful. He will probably recognise that the changes proposed in the Bill to the entire employment services will benefit the young as well, because the better the image of those services the more likely they are to be used. This is not perfect, but it is a step in the right direction.
  The right hon. Member for East Ham, North (Mr. Prentice), who is not here at the moment, unfortunately, took us off on a flying carpet in imagining what the commission would do in the years ahead. That was fascinating, and gave more dimension to the debate. I am sure that the right hon. Gentleman is right. From reading the Bill, one gets the feeling that the commission, important as it will be in the short term, is ahead of its time in the work that it will do.
  I am sure that the manpower needs of a country and the increased leisure, we hope, of all our people in the years ahead, will be one of the central problems. This may be a strange thing for the commission to consider, but it is not a bad idea. I hope that its work will develop over the years. I suspect that what we are seeing born today will be only the tip of the iceberg of what we will see in five, eight or 10 years growing up behind it. I do not disapprove of that. It is a fairly healthy development, and I hope that it will become more and more sophisticated and will be able to make accurate forecasts of the nation's needs.
  I want to concentrate on the youth employment side of this measure. I enthusiastically support the expansion of the youth employment services. The Bill undoubtedly ends a long period of uncertainty in these services—both the LEA-based ones and the Department-based ones—which has not helped over the last few years. I am glad to see that uncertainty ending. It has gone on too long.
  Until 1970 I was a member of the National Youth Employment Council—on which body we considered many times whether the future structure should be education-based or Department-based. I make no apology to my hon. Friend the Member for Oxford (Mr. Woodhouse) for violently disagreeing with him. I have believed all along that it should be education-based. Unlike my hon. Friend,

  1195
  I think that the Government have made absolutely the right decision in this direction.
  It is right to record that the National Youth Employment Council has all along been divided on this, although each time it had to come to a decision there was a considerable majority in favour of the service remaining LEA-based. I am glad that the Government have recognised the pioneering work, over the last 20 years, of the education authorities in providing careers advice. It is a progressive step to make this service mandatory on local authorities and it will be much clearer to people who are going to receive advice.
  In many education authorities, certainly the larger ones, careers advice has been an integral part of the school curriculum. It is as much a part of school activities as are arithmetic and languages, and it would be impossible to try to make a division. As well as shaping his future, the education that a person receives is profoundly affected by his knowledge of careers prospects. Such knowledge is vital, and widens his whole perspective of life. School work cannot proceed properly without it.
  But advice on possible careers comes from team work by the careers master and the careers officer. The more one studies the matter and sees this going on in schools the more one appreciates that education and careers advice are inextricably interwoven, and cannot be severed. If there had been an attempt to sever them or to drag them, reluctantly—it would have been reluctantly—from the education authorities, there would have been an almighty row.
  This was not just a question of taking the easier decision, as my hon. Friend suggested; the alternative would have been a bad decision, not so much for those involved in this service as for the present and future pupils
  The restriction that the education-based service has suffered over the past is that it has been limited to the age of 18. Thus, until now, students in higher and further education have not had the opportunity of careers advice. This has been a very bad gap in the service.
  The hon. Member for Wolverhampton, North-East (Mrs. Renee Short) said that the school careers advice system was a
  1196
  little patchy. In the hon. Lady's absence perhaps I may say that in the higher education sector it is not a question of its being a little patchy; it has not existed at all. So the removal of this limitation is something about which we ought to be very pleased. My right hon. Friend the Secretary of State for Education and Science, having announced her plans for the expansion of student numbers between now and 1981, expected that by that date half of the students—about 350,000—would be in polytechnics. If this had not been done, none of those students would have had careers advice. That would be absurd and deplorable. I am delighted that the Bill rectifies that situation.
  When the Bill becomes law, I hope that all those authorities which have the opportunity of establishing a careers advisory service, particularly in higher education, will do that as quickly as possible. Any one who has been concerned with higher and further education feels that a gap has existed, which has meant that students have not had the necessary advice at CNAA courses in polytechnics or other colleges. I am glad that we are remedying the situation.
  I notice that there is to be a cut-off, as it were, at 5 p.m., and that people attending evening classes will be unable to have the benefit of careers advice. Many people will say that if one is doing basketwork or painting one does not need advice on a career. But many of these non-vocational courses are vocationally oriented. If you felt so inclined, Mr. Deputy Speaker, you could do a course on the "Cutty Sark" on navigation, and you might feel that you wanted to join the merchant navy. Why should you not have that advice from a careers officer? If the 5 p.m. cut-off is to be maintained and anyone staying after that time is not allowed to seek advice from careers officers, it will be a pretty rum situation, to continue the naval metaphor. The careers officers involved in the college where those studies are being undertaken will not refuse to give the advice. They will advise such a person. It is a very unnatural division. I hope that my hon. Friend the Under-Secretary will give some help in that direction.
  I am also worried about Clause 8(6)(b), which states that some part-time students shall be disregarded. I hope that that does not mean that the careers service will be prevented from helping students

  1197
  on part-time or day release courses. That is very important. In the more progressive authorities a great deal of very valuable work is done in helping students to continue with their employment. Very often the young get restless, or uncertain, and many employers find that the advice given is particularly helpful.
  One aspect of the Bill which I find a little strange is that there is no provision for the training of careers officers. I should have thought that this was vital. It is one thing to say that we have a service provided by 90 per cent. of education authorities, and that now it will be mandatory everywhere, but there is not a mention of training. Something should be done about that—perhaps in Committee. It could be done, perhaps, by adding to Clause 8, for example, a provision that it should be the duty of local education authorities to appoint careers officers trained to the standards of the Central Youth Employment Executive or those of the careers officers in the Youth Employment Service Training Board, which has these things laid down. Those two bodies put out a joint circular in 1970 advising local authorities to concentrate on the training of careers officers. Yet in the Bill there is no mention of such training. That is a crucial omission.
  Mr. Edwin Wainwright: It is true that careers officers have not been trained as they have been in the past. At grammar schools and comprehensive schools it has been left to the teachers to do the job, and they have done it very well, but without being trained as careers officers. It is time the Government did something about it.
  Mr. Grylls: I agree. As the hon. Gentleman will know, there have been one or two useful steps in this training. For instance, the Hatfield Polytechnic brought in the Youth Employment Service option as part of the ordinary CNAA degree course in social studies. That is very good. That is the sort of thing that people could do. If the careers service is to get going, as we hope it will, it must become a fully professional service. That is crucial to its improvement and growth. I hope that my hon. Friend the Under-Secretary will give the House an assurance on that point.
  A further point about training is that until now the Central Youth Employment
  1198
  Executive has played a major part in setting out this policy. The executive will no longer exist under the Bill, but it did a useful job in propagating information on careers to careers officers and careers teachers in schools. It is important that someone is able to assist these people in learning more about careers work. As the CYEE is to disappear, who will do the job of training and, most important, of keeping up to date? My hon. Friend the Member for Oxford implied that careers officers did not know anything about the outside world. That impression is out of date. They spend a great deal of time with industry, learning about it so that they can pass on their information to pupils whom they are trying to help. I hope that my hon. Friend the Under-Secretary will give sonic assurance that that is exactly what will happen.
  Finally, I come to a small but important administrative point—although it is perhaps more suitable for committee. Under the reorganisation, there is a separation between the employment work and the benefit work. The Bill complicates rather than simplifies the situation, in that people are to have to visit two offices. They go first to careers officers, but if they want unemployment benefit they have to go to a different office. That is a retrograde step. I hope that something can be done to alter what is contained in paragraph 54 of the White Paper, which states that this work is to be taken away and given to departmental branches. It is not a good thing for people to have to visit two offices. Why can they not register for employment and claim unemployment benefit at either the careers office or the departmental office, but not both? This is an unsatisfactory situation.
  As hon. Members representing London constituencies will know, there have been experiments in Brixton under which people can now go to the local careers office, from which information about their unemployment benefit or other benefits is passed to the social security office and computerised. The benefits are paid by Giro. The person concerned has to make only one visit.
  In talking about the previous division of the service, my right hon. Friend the Secretary of State rightly said that he wanted to get away from the previous

  1199
  rigid demarcation. In a small administrative way we are recreating a demarcation in saying that people may go to careers officers for advice but must go down the road to get their benefits.
  I hope that my somewhat criticial questions—hon. Members are here to be critical—will in no way detract from the genuine enthusiasm with which I welcome the Bill. Hon. Members on both sides of the House have raised various questions, but have generally welcomed the Bill, believing it to be a really progressive measure which will be helpful to all our people.
  7.40 p.m.
  Mr. James Hamilton: As one who comes from the engineering industry, I have always taken a very keen interest in industrial training. Before being elected to this House I was responsible in my factory for the operation of a day release scheme. It operates to this day.
  Unfortunately the Minister of State is no longer present. Recently he visited my constituency and saw the training centre on the industrial estate there. It does a magnificent job. An annex is to be opened in the very near future, and it will be recognised from this that in Lanarkshire there is a great need for industrial training. However, the end product is a job and unfortunately, for one reason or another, many people being trained in industrial training centres find it very difficult to obtain the necessary employment afterwards.
  At my "surgery" last Saturday I saw a lad who had been training at an industrial training centre to become an electrician. A Lanarkshire company was prepared to employ him. But because many craftsmen in electrical work are unemployed the union would not allow him to begin work. There is an agreement between managements and unions about the employment of these people, but with an unemployment situation such as we have in Scotland we must ask ourselves why we are training people. If we do not have the necessary jobs, to all intents and purposes training may become abortive.
  Having said that, however, it is fair to point out that 60 per cent. of the people
  1200
  trained at the Bellshill training centre obtain new jobs, and this is a move in the right direction. It is very important that people should be retrained. With the technological advances being made and the many changes taking place in industry, workers must themselves be prepared to enter training centres and to retrain for new jobs.
  I wish to concentrate mainly on young people. Recently I put a Question to the Secretary of State for Employment and I was sad to discover that from 1969 to the latest available date there had been a decided decrease in the number of young people entering apprenticeships. My hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) pointed out that in the construction industry, as a result of the large-scale practice of labour-only sub-contracting, very few apprentices were employed, thus doing a great disservice to industry as a whole and to the very many people employed in the construction industry.
  I recognise that in introducing the Bill the Government are taking an important step forward, and I congratulate them. Nevertheless I have certain reservations about the Bill. We find, for example, that because the school leaving age has been raised to 16 education authorities are not properly geared to deal with it. That is no criticism of local authorities, because my own Government postponed the raising of the school leaving age and that too made me very sad. But we must ask whether in their final year at school our youngsters are being trained to prepare themselves for industry in a way that suits their individual aptitudes and talents.
  Once again I must refer to my own constituency where we have a prevocational school training young people from the age of 16 upwards. These youngsters are all available for employment. Many leave after a few months and are able to get their first jobs. But there is no one in the establishment with the expertise needed to give them the necessary guidance. The first job is by no means finality. It is only the first step in a career in commerce or industry.
  Any youngster going to the prevocational school can do so for three days, then sign on for two days for employment and be entitled to supplementary benefit. Anyone doing the full

  1201
  five days at the school gets no benefit. It means that there is no incentive to take a full course at the school. I believe that in the Bill the Government ought to give the situation very serious consideration.
  Another anomaly, which is not the Government's fault, concerns an agreement between employers and unions in the engineering industry. Under the terms of the agreement employers must pay an apprentice a wage commensurate with his age. It means that youngsters of 17 and 18 attempting to enter the engineering industry find that, because employers have to pay them the wage for the age, only boys of 16 are wanted. Between the ages of 17 and 18 the opportunities are not as great as the opportunities afforded to those who are 16 years old.
  Earlier in the debate an hon. Member referred to the distributive industry. I remember when I was a local councillor that a course was started at one of our technical colleges to train people for the distributive industry. The course failed for two reasons. First there was a lack of desire on the part of employers in the distributive industry to allow young people a day off work so that they could attend the college. The second reason was that in many cases the young people concerned had not been properly advised about and their minds were not conditioned to further education, with the result that they did not want to go to college. The course had to be abandoned. This was quite unacceptable to those of us who were concerned with further education.
  Another factor which has been referred to by a number of hon. Members concerns day release. We have discovered from replies to parliamentary Questions that we have put to the Minister that at at present only 22 per cent. of our young people are getting day release or block release. A Bill of this kind should have made it mandatory on employers to grant either block or day release to their employees. This is very important. If we could get young people conditioned to accepting such a situation, we should go a long way towards meeting many of our requirements.
  I notice that reference is made in the Bill to community interests. I am pleased that the Secretary of State is himself to
  1202
  take over the relevant powers. This is a very valuable service. It is being operated already by Glasgow Corporation. I have spoken to a number of young people who are doing community work. It is keeping them fully occupied and they have the satisfaction of knowing that they are earning their living.
  I want to say a few words now about the Engineering Industry Training Board award scheme. Once again I have put Questions to the Minister. I have discovered that in Scotland not one of the boys who attended the course has been employed in a nationalised industry in Scotland. I think that the Government should be making the necessary representations and inquiries to discover the reason. After all, if we in this House are prepared to advance these schemes, at the same time preaching to our young people that at the end of the road they will be successful, in my view the nationalised industries have a responsibility to ensure that they play their part in making available the necessary employment.
  We have heard mention of the attitude of American companies. I have many American firms in my constituency, every one of which without exception trains its own apprentices. The schemes in operation are first-class and can be compared with those of any other industry in the country. I speak with some experience because I have seen young people being trained in Sweden and Italy and, very early in my parliamentary career, in Germany. I do not subscribe to the view held by my hon. Friend the Member for Dearne Valley. We have proved that we can train the necessary skilled personnel to play their full part in industry. They can compete with the people of any other nation. If proof is needed of that, one has only to remember that our engineering products are the backbone of the fiscal policy of all Governments.
  I want now to refer to paragraph 52 of the White Paper. We should ensure that the careers service is staffed by careers officers whose training is recognised by the Youth Employment Service Training Board. Unless we do that, authorities will be tempted to leave guidance to be carried out on a part-time basis by teachers or other unqualified people to the detriment of the young people seeking advice from them. I am the first to defend our teachers. They

  1203
  do a first-class job. However, I subscribe to the view "Every man to his own job". With respect to our teachers, very few of them are conversant with the ramifications of industry. It is very important that we have trained careers officers, and I align myself with the sentiments expressed by the hon. Member for Chertsey (Mr. Gulls) that provision should be made in the Bill to ensure that careers officers have certain standards and are trained by the proper people.
  Paragraph 53 of the White Paper suggests that young people should have the opportunity to go to one or the other: young people other than school leavers should be able to choose whether to use the careers service or the Manpower Services Commission. It should be the careers service until they are 18, or thereafter if they wish. We must remember that careers officers have all the necessary expertise and the documents relating to the young people concerned. They are best able to give advice, because it is not the first or the second job that matters. As my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) said, it could easily be a third or a fourth job.
  The Under-Secretary of State for Employment (Mr. Dudley Smith): The hon. Gentleman will realise that we are introducing a degree of flexibility into the service and that a young person who has been under the aegis of the careers officer will go back again and be within the national employment service.
  Mr. Hamilton: That is the very point I am making. I believe that it should be mandatory for a young person to come under that service. The service has all the necessary documents and information and is able to give the necessary advice based on expertise or knowledge of the person concerned.
  In respect of paragraph 57 of the White Paper, there is a possibility that information obtained by an employer may be used to the detriment as well as to the benefit of a young person. Therefore, I hope that as the Bill progresses that matter will be carefully considered. I believe that there should be a fixed time limit for the transitional period. I believe that unless education authorities are set a time limit, there is a possibility
  1204
  that they will not introduce the services covered by the Bill for a very long time.
  Much as I welcome the Bill and feel that it is a move in the right direction, my main criticism is that the figure of 1 per cent. levy is insufficient in financial terms. I hope that the Government will not only provide the necessary training and retraining but will provide jobs for those who are retrained.
  7.58 p.m.
  Mr. Ronald Bray: I should like to add my congratulations to my right hon. Friend the Secretary of State for Employment for introducing the Bill. I support it for a number of reasons although I have minor reservations on points of detail.
  One of the main reasons why I support the Bill is that it places responsibility for the overall use of manpower and training on one authority, the Manpower Services Commission—although I, like other hon. Members, am not entirely enamoured of the title. I hope that the commission will not become a partisan body and that it will be as impartial as possible in its decisions and process of delegation. This is a vast improvement on what has been a virtually non-existent policy in this respect.
  It is a truism that all training costs money, but unemployment costs an immense amount in terms of human misery as well as in cash terms. It is the responsibility of every Government in every nation to ensure that manpower is put to the best possible use for the benefit both of the nation and of the individual.
  I believe that I am one of the few Members of the House who have established a training department within industry—in my case in the engineering industry. It was profitable in terms of reduction in the turnover of labour, the loyalty of the individual and the general standard of workmanship which was achieved. It was a well worthwhile exercise and it shows what can be done in a medium or small firm.
  The hon. Member for Bothwell (Mr. James Hamilton) referred to the firms from the United States which have established themselves in his constituency. I appreciate that the hon. Gentleman was referring to what goes on north of the border, but certainly in England there

  1205
  are many indigenous firms in many industries which undertake training at all levels from the shop floor to the highest executive level. I know of firms which have training facilities both inside and outside the company, and their executives are to be commended. The training boards have been of great assistance and many have been in existence for some time.
  Within any industry there are people who are used to the methods in that industry and the speed at which the industry operates. There are people who know the situation from a practical rather than from a theoretical point of view, and this aspect must always be borne in mind. On the other hand, there are the blaggards or the baddies in training, and I share the concern which has been expressed about whether a 1 per cent. levy will be effective in certain industries or firms. I hope that the Minister in his reply will assure the House that he will not fail to use the levy as a weapon as and when appropriate. We cannot afford to have any back-sliders in training. That would not be in the interest of the country because we must put our manpower to the best possible use, whether from the point of view of training or of retraining.
  There are some firms which will always pay over the odds to attract labour, and I suggest that such firms can afford to pay a slightly higher figure for the training of personnel.
  Many hon. Members have mentioned the qualifications of members of the commission and the agencies, and this factor concerns me greatly. I hope that members appointed to these bodies will have sufficient expertise to be able to talk intelligently to those whom they meet in their respective duties and to whom they give advice. However, I am not advocating that hundreds of civil servants should be translated from Government service to one of these agencies and to operate it in a bureaucratic administrative sense.
  A number of members of training boards have told me in confidence that they are now of a standard at which they can command a fee for their services. This surely is the acid test of whether the service which is offered is satisfactory. This point was particularly emphasised to me by the Distributive Industry Training Board. Its members were confident
  1206
  that they had the ability to make a mark on their own account. I am positive that the framework envisaged in the Bill will continue to benefit the system as a whole.
  I wish to refer to the situation involving voluntary advice about courses of training, methods and so on. The members of the manpower commission must be completely au fait with what they are doing and in the advice they give at all levels. I envisage friction occurring between the various training boards unless their immediate superiors in the agencies are well versed in the matters covered by the Bill.
  I should like to refer to a small point which relates to expenditure control, and I hope that this is within the Department's responsibility. I refer to the employment of public relations consultants to condition the minds of those who might be termed the opinion formers—including Members of Parliament—about the various boards, particularly when the views of those people might be at variance with a Government proposal or a consultative document. Surely a training board is large enough to stand on its own feet and to form its opinions without seeking to use professional mouthpieces to do the job for it.
  I should also like to refer to research into employment and its surrounding circumstances and into unemployment and its causes, as well as research into projected long-term needs. Such research is a welcome step forward and I believe that the Department should have the ultimate responsibility and the final say on policy.
  It is regrettable that in 1964 we did not fully see the writing on the wall in terms of the effect on the service industries. Unfortunately we did not heed evidence from the United States about what happened to employment in the service industries as against the manufacturing or production industries. As a result we saw a penal tax on the service industries in the form of selective employment tax. Service industries, through no fault of their own, have been penalised while that tax has existed, and that will be the situation until it is rectified at the end of this month. This policy was a regrettable error of judgment and one must conclude that it has caused appreciable

  1207
  unemployment in certain parts of the country.
  Clause 6 of the Bill contains power to amalgamate the Agricultural Industrial Training Board with other boards. I suggest that other amalgamations could be effected. I refer particularly to the creation of a fashion industry training board which could be brought about by the amalgamation of the footwear, leather and allied trades with the clothing trade. These trades are complementary and such a move would have the effect of offering a composite training service to industry as a whole. Perhaps I could suggest as an aside that the now defunct Hairdressing Industry Training Board could be put in with them at the same time.
  Within the framework of the Bill I should like to see greater emphasis placed on the executive training boards at the universities or specialist colleges. That is, to my mind, a weakness in the training system. We train too few people and do too much training in theory, and there is not enough of getting down to the nitty-gritty of fighting for an order and fighting to cut prices and for improved efficiency. That is a failure and I hope that when the agencies and the commission are established the remedying of these faults will be well to the fore.
  My final point refers to the cut-off or the level at which firms are not liable for payment of levy. By and large there is a degree of agreement between the boards about roughly where it might come, but I fail to see the logic when one board, for example the Engineering Industry Training Board, sets a figure of, say, 120 employees with a wage bill of £150,000 a year, which gives potential turnover of the best part of £500,000. If a firm is of that size, it should not only pay the levy for training but it should also need training for its operatives—not 120 of them but a substantially lower number, perhaps 20. I know it is easy to say that such firms are too small to take trouble with and that it is impossible to do this or that, but experience has shown that the most critical size in firms, is when they reach 20 employees and later when they reach 100 or more. That is the point at which they want help and training for their staff as well as for their younger executives. This is a point on which we could slip up and I would ask
  1208
  the Department to instruct the agencies to consider this.
  With these reservations I wish the Bill every success in its passage tonight and in Committee.
  8.13 p.m.
  Mr. William Hannan: There is little that the hon. Member for Rossendale (Mr. Bray) said with which I would disagree. I welcomed his forthright denouncement of laggards and poachers in these valuable schemes and the Minister, in listening to speeches like that, should take courage in the fact that there is general agreement on the matter on both sides of the House.
  At this stage in a debate points have slipped by and other points have already been made, and as a result there is a danger of repetition. I want generally to welcome the Bill and express a few criticisms by way of preliminary remarks. First, I wish to deal with the composition of the commission, particularly in regard to educational representatives. We heard excellent contributions tonight on the strength of the educational case as it applies to young people. It is a pity that in the composition there is only one representative from professional educational interests. It is true that the White Paper says that it is envisaged that at least one of the people appointed after consultation with local authority associations will have experience of education matters.
  Mr. Dudley Smith: I take the point that the lion. Member for Glasgow, Mary-hill (Mr. William Hannan) is making. I am sure that he appreciates that one would often like to have all types of representatives on a body, but if it becomes too large it becomes less effective. If it is smaller it is more flexible and is better able to do its work. There has to he a reasonable figure—not too many not too few—and I believe that we have it about right.
  Mr. Hannan: I take the Under-Secretary's point, and I would not want to take the shadow for the real substance. However, in view of the important contributions which have been made about the continuity of young people's records and the growing importance of educational standards, education should have an extra place in the composition as of right. This is a matter of honest difference of view.

  1209
  I welcome the proposal in Clause 5 which gives the Secretary of State specific power to provide temporary employment in appropriate cases. Naturally, we should be much happier if the work could be of a permanent character, but in this respect it will at least enable the Minister to finance schemes such as Community Industry. I hope that it is his intention to assume responsibility for the administration of that scheme and that he will not leave it to the National Association of Youth Clubs, valuable as its work is and has been in the past.
  Like other hon. Members, I warmly welcome Clauses 8, 9 and 10, dealing with careers services provided by local education authorities. I disagree with one aspect, and I hope that the Minister will consider it seriously. It was raised by my hon. Friend the Member for Bothwell (Mr. James Hamilton) and the hon. Member for Chertsey (Mr. Grylls). It concerns the proposal to allow young people under 18 to use the services of the Employment Service Agency, if they so choose, after they have entered their first employment. I take the same view as my hon. Friend and the hon. Member that they should be responsible to the new careers agency at least until the age of 18.
  I doubt the training boards' ability to ensure that all the workers for whom they are responsible will be adequately trained in view of the continued exemption of small firms from the levy. I consider that the sum available to the commission is inadequate for administration expenses, key training activities and the promotion of training in areas of employment not covered by the boards.
  Another aspect was mentioned by my right hon. Friend the Member for East Ham, North (Mr. Prentice) who referred to the technological pace of change that was taking place both actually and relatively in comparison with other features of our life. It reminded me of speeches which have been made in the past about the progress of technology and the application of science to industry, which will continue to mean an increasing quantity of goods and a decreasing labour force. The House will not need to be reminded of two examples. In the mines, for example, it now takes only half the number of miners to produce far more coal than was once the case. In agriculture, the same process is taking place.
  1210
  Unhappily, trends of this kind mean fewer opportunities for the type of girls and boys about whom we are concerned. It was in that context that my right hon. Friend the Leader of the Opposition in 1963–64, referring in a notable speech to men displaced, said it might mean an individual's changing his job not once, not twice but perhaps three times in his working like. I believe it was in this context that my right hon. Friend introduced his remarks today. Therefore, it is most important that we should have a Bill of this character, setting up the new organisation. But given the maintenance of the present material standard of living and its growth prospects, we should improve the quality and opportunities now coming to us by expanding the labour force in the service industries, both private and public, and in the social services themselves.
  Reference has been made today to the relatively low numbers precisely in these types of industries who are attending day release or block release classes, or are undergoing other forms of training. I am grad, therefore, that in his opening speech the Minister referred to these possible changes. Some time ago the hon. Member for Aylesbury (Mr. Raison) put a very important question to the right hon. Gentleman the Prime Minister on precisely what changes were intended when, referring to the manpower requirements for the social services on 8th February 1972, he asked:
  "whether, in view of the estimate in Social Trends No. 2 that the manpower requirements of the social services are likely to grow by over 300,000 between 1970 and 1975, he is satisfied that there is sufficient co-ordination between the various Departments responsible to ensure that suitably qualified manpower will be available."—[OFFICIAL REPORT, 8th February, 1972; Vol. 830, c. 1131.]
  The Prime Minister replied "Yes, Sir" but went on later to raise doubts in some of our minds as to whether such co-ordination was going on. I do not want to develop this point, as I had intended, in view of the admirable speech made earlier by my hon. Friend the Member for Hammersmith, North (Mr. Tomney), but the number of young people to be found waiting around youth employment offices these days is a depressing feature of our present day society, and girls who have left school looking for office jobs are finding that the vacancies are few and the competition

  1211
  very keen. Male school leavers, even when well qualified, often end up taking a job which is unlikely to stretch their ability to its greatest extent. But many of us have been most concerned with the boys and girls who are unqualified, because it is they who find the greatest difficulty and have to be prepared to take the most uninteresting and temporary work.
  Mr. Ronald Brown: Does not my hon. Friend therefore agree, by reference to paragraph 8 (6a), that it seems absurd for the Minister in this Bill to exclude as part time any person who attends a school where the classes begin after 5 o'clock?
  Mr. Hannan: My hon. Friend anticipates what I was going on to say. More than that, I was going to ask whether the Minister would not agree, or whether he has given consideration to the proposition which has been put, that in many respects even day release is now almost going out of fashion—that it is inadequate—and that evening classes are going out of fashion, too. My hon. Friend, to whom I am grateful for underlining my point, is quite right. Community interest projects, training boards and the rest are valuable but what is needed—and I do not want to go on to debate another subject altogether—is the assurance of a job when that training is completed.
  For many years the careers service—formerly the Youth Employment Service —has been trying to prove its effectiveness. A greatly improved and dynamic service is vital if young people are to be assisted in reaching the best decisions for themselves over choice of career. This is one of the principal reasons why I welcome this Bill.
  I will not delay the House much longer in view of what was, in my view, the admirable contribution of the hon. Member for Chertsey, who pointed out very effectively that it was a question of the youth careers service being able to advise young people; and whereas we spend £5,000 on the education of many young people at university we spend comparatively very little in advising young people where to go for jobs in their own best interests and to make the best use of their ability in the interest of the country. An hon. Member asked earlier about the
  1212
  staffs of the service itself. They have been left unhappy, not knowing whether they are coming or going. Let us consider the position in Scotland alone. Until now the careers service there has been run on dual lines, with 11 of our 55 education authorities, including Glasgow, Edinburgh and Lanarkshire, running their own service while in the remaining areas the service is run by the Department of Employment.
  This Bill gives effect to changes which are welcome but, while it does that, it must be emphasised that more sophisticated arrangements in that respect will not create the new jobs which are vitally needed. It will, however, at least help many of those who at present have not a clue about what they want to do or how they are to go about it. Some careers officers in the front line of job placements are dismayed at what they see. I have already mentioned the lack of facilities and lack of money to help them to place young people in their proper jobs. They feel that the priorities are wrong and that it is about time that their talents were employed to their own advantage and that of the community. They take the view that all young people, whether or not they go to universities or further education colleges, are entitled to training but even more important, are entitled to have a job; and there is a quite disgraceful imbalance in that respect between area and area. In Scotland, for example, out of the total of unemployed boys, 34 per cent. are in the city of Glasgow alone; and of the total of unemployed girls in Scotland, 22·5 per cent. are in Glasgow. Others are attending further education courses. A number are receiving awards from industrial training boards or are on limited skills courses financed by Government Departments. But all of them would normally be registered for employment, and, valuable as those activities are, they are a form of hidden unemployment.
  A study of percentages of school leavers entering their first employment in London and the South-East in clerical work alone shows a striking comparison with Scotland. Whereas in London and the South-East 13·2 per cent. of boys and 50 per cent. of girls enter clerical work in Scotland only 5 per cent. of the boys and 30 per cent. of the girls enter such work. There is vital work to be done

  1213
  there, and there is an urgent need for training at that level.
  At the semi-skilled level, even with planned training for progress and promotion, the comparison is even more startling. In London, 25·4 per cent. of boys enter at the semi-skilled level while in Scotland only 4·17 per cent do so. That is the measure of the job before us.
  I welcome the Bill, but I hope that the Minister will give the House some reassurances on the points I have made. I welcome the Bill particularly for the opportunities it gives to promote the careers service to a more important rôle and 10 give it a better image. It should also improve the morale of the careers officers.
  It has been suggested that there is a danger in having in the careers service teachers and others concerned with education as compared with those with a knowledge of the industry. Does it need to be one or the other? The careers officer in Glasgow is a former miner who became a mining engineer, and went into industry, and by taking courses became established in a job. He replied to an open advertisement for the position of Youth Employment Officer in Glasgow, and was successful. That example could be followed, and is worthy of consideration. It is not necessarily true that careers officers should all be of one category or the other.
  8.31 p.m.
  Mr. Robert Taylor: There has been a degree of unanimity about the debate which is unusual when the Government are introducing a major Bill. The Opposition's welcome has been such that I have been looking through the Bill again to see whether it contained something I had missed, because I am always suspicious when there is such keen support from them.
  I think that the answer lies in the opening words of the speech of my right hon. Friend the Secretary of State, when he confirmed that the Bill was the result of a long period of gestation. That period has produced a compromise which has been welcomed on both sides. I find much in the Bill that I like, and there are parts that I dislike, so I am in a situation similar to that of the right hon. Member for East Ham, North (Mr. Prentice),
  1214
  although the points that we like and dislike are probably reversed. There is undoubtedly an overall improvement in the Government's facilities for employment and training, so I welcome the Bill.
  Policies must change as circumstances change. The average individual in employment today will change his job and the industry in which he works many more times than his father did 30 years ago. There is, therefore, much greater pressure on the employment services, and this tendency is likely to increase rather than decrease.
  It makes sense that the agencies of the Manpower Services Commission should not be involved in the payment of unemployment benefit in any way, and I welcome the provision allowing for the payment of unemployment benefits to be made by the Department of Health and Social Security alongside other payments. However, I have one slight reservation about it. The staff of the Employment Service Agency will be the people who know whether an individual is genuinely seeking work or is one of the small minority who have no intention of taking employment. There will have to be a close channel of communication between the agency and the Department to make sure that there is no abuse.
  It is probably appropriate to pay a tribute here to the staffs of the local employment exchanges, which have worked so hard—I speak with particular experience of my own in Croydon—to be fair but firm with those who come for advice and help.
  If my interpretation of paragraph (d) of Clause 2(2) is correct, there is a welcome opportunity in the Bill for the Employment Service Agency to charge employers fees if it is successful in finding employees to fill vacancies. My first impression was that this was unfair because it introduced an element of competition with outside employment agencies, but on reflection I am sure that I am wrong about that because today the difference between the pay of manual workers and that of clerical workers is such that the employment agencies being set up by the Government must obviously cater for the whole working population. Therefore, it they are in competition with private agencies, they should charge a fee in the same way as the private agencies do.

  1215
  I want to turn now to the two parts of the Bill with which I am less than happy. The first is a fairly major point. I refer to the fact that the commission and the two agencies will be responsible to the Secretary of State but that their employees are not to be regarded as civil servants. I fully understand that they are not in the direct employment of the Crown. Nevertheless I am concerned—and I do not welcome this point as did the right hon. Member for East Ham, North—that there should be a tendency for the Government to transfer functions in which they are legitimately involved to outside bodies and then pay the salaries of the people employed by those bodies by way of grant, at the same time claiming a substantial reduction in the Civil Service. Indeed, the Bill itself states that as a result of these proposals there will be a reduction of 20,000 in the Civil Service. To my way of thinking this is sleight of hand, and it is not something of which I approve.
  I come now to the second point, which gives me greater cause for concern. I refer of course to the reform of the training boards. My hon. Friend the Minister of State was kind enough to say to me in a letter this week that my views on the training boards had already been made known. However, I believe I am right to repeat them because I have been completely consistent in this attitude over a number of years. I have consistently believed that, however laudable were the objectives in setting up training boards, and however splendid have been the efforts of those who have been running the training boards, as long as the levy grant system is retained in any way the board's practicability becomes questionable and the boards can be shown on occasion actually to have harmed the objectives which they have sought to achieve. This can be substantiated from the document "Training for the Future" because paragraph 19 states that
  "… the criteria for grants are designed to meet general priorities for an industry or an occupation as a whole which will not, given the variety of firms' activities and organisation, apply equally in each particular case. A policy by a firm of maximising its grant return can therefore lead to distortion of the training that it really needs to undertake."
  Hon. Members on the Opposition side have stated tonight that the levy principle is the carrot which is needed to continue
  1216
  training. In other words, they disagree categorically with the statement I have just read. Therefore, I think it right and proper that I should remind them that as long ago as 1966–67 the Ninth Report of the Estimates Committee, which, under the chairmanship of the hon. Member for Woolwich, West (Mr. Hamling), investigated the early days of these industrial training boards, came to substantially the same conclusion.
  In paragraph 42 of its report, the Committee quoted the education and training officer of the G. A. Harvey group of companies—which, as we all know, is a substantial London group of companies —who, describing the future of the Act, said:
  "I do not think it has made us do any more training than we would have done anyway. What it has done is possibly changed our priorities, and not necessarily, to our way of thinking, correctly."
  That led the Committee, as long ago as 1966–67, to forecast the eventual abandonment of the levy/grant system.
  A long time has gone by since then. There have been complaints about the effect of the levy/grant system, and today we have before us a Bill which changes the system completely so that in future many firms will be excused from paying the levy, but they will have to prove that their system of training meets with the approval of the boards. In ether words, we are back to square one—as long as someone trains as the board thinks fit, he will be excused from paying a levy.
  This system will not work, because no firm will admit that its training is not up to standard. The elaborate machinery which is being set up under the Bill for appeals by firms which have a levy charged to them will be used to a considerable extent. I cannot see any firm agreeing to pay a levy without going through the appeal procedure to show that its training facilities, although different from those approved by the relevant board, are perfectly adequate.
  The boards will have to spend a considerable amount of money and time listening to appeals. That draws me to the point that in "Training for the Future" the table at Annex 3 shows that in 1970–71 the administrative expenses of the industrial training boards totalled

  1217
  £5,833,540, while the amount spent on training, advisory services and training facilities totalled £10,232,941. In other words, the total spent on training was more than 50 per cent. of the sum spent on the other activities to which I have referred. In my view, if the boards are to be subjected to appeals by every firm which is called upon to pay a levy the cost of administration will remain an equally high proportion.
  The Construction Industry Training Board, in a Press statement handed out on 31st January this year, made that very point. It said that
  "there is a genuine fear that the Board's job in deciding which firms should be charged the levy and which should be exempted would necessitate more complex grant/levy operations, lead to more paper work, many more staff, bad relationships with firms and would prove to be impractical to operate."
  One final point arises concerning the cut-off for small firms. Hon. Gentlemen opposite have said that they are concerned about this. They believe that small firms should pay the levy, just as large firms should. Under a statutory instrument which is awaiting the approval of the House, and against which I have put down a Prayer, the Construction Industry Training Board seeks to charge a levy on every establishment in its industry with a payroll starting at £6,000. That means that a builder and decorator in a small village who employs perhaps two men and a secretary will be subject to levy. He will also be subjected to all the paper work that that involves. The paper work for a small firm is the same as for a large one, and there is considerable opposition to the proposal.
  I hope that no hon. Gentleman opposite will try to justify a levy on any firm which today has a payroll of £6,000, because the situation is absolutely ludicrous. In most instances in the construction industry one is referring to a small firm of plumbers and decorators who have many years' experience. There is no changeover in labour in a firm of that size, and I very much regret that my right hon. Friend should have seen fit to approve that statutory instrument.
  I have grave reservations about the Bill. I am not happy to see any levy remaining in it. I hope that it will be improved during its passage through the House.
  8.45 p.m.
  Mr. John Mackie: I want to direct my remarks specifically to agricultural training and the changes which the Bill makes to the present set-up. Generally speaking, the industry welcomes these changes. Certainly, the present training board does, if for no other reason than it will cease to be known as the Agricultural, Horticultural and Forestry Industry Training Board and will simply be known as the Agricultural Training Board. The National Union of Agricultural Workers, the National Farmers' Union and the Country Landowners' Association all welcome the changes.
  The scope of the board's work has rightly been widened to include storage, preparation and marketing. This will be a very important aspect of agriculture in the European Economic Community. Training for storage, preparation and marketing is most important and I am glad that it now comes under agricultural training generally.
  The responsibility will move to the agricultural Ministers in the United Kingdom. They are getting a lot under their hats. We have given agricultural research to the Ministers of Agriculture and now we are giving them training responsibility. I hope that they are capable of handling it all. However, it is right that training should be under the egis of the Ministeries of Agriculture because agriculture is quite different from other industries. For example, the size of its units makes it a special case, and there is the very wide spectrum of skills involved—a factor which is not sufficiently appreciated.
  The days when a farm worker had only to know how to plough, sow and reap are passed. I could detain the House for a long time explaining all the techniques of the farmworkers today and the technologies they have to acquire. It is these factors which have given us the great rise in productivity.
  The hon. Member for Croydon, North-West (Mr. Robert Taylor) referred to small firms. There is a strong case for small firms doing what we do in agriculture—combining to use training officers. There has been a lot of talk about small firms being at a disadvantage. I do not see why they should be

  1219
  and they need not be if they use the same methods as agriculture.
  We in agriculture are glad that administration and key training activities are to be paid for by the Treasury, as is the case with other training boards, and that any extra functions mentioned in the Bill will be dealt with in the price review. However, this will raise difficulties, because the price review and subsidies for production are being phased out—indeed, three items have been phased out during the last month. The money will have to come off the direct grant. At present, there is a rather rough-and-ready take-off through the price review, but some farmers may not be producing things which come under the price review, so that if the money involved is to come off the direct grant the situation could be even More unfair. This is an aspect we must consider further during the passage of the Bill through the House.
  There will be considerable scope for argument between the Minister of Agriculture, Fisheries and Food and the commission about what is a key activity and what is an extra function. I shall be interested to hear the Minister's reply tonight. The matter can be considered in Committee.
  The Minister is given power to direct a board to carry out fresh functions. I hope that the Minister will be farseeing and will realise that many fresh functions can be considered, for which there is real need. Paragraph 2(1) of Schedule 2 says:
  "For the purpose of encouraging adequate training of persons employed or intending to be employed in the industry …"
  The hon. Member for Bolton, West (Mr. Redmond) gave an example of a mother suggesting that as her small boy did well in a drawing class he should be trained for architecture. A retired gentleman of 61 wrote to me recently asking about training opportunities in agriculture. Those are the two ends of the scale. I am not sure what advice I shall give to the retired gentleman.
  The new functions now apply to the self-employed. That is an excellent provision. It is difficult to find them in the Bill, but I am told that they are to be found in Schedule 2 at page 45, lines 13 to 16, which say:
  1220
  "'employment means employment under a contract of service or aprenticeship or a contract for services or otherwise than under a contract and employed ' shall be construed accordingly."
  I am told that means self-employed. I feel that it could have been put in a simpler form. It is excellent that it has been put in the Bill, however difficult it is to find, because many self-employed people in agriculture—usually small farmers—could benefit greatly from training. The Bill should provide for a close working relationship between the Ministry of Agriculture and the training boards for the promotion of training.
  In my constituency many factories have been closed down. Men have had to find other jobs. There is no lack of work in London, but many men between the ages of 40 and 50 have had to look for other work. One factory closed down in my constituency and 720 men lost their jobs. I asked for a breakdown of these people from the management and was kindly supplied with the information. It appears that nearly 200 men—some skilled and some semi-skilled —will have to find what will probably be less remunerative jobs. I am looking round the House to see how many hon. Members fall between the ages of 40 and 50.
  It is not easy for people of that age to be retrained. Just as there is a special case for the training of the disabled, so there is a special case for these people. They are a valuable section of our labour force. It is difficult for them to readjust to new jobs without some help. Their difficulty is probably more psychological than anything else.
  It is no good assessing manpower by computer or in any other way and claiming that the country needs, for example, another 20,000 engineers in Birmingham and London, and training facilities for the unemployed in the east of Scotland. There is such a shortage of housing in practically every town that there is no mobility of labour. It is difficult to assess national needs in such circumstances. I give a general welcome to the Bill because training is important. We have neglected it for a long time, and I am glad that there is a considerable degree of agreement on both sides about this. It is something to which we must give our attention because it will

  1221
  make all the difference in the world to standards in this country.
  8.56 p.m.
  Mr. Ronald Brown: I wish to take up the last point mentioned by my hon. Friend the Member for Enfield, East (Mr. Mackie). I too welcome the setting up of a Manpower Services Commission. It is most important. For years we have been desperately asking and arguing for a commission which could foresee the use of the nation's human resources.
  After looking at the Bill I went to the Library and took out that old faithful called the National Plan which came out in 1965. I remember that hon. Gentlemen on the Government side laughed and jeered at it and said it was no good. It is fascinating to re-read that document. There are the same words in the Bill as appeared in the National Plan. There is the same exhortation over training and retraining and the statements that there are too few skilled men and that there is need for training through industrial training boards.
  The plan argued that if we had a 5 per cent. growth rate for five years we would be short of 200,000 men by the end of 1970. It cogently put together all the arguments which appear in the Bill. This is a late conversion by right hon. and hon. Gentlemen opposite but I commend them for their diligence and their realisation that the plan laid down an important framework for the use of our human resources.
  I fail to see how the forecasting will be done under the Bill. How will needs be determined? Aspirations are all right but what the House wants to know is how this will be implemented. I hope that the Minister will be able to sketch some kind of plan of how he believes the Manpower Services Commission will produce the trends and forecasts and will say where they will come from.
  The National Plan was not too bad. If we had got the 5 per cent. growth rate it would have been right. It was right in many other respects. In what way do the Government intend using the commission? Is it the same way as the National Plan was developed? Will we use the little "Neddies"? The House ought to understand this. I am not ask-
  1222
  ing for detailed answers but we ought to have a sketch plan of what is proposed.
  I am still concerned about the two services despite the courteous reply given to me by the Secretary of State when I intervened in his speech. I am not sure that I understand the rôle of these agencies. Is the Training Services Agency to be in itself an executive body? Does it have power devolved on it from the Secretary of State through the Manpower Services Commission, and can it give instructions to the industrial training boards? Can it reject proposals from the boards? There are those outside the House who have suggested that their interpretation is that the boards still have the right of direct representation to the commission. They base that argument on the fact that the boards are appointed by the Secretary of State and therefore still have the right to go back to the commission.
  Mr. Chichester-Clark: Perhaps I could help the hon. Gentleman. It may help to think of the agency in terms of being one of the executive arms of what is really a holding company, which is the Manpower Services Commission.
  Mr. Brown: That has not quite sunk in. I am grateful to the Minister for his intervention. I am sure it was meant to be helpful. Will the industrial training boards still have the right to act as they so desire with a final appeal to the commission and no instruction from the Training Services Agency? Will they have complete freedom to deal directly with the commission? If so, I am not sure that I understand the point of having a Training Services Agency.
  If the industrial training boards have to operate through this executive arm of the holding company, they will feel very sore. The whole success of the industrial training boards—I believe that they have been a success since 1964—has depended upon high-level industrialists and trade unionists being prepared to spend time on them. If it had not been worth while, if we had had people of lesser standing, the industrial training boards would have been a failure.
  If the Training Services Agency is to be an executive between the commission and the industrial training boards and the boards must always work through the agency, I fear that high-level trade

  1223
  unionists and industrialists will not be prepared to spend their time working, as it were, as agents for the agency. I hope that this point will be clarified not only for my benefit but for the benefit of people outside the House who are extremely concerned about these matters.
  The hon. Member for Croydon, North-West (Mr. Robert Taylor) referred to small firms. Since publication of the Bolton Report much has been said about small firms. We have never had this situation clarified. It depends on the industry, as the hon. Gentleman pointed out.
  I am concerned with the furniture and timber industry. As the House knows, I am parliamentary adviser to the Furniture, Timber and Allied Trade Union. Therefore, my main concern in this connection has been with the Furniture and Timber Industry Training Board. The furniture industry comprises many small firms. I have a breakdown of the numbers involved. It is quite instructive. I suggest that the Minister must deal with this problem when he replies to the debate.
  There are 4,283 firms registered in the furniture industry representing 212,297 employees. If we exclude firms employing up to 200 workers, we shall be left with only 199 firms within the scope of the scheme, representing only 87,688 employees. In other words, only 5 per cent. of firms in the furniture industry and only 41 per cent. of employees will be left in the training scheme. Clearly that is not what we are talking about. If it is, I am against the Bill and will vote against it.
  Men in small firms have the same rights regarding industrial training as those in big firms. A cabinet maker working for a man who employs 15 or 20 workers is entitled to the same opportunities as the man working for a large company employing 3,000 people.
  Mr. Robert Taylor: The point that I tried to make was that we should not have a levy at all, and then all firms could benefit from the training which was available. It is the principle of the levy to which I object. I should exclude all firms.
  Mr. Brown: I do not wish to be diverted. The Government do not seem
  1224
  to realise, when they talk about excluding small firms, that it will be a meaningless exercise particularly in the furniture industry. Although the training board for the furniture industry has suggested that the exclusion should only be of firms with up to 15 employees, even that leaves one with only 53 per cent. of the firms and 93 per cent. of the employees. It would still cut off a large number of firms.
  I thought that the Secretary of State said that he would deal with this matter industry by industry, so I am making my plea on behalf of the furniture industry. The exclusions will have to go far down the scale. It is no good talking about excluding firms having more than a limit of 15 employees.
  The other issue which concerns me is the problem of group training schemes. I take the point that if one excludes the small firms, one excludes their chance to enter these group training schemes. There is a large number of these schemes in the furniture industry which give benefits to many small firms. At the moment there are about 44 group training schemes covering about 739 firms out of the total of nearly 5,000, involving 44,953 employees. Unless we can have a fairly quick answer about the size of firm to be excluded, it seems that many of these schemes will fall. I plead with the Minister of State to help me by giving an assurance that those 44 schemes will be able to continue their excellent work.
  In an intervention I mentioned Clause 8(6)(a), which refers to the persons who would come under the education authorities. That paragraph excludes from these benefits
  "part-time attendance where none of the relevant classes begins on any day before five o'clock in the evening".
  I take it that this means that a young person who, after a day's work, begins at five o'clock what is euphemistically called evening school will not be covered by that proposal. That would be wrong.
  One understands the system of part-time day release and wants it to be made full-time, with far greater involvement of industry. If we can get young men and women to continue to go to school in this way to advance their careers, it will be wrong to exclude this practice from the privileges under Clause 8. If I

  1225
  do not have this matter in perspective, I hope that the Minister will say so.
  There are many other points which time precludes me from raising. I hope that the Bill will be successful. It has a great deal of merit. Industry today is desperate for a lead in its training programmes. There are not large numbers of laggard employers. More and more they are recognising the need for training. They want to give as much as possible.
  Now we have the chance to get the Manpower Services Commission working with the training boards to provide the best possible training for our people, recognising, as my right hon. Friend the Member for East Ham, North (Mr. Prentice) said, that with the new and changing technologies of the modern day it is becoming more and more important that men should be trained and retrained more easily. I hope, therefore, that we shall hear tonight how the Minister sees the final implementation of this scheme.
  9.10 p.m.
  Mr. Harold Walker: We have had a very constructive and, so far at least, very agreeable debate. In opening the debate for the Opposition, my right hon. Friend the Member for East Ham, North (Mr. Prentice) gave a welcome to the Bill, albeit a qualified one. So do I. I particularly welcome the bringing together, for the first time, of the training functions for which the Department is responsible. That is probably one of the most constructive parts of the Bill and one which I have advocated for a long time.
  Notwithstanding the speech of my hon. Friend the Member for Enfield, East (Mr. Mackie), by and large the debate has revolved around four principal issues. Although there are a number of other matters which we shall wish to discuss in more detail in Committee, in the main these are the four issues to which I shall confine my remarks—the Youth Employment Service, the training levy position, the responsibilities, powers and functions of the commission, and the question that has been raised on both sides of the House of what the Secretary of State chooses to call in his White Paper "manpower intelligence".
  Doubts have been expressed on a number of issues and questions have been raised on which we shall expect
  1226
  some clarification and resolution when the Minister of State replies.
  Notwithstanding what I have said about the principal issues, I express some surprise that Clause 5 has not been mentioned in the debate, as far as I recall. Although I have missed parts of the debate, I am sure that this would have been drawn to my attention, because I was so curious about the provisions of the clause. Will the Minister of State tell me whether the provision contained in the clause has been drafted with Community Industry and, possible, similar schemes in mind, or whether it goes behind that? I am glad that the Under-Secretary is nodding his head to confirm that it covers such schemes as Community Industry—a very valuable scheme. One would assume that it may go beyond that, but some clarification is required about the purpose and possible scope of Clause 5(1). If the Minister of State does not feel inclined to discuss it tonight, we can explore the matter further in Committee.
  I was equally surprised that there was no reference to the provision of Clause 2(2)(d). I assume that these are the statutory provisions for the fee charging for the placing of professionals and executives on the professional and executive register. I am surprised that this provision has attracted no comment. We shall have to pursue this matter further in Committee. The only people who have a legitimate ground for rejoicing over this decision by the Government, in spite of their consistency with the philosophy that they have enunciated on so many other matters, are those who are at present privately and commercially engaged in placing people through their private employment agencies. What it means is that those firms for which the professional and executive register and the professional and executive office at present provide a service will in the future have all the more incentive to use the private sector. It may be that I am being over-suspicious. I am pleased that the Minister of State is shaking his head in disagreement. Perhaps we can explore this matter further. It deserves further explanation.
  Before I turn to what I see to be the main issues I want to comment on the reference by the Secretary of State to the provisions dealing with disabled persons. I wish to put a small but important point

  1227
  to the Minister of State. The Secretary of State says that he will continue to be responsible for the quota scheme and that this is one part of the Department's present responsibilities for the disabled which will not be transferred to the commission. In my view that is quite wrong. After all, who is better placed to identify the areas where the disabled can he found suitable employment, and who better to put them into that employment, than those who are given the responsibility for placing—that is, the Employment Services Agency.
  As the Secretary of State knows, growing disquiet is expressed about the plight of the unemployed disabled, their difficulty in finding suitable employment, and the failure of many firms to fulfil their quota obligations. I do not know the figures, but I recall that when we last discussed this subject in the House at Question Time it was revealed that an extraordinarily large number of firms failed to comply with their quota obligations and were—theoretically, I suppose—in breach of the law. In the light of the difficulties being experienced by the disabled, there is a strong argument for reconsidering the possibility of transferring the responsibility for placing the disabled and for ensuring that firms fulfil their quotas to the Employment Service Agency. It would be putting the responsibility with those who are engaged in the field and can identify the situation. In my view they should be given the power to act.
  I have referred to these three points, two of which were not raised in the debate and one where I wanted to dissent from the view expressed by the Department. I turn now to the four main issues to which I have referred.
  The first concerns the Youth Employment Service. The Secretary of State said—and it has been echoed again and again in the debate—that it will be a mandatory duty of local education authorities to provide a careers guidance service and that the proposed power to hive this off to the Manpower Services Commission will be purely transitional. I searched the Bill in vain for confirmation of that statement. It may be that the Minister of State can say precisely where provision is to be found in the Bill for this hiving-off to be purely transi-
  1228
  tional. I cannot find it. Nor does it reconcile itself with paragraph 56 of the White Paper, the final sentence of which reads:
  "In practice it is expected that apart from a transitional period such arrangements with the Commission will be confined to a small number of cases."
  That seems to deny what the Secretary of State said. That is one matter which requires putting beyond doubt.
  I reiterate what my right hon. Friend the Member for East Ham, North said earlier and what has been echoed by my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renee Short) and others. We believe that the obligation of local education authorities in this matter should be put beyond doubt and that any ambiguities and confusions in the Bill should be eradicated. We believe firmly that this should be a mandatory obligation on local authorities and that they should have responsibility not merely for—as the Secretary of State put it—the first placing but all subsequent placings, up to a certain age level. We can argue with my hon. Friend the Member for Wolverhampton, North-East and her Committee about whether the ideal cut-off-age should be 18 or 21, but the principle is beyond doubt.
  The Secretary of State and his officials underrate or fail to understand the difficulty confronting a teenager seeking employment. It is a known fact that apprenticeships and most career occupations start with relatively low rates of pay. A young person freshly out of school obviously is tempted by the prospect of higher pay in employment which does not have future prospects in career terms. The careers guidance officer may exercise his proper responsibility in ensuring that the teenager leaving school finds appropriate employment. But here is a boy mixing with his mates in the coffee bar in the evening. His mates are earning several pounds a week more doing labouring jobs. He sees opportunities to obtain such employment himself, and the pressure is on him.
  Our employment exchanges are working under constant pressure to keep down the unemployment figures. They see their overriding duty as keeping down the number of unemployed and filling every possible vacancy. That is very proper. But it is not the approach that we want

  1229
  for young people freshly out of school and perhaps susceptible to the influences and pressures that I have described. They need guidance so that they will pursue careers which are appropriate to their education and the talents that they possess. That is the primary reason why we want to see the responsibility not merely for the first placing but for subsequent placings of young people, up to a cut-off age, to be clearly that of local education authority careers guidance officers.
  My right hon. Friend the Member for East Ham, North described what he called his five-point plan for non-student teenagers. Without repeating it, perhaps I may add to it and tell the Secretary of State that I very much regret that in his speech he did not take the opportunity to explain his decision to exclude those between the ages of 16 and 19 from the training opportunity scheme. I cannot recall, in any debate since the right hon. Gentleman put forward his original proposals, an adequate explanation being given and an opportunity to tell him how much we disagree with the decision.
  When I hear mention of non-student teenagers, I remember the remarks of my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) concerning the unemployed non-student teenager. I am always struck by the contrast between the provision made by the State for a boy or girl who successfully passes the A level examination and the inadequate provision made for boys and girls who fall short of that standard and cannot find employment. It is right that we should provide student grants and facilities for those who pass the examinations, but we must consider why we do so little for the other young people who are unemployed.
  I say this with some feeling because my constituency, the Doncaster travel-to-work area, probably has the most severe teenage unemployment problem in the country. I see this problem at first hand. I believe that we should be doing more about this situation than it being done in the Bill—and certainly more than has been suggested in the plethora of White Papers which have emanated from the Department—to help these young people. One way in which we can help them is to give them access to the TOPs scheme, the training opportunities
  1230
  scheme. I hope that the Secretary of State for employment will bear this point in mind.
  I turn to the training levy. We have heard comments, particularly from my hon. Friends, that the imposition of a levy with a ceiling of 1 per cent. will be harmful. I regard it as a hangover from the Government's "lame duck" days. There is nothing to prevent a board's setting a levy level at less than 1 per cent. The Secretary of State pointed out that the majority of industries already had a level below 1 per cent. If that is the case, why was it thought necessary to introduce into the Bill the statutory ceiling of 1 per cent.? I appreciate that the Bill provides for the exception to be made, but the affirmative resolution procedure is a formidable obstacle and we shall seek to do something about the situation when the Bill reaches Committee.
  Yesterday evening, in company with a number of my hon. Friends, I met some officials of the Engineering Industry Training Board who said that in that industry very little that was worth while in training terms, could be achieved without expenditure of something in the order of not 1 per cent., but 3 to 4 per cent. Indeed, the present average level in the engineering industry amounts to 2 per cent. or slightly less.
  Mr. Albert Booth: Does my hon. Friend agree that the case against excluding from Government training centres young people of 16 to 19 years of age will be seriously diminished if there is a restriction of training levy and therefore less inducement for employers to provide training for those people?
  Mr. Walker: My hon. Friend is quite right. The very next point in my notes refers to the future of the apprentice award scheme. I understand that the scheme has been applied by other boards, and I know that in the engineering industry it has made a distinct contribution to the welfare of young people who otherwise would have been denied the opportunity to take up apprenticeships.
  Anxieties have been expressed about the effect in the engineering industry of reduced resources in terms of the apprentice award scheme. I hope that the Minister of State will give us the Department's assessment in the light of the

  1231
  discussions which have been held with the Engineering Industry Training Board about the continuation, development or reduction of the scheme and the importance of giving these young people access to the training opportunities scheme.
  From the Opposition Front Bench I appeal to the Government to say something tonight about their view of the small firm. I do not ask that they should quantify a small firm exactly, or say that a small firm comprises 100 or 200 people. I am merely asking for an indication of their definition of a small firm. So far we have had no guidance. One can understand that there may be a need to treat the matter on an industry by industry basis, but each industry will be looking for an early indication of what the Government understand by a small firm.
  I turn to the question of the Manpower Services Commission and its role and functions. I say, en passant, that I find it difficult to understand from the Bill whether the strength of the commission will be nine plus a chairman, or nine plus a chairman and deputy chairman, or nine members from which will be selected a chairman and deputy chairman. There seems to be an option of nine, 10 or 11 members.
  The problem may arise from the fact that I cannot understand the relevant subsection of Clause 1. My difficulty may be in understanding lawyer's language, but perhaps the Minister of State will tell us about that when he replies. More significant is the importance that has been attached to ensuring that the people who comprise the commission will be of the highest calibre—people of the right kind of rating in industry who attach to the commission the importance it deserves and the authority that it requires. Perhaps the Minister of State will give some indication of the kind of salary range that will be offered, so that we can get some idea of the sort of people who might be attracted.
  We heard very little from the Secretary of State about the functions of the Manpower Services Commission in co-ordinating the manpower requirements of different industries. That sparked off a number of questions, in particular the question twice posed by my hon. Friend the Member for Shoreditch and Finsbury
  1232
  (Mr. Ronald Brown), on which we deserve an answer. There is confusion and doubt about the relationship between the boards, the Training Services Agency and the commission. The Minister of State thought that he had cleared it up in an intervention when he described the Manpower Services Commission as being like a holding company and the Training Services Agency as being one of its subsidiaries, presumably of independent management, to which the training boards would be subordinate. This is the crucial question. Will they be subordinate to the Training Services Agency or answerable direct to the commission? The boards themselves require an answer to that question.
  My hon. Friend posed the question whether there is to be inserted between the boards and the commission a tier of responsibility—the Training Services Agency—to which the boards shall be answerable. In his reply the Minister may be good enough to make the position clear, as it is confused particularly by the conflict between paragraphs 7 and 11 of the White Paper. Paragraph 7 contains the sentence
  "The Commission will also co-odinate the work of the industrial training boards …"
  and paragraph 11 says that the agencies will have the duty of
  "running the employment and training services and co-ordination of the work of the industrial training boards."
  On one page two separate paragraphs allocate responsibilities first to the commission and then to the Training Services Agency. Perhaps we may have some clarification about that.
  In conclusion, I emphasise what has been said about one of the most crucial omissions—the manpower intelligence requirement of the commission. I have made a note in which I describe the Employment Service Agency and Training Services Agency as two legs supporting the Manpower Services Commission. The hon. Member for Howden (Sir P. Bryan) suggested that a third leg was needed. That is precisely how I see it. This tripartite arrangement would be needed in order to provide a stable structure. We have more than sufficient evidence that this is one of the critical weaknesses in the present arrangements.
  I am not saying, and I have not heard anyone else say, that what should be

  1233
  provided is precise statistical data. None of us believes that this is obtainable, but the Government should be seeking to establish machinery which identifies the trends, industry by industry and region by region, so that we can form a clearer picture than is available at present about the totality of existing and future supply and of excess or shortfall in manpower requirements.
  I am under no illusion about the size and complexity of the task, nor am I unaware of the past attempts that have been made—for example, in the Manpower Research Unit set up by the last Government. Certainly, manpower forecasting is difficult, having regard to the rate of educational, technological and demographic change, the greater mobility of labour and the increasing interchange between industries. But I believe these are factors which already strengthen the case for trying to make some kind of forward assessments rather than throwing up our hands in despair at what seems to be a hopeless task. I would have thought that we already have, in the Office of Manpower Economics, an embryonic machine that might have been, and might yet be, brought more directly into the structure of things to help to provide this kind of service.
  The Government may see the Bill as the fulfilment of their objectives in the provision of employment and training services. But what Opposition Members who are concerned with in these matters believe—and I am sure that I reflect the views of many people outside—is that this is but another phase of what must for a considerable time be a continuing process of expansion and development in this sector. Some of the weaknesses and inadequacies of the earlier recast schemes have been clearly exposed in the course of the debate, such as the need for a better deal for non-student teenagers, particularly the unemployed, the restriction on the levy facility of the boards, and the absence from the speech of the Secretary of State of a recognition that the elimination of discrimination against women in employment can be heavily influenced by training and employment-placing policy. Above all else, perhaps, is the fact that while the Government recognise the need for information about future manpower requirements they have not given any
  1234
  clear indication about the machinery and resources to be provided for that purpose.
  None of us can be other than deeply disquieted by the situation that we see in the building industry, where, apparently—in some parts of the country at least—there is a desperate shortage of craftsmen seven or more years after the creation of the Construction Industry Training Board, and that at a time when we have 750,000 people registered as unemployed. Nor should we be other than concerned about the kind of situation that I have in my constituency, where highly skilled toolmakers are driven by redundancy to waste their talents and training on unskilled work. These anomalies are presumably being repeated throughout the country. They should not be endured. They should be ended, but I very much doubt whether this is the measure to end them.
  For my part, I shall not feel the Government's obligations in the provision of manpower services to be satisfied until we have given every person who is able and willing to work the opportunity to do so. The ultimate goal towards which our efforts should be directed is that of having every employable person in one job, or preparing for another. By doing so we shall not only be serving the needs of the economy but—perhaps more important—giving millions of people an opportunity to live more satisfying and fulfilling lives.
  9.38 p.m.
  The Minister of State, Department of Employment (Mr. R. Chichester-Clark): I had not realised just how wide-ranging a debate this could come to be. I have enough notes to paper the walls of the Chamber and I am perfectly certain that I shall not be able to get through all the points that have been raised this afternoon. The hon. Member for Doncaster (Mr. Harold Walker) was kind enough to say that many of the points which he raised would be better dealt with in Committee. I shall take him at his word in respect of most of them.
  The debate has been notable for the welcome which has been accorded to the Bill. On the whole it has been warmly received even if a little chill seemed to creep into the air during the course of the last speech. I am sure that the warmth will come back when we confront each

  1235
  other in Committee. The Bill, however, has been welcomed on all sides.
  There have been some powerful speeches on the subject of the Youth Employment Service, and my right hon. Friend the Secretary of State covered an enormous amount of the ground this afternoon. I do not propose to follow that too far except to refer to the powerful speech of the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renee Short) which will obviously deserve careful examination, as does the report of her Committee which was published only on Thursday last. Obviously, we shall have some interesting discussions in Committee on the differing views which have been expressed from both sides on this subject.
  My hon. Friend the Member for Chertsey (Mr. Grylls) made some important points which I propose to answer in detail by letter. They concern, amongst other things, the question of training of careers officers. I pay tribute to careers officers in general. We can examine in Committee whether such training is necessary.
  I come first to the question of the Manpower Services Commission. I want to clear up a point which the hon. Member for Doncaster raised about the numbers of the commission. Until the hon. Gentleman spoke I thought that this was one part of the Bill on which I was absolutely clear. In many ways the Bill seems complex, but close examination shows that it is not. It should be clear from Clause 1(2) that the commission will consist of 10 persons. If doubt is later cast upon that by magic of drafting, we can consider the matter in Committee.
  One of the main objectives in setting up the commission is to make the manpower services more responsive to the need of all who use them and more alert to new developments. It will need the best possible manpower intelligence, with full powers to conduct or commission research in all matters falling within the services' responsibilities. They will not be acting alone, because the industrial training boards and the resources of the Department of Employment and other Departments will continue to be closely involved in manpower research, but the commission has a major role to play.
  1236
  More than that—and here I join the right hon. Member for East Ham, North (Mr. Prentice) on his magic carpet—it will be up to the commission to form its own judgment of how the manpower services can be developed and of the priorities for action. That will be one of its most important activities, which is why we are asking employers, trade unions and other interests to take responsibility for the service. Instead of acting in an advisory capacity they can then tackle the job directly, making sure that the services provide them with what they need and want.
  No doubt the commission, having formed its view, will want to voice it loudly and clearly, not least in its annual report to the Secretary of State, which is obligatory. That will be laid before Parliament. We are creating a new body which will have its own ideas about the manpower services, based on the direct experience of the organisations from which the commission's members will be drawn. They will be fully able to express ideas about the way in which the service should be developed, what the priorities should be, whether new initiatives are needed and so on.
  The Secretary of State of the day may not always completely agree with the ideas of the commission. But we probably all agree that it is all to the good that such questions should be freely and openly discussed and thrashed out between all those concerned, with the best information that can be obtained.
  The whole House will wish to join me in paying tribute to my hon. Friend the Member for Howden (Sir P. Bryan) for the work he did concerning the training boards when he was in office. He was a little disappointed that there had not been more of a fanfare for the commission. He feared, I hope wrongly, that that might affect the calibre of the people who will be willing to serve upon it. To judge by the enthusiasm with which the idea of the commission has been received by the TUC and the CBI, his fears may well prove to be unfounded.
  Several hon. Members asked whether the commission would be dealing with the industrial training boards or would leave that to the Training Services Agency. I think that the answer is that overall responsibility for dealing with the industrial

  1237
  training boards will rest firmly with the commission. The White Paper makes it clear that the agencies will act as the commission's executive arm, subject to the commission's direction.
  Clearly the commission will not itself be dealing with day-to-day matters which affect ITBs any more than the Secretary of State does today. That will be the job of the agencies and the commission itself will be concerned with the major questions—especially, for example, the plans and budgets which the boards draw up covering their future operations. I share my hon. Friend's views about the training boards. I have met all of them at one time or another and I think they are of a very high calibre indeed and that their work has been remarkably good. They will have many dealings with the commission. I make it perfectly clear once again, as my right hon. Friend has made it clear to them, that they will have access to the Secretary of State in the last resort. I am speaking here of the chairmen, of course.
  My hon. Friend the Member for Bolton, West (Mr. Redmond) was interested in a matter concerning the Engineering Industry Training Board, to which I shall refer in due course He also expressed the hope that there would be no unnecessary training boards left lying about, as it were. It is true that a decision to wind up the Gas Industry Training Board has been announced, and this is because the industry itself has statutory responsibility for training and it seems right that it should be able to get on with it. Consultations are going on concerning the Electricity Supply Industry Training Board and it may well be that the same course will be followed in that case.
  As regards water supply—I think that my hon. Friend mentioned it—there is a measure at present before the House involving the National Water Council. If that measure is passed by the House, I imagine that the water supply board will be wound un and its functions transferred to the National Water Council.
  The hon. Member for Enfield, East (Mr. Mackie) approved, as did other hon. Members, the new arrangement regarding the Agricultural, Horticultural and Forestry ITB. That has always—or nearly always—been rather different from the other training boards. As the
  1238
  hon. Gentleman realised, it will in future be the responsibility of the Minister of Agriculture, Fisheries and Food and independent of the Manpower Services Commission.
  The hon. Member for Dearne Valley (Mr. Edwin Wainwright) was anxious about the agencies and he asked particularly whether the staff would all be civil servants or ex-civil servants. The answer is that the appointment of the heads of the agencies will be made by the commission, which will also appoint two other members of each agency to form a governing board. With regard to the rest of the staff of the commission or agencies, I would draw the attention of the hon. Gentleman to paragraph 37 of the White Paper which makes it clear that the staff of both will be drawn largely from the Department of Employment—after all, we already have within the Department the two agencies—but they will be able to recruit staff on a short-term or long-term basis from industry, the education service and so on.
  The hon. Gentleman was also concerned, as were one or two other hon. Members, about the question of young people and "in particular" apprentices. I shall content myself for the moment with saying that there was a big increase in apprenticeships in 1972, and that was welcome because it was the first time that it had happened since 1968.
  The right hon. Member for East Ham, North dwelt for a good deal of his speech on the whole question of levy/grant, which is undoubtedly one of the more controversial aspects of the Bill, and I shall spend some time on that. I suppose that nowadays one ought to call them levy/grant exemptions because of the provisions of the Bill.
  The right hon. Gentleman has one view. I know that there are others, and one of them was exemplified by my hon. Friend the Member for Croydon, North-West (Mr. Robert Taylor), as he has done on other occasions. My hon. Friend would have preferred the proposals in the original consultative document "Training for the future", which was devised—and I emphasise this—as an agenda for discussion. It was drawn up at a time when the boards were a good deal younger—after all, the oldest is only eight years or so old—and then they were less efficient and

  1239
  less well developed in their operations than they are now. That is not to suggest that they would claim that they have become perfect in their operations. I have already paid tribute to what they are doing, and I am glad to do so. I think that most of the House would echo that tribute, but our present proposals attempt to eliminate some of the difficulties which remain.
  "Training for the future" proposed the end of levy/grant after 1972–73. As the House knows, we held extensive discussions—they really were exhaustive—with industries, with the training boards and with all those who had an interest in training who could reach us. We had thousands of letters about it and it was generally a massive exercise in consultation.
  The basis for discussion was the premise that there had been a permanent shift in the attitude of industry to training. I must tell the House that in the consultations on the document the most marked impression that came through was that there had been a change of behaviour by industry—by implication because of the operation of levies—though not necessarily a change of attitude.
  We could not with any honesty have claimed that the consultative processes which we had promised and carried out were genuine had we ignored the preponderance of that sort of view. There was genuine concern that without some continuing financial pressure for good training we risked a serious setback in training. Naturally, if somebody is asked whether he would rather not pay something which seems like a tax he will be inclined to say "Yes", and many people said just that.
  However, it was noticeable that even many of the industrial organisations which said that the levy ought to be ended were at the same time and with the same voice expressing concern about the effects on training of doing just that and were pointing to a need for Exchequer money to counteract the effects of the removal of the levy. Paradoxically, some of those who wanted us to end the levy were the very people who, in other contexts, were crying out for cuts in public expenditure. By retaining the
  1240
  levy, albeit in a reduced way, we are eliminating the risk of sudden and much greater calls upon public expenditure.
  We listened to those whom we consulted and decided that the balance lay with continuing the levy as a pressure for good training. Equally, as my right hon. Friend said, we thought it right to modify the system to make it simpler for everybody, to make it relevant to individual firms and operative in a way which eliminates bureaucracy, form-filling and time-wasting and, in particular, the burden upon firms which have been consistently concerned to carry out good training according to their needs, and there have been many of these.
  We have been concerned also to exclude from the system many small firms upon which the burden has fallen particularly harshly and in many cases irrelevantly. Some firms have consistently carried out good training and it is true that they can, because of this, claim and receive grants. To do so, however, they have to prove in detail what they are doing. To do this in adequate detail is time-wasting and in some cases creates the wrong sort of relationship between industry and the boards. It also tends to make the employees of the boards spend more time thinking about money than about training.
  I will not deal now, because of shortage of time, with the whole question of exemptions, but I point to the appeals system. There is already within the boards an appeals system but there will be a separate one, now under discussion, which will go beyond the scope of the boards.
  My hon. Friend the Member for Croydon, North-West mentioned the Construction Industry Training Board's Press release. We recognise that the construction industry has very difficult problems because of the mobility of its manpower, with different firms having so many different sites and so on, and we are holding consultations with the industry about these problems.
  My hon. Friend the Member for Oxford (Mr. Woodhouse) referred to the 1 per cent. levy provision and whether it should be included in the Bill. I reject at once any suggestion that my right hon. Friend has been guilty of a breach of faith in this matter. On 8th August he announced his policy and he adheres to

  1241
  it. He considers that any levy should not exceed 1 per cent., but that does not necessarily mean that it is desirable to write into the Bill a provision to ban a levy going above 1 per cent. It would be possible for the Bill to remain silent on this matter and for the Secretary of State to sign no order for a levy exceeding 1 per cent., but instead my right hon. Friend has decided on a provision whereby a levy exceeding 1 per cent. may be made but only after approval by both Houses of Parliament. That is a safeguard against levies reaching an unnecessarily high level in any industry. I hope that it will not be necessary to have a levy above 1 per cent. As my right hon. Friend has made clear, however, it will not be done unless it is justified by very exceptional circumstances.
  My right hon. Friend was asked about the effect of the 1 per cent. on the Engineering Industry Training Board. The first levy to be subject to the limit will be the first levy under the new arrangements, which do not come into effect for the boards until August 1974. We shall be discussing with the engineering board its arrangements for the first and succeeding years. The preliminary indications are that it will be able to work effectively with a 1 per cent. levy, although a good deal has yet to be decided—for example, about criteria, exemptions, the firms which should be
  1242
  excluded on grounds of size and so on. The hon. Member for Doncaster suggested that the board could not manage with a levy of less than 3 to 4 per cent. but the existing levy is only about 2 per cent., so he is wrong there.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  EMPLOYMENT AND TRAINING BILL

    EMPLOYMENT AND TRAINING [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of the present Session to establish public authorities concerned with arrangements for persons to obtain employment, it is expedient to authorize—

    (1) the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State for the purposes of that Act and any increase attributable to that Act in the sums payable out of such moneys under any other Act;

    (2) the payment into the Consolidated Fund of any sums received by the Secretary of State by virtue of that Act.—[Mr. Dudley Smith.]

LEGAL AID AND ADVICE
10.0 p.m.
The Solicitor-General (Sir Michael Havers): I beg to move,
That the Legal Advice and Assistance (Financial Conditions) Regulations 1973, a copy of which was laid before this House on 7th March, be approved.
Mr. Speaker: Does the House agree to take at the same time the second Motion.
That the Legal Advice and Assistance (Scotland) (Financial Conditions) Regulations 1973, a copy of which was laid before this House on 7th March, be approved.
The Solicitor-General: That would be convenient, Mr. Speaker.
These two sets of regulations increase the disposable capital limit for the availability of legal advice and assistance from £125 to £250. The 1972 Act provides that advice and assistance should be available for any person if his disposable capital does not exceed £125 or any such larger sum as may be prescribed by regulations made under the Act. The regulations must be approved by resolution of each House. That is the reason for the time of the House being taken up tonight. One set of regulations covers England and Wales and the second covers Scotland. My hon. Friend the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, is present to deal with any matters that I cannot answer arising from Scotland.
The object of these measures is to raise the capital limit. The scheme is intended, broadly speaking, to enable those who would be entitled to legal aid on payment of the contribution from income without payment of the contribution from capital to be eligible for advice and assistance. The capital limit originally was £125 and it has become apparent that the sum should be raised. It is being raised in conformity with the increase in the capital sum limit under the legal aid scheme when that was raised in November last year to £250. The two now become parallel.
The regulations come into operation on 2nd April, the same day as Parts I and III of the Legal Advice and Assistance Act, which come into operation by
1244
reason of the commencement orders made by the Lord Chancellor. From that time onwards we hope that the scheme, which is known as the £25 scheme, will enable people to obtain legal advice and assistance immediately without any complicated red tape. They will be able to go to a solicitor. It will be the solicitor who will ensure that the form is completed and advise the applicant how to make his application. It will be for the solicitor to assess whether the case falls within the scheme. If the service that should be provided exceeds a cost of £25, the solicitor can apply to an appropriate committee of the Law Society for authority to incur further costs. No prior authority will be needed if the excess cost is merely that which arises out of the imposition of value added tax.
There is no limitation on the type of advice and assistance that a solicitor can give. He will be able—and I hope he will do so in any event—to treat his client in every way as if he is a paying client. The entire range of the solicitor's services will be open to him, except that in the ordinary course of events the solicitor will not be able to undertake appearances in court because that would come under the other legal aid provisions.
It is intended that the new scheme shall be well advertised and that a campaign shall be directed not only at those likely to benefit from the new scheme but also at persuading those who might be in a position to advise people in need of advice and assistance to lend their services. There will be advertisements on television, in the Press and on posters. Simple explanatory leaflets will be available in post offices and elsewhere. Those who will be in contact with people who might need such assistance—such as citizens' advice bureaux, hospitals, local authorities and others—will receive detailed pamphlets explaining how the system will work.
We are grateful to the Law Society, which is undertaking a great deal of persuasion to ensure that solicitors are willing to join the scheme and to make it work. Meetings are being held with solicitors throughout the country during the coming month so that they can play the part which is essential in making the scheme a success.
10.5 p.m.
Sir Elwyn Jones: These regulations constitute yet another timid and tentative step towards remedying the continuing failure of our legal and social arrangements to ensure that those in our community who need legal advice and help get it. The regulations are based on the Legal Advice and Assistance Act 1972 the purpose of which,was to give effect to the recommendations of the Legal Aid Advisory Committee's report.
That report highlighted the problem that:
"All those who have considered the matter agree that there are people who would benefit by going to a solicitor but who do not do so."
The advisory committee set out five reasons for that unhappy state of affairs. The first was defects in the existing legal advice scheme, the second insufficient publicity, the third lack of solicitors in the areas concerned, the fourth a reluctance to consult solicitors and the final point was a failure to recognise that legal remedies might be available. The report concludes:
"We agree that people fail to get the legal help they need for one or more of these reasons."
I am glad to hear what the Solicitor-General has said about the publicity that is to be given to the legal advice scheme and to the legal aid scheme generally. There is no doubt that there is a great need for this. I can only hope that the extent of the publicity campaign will encourage those who need the facilities now being provided to make use of them.
The regulations go some way to meet the defects in the existing legal advice scheme and to that extent they are welcome on this side of the House. In my submission they do not go far enough and I do not suppose that those on the Treasury Bench will be surprised to hear me say so. I venture to think that if the position was reversed and they were sitting on this side they would be saying precisely the same thing. Did the advisory committee recommend a figure in respect of the capital limit for the availability of legal advice and assistance? In Committee on the Legal Aid and Advice Bill we proposed an amendment to the effect that the figure should be £500. We felt that this would be more realistic particularly in these inflationary times. It was dis-
1246
appointing that the Government felt unable to accept that amendment, which was defeated on a Division.
I hope that the Government will feel able in this whole subject of legal aid to adopt a suggestion which I made at Question Time to the Attorney-General and which he seemed to accept, or at least to view with some sympathy, namely, that there should be built into the scales and limits some provision to allow for the continuing rate of inflation so that it would not be necessary for us to keep on trying to catch up with the inevitable consequences of inflation. However, we have the regulations. They are better than nothing. To the extent that they are better than nothing, we on this side of the House welcome these two sets of regulations.
If it was expected that I should say something arcane or esoteric about the Legal Aid and Advice (Scotland) Regulations, I must disappoint the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, whose presence we welcome even at this late hour.
10.10 p.m.
Mr. David Waddington: I am a little disappointed that the disposable capital limit should have been increased to only £250. I remind my hon. and learned Friend the Solicitor-General that in the Housing Finance Act 1972, Schedule 3, it was decided that the income of a tenant and his spouse should be increased notionally by only 0·1 per cent. of the excess over £800. Bearing in mind that provision, it seems extraordinary that a person with as little disposable capital as £250 should find himself unable to obtain considerable help by way of legal aid.
I invite the Government to bear in mind in future, if not now, that apart from present-day inflation it is not realistic to look upon a person with £250 disposable capital as someone who can afford to pay any substantial sum towards the costs of legal aid.
10.11 p.m.
Mr. Gordon Oakes: I rise briefly to agree entirely with the hon. and learned Member for Nelson and Colne (Mr. Waddington) and my right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones).

1247
It is nonsense today to suggest that a person with a disposable capital of £250 can afford the sometimes massive costs of a legal action. Indeed, by increasing the limit of disposable capital from £125 to £250 the Government—I do not know whether they realise it—are penalising thrift. They are penalising the person who has put away a few pounds in the bank.
In 1947 it was not envisaged that the legal aid service should benefit only those who were on supplementary benefit. Fhe idea was that it should be widespread to help litigants in need of legal assistance on both income and capital grounds.
I should declare my interest as a practising solicitor. Time and again I find that people, more on income than on capital grounds, are denied legal aid. Unless a person is at the lower end of the income scale he must meet the whole of the legal costs of an action, whether it be for divorce, an accident or any one of the many civil actions which take place.
My right hon. and learned Friend welcomed the increase from £125 to £250. I think that the Government have been mean and niggardly. The figure should be at least £500, which is no considerable sum of disposable capital for any person to have today. There ought to be built-in safeguards against inflation. Otherwise in two or three years £250 will be worth the same as £125 today. People ought to be entitled to legal aid to pursue their cases. However, if they have what amounts to only a few pounds in the bank they are denied legal aid.
The Government should have thought much wider in their concept of the amount of the disposable capital that a person may have. I admit that it is disposable, not naked, capital in the bank and that certain considerations are taken into account when deciding on that capital; but it is still far too low a figure.
10.15 p.m.
Mr. Ivor Stanbrook: I also have a reservation about the figures specified in the regulations. We are attacking the problem of the need for legal advice by these provisions. It is all very well to increase the limit from £125 to £250, but for how much longer will we go on setting limits of this kind? Presumably this
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revision is due not solely to the fall in the value of money but also to the Government's attempt to cover a broader band of need.
The question is whether need is properly measured in terms of income and capital limits alone. No doubt many other hon. Members have been confronted at their weekly advice bureaux by people who want advice about where to get legal aid. Very often the question comes from elderly people, often retired, who have managed to accumulate the asset of their own home but who have little else to live on beyond their pension. To their credit, some have saved a little capital which, being elderly, they do not want to touch. They must consider the future and the fact that the retirement pension has never been adequate to live on and perhaps never will be completely.
As a result, those who have been wise enough to save and have put money by will naturally want to regard it as savings for their old age, for a rainy day. Who knows how long they will need capital for this purpose?
We are wrong to draw the limit so low as to present such elderly people with the dilemma of whether, if their disposable capital is above the limit, they should start on a legal problem which may cost them a great deal, taking most of their saved capital. Often, however, the elderly are the very people who suffer most injustice through legal problems of this kind. No doubt other hon. Members have had to advise elderly constituents to go to a solicitor. Usually, he tells them that because their capital is over the limit neither the old limit nor the new one is at all realistic—unless they can afford to finance the action out of their own pockets they should not go ahead with a questionable case, and certainly they would not receive legal aid. This is quite undesirable.
We should examine the whole principle of drawing a line at all. The £250 limit means that many people, especially the elderly, with small savings will be excluded from these benefits. They should be reassured in their closing years that if they need advice—and these instruments concern advice rather than court action—they can get it without having to dip so deeply into their pockets

1249
The right hon. and learned Member for West Ham, South (Sir Elwyn Jones) referred to the need for publicity for the new limits. There should be equal publicity for the legal advice service itself. So far it is abysmal. It has had to contend with the general distrust of solicitors, with the result that very few people are willing to go to solicitors for advice. We are, perhaps, giving an inducement to those who can bring themselves within the limits by saying that it will not cost them anything and that they can even spend up to £25 without incurring further obligation. But how many people find that that enables them to overcome their reluctance to get into the hands of solicitors? Solicitors themselves ought to put their house in order and do something about making their profession more open and generally more respected by the public.
I have seen some publicity recently given to a graph or scale, at the top of which in terms of public esteem were solicitors. At the bottom of the scale came estate agents and politicians. I wonder whether that scale is entirely accurate when judged by the measure of distrust concerning the profession.
There is a great deal of distrust against solicitors. Much more could be done by the profession as a whole and by the Law Society in particular to redress this grievance. It can be done through instruments such as these, especially if the Government would only see to it that people in need, not measured in terms of money, were able freely to obtain advice whenever they needed it.
Mr. Michael Cocks: The hon. Member for Orpington (Mr. Stanbrook) has referred to the recent revelations concerning Members of Parliament and estate agents. I wonder whether he would agree with me that it is rather a coincidence that that poll appeared shortly after a certain meeting. Perhaps a more representative sample could have been obtained if those who were canvassed had had immediate contact with solicitors rather than taking merely the general public.
I am glad to join with hon. Members on both sides of the House in saying what a pity it is that once again we seem to be penalising old people who have throughout their lives practised thrift.
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Time and again elderly people ask me whether it has been worth while throughout their lifetime to try to put by a little sum for a rainy day. The hon. Member for Orpington mentioned a rainy day. A number of my constituents are living in an area which is liable to heavy flooding after excessive rainfall until a substantial drainage scheme is completed. They are independent, practical people who pride themselves on the fact that they keep back a nest egg to which to turn if disaster should overtake their homes, so that they can put things right very quickly from their own resources.
It is scandalous that a figure of £250 should be set, because these people who by their own efforts are trying to relieve society of burdens are being penalised. Even though the debate is taking place in a sparsely attended House and at a late hour, I hope that the Solicitor-General has listened to the representations which have been made from both sides.
The Solicitor-General: The timid and tentative step, as it has been described by the right hon. and learned Member for West Ham, South (Sir Elwyn Jones), is a doubling of the previous figure. We must remember that when we talk of disposable capital of £250, that does not mean simply that a person has savings and other possessions worth £250.
In order to reach the disposable capital figure, the value of the household furniture and effects, articles of personal clothing and tools and implements of trade should be left out of account. As regards an applicant's house, half of tile amount of the value of the dwelling in which he resides or has an interest—after deducting any mortgage or other charge—as long as it does not exceed £6,000, is not attributable when calculating disposable capital. There is discretion for the solicitor not to take into account any sum in respect of the value of the dwelling if it appears to him to be inequitable or impracticable so to do. An applicant does not have simply £250. He has that figure after those other deductions have been made.
The right hon. and learned Gentleman asked me what figure was recommended by the advisory committee. I suspect that he knew when he asked because

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of the confidence he showed. It was £325, in the same way as a different figure was recommended for the disposable income.
It is right that we should see how these provisions operate. The scheme is not even in effect yet. It does not start until 2nd April. I suggest that it is right to leave it for, say, six months or so to see what happens, how successful it is and how many people, if it is a large number, are being excluded from the scheme by the present limits not only upon capital but upon income.
The hon. Member for Widnes (Mr. Oakes) talked about the massive costs of legal actions. I emphasise yet again that we are not dealing with legal aid for legal actions. That arises under an entirely different situation. The regulations seek to provide advice and assistance up to £25 for those who need it. If they seek legal aid for the purpose of conducting or defending proceedings in court, that comes under entirely different provisions, the assessments are made by a different authority and different principles apply.
Sir Elwyn Jones: Will the hon. and learned Gentleman say on what principle the Government rejected the advice of the Legal Aid Advisory Committee that the figure ought to be £325? After all, the committee was set up to advise the Government and, if I am right in my recollection, Governments normally act upon the advice. What was the principle which led to the cheeseparing decision to reject £325 and to come down on the side of this miserable figure of £250?
The Solicitor-General: It was almost exactly 12 hours ago that I was upstairs answering questions put in exactly the same manner by the right hon. and learned Gentleman with that faintly questioning air that he has, forgetting when he talks about timid, tentative and cheeseparing attitudes that this is a 100 per cent. increase on the 1972 Act and an increase which comes within £75 of the figure recommended by the advisory committee in respect of a scheme which is not yet in operation. It is not unreasonable for any Government to say "Let us see what happens."
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I emphasise that the regulations relate to advice and assistance and not the conduct of proceedings in court. It is advice and assistance calculated or estimated to be usually within the range of £25. This is not a fixed figure for all time. Just as the income limits will, no doubt, be reviewed after the scheme has been in force, so will the figure of £250 be under constant attention.
When one hears my hon. Friend the Member for Orpington (Mr. Stanbrook) saying to the solicitors that they must put their house in order, I welcome the assistance to the scheme that has been given by the solicitors. They have gone to a great deal of trouble in preparing for the scheme on 2nd April. Special signs will be made available outside solicitors' offices to indicate to the public that those solicitors are prepared to operate the scheme. They are drawing up forms, training solicitors and going to great lengths generally about the scheme. I regret my hon. Friend's allegation that they have not got their house in order. I suspect that my hon. Friend does not really know just how much the solicitors have done. For my part, I wish to say how grateful we are for all that they have done in anticipation of the scheme to make it work, as I am sure it will.
All that we are discussing tonight is what should be the figure for the disposable capital sum. It is double the previous limit. If it proves to be inadequate, I have no doubt that we shall come back to the House and ask for it to be increased.
Question put and agreed to.
Resolved,
That the Legal Advice and Assistance (Financial Conditions) Regulations 1973, a copy of which was laid before this House on 7th March, be approved.

LEGAL AID AND ADVICE

  LEGAL AID AND ADVICE (SCOTLAND)
  Resolved,
  That the Legal Advice and Assistance (Scotland) (Financal Conditions) Regulations 1973, a copy of which was laid before this House on 7th March, be approved.—[Mr. Buchanan-Smith.]

  ANTI-DISCRIMINATION (No. 2) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make illegal, and provide for the prevention of, discrimination on grounds of sex and to establish an antidiscrimination board, it is expedient to authorise the payment out of moneys provided by Parliament of any sums payable out of moneys so provided under or by virtue of any provision of that Act relating to the constitution and functions of any such board as aforesaid.—[Mr. Carlisle.]

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

PLANNING AUTHORITIES (MEMBERSHIP)
10.31 p.m.
Mr. Charles Loughlin: In a recent Adjournment debate I said, in what was almost a throw-away line, that a member of the Gloucestershire Planning Authority was, and might still be, a director of a land development company. The Western Daily Press, which circulates in my area, pursued this matter and subsequently disclosed that three members of that planning authority were directors of building and land development companies, and indeed that an official of the Highways Department was also a director of a land development company.
This debate must not be construed as an attack on the Gloucestershire Planning Authority or individuals associated with that authority. This is a national issue and what applies to Gloucestershire applies equally to planning authorities throughout the country.
Planning permissions could lend themselves to a degree of possible graft. We have only to bear in mind that fallow land which may be worth £500 an acre could be worth with planning permission £15,000 per acre—and, depending on the area, it could be worth substantially more.
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The refusal of planning permission, if my constituency experience is anything to go by, beggars description. I must have examined hundreds of sites and in the majority of instances have yet to understand the real grounds for refusal. It may be that I lack knowledge of good planning principles, but I was at the Ministry of Public Building and Works for a considerable time and some of the gilt must have rubbed off on me when dealing with planning matters in that Department.
My biggest problem is in seeking to deal with those cases where the planners say that the area should be developed on a "comprehensive" basis. Let me try to illustrate the problem. A man has a piece of land which has been in the possession of his family for generations. He wishes to build a house for his son or daughter. He is turned down. Along comes a developer who is granted permission to develop the area, including the piece of land on which refusal to build was upheld by the planners. It is impossible for me to convince my constituent that nothing untoward has happened. Indeed time and again I have been asked to become the go-between for the passing of what my constituents call "back handers", and it is difficult for me to convince them that this is not done and that this is not the way to get planning permissions. From cases reported in the national and provincial Press it is obvious that the problem applies particularly in rural areas where the ownership of small pieces of land is not uncommon. The same problem arises when refusal is based on the projected development being outside a development area. There are cases when such grounds have been advanced and subsequently developers have come along and carried out substantial developments.
All members of planning authorities and their officials are certainly not crooks. The great proportion of them are good, honest people trying to help their fellow men. I am concerned about the minority who, in the words of a leading banker, referring to the Stock Exchange, said that there were those who would take every advantage of every situation to make money no matter how close to the wind they sailed.
In what I have to say I refer to this minority alone and it is against this minority that I want action taken. When

1255
Ministers of the Crown take office they are issued with the Prime Minister's guidance notes. They have to divest themselves of directorships and major shareholdings. There are some loopholes, and I would not claim that these notes are the absolute answer to possible corruption. I believe that over the years they have worked well. I wish that they applied not merely to Ministers but to Members of Parliament.
I would say that the avenues of graft and corruption at local level are in some instances greater than those at national level. The temptation to some people who are directors or major shareholders in building or land development companies must be almost irresistible. How can we explain the situation to ordinary men and women who are refused planning permission on their own land and are driven into the hands of these sharks who have filched hundreds of thousands of pounds from the community?
When it was discovered that a deputy surveyor of Gloucester County Council was a director of a land development company I was amazed to find that the County Surveyor, Mr. R. Downs, knew all about this. Apparently in law there is nothing wrong with such a situation. It was said that Mr. Downes had given the deputy surveyor permission to take up this directorship. This cannot be allowed to continue. Without commenting on the specific case, we cannot allow civil servants at local authority level who are intimately connected with planning to be directors of land development companies. The possibilities of such a situation are beyond belief. I hope that the Minister will look at this carefully. I am prepared to press this at Question Time and in future debates. I hope he will do whatever he can to change the situation.
There are two grounds on which those who support the present position under which members of the planning committees can be directors of building and land development companies, or major shareholders in those companies, argue that it should continue. First, it is said that if these people were debarred from being members of a planning committee the community would be robbed of a degree of expertise and would therefore be much the poorer. That is palpable nonsense because my experience of almost all the
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people who are directors of development companies is that they are not particularly interested in good planning principles. They are interested in maximum profits, and in many instances if they had their way we would be back to building 60 houses to the acre as happened in the 1830s.
The second argument is that they declare their interest and take no part in a discussion and do not vote on issues which concern their firms. That is no safeguard. The damage has already been done well before the specific case comes before the planning authority for decision. It is the pre-planning infomation that is of importance. That information may have been gleaned years previously. Such people might get the information they require two years before the meeting at which they declare an interest.
If the type of person to whom I am referring—and not the generality of members of planning authorities who may be directors—hears the slightest whisper that a particular area is to be developed under the long-term plans of the authority, that is enough to send him in grabbing land at low rates, sitting on it, knowing that in the fullness of time the community will pay through the nose to build a school, a road, or a hospital and that the ordinary man and woman, as we have seen in the last two-and-a-half years, and possibly the local authority will have to pay him fat profits for the privilege of buying the land or houses built on it. It is solely because such people have been able to get this information as members of the planning authority that they have been able to take advantage of the situation.
I challenge the Minister to make a random spot check on a number of authorities and to examine an area where members of the planning authority who are directors of development companies operate. Let him take possibly a five-year period. Let him examine the activities in the developments of companies of which they have been directors. I will almost gamble that he will discover a cesspit of corruption that makes Poulson pale into insignificance.
Persons who are engaged in public life should be incorruptible. That applies to Members of Parliament. I not only support publication of all information

1257
about the incomes of Members of Parliament on a register of interests but I go further and would prohibit many of the activities now engaged in by Members of Parliament, particularly in public relations matters.
Persons who are engaged in public life, whether they are Members of Parliament, members of local authorities or planning authorities, have to be not merely incorruptible but seen to be incorruptible by the average man and woman.
I have said some harsh things, and I want to repeat what I said earlier that I do not want anyone to think that I am making a blanket attack upon all members of planning authorities or even upon members of planning authorities who may be, or have been, directors of land development or building development companies. The majority of them may be as good as gold, but enough of them have taken or are taking advantage of the community, of local authorities, of the ordinary people, to justify a full-scale investigation by the Minister's Department.
10.46 p.m.
The Minister for Local Government and Development (Mr. Graham Page): The hon. Member for Gloucestershire, West (Mr. Loughlin) has characteristically raised again the standard of the standard of behaviour in public life, and has directed the attention of the House to local government, where high standards of behaviour are essential, because the opportunities for self-interest bringing big rewards are frequent. The hon. Gentleman said that he thought that in those areas the temptation was irresisible. I would not go as far as that, but I agree that the temptations in certain areas of public life are very great.
The hon. Gentleman's examples concerned planning committees—both members and paid officials, as I understood him. The law has dealt with the subject of elected members over the past one-and-a-half centuries, with a changing attitude. A Poor Law Act of 1815 provided that poor relief administrators should not supply or contract for their own profit goods, materials or provisions used for poor relief in the area of their administration. Under the Municipal Corporations Act 1835 nobody was qualified to be elected or to be a councillor or an alderman
1258
"during such time as he shall have directly or indirectly, by himself or his partner, any share or interest in any contract or employment with, by, or on behalf of"
the council.
There was then, early in the last century, the wholesale disqualification of people who were contracting or who had contractual relationships with their authority. For a century that idea prevailed, but in the 1930s control swung away from disqualification from election to disqualification from speaking or voting. Since 1933 the view has been that the wholesale disqualification went too far, and that professional people, skilled in business or having practical knowledge of the working of local administration, have much to offer to the deliberations of local authorities, and that it would be wrong to exclude them altogether. Therefore, the law concentrated on saying, "You must disclose your interests. Under certain circumstances you should not speak and you should not vote in connection with those interests."
The key factor is the possession of a pecuniary interest in a contract or other matter under discussion by the local authority or by one of its committees. If a member has such an interest and is present at the meeting at which the subject is to be discussed he must disclose his interest as soon as practicable after the start of the proceedings, and it must be recorded in a book kept specially for the purpose. The Member is then debarred from speaking or voting on:he matter in question unless he has already applied for and obtained a special dispensation from my right hon. and learned Friend the Secretary of State for the Environment. There is also the provision that if he, his spouse, his partner or his nominee is connected with bodies contracting with the council he is disqualified.
It is the practice of my right hon. and learned Friend to give dispensations to members who are disabled by pecuniary interest as follows: first, dispensation to speak is given fairly freely, provided that the member's interest is not peculiar to himself. Dispensation to vote is given only where at least half the council cm committee is disabled, or where the balance of political power is such that otherwise policies might be adopted to which the majority of members were opposed.

1259
The hon. Gentleman drew attention to cases—which he said were a minority—where members take advantage of their position. I sought in his remarks for some solution to this beyond merely seeking for an inquiry into these cases. The hon. Gentleman drew attention to the use of pre-planning information. That can be used by anyone, whatever his profession or business, and therefore the disqualification of directors of development or property companies might not reach the mischief which the hon. Gentleman saw in this.
I sympathise greatly with the lion. Gentleman in his concern about these cases, and I assure him that I am considering very carefully what course can be taken to prevent this sort of thing from happening. One cannot prevent it altogether. There are black sheep in any profession, business or public body, but one can go as far as possible to make the opportunities less and the circumstances more difficult.
The position of officers in local government is slightly different from that of elected members. They are primarily answerable to the elected members. Their function is not to take statutory decisions but to implement the decisions of the elected members. However, there are occasions when the interests and the duty of a local government official can come into conflict.
There is the statutory provision that where an officer has a pecuniary interest in any contract or proposed contract involving his authority he must give written notice of this to the authority. In the case which the hon. Gentleman cited, apparently the official had disclosed his interest—his directorship—and had in that respect done all that was required of him, but I wonder whether he did all that was required of him in accordance with the conditions and standards to which I shall refer in a moment.
One must always remember in these cases that officers of local authorities are subject to the Prevention of Corruption Acts which would cover such conduct as the taking of bribes to influence decisions in a particular direction—what the hon. Gentleman referred to as "suspected backhanders".
1260
Apart from those statutory provisions, there are particular restrictions on freedom of action of local authority officials in what I refer to as the national conditions of service, but what I understand is known in the service as the "Purple Book" which applies to administrative, professional, technical and clerical grades, and failure to comply with this standard would be a proper ground for disciplinary action against the officers concerned.
The Purple Book declares—and I think quite rightly—that
"The public is entitled to demand of a local government officer conduct of the highest standard and public confidence … would be shaken were the least suspicion, however ill-founded, to arise that he could in any way be influenced by improper motives.
An Officer's off-duty hours are his presonal concern but he should not subordinate his duty to his private interests or put himself in a position where his duty and his private interests conflict."
The "Purple Book" goes on to provide that senior officials
"… shall devote their whole time service to the work of their Council and shall not engage in any other business or take up any additional appointment without the express consent of the Council."
A similar provision applies to chief officers.
Mr. Loughlin: I make it clear that, although I had to use a specific case as an illustration, I was dealing with the generality of the position of officers being able in law to carry on jobs of this kind. I was not in any way suggesting that the individual concerned had done something wrong in law, but that it was morally wrong.
Mr. Page: Yes. The "Purple Book" says in the part dealing with senior officers that:
"The employing authority should not attempt to preclude officers from undertaking additional employment, but any such employment must not in the view of the authority, conflict with or react detrimentally to the authority's interests or in any way weaken public confidence in the conduct of the authority's business."
I think the hon. Gentleman has raised sufficient points to make us pay attention at that phraseology in the "Purple Book".
I return now to the general theme of the debate. Later this week, the House

1261
will be considering a motion asking the Government to initiate legislation to remove certain disqualifications of those who seek election as councillors. Tonight the hon. Gentleman has indicated a desire to impose more disqualifications. This shows the difficulty of the matter, and it is one in which all parties in the House can assist in finding a solution.
The qualifications and disqualifications of our democratic institutions should not be adopted merely upon the Government's diktat, but with all-party advice. I hope I shall have an opportunity of developing, in the debate on the motion
1262
later this week, the idea that we should seek all-party advice on the membership and qualifications and disqualifications in the democratic institutions of local government and in the other democratic institutions in the country, and that we shall be able, by that means, with the help of all right hon. and hon. Members and of experts outside, to protect the public to the utmost against the black sheep that are in our midst.
Question put and agreed.
Adjourned accordingly at two minutes to Eleven o'clock.

EDUCATION AND SCIENCE
  Library Services (Yorkshire)
  Library Services (Yorkshire)
  Colleges of Art (Pooling Committee)
  Colleges of Art (Pooling Committee)
  Teachers (London Allowance)
  Teachers (London Allowance)
  School Leaving Age
  School Leaving Age
  Student Grants
  Student Grants
  Cultural Activities (Grants)
  Cultural Activities (Grants)
  Schools (Staff Turnover)
  Schools (Staff Turnover)
  Expenditure
  Expenditure
  Primary Schools (Nursery Nurses)
  Primary Schools (Nursery Nurses)
  Housing the Arts Fund
  Housing the Arts Fund
  Newcastle-under-Lyme (Reorganisation)
  Newcastle-under-Lyme (Reorganisation)
  Day Release
  Day Release
  Schools (Indiscipline and Violence)
  Schools (Indiscipline and Violence)
  Special Schools (Sheffield)
  Special Schools (Sheffield)
  Higher Education
  Higher Education
  Comprehensive Reorganisation (Havering)
  Comprehensive Reorganisation (Havering)
  Post-School Education
  Post-School Education
  Teacher Training (Cost)
  Teacher Training (Cost)
  Student Unions
  Student Unions
DEFENCE
  Submarines
  Submarines
  Republic of Ireland
  Republic of Ireland
  Muscat and Oman (Civil Air Agreements)
  Muscat and Oman (Civil Air Agreements)
  Crown Proceedings Act 1947
  Crown Proceedings Act 1947
EMPLOYMENT
  Inland Revenue Building, Bootle (Dispute)
  Inland Revenue Building, Bootle (Dispute)
  Northumberland
  Northumberland
  Advance Factories
  Advance Factories
  Macclesfield
  Macclesfield
  Factory (Penygroes)
  Factory (Penygroes)
SOCIAL SERVICES
  EEC Countries (Reciprocity)
  EEC Countries (Reciprocity)
  Medicinal Products (Restricted Sales)
  Medicinal Products (Restricted Sales)
  Disabled Persons (Earnings Limit)
  Disabled Persons (Earnings Limit)
  National Health Service (Information and Records)
  National Health Service (Information and Records)
  Hospital Staff (Dispute)
  Hospital Staff (Dispute)
  Pensions (Contribution Increments)
  Pensions (Contribution Increments)
  Supplementary Benefit (Wales)
  Supplementary Benefit (Wales)
  Tax-Free Benefits
  Tax-Free Benefits
  Haemophiliac Disabled Drivers
  Haemophiliac Disabled Drivers
  Hospitals, East Cheshire (Establishment Vacancies)
  Hospitals, East Cheshire (Establishment Vacancies)
  Northern Ireland Forces (Widows and Dependants)
  Northern Ireland Forces (Widows and Dependants)
  Elderly Persons (Warning Devices)
  Elderly Persons (Warning Devices)
  Dental Services
  Dental Services
  National Health Service (Superannuation)
  National Health Service (Superannuation)
ENVIRONMENT
  Rates
  Rates
  Palace of Westminster (Cleaning)
  Palace of Westminster (Cleaning)
  Freight Transport (Tariffs)
  Freight Transport (Tariffs)
  A35 (Stoneyhead Diversion)
  A35 (Stoneyhead Diversion)
  Hull (Albert Dock)
  Hull (Albert Dock)
  Ordnance Survey
  Ordnance Survey
  Operation Eyesore
  Operation Eyesore
  Disused Railway Land
  Disused Railway Land
  Channel Tunnel
  Channel Tunnel
  Ancient Monuments Acts
  Ancient Monuments Acts
  Rents
  Rents
  Heavy Goods Vehicle Drivers (Testing)
  Heavy Goods Vehicle Drivers (Testing)
  Vehicle Inspectorate (Vacancies)
  Vehicle Inspectorate (Vacancies)
TRADE AND INDUSTRY
  Factory (Penygroes)
  Factory (Penygroes)
  Holland-Martin Report
  Holland-Martin Report
  Computers (Exports)
  Computers (Exports)
  Production Engineering Research Association
  Production Engineering Research Association
  Nuclear Fusion Research
  Nuclear Fusion Research
HOME DEPARTMENT
  Industrial Action and Terrorism
  Industrial Action and Terrorism
  Collier v. Metropolitan Police
  Collier v. Metropolitan Police
  Builders' Skips (Accidents)
  Builders' Skips (Accidents)
  Education and Welfare Services (Ealing)
  Education and Welfare Services (Ealing)
  Conspiracy Charges
  Conspiracy Charges
  National Marriage Guidance and Family Council
  National Marriage Guidance and Family Council
  Students (Voting Rights)
  Students (Voting Rights)
  ADVANCE FACTORIES
  ADVANCE FACTORIES
  NORTHERN IRELAND
  NORTHERN IRELAND
  PRIME MINISTER OF FRANCE
  PRIME MINISTER OF FRANCE
  URBAN AID
  URBAN AID
  WEST GERMANY (PRIME MINISTER'S VISIT)
  WEST GERMANY (PRIME MINISTER'S VISIT)
  BANGLADESH
  BANGLADESH
  PAY SETTLEMENTS
  PAY SETTLEMENTS
AGRICULTURE, FISHERIES AND FOOD
  "Head of the Household"
  "Head of the Household"
  Farm Price Review
  Farm Price Review
  Calves (Air Transit)
  Calves (Air Transit)
  EEC Farm Review
  EEC Farm Review
  Agricultural Land (Ownership)
  Agricultural Land (Ownership)
  Food Demand (Elasticities)
  Food Demand (Elasticities)
  Intervention Board (Food Destruction)
  Intervention Board (Food Destruction)
  Common Agricultural Policy
  Common Agricultural Policy
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia
  Rhodesia
  Muscat and Oman
  Muscat and Oman
NATIONAL FINANCE
  Inflation
  Inflation
  Dividends
  Dividends
  Value Added Tax
  Value Added Tax
  Investment (United Kingdom-EEC Countries)
  Investment (United Kingdom-EEC Countries)
  Price and Pay Code
  Price and Pay Code
  Revenue Duties
  Revenue Duties
SCOTLAND
  "Head of the Household"
  "Head of the Household"
  Highlands (Administrative Definition)
  Highlands (Administrative Definition)
WALES
  Teachers (Employment)
  Teachers (Employment)

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

AIR FARES ON NORTH ATLANTIC ROUTES
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement concerning the recommendation from European Governments that existing air fares should continue in force on North Atlantic routes; whether it is correct that this fares structure includes cheap excursion rates of £164·50 return for a 14- to 21-day excursion and £124·95 for a 22- to 45-day excursion; and, if so, whether it is correct that these fares were never accepted on the American side.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, on the first part of the Question, I have nothing to add to my reply to the noble Baroness when her Question was dealt with last Thursday. On the second part, it is correct for the peak season—July, August, September; on the third part, it is not correct.
BARONESS BURTON OF COVENTRY: My Lords, that certainly is not a long reply. May I ask the Minister whether he is aware that the schedule airlines— not only our own—are disturbed at the failure to reach agreement on cheaper scheduled fares; and does he not agree that failure to do so will divert the traffic from the schedule airlines to the charter airlines?
LORD DRUMALBYN: My Lords, with great respect to the noble Baroness, that is a totally different question from the one on the Order Paper and it is one
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which I thought we had debated last Thursday on her Unstarred Question.
BARONESS BURTON OF COVENTRY: My Lords, then may I ask the Minister this: does he not feel that the schedule airlines of Europe and of America should get together and try to reach some formula on cheaper scheduled fares before the summer is over?
LORD DRUMALBYN: My Lords, as I have indicated to the noble Baroness, I think there is no chance of that happening As I told her, we are endeavouring to reach agreement to hold the present fares until October 31, but of course before that time we shall have to consider what further steps should be taken.

IMMIGRATION CONTROL AND PRISON DETENTION
2.38 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many persons are confined to prison whilst their claims to enter this country are considered; and for what periods they have been so detained.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, the number of persons detained in prisons or remand centres on March 7 after refusal of leave to enter, or pending further examination under the Immigration Act 1971, was 110. Of these 44 had been detained for less than two weeks, 39 for between two and four weeks, 25 for between four and eight weeks and 2 for between eight and nine weeks.
LORD BROCKWAY: My Lords, while thanking the Minister for that Answer may I ask him this question? Is it not a little disturbing in the spirit of British justice that this number of men should be detained in prison for the long periods he mentioned without being charged and without trial? Is it not possible, if these detentions are necessary, that these people should be detained in other accommodation than in a prison, where conditions are by no means the best?
VISCOUNT COLVILLE OF CULROSS: My Lords, I am not certain that this is immediately related to the ordinary question of British justice. The vast majority of these people are, in a sense, acting unjustly in that, in attempting to come into this country, they have attempted to jump the queue over the heads of others in front of them. I am afraid they have to be detained somewhere. I agree that Pentonville may not be everything that everybody would wish. Latchmere House, where the younger ones are detained, seems to me to be substantially adequate for this purpose and, frankly, I do not know of any other accommodation at the moment which would be suitable, though it is something that we perpetually keep under review.
LORD BROCKWAY: My Lords, while one recognises the right to detain these people, should they be detained without being charged, without trial, for a very long period in British prisons? Cannot some alternative accommodation be found, such as Harmondsworth? I understand that Harmondsworth is overcrowded now. But is it not possible to find some other accommodation than these rather bad conditions in Pentonville?
VISCOUNT COLVILLE OF CULROSS: My Lords, I am not certain that conditions are as bad as all that. Harmondsworth has proved inadequate, largely because of the number of people who will insist on jumping the queue. I am not aware of any other accommodation apart from the prison system; and I am afraid that apart from building, or doing some major adaptations, it would be a long-term venture to provide such accommodation. I appreciate the points made by the noble Lord, and I perpetually keep in touch with my colleagues in the Home Office about this matter because I wish to make certain that we do everything we can for these people.
BARONESS EMMET OF AMBERLEY: My Lords, is it not time that those who break the law should realise that they are liable to the penalties of the law? While it may be inconvenient to have them in a particular place, it would surely be very expensive to get up a special place in which to keep these people who do not want to go to Pentonville. They have chosen to break the law.
VISCOUNT COLVILLE OF CULROSS: My Lords, my noble friend is perfectly right in everything that she has said, and I think one must realise that these people have been attempting to "do out of" their places in this country others holding United Kingdom passports who have waited for a long time to get here.
LORD CLIFFORD OF CHUDLEIGH: My Lords, can the Government tell me why it is that there was no protest when Charles Beasley from Tasmania was imprisoned, whereas there is when these others are imprisoned? It is because, from that source, everything black is right and everything white must be wrong?
VISCOUNT COLVILLE OF CULROSS: My Lords, I think it would be very dangerous for me to speculate on why there was no protest.
LORD SEGAL: My Lords, would it not be more kind of the Government to consider hastening the possibility of deportation in those cases where detained persons may be willing to return to their country of origin?
VISCOUNT COLVILLE OF CULROSS: My Lords, that is, of course, what we attempt to achieve. In some cases it can be done more quickly than in others.
VISCOUNT MONCK: My Lords, would my noble friend agree, whatever has happened to some unfortunate people, it is at least a great pleasure to us to know that that notable Australian, Lord Clifford of Chudleigh, has slipped through the net?
LORD WALSTON: My Lords, could the noble Viscount tell us something about which I am not very clear myself? He referred originally in one of his earlier answers to the fact that the great majority of these people were trying to jump the queue. The noble Baroness, Lady Emmet of Amberley, referred to all these people as if they were law-breakers. If, in fact, all of those who are detained in this way have been convicted of breaking the law, very few of us would have sympathy with their complaints about conditions. But if in fact they have not been convicted, and are awaiting trial or a decision as to whether they have jumped the queue or not, the conditions are very different. Could the noble Viscount perhaps explain that?
VISCOUNT COLVILLE OF CULROSS: My Lords, the original Question related essentially to queue-jumpers. In the prisons there are also illegal immigrants, who have definitely broken the law, or who are about to be tried to see whether they have; people who are subject to deportation orders. In addition there are the people whose cases are being considered because they arrived without the necessary documentation. On the whole, these are the queue-jumpers. The question is not one of trial or bringing them to justice; it is a question of them having come to this country without having complied with the well known provisions for getting the necessary entry documents in their country of origin.
LORD BROCKWAY: My Lords, the Minister has referred to the conditions in Pentonville Prison. While I am aware that he has personally investigated them and that the detainees are informed in their own language of their rights, and appreciate that, would he not agree that the conditions are such that there is serious overcrowding and that lavatory accommodation is appallingly inadequate?
VISCOUNT COLVILLE OF CULROSS: My Lords. I doubt whether the conditions in "P" Wing in Pentonville are much different from conditions in many of the Victorian prisons, whether in terms of accommodation or the recesses. I only wish that the Government could hasten even faster in replacing these buildings, but it is a matter of time and money. If the noble Lord would like to see the general information booklet for "P" Wing, a copy of which I got when I went there, he will see a certain amount of material of interest to himself and will also appreciate that there is an Urdu speaking officer; that interpreters are provided; that there is provided a substantial amount of literature in the languages these people are likely to use; and that we try our best to provide for them in their own language and culture.

AFRICAN GUERRILLAS AND THE WORLD COUNCIL OF CHURCHES
2.47 p.m.
LORD BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will discourage Ministers from calling African terrorists "Freedom Fighters" both on general moral grounds and more particularly because, taken together with the attitude of the World Council of Churches, this approach is having deleterious effects on the practice of Christianity.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): No, my Lords. Reference to names or titles in current use does not imply acceptance of those in question at their own valuation, or approval of their aims and activities. Nor would I subscribe to the premise that all freedom fighters must necessarily be terrorists, or all terrorists freedom fighters.
LORD BARNBY: My Lords, arising out of that reply may I ask the noble Baroness whether she is aware, as I am, of reports in the overseas Press where religious, regular churchgoing people, because of their consciences have been obliged to renounce church attendance because of the support given by the World Council of Churches to terrorist organisations whether it be in South Africa, Israel, Rhodesia, Ulster, Mozambique or Angola? Also is she aware that the foreign Press attribute their faults, I hope wrongly, to the Prime Minister?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am not sure to what report the noble Lord refers in connection with the Prime Minister. Her Majesty's Government have no responsibility for the World Council of Churches' support for movements calling themselves liberation movements. We greatly deplore the donation of funds to any organisation which uses violence to achieve political ends.
LORD BARNBY: My Lords, may I ask the noble Baroness whether she will give thought to the support that her words, when uttered here, give to actions which have taken place all over the world, and which, since I put my Question down, have been brought nearer to home by the dastardly actions and the inhumanity of these terrorist organisations?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I do not see how the noble Lord could interpret what

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I said in the way that he has. I should like to repeat it. I said that we deplore the donation of funds to any organisation which uses violence to achieve political ends.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, would the noble Baroness agree that while there may be many happenings which have deleterious effects on the practice of Christianity, showing sympathy for oppressed peoples is not one of them?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think that there is a distinction between a "liberation movement" and a "freedom fighter". The latter has recently acquired a militant and violent meaning, although I do not suggest that such a person is necessarily within the law.
LORD WELLS-PESTELL: My Lords, may I ask the noble Baroness whether she is really correct, not in her last reply but the reply she gave before that? Is it not a fact that the World Council of Churches has given money to two guerrilla / terrorist freedom fighter organisations, not to help them to pursue a violent course but to relieve destitution of the families in those two concerns?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I said earlier, Her Majesty's Government have no responsibility for the actions of the World Council of Churches. However, applications to give funds to support groups who are seeking the violent overthrow of Governments would certainly not be approved in cases where Treasury sanction is required.
THE LORD BISHOP OF ROCHESTER: My Lords, may I ask the noble Baroness whether she is aware that the World Council of Churches, which does reflect world and not British or white opinion, has by these very small token grants in fact given strength and encouragement in their faith to some of those who are suffering under the institutionalised violence of some régimes?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am sure that the right reverend Prelate would have more knowledge of the ways in which the World Council of Churches are
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seeking to distribute their funds. While we sympathise with the aspirations of people trying to exercise self-determination, I should like to repeat that we cannot condone the use of violence to achieve political ends.

NORTHERN IRELAND: PROPOSED U.K. REFERENDUM
2.52 p.m.
LORD CLIFFORD OF CHUDLEIGH: 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 would think it desirable to ascertain, by referendum or otherwise, how far the people of this country are in favour of retaining Northern Ireland as a part of the United Kingdom.
VISCOUNT COLVILLE OF CULROSS: My Lords, this is a matter for Parliament. Her Majesty's Government do not consider that a referendum would be constitutionally appropriate, or helpful.
LORD CLIFFORD OF CHUDLEIGH: My Lords, while thanking the noble Viscount for that Answer, may I ask him whether Her Majesty's Government realise that the friends of this country overseas—I have spent the last three months in five overseas countries—are desperately anxious lest this country get bogged down in a Vietnam-like situation in Northern Ireland? Secondly, does the noble Viscount think that the Government have been completely honest in keeping the taxpayers of this Island informed of the hundreds of millions of pounds of their money spent per annum, which could be profitably spent elsewhere, and of the increasing running total of dead and seriously wounded (this is the point in which I am more interested than anything else) sons of those taxpayers?
VISCOUNT COLVILLE OF CULROSS: My Lords, I am glad to know of the overseas concern for our future and our welfare and that of Northern Ireland. I am sure that this will be very encouraging for all the security forces in Northern Ireland who are attempting to deal with

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this situation. I frankly do not know in what respect the noble Lord thinks that we have been less than candid in the disclosure of the matters concerned. I should have thought that Parliament knew very well how much money had been spent, and as for the casualties, which we very much regret, these are, as I see daily in the Press, widely reported, and I should have thought were very well known.
LORD MONSON: My Lords, does the noble Viscount not agree that even to think of depriving our fellow citizens of their nationality against their will would be to behave like General Amin?
VISCOUNT COLVILLE OF CULROSS: My Lords, we simply cannot do it because it would be against the Ireland Act 1949.

PARLIAMENTARY PAPERS AND INDUSTRIAL ACTION
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, I very much regret that Hansard and some of the other Parliamentary papers we receive in the normal course of events are not available to your Lordships in their usual form. This is a result of the consequences of industrial action affecting the Parliamentary Press. As your Lordships will have noticed, steps have been taken to produce to-day's Order Paper, and limited quantities, but I hope adequate quantities, of the report of our proceedings yesterday, (Hansard), can be obtained from the Printed Paper Office. I much regret any inconvenience caused to noble Lords, and I should like to give the assurance that I will naturally do all I can to mitigate that inconvenience.
LORD SHACKLETON: My Lords, I suppose we are pretty well trained in your Lordships' House to the sudden cessation of our essential papers. The chief difference is that when I was sitting in the place of the noble Earl I was constantly harassed by the then Opposition, who refused to understand my problems, whereas I understand the noble Earl's
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problems very well and I am sure he is doing his best for us.
LORD BYERS: My Lords, I should like to say how very much we appreciate the arrangements made, by whoever is responsible.

E.E.C SECONDARY LEGISLATION
EARL ST. ALDWYN: My Lords, my right honourable friend the Lord President of the Council is making a Statement in another place to-day on the Interim Report of the Commons Select Committee on European Community Secondary Legislation. It has been agreed through the usual channels that this Statement need not be repeated here, but, with the leave of the House, I will arrange for it to be circulated in the OFFICIAL REPORT.
Following is the Statement referred to:
"The thanks of the House are due to my honourable and learned friend, the Member for Northwich, and the members of his Committee for the speed with which they have been able to make this Interim Report.
"The Government agree broadly with the proposals made by the Committee.
"The first recommendation relates to proposals for Regulations, Directives and relevant Decisions by the Council of Ministers, and is that the relevant documents should be followed by explanatory memoranda. The Government accept that a memorandum of the kind illustrated in the Report should normally be produced for each of these documents by the Department primarily responsible. They may amount to about 300 a year.
"The Committee also asked for a monthly statement to accompany a forecast of the Agenda of the Council of Ministers. Since items are sometimes inscribed on the Agenda at short notice, and some are treated as confidential, in the circumstances the Government believe the most appropriate way of meeting the Committee's objective would be for the Government to lodge each month in the Vote Office their estimate of the subject headings likely to come up for discussion in that month. This would, in accordance with the practice of the House, enable questions to be put down or debates to be arranged.
"The Committee also recommends that regular Statements should be made after each meeting of the Council of Ministers Taken literally this might give rise to an excess of Statements, many of them on matters that do not warrant the time of the House at 3.30 p.m. As in the past, the appropriate Minister will make a Statement to the House whenever the substance of the meeting warrants it."

COUNTER-INFLATION BILL
2.55 p.m.
LORD DRUMALBYN: My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Drumalbyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 5 [Notification of price and pay increases, and approvals and consents]:
LORD BESWICK LORD BESWICK moved Amendment No. 19:
Page 4. line 7, leave out ("may") and insert ("shall").
The noble Lord said: I hope we shall not spend an undue amount of time on this Amendment. It was gone over pretty thoroughly in another place, without, I am afraid, getting very far so far as the Government were concerned. If noble Lords will bear with me for a moment, perhaps they will look at my Amendment and the point in the Bill to which it is proposed to apply. The Bill as it now reads says:
"The Minister may, in such cases as appears to him appropriate, by order make provison to ensure that the agencies receive notice of…".
I should not have thought it was going too far down the revolutionary or radical path to say that the Minister, in such cases as appear to him appropriate, shall make an order to make provision et cetera. That is not asking very much. I am not saying that in every case he shall make an Order. I understand, of course, that there will be a number of comparatively minor instances where it will be quite inappropriate to make an order. But the Bill does say "in such cases as appear to him appropriate", and I am asking that in such cases as appear to him to be appropriate he shall make provision to ensure that the Agencies shall receive notice of any increases in prices, charges or remuneration. I beg to move.
BARONESS WOOTTON OF ABINGER: I should like to support my noble friend's Amendment. As implied in what he said, the Minister still has wide discretion. He may find in a large number of cases that it is not appropriate for him to act, but when he does think it appropriate, surely it is incumbent upon him to do what he himself believes to be appropriate. I would suggest to the Government that they should be grateful to my noble friend. Far from trying to destroy the Government's Bill, which is so often the occupation of these Benches, he is actually trying to strengthen it, to put more teeth into it. I hope the Government will see their way to accept the Amendment.
THE EARL OF GOWRIE: The Amendment has been put forward by the noble Lord, Lord Beswick, and supported by I the noble Baroness, Lady Wootton of Abinger, with such grace and brevity that it seems to
me very churlish to resist it. If I do so, it is really because the effect of it, as we read it, would be to make j it mandatory for the Minister to ensure I that the Agencies receive notice of increases in any prices, charges or remuneration, and to block all such increases in prices, charges or remuneration until the Agencies have considered them. The administration of this would be extraordinarily difficult. To make notification mandatory on the prices side would be impractical. As noble Lords will be aware, there are over a million enterprises in the United Kingdom, and I cannot see that it would make any administrative sense to overburden the Price Commission with an unmanageable flood of price notifications. In the same way, to block price increases across the board before they have been considered by the Price Commission would mean a continuation of the standstill and would have nothing to do with Stage 2 at all. I must ask noble Lords to reject this Amendment.
3.1 p.m.
BARONESS WOOTTON OF ABINGER: That seems a quite extraordinary reply, because the Minister has discretion and acts only where it seems to him appropriate. Therefore, all these innumerable cases which the Minister has said would present an obstacle are out of the picture altogether. He looks at the information j available to him and says, "In this case I it is appropriate for me to act". I

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should have thought that any honourable Minister, when he has to decide that it is appropriate for him to act, has the obligation to act.
LORD SLATER: My noble friend Lady Wootton is on a good point here. If the position remains as set out in the Bill, then it is leaving the Minister in a position where he becomes judge and jury at all times. On the other hand, if the Amendment is accepted, then it becomes incumbent on the Minister to follow the directions contained in the Bill. Even if the Act had to go before a court for interpretation, it is for the court to interpret what the Act really means, and not to decide on what is said here or in another place. In order to comply with this clause in this Bill, I think that the Minister ought to give way on this Amendment that has been so ably moved, and so ably supported by my noble friend Lady Wootton.
LORD WIGG: It seems to me that it is at this point that the Government begin to wobble a little in their thinking. Yesterday, in proceedings before the Committee, the Government took a firm view, and although I do not agree with it I understand the doctrine which caused them to act as they were doing. It is clear that they were influenced by what has happened in the United States. I think, too, they are influenced by the lack of success of the Labour Government. The fundamental difference between what happened between 1965 and 1970 and the policies which the Government are now putting forward is that the Prices and Incomes Board of 1965 to 1970 was entirely advisory. It had to wait until matters were referred to it. They sat, their powers were discretionary, and they did not look at the problems in any comprehensive way. What happened in the United States was that they freed their two Boards from the incubus of Government oversight, and freed them to make it clear that they acted as they thought best. If they thought, or suspected, that they needed information, they could seek it.
I quite agree, and have sympathy with, the point of view put forward by the Minister over what is involved in a change from "may" to "shall". However, I should have thought that the Government need to be quite clear in
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their mind if they want their policy to succeed. Having got the policy worked out by the Government with the approval of both Houses, the two Boards should be free to get on with it. At this point in Clause 5 it looks as though the Boards have to wait until the Minister takes note, and in cases that appear to the Minister appropriate, that he ensures that the Agencies will take account of what happened. What I want to happen, accepting the Government's policy up to this point and sincerely hoping that it is going to work, is that the Agencies shall then be as free as possible, and that we should get away from what was a basic weakness in the operation of the Prices and Incomes Board as operated by the Labour Government.
Mr. Aubrey Jones, two or three weeks ago, drew attention to this point. He said that the weakness in 1965 to 1970 was that the Board had to wait for reference from the Government. The Government have turned their back on that course. They are going to have a Prices and Incomes Board which has really got teeth, and therefore what they should do is to accept the logic of their own position and act accordingly. I should have thought that in that case they would either accept my noble friend's Amendment or, being conciliatory men—and I am sure that my noble friends would accept this—they will say that there is something in what we have been saying, they are a bit doubtful about how it will work because they do not want those Boards inundated with masses of irrelevant information, but that between now and the Report stage they would go away and see whether they could find a form of words more acceptable than those on the Marshalled List. I am sure that my noble friends would be willing to accede to the Government's view on this point.
THE EARL OF GOWRIE: I am glad that the noble Lord, Lord Wigg, underlined to the Committee the difference between the Price Commission and the Pay Board and the Prices and Incomes Board, and that these are not advisory but executive bodies. I must say that I am grateful to him for saying that. The noble Baroness, Lady Wootton of Abinger, shook her head during my explanation, and said that what I was saying

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would not be the case under the Amendment. But, as I see it, if one substitutes "The Minister shall" for "The Minister may", so long as one keeps "in such cases as appear to him appropriate", there is no real necessity for the Amendment as it stands.
More importantly, looking ahead I think that the Amendment would preclude the Government—this is where I want to answer the noble Lord, Lord Wigg, particularly—from voluntary notification policies, should this become desirable at some later stage in the policy. To put it mildly it would be undesirable to restrict the ability of the Government to operate a voluntary policy (which it has so long sought), at some stage in the future. We all know that maximum flexibility is being sought during Stage 2, and I must ask noble Lords to resist an Amendment which would all too literally freeze that possibility.
3.7 p.m.
LORD BESWICK: I hope that noble Lords have come into the Chamber with a fairly open mind, if one may so put it, and one will be interested to see how they vote. Although the noble Earl who has just replied for the Government has said that he has no wish to be churlish, with respect to him he is giving a very good impression of churlishness when he turns this Amendment down, although he has turned it down in a very kindly way. Does not the noble Earl understand that the sort of feeling that was generated on both sides of the Committee in the other place, and certainly among my noble friends on this side of the Committee, is that the Government are not too serious when they say they are going into this business of controlling prices and wages. When they wrap things up like this,
"The Minister may, in such cases as appear to him appropriate, by order make provision to ensure…"
it looks as if they are a little less than determined, or definite, in what they are setting out to achieve.
As I understood the noble Earl, in his second reply he is saying that if we
put in "shall" it makes very little difference when read in conjunction with "in such cases as appear to him appropriate ". In his first speech he was suggesting to us that in some way that was inhibiting the Government. I beg noble Ministers opposite—and they represent a very formidable array of talent—to appreciate that on some occasions it would be refreshing if they tore up their briefs and just exercised their own judgment. If they exercised it on this occasion, I am quite sure that they would agree with us that "shall" is more appropriate. It does not in any way tie the Minister. It does not add to his burden, because if he has already to consider which cases are appropriate, he has to look at all of the cases before he can decide which are appropriate and which are inappropriate. Therefore, if it has no negative effect it is just conceivable that it may have a better positive psychological effect, and I suggest to my noble friends that we go into the Lobby in support of this Amendment.
BARONESS WOOTTON OF ABINGER: I must just take up the point of the noble Earl, that this Amendment would block a voluntary policy. I cannot see that it would block a voluntary policy at all. First of all, the Minister has to consider: is this an appropriate case for me to do anything? Having decided that it is an appropriate case for him to act, what action is he compelled to take? He is compelled to send notice— no more—to the Agencies, in time for them to consider whether the proposed increases conform to the Code and whether they wish to exercise the powers conferred upon them. If the word "shall" is written into the Bill, there is no obligation on anybody to take any compulsory action at all except to notify the Agencies and let them consider the matter.
3.11 p.m.
On Question, Whether the said Amendment (No. 19) shall be agreed to?
Their Lordships divided: Contents, 62; Not-Contents, 95.

CONTENTS

Addison, V.

Beswick, L.

Burntwood, L.

Airedale, L.

Blyton, L.

Chalfont, L.

Archibald, L.

Brockway, L.

Champion, L.

Ardwick, L.

Buckinghamshire, E.

Chorley, L.

Clwyd, L.

Leatherland, L.

Shinwell, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Slater, L.

Douglas of Barloch, L.

Snow, L.

Douglass of Cleveland, L.

Maelor, L.

Soper, L.

Fiske, L.

Nunburnholme, L.

Stocks, B.

Gaitskell, B.

Ogmore, L.

Strabolgi, L.

Gardiner, L.

Phillips, B. [Teller.]

Strang, L.

Garnsworthy, L.

Platt, L.

Summerskill, B.

Geddes of Epsom, L.

Popplewell, L.

Swaythling, L.

Gore-Booth, L.

Porritt, L.

Taylor of Mansfield, L.

Greenway, L.

Royle, L.

Walston, L.

Hale, L.

Sainsbury, L.

Wells-Pestell, L.

Hanworth, V.

St. Davids, V.

Wigg, L.

Henderson, L.

Seear, B.

Wootton of Abinger, B.

Hughes, L.

Segal, L.

Wright of Ashton under Lyne, L.

Jacques, L.

Serota, B.

Janner, L.

Shackleton, L.

Wynne-Jones, L.

Kings Norton, L.

NOT-CONTENTS

Aberdare, L.

Dundee, E.

Merrivale, L.

Ailwyn, L.

Eccles, V.

Milverton, L.

Albemarle, E.

Effingham, E.

Molson, L.

Alport, L.

Emmet of Amberley, B.

Monck, V.

Amory, V.

Ferrers, E.

Monson, L.

Ashbourne, L.

Ferrier, L.

Mowbray and Stourton, L.

Auckland, L.

Gage, V.

Napier and Ettrick, L.

Balerno, L.

Glasgow, E.

Nugent of Guildford, L.

Balfour of Inchrye, L.

Gowrie, E.

O'Neill of the Maine, L.

Barnby, L.

Grenfell, L.

Onslow, E.

Belstead, L.

Gridley, L.

Rankeillour, L.

Berkeley, B.

Grimston of Westbury, L.

Redcliffe-Maud, L.

Bethell, L.

Hailes, L.

Reigate, L.

Birdwood, L.

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

Rockley, L.

Braye, L.

Ruthven of Freeland, Ly.

Brooke of Cumnor, L.

Hatherton, L.

St. Aldwyn, E. [Teller.]

Brooke of Ystradfellte, B.

Hewlett, L.

St. Helens, L.

Carrington, L.

Hood, V.

Sandford, L.

Clancarty, E.

Hylton-Foster, B.

Strange of Knokin, B.

Clifford of Chudleigh, L.

Inglewood, L.

Strathcarron, L.

Cole, L.

Ironside, L.

Strathclyde, L.

Colville of Culross, V.

Jellicoe, E. (L. Privy Seal.)

Sudeley, L.

Conesford, L.

Kindersley, L.

Suffield, L.

Cottesloe, L.

Kinloss, Ly.

Thomas, L.

Craigavon, V.

Kinnaird, L.

Thurlow, L.

Cromartie, E.

Kinnoull, E.

Townshend, M.

Daventry, V.

Lauderdale, E.

Tweedsmuir of Beihelvie, B.

Davidson, V.

Lothian, M.

Vivian, L.

Denham, L. [Teller.]

Lucas of Chilworth, L.

Wise, L.

Derwent, L.

Lyell, L.

Wolverton, L.

Drumalbyn, L.

MacAndrew, L.

Wynford, L.

Dudley, E.

Mar, E.

Young, B.

Resolved in the negative, and Amendment disagreed to accordingly.

3.19 p.m.
LORD BESWICK LORD BESWICK moved Amendment No. 20:
Page 4, line 9, at end insert ("including any scheme making provision for the purchase of shares on specially favourable terms").
The noble Lord said: Just reverting to the last Amendment and having some interest in Parliamentary procedures, I should be greatly interested to know what proportion of the 62 who voted for the Amendment were in the Chamber when
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we had the discussion, and what proportion of the 90-odd were in the Chamber before they decided to go into the opposite Lobby to oppose that Amendment. We now come to another Amendment which I hope will appeal to the reasonable Members of your Lordships' House. Again, it is by no means a wrecking Amendment; it is a reasonable Amendment. I do not complain that there is no reference in the Bill to the matter of which I speak, because of course the Bill was drafted before the Chancellor of the Exchequer spoke in his Budget Statement about these special share schemes.

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But now that he has indicated his intention to encourage these special schemes for advantageous share purchases, I have no doubt—at least, I hope there can be no doubt—that the Government will wish to take account of them in this Bill. I should be satisfied if an undertaking could be given that some mention will be made of them in the Code.
The motivation behind these special schemes of which the Chancellor spoke is no doubt political, or could be said to be one of dogma, but I am not disposed to argue against the schemes on that account. This Bill is not concerned with the merits of share ownership, but it is concerned with the question of remuneration. If, as the Chancellor says, these special schemes will have the effect of providing an incentive to employees, then clearly there must be an element of remuneration in them. In the Code (a copy of which I do not have handy at the moment, although possibly my noble friends can help me) there is a reference to various matters which need to be taken into account by the Pay Board: such matters as certain pensions, seasonal bonuses, lunch or other meal vouchers, responsibility allowances, shift pay, night duty allowances, London allowances, geographical allowances, stand-by payments and so on. I am suggesting that if those are to be taken into account, then similarly the special schemes of which the Chancellor spoke ought also to be taken into account.
Noble Lords will recall that it was proposed by the Chancellor that certain employees should be enabled to buy shares at a 30 per cent, discount. It is not clear from the information given by the Chancellor or made public so far who is to make good this 30 per cent.; and I know that it can be argued that in the S.A.Y.E. provisions an employee making savings over a period of five years would receive at the end of that period a 20 per cent, tax-free bonus on his savings. Therefore I assume that one might say that these share schemes are of a kind with S.A.Y.E., but, of course, it is not quite so. In any case, there is an extra 10 per cent, bonus in these schemes under the Chancellor's proposals as made known; and here we are talking of an interest in an equity share which not only will be bought at a 30 per cent.
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discount but over a period of five years, at any rate, ought to represent more than the 30 per cent, discount.
As I say, I am not arguing against these schemes at all. I do not think they come as to merits within the scope of this Bill; but the Bill here and all the principles that govern the Pay Board as provided in this Bill are designed to ensure fairness as between one category of workers and another, and clearly, workers in, say, the National Health Service—those now protesting about their low pay—cannot be given an equity share in the National Health Service. Possibly a majority of the workers in this country are engaged in work for a private company or for a public service company and cannot possibly qualify for a special scheme of this kind. I am suggesting, therefore, that the Pay Board ought to be advised when a particular category of employee can benefit from these schemes, so that the decisions of the Pay Board can be taken in the light of all the circumstances. It is, I suggest, a reasonable proposal, and I hope very much that the Government will be able to indicate that they can accept it. I beg to move.
THE EARL OF GOWRIE: It is the Government's view that share option schemes, like the catalogue of allowances enumerated by the noble Lord, Lord Beswick, should squarely be regarded as part of remuneration in a counter-inflation context. We agree with the noble Lord there, and I am very glad to be able to do so. He also said that he would be satisfied if mention were made in the Code of these schemes, and I can give that assurance: the Code will cover these, and the Green Paper already does. Our quarrel with the Amendment is over the issue of including this provision, which raises difficult questions of vires. There is no doubt that in our view that it seems unnecessary to amend the Bill in this particular way, since paragraph 1 of Schedule 3 to the Bill already allows the meaning of "remuneration" under Clause 5 to be defined to include any type of fringe benefit, including arrangements for the purchase of shares by employees on favourable terms. So I must ask noble Lords to resist the Amendment.
LORD SHINWELL: Surely it goes much further than my noble friend Lord Beswick has mentioned. I must say that

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when I heard him speaking on this Amendment I was somewhat astonished, because he seemed to suggest that, in spite of all the talk of everything being fair— I use the expression used by the Prime Minister, who said "everything has got to be fair "—the directors of some of the food companies, for example, or of some of the manufacturing or industrial firms, might take advantage of their exalted position to obtain goods, even food, at reduced prices, thus seeking to circumvent the principles underlying the whole purpose of the Government in this measure. Or, for example, they might be able to get food supplied without any payment at all, rather as part of their remuneration, as something which goes with the job. It seemed to me that my noble friend was making a suggestion of that kind—a horribly suspicious concept, I must say. One can hardly believe that those associated with industrial firms, whether directors, managers, under-managers or anybody else, would dare to do anything like that—anything so (if I can use the language of the Bill) "inappropriate".
Of course, you never know what might happen. After all, people are tempted. One can understand that; and, appreciating the possibility of temptation, one ought to guard against it. In fact, we ought to insert in the Bill, "Yield not to temptation ". But as the Labour Opposition have decided not to inject into the Bill a phrase of that kind, perhaps we ought to agree about this Amendment in order to safeguard those people who might be disposed—I would not put it higher than that—to take advantage of an elevated position in industry, or in food manufacturing and distribution, to get something "under the counter ", a kind of black market. I am sure that the noble Earl who is dealing with this matter from the Government Front Bench would not want anything of that sort to happen, and in those circumstances, in order to exercise prudence and caution and to safeguard the interests of these people who are likely to be tempted, I suggest that he accept the Amendment.
LORD BESWICK: The noble Earl says, as I understand him, that share option schemes are, in effect, remuneration. That is accepted. I have said that they should be taken into account. The noble Earl says that they are mentioned
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in the Code. In fact, they are not in the list as set out in paragraph 113. If the noble Earl is referring to paragraph 112, all it says is:
"There shall be no new 'share option schemes."
That is presumably during Phase 2. It is not clear to what exent the special schemes to which the Chancellor referred on Tuesday are covered by paragraph 112, and the noble Earl might well have made that much more clear. In any case, if the noble Earl is resting his case on what is said in an oblique fashion in paragraph 112, that cannot possibly refer to Phase 3 and onwards, and we are saying that as a matter of procedure and fairness throughout the life of the Price Commission and Pay Board these share option schemes shall be taken into account. At the moment they are not so taken into account, and although I hoped for some assurance from the noble Earl he has not up to the moment given us that assurance.
THE EARL OF GOWRIE: The new Save-as-You-Earn linked share saving scheme announced by the Chancellor surely could not be introduced until the Finance Bill has passed through Parliament and the necessary adjustment to the S.A.Y.E. system made. This would not be until the autumn, so the question of implementing the scheme during Phase 2 is not likely to arise. As to the other points, I should have thought that, as the noble Lord, Lord Beswick, himself said, these are questions to do with the Code rather than with the Bill.
LORD BESWICK: I must ask the noble Earl whether he will give me an assurance that this share option scheme item will be put in the list with the other items in paragraph 113 when the Code is drawn up as a final report. That is what I am asking. At the moment it is not stated in the Code that they shall be taken into account. As for the story about the S.A.Y.E. linked scheme not being operative until September, that, of course, I can understand, but we are talking about a Price Commission and Pay Board that will go on beyond September. We want these matters to be taken into account beyond September, and therefore in my judgment it had better be in the Bill rather than in the Code. But if the noble Earl cannot go so far as to say that he will accept the Amendment to put it in the Bill, then I ask him to give

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us an assurance that it will appear in this Code and also the Code which will apply to Phase 3.
THE EARL OF GOWRIE: We have asked for suggestions as to what should be in the Code and we welcome them. I welcome the suggestions made by the noble Lord, Lord Beswick. I thought I had actually given him the assurance he wanted that this would be in the Code. If I was unclear about that, I apologise and I now give him those assurances. I only repeat that in our view this is a matter for the Code rather than for the Bill.
LORD BESWICK: On the definite understanding that in the Code as applying to Phases 2 and 3 there will be a reference to this, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Powers of Price Commission]:
BARONESS PHILLIPS BARONESS PHILLIPS moved Amendment No. 20A:
Page 4, line 39, at end insert—
("( ) The code shall provide for a special panel in the Prices Division to deal with the prices of food and drink. The panel shall have power to carry out enquiries into all circumstances affecting the price of food and drink, especially fresh food, and shall have power to make recommendations for any special action designed to control the price of food including as considered practicable, if necessary, subsidies.')
The noble Baroness said: This is a very simple Amendment and therefore I feel certain that the Government will accept it. It is, of course, a practical Amendment. It carries the name of two noble Baronesses. Despite what the noble Earl said yesterday about voracious females, I cannot call him a "noble Chauvinist pig", but there is no doubt that as a sex we are eminently practical and this is offered as a constructive Amendment to the Bill. I have the unique opportunity of mixing daily in close contact with housewives who do the shopping. I know that we are told frequently that men are also consumers, and this is true, but in the question of determining how the budget is to be allocated it is still primarily the housewives who have to do this. These are
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the wives who are being told daily about a freeze, but when they go to the shops they begin to wonder where the freeze begins and what is being frozen. If counter-inflation is to work at all, as we have heard throughout the discussion on this Bill, it must above all be seen to be fair and just. The reason why workers take industrial action may be that they see a clamping down on their pay increases, many of which had been promised prior to the freeze and which they need, not to improve their standard of living but indeed just to keep at the level at which they are now, while at the same time the goods they have to buy are not so controlled.
If we leave aside the increases to which we are all subjected in rents, rates and cuts in services like school meals and school milk, it is important to appreciate that 31 per cent, of average family income is still spent on food—food such as perishables which are not included in the freeze —meat, fish, vegetables, eggs and bread. If we look at the other prices which are also exempt for a variety of reasons set out in the Consultative Document, for example, prices paid to overseas suppliers for imports or prices of goods where the application of the control would be inconsistent with an international agreement, it is not difficult to see why there are so many prices which seem to be increasing and why an explanation can always be advanced why price rises are legitimate.
If we take the case of canned meat, I found in a branch of a well-known multiple, Marks and Spencer, two weeks ago that it was on sale at 52p in one branch, at 49p in another, and at 47p in another. The explanation given to me when I asked for one was that it was new stock in one case—giving rise to the rather frightening thought of what the other was. The assistant further advanced her case by saying, "There is, of course, the situation in which meat prices have advanced". I rather timidly suggested that it was not canned last week. This is an example of an increase which obviously can be easily justified under either of the points which we have in the Consultative Document— prices paid to overseas suppliers for imports.
The Minister, Mrs. Fenner, when replying to a Question on coffee, said:
"Wholesale prices of soluble coffee were increased in September and October of last

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year but because of stocks bought at lower prices the full effects of this increase are only now showing up in the shops. The change reflects an increase of up to 25p in world coffee bean prices in 1972".
If these prices are only now showing up in the shops, this is exactly the argument that can be advanced about wages. Wages are going down because prices continue to go up. There is no freeze which is workable.
Again, on February 15 the Minister explained the reasons for the increase in the price of fish. She said—and this is one of the explanations that really rather baffle one—
"Fish prices change essentially in response to fluctuations in supply, and supplies have on average been…4 per cent, below catches of a year ago…".—[OFFICIAL REPORT, Commons; col. 1423.]
Why do we wait until this year for prices to go up if this situation has obtained for the last two or three years? This does not explain why frozen fish has risen. We get the feeling that there is an excuse every time. I am not prepared to accept this, but even if it were accepted that fresh food cannot be exempted, since there does not appear to be a separate retail price index for fresh food—and again I take the words of the Minister who when asked about retail prices of fresh food said that there is no retail price index for fresh food as such —how can a Price Commission check whether prices are being effectively frozen if they do not know which prices come under the price index? There may be an answer to that, but it defeats me as a simple shopper. I know that the Minister will say that there is already a Department concerned with price increases. I was interested to read that action taken under the Counter-Inflation (Temporary Provisions) Bill resulted in 200 price increases being withdrawn in December. Splendid ! But I believe there were about 200 price increases immediately prior to the introduction of the freeze.
The consumer has never been more alert to prices than she is now; for she has to be. I must say to Her Majesty's Government, as one who believes in a prices and incomes policy, that it will work only if it does not appear to be one-sided. I understand that the Price Commission will have representation from the retail consortia. What repre
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sentation is there to be of the consumers' interests? How far are the retailers going to see this as a short-term policy? Our system is based on a competitive method of trading. Only this morning I heard on the radio, as I understood it, a spokesman of the C.B.I, say that they were to go to the Minister to ask whether they could have some exemption from this heavy price freeze. We shall get further rising prices long before the wages will be able even to catch up.
I would say to the Minister that I can offer him some consumers who would be very glad to operate this panel which I suggest for nothing; so that there will be no need to add to the 700 extra civil servants and the £300 million cost of operating the two Commissions. With my noble friend Lady Wootton, I must confess that I am puzzled as to why it is necessary to pay a man £16,000 a year in order to keep down prices. It appears to me, as a mere woman, that you will keep down a greater number of prices through subsidies by utilising some of this money.
LORD STRATHCLYDE: This argument really refers to every family in the country. The noble Baroness is talking about wage earners. Some of us have been wage earners over a long period of years and we are suffering just as much as anyone else.
BARONESS PHILLIPS: The distinction I have been making is the old-fashioned one between those who work for a living and those who do not. There are not many people who do not work for a living. Whether what one receives is called wages or salaries is a matter of choice. I receive wages although I receive them monthly. The noble Lord presumably receives wages.
LORD STRATHCLYDE: Some of us have retired and have worked all our lives. The noble Baroness seems to be differentiating between those who are working today and those who have worked in the past.
3.45 p.m.
BARONESS LLEWELYN-DAVIES OF HASTOE: I should like to support my noble friend Lady Phillips on a slightly different aspect of this question of the rise in the price of food. We often forget the effect that the rise in prices has on

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our national institutions. I propose to keep this intervention as short as I can and to refer only to two kinds of institutions with which we are all very familiar. In the first place I refer to our schools. I think that noble Lords in general will agree that school meals are of immense importance to our growing and maturing children, physically and socially. When we think of that, I should like the Committee to consider the cost of food in one quite typical county in what is described officially as "model costing for four weeks for a kitchen serving 100 meals for children of about 11 to 15 years". The prices are based on the average for the whole county. I shall not weary your Lordships with all the different categories of prices; but I should like to take the main course—that is, the main protein dish, fish, meat, sausages and the like. Looking at these figures, we find that in April 1972 the cost was £76·50 and in October 1972, £85·12. In February of this year, after the freeze, the figure was £105·54. I want to stress that this is the main course only. Other fresh food like vegetables, eggs and fruit I shall not bother the Committee with. That is the effect on one very essential part of our national life, the schools.
Let us turn now to the hospitals. Again, I shall not weary the Committee with too many figures. I have taken mine from the official figures for the acute hospitals' costs of provisions per person per week. These show that between May 1972 and November 1972 there was an increase of nearly 6·3 per cent, per person per week. The official figures are not yet out for after November to February; but the unofficial figures from the catering establishments in the hospital show a further rise of 6 per cent. In other words, the figures show a rise of 12 per cent, in under nine months. These figures are very serious; but apart from the seriousness of them in themselves there is a sidelight on them which I think the Committee will be interested to consider. Noble Lords may not realise that the meals served in hospital canteens have to rise in price in proportion to the general cost of provisions in the hospitals. Many noble Lords will have served in one way or another in the administration of hospitals and will know of the devotion and loyalty of those hospital
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ancillary workers who feature so much in the Press at the moment. We know of their loyalty and we know of the gap of £8 a week between their average earnings and those of other workers in industry. Surely this rise in the cost of their canteen meals must have contributed to their general feeling of unfairness and unrest.
This poses the whole question of food subsidies which is what we have referred to in our Amendment. Who will eventually pay for this rise in the cost of provisions in the hospitals? Will it come out of the hospital's block allocation —that is, out of the other welfare, medical and social, of the patients? Or will it, in fact, eventually be paid by the Department of Health and Social Security? The same goes for the schools. I am certain—I do not think there can be much doubt of it—that, in fact, the rate support grant will eventually cover the increase. In other words, we are paying food subsidies. Why should these subsidies be hidden? Why should not the Government grasp the nettle and say, "We must accept the fact that we have to control food prices and that one of the ways of doing that is probably by food subsidies"?
Noble Lords opposite asked where the money would come from. If we are going to pay something like £300 million to keep up the price of food, because of the European Community's agricultural rules, why not pay a smaller amount and keep the price of food down? I believe that there are quite serious divisions in the Party opposite over the question of food subsidies. In the Standing Committee on this Bill in another place, honourable gentlemen on the other side argued for food subsidies. I think that this is a matter of common sense, apart from anything else. In our debate on Second Reading the noble Lord, Lord Drumalbyn, dismissed the possibility of food subsidies. One of his main reasons was that, like rationing, it was far easier to put them on than to get rid of them. To us on this side of the Committee that seems an inadequate reason for dismissing such an important way of controlling prices at such a desperate moment for the national economy and for the political and social health of the country.
I am sorry that the noble Lord, Lord Robbins, is not in the Chamber. He also

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dismissed food subsidies. In that marvellously beguiling and paternalist way of his he said that because of the misguided misconception of 80 per cent, of the population
"I suppose we must stomach a certain amount of unnecessary price control to make the prevention of inflationary pay claims at all palatable."—[OFFICIAL REPORT, 5/3/73; col. 894.]
We do not mind how "illogical "—that is the noble Lord's own word—this may seem. We believe passionately that we cannot control wages, salaries, anything of that kind, unless we control the vital and essential basis of our lives, and that is the price of food. I do not believe that workers, their wives, those who want our national institutions to work properly, can conceive of them doing so unless we control the price of food.
During the Second Reading debate, my noble friend Lord Beswick said that we must change the social climate if this policy of the Government is to work. This was referred to over and over again during the debate yesterday by speakers on both sides of the Committee. We on this side have always tried to do this. We have tried to seek the proper social priorities. During the war and since, until a Conservative Government came in, we have always had food subsidies in an attempt to keep the whole question fairly organised. But what can one think of a Government whose only present attempt to curb the price of food is a zero rating of the Value Added Tax on sweets and ice cream—the very things that cause tooth decay in our children —and who raise the tax on tooth brushes, when the regular use of them is the only sure way to prevent tooth decay? No wonder the dentists sent a telegram of protest to the Government, pointing out that over 90 per cent, of British children suffer from unnecessary tooth decay. Imagine it—four tons of teeth extracted from the mouths of British people, mostly from the young ones, every year ! And this could be avoided. Yet the Government's only positive attempt to curb food prices is by this fringe, gimicky approach—iced lollies and potato crisps!
It is a question of social priorities, but that seems to be going by the board. It seems to the people, I believe, that luxuries are going down in price and necessities are going up in price. I do not believe
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that our people will accept the control of wages policy which the Government want to get across without the control of basic essentials like food. I think that this must mean food subsidies. So far, we have not heard any good reasons from noble Lords opposite why we cannot have food subsidies. If it is true, as it may well be, that they cannot subsidise food even at the peril of not getting their own counter-inflation policies across, because of their commitments under the Common Market, I think it is time that the British people were honestly told that. Then they could make their own judgment on the matter. In the meantime, we believe that our Amendment is right and we beg the Government to accept it.
3.56 p.m.
BARONESS YOUNG: It may be for the convenience of the Committee if I intervene at this point. We have all listened with great interest and attention to the noble Baroness, Lady Phillips, who moved this Amendment and was supported by the noble Baroness, Lady Llewelyn-Davies of Hastoe. I should like to begin by saying that we on this side of the Committee appreciate and understand the very real concern of housewives about the price of food, and no one does so more than I do as I shop each week for my family. We recognise that food prices affect every individual in the country and we have therefore given much consideration to the whole question of food prices within the counter-inflation policy. I hope that in the course of what I say in reply to the Amendment I can show that what the Government are proposing goes a long way to meet at any rate the first part of this Amendment.
It seems to me that, broadly speaking, the Amendment would have two effects. First, it would require that the Code should provide for the appointment of a special panel of the prices division to deal with the prices of food and drink. Secondly, it would specify the powers of the panel additional to those possessed by the parent Price Commission or price division of the Commission; namely, to carry out inquiries into the circumstances affecting the prices of food and drink, including fresh food; and secondly, to make recommendations designed to control the price of food including making recommendations for subsidies. I think

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that the best way to look at this Amendment would be to consider first what the Government intend to do at present and to see how far these intentions coincide with the objectives of the Amendment, and, in so far as the Amendment goes further, whether or not it is desirable to do so. I should therefore like to begin by explaining what it is that the Government propose to do.
First, paragraph 137 of the Consultative Document states that a special panel of the Price Commission will be set up to deal with prices of food and drink. It will exercise the functions of the Commission in relation to the whole range of food and drink manufactured and processed in the United Kingdom, including such semi-processed products as butler and quick-frozen vegetables. These foods cover between half and two-thirds of consumer expenditure on food and drink. Their prices will be permitted to rise only if allowable costs rise, and manufacturers will have to allow for the adjustment for productivity referred to in paragraph 19 of the Consultative Document in fixing prices. The gross percentage margins of distributors of food and drink-merchants, wholesalers and retailers—will be held to the level of the last complete account year, less an appropriate deduction for the abolition of selective employment tax.
The net profit margins of manufacturers and distributors of food and drink will not be allowed to exceed the average level of the best two of the last five years of account. Secondly, Ministers have already made clear that they intend to make use of the powers contained in paragraph 2(2) of Schedule 1 to instruct the Price Commission to keep the prices of fresh food under continuous review. It will be the Commission's duty to carry out these instructions, or to see that they are carried out. And may I say, in answer to the noble Baroness, Lady Phillips, that the prices of fresh food are recorded and taken into account in the retail price index; and my understanding is that the total percentage of household expenditure which goes on food is 20 per cent., of which 8 per cent. is on fresh food.
To return to what the Government are proposing to do, the Price Commission may also carry out, on a reference from
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Ministers, special inquiries into the circumstances affecting the prices of any fresh food or drink; that is to say, if there is some unusual price movement which comes to the Commission's attention, such as an increase in the price of fresh vegetables at a time of year when normally such vegetables are plentiful, it could investigate this. It is also envisaged that the Commission will establish a system of advisory committees, whose members would include representatives of consumers, and that it will issue regular advice and reports to the Press and public along the lines of those which the Ministry of Agriculture, Fisheries and Food has been issuing in recent weeks. These functions could appropriately be delegated to the panel in respect of food and drink.
The panel will clearly have to watch prices of all food, imported and home produced, if it is to perform its functions properly. It could not know whether the margins of the importers were complying with the Code unless it knew what the import prices were. If there are abuses in the pricing of any food product, and if there is a tendency to which the Commission feel that they should draw the attention of the Government, no doubt they will do so either immediately as a matter of principle or in one of their quarterly reports. I hope that I have said sufficient so far to indicate that the Government have done far more than simply fix a zero rate of V.A.T. for sweets and ice-cream, as suggested by the noble Baroness, Lady Llewelyn-Davies.
BARONESS PHILLIPS: If I may interrupt the noble Baroness, can she explain how canned meat is allowed to rise? I cannot follow that. I have tried to work out under which clause it would be permitted. The explanation did not cover that. It is not fresh food.
BARONESS YOUNG: I speak subject to correction, but I believe it would be because the contents would be imported. It would presumably be canned beef, and it would be imported beef, and therefore would not fall in these particular categories.
I should like to turn to the point about import prices, because I accept that there is a genuine problem here, but I believe

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that we should put imports into perspective. About half of our imports consist of raw materials and foodstuffs; we do not, and in many cases we cannot, produce within the United Kingdom various products. Of the rest, a significant proportion consists of vital capital goods. World demand for raw materials and foodstuffs is putting up the prices of these commodities all over the world, and, short of major international agreements, there is virtually nothing we can do to control world prices.
I have gone into some detail here because I want to show that what the Government intend to do is, I believe, close to what is proposed in this Amendment. It may well be argued that if the differences that divide us are so slight, we could accept the Amendment. But in the second part of the Amendment there are two difficulties of principle, and it is for this reason that we are unable to accept it. The Amendment is proposing that the panel of the Commission should have a statutory right to carry out inquiries into all the circumstances affecting the price of food, especially fresh food; and furthermore, that it should have the right to make recommendations on policies to control the price of food, including subsidies. This is asking it to do something which is far beyond the functions which the Agencies are to be created to perform. I realise that the question of food subsidies is a major issue of policy between the political Parties. We consider that whether or not there should be food subsidies is a matter for the Government and Parliament, and that it would be wrong to delegate such a power to a subordinate body of the Commission to take the initiative in making recommendations on such issues as subsidies. We believe that it would be wrong, also, quite apart from the constitutional impropriety of doing so, to introduce such an important issue as food subsidies in this way, and it would not be appropriate to do so through the Code.
Although I appear to have been critical of the latter half of this Amendment, I should like to return to the point which I made at the start. We, too, on this side of the Committee are fully aware of the anxieties and worries that people have over the price of food. I hope I have said enough to indicate that the
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Government's measures go a long way to meet the first part of the Amendment, and that we take most seriously the question of food prices within the whole context of the counter-inflation policy.
BARONESS LLEWELYN-DAVIES OF HASTOE: Before the noble Baroness sits down, may I point out that she dealt in the first part of her reply with the food that we produce in this country, and then went on to say that the question of subsidies was not suitable for the Agencies because it was beyond their function. One small but important item of food which we produce in this country is bacon, and 40 per cent. of the bacon that we eat in this country is produced at home. That used to carry with it a rather substantial subsidy, which made it easier to sell here. Now, because of our commitments under the Common Market, that subsidy has been removed. If the Agencies cannot function in this kind of way, and bearing in mind a large increase in the price of some home-produced food—a matter concerning which the noble Baroness said the Government were very close to us in worrying about and in being effective about (I must say that I disagree with her nevertheless), then, in spite of assurances, I really cannot see that the Agencies are adequate for keeping down the price of food.
BARONESS YOUNG: What I believe I really cannot see that the Agencies cerned, is that we have the control powers over manufactured and semi-processed foods, and also that the Minister would instruct the Price Panel to monitor prices of fresh food. I do not think I gave a guarantee that under this system we could keep their prices down. What I say is that they will be able to do this monitoring, and to see where it is going: and, of course, Ministers could give directions on the matter as they thought necessary. The difficulty of this Amendment is that it would give power to the Panel to make recommendations about food subsidies, a power which rightly should belong to Government and Ministers and not to a subordinate agency of the Government.
4.7 p.m.
LORD BESWICK: We were of the opinion that the Government were serious in their intention to do something

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about the cost of living, and when the noble Baroness says that we are actually asking for this Panel to be empowered to make recommendations, of course that is precisely what we are asking for. We are not saying that they should have the power to make laws or to lay down statutory requirements; but we are asking that a body which will have professional expertise, and will be in day-to-day contact with these matters, should have the power to make recommendations, among other things on food subsidies. The noble Baroness says that we are actually suggesting that this panel should have statutory powers. If this is such a wicked thing to suggest, what does the noble Baroness say is the meaning of paragraph 137 in the Code, which says that
"The Commission will also be able to carry out special inquiries…"?
Is that a meaningful requirement, or not? And if it is a meaningful requirement, why should it not be in the Bill? What is there wrong about that? Is this provision in the Code something less than real? And if it is real, why cannot we see it set out clearly in the Bill?
There is a difference between us on one or two matters here. The noble Baroness dismissed the importance of food as an element in the cost of living, and I have no doubt my noble friends will be able to deal with that point in rather greater detail. But I would put this to the noble Baroness. Whereas she gave one figure about the element in the cost of living represented by the price of food, the fact of the matter is that there are several figures in this country. It is a very low figure when one is talking of the higher incomes groups, but it is a very high figure when one is talking of the low income groups. The lower the income, the greater the proportion of the income that is spent on food. Therefore it is most important that we treat this matter as a special one.
My noble friend Lady Llewelyn-Davies said that (I quote her words) "luxuries are going down and prices of necessities are going up". This, unfortunately, is the fact to-day. The price of mink coats will go down after April 1; the price of jewellery will go down after April 1; and the price of motor-cars will go down. But the price of food and other necessities
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is going up all the time. If you take the less essential foods, they are not going up so much. I read last week in one newspaper that champagne corks were popping at an ice-cream conference in Llandudno because they had been let off by the Chancellor. That is the case with ice cream; yet when it comes to fresh food, the real essentials, the noble Baroness says they cannot do anything more about it. Let us get these actual words right because they will become very familiar to Parliamentarians over the years. I will tell noble Lords what the Government are proposing to do about fresh food prices: they are proposing to "keep them under continuous review ".This is the extent of their action there.
We are suggesting that this panel should have the statutory power to make special inquiries into all aspects of food prices, and that they should have the power to make recommendations if they consider it desirable and necessary for certain foodstuffs to be subsidised. The noble Baroness dismisses subsidies as something which is between us as a matter of principle. I wonder whether the noble Baroness is really wise about that. Let me quote from the Financial Times of March 9, which says this:
"The use of direct subsidies rather than high market prices to support farmers' incomes, far from being a dirty word, is I beginning to be actively pursued. A clutch of proposals for direct incentives for beef production and direct support of hill farming areas is now under active discussion with a view to their introduction in the coming year."
My experience is that there is usually more of an element of truth in what the j Financial Times reports than in most I other newspapers. I think they are latching on to what is happening and I believe there are a lot of practical people in Whitehall who are now beginning to realise that the obligations of the Common Agricultural Policy are really adding to our problems. The sooner we realise this and do something about it, the better.
I end by saying this. I have occasion now to look at wage costs in one industry and I have the opportunity to compare them quite closely with the wage costs of certain other industries. I have found that our wage rates, compared with those of some other European countries, have been quite low. They are going up, but they have been quite low and they are

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still comparatively low. That is because in the past our food prices have been much lower than those of countries on the Continent—I repeat, much lower— and they have been much lower because of the policy we have pursued since that famous Act of Tom Williams in 1947, which was designed to keep down the cost of food. Incidentally, it had the effect of keeping down our wage rates as well. What is happening to-day is that we are endeavouring to keep down wage rates while embracing the Common Agricultural Policy in other matters, and our cost of living is going up. We shall find it quite impossible to accept European costs of living unless we go some way nearer to the European wage rates.
We are suggesting that, with our social and political wisdom, our experience and techniques, we must endeavour to do something to ameliorate this apparently relentless increase in the cost of living, including the price of fresh foodstuffs. To that end, we did not put forward a very revolutionary or radical proposal. We put forward a quite reasonable suggestion that there should be this special panel referred to in the Code, and that not only should it have the power to look at all aspects of food prices and their relation to the cost of living but it should have the statutory right to make recommendations. It is not an unreasonable suggestion to make, and I am very sorry that the noble Baroness has not been able to indicate rather more clearly why the Government feel they cannot accept it.
4.15 p.m.
LORD WIGG: It seems to me quite impossible for a nation with a complex society such as we have to steer a course unless we have a constant and clear vision in our minds of the destination at which we are seeking to arrive. Obviously, there are influences at work trying to blur our vision and sap our faith. I should like to say this to the noble Baroness who has just spoken. I do not think I have ever heard a Minister who had a worse brief or who made a better job of it than the noble Baroness did. I believe that what she should have said was that the present Government have embarked upon a policy of dear food. This is a reversal of the policy that has been at the heart of our country's affairs for the last hundred years.
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It is idle to deny that this represents only the first instalment—it will not be the last one—of the Heath policy of going into the Common Market regardless of the consequences. This is the truth. Of course I sympathise with the noble Baroness and with noble Lords opposite, but they have not the honesty to say, "Of course we cannot accept a policy of subsidies because if we were to do so the cost would run into thousands of millions of pounds". We are, of course, the cockshy of all world prices. We do not control this or that, and we cannot do anything about prices.
I must say, as a practitioner of many years' standing, that I get a queasy feeling in my stomach when I think of Conservative Government's saying that we are at the mercy of world prices. They did not say that at the time of Korea when a Labour Government was on the verge of breaking through the post-war malaise and then found themselves at the mercy of world prices. But the terms of trade changed. The Conservative Government had the good luck and this is why they stayed in power for thirteen years. After the settlement of the Korean War the terms of trade remained in their favour, and now they thave turned the other way. In my judgment, the terms have moved against us. This is bad luck for the Government and it is even worse luck for the country. The terms have turned against us permanently. The Government have committed us at the worst possible moment, as a result of going into the Common Market. They are pursuing a political will-o'-the-wisp and they have gone for a dear price policy.
I should like to take a bet—my pocket is at the service of all noble Lords—that what will beat them on the Common Agricultural Policy is sugar. M. Pompidou has won his election, and these Gaullists, with their certainty of La Gloire and their certainty of the Kingdom of Heaven, have to pay for it by a beet sugar policy which guarantees them £90 a ton. Of course, sugar comes into costs as a basic ingredient of almost every food and drink that is manufactured in this country. I will tell you, free and for nothing, of the extraordinary situation that in Jamaica, which is a natural hot-house and probably the world's No. 1 primary sugar producer, you

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cannot buy a pound of sugar. Sugar has vanished, because the coming of the Common Market has stultified or prevented capital investment that would make the production of cane sugar acceptable to the Jamaicans. They prefer to be unemployed rather than to cut cane.
There is another figure which I should like to quote your Lordships. I did not look up the figures before coming here, but I am sure that this is right. Last year, Jamaica was 31,000 tons short in her quota to the United States. It was redistributed all around the Caribbean, so what is bad this year is going to be much worse next year.
There is another factor: both Russia and China have a rising standard of living. So far as the Soviet Union is concerned the post-war reconstruction' is over; the nurturing of their heavy industries has passed to the point when they can look to a rise in the standard of living. They are in the market permanently for sugar, coffee and grain which has an effect not only on the cost of the primary products themselves, but, even worse from our point of view, it forces up freight rates. As the bulk of our commodities have to be imported into this country the results in the long run are quite catastrophic. I sympathise with the Government when they say: "We are hesitant on the policy of subsidies". They do not know what they are letting themselves j in for. I would advise my friends in the I Shadow Cabinet of the Labour Party to do a little sum to see what they are letting themselves in for.
If prices continue to rise and we subsidise them, we shall have nothing on poor old King Canute when somebody said to him, "Stop the tide coming in". It would be far more honest of the Government to say: "Sorry, we cannot accept this Amendment because it runs right in the face of all that we have been trying to do. We have set down a policy of having higher food prices, and they are going to go even higher yet". We have got rid of "Rule Britannia" and "wider still and wider "—we are going to have food prices going "higher still and higher". We shall not reach the ceiling this year or next year. Prices will go on rising. Do not let us be mealy-mouthed about this. This is an act of
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deliberate policy on the part of the Conservative Administration. So when faced with the logical consequences of that policy do not whine about it—the bills can be paid by the British public.
I repeat that there is absolutely nothing that we can do about it. I would have preferred the noble Baroness to have curtailed the debate and to have said: "Sorry, this is not a runner; the price is too high. In any case, we are not prepared to give open cheques for subsidies". The Government believe in higher food prices, otherwise they would not have backed that policy. It is a deliberate policy of higher food prices and the public have to pay the bill.
4.22 p.m.
LORD SHINWELL: NO one would doubt the sympathy of the noble Baroness in this matter of rising food prices. She stated that the matter of subsidies was not one for an Agency, but was a matter for the Government. She was speaking quite correctly in accordance with protocol. Of course it is for the Government to decide on this matter of subsidies. Nevertheless, it must be obvious to her and to other Members of your Lordships' House that in deliberations on food costs, and their effects, the matter of subsidies might emerge. I should like to have an assurance from her that there is nothing to preclude the Agency concerned from deliberating on this matter j of subsidies and making a recommendation to the Government. If they are to be precluded from doing so they are going to be hamstrung; they are going to be circumscribed in a fashion that is not in accordance with the principles that are embodied in this measure.
There is nothing objectionable about subsidies. There has been a great deal of discussion recently about the effect of subsidies. I understand that some Ministers—not in your Lordships' House—in the other place and outside on the public platform, and on television, have declared that food subsidies would have the effect of introducing food rationing and the black market. I should be interested to know why anybody in the Government feels that that is likely to happen. Subsidies are part of the policy of the Government. We have had subsidies in connection with Rolls-Royce, and I am not

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objecting. We have had subsidies in connection with the nationalised industries, and I am far from objecting to that. Time and again subsidies are necessary for the purpose of introducing new equipment into a service or industry that is nationalised. Subventions are necessary. Sometimes when the Government agree to reduce a debt associated with the nationalised services that is a kind of subsidy. There is nothing wrong with subsidies. For many years now the agricultural industry has been subsidised. I have never objected to that because it was essential in the circumstances, otherwise food prices would have risen substantially. Therefore, if there is no objection to having subsidies, why should the Agency concerned not be so empowered if it wishes to raise the matter of subsidies?
One could imagine a situation like this emerging: the question of food prices is under consideration; world food prices come into question and members of the Agency are faced with an obstacle; there is no solution to the problem so they turn their attention to subsidies. Why should they not do that and make a recommendation to the Government accordingly? If that is -the position, or ought to be the position, why not mention it in the Bill? I endorse entirely what my noble friend Lord Wigg said about the speech of the noble Baroness. Nobody doubts her sympathy in this matter, but her conclusion was unsatisfactory. This Amendment was ably moved by my three noble friends from the Front Bench. I say that because my noble friend Lord Beswick came to their assistance, although I think they could have done it even without his assistance—not that there was anything improper in what he said.
But why make heavy weather of this as if it was something almost obscene? It is nothing of the sort; it is very desirable in the circumstances. I deplore what I have to say: food prices are going to rise. In my lifetime, or in the lifetime of anybody in your Lordships' House, I doubt whether food prices will be reduced to any extent. This is inevitable. In those circumstances, sooner or later either this Government, or some other Government, will be faced with the need to bolster up the finance associated with food prices. They may find themselves in circumstances which obviously turn in the direc
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tion of subsidies. So we had better start now and make a proper job of it.
THE EARL OF ONSLOW: Perhaps the Committee might like somebody involved in beef production to say why prices have gone up. It is important that we should try to understand the situation. The price went up in January to approximately £22 a live hundredweight. Prices are now back by about 15 per cent. to £19 a live hundredweight. Unfortunately, this price reduction has not yet been reflected in the shops. Perhaps the Government could comment on that. The figure of £19 a live hundredweight is approximately the same price which was reached at last June's peak. In June this year it will peak again. I venture to forecast that it will reach £24 a live hundredweight.
There are these cycles in beef production. There are four or five reasons for this acute rise in beef prices. First, there is an enormous rise in the E.E.C. consumption; second, there is the Japanese consumption; third, there is the seasonal shortage which I have already touched upon; fourth, the Argentinians are producing less and eating more, and possibly one of the worst reasons—and I say this as an ardent pro-Marketeer—is the fact that when the "butter mountain" was in existence the E.E.C. Agricultural Commission encouraged the slaughtering of dairy cows. Somebody failed to realise that a lot of cows are normally necessary to produce a lot of calves. Perhaps if we had then been in the Market we could have encouraged them to give the subsidy which was then being given for slaughtering dairy cattle to single suckled calves and increase the production of beef, which then perhaps might have gone quite a long way to ease off the price rise which occurred in January this year and which I am afraid will again occur in June. Grain is down, too; wheat is off the top; barley is down— due to the denaturising of the wheat—£6 a ton to £33 a ton. I apologise if this sounds like a catalogue of woes.
As the noble Lord, Lord Wigg, and also the noble Lord, Lord Shinwell, have said, to introduce subsidies now would surely be extraordinarily costly, but we may have to think of it. However do not let us actually put it into the Bill at the moment. Let us think about it later if it becomes really necessary. The

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only real way in which the rise in the price of food can be slowed down, and possibly halted, is by an increase in world production. This means an increase in the efficiency of French and German cattle farmers and a decrease in the efficiency of the Argentinians in their beef production. Of course, this particular increase in food production has to take into account not only the rising populations but also the rising standard of living all over the world, so food production has to go on at an even higher rate than it would normally do if these other factors remained constant.
LORD BESWICK: Would the noble Earl allow me to intervene? Supposing the production was increased, supposing the price on the market went down, would he not agree that at £14·50 per live hundredweight the intervention price operates, beef is brought up and taken off the market simply to keep up the price?
THE EARL OF ONSLOW: I honestly do not know the answer to that question.
LORD BESWICK: The answer is, "Yes".
THE EARL OF ONSLOW: The noble Lord may think so, but I do not know the answer. The continuous review mentioned by the noble Baroness, Lady Young, must be rigorous because, as the noble Baroness, Lady Phillips, has said, the rise in the price of food affects the lower-paid worker much more than any Members of your Lordships' House and those are the only people who are intended to be protected by this whole Bill. I shall not support the Amendment but I hope the Government will be particularly rigorous in their review of the price of food.
LORD WOOLLEY: I rather agree with the noble Lord, Lord Wigg, that a policy of directly subsidising food prices on his premises would be an impossible undertaking because if, as he assumes, and many others assume also, the market price is going to remain at the present level, and possibly increase as time goes by, then it would be, as it were, giving a blank cheque which it might well be impossible to honour. On the other hand, my experience in agriculture is such that I cannot be as certain as many
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people are about what will happen, because I have seen so many things happen that one would not have thought at all likely. Undoubtedly we are going through a period when a combination of natural circumstances has created very high prices, and not only in food commodities but in primary commodities generally. We are suffering very much as a great importing country.
It is of course true that our Government have, quite deliberately and with immense determination, headed for a system which, among other things, carries with it the necessity for a high food-price policy. This has been an act of national determination—almost of national obstinacy, one might say—but we cannot complain if the chickens come home to roost. We might have expected that they would have had a little more time to hatch out, even to grow a few feathers, but they are almost coming home to roost before they are out of the egg. On the other hand, there are many factors that have come about which cannot be held to be directly attributable to this remarkable decision to bulldoze our way, regardless, into the E.E.C. I think it would be a mistake to assume—and I certainly could not make such an assumption, although one could say that it is a probability that this high level of prices will obtain.
I agree with the noble Earl, Lord Onslow, about the factors in the beef situation. I do not know whether I would even prophesy as far ahead as he would with regard to what the price will be next June. Speaking personally, I might say that I hope he was right, because I happen to have a yard full of bullocks, but I am not at all sure. I do know this: that yard full of bullocks is worth a good many thousands pounds less at the moment than it was about six weeks ago. This is where we have had great strength over many years in agriculture. We may not have had our prices but we have had stability and a considerable measure of security, and this has been of inestimable value to agriculture. It has been the basis on which agriculture has been able to get the finance: the basis on which it has been able to develop, but this I am sorry to say seems to be something of the past.
However, time moves on and circumstances and policies change, but as regards

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the idea of a subsidy and as regards the Agencies having the power to look into the matter, I do not think I could go along with the noble Lord, Lord Wigg, in saying that this is completely outwith—because the prices are going to be so high this would be a complete impossibility. It may be that in looking at the circumstances they will also have to look at the trends of prices. If, as I believe is at least possible, these particularly high prices may be a somewhat temporary phase, then one can also hope that the restraint on wages is going to be a temporary phase and is not something for all time either. Surely what is now being talked about is a mechanism to deal with current circumstances which are extraordinary.
There are two elements that are extraordinary in the present circumstances: one is holding down the negotiations and the natural right of people to improve their incomes by negotiation and within the practicabilities of the economy. That is an unnatural thing anyhow. The other extraordinary and perhaps temporary thing, though not perhaps unnatural, is the very high costs that are crashing up against this restraint and causing very intense pressure, dissatisfaction and great unease. It is no use people trying to wash this away and to say that the people who are upset are being unreasonable, irresponsible and so on. Undoubtedly there are some elements that are irresponsible—there always have been and there always will be. But this is not true of the majority of people involved. Therefore I think that there is a case here for the Government to consider. This is a case that is outside the general principles by which, for better or worse, they are bound within the E.E.C. The E.E.C. is considerably responsible for the intense need to counter inflation. That makes it absolutely imperative that we should do this. By the same token it is also open to us to take the practical steps to enable `those counter-inflationary measures to succeed.
4.42 p.m.
BARONESS YOUNG: I should like to begin by reiterating what I said at the beginning: that we regard the whole question of food prices as a very serious and a very important one. Many noble Lords have spoken in this debate and I should like to thank my noble friend Lord
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Onslow for his explanation on beef prices. It gives us one example of how food prices move. Of course, the other examples that have been given by the noble Lord, Lord Wigg, are ones that are known to us all.
The debate has centred on the question of food subsidies. This subject was raised by the noble Lord, Lord Beswick, and the noble Lord, Lord Shinwell, and again I think by the noble Lord, Lord Woolley. There are several general arguments against the whole principle of food subsidies which I am sure do not need any detailed elaboration from me. One is that everybody benefits from a food subsidy, whether he really needs it or not, and it has been the Government's view that those who need the help are the poorer members of the community. That, I think, was a point that was made by the noble Baroness, Lady Phillips, in her opening remarks, and she pointed out that the poorer people spend a larger proportion of their income on food than do the richer. It is for that reason that the Government have increased the family incomes supplement to help those who are poorer, and have also increased the old age pensions. I myself do not feel that this is a matter for which I should apologise, because old age pensions have risen by 55 per cent. since 1970—or will have done when the further increase comes in in October. That is considerably more than the comparable rise in food prices.
LORD BESWICK: The noble Baroness makes the point about the increase in the family incomes supplement. Supposing a National Health Service worker gets a £1·90 increase, how much of that will he lose in the family incomes supplement?
BARONESS YOUNG: I must apologise to the noble Lord. I cannot give him an answer to that one immediately. But I will let him know what it is. However, it sounds to me as if he has the answer.
LORD BESWICK: The answer is that when one takes the reduction in the family incomes supplement at the end of the current year, and when one takes into account the loss of free school milk and so on, the National Health Service worker with a £1·90 increase will probably be worse off.
BARONESS YOUNG: That would be very much of a marginal difference. The

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point that I was making is that we have taken steps to help the poorer people and we are looking forward to our tax credits system which will get rid of many of these anomalies, although I recognise that that will not come in immediately.
Perhaps I could now turn quite specifically to the Amendment before us which I do not think we have really looked at in very great detail. I said in my opening remarks that there was very little between us in regard to the first part of this Amendment. The debate, I believe, turns very much on the machinery of the Price Commission and the Panel. As I understand it, what the Amendment is asking for is that the Panel should have a statutory right to make these inquiries and to make recommendations about food subsidies. What we are saying is that the Panel could, if Ministers asked it to do so, inquire into food prices and, as I understand it, could, if a Minister asked it to do so, inquire into subsidies.
It may well be thought that this is a distinction without a difference, but I suggest that there are constitutional points here and that it is for Ministers, for the Government and for Parliament to decide on questions of food subsidies and whether they should be considered or not. We should get ourselves into great difficulties if the Panel, which is to be a subordinate body of the Price Commission, had powers to make recommendations about food subsidies so that one arm, as it were, of the Government was making recommendations in this way on a very serious matter of policy. I hope that I have said enough to assure noble Lords in all parts of the Committee that we take this important question very seriously. I give the assurance once again that the Price Panel would have power, if Ministers requested it to do so, to undertake these inquiries and, if necessary, to look at the question, if they are asked to, of food subsidies.
LORD HOY: May I ask the noble Baroness one question? Is she saying that if the Ministers do not require it or do not ask for it, then nothing can happen? Will the decision ultimately rest with the Minister, so that even if the whole of the public in this country want an inquiry to be made and if the Minister does not agree, then it will not take place? Is that what she is saying?
BARONESS YOUNG: What I am saying is that the Price Panel has certain functions but that it does not have a statutory right to make an inquiry into anything and it does not have a statutory right to make recommendations about food subsidies unless a Minister specifically asks it to do so. But I do not see that on such a very important and sensitive issue as food prices any Minister would be unaware of what the feelings of the public are.
LORD HOY: Indeed, if the Minister is saying that the Ministers would not be so insensitive, why does she take steps to prevent the Ministers from doing it and for the public to have any recourse? The noble Baroness said this afternoon that if the Minister decides not to do it, then the public cannot ask for it. If, as she says, they are so insensitive about it, obviously she ought to leave some power to the public to ask for such an inquiry.
BARONESS PHILLIPS: I should like to thank the noble Baroness for rather alone, it seemed to me, having to battle on against several very powerful arguments coming from this side of the Committee. I should like to thank all noble Lords who have made helpful contributions to the debate, including the noble Lord, Lord Woolley, the noble Lord, Lord Wigg, and of course my noble friend (on occasions) Lord Onslow. I appreciate very much the explanation of why the price of beef has gone up. I find that shoppers are very unreasonable people: they do not want to know why prices have gone up; they want to know why prices cannot come down.
What I find very depressing in the replies given by the Government is the fact that we seem to be totally in a cleft stick. If the prices to be exempt are to be prices paid to overseas suppliers for imports, I come back to my canned food again. If it is to be all fresh food, I am rather at a loss; I was trying to think what I would buy that would not be exempt. In other words, I find the Price Commission is a piece of nonsense, because it is not going to control the very things for which people need more money. You cannot control a man's right to have a little more wages or salary—call it what you will—if at the same time his basic needs are increasing in price, for whatever reason.

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I am interested in the debate about what is natural and what is unnatural. I am glad that the Argentinians are eating more—good for them! But cannot we produce more beef? This is a mystery to me. It is like that other "mystery", that if immigrants come in they are taking the houses. The answer, surely, is to have more houses. Cannot we have more bulls? It seems to me that there is one clear thread running through this problem. If you do not have some form of subsidy you will have rationing by price. It is as simple as that.
I was very sorry that the noble Lord, Lord Strathclyde, seemed to think that I was excluding the pensioners. I hope I have spoken enough times in this House to show that I feel very strongly about the pensioners. Of course, the percentage of income that they spend on these things will be much higher. Even with the noble Baroness's excellent explanation about family incomes supplements, would she agree that there is very little difference whether the Government subsidise on food or through a contribution to a man's income? I am sure there is a subtle distinction, but it defeats me at the moment. If we say that subsidies on food go to everyone, so do pensions; a retirement pensioner can collect his pension even though he may have quite a lot
of money. He is only subject even to the earnings rule if he earns. So I do not think a subsidy would ever be selected as the answer. That we must recognise. But we do know that if you have a low income there will be a proportionately higher expenditure out of that income on food. That seems to be basic.
The noble Baroness made reference to the fact that provision for the special panel was made in the Code. But she did make a very strong point, which my noble friend Lord Hoy mentioned, that that hinges on whether the Minister asks for it. It does say here that the Panel of the Price Commission shall be able to carry out special inquiries. Well, this is splendid; but I am not quite sure what is the point of doing the research if, at the end of the day, you cannot make any recommendations.
I do not feel satisfied about this situation, and I offer a solemn warning to the Government. You will not make this Counter-Inflation Bill work if you do not control with the same firmness the prices the people have to pay as you do the wages that they are able to collect.
4.55 p.m.
On Question, Whether the said Amendment (No. 20A) shall be agreed to?
Their Lordships divided: Contents, 46; Not-Contents, 103.

CONTENTS

Addison, V.

Gaitskell, B.

Royle, L.

Archibald, L.

Gardiner, L.

St. Davids, V.

Ardwick, L.

Garnsworthy, L.

Segal, L.

Arwyn, L.

Hale, L.

Serota, B.

Bacon, B.

Henderson, L.

Shackleton, L.

Beswick, L.

Hoy, L.

Shinwell, L.

Blyton, L.

Hughes, L.

Slater, L.

Brockway, L.

Jacques, L.

Summerskill, B.

Buckinghamshire, E.

Janner, L.

Taylor of Mansfield, L.

Champion, L.

Leatherland, L.

Walston, L.

Chorley, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

White, B.

Davies of Leek, L.

Wigg, L.

Douglas of Barloch, L.

McLeavy, L.

Woolley, L.

Douglass of Cleveland, L.

Peddie, L.

Wootton of Abinger, B.

Faringdon, L.

Phillips, B. [Teller.]

Wright of Ashton under Lyne, L.

Fiske, L.

Raglan, L.

NOT-CONTENTS

Ailwyn, L.

Berkeley, B.

Conesford, L.

Albemarle, E.

Bethell, L.

Cork and Orrery, E.

Alport, L.

Boothby, L.

Cowley, E.

Amory, V.

Brentford, V.

Craigavon, V.

Atholl, D.

Brock, L.

Croft, L.

Auckland, L.

Brooke of Cumnor, L.

Cromartie, E.

Balerno, L.

Brooke of Ystradfellte, B.

Daventry, V.

Balfour of Inchrye, L.

Caccia, L.

Davidson, V.

Barnby, L.

Cole, L.

Denham, L. [Teller.]

Belstead. L.

Colville of Culross, V.

Derwent, L.

Devonshire, D.

Hyton-Foster, B.

Onslow, E.

Dibgy, L.

Inglewood, L.

Porritt, L.

Drumalbyn, L.

Jellicoe, E. (L. Privy Seal.)

Redcliffe-Maud, L.

Dudley, E.

Kilmarnock, L.

Rockley, L.

Dundee, E.

Kindersley, L.

Ruthven of Freeland, Ly.

Eccles. V.

Kinloss, Ly.

St. Helens, L.

Ellenborough, L.

Kinnaird, L.

Sandford, L.

Emmet of Amberley, B.

Kinnoull, E.

Sandys, L.

Exeter, M.

Lauderdale, E.

Seear, B.

Ferrers, E. [Teller.]

Limerick, E.

Somers, L.

Ferrier, L.

Lothian, M.

Stamp, L.

Gage, V.

Lucas of Chilworth, L.

Strang, L.

Gisborough, L.

Luke, L.

Strange of Knokin, B.

Glasgow, E.

Lyell, L.

Strathclyde, L.

Gowrie, E.

Macpherson of Drumochter, L.

Suffield, L.

Greenway, L.

Massereene and Ferrard, V.

Swansea, L.

Grenfell, L.

Merrivale, L.

Teviot, L.

Gridley, L.

Milverton, L.

Thomas, L.

Grimston of Westbury, L.

Molson, L.

Tweedsmuir of Belhelvie, B.

Hailes, L.

Monck, V.

Vivian, L.

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

Mowbray and Stourton, L.

Wise, L.

Napier and Ettrick, L.

Wolverton, L.

Hanworth, V.

Northchurch, B.

Wynford, L.

Henley, L.

Nugent of Guildford, L.

Young, B.

Resolved in the negative, and Amendment disagreed to accordingly.

Clauses 6 and 7 agreed to.
5.3 p.m.
LORD WIGG LORD WIGG moved Amendment No. 21:
After Clause 7 insert the following new clause:
Special Cases
".—(1)A Trade Union or other organisation of workers (hereinafter called 'the applicant') may apply to the Pay Board for exemption from the provisions of the code concerning remuneration on the ground that they are a special case and the Pay Board shall determine whether the applicant shall be included in a list of Special Cases within seven days from the date of the application.
Provided that any applicant so included shall be removed from the list of Special Cases at the expiry of thirty days after notice given by the applicant in writing to the Pay Board.
(2) If the Pay Board determines that an applicant shall be included in a list of Special Cases the Pay Board shall be exempted in respect of the applicant—

(a)from the duty imposed on them by section 2(1) of this Act to have regard to the code for guidance of Agencies,

(b)from the provisions of section 7(1) of this Act to ensure that the provisions of the code which concern remuneration are implemented.

(3) The Pay Board shall keep under constant review the pay and conditions of any organisation ircluded in the list of Special Cases and shall take such steps as will ensure that such pay and conditions do not contrast favourably or unfavourably with the pay and conditions of comparable groups of workers.
(4 Where an application to be included in the list of Special Cases has been made under subsection (1) above the applicant shall not call, organise, procure or finance a strike of
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any of the workers represented by the applicant or organise, procure or finance any irregular industrial action short of a strike on the part of any of the workers—

(a)for the period during the consideration of the application by the Pay Board;

(b) while included in the list of Special Cases, until the expiration of a period of thirty days from the date on which the applicant has given notice in writing to the Pay Board of intention of taking any industrial action referred to in this section.

(5) For any period between the commencement of this Part of this Act and the establishment of the Pay Board the provisions of this section shall apply as if for references to the 'Pay Board' there were substituted references to the Secretary of State'."
The noble Lord said: We have now got to the point in the Bill when the Government have taken powers to move, subject to the approval of the House, a code of conduct. The two Agencies will come into operation, and the Pay Board will have powers to exercise the powers conferred by what will one day be the Act,
"in such ways as appear to them appropriate for the purpose of ensuring that the provisions of the code which concern remuneration are implemented".
What I want to do is to give the Pay Board the opportunity to solve perhaps the most vexed question in relations with not only unions but groups of work-people who feel that they are special cases.
Last night, when we were almost at the conclusion of our business, my noble friend Lord Beswick was challenged by one of the leaders of the Liberal Party to say what he would do about the special

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case, where he would draw the line. I propose to endeavour to answer that question; indeed, I have done it in the Amendment I am now moving. If we can find an answer to this question—and it would be presumptuous of me to suggest that I have succeeded, but at least I have attempted it—we should be well on the way to reaching the American position. Indeed I think it is not unfair to say that that is what the Government have striven for. They have been greatly influenced in their change of front—and I do not say that unkindly—by what has happened in America. There they have attained that great prize. They have a cooling-off period, and they have power to deal with the special case. The Nixon Administration, having set up the two Pay Boards, let them get on with it. They can seek information or take decisions, and they can look at what cases they want, and for the first five months of the new policy in America things went quite smoothly. Then the unions pulled out. But one thing that has not been challenged is the cooling-off period. Even at the height of the American Election Republicans and Democrats both accepted it.
This state must come about in this country if there is to be a cooling-off period which is effective. If one looks at the problem, not through the eyes of the C.B.I. or the T.U.C. but of the ordinary citizen going about his or her daily tasks, the attractions are very great. The commuters waiting for a long time for trains that do not come, or waiting at a bus stop in a "go-slow", would find it greatly attractive if they could feel that at that point in our economy that makes the greatest impact on an individual's personal convenience disputes could be dealt with in a sane and rational way. That would be a large step forward.
I hold the view—not that I claim any specialist knowledge, but I certainly have a very great interest in it—that the state of negotiating machinery in Great Britain is really at the bow and arrow stage. One of the least competent of the Ministries—and here I suppose the responsibility must lie with successive Administrations and Ministries—is the Ministry of Employment. Of course their conciliation officers are amateurs in the extreme. Many of them are estimable people, probably recruited from employ
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ment exchanges and the like, and if they are to play a role of conciliation they will arrange a meeting place and see that the fires are lit, the cups of tea are made (or whatever form the light refreshments take); they will see that the blotting paper is put out, the inkwells are full, and the pencils are sharp. Turning now to the United States, there the conciliator is a well-trained man, earning a high salary and having a first-class brain. The result is that a tremendous number of problems which might lead to strikes are solved on the spot.
In the early part of this year I had some discussion with trade union officials in leading unions. I found that they felt exactly the same way, and proposals began to emerge which one hoped the Government would pick up. I went a little further with two of my friends—both well-known public figures, and one of them, a man of great wealth, I found was sufficiently interested to talk about raising some money to enable conciliation officers to be trained as specialists in the art of conciliation. This is something that has to be tackled if we are speedily to get away from the nuts and bolts stage. One can easily fix on a percentage and say 80 per cent. or 90 per cent., but I am certain that with trained conciliation officers a considerable number of disputes could be solved almost on the shop floor and before they ever reached the point where people began to feel angry.
I am not suggesting that my humble and very amateurish, but what I hope will be regarded as public-spirited, effort, should lay the foundation; but I am certain that I am expressing the views of officials of very powerful trade unions, on the one hand, and of employers—men of great influence—on the other hand, when I say that here is a gap to be filled.
I do not want to keep your Lordships too long, and if the principles upon which this Amendment is based are wrong I hope very much that the Government will go away and do a bit better. But what do I set out to do? Here I am very conscious of the point that was made by the noble Lord, Lord Byers, who administered what he thought was the coup de grace to my noble friend Lord Bcswick last night when he asked: How will you deal with the special case? My Amendment deals with the special case

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in this way. A group of workers who claim to be a special case must say so. They must say, "Looking all around us, we think that our industry is a special case." Let us suppose that they are representatives of the nurses, the teachers, the gas men or the hospital workers, because I am thinking not only in terms of current disputes but right across the board.
Let us take a group of workers, such as the nurses, who are probably not in a very powerful position. They are public servants of great integrity whom we all respect. The nature of their calling does not make them spend very much time on their pay and conditions. They are not militantly minded; they are people who are conscious of their duty to society, which they discharge admirably, but in the nature of things they tend to fall behind. The nurses' representatives would go to the Pay Board and say, "We think that we should be treated as a special case". The Pay Board would then look right across the board and see whether, in their judgment, the nurses were a special case. I take the case of the nurses because they are not actively engaged in a dispute; a state of war does not exist at the present time. The nurses would then say, "Thank you very much. You accept us as a special case and we, for our part, will undertake an obligation. If we are treated as a special case we undertake not to finance, to engage in or to organise an industrial dispute without giving 30 days' notice." So in becoming a special case, they accept an obligation. The privilege of being regarded as a special case carries with it the obligation, which they invite and accept, that there will be a cooling-off period of 30 days.
In return for that, the Pay Board would be under an obligation to keep the pay and conditions of the nurses under constant review. In my Amendment I have used the balancing words" favourably or "unfavourably", but of course I should hope that such workers would do slightly better than that, and that if it was difficult to compare them with other workers the Pay Board would look after them and see that they at least kept up with other people and perhaps even did a little better. So that to be regarded as a special group in the first
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place, the initiative must come from the group of workers and the Pay Board would be required to deal with the case within a period of seven days.
I say that because I am conscious of the current disputes, and the way to get a reasonably quick decision is to lay upon the Pay Board the obligation to deal with a case within a specified period. But there is no magic about the period of seven days, and if the Government said that the period must be 14 days or 30 days I should accept that. But there must be a limit of time after the Pay Board has said that there is a prima facie case, when a group of workers have said that they will not undertake strike action, and I have tried to use words which make the situation absolutely watertight. Of course—
VISCOUNT AMORY: Will the noble Lord allow me to ask one question? Under this proposal, would a special case always be a special case or would it be a special case until it had been considered?
LORD WIGG: The noble Viscount and I are old political opponents, but I assure him that if ever he puts down an Amendment I shall always do him the courtesy of reading it. If he will do me the courtesy of reading my Amendment, he will find that I have tried to deal with that point. I have tried to think round it and through it, because I realise the danger, but if a group of workers wants to get off the special list they must give 30 days' notice.
VISCOUNT AMORY: But if they do not give notice, do they remain indefinitely on the special list?
LORD WIGG: No. I say that they accept an obligation. The noble Viscount has much wider experience than I, and has access to professional advice which I cannot afford. But this point could be covered by way of a bond. There are many ways of tying this in. Once they have applied to go on the special list, there they stay until they come off and before they come off they have to give 30 days' notice. I have suggested a period of 30 days, because I think that there must be a cooling-off period of at least 30 days. But if somebody suggests 40 days, 45 days or 28 days, I will accept

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that. But once they are on the list, they stay there until they ask to come off, or at least they stay there with an obligation. In terms of the words I have used, it would be a legal obligation. If the noble Viscount is not satisfied, there could be a guarantee or something of that nature that would make them liable to civil action. I want to create conditions whereby groups of workers, the withdrawal of whose labour would make a fundamental impact upon the convenience and wellbeing of our society, will be put in a position of special privilege, but at the same time they will have a special obligation.
VISCOUNT AMORY: I have read the noble Lord's Amendment. I think he is now saying that, once a special case, a group will remain a special case unless unilaterally it asks to be taken off. The point to which I want an answer is whether the Pay Board itself, having dealt with the situation, could then say, "We do not think you are any longer entitled to remain a special case."
LORD WIGG: Certainly I have not provided in my Amendment for a group being discharged from the special list, but I should have thought that any Government would be only too glad for the list of groups of workers who would accept a cooling-off period to grow longer and longer. That is what I am striving for, because this is at the heart of the success of the American policy. By painless methods, by consent, we want to introduce a cooling-off period. In a free society, it is fundamental that men and women should have the right to withdraw their labour. The right to strike is absolutely basic and we must at no time do anything that impinges upon that right. But, equally, society as a whole has claims. Just as we accept privileges we must also accept obligations, and the obligation here balances the special privilege that the Pay Board will look right across the board at a particular trade union group. But if the noble Viscount has any hesitancy on that point, I shall gladly meet him. I have no objection whatever to saying that, if for some reason which I cannot foresee, the Pay Board wanted to kick somebody off the special list, it could do so after giving notice. But I should have thought that to get groups to accept a cooling-off period deliberately and
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voluntarily, was the very object which the Government had in mind.
Having adumbrated the policy which has been stirring my thinking for some time, may I say at once that of course I have been influenced by the current difficulties—the difficulties of the gas workers, the hospital workers and the like. Again, it would be utterly unfair for me to claim specifically that I have the support of this group or of that group, but I have paid them the courtesy of sending them my Amendments and inviting their comments, and I think I can rightly say that they were not unfavourable. I claim to speak for nobody but myself in advancing this proposal, but I have drawn my Amendment in terms to deal with the current difficulties. I realise only too well that when you have a state of war and active operations are under way it is very difficult to draw up the terms of an armistice and to apply them with just a snap of the fingers.
Therefore, what I have in mind is this. There is going to be a gap between the passage of this Bill through this House—it will have to go back to another place—and its receiving the Royal Assent. So what my Amendment does is this. In subsection (5) it confers on the Minister the power that the Pay Board will subsequently have. So let us say that the hospital workers, for example, said, as they do say, "We should be treated as a special case". Then they would make an application—and the Government have indicated that they want the Pay Board, even before it is formed, to get on with the job. They would make an application to be treated as a special case, and if the Pay Board thought there was something in it—and they would look at the problem not only in the terms of the current dispute but in the long term—they would say, "All right, you can come on the special cases list". Then the Pay Board would presumably tell the Minister, under whose umbrella they are working at the present time, in which case the Minister would then be able to act and they would be accepted as a special case. But by marking the application to the Minister officially—this is the point—they would accept the obligation of the cooling-off period, so it would make it possible for industrial action to be suspended forthwith.

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Again, of course, it may well be that in my clumsy, bumbling efforts to deal with the long-term policy and the short-term difficulties I have slipped between two stools, but what I have endeavoured to do is to think out a long-term strategy which will deal with those who claim to be special cases, and to draw the line. This is the difficulty that is constantly presented, not only by the leaders of the Liberal Party but by the Government: that if you let one special case through you let the lot through. Or, where do you draw the line, and how many more will you let in? In this case, the more that come into the net the better, because the more that come in the longer the list of those who have accepted the obligation of the cooling-off period. It seems to me that this is where we have to aim. I am not making any political point, and I am not making any point which is unkindly individual, but it is perfectly clear that the Government have changed their policy. We are all entitled to change our policy: Mr. Wilson changed his policy. Of course, there was a difference in the reactions of Mr. Heath and Mr. Wilson at the point of changing their policy.
I am prepared to accept that the Government are as convinced now as they were convinced in the opposite direction when they first formed their Administration. I am absolutely sure that the Government want to make this policy work. I am completely sure about it as regards the Leader of the House. I accept his sincerity without any question. I have watched him very closely during the last couple of days, and I am sure that there is no man in this Kingdom who is more anxious to make this policy work, and more conscious of the difficulties involved in doing it, than is the noble Earl, Lord Jellicoe. I want to help him. I am not one of those who believe that the heavens are going to fall if inflation goes on. That does not bring down nations. But what will happen if inflation is not cured in this country is that our democratic institutions may be called into question, because a society which, as I said yesterday, remains helpless in the face of grave economic difficulties is a ship without a rudder. Therefore, we all have an interest in so far as we accept the concept of democratic institutions. We all have a direct interest
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in seeking to make this work. I accept without any question that the Government want to make it work.
I am not throwing any bricks because their conversion was of recent date. I am absolutely certain that they have been no more than clumsy in their handling of the trade unions. I wish that in their discussions with the trade unions they would go back to fundamentals and discuss principles rather than a take it or leave it "attitude. But, again, I understand the difficulties. If they meet the trade unions, as they did last autumn, and think they are near agreement, and then find out that the trade unions want to discuss taxation and industrial relations, that is because the union membership —and, after all, union leaders are under tremendous pressure from their membership—is interested in those two subjects. When they come out of 10 Downing Street, no matter what they have agreed inside they have to present it in terms which are acceptable to their membership. Therefore, they have to be very conscious of that and have to raise these subjects. If they do not, they are destroying their own influence with their membership. They are just forced to do it.
Likewise, of course, the Government, too, when they have taken decisions, when they have finished discussions with the trade unions, are answerable to a wider electorate than the trade unions. Of course they are going to talk to the Confederation of British Industry. But their accountability goes far wider than that. I hope noble Lords will bear with me in this. A Government, when elected, have just commanded the Election they have got power. But obtaining power and putting their policies into operation are very different, because in all societies, be it Hitlerian, Stalinist or a democracy such as our own, government is always by consent. You get the consent in different ways—Hitler by the concentration camp, Stalin by terrorist methods. Here we do it by persuasion: but the Government suffer from a grave disability. So does the Labour Party. The disability is that you have a Press in this country and a media which is the reverse of objective. They do not see that a free Press and a free media in a free society have a fundamental task of educating pubic

209
opinion; and every time they gloss it over, yes, they hurt the Labour Party, but (and this is perhaps God in his wisdom) the toll is exacted—they also hurt themselves.
Now, with the difficulties that are around us, we may be in sight of success. As I say, the Government, having backtracked, have now looked for help and inspiration to what happened in the: United States. I have had a look at it, 'too, on the spot. Of course, I have not got the access to information that the (Government have, but I used my powers of observation and I talked to people of influence. I have seen what the weaknesses are and how it works, and then I have looked to see what the problem is here. The problem here is amateurish conciliation machinery. But you have, on the one hand, the unions willing to develop a professional approach. They are most anxious to do it. On the other hand, I believe that the more enlightened employers want to do the same. That, I believe, would bring about fairly quickly, over a period of the next year or two, an enormous improvement in industrial relations in this country—a competent professional approach by highly-trained practitioners.
Then the question is how to deal with these points where the shoe rubs; the groups who claim to be special. When you look at their problems through the spectacles of intelligent men wanting to be fair, one must admit that they have a case. If I were a hospital worker, a gas worker or an engine driver, I should feel, and would probably react, in the same way as they do. But, equally, if I were a commuter, and not the fortunate possessor of an old car, I should feel as a commuter must feel, or as the woman who has to wait in the queue must feel, or as a patient who cannot get a bed in a hospital must feel. This is an effort to deal with the problem of the group which claims to be deserving of special treatment and to do so without opening the floodgates and creating the difficulty that if you admit one case where do you draw the line? I have tried to draw the line by putting the onus fairly and squarely on the groups themselves to make their claims. They claim to go on the list. If they go on the list the privilege they claim—and this is good democratic practice—is balanced by the obligation they
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undertake to society as a whole not to withdraw their labour without a cooling off period. I beg to move.
LORD DAVIES OF LEEK: It is a pleasure to support my noble friend. I shall be very brief. I do not want to make a Second Reading speech, but this has been an exercise in the art of conciliation. I have listened carefully to what my noble friend has said, and even if there is some drafting that does not quite fit in, nevertheless the purpose of the new clause is crystal clear. If I may use a figure of speech, its purpose is to be a social shock absorber in conciliation with special cases and low paid workers. That is putting it briefly. In the Bill as we have it, the Pay Board will approve or reject any proposed increases in accordance with the Code, though within this Bill the Minister concerned will be able, I take it, in exceptional circumstances to approve increases which may have been turned down by the Board. I understand that that exception also applies to the Price Commission. We are asking here that these special cases should be attended to. The noble Viscount asked my noble friend a question. I followed carefully the answer, and it is quite clear what will happen to the special cases over a 30-day period. It will have established a cooling-off period. It will also have its effect among the lower paid workers, some of whom have had a marvellous record of industrial peace for half a century, but who have suddenly become bloody-minded because of lack of information. That is one thing that we are paying the price for.
This Bill, we know, is modelled on American thinking and it is noticeable that the leniency of the Price Commission is in striking contrast to the severity of the pay control in the Pay Board. My noble friend's Amendment is an effort to achieve this cooling off period. If we are told that the Government do not like this phraseology I hope that before they reject it, or indeed if they accept it, that a formula will be introduced into the Bill to make clear that we are struggling to find an answer to this problem of social peace and the cooling off period. One of the things we are paying the price for to-day is the apotheosis of the planner, the apotheosis of the technocrat. They are becoming remote from the people at

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the point of production. Our social systems are spinning out of control because of the remoteness of people in swivel chairs drawing up and drafting Bills. This is where draftsmen and those of us in Parliament can get near to the people who are feeling the social cost of underpayment. There are dangers—political, cultural and psychological currents—being let loose in society, and passivity is passing because of neglect.
I would therefore beg the Government to look at the essence of this matter, because with all due respect I think there is a dash of creativity in the new clause that my noble friend has moved. It would help to quieten down or, shall I say, reduce the rising levels of uncertainty about the underpaid workers that are produced in society by the terrific acceleration of change which we are meeting to-day. I hope therefore that this Amendment will not be turned down in a peremptory manner, but that it will be dealt with in much the same way as my noble friend has drawn it up. He has obviously given a lot of time to this question and I am grateful to him for having presented to the Committee the opportunity of discussing it.
5.35 p.m.
VISCOUNT HANWORTH: I feel that this Amendment has an clement of inspiration about it, and though I do not suppose for one moment that the Government can accept it as it stands, I would appeal to them at least to give serious thought to it because we are dealing with a problem for which there is no obvious solution. As everybody has said, in the end you cannot fight a battle which neither side can win. It is this sort of confession—it is not even a confession—that might just free the atmosphere and start something better again. So I say once more, as has been said by the noble Lord, Lord Davies of Leek, that the Government should look at this matter really seriously, and perhaps discuss it or the possibility of it, later on with the trade unions.
5.36 p.m.
EARL JELLICOE: I should like to assure both the noble Lord, Lord Wigg, and the noble Viscount, Lord Hanworth, that I would be the first to agree that this matter touches on a very real problem, and I think it does so with a consider
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able degree of ingenuity and more than a dash of imagination. But I think the noble Lord, Lord Wigg, said he had thought round this problem and through it in drawing up his Amendment. I have thought round it and through it, though not to the same extent that he has, in considering his Amendment and reflecting on what he has said. I am going to say some softer things in a moment but I think it would be right for me to say that I am rather reminded of what he said to my noble friend Lady Young, to the effect that it would have been better in rejecting an Amendment if she had come out straight away and said, "No, this is not a runner. I am terribly sorry, but it runs counter to a very great deal of what we are about".
The idea which the noble Lord, Lord Wigg, has adumbrated could, I suppose, at a certain stage be a runner. I do not think it is a runner now; in fact I am quite certain it is not a runner so far as the Government are concerned. I think I must say why, because the Amendment has been seriously moved and seriously supported. The noble Lord, Lord Wigg, said that the Amendment was intended to bite upon our current difficulties and upon the present situation; and that is a situation which, if this Bill goes through, finds us on the verge of Stage 2 of our incomes policy. My first objection to the Amendment is that acceptance of it would, I am quite certain, despite what the noble Lord, Lord Wigg, has said, drive a coach and horses through our announced policy not to admit special cases during Stage 2. It is a comparatively brief stage, which starts at the end of this month or the beginning of next month and ends in the autumn.
I have made it clear on a great many occasions recently that we accept that the combination of standstill in Stage 1 and of the ceiling on pay increases in Stage 2 —a very different matter—will leave some groups with a real feeling that they have been treated harshly or unfairly. I accept that. I have also made it clear that not only I personally—which does not matter very much—but the Government are not unsympathetic to these cases. Your Lordships have shown that you are not unsympathetic to these cases. We are all aware of them, well aware of the trouble they are causing and the trouble which flows

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from them. Nevertheless, I sense that a great majority of your Lordships agree that it really is in the paramount national interest to bring inflation under control. That being so, we are not in a position to allow special cases under Stage 2. I, personally, entirely share the view of the missing doyen of the Liberal Benches, the noble Lord, Lord Byers, that one special case breeds inevitably another and that the admission of one is therefore likely to lead to the torpedoing of the anti-inflationary vessel almost before it is launched.
As I see it, despite what the noble Lord has said, the acceptance of his Amendment would mean acceptance from the start of Stage 2, whatever the safeguards, of precisely such special cases. I believe, despite what he has said, that it is bound to open the flood gates. Moreover, I very much doubt whether it would lead, that being so, to one objective which I think he has much in mind and which we all must have very much in mind, the lightening of the present murky industrial relations scene. If some special cases were accepted and others rejected —and this is bound to happen unless all are accepted— fresh grievances will arise which will give ground to further disputes and tensions within our industrial society.
I am the more confident in advising your Lordships to resist this Amendment because I am convinced that the way forward which the Government have proposed is the right one. We recognise that the concept of fairness is at the root of this problem and to a large extent this turns on the problems of relativities and anomalies (and I wish we could get away from this jargon) within groups of employees and between employers and employees. As the noble Lord, Lord Wigg, has said, this is perhaps the most vexed problem that we have to grapple with. This is one of the real nettles that we have to grasp in industrial relations.
We have decided to seek the help of the Pay Board in their advisory capacity to assist the Government in devising guidelines under which cases of this kind can be considered in relation to Stage 3. This is one of my difficulties over the Amendment of the noble Lord, Lord Wigg; for I see in it no guidelines which would help the Pay Board in deciding whether or not to admit a special case. The only guideline—and I hope that I
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am not being unfair—is whether or not a group of employers or employees are in a position to cause great difficulties for our society.
LORD WIGG: Not "great" difficulties. I took the nurses. If the noble Earl wants to put me on the spot and to think of another group, I invite him to do so. The nurses are quite a small group, badly organised and highly regarded, a group whose services, if withdrawn, would tear a gaping hole in our society. This House ought to give them the opportunity of opting out from industrial action and, in return for opting out, they would be given the privilege that their pay and conditions would be kept under objective review by a body in which society as a whole will have the complete confidence that it does not have at the moment.
EARL JELLICOE: I take the noble Lord's point. I think I had already taken it. I understand that the opting out would be short: only between thirty and forty-five days—whatever the period may be. The noble Lord, Lord Wigg, called in aid the nurses. I do not want to say anything that is going to inflame or further trouble our already troubled industrial scene; but since we are on the subject of hospitals let me refer to the National Health Service ancillary workers whose problems we read about every day in the newspapers. Let us take them. What we suggest is that if, as a result of the coming down of the chopper or the drawing of the frontier between the standstill and Stage 2, there is a problem of unfairness affecting that group of workers, this problem should be looked at, and looked at straight away, by the Pay Board. We propose that that study—it could embrace whole groups of workers and employees and need not be confined to those who are taking industrial action of one form or another at the present time—should have a high priority.
Formally, it must await the Royal Assent to this Bill, but I should like to remind the Committee that my right honourable friend the Secretary of State for Employment has already announced the proposed terms of reference for that study. He has already said that he is proposing to appoint Mr. Derek Robinson as Deputy Chairman of the Pay Board

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with special responsibility for handling that study. I think that those who know Mr. Robinson and who know of his knowledge of Whitehall, of the industrial scene and of the unions, know that he is admirably qualified to undertake that particular study. I should like to add that the Pay Board will be asked to report as soon as possible (and in any event not later than mid-September) on the treatment of those cases where anomalies have arisen, and particularly those which have arisen as a result of the impact of the standstill on groups like the hospital workers or the gas workers whose pay is linked with other settlements or other groups; for example, the Civil Service, whose pay is linked by formal procedures such as Pay Research for comparing their pay with other groups.
I am sure that this is the right way to proceed now. We need now to get at the facts and to get at them urgently, but we need to consider them as they affect one group of workers in relation to others. Only by proceeding in this way can we avoid a repetition of all that endless leapfrogging of wage claims to which we have all become far too well accustomed. It is also, I believe, the fair way of proceeding: to deal with these problems not in isolation, not as special cases, not singled out: on their merits but also in relation to the merits of other cases.
Meanwhile, those who feel aggrieved (and some have cause, possibly, to feel aggrieved) will be eligible for the April 1 or earlier (but not later than April 1) increase, the 4 per cent. plus £1—something between 7 per cent. and 8 per cent. This is an increase in pay not to be sneezeed at. I would also emphasise that once again we recognise the need for getting on with this study and we recognise the need for proper consultation. That is why the Board will wish to take full account of any view which individual citizens, employers or organisations such as the C.B.I. and the T.U.C. might wish to put to them on the matters covered in the terms of reference given to the Pay Board. My right honourable friend the Secretary of State for Employment has made it clear that the Pay Board in its present embryonic form is ready to receive that evidence. That we believe to be the right way of proceeding now at this stage
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in relation to what is termed the special cases.
In conclusion, to come back to what the noble Lord has said, I should be the first to agree that the proposal that he made is a far-reaching and a radical one. I think that what he has said about the need for improvement in conciliation machinery gives plenty of food for thought for us all. I would tend to dissent from what he has said about some of the conciliators, for some of whom I have the highest regard, and from what he has said about the cooling-off period and about this problem of matching power and responsibility in our industrial society, which is a very real problem. I believe that there may be a germ of an idea here which could be further developed. I am certain that this stage of the policy is not the moment for it, but I will undertake that the noble Lord's ideas will receive the due consideration of my right honourable friend the Secretary of State for Employment.
LORD BESWICK: I am sure we all appreciate the spirit in which the noble Earl, Lord Jellicoe, has replied to the case which my noble friend Lord Wigg has put forward. I was going to say that I agree wholeheartedly with what the noble Earl said. He told us he was quite certain that this was not a "runner" so far as the Government were concerned. It is the fact that the whole attitude of the Government, as distinct from the whole spirit of what the noble Earl was saying, has been absolutely negative and against the sort of creative approach which the noble Earl has shown.
EARL JELLICOE: I dislike intervening so early in Lord Beswick's remarks, but may I say that, whatever the inflexion in my voice may have been, what I was saying was square in line with Government policy.
LORD BESWICK: I do not know about the inflexion in the noble Earl's voice; I was referring to the words he used, and I was complimenting him on them. I meant that quite sincerely. I thought that the noble Earl had seized the essence of what my noble friend was saying and was responding to what he said. I said, and I say it again, that there is a difference —the noble Earl will have to take this—between his spirit and the action of the Government of which he is a member.
EARL JELLICOE: I must interrupt the noble Lord, Lord Beswick, to say again that there is no difference whatsoever between the policy which I have advanced and that which Her Majesty's Government are following.
LORD BESWICK: I am sorry that when I try to force a compliment down the throat of the noble Earl he should seem very reluctant to accept it. Here we have been talking about special cases and the difficulty in dealing with a dividing line. As my noble friend Lord Wigg said, there are some people in the Cornmittee who find it difficult to draw a dividing line. I agree, it is so much easier to say, "No"; to have no dividing line and to say that nothing should be done. That has been the attitude of the Government. The noble Earl himself said in an earlier speech that they were not prepared to give an inch in response to industrial action. As I have said, his right honourable friend the Prime Minister said on television that they were not prepared to give a penny in response to industrial action. It is much easier to adopt this negative, rigid approach. But I am reminded of something which the late Sir Stafford Cripps once said, and there are those in the Committee who may remember it. He was told that in making a certain concession he was breaking, if not a regulation, the spirit of a certain regulation. He said, "Yes, I have broken that regulation. It is necessary sometimes to make a choice. In this case I have decided that it is right to give way, and I propose giving way." He emphasised the moral attitude; that occasionally it is the duty of us all to make a choice.
I think there is a case for making a choice in respect of some of these issues before us. All of us would agree, I think, that there is a special case so far as the Health Service workers are concerned. It is a remarkable thing that we should have the whole of the Health Service, all the highly-paid people and all the skills and technical equipment, and yet it can all be set at naught because those who launder the linen have gone on strike. We have under-valued those Health Service workers, and it was not until they said that they would not do the work for that amount of money that we began to think about what was involved and to realise that we have under-valued
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them. What we on this side of the Committee have said during earlier stages of the Bill, and what my noble friend has said on this Amendment, is that it would be better to make provision for special cases; it would be better to make the moral choice; that here is a special case and we are prepared to look at it.
There is no reason why we should not look at special cases. Indeed, the noble Earl himself has said that, one way or the other, the Government are struggling to deal with things specially. He has told us about the arrangements set up under Mr. Robinson and that it is hoped that by September they will be able to give some sort of recommendation. There will be an attempt made to find a way, under the law, to come to an agreement with the gas workers. How much better it would be if there were a positive or a creative approach to these matters; if we looked at them above board to see whether we could come to some special arrangement. I think that the country would accept it if we said that there is a difference between the Health Service workers and, for example, the car workers; that we admit it openly and that we are proposing to make some special dispensation in the case of the one but not the other. We are all interested in combating inflation. I do not believe that any of us would say that an extra payment to the Health Service workers would be inflationary. It would not affect the fight against inflation at all if some special dispensation were made in their case, and I suggest that it would help the moral climate of the country if we went about things in that way. I should not like to claim that this clause and machinery which my noble friend puts forward is precisely the way to do it, but I agree with the noble Ear' that it contains more than a germ of an idea, and I hone that it will be considered.
5.58 p.m.
LORD WIGG: I will not embarrass the noble Earl by thanking him overmuch for the way in which he attuned his mind to what I said. If I could speak German I would use a word which illustrates a situation when the voltage is all the same, but I cannot pronounce the word. Obviously the noble Earl is the spokesman for Government policy and he cannot deviate, not even by a millimetre, from putting Government

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policy fairly and squarely, but as he has been kind enough to say that my thinking, or the words I have used, will be taken into account at some time or other, perhaps by the Secretary of State for Employment, I would put this to him. In the first two years the Government, clearly, were on attack. Let me not say that they were mistaken. I think I can explain that—at least, I can explain to my own satisfaction. The previous Labour Administration had not into difficulties over their labour relations, and the unions, at least from a Conservative point of view—not necessarily from mine—were a bit bloody-minded. Mr. Heath arrived at 10, Downing Street, and was faced with the same problems that faced the Labour Government. He said to himself, or if he did not others said it to him, "Well, if the trade unions are bloody-minded towards a Labour Government, we have no right to expect that they will be any less bloody-minded towards us." Therefore he proceeded to deflate; to attempt to solve the problem in the traditional Conservative way—deflate and create unemployment to get the little bit of elbow room which was so elegantly described by the late Mr. Hicks; a description which I found of the utmost use in my election campaign in Dudley. Mr. Hicks represented the Conservative interest in West Birmingham and he said that the only time when Britons will work is when there are ten men looking for nine jobs; or, put even more elegantly, empty bellies are the only things that will make Britons work. That is deep down in the Conservatism of yesterday. I am prepared to believe that the new disciples do not believe it now.
I could weary the Committee by repeating all the things that were said. It is a lengthy list if I quote just the Prime Minister. What he had to say about wages policy was all good coinage in political warfare. But every member of the Committee knows that the Government were mistaken, and the Government, rightly, in the national interest, changed their policy. If they have been mistaken from 1970 to 1972, is not just possible that they are mistaken again? But they are acting now as if they are certain that their present policy is going to pay off. I had in mind when drafting this Amendment
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the Government finding themselves in difficulties and how they can save face with their own supporters. I set out to achieve that end, and to make it possible to get those who are engaging in industrial action and strikes to go back to work. That was my first approach.
Perhaps I may even remind the noble Earl of some words used by Cromwell when he wrote to the Kirk:
"I beseech you, in the bowels of Christ, think it possible you may be mistaken."
Just contemplate the possibility that the Government have made these blunders. They are like The Times, which has never been right on any subject. Just as an aside, I can assure your Lordships that there is no major issue in British politics since 1900 onwards on which The Times has not been wrong; and the Government obviously follow very slavishly the advice that they get from The Times. But I am prepared to believe now that, under the pressure of events, the possibility exists that they are right. But if they are wrong—they will agree that their popularity is comparatively unimportant—they will have landed the country in the most almighty mess, because the problems of inflation will not be that much better, but that much worse.
What again the Minister does not understand, I am quite sure, is that if you go along and look in the Cabinet Room at 10 Downing Street you will probably see that they have a record of victories. You look at the wall and there is probably a light over the victory over the Post Office workers. That was an empiric victory indeed! If we have not got the worst postal services in the world we are certainly heading in that direction, and it is not because of the postal workers. The costs rise; they are terribly short of labour. Go and talk to the chaps who have to run the South-West District Post Office, honourable gentlemen, who live in the heart of London. Post a letter in London on Friday, and see when you get it. Pay your 3p, and see when it will turn up. The more expensive, the more nuisance. Do not blame the Post Office workers. It is the Government who are to blame.
If the Government have an Election—and it is talked about; "Have an Election", they say; "win a great victory"—what will they have solved? Instead of a majority of 30 in the other place

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suppose they have a victory as great as in 1931. That was a great victory, was it not? It was a great victory that made 1945 absolutely certain. It would not solve a single problem. If the Government drive back the hospital workers and the engine drivers and they all go back and pull their forelocks and say: "We are glad to report back for work, sir; we are absolutely starving", the Conservative Government will have won, but what will they have solved? They will have left behind a legacy of bitterness and hatred that will last for two decades. It will last for a generation. Indeed, the bloody-mindedness of many of the groups of industrial workers is because of the memories of what happened to them in the Welsh valleys. The noble Lord, Lord Davies of Leek, and I come from the same part of the world, North Staffordshire. We know only too well the legacies that were left behind in parts of his constituency, and in Kidbrooke, where I lived for a long time, where there was not 20 per cent. unemployment, not 25 per cent. unemployment, but 100 per cent. unemployment. The memories of that do not die with the passing of one generation, or maybe the next generation.
If we are to survive, because our margins of strength are narrower we have to find a completely new basis. That is what I have attempted to do. I have attempted to find a new basis which the Government could accept with honour and without loss of political face. And they have said, "No". They have not shut the door in my face; they have banged the door in their own faces. They banged it yesterday when they rejected the first Amendment. They have banged it again now. A noble Lord said to me as we finished: "Well, George, they said No' to that one, but I tell you what you can do. They have given you the chance to turn round a bit later on and say, ' I told you so'."
I am not going to withdraw the Amendment. I hope that it will go to a Division, but in any event it will have to be negatived. Before this year is out. I will say to the noble Earl, if he is still sitting on that Bench: "I told you so." They are going to stand fast; they are going to stay put. They are not going to see even a chink of light. The point was made yesterday that they could have drawn the line much later and could have
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escaped if they had wanted to. But this is essentially the Heath hatchet policy. He has got to treat these chaps as he wants them treated. This is the strong, iron hand. He has never realised that there is no strength that way. The real strength is in saying: "Yes; I made a mistake. I have changed my mind. The facts are too strong for me. I am on a different tack." Not pretending that you have not changed your mind. That is the fundamental difference between Harold Wilson and Ted Heath—and I know them both fairly well. Indeed, I know who is the stronger man: and it is not Heath. For all the appearances, the strength he has is the strength of cast iron; it is brittle; it cannot bend. And our national character is that we bend. We are pragmatists.
Perhaps I can give a little story, born of my Service experience. If you marched a group of British troops up to a river, with no equipment of any kind, and said "Build a bridge", the language would be unprintable—I dare not repeat what it would be like. But they would scrounge around, "pinch" this and "pinch" that, and when you came back after a period you would see a most horrible contraption: but it would be a bridge. If you said the same thing to a group of Germans, they would assess the situation, draw blueprints, have conferences and so on, and then they would say that it was impossible. That is the difference. We are a race of pragmatists. We live by trial and error. But we are run at the present moment by a Prime Minister who is utterly out of keeping with the British character. He is always going to dominate, even when he is wrong: and then, when he is proved to be wrong, he pretends he is not. That is the difference between Harold Wilson and himself. Harold Wilson is always conscious of his imperfections and seeking to exploit them—
EARL JELLICOE: The noble Lord is, I am sure, entertaining the Committee with these auto-biographical and biographical vignettes, but he is departing a long way from our normal procedures in Committee.
LORD WIGG: I am sorry. I have not passed a very long way. I am explaining why the noble Earl is so uncomforable when he has to tell the Committee that he is speaking 100 per cent. for a

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Government policy which in his heart of hearts he knows lacks resilience.
EARL JELLICOE: No, I think I am extremely comfortable, listening to the speech that is being made by the noble Lord, Lord Wigg, in asking my noble friends to resist his Amendment.
LORD WIGG: Of course. That is the safe way out. That is in accordance with the brief that the noble Earl has been handed. I entirely agree, and I wholly accept that he has to discharge Government policy. But I did say a little earlier (I am coming to a conclusion) that this is the difference between us, because the point I am making is not a light one, as we shall see before the year is out. The noble Earl thinks that he is right and the Government think that they are right. The Government are going to stick their toes in and resist the Amendment; they are going to stay pat and try to pass the buck to the Pay Board. They will not
even give the Pay Board the chance to earn some popularity or to establish its competence. What the noble Earl does is to turn round and say, "You all know Mr. Robinson, and of course you can trust Mr. Robinson". I do not trust Mr. Robinson a bit. Mr. Robinson has got to prove his case. The fact that he has been to Ruskin College and is said to be a Labour supporter does not influence me. The Tories have introduced many such in the past; so I do not accept that argument. Mr. Robinson has been appointed and the Pay Board is a Tory institution, set up at a time of extreme difficulty in the hope of getting the Tory Government off a spot. The noble Earl thinks it is going to do that. I do not; so I will stop at that point and ask my noble colleagues to support me in this Amendment.
6.11 p.m.
On Question, Whether the said Amendment (No. 21) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 86.

CONTENTS

Addison, V.

Hoy, L.

Segal, L.

Archibald, L.

Hughes, L.

Serota, B.

Arwyn, L.

Jacques, L.

Shackleton, L.

Bacon, B.

Janner, L.

Shinwell, L.

Beswick, L.

Leatherland, L.

Slater, L.

Blyton, L.

Llewelyn-Davies of Hastoe, B.

Stocks, B,

Brockway, L.

Lloyd of Hampstead, L.

Strabolgi, L.

Chalfont, L.

Longford, E.

Taylor of Mansfield, L.

Champion, L.

Maelor, L.

Walston, L.

Davies of Leek, L. [Teller.]

Phillips, B.

Wigg, L. [Teller.]

Energlyn, L.

Popplewell, L.

Wright of Ashton-under-Lyne, L.

Garnsworthy, L.

Raglan, L.

Hale, L.

Rhodes, L.

Wynne-Jones, L.

Henderson, L.

Royle, L.

NOT-CONTENTS

Aberdare, L.

Cork and Orrery, E.

Hanworth, V.

Ailwyn, L.

Craigavon, V.

Henley, L.

Albemarle, E.

Croft, L.

Hood, V.

Amory, V.

Daventry, V.

Hylton-Foster, B.

Auckland, L.

Davidson, V.

Inglewood, L.

Balerno, L.

Denham, L. [Teller.]

Jellicoe, E. (L. Privy Seal.)

Barnby, L.

Digby, L.

Kindersley, L.

Beaumont, L.

Drumalbyn, L.

Kinnoull, E.

Belhaven and Stenton, L.

Eccles, V.

Lauderdale, E.

Belstead, L.

Emmet of Amberley, B.

Limerick, E.

Berkeley, B.

Exeter, M.

Lothian, M.

Bethell, L.

Ferrers, E.

Lucas of Chilworth, L.

Bledisloe, V.

Ferrier, L.

Lyell, L.

Bradford, E.

Furness, V.

Massereene and Ferrard, V

Brooke of Cumnor, L.

Gage, V.

Merrivale, L.

Brooke of Ystradfellte, B.

Gainford, L.

Milverton, L.

Brougham and Vaux, L.

Gisborough, L.

Monck, V.

Caccia, L.

Glasgow, E.

Mowbray and Stourton, L. [Teller.]

Clifford of Chudleigh, L.

Gowrie, E.

Cole, L.

Grimston of Westbury, L.

Napier and Ettrick, L

Colville of Culross, V.

Hailes, L.

Northchurch, B.

Colwyn, L.

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

Nugent of Guildford, L,

Conesford, L.

Onslow, E.

Rankeillour, L.

Strange of Knokin, B.

Tweedsmuir of Belhevie, B.

Ruthven of Freeland, Ly.

Strathclyde, L.

Vivian, L.

Sandford, L.

Sudeley, L.

Wise, L.

Sandys, L.

Suffield, L.

Wolverton, L.

Seear, B.

Trefgarne, L.

Wynford, L.

Somers, L.

Trevelyan, L.

Young, B.

Strang, L.

On Question, Motion agreed to.

Clauses 8 and 9 agreed to.
Clause 10 [Restrictions on dividends]:
6.19 p.m.
LORD WIGG LORD WIGG moved Amendment No. 22:
Page 7, line 11, leave out ("companies") and insert ("those companies, designated by them, who shall be included in a list to be known as the Special Case list',").
The noble Lord said: I beg to move the Amendment standing in my name on the Marshalled List. This Amendment is a balancing Amendment with the previous one. The previous Amendment dealt with the special case list so far as the unions were concerned. Here the special case list deals with the other side of the picture, which is the provision in the Bill in Clause 10 for a restriction on dividends. Those who are going to look after this really will have a job on their hands because this part of the Bill applies to every company incorporated under the law in any part of the United Kingdom, so that the watch over dividends applies over the whole area of companies.
I have already taken up rather a lot of your Lordships' time, so I promise to be brief as regards this Amendment and I will talk in a kind of verbal shorthand. I want to say categorically that the Government's proposals to deal with dividends, and the complex problem of costs, are humbug—pure, unadulterated humbug; political window-dressing of the worst kind. We are living in a mixed economy. The argument is where to draw the frontier between private companies and public undertakings. Different Governments would draw the line in different places. What the Government are doing, doctrinaire as they are, having changed their front, having changed their policy and, as we have heard in the discussion which has just ended, being prepared to dig their toes in because they are afraid of the "horses" on their Back
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Benches, is to limit dividends and to police dividends and costs right across the board. They propose to take out the hairspring of the capitalist economy. How in the circumstances they ever expect to get the capital investment which is absolutely essential if the economy is to grow, is quite beyond me. They will not do it by the proposals in this Bill.
My Amendment sets out to eradicate this state of affairs. Instead of imposing the' policy right across the board on every incorporated company in the British Isles, the Government should seek to exercise their authority in, in the words that I quoted yesterday of the late Aneurin Bevan, "the commanding heights of the economy". The duty would be imposed upon the Treasury to nominate the companies that should be looked at, whose dividends should be watched, because they are the ones that set the example. I would include every bank and many of the merchant bankers in the City, because it is the financial interests that have gone wild. I would have, for want of a better expression, the hundred top companies. The Treasury would be required to put forward a list which would be limited by the ability and expertise which the Agencies would have to tackle the job. I would not impose upon them the responsibility of looking at every incorporated company in the British Isles.
I will not take up the time of the Committee further beyond saying that dividend restriction and dividend control in a capitalist society is tantamount—I am inspired by Cheltenham Races—to wanting, in order to get the economy to grow, somebody to back a 100-8 chance. This is the great capitalist theory which I have fought—risk capital. No one is going to back the 100-8 chance, if, when it has won, he only gets paid out even money. That will not work. We shall have a society which is only going to back odds-on chances. I can assure noble Lords, as one who once tried it, that backing odds-on chances is a sure way to go broke.
The whole idea of the City of London, and the Stock Exchange, is tied up with bookmaking and betting. The only thing is that bookmakers, and those who bet on horses, are much more honest than those people in the City of London. The City of London never does anything unless it has a contract; people will go on a racecourse and exchange hundreds of pounds on the strength of their word—they honour their word. What I am socking to try and rescue the Government from is the doctrinaire approach that is going to produce a vast amount of paper. The dead hand of bureaucracy is descending upon our economy.
I do not share the confidences of those on the other side of the Committee, but what must the Confederation of British Industry think about the Government (which they heavily subscribed to be returned to power) who "conned" them into accepting a price freeze? The price freeze lands them in a period of a legal freeze and they find their previous act of self-denial is completely ignored. I am certain —and Mr. Campbell-Adamson is always saying this—they are going to get a vast amount of bankruptcies. Industry can never operate that way; it certainly can never take risks. Why should they take risks when as a result of Mr. Barber's policy life is made easy for the surtax-payer because of the new funds that are available at a high rate of interest—10 per cent. quite easily? Why should somebody put his money into equities when, if he is successful, the Government will say, "No, you cannot take your winnings"? It is a piece of nonsense, and I go further: it is a piece of humbug.
I introduced this Amendment and I gave it as much thought as I gave previous Amendments. It is a balancing Amendment. a special case list. In the case of the unions, they would apply to go on the list. In the case of the special case list under Clause 10, or my Amendment if it is accepted, the Treasury would make the nomination; they would decide what the commanding heights of the economy should be, and they are the people who would be looked at, and I hope that they would be looked at by a beady and a competent eye. I have no doubt that I will get the same answer as previously: the Government will not
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do anything about it. This is one of their dummies in the shop window. This is my treble in these two days: there are three cases in which before the end of the year I shall be saying to the Minister, "I told you so". The policy on which this Bill is based is doctrinaire and unimaginative. It is designed to get out of political difficulties, and for that reason it will not work. I beg to move.
6.28 p.m.
LORD DRUMALBYN: The noble Lord has made his point very emphatically here. As I understand it, he is proposing that there should be a list of companies. He is doing this in order, as he puts it, that the Treasury should exercise control over the "commanding heights". If I have correctly understood him, he is not proposing that there should be any control of dividends in any other part of the economy. He seems to regard it as undesirable that there should be—
LORD WIGG: The noble Lord is quite right. But I did not use the word "undesirable"; I said "humbug".
LORD DRUMALBYN: The noble Lord said that the Government's proposals were humbug; I am taking it that he thinks that in the present circumstances it would be undesirable to do this. There is a distinction there.
I am sure I am right in saying that the Government would have been criticised if it had not provided for dividends to be restricted right across the board. The noble Lord argues that it is neither practicable nor desirable for the Treasury to exercise control over dividends on the scale that we intend. The scale, of course, is set out in the Code and I should make quite clear what we are talking about here. What the Code says is:
"Except as indicated in the following paragraph,"—
which are the exceptions—
"companies incorporated m the United Kingdom will not be permitted, without the consent of the Treasury, to declare dividends for any company account year which exceed by more than 5 per cent. the amount of ordinary dividends declared by the company for the preceding company account year."
We believe that in the context of the arrangements we are making on prices and pay that is a reasonable proposition, and indeed something that would be expected. The noble Lord may say that it is not reasonable because it just cannot

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be done, but I do not think it would be very easy to choose the special cases. Indeed, there would be nothing really very special about them except for the fact that the Treasury or Parliament had decided to put them on the list. That is the only thing that would make them special. The noble Lord suggested that the Treasury should try to choose those which are on the commanding heights, but on the noble Lord's own argument those that are on the commanding heights will exercise an influence throughout the economy. It is therefore probably equally undesirable that these should be controlled; so what he is proposing is, if I may say so, also humbug. Either you take the view that there should be a fair across the board control, or else you say, "All right, we will have a cosmetic, presentational measure and leave it at that." But this latter course is not the one we are taking.
As the clause stands, the Treasury is given power to restrict all dividends. As the Green Paper makes clear, it is intended that the Treasury will make an Order as soon as Part II comes into effect. The Green Paper itself says, in paragraph 129:
"Effect will be given to the control for quoted companies by making an order after Royal Assent applying the relevant provisions of the Bill to such companies, except where they are in the categories mentioned above"—
that is the investment trust companies, trusteeships, and so on—
"The order will specify in detail the coverage of the control, the basis of comparison for purposes of calculation and other relevant factors."
There will be no requirement for quoted companies to notify before declaration, but there is nothing to prevent companies who are in any doubt from consulting the Treasury, as indeed many, both quoted and unquoted, have been doing during the standstill. Quoted companies (of which there were 3,145 in June 1972) account for 80 per cent. of all dividends, and it is important that the control of dividends should not only be exercised, if this control is to be exercised at all, but be seen to be exercised.
It is true that the control powers over dividends contained in the 1966 Act were not exercised in the Labour Government standstill. This argument cuts both ways. No doubt the then Government thought that business could be relied upon to
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comply with the standstill without compulsory powers —or possibly just with the threat of compulsory powers. The global figures for dividends suggest that the restraint was generally observed. It is reasonable to suppose that the same will apply in the case of unquoted companies this time, more particularly as they will know that the bulk of dividends will be subject to control. Moreover, the Treasury have the power to make an Order in respect of unquoted companies or to serve a notice on a particular company if it is found to have exceeded the 5 per cent. limit. But in any case the circumstances are not the same as in 1967/68, and there is no doubt that the public this time expects control to be exercised from the start over the dividends of quoted companies.
As for unquoted companies, there is no case at all for excluding unquoted companies from the restrictions, even though the manner of control is different. Given that there are over half a million companies involved, many of them small, they are bound to be different. There is no case for excluding them, any more than there is any case for exempting small business from the restrictions on price, even though only the 200 or so largest companies will be subject to the prenotification provisions. Nor is there any case for picking on certain quoted companies and subjecting them to control and leaving the remainder of quoted companies outside the control.
I do not see any great difficulty in controlling the dividends, after declaration, of some 3,000 companies. As to the rest, it may be said that it will be difficult to gather information. However, infringements have a way of getting out, and I should have thought it would be possible to exercise control on that basis. Moreover there is the important point that there is the power to issue a notice, and also we know from experience that there is the manifest will of the companies themselves to keep within the law. Companies have been inquiring during the standstill about what they should do; how they should keep within the present temporary provisions Act, and there is no reason to think that they will not do so in future.
I say to the noble Lord in all sincerity that in this case he is wrong in thinking that this is humbug. We believe that

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this can be done; we believe that it should be done in the circumstances, and I hope noble Lords will not accept this Amendment.
6.37 p.m.
LORD DAVIES OF LEEK: The point about this Amendment was to establish something that I think is needed among the mass of the people. For instance, a survey in the Sunday Times of February 2 pointed out that the 3,473 companies which the Minister has just hinted about —public companies—reporting on the previous 52 weeks showed a pre-tax profit on average of 17·9 per cent. This survey covered companies where the financial year ended approximately on August 31 1971.
On dividends, the position is that the man in the street regards dividends as being different from wages in so far as they are not lost permanently. All my noble friend is trying to do is to get some kind of fairness. If a company is prohibited from paying higher dividends it will still have the money, which it can either retain until restrictions are over and then pay it out to shareholders, or else it can invest the money. This then raises the value of the company to the shareholders, and the value of the assets owned by the company will rise and so increase the share prices, and the new investment should generate higher profits and dividends for the shareholders. This is the nub of the unfairness as the man in the street sees it.
Those were the two best years, too, although I do not want to go into that in depth because noble Lords opposite know it to be true; the years that have been selected are two of the best years. I do not want to bore the Committee or to detain your Lordships too long, and therefore I have made what I call a Committee speech on this point. That is the nub, to try to introduce an element of fairness to the man in the street who is asked to suffer, and particularly the special cases and the lowest paid workers mentioned by the noble Lord in his last speech on Clause 7.
LORD WIGG: I am not going to press this Amendment to a Division but I must tell the noble Lord who replied to me that he read his brief so quickly
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and so badly that I did not quite understand what he was saying. The first part was a little slower and I think he said that my proposal was equal humbug. If so, of course I agree with him; it is complete humbug. But he misses the point. What is complete humbug, as he must surely know, is the whole proposal to have a limitation on dividends. He underestimates the skill of accountants; they will vary the amounts of depreciation and the like, and of course the big companies are not going to declare any extra dividend. Indeed I tried my proposal on the leader of a great company. He said, "Of course we want limitation on dividends. It gives me the excuse for not increasing the dividend in my company".
Surely the Government do not really think that they deceive anyone with a proposal of this kind. It is just plain, unadulterated humbug. What they ought to be dealing with is the question of rents, of speculation and of interest rates generally. They are the contributory causes of inflation. The pill that the Government are intent upon administering to the workers of this country is not made any easier to swallow by nonsense of this kind. I spoke yesterday of people who are "conned". The Chancellor himself is "conned" and he has obviously "conned" the Minister here into believing that this idea means anything. It is utterly and completely meaningless. He should have spent the last five years that I have spent, dealing with bookmakers' accounts, to know very well what accountants are capable of. I am under no illusions about that. Any good firm of accountants or any accountant with any qualifications at all can produce any kind of balance sheet you want: one with a little profit or with no profit or with a big profit. They will produce whatever you want.
If the Government imagine that by some proposal that they limit dividends this is going to become acceptable to the workers of this country, then they underestimate them. All that they will do will be to cause a lot of trouble, a lot of bureaucratic nonsense to no purpose at all. Try to limit it to the ones who can afford it. Let us limit it to the top one hundred. I should like to include in that a few of the bucket shops who call them

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selves merchant bankers. The idea that the Government can effectively alter the trend of our economy by a proposal of this kind is nonsense, except for this: if they damp down the profit motive then there will be no motive there at all, and that will perhaps be the great irony of history: that a Conservative Government elected with capitalist money is going to knock the bottom out of what passes for free enterprise in this country. All the way through I have tried to help the Government. I shall not keep your Lord-ships any longer. I shall withdraw my Amendment.
LORD DRUMALBYN: Before the noble Lord withdraws his Amendment I feel that I owe it to the noble Lord, Lord Davies of Leek, to reply to the points that he has made. There are two points here. First of all, dividends are incomes, just as wages are income, and if the one should be restricted, so should the other. In the case of dividends the limit is 5 per cent., and in the case of wages the limit is 7 to 8 per cent. That is by the way. The second point is that it is only by increasing its turnover that a company can earn more profits under this scheme. Profits can be distributed as a dividend, as income, or not distributed. We want to see as much of the profits as are necessary for investment retained. That is the nature of capital. It is only if more investment is put into business that we shall get the sustained growth for which we are aiming. I hope the noble Lord will not take the view that this is not as fair as we can make it in the nature of the case. There are differences, of course, between pay on the one hand and dividends on the other, and the position in the case of companies. But, after all, it is not everybody that wins; some people lose their money.
LORD WIGG: Does the noble Lord realise what he is saying? You limit wages and if you limit wages or incomes the worker does not get the money. Somebody does not come along later on and give it to him. He has not had it. In the case of dividends, if you do not want them distributed they go back into reserves and then later on, when the Government think their policy has succeeded, the company has a bonus issue. And that is what is called equality of treatment!
LORD DRUMALBYN: What I said was that we made it as equal as we could.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 agreed to.
Clause 12 [Introduction of value added tax: temporary power to control prices and charges]:
6.44 p.m.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 26:
Page 8, line 15, after ("reflect") insert ("— (a)").
The noble Baroness said: I beg to move Amendment No. 26 and to take with it Amendment No. 27. I am sure that the Committee will understand why this Government Amendment is tabled at this stage rather than at an earlier stage. The object of the powers set out in Clause 12 is to enable the Minister to ensure that prices and charges correctly reflect the abolition of purchase tax and selective employment tax and the introduction of value added tax. The effect that we want to achieve is that no price is increased by more than is strictly justified by reference to the incidence of indirect taxation, and that where the tax burden is reduced the benefit is passed on in full to the consumer. This Amendment extends the powers which the Government are seeking so that they can be used to ensure that prices and charges reflect all the changes in indirect taxes which are due to take place on April 1. The changes which the Chancellor has announced in the coverage of value added tax, particularly the zero rating of young children's clothing and footwear and food, which are currently liable to purchase tax, are being made by Statutory Instrument under the powers contained in the 1972 Finance Bill. So there the position is adequately covered by subsection (1) of Clause l2 as it stands. The other changes which the Chancellor is making and which will take effect on April 1 are the abatement of the revenue duties on spirits, beer, wine, British wine, tobacco, matches and mechanical lighters. All these goods will be subject to value added tax at the standard rate and the Customs and Excise duties are being reduced so that the total revenue payable by way of Customs and Excise duties and

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by way of value added tax will amount to roughly the same as it is now. The Amendment to this Bill is to ensure that the abatement in the Customs and Excise duties as well as the imposition of value added tax is properly reflected in the prices of these goods. I beg to move.
BARONESS YOUNG: I beg to move Amendment No. 27.
Amendment moved—
Page 8, line 17, at end insert—
("(b) alterations in the rates of customs and excise duties payable in respect of spirits, beer, wine, British wine, tobacco, matches and mechanical lighters, being alterations first having statutory effect by virtue of Resolutions of the House of Commons made in March 1973 under the Provisional Collection of Taxes Act 1968."). —(Baroness Young.)
Clause 12, as amended, agreed to.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved Amendment No. 28:
After Clause 12, insert the following new clause:
Power to modify subordinate legislation about prices and charges
". —(1) The Minister may, not later than 30th April 1973, by order direct that any order, regulation, byelaw or other instrument—

(a) which has effect under any Act passed before this Act, and

(b) which relates to prices or charges,

shall have effect subject to such exceptions, modifications or adaptations as appear to the Minister to be expedient for the purpose of ensuring that prices and charges correctly or sufficiently reflect the introduction of value added tax and car tax, and the abolition of purchase tax and selective employment tax, by the Finance Act 1972.
(2) An order under this section relating to a byelaw made by a local authority may authorise the local authority having power to amend the byelaw, or a committee of the authority, to amend it by resolution.
(3) Any amendment of an instrument made in pursuance of this section shall have effect as if made under the same power as that under which the instrument was made, and accordingly may be amended by a subsequent instrument made in exercise of that power.
(4) An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament."
The noble Viscount said: On behalf of all my four noble friends I beg to move this new clause. It is designed to allow action to be taken quickly to deal with
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the consequences of the introduction of value added tax for a small, but nevertheless important, section of the community, the operators and drivers of taxicabs. It follows from my right honourable friend the Chancellor of the Exchequer's decision, which he confirmed in an Answer last Tuesday in another place, that taxi fares should be subject to value added tax at the standard rate. Last Tuesday my honourable friend the Chief Secretary to the Treasury announced that the Chancellor had carefully considered all the representations which had been put to Treasury Ministers (and I know about them and that this is of some importance to the taxi trade) but had decided that taxi fares should remain within the scope of V.A.T. But the announcement recognised that because in many areas maximum taxi fares are statutorily controlled, arrangements would have to be made for variation of those fares without delay in those places where it would be appropriate. So an Amendment in this Bill was promised to deal with the matter.
In London, as opposed to the Provinces on which this bites, my right honourable friend the Home Secretary already has powers to act quickly. Taxis are a form of public transport—and I owe the House a short explanation on this point, so that anybody may read it in the OFFICIAL REPORT. They are a form of public transport where there is control by a public authority of an enterprise in the hands of the private sector. In places where there is control, taxi fares are regulated by bylaws made by the local authorities. In all the areas in which the maximum fares are fixed by by-law—and in England at least this means virtually all urban areas —it is an offence for a driver to charge more than the permitted fare. I am advised that he would not be able to add the V.A.T. charge legally to that existing maximum fare.
In order to deal with this quickly—and this is the real point of this clause—we have got to get round the rigidity of the by-law making procedure. For instance, the procedure under the Acts of Parliament governing it require that the by-law must be placed on depositor one calendar month, during which time objections may be lodged against it; that in itself, of course, makes it impossible for these changes to occur by April 1. The

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local authorities could not start the bylaw making process before now, for obvious reasons; first of all, it was not known for certain until last Tuesday what the rate of V.A.T. would be; and, secondly, it was only on that day that my right honourable friend announced his decision about V.A.T. and taxis at all.
The Government appreciate that because taxi fares are statutorily controlled, and can be increased only by a complicated and lengthy procedure, the taxi trade is at a considerable disadvantage as against the rest of the trading community. Like other traders, the taxi operators will find themselves paying V.A.T. from April 1, but, unlike other traders, they will have no means of raising their charges to take account of this fact. The purpose of the new clause is to provide an early opportunity for local authorities to authorise increases in the fares to take account of the effect of tax changes, but for no other reasons (I emphasise this), at an early date after the 1st of next month.
The clause will do this by empowering the appropriate Minister—that is, my right honourable friend the Home Secretary, the Secretary of State for Scotland, also the Secretary of State for Northern Ireland—to make an order which will allow local authorities to amend their own by-laws by resolution without the need to go through the normal by-law making procedure. It is intended that the order will allow a local authority to increase fares by an amount not exceeding an amount which will be specified in the order for any one journey. The order will be made after consultations with the local authority associations and the representatives of the trade, which have already begun. If this House approves the new clause, consultation will go on; it started this week and it will be pursued urgently. Within the limits set by the order the local authorities will have a discretion to choose the amount of increase, if any, which will be authorised in their area.
This discretion is necessary because V.A.T. will not affect all taxi traders in the same way, and, because the structure of the trade varies from area to area, not every place will require the same increase. In some areas all, or very nearly all, the taxis will be operated by owner
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drivers who have one or perhaps two vehicles. Virtually all owner-drivers will have a taxable turnover of less than £5,000 a year, and, therefore, will not be required to register for V.A.T. purposes. This means that their fares will be regarded by Customs as being exclusive of V.A.T. But as unregistered traders they will not be able to claim back any V.A.T. paid as part of their input of tax for operating expenses, such as the cost of replacing parts. Neither will they be able to increase their charges to their customers to recoup this extra expenditure. Depending on the amount of input tax they pay, they may feel obliged to ask their local authorities for a small increase in fares to cover this increase in their operating costs.
The position will be very different in those areas where the trade is predominantly in the hands of larger operators paying wages to their drivers. These will be required to register for tax purposes, and their fares will be regarded by Customs as inclusive of V.A.T., and Customs will, therefore, want from these traders one-eleventh of their turnover, less the input tax they have paid on their operating expenses. In order to meet this new liability, the registered traders may wish to ask for somewhat larger increase in fares. There will, of course, be some areas where there is a fairly equal balance between the two types of traders I have mentioned. In those places, it will be the task of the local authority to find the increase which as nearly as possible is fair to both, and this is one of the issues that will be covered in the detailed advice which the Home Office will be giving to all local authorities in due course.
Powers given by this new clause are, of course, intended to be temporary. In due course it will be possible for the local authorities to take a longer look at the effects of V.A.T. on taxi operators in their area and produce a more sophisticated amending by-law. Fare by-laws which are made and come into operation after a resolution passed under the powers given by this clause, will be able to consolidate or revise increases which are authorised in a resolution under this particular clause. I am afraid that the powers in the new clause will create a somewhat crude but essential solution to the situation. We think it would be

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wrong to leave the taxi trade in a situation where the general level of earnings would fall as a direct result of the introduction of the new tax arrangements. The clause is designed to prevent this, and it will be able to be superseded by even more sophisticated arrangements under the normal procedure in due course. I beg to move.
BARONESS PHILLIPS: I do not want to detain the Committee, but I am not clear on this point. I got the impression that the owner-driver would charge one amount to meet V.A.T. and the others a different amount. Is that correct'?
VISCOUNT COLVILLE OF CULROSS: The noble Baroness is right. The owner-driver whose income is less than £5,000 a year will not have to pay V.A.T. on any of his turnover, but he will, of course, not be able to recoup the V.A.T. element of some of his expenses. Therefore, in a town where the taxis are predominantly owner-operated there may be a smaller increase to take account of this. The structure of the taxi trade varies widely. Where the town or the area concerned is provided with taxis by larger firms, who will be registered for V.A.T., they will pay V.A.T. to the Treasury on the income on the fares, and they will be able to recoup, and the balance will therefore be different. They may have to charge up more. The details of this will have to be worked out by the local authorities according to the structure of the taxi trade in their particular area. That is why we want to allow them to do it by their own resolution for this temporary purpose, which they can fine down and sophisticate in due course.
LORD HOY: May I ask the noble Viscount one question? In his concluding remarks in reply to my noble friend Lady Phillips, he said that this would be left to the local authorities. They in fact are going to be the deciding factor on increasing taxation, and that is a little unusual for this country. I put it that way simply because this is what the noble Viscount said. Earlier on he said that it will be permitted as a result of one increase in a single fare.
VISCOUNT COLVILLE OF CULROSS: A journey.
LORD HOY: A single journey; I hope I have got that correct. Supposing one takes a return journey, because it is not unusual in using taxis, even leaving this House, to say: "Take me to a particular destination and then take me back again". I could not understand from the noble Viscount whether the increase would be only on the single journey. What happens to the return journey? Is he saying that tax is payable on the outward journey, but on the return journey we do not pay tax at all?
VISCOUNT COLVILLE OF CULROSS: No. The resolution of the local authority will be subject to the maximum which will be laid down by the order. It will be only within that maximum that they will have the discretion to operate. What the maximum is to be in the various different circumstances is what we are at the moment discussing with the local authorities and the taxi trade as a whole outside London; we may have to do a separate consultation inside London, where the situation is different. The noble Lord asked about the return journey. I would not like to say exactly how this will be done. It may be that there will be an overall payment per journey, in which case, for all I know, the return journey will be separate, or there may be a graduated payment, according to the distance or the time the taxi is hired or something of that sort. Again I think it is likely to vary according to the type of journeys taxis make in different places. We shall allow for this sort of flexibility in the order procedure that we are going to adopt. I do not think that at this stage, in the very midst of these talks, it would be right for me to be too definite about it, except to say that there will be a maximum which local authorities will not be allowed to exceed.
LORD HOY: That looks as though it is going to be very flexible indeed. I am sure that we all look forward to the outcome of these flexible negotiations. The noble Viscount said that these orders will be laid by the Home Secretary. When he said that, I take it that he meant also the Secretary of State for Scotland, and I suppose the Home Secretary is responsible for Northern Ireland as well.
VISCOUNT COLVILLE OF CULROSS: To do me justice, this was not a point that I dropped. I did say the Home

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Secretary, or the Secretary of State for Scotland, or the Secretary of State for Northern Ireland. I think I should have added the Secretary of State for Wales.
7.1 p.m.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 29:
After Clause 12, insert the following new clause:
Protected tenancies
".—(1) For paragraph (a) of section 1(1) of the Rent Act 1968 (protected tenancies) there shall be substituted the following paragraphs: —

"(a) where the appropriate day in relation to the dwellinghouse fell before the date of the passing of the Counter-Inflation Act 1973,—

(i) the dwelling-house on the said appropriate day had a rateable value exceeding, if it is in Greater London, £400 or, if it is elsewhere, £200, and

(ii) the dwelling-house on the date of the passing of the said Act of 1973 had a rateable value exceeding, if it is in Greater London, £600, or, if it is elsewhere, £300, or

(aa) where the appropriate day in relation to the dwelling-house falls on or after the date of the passing of the said Act of 1973, but before 1st April 1973, the dwelling-house on the appropriate day had a rateable value exceeding, if it is in Greater London, £600, or, if it is elsewhere, £300, or

(aaa) where the appropriate day in relation to the dwelling-house falls on or after 1st April 1973, the dwelling-house on the said appropriate day has or had a rateable value exceeding, if it is in Greater London, £1,500 or, if it is elsewhere, £750, or."

(2) So much of section 89 of the Housing Finance Act 1972 as relates to the said section 1 of the Rent Act 1968 (being provisions superseded by subsection (1) above) shall cease to have effect.
(3) Schedule (Rent Restriction) to this Act shall have effect for supplementing this section, and in that Schedule this section is referred to as the principal section".
(4) References to this Act in sections 13 to 19 of this Act, and in Schedules 1 to 4 to this Act, shall not include references to this section."
The noble Baroness said: I beg to move the new clause, Amendment No. 29. It may be for the convenience of the Committee to discuss Amendment No. 41, the new Schedule, at the same time, I apologise for the length of these provisions. As anyone who has in the past been concerned with Amendments to the Rent Act will know, the most simple sounding measure becomes extraordinarily complex
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when translated into draft legislation. In this case the length of the provision is dictated by the need to integrate this measure with the existing Statutes, and there are a number of consequential amendments to the Rent Acts. Indeed, these provisions have themselves been drafted in haste, and it may be that some minor technical drafting Amendments will need to be made at a later stage to get the Amendment absolutely right.
When we were discussing the Housing Finance Act in the House less than a year ago, it was urged upon us then that measures should be taken to protect tenants in properties falling outside the Rent Acts. I am thinking particularly of the efforts made by the noble Lord, Lord Bethell, and the noble Marquess, Lord Hertford, on behalf of these tenants. More recently, honourable Members in another place, Mr. Tugendhat, Mr. Finsberg, Sir Brandon Rhys Williams and others have strongly represented their constituents' difficulties to the Government. I hope that this new clause will have the support of noble Lords opposite, as in another place the honourable Member. Mr. Prentice, speaking for the Opposition, said: "The new clause deserves support."
Under Section 1 of the Rent Act 1968, one of the criteria that disqualify a tenancy from the protection of the Rent Acts is that the dwelling in which the tenancy exists has a rateable value exceeding £400 in Greater London and £200 in the rest of England and Wales. These rateable value limits are expressed in terms of the current rating valuation. A tenant falling within the rateable value limits enjoys full security of tenure. Unless the rateable value of the dwelling is very low, the tenancy will also be a regulated tenancy, entitling the landlord or the tenant, either singly or together, to apply to the rent officer for a fair rent to be registered in accordance with Part IV of the Rent Act 1968. The rent officer, when determining a fair rent, takes into account all the relevant circumstances, other than the personal circumstances of tenant or landlord, and has to assume that the supply of and demand for the sort of accommodation under consideration is in balance—to discount scarcity, in other words. Fair rents are, in the normal way, significantly below market rents.
The current rateable value limits were determined in 1965. They brought within the Rent Acts some 1·2 million regulated tenancies, with the effect that 2·3 million tenants in unfurnished accommodation enjoy full security of tenure and some form of rent restriction. This left outside the Rent Acts some 20,000 tenancies in dwellings above the rateable value limits. We estimate that about half of these are in London and the other half largely along the South Coast. In earlier discussion of this Bill on February 27, 1973, in another place, the Minister for Housing and Construction referred to the problems now being faced by tenants of these properties; steeply increasing rents, rapid changes of ownership of the property and resulting insensitivity towards the tenants by some landlords, shortage of accommodation and fear of eviction. He said that the Government were considering what measures might be appropriate to meet these problems and gave at, assurance that the Government would propose Amendments to the Bill to give effect to their conclusions. This new clause and Schedule implement that assurance and will, I believe, be welcome to both sides of your Lordships' House.
The effect of these provisions, taken together, is quite simple: to raise the rateable value limits in Section 1 of the Rent Act 1968 from their present levels of £400 and £200 in London and elsewhere respectively to new levels of £600 and £300 respectively. This brings within the Rent Acts, for the first time, tenancies with rateable values between £400 and £600 in London and between £200 and £300 in the rest of England and Wales. The tenants of these dwellings will have security of tenure, and their tenancies will become regulated tenancies. This is achieved by amendment to the Rent Act 1968. Subsection (1) of the new clause provides for the new limits with effect from Royal Assent and has the effect of excluding from the protection of the Rent Act only those tenancies in dwellings which have a current rateable value exceeding £600 in Greater London or £300 elsewhere. This is at current rateable value. But the subsection also looks forward to rating revaluation on April 1, 1973, and provides that for tenancies in dwellings which first enter the valuation list at the new
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values after April 1, this year, the limits are to be £1,500 in London and £750 elsewhere.
The Government are also considering the possibility of raising the rateable value for existing tenancies in existing dwellings more directed to the new valuation lists to come into effect on April 1, so as to bring within the Rent Acts any tenancy in an existing dwelling which, on April 1, 1973, has a rateable value of not exceeding £1,500 in London and £750 elsewhere. Under the Rent Acts, at present, for example, a tenancy in a dwelling which has a rateable value over £600 in London and £300 elsewhere before April 1 this year would still be excluded from the protection of the Act on April 1. even if, as a result of rating revalution, the new rateable value of a building was less than the new limits of £1,500 in London and £750 elsewhere. The Government hope to bring forward further Amendments on this point on Report, and I hope that this may meet the case of the noble Lord, Lord Royle, on the point that he has made in his Amendments.
I should make it clear that rating revaluation has no effect whatsoever on the rights of existing tenants, and the current limits, or those of £600 and £300 if Parliament approves this measure, do not need amendment to preserve the rights of existing tenants. The figures following rating revaluation simply provide equality of treatment for new tenancies in new dwellings after April 1, 1973, being the £600 and £300 limits multiplied by 2·5, which is the average increase between the current and the new rating valuations. Previously, this multiplication would have been done, so far as the rateable value limits are concerned, by order under Section 89 of the Housing Finance Act 1972—hence the reference to that provision in subsection (2) of the new clause. Subsection (3) applies to these tenancies brought within the Rent Act, the proposed new Schedule.
Let me now turn to the Schedule itself. Paragraphs 1 and 2 are best considered together. As I have said, fair rents are, in general, well below market rents. Rents for these tenancies in London between £400 and £600 rateable value are currently market rents, freely negotiated in

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the light of demand and supply. Typically they may now, for a new letting, be around £2,000 a year for a property just over the current rateable value limit. A fair rent would be likely to be less—perhaps in some cases several hundred pounds less—than the market rent. The Government do not consider that it would be right or fair to landlords if rents which were freely negotiated with tenants were to be reduced overnight, presenting the tenant with an unexpected bonus of a significantly reduced rent. The effect on the finances of the landlords and property companies could be very serious. For existing tenancies, therefore, paragraphs 1 and 2 provide that the landlord may—where his contract allows—charge the tenant either the current rent or the fair rent, whichever is the higher. When these provisions are enacted, the current rent limit is to be the rent passing, broadly, on November 5, 1972, increases over which have been made irrecoverable by the landlord under Article 10 of the Counter-Inflation (Rents) (England and Wales) Order 1972, made under the Counter-Inflation Temporary Provisions Act. Only when a fair rent registered by the rent officer, or, after appeal to the rent assessment committee, is higher than the current rent limit and the lease agreement permits, will a landlord be able to take steps to increase the rent above the current rent. Thus, in due course, the current rent limit will disappear, and this whole sector will become consolidated on the fair rent principle. In the meantime, the tenant and landlord mark time so far as the rent is concerned, giving to the landlord the benefit of a rent higher than the fair rent where the tenant is already showing his willingness to pay, and to the tenant assurance against further rent increases.
Paragraph 3 enables a landlord to increase the rent recoverable above the current rent limit on account of any transfer of burden as between landlord and tenant relating to repairs, or where there is an increase of rates or for services. Of course, these increases can be charged only where the contract, lease, or tenancy agreement so provides; and any dispute as to the reasonableness of such an increase is to be resolved by the county court. Your Lordships will note that there is no provision for rent increases following improvements to the property
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—paragraph 4 makes express provision for this in respect of statutory tenancies. In the Government's view, the landlord should either absorb any such costs within the current rent limit, or seek a fair rent. Paragraphs 5 and 6 attract to these particular tenancies the provisions of the Rent Act 1968, or the alternative provisions of the Housing Act 1969 relating to premiums, enabling tenants when assigning a lease, to recover a proportion of premiums which they may legally have paid in respect of their tenancies before they come into rent regulation. There is no new point of principle here.
I come now to a particularly important provision, paragraph 7. Where a landlord wishes to obtain possession of his property at the expiry of a tenancy, he must, where the tenant remains in occupation, get a court order for possession. This is the law for all tenancies. This paragraph applies when a tenancy, which would have become a regulated tenancy had it been in existence at the time when these provisions are brought into effect, has come to an end before that date and the tenant or his widow is still lawfully in possession of the property. If a possession order has already been made, the court may vary or rescind the order if it considers that the order would not have been made if these provisions had been in force. This converts the tenancy into a statutory tenancy on the same terms as the tenancy which has come to an end, subject to any variation made by the court. If a possession order has not been made, then a tenant can be evicted only on the grounds for possession specified in the Rent Act; for example, non-payment of rent in breach of the terms of the tenancy. This should effectively guarantee that no tenant is dispossessed of his home as a result of these measures being brought forward between now and Royal Assent, and I confirm that these measures will come into operation immediately on Royal Assent. I do not think I need expand on the provisions in paragraphs 8, 9, 10 and 11 of the Schedule. These simply contain minor consequential amendments to existing legislation, and contain no new points of substance.
This has been a long account. I come back now to the main point, that the effect of these provisions is quite simple: to raise the rateable value limits to £600 and £300 for London and elsewhere in

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England and Wales respectively, thereby giving tenants in these properties security of tenure and access to the fair rent system. We calculate that this will bring about 80 per cent. of tenancies currently above the rateable value limits within the Rent Acts. Any borderline is, to some extent, arbitrary. In 1965 the current levels were, I understand, pitched at a point where it was felt that demand and supply were in sufficient balance to allow the free play of market forces. That is manifestly no longer the case. The proposed new levels of £600 and £300 will exclude the large mansion flat type of property with very high rents, and I do not think anyone has seriously suggested that they should be included.
The Government have reached this decision to extend the limits only after the most careful consideration. The whole history of rent control shows that, in the long run, it depresses the rate of return to landlords on their investment, and leads to rented accommodation being taken off the rented market and sold for owner-occupation. But a very serious situation exists for these tenants to-day. The supply of rented accommodation at these levels of rateable values is already rapidly drying up, both in London and along the South Coast. The property companies have discovered that there is a large unsatisfied demand for purchase of these flats on long leasehold. Sale prices are high. This has encouraged the process of "break-up", whereby whole blocks of flats are bought up and, when the tenancies have been terminated, the flats are sold off individually. Large speculative gains have been made by this operation. At the same time, the ensuing even greater shortage in rented accommodation has forced up rents as leases fall in. Many noble Lords will have heard of cases of rents causing particular difficulty for those retired and on fixed incomes. Of course there are good landlords and property companies operating in this area, whose record as managers of rented accommodation is impeccable. But there are others whose behaviour has left the Government with no choice but to give the tenants concerned security of tenure. As to the question of supply of accommodation, the truth is that this rented accommodation is already fast disappearing under the speculative process I have described.
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Security for existing tenants will at least ensure that their properties are kept available for renting so long as they remain in possession.
The Government believe that this measure, even though relating to perhaps 20,000 tenancies only, is necessary and just. It is an extension of the fair rent system initiated by the Labour Administration in 1965 and will, therefore, I hope, be common ground to both sides of the Committee. The need for this measure has arisen acutely in the context of the Government's counter-inflation policies, and hence in this Bill. But the problem is itself long-term. Thus if Parliament approves these measures, they will be a permanent addition to the Statute Book and a permanent amendment to the Rent Act. I commend this new clause and Schedule to your Lordships. I beg to move.
THE DEPUTY CHAIRMAN OF COMMITTEES (LORD MERTHYR): The noble Lord, Lord Royle, has given notice of his intention to move an Amendment to the proposed new clause, and since your Lordships may not all have the terms of this Amendment I propose to read it out. It is Amendment No. 29A, which reads:
"Line 12, leave out ('£600') and insert ('£700')."
7.20 p.m.
LORD ROYLE LORD ROYLE moved, as an Amendment to Amendment No. 29, Amendment No. 29A:
Line 12, leave out ("£600") and insert ("£700").
The noble Lord said: I am sure it will be for the convenience of the Committee if I discuss the two Amendments which are down in my name at the same time because they deal with the same point, though they can be put separately if necessary. May I say straight away how deeply I personally appreciate the very clear explanation that the noble Baroness has given of the Amendments in her name. I was deeply encouraged by one sentence that she used when she said that she felt the case I had to put would probably be met by the Government; that they hoped to do something about it before Report stage. But I am not quite sure why, if that is the position, she cannot accept my Amendments. It is only the question of figures that divides

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us. Briefly, the Government's present suggestion in this new clause is that the limits should be put up from £400 to £600 in the case of London and from £200 to £300 outside London, and that within those figures tenants should be protected. The difference between my Amendment and the Government's new clause is that I want to go the other mile. I therefore suggest in my Amendments that, instead of it being put up to £600 it should be put up to £700 in the case of London, and that in the case of other places it should be put up from £300 to £400.
I shall be as brief as possible at this hour, but perhaps I may be permitted to say why I feel that this should be done. I know that, in another place, while Mr. Prentice gave his blessing, there are other people who did not, and I think about my ex-colleague in the representation of the City of Salford, who talked in terms of just looking after the wealthy people of Kensington. I could not disagree with him more, because that is not what this does. The new protection which the Government are now giving in this new clause covers about 80 per cent. of the 20,000 cases which the noble Baroness mentioned. This I take from the Press—the responsible Press—and the noble Baroness's figures seem to agree with it. This, in regard to unfurnished tenancies, would, I reckon, leave only 4,000 houses and flats in the country outside protection. So my appeal to the Government is that they should go the whole hog. My Amendment does not quite say that, but I should be very happy if they did. Do the Government really want these few left out of that protection, protection against (I use a strong term, and I mean it; it comes from experience which I am about to quote) property sharks? This is happening in London, and it is happening particularly, as the noble Baroness has said, on the South Coast.
I always feel that when I have a case to argue it is best to provide an illustration. The illustration I use is, I think, a very strong one. I know of three blocks of flats on the South Coast in the Borough of Hove, most of which have two bedrooms, a lounge with a dining recess, and the usual other offices. At the moment, they have a rateable value of £326 per annum. They are very highly rated indeed for that sort of accommodation
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out of London. What I want to point out to your Lordships is that, in the main, the people living in those flats are old folks, over 75, up to 85, and so on, without capital, and living on annuities and other forms of fixed income. When the threat of their lease finishing comes along and the owners want to sell the flats to somebody else, the tenants are not in a position to buy. They have not got the capital, and at their age they cannot go to a building society for a mortgage. From this side of the Committee this might sound rather surprising, but in the circumstances they are much worse off than many thousands of council tenants, and they are at their wits' end as to what they are to do when the threat comes.
These three blocks of flats are all in one ownership. They have changed ownership five times in 15 months, with each lot of owners taking a profit from the next. At the same time, the people in the flats have been given no opportunity whatever even to seek a method of purchase; they have been told that they have to go at the end of their leases. Then the property owner will try to do something about "tarting" the places up, and will put them on the market at high prices. I understand—and this is my example—that people who make inquiries about that sort of accommodation are being asked £23,000 to £25,000 for such flats. At the end of their leases, these people get their notice to quit and they do not know what on earth to do about it. I may say that in the South-East, and on the South Coast particularly, rateable values are in many cases as high as they are in good parts of London.
So this is the case I want to put. I want Her Majesty's Government to go further, and to give cover to that extra number of people, so that in the later part of their lives they might have some sort of real security and so that the tenancies that they occupy will be theirs for quite a long time. I would finish with a question to the noble Baroness. I have been looking at her new clause, and I am wondering whether paragraph (aaa) of subsection (1) would protect the people I am referring to because of the different values which are being fixed under the latest revaluation. I do not think I can say any more. I hope your Lordships will appreciate that I feel strongly about

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this, and that I am very anxious. These people I am talking about all voted Tory at the last Election, I am quite sure, and I am pleading for them from these Labour Benches. I hope I might have the support of the Committee. I beg to move the Amendment to the Amendment.
LORD JANNER: I rise to support my noble friend in the plea that he has made to the Government. It has been my lot ever since the 1915 Act, the first Rent Act, to watch the progress of these Acts which have been passed since for the protection of tenants, and much of what my noble friend has said has applied from time to time, as the Acts have progressed, in respect of the different sets of people who have been protected by raising the rateable values, and so on, during that period. There is no doubt at all that the vast majority of those who are occupying flats and houses which are rated at a higher rate than the one which prevailed up till now have been terrified by the kind of action that has been taken by speculators who, from day to day, have been drawing tremendous profits without having done anything at all in respect of the properties.
My noble friend Lord Royle is quite right. This is not a question of whether the person is poor or rich; it is a question of life and death—and I put it as strongly as that. These speculations have gone on and will go on unless and until the speculator realises that the whole of the people concerned are against these practices. Even so, some are going to be left out, but I think it will help in curbing the kind of action which is taking place and which I believe has horrified the whole country irrespective of the amounts of rent being charged or the rateable values. We have been looking for a way in which to stop that kind of action by unscrupulous people. After all, I have experience of this not only from knowledge of what is happening in certain areas but also in the course of practice. Every solicitor comes across these problems.
In my view, the only way in which you can prevent this great speculation going on is by making those who are utilising the present position in the way they do realise that they are not going to benefit and that they may even lose from the transactions in which they participate.
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Consequently, I hope that what the Minister has said with regard to the possibility of bringing in higher rated places will be considered by the Government between now and the Report stage. I should like to underline that it is not only the question of the protection of the tenant it is the question of the protection of the community against an inflationary action which is taking place and which does not produce benefit to the country but only a benefit to private individuals who have to be utilising the position for the purpose of creating highly inflated values in respect of accommodation.
This practice is bound to go on unless something is done, because if a rateable value is reached beyond which there will be no protection a new avenue will be opened for people to continue that kind of speculation against those who in many cases are prepared to pay anything in order to have accommodation. I think the country is confronted at the present time with a situation which demands drastic surgical operations (if I may put it that way) and this is the method which, although it may not entirely deal with the position, at least will create a situation in which people will be frightened to take the kind of actions that have produced such, as I think, universal disapproval in the country except among those who have been speculators in that sense. I hope noble Lords will forgive me for having taken up so much time, but I really feel—and I say in all humility; I have had vast experience of this particular subject of rent control—that now is the time to take this action, and I hope that the Government will accept the proposal that has been put forward.
7.37 p.m.
LORD BETHELL: I should like to congratulate the Government in taking a new view of this problem since about six months ago when the Housing Finance Bill was discussed by your Lordships. It was then thought by a large number of advisers to the Government that those who inhabited unfurnished flats with a rateable value of more than £400 in central London, £200 outside, must be comparatively well off, must in fact be quite rich and able to exercise choice in housing matters. Many people tried to show at that time that that was not

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always the case, but that genuine hardship was caused to people, particularly in central London, who lived in flats with rateable values slightly higher than £400 and who perhaps were of an age where mortgages were hard to obtain. Leases very often were not being renewed. They were being offered long leases, often in excess of £25,000, and were unable to purchase their leases and were in fact being evicted.
The Government now feel that in very many cases there is a genuine hardship and I wish to express my appreciation to them for bringing in this Amendment. There are just two quick points that I would make about this proposal; one is environmental. Even after this Amendment is carried there will, I suspect, remain a pocket of highly rated residential units in central London. The noble Lord, Lord Royle, spoke about the South Coast which is an area particularly affected. Another area which is particularly affected is Mayfair and certain parts of the City of Westminster, where there are flats and houses inhabited by tenants on an unfurnished basis which will be higher even than the proposed £600. They will not perhaps be exposed to hardship but may be threatened with eviction.
Whether this is a valid point on social grounds I would not care to argue, but on environmental grounds I would suggest there is severe danger to the character of the centre of London, because it is here that tile pressure is greatest for residents to move out and for itinerants to move in. By "itinerants" I mean diplomats who are prepared to pay very high rents for furnished flats; directors or visiting executors of companies who come to London for a month or even a shorter time and who are ready to inhabit flats on a short-term basis for extremely high rents, and even tourists who will find in Mayfair and other parts of the City of Westminster and also the Royal Borough of Kensington and Chelsea, clandestine hotels which purport to be blocks of flats but which in fact are places where one may walk in and take a room for the night.
This situation has been aggravated by the fact that tenants who used to inhabit highly rated flats have had to move out. It is particularly prevalent in blocks like Ashley Gardens in Victoria and I would suggest that a higher limit than £600 is
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appropriate in central London where a comparatively modest flat can, in certain areas right in the centre, exceed the limits proposed. The alternative is a continuing depopulation of the very centre of London, and one only has to look at statistics to see that in the ward of Mayfair, for instance, two-thirds of the population have left since 1939. The area is becoming something approaching a ghost town. This will continue unless some finger is put in the dam and something done to stop more and more residential units being vacated and more and more residential tenants being replaced by itinerants.
The other point that I want to make is on the question of anomalies which may arise, even under this Amendment which is a tremendous step forward. When this matter was discussed in the Housing Finance Bill it was pointed out that there can be glaring anomalies. For example, where there are two flats next door to each other, one with a rateable value of £398 and another with a rateable value of £402—and they can be identical flats—someone might have made an application and got his rates slightly reduced. He then has protection while his next-door neighbour in an identical flat has no protection. My noble friend who was replying for the Government pointed out that one must draw the line somewhere, and that whatever limit one sets there will be some on one side and some on the other. What I should like to ask now is this. Have we not reached a stage where the number of units without protection—and when I say "without protection" I mean without any protection, without even the protection given to furnished tenancies— is so small, 4,000 out of a total of many millions of residential units in the country, that it would be tidier and clearer to abolish this group of residential units altogether and to give protection under the fair rents system to all?
I know that there are many people in your Lordships' House who feel that extension of protection such as that now proposed by the Government is a violation of the law of contract and that the present situation is bad enough without being increased. One can argue this point; but I would suggest that since the fair rent system was brought in by the previous Government is has become

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very firmly established in the law of the country and is accepted as just by the vast majority of people, even by the present Government, and that it is here to stay. These 4,000 units if they remain will surely be something of a relic of a bygone age, a control of the period before rent control on unfurnished tenancies where market forces were the sole criteria of rent to be fixed. They will be something of a coelacanth, a prehistoric animal about to become extinct. It might be better, perhaps not during this Bill but in the near future, to abolish altogether this group. But in general I should like to say how pleased and encouraged I am that the Government have seen fit to bring in this Amendment which is a tremendous step forward.
THE EARL OF KINNOULL: I wonder whether I could talk about my Amendment without moving it. It is very much concerned with my noble friend's Amendment No. 29. Before doing so, I should like to congratulate my noble friend on his very clear introduction and on the official interpretation of both the new clause and the new Schedule, which is very complicated, and also to congratulate the noble Lord, Lord Royle, for the moving way in which he introduced his Amendment. The purpose of my Amendment is to simplify, if possible, this rather complex wording. At the outset, like other noble Lords, I would say that there is no disagreement on the new clause introduced by my noble friend. It is much to be welcomed. The argument that it would dry up the market is now shown to be nonsense as an economic factor. It is fundamental to the system that you can sell long leases at a greater profit than the old three, five or seven year leases for rental. Other speakers have referred to large-scale operations by property companies for the breaking up of flats. We have seen this in the case of Key Flats, of the St. George's Estate, Pimlico, and there have been cases in Hampstead. My noble friend spoke of hardship cases, of old tenants on fixed incomes having lived for years in certain areas, who being unable to purchase the lease have had to move. We have seen changes in the communities of these areas and the break-up of mixed-income inhabitants of the area which, from a good planner's point of view, is bad planning.
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Undoubtedly the break-up of flats has caused hardship.
I am grateful to my noble friend for introducing this clause tonight. My only doubt about the new clause and the new Schedule is that we seem to be tacking on to an emergency Bill with a maximum life of three years a fundamentally complicated housing matter. I believe that this sort of Amendment should really be the subject of a proper Housing Bill, carefully considered and drafted. Evidence of the haste of drafting is apparent, and my noble friend was good enough to say that she will be looking at the drafting again. I wonder whether there are any loopholes at the moment in the present drafting of the clause; for it includes three stages at which we must in future look at rateable values. The first is the 1965 rateable value of property; the second is the present, March, 1973, rateable value; the third is that of April 1, 1973. Houses which had a rateable value of £410 in 1965 would have been outside the protection. If in March, 1973, due to improvement of that property, it had been re-rated to £580, it would be inside. If then in the revaluation of April it was rated at £1,510, it would be outside. What will be the protection situation of that property? In 1965, a house of £395 rateable value would be inside; in March, 1973, with a rateable value of £610 it would be outside. In April it could be revalued to £1,510. What of that case? One could go on quoting cases which would confuse my noble friend. I am not intending to do this, but these are examples of arguments used by the noble Lord, Lord Royle, in favour of the 4,000 remaining units coming into protection. A property that could have been a cottage in 1965, but has since been converted into a mansion could to-day still claim protection under the protected tenancies net.
The purpose of my Amendment is to simplify the words, to put into this Bill the wording of the 1968 Act. I hope that my noble friend will be able to say that this matter is going to be looked at again and will invite any noble Lord who is interested in it to help to redraft the clause in relation to the limits. I was going to say that I accepted the Government argument; but having heard the noble Lord, Lord Royle and my noble

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friend behind me, I am convinced now that the 4,000 units should come within the protection network. I wish to ask my noble friend three questions. The first refers to redevelopment. There will be old blocks of flats at present outside the rateable value protected tenancy where, due to redevelopment, under the protected tenancy the owner or developer would have to offer suitable alternative accommodation. I believe that this could cause problems in respect of certain old types of flats, particularly in London, where there is a genuine case for redevelopment, and I ask that this matter may be looked at to see whether an exception could be made on a limited scale within the present clause.
My second point is, what happens in Scotland? I do not think that Scotland is referred to in the clause or the Schedule and I think that it should be. Thirdly, on the question of appeals, on April 1, 1973, we shall have come to the publication of the new revaluation. Many people will appeal against their rating assessment and many of the appeals will not be heard perhaps for 12 months. I wish to ask whether the original assessment will be the one on which the rateable value will be assessed or whether it will be the final assessment. That is an important point for tenants who are in a borderline situation. Otherwise I welcome what my noble friend has said, and wish to thank her again for her clear exposition.
BARONESS YOUNG: I am sure that we all listened with sympathy to what was said by the noble Lord, Lord Royle, and what was said in supporting him by the noble Lord, Lord Janner. As I said in moving the new clause, one of the particular difficulties about setting a limit anywhere is that it must up to a point be an arbitrary limit, and there always will be hard cases on the borderline. This was found to be true when the limits were set in 1965. The Government have taken into account the arguments which have been put in this Committee and in another place about the hardship caused to about 80 per cent. of the tenants remaining outside the Rent Acts. They have fixed these limits to bring in those tenants. They feel it would be wrong to abolish the limits altogether. Although the number of
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excluded tenants may be small, probably about 4,000, the Government do not feel that it would be reasonable to bring within the fair rent system many of the mansion flats and penthouse-type flats with rentals of several thousand pounds a year. They consider the limits that they have set will meet the case in respect of the majority of tenants affected and do not feel they can go beyond that.
The noble Lord raised a particular case and I should like to confirm that subsection (1)(aaa) of the new clause does not include the case he mentioned. However, I said that he might be able to take some comfort from the fact that, as a result of the rating revaluation, the tenants about whom he has spoken may find that the rateable value of their flat is less than £750 on April 1. I believe that the case he quoted was of a flat which in March had a rateable value of £326 thus bringing it outside the ambit of the 1965 Act and protection. Assuming the arithmetic to be more or less correct the value, when multiplied by 2·5, would bring the figure to somewhere about £605. These cases could come within the protection of the Rent Act if, as indicated in my speech, we are able to find a way to amend these provisions on Report and bring them within the Rent Act, with the tenancies with a rateable value on April 1 not exceeding £1,500 in London and £750 elsewhere.
I apologise to the Committee, because I realise now that I have not got my arithmetic quite right. But I think it is the kind of case which could be dealt with, and I gave an undertaking that we might be able to bring forward an Amendment on. Report to meet that point. I am grateful for what was said by the noble Lord. Lord Bethell. I am glad that he derives some comfort from the fact that we have been able to meet part of the case he made, and I think the argument that I have just advanced to the noble Lord, Lord Royle, applies also to him.
LORD BESWICK: I wonder whether the noble Baroness would explain her arithmetic. If the rateable value of the case mentioned by my noble friend is £326, and one multiplies that by 2·5, surely one gets a figure in excess of £750.
BARONESS YOUNG: The noble Lord is absolutely right and I apologise. I looked at it in rather a hurry and arithmetic never was my strong point. I do apologise for making a mistake.
LORD BESWICK: Is the noble Baroness then saying that my noble friend may take no comfort from this, and that his case will not be covered?
BARONESS YOUNG: I was going to say that it entirely depends on how the arithmetic works out. The 2·5 is an average figure. It could well be that on revaluation the new rateable value would be below £750 a year. Then the Amendment we hope to be able to move on Report would cover it. I am not saying this will cover every case, but it could well be that it would cover this particular case.
My noble friend Lord Kinnoull raised a number of points and I should like to make clear that the new clause will be a permanent addition to the Rent Act. I imagine that one day the rent legislation will be consolidated, but in the meantime it will remain on the Statute Book. Regarding the detailed examples he gave about rateable values, I should like to write to him when I have had an opportunity to study the cases he made out. The noble Earl put three specific points. In the case of redevelopment, where there are still tenants in some of the flats, once the Act comes into force and they are eligible under the fair rent scheme, they will have security of tenure, as other tenants do under the fair rent scheme. I confirm that this new clause does not apply to Scotland. On the question of rating appeals, I hope that I made clear in my second answer to the noble Lord. Lord Beswick, the position about the Amendment we hope to bring forward on the question of new rateable values which would come in on April 1. Having made the point quite clear I hope that the noble Lord, Lord Royle, will feel able to withdraw his Amendment.
LORD ROYLE: I am grateful to the noble Baroness. In her last few sentences she gave me a lot of comfort, but I hope she will forgive me if I say that I shall await with great interest what transpires when we get to the Report stage. I want to reserve my position, and if I am not made as happy as at
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this moment I feel that I could be, I must come back to this matter on Report. I want to make sure that the noble Baroness's arithmetic is right and that the people I have mentioned are protected. If, when we get to Report stage, I see that the protection is there, I shall be happy; otherwise I shall have to come back to this point. Meanwhile, I beg to ask leave to withdraw the Amendment to the Amendment.
Amendment to the Amendment, by leave, withdrawn.
LORD JANNER: I assume that we are now dealing with the new clause itself. I did not speak on the Amendment but there are one or two points which I want to make. I should like first to add my congratulations to the Government. I do not want to appear difficult about the matter, but it is a little unfortunate that this was not brought in when inflationary action was being taken some considerable time ago. Nevertheless, I should like to congratulate the Government for bringing in this particular clause. However, there are one or two points I should like to raise, even at this late hour, because I think it is important that the public should know where they are on these matters. There is the question of the Landlord and Tenant Act 1954, which relates to tenancies which have come to an end or which might come to an end. They are long-term tenancies on which there is a question of ground rent only, and not rack rent. I should like to be satisfied that the clause, as it stands, will cover the cases referred to in that Act. I believe it probably is the case, but it is important that we should have an assurance about it, because it is an important matter from the point of view of people who have long-term tenancies.
There is one other point which I should like to make—and I hope the noble Baroness will forgive me for referring to it at this stage. There is another section of tenants who have long leaseholds. For many years there was a big struggle to enable tenants who hold long leases to purchase the freeholds. The Act which provides for that again has the limit in so far as rateable values are concerned. I do not want to argue the case now, because it is late, but I think it has actually formed part of the question of inflation. Perhaps the noble

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Baroness would consider between now and the Report stage whether she could not also bring in a provision to enable the Leasehold Reform Act 1967 to be amended in a similar way to the Rent Acts to which she has referred. This is of importance to a large section of the community, and certainly I would advocate the bringing into the same rateable value scheme leasehold reform, so that it can have similar attention to that given to rented houses.
THE EARL OF KINNOULL: Before the noble Lord sits down, I wonder whether he can clarify to the Committee what possible effect the Leasehold Reform Act has on this Rent Act. The Leasehold Reform Act has nothing to do with the Rent Act.
LORD JANNER: Indeed, it has. With respect, a person who has a long lease and whose lease is about to terminate is placed in an extremely serious position. The whole object of the Leasehold Reform Act was to give him protection in a similar way to that granted by the Rent Acts, and, in addition, to enable him to purchase the freehold. I think that we should take this opportunity to extend the provisions of that Act. We are dealing with the question of rateable values in so far as the Rent Acts are concerned and increasing the range there, and frankly, I do not see why these tenants who have held tenancies for many years should not have the same opportunity in so far as the actual extension of rateable value is concerned.
THE EARL OF KINNOULL: Is the noble Lord saying that long-lease tenants would not be protected by the Rent Act?
LORD JANNER: There is a certain amount of protection under the Rent Acts, but the provision in so far as concerns the security of tenure for long leases has been extended to enable people to purchase their freeholds, and I see no reason why they should not purchase the freeholds if their rateable values are more.
BARONESS YOUNG: The noble Lord, Lord Janner, has made two points. The first is as to what effect this new clause will have on the Landlord and Tenant Act 1954, and whether these people will be covered by the new limits in the Rent
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Act. I am glad to confirm that they will, and that the Landlord and Tenant Act affects the relevant provisions of this Rent Act. The second point that he raised was with regard to the Leasehold Reform Act, and in this case the answer is No; the Government have no proposals for raising the limits except in relation to rating revaluation. Over the years a number of cases have been determined under the existing limits, and to make any change now would not be equitable. So we have no plans at the moment for altering that.
LORD JANNER: Would the noble Baroness consider it again between now and the Report stage?—because it is an important matter and affects a large number of tenants.
BARONESS YOUNG: I take the noble Lord's point that this is an important matter, but, with respect, I do not think it is strictly relevant to this new clause, and I could not give any undertaking at this stage.
LORD STRABOLGI: Perhaps before we leave this the noble Baroness could answer two questions. First of all, with regard to existing tenancies which already have protection and have rateable values under £400 in London or under £200 outside London, based on the 1965 Act: will these be affected by any revaluations which may take place on or after April 1, or will they continue to be based on the earlier date of 1965? Secondly, I wonder whether the Government have considered the question of tribunals. The noble Baroness mentioned the courts when she put forward this Amendment. There have been cases with these tribunals when there has been a dispute between a tenant and landlord; the landlord has been a rather rapacious company—the type of company alluded to by my noble friend Lord Royle and the noble Lord, Lord Bethell—and has asked more than the tenant thinks it is worth. They have not been able to come to agreement. It has then gone to the tribunal, and the tribunal has fixed the rent even higher than the most rapacious landlord wants. Yet there is no appeal. What are the Government proposing to do in a situation of that kind? Are they proposing that there should be an appeal to the courts; or are they leaving this to the decision of the tribunal?
THE EARL OF KINNOULL: Before my noble friend replies, may I point out that surely that is the appeal. The noble Lord says that there is no appeal from the tribunal. The tribunal is the appeal body.
LORD STRABOLGI: But the point I was trying to make was this—and perhaps I may give an instance which was in the newspapers. The rent was, I think, £900 a year, and the landlord wanted to increase it to £1,100, which the tenant thought was too much, although he was probably prepared to pay £1,000. They then went to the tribunal, who said: "We do not think £1,100 is enough. We think a fair rent is £1,300", which was £200 more than the landlord had thought of. Will it be possible to appeal against decisions of that kind?
BARONESS YOUNG: The noble Lord, Lord Strabolgi, has raised these two points and I should like to confirm that the new clause applies to all tenants under the present Rent Acts whose rateable value in London is £400 a year or less and outside London £200 a year or less.
On the second point, I am not a lawyer, but as I understand it, where a tenant and a landlord go to the tribunal and the tribunal determines the rent, as my noble friend Lord Kinnoull has said, this is the new rent; this is the decision taken by the tribunal on appeal. There would be no further appeal from that decision.
Clause 13 agreed to.
Clause 14 [Power to obtain information about rates from rating and other authorities]:
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 30:
Page 11, line 34 leave out subsections (6) and (7).
The noble Lord said: The hour is somewhat late, but the subject matter of the Amendment is important and I trust that your Lordships will bear with me while I put the case in support of it. Clause 14 gives the Secretary of State the power to require rating and other authorities to furnish information about rates for the financial years 1973–74 and 1974–75, including information about the levels of proposed rates together with the esti
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mates and other assumptions on which those proposals are based. The clause also enables an authority to substitute a new rate where it appears to them that a rate lower than one made for either of those financial years will prove sufficient.
One wonders why this clause was ever put in the Bill. The whole of it is offensive to local government and casts an aspersion on them that they do not deserve. Subsections (6) and (7) are largely concerned with machinery. This was stated by the Minister in the other place at col. 1607 on February 28, when he said that subsection (6) provided for reducing a rate after it had been published and subsection (7) dealt with the giving of information about that reduction. It is interesting to note what the Minister said on February 28, and I quote:
"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."
There is no precedent for the powers which the Government are now seeking and I certainly have no knowledge of any instance of non-co-operation by local government which would warrant the inclusion of this clause in the Bill. Perhaps I might put forward the feeling of the local authority associations in this way. It has been the practice of the associations and their members to cooperate with successive Governments in policies aimed at helping the national interest, and if some sort of monitoring system of rates is required in the present economic climate it could be achieved by an entirely voluntary approach without the necessity for the compulsory power proposed. The fact is that this is nothing more than a piece of window-dressing, and I more than doubt that anyone seriously thinks the occasion will arise when the local authorities, having made a rate for the years 1973–74 or 1974–75 will in fact make a new or a second rate on the grounds that the amount of the first rate exceeds what is required in respect of either of those two periods. Local authorities do not work in this way.
The clause gives the Secretary of State the power to monitor proposals of local authorities, but what complaint can be

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made of the unwillingness of local authorities to give information? What evidence is there of any such unwillingness? Do the Government not already get all the information they want without this new provision? It may be argued that the Secretary of State ought to have the power to request a reduction or a re-consideration of the rate. That is the only merit that can be advanced in favour of these subsections (6) and (7), and probably of the whole clause. Before this indignity —and it is an indignity—is perpetrated on local government, I believe that we in this Committee ought to remind ourselves of how local authorities deal with the fixing of rates. The fixing of a rate or precept represents the decision of a democratically-elected body and is the culmination of a very long process, which must be an exercise of judgment. The judgment lies in the establishment of a proper balance between the demand for services and the cost which the ratepayer can fairly be called upon to pay. The process is a long one and is carefully carried out. It is difficult to see how a short, sharp, monitoring process on one sheet of paper can interpose a better and more valid judgment. If it is only an increase in expenditure that is to be called into question then it becomes even more difficult, since reference has to be made to such things as the budget for the previous year and the base-line from which an authority is working.
The Government's approach would appear to be that they are not calling into question the judgment of the authorities but merely saying that, even if the judgment is correct, the overriding factor is the danger of inflation and that, come what may, the rate should be reduced. It is important to remember that many of the functions of local authorities are obligatory. Much of their expenditure is quite beyond their control. In any case, if control of expenditure is regarded as essential it should be undertaken in a different way, but it can best be done in full consultation with local authorities when considering the rate support grant calculations. This could be done well in advance within this framework by letting local authorities know in ample time; that is to say, prior to the preparation of their estimates.
I find it ironic that the Government should be seeking these powers at a time
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when they have been compelling local authorities to raise rents and when some authorities have been taken to court for refusing to act as agents in an operation that itself has helped, and will go on helping, to produce an inflationary pressure. I find it particularly ironic when I reflect on the promise of that "better to-morrow" when those meaningful words were spoken:
"We think it wrong that the balance between central and local government should have been distorted, and we will redress the balance and increase the independence of local authorities."
Under this Government we have seen the whittling away of the power of local government. There was the Housing Finance Act; the use of Section 68 of the Education Act by the Secretary of State for Education and Science; the loss of health responsibilities and powers as a result of the reorganisation of the National Health Service; and so we judge the Government's promise by their performance.
For local authorities this clause represents another intrusion, and a very unnecessary one—an indignity they do not deserve. Mr. Graham Page, speaking again on February 28 in the other place, said, and I quote from column 1604 of the OFFICIAL REPORT:
"… in local government finance central Government are a partner with local government, and not merely a sleeping partner: central Government contributes 60 per cent. of the expenditure of local government."
He went on:
"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."
I doubt whether this clause will give the Government one iota of information they could not obtain otherwise. If a partnership is going to be meaningful it certainly needs to be based on trust, and that trust is not strengthened when one partner is reminded too forcefully that despite his responsibilities and public accountability he will do as he is told. One wonders whether this clause is designed merely to show that the Government intend to make it known that they are the masters. I do not think that local government quite deserves to be treated in this way. I beg to move.
8.22 p.m.
VISCOUNT AMORY: I go some of the way with the noble Lord, Lord Garnsworthy, though perhaps not all the way. Local authority associations, as the noble Lord said, have an honourable tradition of co-operating voluntarily with the national Government of the day in the national interest. We would have hoped that it would be thought unnecessary to make statutory provision of this sort which seems rather derogatory to the local authorities. In fact, I think the local authorities feel hurt at this treatment. When the Bill first appeared the provision was permanent. The association I am connected with disliked that very much. At the Report stage in another place the provision was limited, I think, to two years. We recognise therefore that the Government come some way to meet us; but we still dislike the principle of statutory monitoring in a case like his, and would be preferred the Government to have been content to rely on voluntary co-operation, and I am sure that that voluntary co-operation would have been given.
8.26 p.m.
LORD WIGG: I can understand the local authorities being hurt, but I do not think that they ought to be surprised. They knew just how far the independence of local authorities was impinged upon by the previous Administration. They could judge for themselves just how far it was a political gimmick for the present Administration to announce that they were going to restore independence which had never been taken away from them. I am sorry that they are hurt; I am very sorry indeed that their dignity has suffered. But that is just as far as my sympathy goes, because even in local government they are concerned, in most local government areas, with the stuff of which politics are made, and they will have been able to read the signs aright.
They know that this Bill is from beginning to end a piece of political window dressing, and that local authorities up and down the country universally —there have never been exceptions—have always co-operated manfully with central Government, irrespective of its complexion. They know that. They know also that the Government have to put the dummies in the shop window to cover
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their past mistakes. Therefore the Government are shaking their fists in the face of their old friends, the local authorities, in order to make others feel that this is a tough Administration. Of course it is not. The present Administration are sawdust Caesars. The more co-operative institutions have been in the past, the more likely the Government are going to treat them with indignity and be rude. When they get a little of their own medicine they do not like it; they start invoking the national interest at the top of their voices.
It is no accident that the Tory Party has always been the Party of bellicosity, the Party of patriotism. It is no accident that Dr. Johnson in his day said that patriotism is the last refuge of the scoundrel. It is the last gimmick left in the political spectrum. This clause does not mean a single thing. I would say to my noble friend Lord Garnsworthy who as a good local government man obviously feels deeply about the indignities that the Government have heaped upon local authorities up and down the country: Be of good cheer! This does not mean very much. Everyone whose opinion is worth having thinks well of the local authorities; they know very well that they have cooperated in the past; they know very well they will co-operate in the future. If the Government want any information they will have it. There may be one or two exceptions who will stray, but, by and large, the local authorities in this country will co-operate. The Government know that they will co-operate and everybody else whose opinion is worth while knows this very well.
It is no good pleading with the Front Bench opposite because they are not going to shift. How dare they move one single dummy! It would take away something from the picture that is put in the shop window. What they are doing is meant to be another indignity heaped upon the co-operative local authorities, another form of the political alibi that the Government are using in order to disguise the shift of their policies.
LORD MILVERTON: I feel in some difficulty in this matter. Following this Amendment I have an Amendment proposing the complete deletion of Clause 14. T was not going to make a speech on the subject because I have already made the speech on the Second Reading of the

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Bill. As there was no time for answers to be given on that occasion, I thought that replies might be given to the many criticisms, some of them coinciding with what we have heard to-night, on this occasion. That is the reason why I put down the Motion—in order to give the Government the opportunity of giving the answers to the speech I made during Second Reading.
Owing to the slowness of the mail and such things there has been some delay, but yesterday I received a private letter from my noble friend Lord Drumalbyn. The letter said that he regretted that he had not had the opportunity of a lengthy summing up on the Second Reading, but wanted to put me right over certain points of view taken by Government, and he painted the picture as he saw it. He also eliminated some of the mistaken outlook which I had had. The answer to much of the debate we have heard Ito-day is shortly, no doubt, going to be given by my noble friend Lord Drumalbyn. What he wrote to me in that letter convinced me that I had misjudged the Government's point of view, and the picture he painted made me feel that I would no longer be justified in proposing or supporting a Motion for the deletion of this clause. It would be much better for him to give the contents of that letter rather than for me to try, even if I had his permission, to repeat some of the words written in that letter by the noble Lord: because obviously what one wants are his own words in the record of Hansard, and that we can get properly only from his own lips. I shall look forward, no doubt, to hearing him repeat to this Committee much of what he wrote to me in that private letter. I shall only say that I personally propose to ask the Committee to allow me to withdraw the Motion standing in my name for the deletion of this clause, and that will mean that I shall also oppose the Amendment which is now before your Lordships.
LORD DRUMALBYN: I must say to the noble Lord, Lord Garnsworthy, that he seems to have misunderstood the situation and that we certainly cannot accept the Amendment. The clause simply gives the Secretary of State power to require certain information; it gives him no power to fix a rate or precept or to tell a local authority what rate or precept it should make. The noble Lord speaks
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as though there was a power to require—
LORD GARNSWORTHY: If the noble Lord will read to-morrow what I have said, he will see, I am sure, that his brief is not too well prepared.
LORD DRUMALBYN: I heard the noble Lord use the words "telling the local authorities what they should do". The fixing of rates is entirely a decision for the authority concerned and it alone is in a position to know all the local circumstances. Any Order made under the clause would be merely an Order to provide information. The power in Clause 6 is simply a power given to the local authority to reduce its rate of precept. It is a new right, not a derogation of power. Rates are, after all, an important item in household budgets and industrial and commercial costs. In the context of the far-reaching measures we are taking to counter inflation we did not think it right to leave rates entirely out- of account. The noble Lord said that we could rely for this information on the voluntary co-operation of rating authorities. We have indeed, as I acknowledge with pleasure, had for the most part excellent co-operation, and indeed the monitoring of rates for England and Wales for the coming year is already taking place on a voluntary basis. It would not have been fair to the great bulk of authorities who are co-operating in the counter-inflation policy if those who are unwilling to give information voluntarily were not required to do so as well.
I would draw the attention of the Committee to the fact that the powers extend only to the end of March, 1974, which will enable monitoring to take place again next year if it is considered desirable to repeat this year's exercise. This limitation results, as my noble friend Lord Amory has said, from Government Amendments in another place, which took account of representations which have been made to us on this point, and in particular this meets representations made by the County Councils Association. The monitoring exercise was explained to local authorities in a Circular that went out on February 2 and some 80 per cent. of the rating authorities have already replied. In the short time since the exercise began about one-fifth of these

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have been asked to review their expenditure and 25 have already agreed to do so, with reductions totalling about£¾ million. This is a very reasonable figure over the short period and I hope the noble Lord will agree that rate monitoring is well worth while.
I cannot accept this Amendment, which would reduce this clause to a virtual nullity, and it would be better to do as my noble friend Lord Milverton suggested, namely, to leave out the clause altogether. But I think my noble friend Lord Milverton has been satisfied on the basis of the letter that I wrote to him that there is sense in what we are doing here; that it is not a derogation of the powers of local authorities; it fully respects the independence of local authorities. All it does is to ensure that local authorities, like everybody else during this particular period that we are in, will co-operate in the fight against inflation.
LORD WIGG: If the noble Lord has written a letter to one of his noble friends which is so completely convincing, why should not the rest of us hear it? Is it some confidential document or has he used arguments to his noble friend of which he is ashamed? Why can we not have this letter read out, because I am sure that the letter must have been strong to have convinced the noble Lord, Lord Milverton. At one time he was a very powerful colonial official and I am quite sure he would not have been convinced by the arguments that have been put to us now. So this great magnum opus which the Minister has obviously taken such a long time to prepare should be read to the rest of us so that we may all know what it is.
LORD MILVERTON: May I say that the noble Lord who has just spoken should not be surprised that I do not publish private letters. It has not been my custom to do so without the permission of the writer and I do not propose to vary my custom, however it may differ from the noble Lord's. In addition may I say that the question of whether I can be convinced by the arguments which have just been repeated by the noble Lord, Lord Drumalbyn, and the fact that I was convinced by those arguments setting out the Government's point
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of view as being reasonable, is a matter for my judgment. The noble Lord may find it impossible to understand how I could have come to that conclusion, but it is also possible that I may be right.
LORD WIGG: On the contrary, the noble Lord's comments as regards myself border on the verge of being impertinent. I understand perfectly well that the ownership of the copyright of a letter that has been written does not rest with the noble Lord; it rests with the person who wrote it. Perhaps the noble Lord will humble himself and will take into account the fact that I was not addressing him. His opinions in this matter do not count. I was addressing my remarks to the Minister. He is answerable to the House, not Lord Milverton. Therefore if the noble Lord writes a letter to another noble Lord, which he has quoted, at least under the rules of the House of Commons you are required to lay it. That is a Parliamentary custom and perhaps the noble Lord has not been in public life long enough to understand its fundamental decencies.
LORD DRUMALBYN: The noble Lord is a very skilled Parliamentarian himself and he knows perfectly well that when a Member of Parliament raises a question during a debate and it is not answered one has the courtesy to write and deal with the point afterwards. That is what I did in that case. I would not dream of regarding anything that my noble friend has said as an impertinence. This was a perfectly ordinary procedure. I have given to the Committee the substance of what I said to my noble friend in that letter. The noble Lord may or may not find it convincing: my noble friend has said that he is convinced and I am happy with that. So I hope the noble Lord will accept that it would not be usual for me to read the letter now.
8.29 p.m.
LORD GARNSWORTHY: I am grateful to noble Lords who have taken part in this short debate. I had intended to take up the matter that the noble Lord, Lord Wigg, has just been pursuing: and indeed I will, because I will say that if the noble Lord, Lord Milverton, is satisfied by what we heard from the noble Lord, Lord Drumalbyn, then he is indeed

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very easily satisfied. He can read Hansard to-morrow and he had better compare it with his letter, because we heard from the noble Lord, Lord Drumalbyn, no argument that could persuade anybody who knew anything at all about the subject. The noble Lord, Lord Milverton, often speaks for at least one of the local authority associations, and part of what I have said this evening was quoted from what they themselves have said, and I did not lightly table the Amendment. I think the speech of the noble Viscount, Lord Amory, indicates that in point of fact the local authorities are not so happy as the noble Lord, Lord Drumalbyn, endeavoured to persuade the Committee.
LORD DRUMALBYN: I did not base my case on the happiness of the local authorities in this matter; I based it on the argument of the strength of the case itself.
LORD GARNSWORTHY: So far as that goes, I am making the point that although he made it clear that he did not go all the way with me, the noble Viscount, Lord Amory, made it fairly clear—and he speaks with a very close association with one of the major authorities—that they are not happy. I thought that the noble Lord, Lord Drumalbyn, tried to ride off with it much too lightly. If I may say so, I think that he stuck much too much to his brief and over-anticipated what was going to be said. He criticised the interpretation I placed on Clause 14. What I said about Clause 14 I read word for word from the Explanatory and Financial Memorandum and I was very careful to do that. I hope that the noble Lord will take a little more care in future before he suggests that I misrepresent the position when I do that. I believe that that is a very fair point for me to make. I believe that the Committee is entitled to know what the noble Lord, Lord Drumalbyn, wrote to the noble Lord, Lord Milverton. The noble Lord, Lord Milverton, asked questions in debate and there is a point at which the House perhaps will want to know detailed answers to the questions he raised. Let me put it in that way, because it will not be difficult for us to pursue it. I certainly should like to see a copy of the letter that was sent because there appear to be some very overpowering reasons if
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the noble Lord, Lord Milverton, is persuaded, having spoken as he, did on Second Reading.
LORD DRUMALBYN: If my noble friend agrees, I have no objection whatsoever to sending a copy to the noble Lord. The point is that my noble friend raised this matter in the debate and the noble Lord did not, otherwise I would willingly have sent him a copy.
LORD GARNSWORTHY: We frequently do not raise questions that have been asked by other people. If they have been raised in open debate, there is a point at which the Committee and the House considers it is entitled to have the answer to the question that has been raised. If the noble Lord, Lord Drumalbyn, is offering to pursue with the noble Lord, Lord Milverton, whether he will let me have a copy, then I accept his offer and I shall be interested to know what co-operation he gets from the noble Lord, Lord Milverton, because I believe that it will be 100 per cent. I should not have thought that there was any reason why the contents of the letter could not have been disclosed.
LORD DRUMALBYN: The noble Lord is making terribly heavy weather about this matter. There is no question whatever of holding this back. It was a letter from myself to the noble Lord, Lord Milverton, and what my noble friend has said is perfectly correct. I have made an offer to send the letter and I understand that my noble friend has no objection to my doing so. My noble friend agrees with me that he has no objection. I shall send the letter to the noble Lord, Lord Wigg, as well. It is completely unusual to read out a letter that has been sent to somebody else. I have never known it done, and the noble Lord should get to know more of the procedure of this House.
LORD WIGG: But it is a question of constitutional importance, and the Minister knows it perfectly well. The questions are asked in debate and once this House, or any other deliberative assembly, is used as a forum in which to ask questions, what is said is the property of all Members. The question of privilege in both Houses of Parliament is a common possession, not an individual possession. The copyright, the ownership, of that

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letter is vested in the Minister. If he uses a private vehicle to convey an answer to a public question, then it should be kept private and not brought out into the open, or any part of it brought out into the open. The Minister has not gone sufficiently far for one to be able to formulate a question here which would involve him in revealing the contents of the letter. I do not think that there is any secret about it, but I feel that it should be accepted, if only as a standard of courtesy, that if a debate is used to ask a question publicly then the answer should not be given privately.
LORD DRUMALBYN: We must not allow this matter to go past because it will disrupt the usual way in which we deal with our affairs in this House, and with which the noble Lord is not yet sufficiently familiar. I know that he has been a Member for a long time but he has not so far come here very often. We very often deal with matters this way by way of courtesy. We write to a noble Lord who has raised a matter in the House either because the Minister does not know the answer at the time or because he has not time to answer. This is done regularly and it is regarded as a facility and a courtesy. There is no reason at all why a letter should not be referred to. There is no Rule of the House against this whatsoever and it would certainly be a great loss to the House, I would submit to your Lordships, if we were to discontinue a procedure which works extremely well and is universally appreciated.
LORD BESWICK: I think that the noble Lord, Lord Drumalbyn, is making a mistake if he tends to underestimate the Parliamentary experience of my noble friend Lord Wigg. I suggest that it is a very weak argument on which to rest his case. Is there not a little truth on all sides here? It is perfectly correct to say that letters are sent to individuals. That is all right and in order, and nothing that my noble friend has said suggests that it should not be continued. The difficulty here arises when one noble Lord makes a reference to a letter and suggests that there is something about it which is much more convincing than we are allowed to hear in public. When that point is reached, another custom should be invoked; namely, that when a letter is sent
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to one individual it should also be sent to several who are interested or, indeed, published in Hansard.
LORD DRUMALBYN: The fact is that only my noble friend raised this matter in the debate and therefore it was to him that the letter was sent. I feel that we have carried this as far as we possibly can. I was trying to quieten down the noble Lord a little because he had got very excited.
LORD WIGG: May I just add one word? I want to make it absolutely clear and the noble Lord, Lord Drumalbyn, must know it, that I do not challenge the right of Ministers to write to whomsoever they like. In my time as a Minister I have written to Members of the House of Commons and of the House of Lords in the ordinary conduct of business, and that is why I reduced my point to one of courtesy. The issue is not that the noble Lord, Lord Drumalbyn, wrote to the noble Lord, Lord Milverton, but that the noble Lord, Lord Milverton, raised the issue of the contents of that letter as being something which convinced him and which, of course, would have been perfectly all right if the noble Lord, Lord Drumalbyn, had repeated it in his reply. But he clearly did not repeat it in his reply. So an argument was introduced about which we knew nothing. That is the point. I repeat that I am not challenging, never have challenged, and indeed would not challenge, because it would be ridiculous to do so.
LORD DRUMALBYN: May I add what I hope will be the last word in this matter? As so often happens, this shows what happens when one tries to save time. In the letter I slightly abbreviated what I had to say to my noble friend. That is all that happened. And now we have spent ten minutes on it.
LORD GARNSWORTHY: I was in the middle of trying to reply to the debate and I was doing it, I thought, with considerable moderation. The noble Lord, Lord Drumalbyn, said that he was trying to reduce the temperature but he should have seen himself from this side. I think that the point is fairly made and since a use was made of the letter I do not regret the approach I made to the noble Lord, Lord Drumalbyn, or what I said. But let the matter pass. I am extremely grateful to

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my noble friend Lord Beswick. We have had one or two quotations from Scripture while we have been considering this Bill. There was something about heaven and all the powers, or something like that, and my noble friend Lord Wigg has told me to "be of good cheer". When the noble Lord, Lord Beswick, came in I thought, "after the storm the still small voice". I think that we should leave the matter where he left it when he finished speaking. I would not want to take up the time of the Committee by taking this matter to a vote this evening. The noble Lord has made clear the Government's opposition to the Amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Offences]:
9.0 p.m.
THE EARL OF GOWRIE: The purpose of this Amendment is to extend the period of 14 days during which the Pay Board have to give warning notice of their intention to issue a restriction order or notice under the protection given by Clause 15 to employers against industrial pressure to contravene such an order or notice. I beg to move.
Amendment moved—
Page 13, line 6, at end insert—
("( ) Where, under subsection (4) of section 7 of this Act, the Pay Board have given notice of their intention to make or give an order or notice under that section then, for the purposes of subsection (2) above, the giving of the notice under the said subsection (4) shall he treated as if it constituted the making or giving of the order or notice to which it relates.").—(The Earl of Gowrie.)
THE EARL OF GOWRIE: This is purely a drafting Amendment. I beg to move.
Amendment moved—
Page 13, line 24, leave out from ("approval") to ("this Act") in line 25 and insert ("under Schedule 2 to this Act, or for consent under any provisions of").—(The Earl of Gowrie.)
THE EARL OF GOWRIE: With the leave of the Committee, I should like to
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take Amendment Nos. 33 and 34 together. These are tidying up Amendments. The effect of them is to give to trade union officials acting within the scope of their authority immunity from personal liability for an offence committed by refusing or wilfully neglecting to comply with the notice given by the Minister or either Agency other than the provisions of Clause 13, that is to say, requiring the furnishing of information or the production of documents. I beg to move.
Amendment moved—
Page 13, line 39, after ("(2)") insert ("or paragraph (a) of subsection (4),").—(The Earl of Gowrie.)
THE EARL OF GOWRIE: I beg to move Amendment No. 34.
Amendment moved—
Page 14, line 32, leave out ("section 15(2)") and insert ("subsection (2), or paragraph (a) of subsection (4), of section 15.").—(The Earl of Gowrie.)
Clause 15, as amended, agreed to.
Clause 16 [Offences by unincorporated bodies]:
THE EARL OF GOWRIE: Amendment No. 35 is a technical Amendment designed to remove any doubt arising from the present wording of Clause 16(4)(c). I beg to move.
Amendment moved—
Page 14, line 46, leave out ("payable out of") and insert ("enforceable, by way of execution, diligence or otherwise, against").(The Earl of Gowrie.)
LORD BESWICK: This may be a technical Amendment but I am not sure what language it uses. If it is English, I am afraid it is beyond my comprehension. How do you enforce something "by diligence or otherwise"?
LORD DRUMALBYN: Perhaps I could explain. "Diligence" in Scotland is the equivalent of "execution", "or otherwise" is a covering phrase.
Clause 16, as amended, agreed to.
Clauses 17 to 20 agreed to.
Clause 21 [Short title, Supplemental provisions and repeals]:
8.55 p.m.
THE EARL OF GOWRIE: In Sassenach English, this is a drafting Amendment only. I beg to move.
Amendment moved—
Page 18, line 28, after ("Acts") insert ("and instruments").—(The Earl of Gowrie.)
Clause 21, as amended, agreed to.
Schedule 1 agreed to.
Schedule 2 [Approvals and consents]:
8.56 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 37:
Page 24, line 18, leave out sub-paragraph (2).
The noble Lord said: I beg to move Amendment No. 37. The effect of these two Amendments is to transpose subparagraph (2) with the omission of the words "at any time" and put it into a new paragraph (2) while replacing subparagraph (5) of paragraph (1) with new sub-paragraphs (2), (3) and (4) in the new paragraph (2). The reason for this is that sub-paragraph (2) as it now stands prevents the Agency, once it has given its approval, from subsequently reducing the price, charge or remuneration which it has duly approved. That is right and proper in the case of remuneration, but it goes too far in the case of prices and charges. We now think that paragraph 1 as drafted does not make this absolutely clear. The new paragraph 2 does two things: first, it permits the Agencies to frame their approval in whatever way seems to them appropriate for ensuring that the provisions of the Code are implemented, including attaching conditions to it, making all allowances for future changes of circumstances and limiting the duration of approval. Secondly, it permits the Minister to frame this order under paragraph 1 in such a way as to impose the same sort of conditions, limitations and qualifications in the case of deemed approvals as might have been imposed in the case of actual approvals: in other words, to ensure that deemed approval does not exempt the applicant from all his obligations tinder the Code in respect of the price or charge in question, should circumstances change in the future. The
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Amendment will not be placing an onerous burden on industry. It merely ensures that where industry is achieving better results it should share the benefits with the consumer or user. The Amendment is therefore necessary to ensure that the central objective of Phase 2, a reduction in the rate of inflation, is achieved. I commend it to your Lordships for approval.
LORD DRUMALBYN: I beg to move. Amendment moved—
Page 24, line 28, leave out ("sub-paragraph (2) above") and insert ("any provision of this Schedule so specified").—(Lord Drumalbyn.)
LORD DRUMALBYN: I beg to move.
Amendment moved—
Page 24, line 42, leave out sub-paragraph (5) and insert—
("2.—(1) Where an Agency approve proposals for an increase in accordance with an order under paragraph 1 above, the Agency shall not exercise their powers under Part II of this Act so as to restrict any price or charge, or any kind of remuneration, where the price or charge or remuneration is duly authorised by the approval.
(2) In exercising their powers under an order under paragraph 1 above, 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.
(3) In acting under sub-paragraph (2) above an Agency may—

(a) attach any conditions to an approval, and

(b) limit or qualify an approval to allow for any change in circumstances, and

(c) limit the duration of an approval.

(4) An order under paragraph I above which provides that an Agency shall be deemed to have given their approval in any circumstances may impose any such conditions, limitations or qualifications as might have been imposed by the Agency under the preceding provisions of this paragraph.").—(Lord Drumalbyn.)
Schedule 2, as amended, agreed to.
Schedule 3 [Supplemental provisions]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 39.
Page 27, line 13, leave out ("or modify") and insert ("any of")
The noble Lord said: This Amendment arises out of an undertaking given in

281
another place to reconsider the wording of sub-paragraph (2) of paragraph 2 of Schedule 3, which makes it clear that for the purposes of Clauses 5 to 7 and of orders and notices under those clauses successors in business and groups of companies can be dealt with as one person. It was represented that the wording of sub-paragraph (2) was unduly wide since it gave power to the Minister and the Agencies not only to restrict the provisions of sub-paragraph (1) but also to extend them. That was not the intention. While accepting the substance of this argument, we felt it necessary to look more closely at the wording. The Amendment we have now tabled gives effect to our undertaking, and I ask the House to accept it. I beg to move.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 40:
Page 27, line 16, leave out sub-paragraphs (1) and (2) and insert—
("(1) The Minister may by order made at any time during a period when Part II of this Act is in force prescribe the degree to which anything made illegal by any order or notice made or given under Part II during that period, or anything otherwise affected by any such provision, is to be valid or invalid either during that period or later.")
The noble Lord said: This Amendment arises out of an undertaking given in another place to reconsider the wording of paragraph 3 of Schedule 3 which deals with validation orders. If an order or notice is given under either of the Agencies under Part II of the Bill, restricting a price, charge or rate of remuneration, it becomes illegal to charge a price or charge, or to pay remuneration, exceeding the restriction, and the validity of the relevant contract will be affected. Subparagraph (1) accordingly empowers the Minister to make orders to proscribe the degree of validity and invalidity in such cases. Sub-paragraph (2) makes it clear that such an order will continue to have effect after Part II has ceased to be in force. This is necessary to make the position clear as regards actions done under contracts during the time Part II was in force, but it was represented to us that the paragraph, as it stands, might empower the Minister at any time after Part II had lapsed to make an order regulating the validity or invalidity of something done when Part II was in full
282
force and effect. That was not our intention, and the Amendment which we have now tabled puts the position beyond all doubt. I beg to move.
Schedule 3, as amended, agreed to.
Schedule 4 [Enforcement]:
9.1 p.m.
LORD MILVERTON LORD MILVERTON moved Amendment No. 40A:
Page 30, line 9, leave out from beginning to end of line 34.
The noble Lord said: This Amendment also springs from a speech that I made at the Second Reading of the Bill. I put it down to-day in order once more to give the Government the opportunity of saying what happened. On this occasion there was discussion with the Parliamentary Under-Secretary of State for Industry and Consumer Affairs with various local government officials. After some discussion—I was not present, and I do not know what happened or what was said—I gather that it was understood that in addition to the reply to the speech that he made, if this Amendment were put down for discussion in the House so as to give it a right of position the Government would take an opportunity of saying how far they were able to go to meet some of the wishes of local government, and to say exactly what the position was. I am not in a position to say what they are going to reply, but I have no doubt that the noble Lord will shortly enlighten the Committee. At the end of that, I would ask leave to withdraw my Amendment. I beg to move.
VISCOUNT AMORY: I am glad that my noble friend Lord Milverton has provided this opportunity so that my noble friend Lord Drumalbyn can say a word to us about this matter. At first sight, the proposal that the Government should use the weights and measures inspectors employed by local authorities for the enforcement of provisions of this Bill seems rather drastic. However, we recognise the tremendous amount of work which is going to fall on the officials of the Central Government, and they will need all the help they can find in this matter. In these circumstances, I am sure that counties will be willing to help the Government in the way proposed.

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We recognise that the functions mentioned are mainly of a transitional nature, but the situation will not be without complications, because the inspectors designated will be serving two masters. In discussions that have been held with the Local Authority Associations, those representatives of the Local Authority Associations have raised various questions, such as about the recoupment of additional expenditure which will follow as a result of this work and the need for advice and instructions to the inspectors. In the discussions, I understand that the representatives of the Local Authorities Associations have in general received satisfactory replies. However, I would ask my noble friend for an assurance that the fullest prior consultation will take place with the local authorities concerned before inspectors are designated, so that this rather unusual scheme will have the chance of working satisfactorily.
9.5 p.m.
LORD DRUMALBYN: I am grateful to both my noble friends. I very much appreciate their concern in this matter. I am glad to hear from my noble friend Lord Milverton that he will not press this Amendment, and I hope he will still be of that view when I have given my explanation. Perhaps I could say to the noble Lord, Lord Garnsworthy, that this was a point, as he will see when he gets that letter, on which I was unable to give the noble Lord the information that he sought at that time. Since then, as my noble friend Lord Amory says, a deputation has seen my honourable friend Mr. Amery, and I hope that what I am now going to say will be helpful.
We regard this paragraph as an essential part of the machinery for ensuring that in the immediate future the Government can effectively supervise prices and charges during the transition to V.A.T. and, if necessary, in accordance with the provisions of the Code. My noble friend expressed the view that it would have been sufficient to frame the legislation in such a way that Ministers could look to local authorities for enforcement instead of direct to their officers, but our reason for taking powers to designate weights and measures inspectors as enforcement officers under the Bill is to maintain central control over the officers implementing it so as to ensure that enforcement
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action is immediate, consistent, and comprehensive in its coverage of the country as a whole. It is difficult to see how we can achieve these ends, and afford adequate protection to the consumer, unless the Minister has the power to give direct instructions as necessary.
My noble friend considers that we are creating here an undesirable precedent. I can only say to him that this paragraph does not, as he seems to fear, amount to a major change in Government policy. Clause 28 of the Fair Trading Bill, which leaves the duty of enforcement with the local authority, follows in this respect the precedent set by earlier Acts such as the Trade Descriptions Act and the Weights and Measures Act. In the present case we are dealing with an emergency situation created by the rapid growth of inflation for which immediate special measures are required. I can assure my noble friends that the points that they have made are being borne fully in mind, and I certainly take special note of what my noble friend Lord Amory has said about consultation.
VISCOUNT AMORY: If my noble friend cares to write to me a letter on that or any other subject, I shall have no objection at all to receiving it.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
BARONESS YOUNG: I beg to move Amendment No. 41.
Amendment moved—
After Schedule 4 insert the following new schedule—
("SCHEDULE
RENT RESTRICTION
Special rent limit for existing tenancies brought within the Rent Act
1.—(1) This paragraph applies to a regulated tenancy—

(a) which was granted before 8th March 1973, and

(b) which would not have been a regulated tenancy but for the provisions of subsection

(1) of the principal section.
(2) Subject to the provisions of this Schedule, the recoverable rent for any contractual period of a tenancy to which this paragraph applies shall not exceed the limit specified in paragraph 2 below, and the amount of any excess shall, notwithstanding anything in any agreement, be irrecoverable from the tenant.
(3) Sub-paragraph (2) above shall cease to apply if the landlord and the tenant so provide by an agreement conforming with the requirements of section 43(3) of the Housing Finance Act 1972 (agreement to explain the nature of the tenant's security of tenure).
(4) Where—

(a) sub-paragraph (2) above applies, and

(b) a rent for the dwelling-house is registered under Part IV of the Rent Act 1968 which is less than the limit specified in paragraph 2 below.

neither section 20(2) (registered rent as limit for contractual periods) nor section 22(2) (corresponding provision for statutory periods) of that Act shall apply to a tenancy to which this paragraph applies.
(5) Where a rent is so registered which is not less than the said limit, sub-paragraph (2) above shall not apply.
(6) Section 33 of the Rent Act 1968 (enforcement provisions) shall apply as if any amount made irrecoverable by this paragraph were irrecoverable by virtue of Part III of that Act, and section 36 of that Act (adjustment for differences in lengths of rental periods) shall apply for the purposes of this paragraph.
2.—(1) Where at the date of the passing of this Act Article 10 of the Counter-Inflation (Rents) (England and Wales) Order 1972 applied to the rent under the tenancy (to which paragraph 1 applies), the said limit is the rent payable under the tenancy at that date.
(2) In any other case the said limit is the rent payable under the terms of the tenancy (to which paragraph 1 applies), as varied by any agreement made before 8th March 1973, being the rent payable at the time in question, or the rent payable at 8th March 1973, whichever is the less.
Adjustment for repairs, services or rates
3.—(1) This paragraph applies to a contractual period the rent for which is subject to paragraph 1(2) of this Schedule.
(2) In this paragraph "the previous terms" means—

(a) where paragraph 2(1) applies, the terms of the tenancy referred to in the said paragraph 2(1) at the passing of this Act, and

(b) where paragraph 2(2) applies, the terms referred to in the said paragraph 2(2)

(3) Where under the terms of the tenancy there is with respect to—

(a) the responsibility for any repairs or

(b) the provision of services by the landlord or any superior landlord, or

(c) the use of furniture by the tenant,

any difference compared with the previous terms, such as to affect the amount of the rent which it is reasonable to charge the limit in paragraph 2 above shall be increased or decreased by an appropriate amount.
(4) Where for the contractual period there is a difference between the amount (if any) of the rates borne by the landlord or a superior landlord in respect of the dwelling-house and
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the amount (if any) so borne during the first rental period for which the previous terms were agreed, the limit in paragraph 2 above shall be increased or decreased by the difference.
(5) Where for the contractual period there is an increase in the cost of the provision of the services (if any) provided for the tenant by the landlord or a superior landlord compared with that cost at the time when the previous terms were agreed, such as to affect the amount of the rent which it is reasonable to charge, the limit in paragraph 2 above shall be increased by an appropriate amount.
(6) Where the previous terms provide for a variation of the rent in any of the circumstances mentioned in this paragraph, the limit shall not be further varied under this paragraph by reason of the same circumstances.
(7) Any question whether, or by what amount, the limit is increased or decreased by sub-paragraph (3) or sub-paragraph (5) of this paragraph shall be determined by the county court, and any such determination—

(a) may be made so as to relate to past rental periods, and

(b) shall have effect with respect to rental periods subsequent to the periods to which it relates until revoked or varied by a subsequent determination.

Statutory period of tenancy: no adjustment for improvements
4. Section 25 of the Rent Act 1968 (increase for improvements) shall not apply to a tenancy to which paragraph 1 of this Schedule applies.
Premiums
5.—(1) This paragraph has effect where a premium was lawfully required and paid on the grant of a tenancy to which paragraph 1 of this Schedule applies.
(2) Nothing in section 86 of the Rent Act 1968 (prohibition of premiums on assignment of protected tenancies) shall prevent any person from requiring or receiving, on an assignment of the tenancy, the fraction of the premium specified below (without prejudice, however, to his requiring or receiving a greater sum in a case where he may lawfully do so under Schedule 11 to the Rent Act 1968).
(3) If there was more than one premium, sub-paragraph (2) above applies to the last of them.
(4) The said fraction is X/Y where—

(a) X is the residue of the term of the tenancy at the date of the assignment, and

(b) Y is the term for which the tenancy was granted.

(5) Sub-paragraph (1) of this paragraph shall apply where a tenancy has been assigned as it applies where a tenancy has been granted, and then Y in the said fraction shall be the residue at the date of that assignment, of the term for which the tenancy was granted.
6.—(1) Where the tenancy to which paragraph 5(1) above applies was granted on the surrender of a previous tenancy, the surrender

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value of the previous tenancy shall be treated, for the purposes of paragraph 5 above as a premium, or as the case may be as part of the premium, paid on the said grant of the tenancy.
(2) For the purposes of sub-paragraph (1) above the surrender value of the previous tenancy shall be taken to be the amount which—

(a) if the previous tenancy had been assigned instead of being surrendered, and

(b) if this paragraph had applied to it,

would have been the amount which could have been required and received on the assignment in pursuance of paragraph 5 above and this paragraph.
(3) In determining for the purposes of paragraph 5 above, or of this paragraph, the amount which may be or could have been required and received on the assignment of a tenancy terminable, before the end of the term for which it was granted, by a notice to the tenant, that term shall be taken to be a term expiring at the earliest date on which such a notice, given after the date of the assignment, would have been capable of taking effect.
Tenancies ending before passing of this Act
7.—(1) This paragraph applies where the tenancy of a dwelling-house has come to an end at a time before the passing of this Act, and the tenancy would have been a regulated tenancy if the principal section had been in force at that time.
(2) No order for possession of the dwelling-house shall be made which would not be made if the principal section had been in force at the said time.
(3) Where a court has made an order for possession of the dwelling-house before the passing of this Act, but the order has not been executed, the court, if of opinion that the order would not have been made if this Act had then been in force may, on the application of the person against whom it was made, rescind or vary it in such manner as the court thinks fit for the purpose of giving effect to the principal section.
(4) If the tenant under the tenancy which has come to an end duly retains possession of the dwelling-house after the passing of this Act (without any order for possession having been made, or after the rescission of such an order) he shall be deemed to do so under a statutory tenancy arising on the termination of the tenancy which has come to an end, and, subject to sub-paragraph (5) below, the terms of that tenancy (including the rent) shall be deemed to have been the same as those of the tenancy which has come to an end.
(5) The High Court or the county court may by order vary all or any of the terms of the tenancy imposed by sub-paragraph (4) above in any way appearing to the court to be just and equitable (and whether or not in a way authorised by the provisions of sections 23 and 24 of the Rent Act 1968).
(6) If the tenant died after the tenancy came to an end, but before the passing of this
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Act, and at the passing of this Act the dwelling-house is occupied by a person who would, if the tenancy had been a statutory tenancy, have been the "first successor" within the meaning of paragraph 4 of Schedule 1 to the Rent Act 1968—

(a) an application tinder sub-paragraph (3) above may be made by that person, and

(b) sub-paragraph (4) above shall apply as it applies where the tenant retains possession.

Mortgages
8. At the end of section 93 of the Rent Act 1968 (mortgages to which Part VIII of that Act applies) there shall be inserted the following subsection—
"(5) If at the date of the passing of the Counter-Inflation Act 1973 land consisting of or including a dwelling-house was subject to a tenancy which becomes a regulated tenancy by virtue of section 13 of that Act, then in relation to that dwelling-house (and any land including that dwelling-house)—

(a) sections 94 and 95 below shall have effect as if for the reference in subsection (1)(a) above to 8th December 1965 there were substituted a reference to the date of the passing of the said Act;

(b) subsection (2)(a) of the said section 94 shall have effect as if for the reference to the appropriate day there were substituted a reference to 7th March 1973, and

(c) subsection (1)(b) of the said section 95 shall not apply."

Grounds for possession of dwelling-house
9. If at the date of the passing of this Act a dwelling-house was subject to a tenancy which becomes a regulated tenancy by virtue of the principal section, then, in relation to that tenancy—

(a) Case 5, paragraph (b) of Case 10, and paragraph 2(a) of Part III, of Schedule 3 to the Rent Act 1968 shall have effect as if for the references in those provisions to 8th December 1965 there were substituted references to the date of the passing of this Act,

(b) Case 8 of the said Schedule 3 shall have effect as if for the reference to 23rd March 1965 there were substituted a reference to 8th March 1973, and

(c) the said paragraph 2(a) of Part III of Schedule 3 shall have effect as if for 7th June 1966 there were substituted a reference to the expiration of a period of six months beginning with the passing of this Act.

Reserve and Auxiliary Forces (Protection of Civil Interests Act) 1951
10. In section 16(2)(a) of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 (protection of premises by extension of the Rent Acts the words "on the appropriate day" shall cease to have effect, and for the words "in subsection (1)(a) of section 1" there shall be substituted the words "in paragraphs (a), (aa) or (aaa) of subsection (1) of section 1".
Tenancies at a low rent
11.—(1) At the end of section 2(1) of the Rent Act 1968 there shall be inserted the following provisio:—
"Provided that paragraph (a) of this subsection shall apply in relation to a dwelling house—

(i) in relation to which the appropriate day fell before the passing of the Counter-Inflation Act 1973, and

(ii) which had on the said appropriate day a rateable value exceeding, if it is Greater London, £400 or, if it is elsewhere, £200.

as if for the reference in the said paragraph (a) to the appropriate day there were substituted a reference to the date of passing of the Couner-Inflation Act 1973.".
(2) In section 2(5) of the Landlord and Tenant Act 1954 (as originally enacted) for paragraphs (a) and (b) there shall be substituted
Page 32, line 18, at beginning insert—

("14 & 15 Geo. 6. c. 65.

The Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951.

In section 16(2)(a) the words "on the appropriate day".")

Page 32, line 25, at end insert—

("1967 c. 88.

The Leasehold Reform Act 1967.

Section 39(1)(b).

1968 c. 23.

The Rent Act 1968.

In Schedule 15, in the paragraph amending section 2 of the Landlord and Tenant Act 1954 the words (amending section 2(5)) from "and in" to the end of the paragraph.")

Page 32, line 28, at end insert—

("1972 c. 47.

The Housing Finance Act 1972.

In section 89, in subsection (1) the words "(6) and", in subsection (2) the words "(6) and" and "1 and", and subsection (6).

Statutory Instrument

S.I. 1972/1851.

The Counter—Inflation (Rents) (England and Wales) Order 1972.

In article 9(5) the words form "and this paragraph" to the end of article 9(5).

Article 10, except as respects rent for a period before the passing of this Act").

—(Baroness Young.)
Schedule 5, as amended, agreed to.
House resumed: Bill reported with Amendments.

FURNISHED LETTINGS (RENT ALLOWANCES) BILL
9.10 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Sandford.)
the words "for the purposes of this subsection the rateable value of the property is that which would be taken as its rateable value for the purposes of section 2(1)(a) of the Rent Act 1968."
Construction
12. In this Schedule—

(a) "rates" includes water rates and charges,

(b) other expressions shall be construed as in the Rent Act 1968.—(Baroness Young.)

Schedule 5 [Repeals]:
BARONESS YOUNG: I beg to move Amendments Nos. 42, 43 and 44, which are all consequential upon Amendment No. 41.
Amendments moved—
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clauses 1 to 4 agreed to.
Schedule 1 [Amendments to Housing Finance Act 1972]:
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 1:
Page 4, line 13, at end insert—
("(13) If and in so far as any regulation the previous subsection requires that as a condition of becoming a qualified person for the purposes of this section he shall have resided in the area of the authority for or for not less than any period specified in the regulation, the period so specified shall not exceed three months.")
The noble Lord said: In speaking to this Amendment, I should also like to refer to Amendment No. 3 which stands in my name, because it applies to Scotland in the same way as Amendment No. 1 applies to England and Wales. The aim of the Amendment is to reduce the period of residence needed to qualify for a rent allowance. The categories or persons affected were clearly defined by the Minister for Housing and Construction in column 1485 of the OFFICIAL REPORT of the other place on February 15, 1973, and they were confirmed by the noble Lord, Lord Sandford, on the Second Reading of the Bill in this House on February 26. They include families with dependent children, including single parent families, who have been resident for six months in a local authority's area, and some others were also mentioned. The period of six months was criticised in the other place as being far too harsh, and I myself pursued the matter in this House on Second Reading. I asked the noble Lord, Lord Sandford, whether further thought had been given to lessening this period, particularly as the Minister in the other place had said at column 1485:
"I will, without any commitment, look again at the question of six months and whether it is too long."—[OFFICIAL REPORT, Commons. 15/2/73; col. 1485.]
I think I am correct in saying that at the end of our debate on Second Reading, the noble Lord, Lord Sandford, made no specific reference to my question about whether further thought had been given, but at column 469 of the OFFICIAL REPORT for this House, dated February 26, he said:
"I confirm that we shall reconsider both the regulations and the guidelines in the light of experience".
That suggested that there was firm experience to justify the period of six months, or it could be that someone thought of a figure. The Minister indicated that the Government would take careful note of what was said in Parliament. I suggested on Second Reading that a month, or perhaps less, would be sufficient for the qualifying period. The period of a month had been suggested in the other place. I wonder whether the noble Lord can tell us to-night what good reason there is for fixing on six months. If there is a need for a rent
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allowance, I should have thought it would not take six months before the need was revealed. Indeed, the need would seem to me to be there almost from the first day of residence. If it is to establish some degree of permanence of tenancy, then I would ask the noble Lord: need it be that long?
In the Amendments that I have tabled I have sought to compromise as between the six months and the month that was suggested, and I hope that perhaps the Minister, if he can accept it, will do so. If he finds difficulty in doing so, perhaps he will tell the Committee what is the precise nature of the difficulty of reducing the period. I am sure the Amendment would add little to the cost of the scheme, but it would give help where there can surely be no doubt help is needed. I beg to move.
9.9 p.m.
LORD SANDFORD: I am grateful to the noble Lord for giving me this opportunity to set out the Government's views on this detailed matter rather more fully than I was able to do at Second Reading. I would agree with him that it would be convenient, while we are dealing with the first Amendment in his name, to consider also the second, which, as he says, does exactly the same thing for Scotland as the first does for England and Wales. I am glad to notice from what the noble Lord, Lord Garnsworthy, said that he accepts that some period of qualifying residence is necessary, first, in order that the furnished tenant eligible for rent allowances may satisfy the criterion that he has set up a home, and, secondly, to prevent local authorities from being required to pay rent allowances to the much more mobile furnished tenants for very short periods. We have, as I said we would, carefully considered the arguments of the Opposition, both here and in another place, for a reduction in the period of eligibility to three months or less. As a result I can tell the Committee and the noble Lord that we accept the validity of this argument for the priority categories of families with dependent children, pensioners, and tenants with a pensioner living with them. We therefore intend, in the regulations, to reduce the period of eligibility for these categories from six months to three months.
However, as the aim of this Bill is, initially at any rate, to give preferential

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treatment to these categories over single persons and childless couples, we still believe it is necessary to have a longer period than three months for the latter. Moreover, since this Bill is introducing rent allowances for the very first time for furnished tenants, we believe it is better to leave the power to prescribe and to amend such periods of eligibility unfettered. This would allow changes to be made expeditiously and flexibly by regulation in the light of experience, and—this is particularly important—on the advice of the Advisory Committee on Rent Rebates and Rent Allowances. The noble Lord's Amendment would not give us quite that flexibility and opportunity to amend by regulation because of the way in which it is worded. With the assurance that we have taken into account the views of the noble Lord and his colleagues in another place in respect of the categories with which I think we are all chiefly concerned, I hope he will feel satisfied with the explanation I have given and will not feel it necessary to press this Amendment.
LORD GARNSWORTHY: I am most grateful indeed to the noble Lord, Lord Sandford, for what he has just said, and I am pleased to accept the position as he put it. We have had two quite long and arduous days, and it would not be my desire to take up your Lordships' time
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any more except to say that, listening to the noble Lord, Lord Sandford, and obtaining from him the statement to which we have just listened, I feel like going home reasonably content. I am most grateful to him; and, with the permission of the Committee, I beg leave to withdraw my Amendment, indicating at the same time that I shall not be moving my other one.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Schedule 2 agreed to.
House resumed: Bill reported without Amendment; Report received.

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